The shares of the leading highway developer gained up to 5% after the company emerged as a lower bidder for the EPC work which is valued at Rs 1,667.78 crore.
With a market capitalization of Rs 6,999.83 crore, the shares of Ashoka Buildcon Ltd were trading at Rs 249.35 per share, increasing around 4 percent as compared to the previous closing price of Rs 239.75 apiece.
Reason for rise:-
The shares of the company have seen such a bullish movement after Ashoka Buildcon Ltd was the lowest bidder for Integrated Infrastructure Development of 20M & Above Wide Roads, Construction of Various Major & Minor Structures, and Allied Electrical Works in TPS – 10 & TPS – 11 under the NAINA Project from City & Industrial Development Corporation of Maharashtra Limited (CIDCO), the order valued at Rs 1,667.78 crore.
Financial performance:-
Analyzing a company’s financial performance, revenue grew by 27 percent from Rs 1,935 crore in Q1FY24 to Rs 2,465 crore in Q1FY25, during the same time frame, the company’s net profit zoomed significantly by 119 percent from Rs 72 crore to Rs 158 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.
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 43.35 percent in six months and a return of 87 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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