Shares of one of the leading highway developers in India are in focus during Monday’s trading session, after the company was declared as the Lowest Bidder (L1) for the projects of National Highways Authority of India (NHAI) worth nearly Rs. 2,791 crores.
With a market cap of Rs. 6,446.8 crores, the shares of Ashoka Buildcon Limited reached its intraday high at Rs. 231.55, up by nearly 0.8 percent, as against its previous closing price of Rs. 229.7.
What’s the news:
Ashoka Buildcon Limited has been declared as the Lowest Bidder (L-1) for the projects of National Highways Authority of India (NHAI), under Hybrid Annuity Mode.
According to the latest regulatory filings with the stock exchanges, the quoted Bid Price for the projects is Rs. 2,791 crores, to be executed within 910 days including monsoon.
The first order, valued at Rs. 1,400 crores, is for the development of a 4-lane Economic Corridor from Kharagpur to Chandrakona-Ghatal Road Crossing (Km 0.00 to Km 41) on NH 116A in West Bengal (Package-I).
The second order, worth Rs. 1,391 crores, is for the development of a 4-lane Economic Corridor from Bowaichandi to Guskara-Katwa Road (Km 89.814 to Km 133) on NH 116A in West Bengal (Package-3).
Financials:
The company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 15.6 percent, rising from Rs. 2,154 crores in Q2 FY24 to Rs. 2,489 crores in Q2 FY25.
Likewise, during the same period, the company’s net profit increased from Rs. 119 crores to Rs. 462 crores, representing a growth of around 288 percent YoY.
EBITDA for Q2 FY25 reached Rs. 945.2 crores, representing an increase of around 61 percent YoY from Rs. 587 cores in Q2 FY24, with an EBITDA Margin of 37.4 percent, up from 26.7 percent, during the same period.
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 1.96.
Order Book & Recent Projects:
As of 30th September 2024, the company has a strong order book valued at Rs. 11,104 crores, with the Road EPC segment contributing a maximum of 46.7 percent.
The Road EPC segment accounts for the largest share at 46.7 percent, followed by the Power T&D segment at 35.5 percent. The Road Hybrid Annuity Model (HAM) contributes 7.6 percent, while the Railways and EPC – Building segments account for 5 percent and 5.2 percent, respectively.
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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 8-10 percent, with the potential to return to historical levels of 10-12 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 61.7 percent in one year, as well as around 26.6 percent returns in the last six months. So far in 2024, the shares of Ashoka Buildcon have given positive returns of about 67.7 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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