Ashoka Buildcon’s shares moved 15 percent higher to Rs 99.25 on BSE in intra-day trade on Monday on the back of heavy volumes on the anticipation of a good growth outlook. The company’s stock of roads and highways reached a peak of over nine months and was quoted at its highest level since 22 February 2020. On January 22, 2020, it reached a 52-week high of Rs 121.60.
Ashoka Buildcon was trading at Rs 98.20 at 01:20 pm, up 13% on the BSE, compared to a 0.62% increase in the S&P BSE Sensex. On the NSE and BSE, a combined 6.1 million equity shares changed hands.The stock has zoomed 56 percent over the past month after the company posted a healthy 44 percent year-on-year (YoY) leap in its standalone net profit to Rs 105 crore for the September quarter (Q2FY21), on the back of robust operating results with lower interest expenditures and tax output.
EBITDA (earnings before interest, taxes, depreciation and amortisation) increased by 11.5 percent year-on-year to Rs 181 crore, while the EBITDA margin increased by 70 basis points year-on-year to 19.5 percent, helped by the cost of good raw materials. At Rs 927 crore, standalone revenue was up 7.7 percent YoY.
The company said that its total order book stands at Rs 9,300 crore as of September 30, 2020.
The contribution from the road hybrid annuity model (HAM) and road engineering, procurement and building (EPC) from the total order book is Rs 4,323 crore and Rs 3,247 crore respectively.
In view of its attractively priced EPC sector and improving outlook on toll ventures, brokerage firm Sharekhan has retained a “Buy” rating on Ashoka Buildcon with a revised price target of Rs 110. The brokerage said the engagement of the analysts with the management indicates a regular speed of project execution and improvement of toll collections during November.
The management maintained guidance for FY2021 on sales and order intake. Project awards and construction continue to increase for FY2021 until Oct. The selection of FASTag continued the growth momentum in November. The EPC company is massively undervalued by the factoring of Ashoka Buildcon’s investments in Ashoka Concessions (ACL) and owned properties like real estate, the brokerage stated.