Ashoka Buildcon Secures ₹2,791 Crore NHAI Order, Shares Surge

Ashoka Buildcon Ltd., a prominent player in infrastructure and construction, secured orders worth ₹2,791 crore from the National Highways Authority of India (NHAI). The contracts pertain to two major projects in West Bengal under the Hybrid Annuity Model (HAM), boosting the company’s portfolio.

• Project 1: Development of a 4-lane Economic Corridor along NH 116A from Kharagpur to Chandrakona Ghatal Road Crossing (₹1,400 crore excluding GST).
• Project 2: Construction of a 4-lane Economic Corridor along NH 116A from Bowaichandi to Guskara Katwa Road (₹1,391 crore).

These orders are expected to strengthen the company’s order book, already valued at ₹11,100 crore as of September 2024.

Financial Performance and Guidance

The company’s Q2 FY25 results reflected challenges from the monsoon season, leading to lower project execution. Key figures include:

• Revenue: ₹1,400 crore (down 9% YoY).
• EBITDA: ₹120 crore (down 17% YoY).
• EBITDA Margin: 8.4% (contracted by 80 basis points YoY).
• PAT: ₹48.8 crore.

Interest costs surged 34% YoY due to higher debt levels. Consequently, the company revised its revenue growth guidance for FY25 to flat YoY from the earlier forecast of 15-20%. However, inflow guidance remains robust at ₹10,000–12,000 crore for FY25, with ₹7,100 crore already achieved.

Focus on Asset Monetisation and Debt Reduction

Ashoka Buildcon has been proactive in monetising assets. The sale of five BOT assets at an equity valuation of ₹2,540 crore is expected to generate net proceeds of ₹860 crore, which will help reduce debt. Additional asset monetisation plans are on the horizon.

Ashoka Buildcon’s Share Performance

On November 19, 2024, Ashoka Buildcon’s share price rose by 1.78%, closing at ₹233. The stock opened at ₹237, reached a high of ₹245, and touched a low of ₹232.25 during the session. Despite being 17% below its recent peak of ₹284.75, the recent rally reflects investor optimism fueled by the NHAI order wins.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.