Morgan Stanley maintains overweight on Dilip Buildcon, lowers target price to Rs 504

Morgan Stanley has maintained overweight rating on Dilip Buildcon in the long term and lowered target price to Rs 504 from Rs 772. The stock ended up 0.3% at Rs 410.95 on Monday while the BSE Sensex closed 529.82 points up at 40,889.23.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1994.40 crore, down -18.14% from last quarter sales of Rs 2436.44 crore. The company has reported net profit after tax of Rs 25.80 crore in the latest quarter.


Investment Rationale

Interest remains low in road EPC stocks as NHAI ordering has been slow, but risk reward is attractive, said Morgan Stanley. Dilip Buildcon is focussed on improving execution in the second half and reducing debt, said Morgan Stanley. Given its diversified and large order book, Dilip Buildcon has reasonable earnings visibility, the brokerage said.