Ashoka Buildcon Q2 Results Review - Weak Quarter; Asset Monetisation In Sight: Centrum Broking
The company will receive sizable cashflows from above deals which will help deleverage balance sheet and provide growth capital.
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Centrum Broking Report
Ashoka Buildcon Ltd.’s Q2 FY23 profit after tax at Rs 655 million was below estimate of Rs 687 million (consensus: Rs 858 million) due to lower margins.
Ebitda margins declined 280 bps YoY to 8.7% (estimate: 10%) due to execution of competitively bid projects and input cost pressures.
Debt increased from Rs 5.6 billion in March 2022 to Rs 9.4 billion in September 2022 due to increase in receivables from highways segment.
Ashoka Buildcon expects debt to remain at similar levels in March 2023. It has increased revenue guidance to 25-30% growth (earlier 15-20%) in FY23 led by strong execution in H1 (up 43% YoY) and has lowered margin guidance to 9-9.5% (earlier: 10%).
Sale transaction of five built-operate-transfer assets is likely to be completed in two months. Chennai outer ring road sale is likely to be completed in two-three months while Jaora sale is likely to be announced by December-22.
Ashoka Buildcon will receive sizable cashflows from above deals which will help deleverage balance sheet and provide growth capital.
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