Buy Ashoka Buildcon; target of Rs 141: HDFC Securities

HDFC Securities' research report on Ashoka Buildcon

Ashoka Buildcon (ASBL) reported APAT at Rs 1bn (+28%/+52% YoY/QoQ), beating our estimates by 45% on better-than-expected execution. Labour availability has improved to pre-COVID level, with sites working at 100% efficiency. Toll collections have also reached to pre-COVID level. ASBL won orders worth Rs 14bn during the quarter, taking the order book to Rs 93bn. Low net D/E of 0.04x and comfortable liquidity insulate ABL from COVID-19 headwinds.

Outlook

We maintain BUY on Ashoka Buildcon (ASBL) with an unchanged target price of Rs 141/sh. Potential monetisation of HAM/BOT assets and diversification of the order book could be positive triggers for the stock.

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