Dilip Buildcon Q1 Results Review - Debt Reduction To Drive Earnings Growth: Dolat Capital

Dolat Capital Report

Dilip Buildcon Ltd. reported revenue below estimates, however Ebitda margin beat led to higher adjusted profit after tax versus estimates.

Dilip Buildcon posted revenue decline of 0.5% YoY to Rs 26.1 billion due to poor execution.

However, Ebitda margin improved by 500 basis points YoY at 12.8% led by lower raw materials cost, which was partially offset by other expenses. Accordingly, adjusted profit after tax was sharply up to Rs 834 million versus Rs10 million net loss YoY.

We expect revenue/ adjusted profit after tax compound annual growth rate of 4.8%/ 120.7% over FY23-25E, with Ebitda margin of 12.6%/ 12.6% for FY24E/ FY25E.

We increase our earnings per share by 8.9%/ 9.4% for FY24E/ FY25E factoring better Ebitda margin coupled with lower depreciation and finance cost.

Considering ~90% stock run up, we downgrade from 'Buy' to 'Accumulate' with target price of Rs 341.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.