INSUBCONTINENT EXCLUSIVE:
ICICI Direct has a buy call on Ashoka Buildcon with a target price of Rs 180.
The current market price of Ashoka Buildcon is Rs 141.65.
Time
period given by the brokerage is one year when Ashoka Buildcon price can reach the defined target.
The view of the brokerage on the
projects 22 per cent power transmission distribution
Of the recently won five HAM projects, four are under financial closure documentation process and one is under term sheet negotiation
ABL is confident of achieving financial closure commencing commercial work for all five HAM projects in H2FY19E
Also, the equity requirement for these five HAM projects is about Rs 470 crore
Furthermore, with a robust bidding pipeline worth about Rs 25,000 crore, the company aims to win more HAM project orders worth about Rs
5,000-7,000 crore about Rs 1,000-1,500 crore in the power transmission distribution division, respectively, in FY19E
Additionally, all of its toll projects saw strong traffic growth leading to about 15 per cent growth in toll collections at key projects
Further, Bhandara and Durg projects are due for rate revision in September 2018
With strong traffic growth ahead, we expect toll collections at Rs 1,168.2 crore in FY20E.
CGD business to diversify product portfolio; aid
revenue growth: The company has been facing clearance issues from petroleum explosives division for its Ratnagiri CGD business
However, it expects this issue to be resolved soon and project work to commence in Q2FY19
Also, the company recently received LoI for laying, building, operating or expanding local gas distribution network for two geographical
The authorisation granted for both projects is for 25 years
Under these contracts, ABL is to connect about 10,000 houses in Maharashtra and about 1 lakh houses in Karnataka
CGD work in Maharashtra is expected to start in Q4FY19E
The company has equity requirement of about Rs 120 crore for these projects in addition to about Rs 50 crore for Ratnagiri project, which
would be funded by internal accruals.
Traffic growth momentum to sustain; maintain BUY: Considering the strong track record, robust
Hence, we expect EPC revenues to grow robustly at 29.7 per cent CAGR to Rs 4,156.2 crore
There has even been a strong revival in traffic growth across its project portfolio, which is expected to be sustainable, going forward
We continue to maintain our BUY recommendation with an SoTP based target price of Rs 180/share
