ASHOKA - Ashoka Buildcon Limited Share Price

In the Q4 FY'25 earnings call of Ashoka Buildcon Limited, management provided a positive outlook with key insights into the company's future direction. The highway segment outlook is strong, supported by the government's announcement of a Rs.10 lakh crore investment plan over the next two years, aimed at improving infrastructure. The National Highway Authority of India (NHAI) has successfully built 5,614 km of highways within the year and experienced a record capital spending of over Rs.2.5 lakh crores.

For the company's order book, as of March 31, 2025, it stood at Rs.14,905 crores, excluding Rs.795 crores in new orders received afterward. Management reported receiving two significant project orders: a Rs.311.92 crore substation from Maharashtra State Electricity Transmission and a Rs.568.86 crore project from Central Railway. The order book breakdown indicated that road and railway projects account for Rs.10,867 crores (72.9% of total orders).

Regarding financial performance, total income for Q4 FY'25 was Rs.2,012 crores, a decline from Rs.2,533 crores in Q4 FY'24, with an EBITDA of Rs.181 crores and a PAT of Rs.60 crores. For FY'25, total income was reported at Rs.7,188 crores, with a PAT of Rs.197 crores.

Management anticipates a revenue growth target of around 10% for FY'26, with order inflow expectations of Rs.10,000 to Rs.12,000 crores spread across various sectors. Debt levels are expected to decrease significantly due to asset monetization, with a target reduction of Rs.4,000 crores by the end of FY'26. They aim to maintain EBITDA margins around 10% for the upcoming fiscal year.

Overall, the management emphasizes a resilient growth trajectory and plans to focus on sustainable business practices while navigating the evolving infrastructure landscape in India.

Major Q&A from Ashoka Buildcon Q4 FY'25 Earnings Call

1. Question: Hardik Gandhi asked about the difference between the debt figures in the balance sheet and the presentation. Answer: I explained that the discrepancy arises as the presentation reflects external debt, while the balance sheet includes liabilities held for sale. As we clarified, our net debt has not significantly decreased on a consolidated basis, but certain assets and their related debts are being managed differently.

2. Question: Hardik Gandhi inquired about the impact of geopolitical changes on government infrastructure spending and overall order generation. Answer: I reassured that NHAI's activity remains strong despite geopolitical issues. We anticipate robust bidding in the upcoming quarters, with expected new orders between INR 2,000-3,000 crores in Q1-Q2, significantly increasing later in Q3-Q4.

3. Question: Yashovardhan Banka queried about anticipated interest cost savings related to reduced borrowings. Answer: I indicated our typical interest rate is around 9-9.5%. While our external debt remains stable for now, we expect substantial reductions in interest costs post-monetization of assets, particularly by Q3-Q4.

4. Question: Vaibhav Shah sought clarity on the revised revenue growth guidance for FY'26 and its impact on EBITDA margins. Answer: I informed that the guidance is adjusted to a 10% growth owing to delays in project commencement. Our EBITDA margins should improve to 10% plus as we incorporate new project orders into our portfolio.

5. Question: Jainam Jain asked about the expected order pipeline for different sectors. Answer: I forecasted a competitive pipeline including INR 2,000 crores for Railways, INR 7,000 to 8,000 crores for Roads, and additional projects in water and buildings, reaching a total target of INR 10,000 to 12,000 crores.

6. Question: Parikshit Gupta wanted information on the financial implications of the BOT and HAM projects monetization. Answer: I clarified that we expect to generate an enterprise value of INR 5,700 crores from BOT projects, with INR 2,500 crores as net inflows to Ashoka, which will help reduce our debt substantially while enhancing future cash flows.

7. Question: Hardik Gandhi asked for debt reduction forecasts for the coming year. Answer: I confirmed our expectation that approximately INR 4,500 crores of debt will be reduced from our balance sheet by the end of FY'26, driven mainly through successful monetization of assets.

8. Question: Bhavin inquired about the cash flow and working capital management for upcoming projects. Answer: I noted that while our working capital needs might remain high due to project scales, we anticipate achieving a positive cash flow from operations in FY'26, as our operational cycle will stabilize following the monetizations.

Each answer succinctly captures the essence of the discussions, with relevant figures and forecasts included where applicable.