Shares of Ashoka Buildcon climbed 4 per cent in Wednesday’s trade after the company said it has emerged as the Lowest bidder (L-1) for a project, whose bid value is Rs 1,668.50 crore. Following the development, the scrip rose 3.58 per cent to hit a high of Rs 79.55 on BSE. The scrip is up 15.3 per cent from its May low of Rs 69 level.
Ashoka Buildcon said the company had submitted Bid to National Highway Authority of India (NHAI) for the project. It was a request for proposal for construction of 6 lane elevated corridor along with development of existing 4 lane road at ground level from Aroor to Thuravoor Thekku section of NH – 66 under Bharatmala Pariyojana in the state of Kerala on EPC mode.
“The company has emerged as the Lowest Bidder (L-1) for the project, the bid value of which is Rs 1,668.50 crore. This announcement is made pursuant to the Regulation 30 of SEBI (LODR) 2015,” it said.
Ashoka Buildcon recently increased its revenue guidance to 25-30 per cent YoY growth in FY23 compared with earlier guidance of 15-20 per cent growth, given the strong execution in H1 (up 43 per cent YoY). It, however, lowered its margin guidance to 9-9.5 per cent for FY23 from 9-10 per cent, as margins are expected to remain under pressure in H2FY23.
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“Large part of Buildings backlog of Rs 2,900 crore is likely to be executable in Q4FY23, providing incremental growth. ABL’s backlog stands at Rs14 900 crore (2.7 times TTM revenues) as on September 30. Given the strong bid pipeline, ABL is confident of receiving incremental order inflows of Rs 4,000-5000 crore in FY23 (YTD inflows: Rs1,900 crore),” Centurm Broking said on November 15.
It said higher debt levels and lower margins estimates while a sharp rise in working capital levels and margin underperformance to peers remain a key concern.
The completion of monetisation of ACL assets should also address overhang of future cash support to the portfolio from Ashoka Buildvon, it said.
