Buy Ashoka Buildcon - Emkay

Ashoka Buildcon
Reco: BUY
CMP: Rs 196
Target Price: Rs 322

Disappointing quarter – Triggers lined up for growth

- 3QFY12 EBITDA disappoints (Rs692 mn (+22% yoy) v/s est Rs 844mn) led by lower EBIDTA margins. Margins contracted 430 bps yoy to 19.6% dragged by major maintenance at VHPL

- Revenues at Rs3.5 bn (+49% yoy) - E&C Revenues +54% yoy & BOT reveues +30%yoy. Gross Toll collection +70.5% yoy to Rs 996mn led by several new SPV's commencing operations

- Debt tied up for Dhankuni Kharagpur, toll collection to start in Feb-12 drving further traction. Mgmt reiterates IRR guidance in excess of 16% for Angul-Cuttack (TPC Rs 11bn)

- Cut FY12/FY13 EPS by 9%/16% led by 3Q earning miss & factroing lower EBIDTA margins for the BOT projects. Fund raising critical to ramp up execution. Maintain BUY.

Source : Equity Bulls

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