Ashoka Buildcon climbs 4% on emerging lowest bidder for Rs 1,669 crore project

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Shares of Ashoka Buildcon rose 4 per cent in Wednesday’s trade after the company said it has emerged as the lowest bidder (L-1) for a project with a bid price of Rs 1,668.50 crore. Following the development, the scrip gained 3.58 per cent to hit an intraday high of Rs 79.55 on the BSE. The stock is up 15.3 per cent from its May low of Rs 69.

Ashok Buildcon said that the company had submitted a bid for the project to the National Highways Authority of India (NHAI). This was a request for proposal for construction of 6-lane elevated corridor along with development of existing 4-lane road at ground level from Aroor to Thuravoor Thekku section of NH-66 under Bharatmala Project in the State of Kerala on EPC mode.

“The company has emerged as the lowest bidder (L-1) for the project with a bid value of Rs 1,668.50 crore. This announcement has been made in accordance with Regulation 30 of SEBI (LODR) 2015,” it said.

Ashoka Buildcon recently raised its revenue guidance to 25-30 per cent growth in FY23, as compared to the earlier guidance of 15-20 per cent growth, citing strong execution (43 per cent YoY) in H1 Seeing it. However, it cut its margin guidance for FY23 to 9-9.5 per cent from 9-10 per cent as it expects margins to remain under pressure in the second half of FY23.

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“Major portion of Rs 2,900 crore building backlog is likely to be executable in Q4FY23, providing incremental growth. ABL’s backlog stands at Rs 14 900 crore (2.7x TTM revenue) as on 30 September. Given the strong bid pipeline , ABL is confident of securing incremental orders of Rs 4,000-5,000 crore in FY23 (YTD inflow: Rs1,900 crore),” Centurm Broking said on 15 November.

It added that higher debt levels and lower margin estimates are expected while sharp increase in working capital levels and margin performance vis-à-vis peers remain key concerns.

It added that with the completion of monetization of ACL assets, the portfolio should resolve the problem of cash support of Ashoka Buildcon going forward.

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