During Monday’s trading session, the shares of one of the leading highway developers in India surged 1.03 percent to Rs. 247.95 on BSE, after the company has been declared as the Lowest Bidder (L1) by the Maharashtra government for a project worth nearly Rs. 312 crores.
With a market cap of Rs. 6,688.2 crores, the shares of Ashoka Buildcon Limited opened in the green at Rs. 247.35, up by nearly 0.8 percent, as against its previous closing price of Rs. 245.4.
What’s the news:
Ashoka Buildcon Limited has been declared as the Lowest Bidder (L-1) by Maharashtra State Electricity Transmission Co. Ltd. (MSETCL). The quoted Bid Price for the project is Rs. 312.13 crores, to be executed within 18 Calendar Months excluding monsoon.
According to the latest regulatory filings with the BSE, the order is for the establishment of a 400/220 kV substation at Nandgaon Peth Dist., Amravati, along with associated transmission lines under Amravati Zone MSETCL, Maharashtra.
Financials:
The company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 27.4 percent, rising from Rs. 1,935 crores in Q1 FY24 to Rs. 2,465 crores in Q1 FY25.
Likewise, during the same period, the company’s net profit increased from Rs. 72 crores to Rs. 158 crores, representing a growth of around 119.4 percent YoY.
Key Financial Ratios:
In terms of key financial metrics, Ashoka Buildcon has a Return on Equity (RoE) of 22.7 percent and a return on capital employed (RoCE) of 27.1 percent. Additionally, the company’s debt-to-equity ratio stands at 2.45.
Order Book & Recent Projects:
As of 30th June 2024, the company has a strong order book valued at Rs 10,356 crores, with the Power T&D segment contributing a maximum of 42 percet.
The Power Transmission and Distribution (T&D) segment accounts for the largest share at 42 percent, followed by the Road EPC segment at 36
percent. The Road Hybrid Annuity Model (HAM) contributes 9 percent, while the Railways and EPC – Building segments account for 7 percent and 6 percent, respectively.
Ashoka Buildcon has completed a 14,000 km roadway and provided lighting to 30,000 villages through its Power T&D projects. The company’s notable clients include NHAI, Rail Vikas Nigam Limited (RVNL), and Ircon International Limited, among others.
The company has received completion certificates for two NHAI Hybrid Annuity Mode (HAM) projects, emerged as the lowest bidder for four EPC projects in Maharashtra and signed an EPC agreement for a water supply project in the Ivory Coast.
Margin Guidance:
Currently, the company’s EBITDA margins are between 7 percent and 8 percent, with expectations of an increase to 9 percent to 10 percent in the third and fourth quarters of FY25. For the full fiscal year, margins are projected to stabilise between 8 percent and 10 percent, with the potential to return to historical levels of 10 percent to 12 percent in FY26.
Future Outlook:
The company forecasts revenue growth of 15-20 percent for FY25, anticipating order inflows between Rs. 10,000 and Rs. 12,000 crores. It aims to maintain a sustainable focus on its EPC business across the highways, railways, and power transmission and distribution segments.
Stock Performance:
The stock has delivered positive returns of nearly 72.7 percent in one year, as well as around 38.2 percent returns in the last six months. So far in 2024, the shares of Ashoka Buildcon have given positive returns of about 73.6 percent.
About the company:
Incorporated in 1993, Ashoka Buildcon Limited is engaged in the business of construction of infrastructure facilities on Engineering, Procurement and Construction Basis (EPC) and Built, Operate and Transfer (BOT) Basis and Sale of Ready-Mix Concrete.
Written by Shivani Singh
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