HDFC Securities has given Buy recommendation for Dilip Buildcon with a target price of Rs. 640 in its research report issued on Feb 15, 2021

HDFC Securities’ research report on Dilip Buildcon

Dilip Buildcon (DBL) reported in-line revenue at Rs 24.7bn (5%/28% YoY/QoQ). However, APAT beat stood at 11% owing to better-than-expected EBITDA margin. DBL has won orders worth Rs 158bn in FY21 till now, taking the order book to Rs 261bn (~3x FY20 revenue). While NWC days increased marginally from 101 days to 104 days in 3QFY21, net debt remained stable at Rs 34bn. The company unveiled its 5-year strategy to achieve 15-20% top-line growth by focusing on diversification and churning the capital by monetising the assets.


We maintain BUY on DBL, with a target price of Rs 640/sh, given its (1) diversified and robust order book of Rs 256bn and (2) continued focus on asset recycling. We have valued the EPC business at 10x Dec-22E EPS and HAM at 1x P/BV.