Anand Rathi is bullish on Ashoka Buildcon has recommended buy rating on the stock with a target price of Rs 127 in its research report dated June 17, 2020.
Anand Rathi 's research report on Ashoka Buildcon
Though it missed its full-year guidance on revenues and inflows (systemic issues earlier, Covid in Q4), Ashoka Buildcon more than delivered on cash-flows. A steep reduction in standalone net debt couldn’t have come at a better time, and leads us to believe that the existing HAM projects are unlikely to suffer for want of funds. Besides, a lighter balance sheet means it would benefit from any pick-up in awarding. The SBI-Macquarie exit overhang remains, but seems more than priced in.
Outlook
Proven execution capabilities and a well-set balance sheet impel us to retain our Buy rating, with a lowered TP of `127 (from `169) on pruning the EPC PE multiple from 10x to 8x, and on lowered earnings.
For all recommendations report, click here
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