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Well funded – Gearing up for big league…
Ashoka Buildcon (ABL) is a leading road developer with a portfolio of 21
road projects encompassing ~5,000 km. ABL’s road portfolio is well
funded courtesy SBI Macquarie’s (SBM) | 700 crore commitment for a 34-
39% stake in ACL (a subsidiary with seven major projects) at implied P/BV
of 1.3x. With this secured funding, we expect ABL’s gross daily collection
to grow 1.4x to | 2.8 crore/day in FY14-16E. With SBI Macquarie’s
commitment of an additional | 650 crore, we believe ABL is also likely to
be a key beneficiary of road awarding opportunities in H2FY15. On the
EPC front, with an order book of | 3042 crore (1.5x order book to bill ratio
on TTM), L-1 bids of | 1030 crore in the T&D segment and new road
awarding opportunities from H2FY15 onwards, we believe ABL’s EPC
revenues and earnings will grow at a CAGR of 19.7% and 15.2%,
respectively, during FY14-FY16E. Hence, we initiate coverage on ABL with
a BUY recommendation with an SOTP based target price of | 166/share.
Transforming into big league player with SBI Macquarie deal…
In August 2012, SBI Macquarie committed | 700 crore (with an additional
| 100 crore contingency reserve) for a 34-39% stake in Ashoka
Concession (ACL) which has seven of its big ticket project. The deal, at
implied P/BV of 1.3x (assuming 34% dilution), ensures equity funding
towards ACL’s project portfolio. With secured funding, we expect ABL’s
gross daily toll collection to grow 1.4x to | 2.8 crore/day in FY14-FY16E.
EPC revenues to grow at 19.7% CAGR during FY14-16E...
ABL’s order book currently stands at | 3042 crore, 1.5x order book to bill
ratio on a TTM basis. Beside this, ABL has L-1 bids worth | 1,030 crore in
the T&D segment. Going ahead, we anticipate ABL’s revenues and PAT
will grow at a CAGR of 19.7% and 15.2%, respectively, during FY14-16E
on the back of a strong order book, aggressive road awarding
opportunities in H2FY15E and opportunities from the T&D segment.
ABL to be key beneficiary from new opportunities, initiate with BUY…
Considering the strong track record, well funded BOT road project
portfolio and healthy order book, we remain positive on its long term
prospects. With SBI Macquarie’s commitment of an additional | 650
crore, we believe ABL is likely to be a key beneficiary of the road
awarding opportunities in H2FY15. Hence, we initiate coverage on ABL
with a BUY recommendation and an SoTP target price of | 166 per share.
We have valued ABL’s BOT projects at | 41/share, EPC business (net of
debt) at | 70/share (5x FY16 EV/EBITDA) and ACL at | 55/share.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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Well funded – Gearing up for big league…
Ashoka Buildcon (ABL) is a leading road developer with a portfolio of 21
road projects encompassing ~5,000 km. ABL’s road portfolio is well
funded courtesy SBI Macquarie’s (SBM) | 700 crore commitment for a 34-
39% stake in ACL (a subsidiary with seven major projects) at implied P/BV
of 1.3x. With this secured funding, we expect ABL’s gross daily collection
to grow 1.4x to | 2.8 crore/day in FY14-16E. With SBI Macquarie’s
commitment of an additional | 650 crore, we believe ABL is also likely to
be a key beneficiary of road awarding opportunities in H2FY15. On the
EPC front, with an order book of | 3042 crore (1.5x order book to bill ratio
on TTM), L-1 bids of | 1030 crore in the T&D segment and new road
awarding opportunities from H2FY15 onwards, we believe ABL’s EPC
revenues and earnings will grow at a CAGR of 19.7% and 15.2%,
respectively, during FY14-FY16E. Hence, we initiate coverage on ABL with
a BUY recommendation with an SOTP based target price of | 166/share.
Transforming into big league player with SBI Macquarie deal…
In August 2012, SBI Macquarie committed | 700 crore (with an additional
| 100 crore contingency reserve) for a 34-39% stake in Ashoka
Concession (ACL) which has seven of its big ticket project. The deal, at
implied P/BV of 1.3x (assuming 34% dilution), ensures equity funding
towards ACL’s project portfolio. With secured funding, we expect ABL’s
gross daily toll collection to grow 1.4x to | 2.8 crore/day in FY14-FY16E.
EPC revenues to grow at 19.7% CAGR during FY14-16E...
ABL’s order book currently stands at | 3042 crore, 1.5x order book to bill
ratio on a TTM basis. Beside this, ABL has L-1 bids worth | 1,030 crore in
the T&D segment. Going ahead, we anticipate ABL’s revenues and PAT
will grow at a CAGR of 19.7% and 15.2%, respectively, during FY14-16E
on the back of a strong order book, aggressive road awarding
opportunities in H2FY15E and opportunities from the T&D segment.
ABL to be key beneficiary from new opportunities, initiate with BUY…
Considering the strong track record, well funded BOT road project
portfolio and healthy order book, we remain positive on its long term
prospects. With SBI Macquarie’s commitment of an additional | 650
crore, we believe ABL is likely to be a key beneficiary of the road
awarding opportunities in H2FY15. Hence, we initiate coverage on ABL
with a BUY recommendation and an SoTP target price of | 166 per share.
We have valued ABL’s BOT projects at | 41/share, EPC business (net of
debt) at | 70/share (5x FY16 EV/EBITDA) and ACL at | 55/share.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://content.icicidirect.com/mailimages/IDirect_AshokaBuildcon_IC.pdf
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