Ashoka Buildcon shares gain 6% on healthy September quarter numbers

The company said its total order book as on September 30, 2020 stands at Rs 9,300 crore.

Shares of Ashoka Buildcon gained 6 per cent to Rs 69.05 on the BSE in the early morning trade on Thursday after the company reported a healthy 44 per cent year-on-year (YoY) jump in its standalone net profit at Rs 105 crore in the September quarter (Q2FY21), on the back of robust operational performance with lower interest expenses and tax outgo.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) was up 11.5 per cent YoY at Rs 181 crore, while EBITDA margin expanded 70 basis points YoY at 19.5 per cent, backed by benign raw material cost. Standalone revenue was up 7.7 per cent YoY at Rs 927 crore.

On a quarter-on-quarter basis, the company’s net profit rose 51.6 per cent on the back of 49.4 per cent growth in operational revenues, aided by a pick-up in execution with better labour and raw material availability.

The company said its total order book as of September 30, 2020, stands at Rs 9,300 crore. Of the total order book, the contribution from road hybrid annuity model (HAM) and road engineering, procurement and construction (EPC) is Rs 4,323 crore and Rs 3,247 crore, respectively.

Meanwhile, the board of directors of the company has approved the sale of a 49 per cent stake in one of its wholly-owned subsidiaries viz. Ashoka Technologies to Auriga IT Solutions at fair market value. It also approved to increase the stake in its subsidiary viz. Ashoka Purestudy Technologies from existing 51 per cent to 59 per cent over a period of next three months by subscribing to the equity share capital of APTPL and/or acquiring shares from Purestudy Software Services, another shareholder of the Company.

“Ashok Buildcon reported a strong sequential recovery and delivered a better-than-expected set of numbers on revenues and profitability front in Q2.  The company’s execution recovery was better than expected in Q1. However, the SBI-Macquarie stake exit and asset monetisation remain the key overhang on the company. We await management commentary on future outlook, order inflow targets, and monetisation plan,” ICICI Securities said in a note.