Nirmal Bang - Ashoka Buildcon- Initiating Coverage- 27 June 2013

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Deepak Vaishnav

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Jun 27, 2013, 4:29:48 AM6/27/13

i,

Initiating Coverage
Ashoka Buildcon
BUY
CMP: Rs182
Target Price: Rs264
Upside: 45%
Tolling Hard
We have assigned a Buy rating with a target price of Rs264 to Ashoka Buildcon (ABL), a premier toll road operator having BOT (Build, Operate, Transfer) road asset portfolio comprising 16 projects worth Rs83bn. We like the integrated business model of ABL which captures the entire value chain and provides strong project execution capability and full control over the costs and timeline. We believe the stock provides a good investment opportunity considering the following: 1) Robust growth likely in BOT toll revenue with a CAGR of 47% over FY13-FY15E, 2) Scalability factor in the business model post investment by a private equity firm (SBI-Macquarie), 3) Potential growth in the EPC (Engineering, Procurement and Construction) segment, and 4) Attractive valuation.

Amit Srivastava
Sr Research Analyst
Nirmal Bang Institutional Equities

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