The shares of the leading highway developer gained up to 5 percent after the company received letters of Award from National Highways Authority of India (NHAI) worth Rs.1,391 crore.
The shares of Ashoka Buildcon Ltd were trading at Rs 286.60 per share, increasing around 3.17 percent as compared to the previous closing price of Rs 277.80 apiece. The market capitalization of the company is Rs 8,045.53 crore.
Reason for rise
The shares of the company have seen positive movement after Ashoka Bowaichandi Guskara Road Private Limited, a wholly owned subsidiary of Ashoka Buildcon Limited executed a Concession Agreement with the National Highways Authority of India for the Development of 4 lane Economic Corridor from Bowaichandi to Guskara-Katwa Road Section Km 89.814 to Km 133.000 of NH 116A (Package-3) in the state of West Bengal under Hybrid Annuity Mode.
Financial performance
Analyzing a company’s financial performance, revenue grew by 15 percent from Rs 2,154 crore in Q2FY24 to Rs 2,489 crore in Q2FY25, during the same time frame, the company’s net profit zoomed significantly by 288 percent from Rs 119 crore to Rs 462 crore.
Order Book & recent projects
As of June 30, 2024, the business has a strong order book of about Rs 10,356 crore. Ashoka Buildcon has completed a 14,000 km roadway and lit 30,000 villages through Power T&D projects. The company’s clients include NHAI, Rail Vikas Nigam Ltd, and Ircon International Ltd, among others.
The company received completion certificates for two NHAI Hybrid Annuity Mode (HAM) projects emerged as the lowest bidder for four EPC projects in Maharashtra, Mumbai, and signed an EPC agreement for a water supply project in the Ivory Coast.
Orderbook breakdown
The order book breakdown is as follows: Roads and railways account for INR 5,316 crores (52%), Power Transmission and Distribution (T&D) contributes INR 4,424 crores (42%), while the EPC building segment makes up INR 617 crores (6%).
Margin Guidance
The company’s current EBITDA margins range from 7% to 8%, with expectations to rise to 9% to 10% in Q3 and Q4 FY 2025. For the full year, margins are anticipated to stabilize between 8% to 10%, potentially returning to historical levels of 10% to 12% in FY 2026.
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Future Outlook
The company anticipates a revenue growth of 15-20% for FY 2025, with expected order inflows of Rs 10,000 to Rs12,000 crores. It will maintain a sustainable EPC business focus across highways, railways, and power transmission and distribution segments.
Remarkable Return
The company has given a return of 25.80 percent in six months and a multibagger return of 103 percent in a year.
Government Initiatives
The NHAI plans to bid out 15 road projects worth Rs 44,000 crores under the BOT model in FY 2024-25. The government has amended the Model Concession Agreement to attract developers and aims to monetize Rs 2.4 billion in projects via InvIT to reduce debt.
Company Profile
Ashoka Buildcon Limited is engaged in the construction and maintenance of roads and supporting services to land support-operation of toll roads and others. The Company is also engaged in the construction of buildings, power, railways, and city gas distribution.
Written by:- Abhishek Singh
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