Prabhudas Lilladher has maintained 'Buy' on Ashoka Buildcon (ASBL) with target price of Rs 188 as against current market price of Rs 163 in its report.

Commenting on the investment rationale, the broking firm said, "ASBL reported sales of Rs 8.03 billion, up 32% YoY (PLe: Rs 5.26 billion).Revenue from the EPC as well as BOT segment was up 29% YoY to Rs 6.7 billion and up 47% YoY to Rs 1.2 billion, respectively. EBITDA was up 34% YoY to Rs 1,713 million (PLe:Rs1.2 billion). EBITDA margin was up 30bps YoY to 21.3% (PLe: 21%). Interest  expense increased 141% YoY to Rs 944 million due to capitalization of Sambhalpur and Dhankuni project. Adj. PAT stood at Rs 378 million (PLe: Rs 135 million), up 179% YoY.

The company highlighted that in the road sector, ~Rs 400 billion worth tenders are at various stages of bidding (NHAI and states) over the next 2‐3 months and ASBL expect to participate in tenders worth Rs 200 billion.

The stock is trading at 9xFY17 core earnings. We expect the EPC segment to deliver Sales and PAT CAGR of 16% and 21%, respectively, over FY15‐17E and expect toll collection to grow at a CAGR of 114% over FY15‐ 17E. We believe limited equity commitment in the current portfolio, funding from SBI Macquarie and a well‐funded balance sheet makes it one of the beneficiaries of the upcoming opportunities in the road sector. We maintain 'Buy' on the stock."

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