Ashoka Buildcon: Target Price Revised to Rs 152 by Prabhudas Lilladher

Ashoka Buildcon's Q4FY26/FY26 Performance Disappoints, But Management Sees Recovery in FY27

Ashoka Buildcon's research report by Prabhudas Lilladher has revealed a subdued performance in the company's Q4FY26/FY26, with standalone revenue declining by 10% year-over-year (YoY) and 18% YoY. This decline can be attributed to slower execution, which management expects to normalize in the coming year. The research report also highlights the company's expectations for a recovery in FY27, with around 20% revenue growth and EBITDA margins improving to 9.5-10.5%.

The company's FY26 order inflow stood at INR 66 billion, while its order book remains diversified at around INR 153 billion, equivalent to 2.6 times the trailing twelve months (TTM) revenue. This diversified order book provides medium-term revenue visibility, with around 66% exposure to roads and railways, and 20% to power transmission and distribution (T&D).

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In order to strengthen its balance sheet, Ashoka Buildcon is expected to complete its highway asset monetization (HAM) program, which is expected to generate INR 11-12 billion in proceeds. This amount is sufficient to materially reduce the company's standalone debt, which currently stands at around INR 11 billion.

Outlook and Recommendations

Following the weak Q4 results, Prabhudas Lilladher has cut FY27E/FY28E earnings per share (EPS) estimates by 11% and 5%, respectively. Additionally, the target price (TP) has been lowered to INR 152. Despite near-term execution challenges, the research firm retains a BUY rating on the stock, citing its valuation support due to the company trading below book value.