Ashoka Buildcon targets order inflow of Rs 50 billion

Ashoka Buildcon is planning to capture the strong growth opportunity in roads.

The company has been the biggest beneficiary of an uptick in orders in roads, due to its dual business exposure and access to Rs 14 billion of cash inflows over FY2016-18E. The company is targeting order inflow of Rs 40-50 billion in the roads segment and Rs 5-8 billion in the power segment.

Ashoka Buildcon expects a higher top line in the next year, with revenues also growing by more than 10 per cent, due to the toll income. ABL has an order book of around Rs 4,100 crore. According to a report by Prabhudas Lilladher and HDFC Securities, the traction in the road sector continues to be healthy for ABL with the National Highways Authority of India (NHAI) already awarding 1,000 km till date since AprilÂ’16; thereÂ’s a further 2,300 km of tender coming up for bidding.

With an improved order book, industry analysts expect EPC revenue to grow by 18 per cent CAGR over FY16-18E.

Financials
The firm recently raised Rs 500 crore via QIP. The funds will be used for bidding for new projects and developing a few existing projects. Ashoka Buildcon wants to maintain the rate of growth in the future with total revenue of Rs 1,795 crore for FY17.

The company’s income from BOT projects increased 47 per cent, driven largely by incremental revenues from the commissioning of the Sambalpur-Baragarh and Dhankuni-Kharagpur projects. Toll collections increased 10 per cent on a comparable basis (excluding the new projects) to Rs 190 crore. Most projects saw a toll rate hike of 5.5-6 per cent. This implies approximately 4 per cent increase in traffic, on an average

ACL, a subsidiary of Ashoka Buildcon, has an investment commitment by SBI Macquarie of Rs 800 crore; it has received a tranche of Rs 91 crore from SBI Macquarie, which led to aggregate investment of Rs 784 crore till date.

With 28 PPP projects, Ashoka Buildcon operates one of the highest numbers of toll-based BOT projects in India. Currently, it has an order book of Rs 3,200 crore for developing various highways and roads. The company has a Rs 3,500 crore balance order book in hand for 2016, around Rs 2,300 in the road sector, and power T&D is around Rs 1,200 crore.