This Stock To 'Buy' For 14.7% Upside, In 12 Months: HDFC Securities

Brokerage firm HDFC Securities has recommended Dilip Buildcon's (DBL) stocks to buy with a potential upside of 14.7%, within a target period of 12 months.

Target Price

The Current Market Price (CMP) of Dilip Buildcon is Rs. 629. The brokerage firm has estimated a Target Price for the stock at Rs. 722. Hence the stock is expected to give a 14.7% return, in a Target Period of 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 629
Target Price	Rs. 722
1 year return	14.70%

Company performance

Dilip Buildcon reported a revenue of Rs. 21.5bn (+12%/0% YoY/QoQ, 28% miss); while its EBITDA margin stood at 10.6%, contracted sharply, on account of under-absorption of fixed overheads and elevated raw material prices. HDFC states, "NHAI restriction on bidding lifted; OI of Rs. 80-100bn in FY22: The order book (OB), as of Sep-21, stood at Rs. 231bn, with Rs. 80-100bn expected in FY22. 47.15% of the OB is now road projects and this is likely to increase, following the lifting of restriction from bidding NHAI projects."

Comments by HDFC Securities

The company has shown weak financial performances, and missed estimates. The company had faced slow execution in large projects. According to HDFC, "High commodity price volatility has led to price escalation coverage reducing to 50-60% in EPC projects and 40% in EPC HAM. We maintain BUY, however, given the margin pressure and cut our EPS along with TP to Rs. 722/sh."

About the company

As one of the fastest-growing Engineering, Procurement, and Construction (EPC) company in India, DBL is aligning with India's infra-growth vision. According to the company, "DBL's success is enabled by its powerful execution capability, a proprietary fleet of 12,903 machinery and vehicles and its 37,793 employees using cutting edge technology and innovation, such as Drone Monitoring, GPS Monitoring and Safety Management."

Disclaimer

The above stock has been picked from the brokerage report of HDFC Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

(Also read: Sharekhan Recommends This Stock To Buy For 21.3% Upside, In 1 Year)