During Friday’s trading session, the shares of one of the leading highway developers in India surged nearly 4.7 percent to Rs. 250.8 on BSE, after the company received an EPC work order worth Rs. 1,055 crores from Banglore International Airport Limited.
With a market cap of Rs. 7,008.3 crores, at 03:17 p.m., the shares of Ashoka Buildcon Limited were trading in the green at Rs. 249.9, up by nearly 4.4 percent, as against its previous closing price of Rs. 239.45.
What’s the news:
Ashoka Buildcon Limited secured an Engineering, Procurement and Construction (EPC) work order worth Rs. 1,055 crores from Banglore International Airport Limited, to be executed within 24 calendar months.
According to the latest regulatory filings with the stock exchanges, the order is for the construction of Elevated Western Crossfield Taxiways (WCT), apron and associated works (taxiway systems, pavement, drainage works, ancillary buildings and associated infrastructure facilities).
Previous Order:
On 27th November, Ashoka Buildcon secured a Notification of Award (NOA) for the Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited Project.
The project, valued at Rs. 192.69 crore, involved the procurement, supply, installation, testing, and commissioning of new 11 KV lines, LT lines using AB cables, distribution transformer substations, and associated works such as DPs, TPs, and crossings.
The project aims to separate 11 KV mixed feeders and mix DTRs under the Feeder Separation Program (FSP) financed by KfW.
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 84.5 percent in one year, as well as around 35 percent returns in the last six months. So far in 2024, the shares of Ashoka Buildcon have given positive returns of about 81.5 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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