During Friday’s trading session, the shares of one of the leading highway developers in India surged nearly 2 percent to Rs. 305.8 on BSE.
Over the past three months, from 1st September 2024 to the present date, Ashoka Buildcon Limited has secured orders worth more than Rs. 13,700 crores.
Stock Performance:
With a market cap of Rs. 8,141 crores, the shares of Ashoka Buildcon Limited closed in the red at Rs. 290, down by nearly 3.3 percent, as against its previous closing price of Rs. 299.9.
The stock has delivered multibagger returns of nearly 114.4 percent in one year, and around 19 percent of positive returns in the last six months. So far in 2024, the shares of Ashoka Buildcon have given multibagger returns of about 112 percent.
Orders in last 3 months:
2nd October: the company received LoAs worth ~Rs. 1,263.8, for 2 projects from the Mumbai Metropolitan Region Development Authority (MMRDA) for the design and construction of the Creek Bridge from Kolshet to Kalher and Gaimukh to Payegaon.
Additionally, an EPC work order of Rs. 474 crore was awarded for the design and construction of the Elevated Road from Kalyan-Murbad Road to Badlapur Road to Pune Link Road parallel to Waldhuni River.
10th October: emerged as the Lowest Bidder (L-1) for an EPC work order worth Rs. 1,667.78 crores from CIDCO for the integrated infra development of 20M & above wide roads, construction of various major & minor structures and allied electrical works.
11th October: declared L-1 by Brihanmumbai Municipal Corporation (BMC) for Rs. 918 crores project to construct Flyover Arm-1 Arm-2 at Sion Panvel Highway Maharashtra Nagar.
Additionally, the company also received a Letter of Acceptance (LOA) for a project that includes the City & Industrial Development Corporation of Maharashtra (CIDCO) in a Joint Venture, for a total consideration of Rs 1,673.3 crore.
12th October: received LoA from Maharashtra State Road Development Corp. Ltd. (MSRDCL) for projects worth a total of Rs. 2,310 crores for the construction of major bridges in Ratnagiri District, Maharashtra.
15th October: received LoA for a project worth Rs. 1,126.6 crores from BMC for the construction of Flyover Arm-1 Arm-2 at T Junction on Sion Panvel Highway Maharashtra Nagar in M/E Ward.
1st November: declared as L-1 by Maharashtra State Electricity Transmission Co. Ltd. (MSETCL) for a project worth Rs. 312 crores for the establishment of 400/220 kV substation, along with associated transmission lines under Amravati Zone MSETCL, Maharashtra.
18th November: declared as L-1 by NHAI for two projects worth Rs. 2,791 crores for the development of 4-lane Economic Corridors in West Bengal under Hybrid Annuity Mode.
27th November: received Notification Award from Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited, Jabalpur, for a Rs. 192.7 crores project to supply, install, test, and commission new 11 KV lines, LT lines on AB cable, distribution transformer substations, and supporting works.
29th November: signed an agreement with Banglore International Airport Limited for a Rs. 1,055 crore project involving the construction of Elevated Western Crossfield Taxiways (WCT), aprons, and related works.
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.
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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.
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.
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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