Ashoka Buildcon (ABL) reported 4% y-o-y contraction in Q4FY20 revenue as COVID-19 adversely impacted execution. Ebitda margin surged 440bps y-o-y to 18.2% aided by one-offs; consequently, adjusted profit rose 56% y-o-y. Toll revenue remained weak with traffic declining y-o-y across all projects. Order book fell to ~ Rs 90 bn (book-to-bill of 2.4x). Incremental order wins and monetisation in Ashoka Concessions (ACL) will be key stock catalysts, in our view.
We revise up FY21/22e earnings 124%/209% due to higher-than-expected margin & other income and debt reduction in Q4FY20. However, the looming slowdown in the economy and weak revenue visibility compel us to slash earnings multiple to 4x from 6x. Maintain Buy with revised SOTP-based TP of Rs 84 ( Rs 67 earlier).
