Target: ₹263

CMP: ₹230.30

Dilip Buildcon Q2-FY23 EBITDA beat our estimates by 17 per cent led by improved EBITDA margins at 12 per cent vs 8 per cent q-o-q. Due to execution of projects which did not have price escalation clause, margins have been weak from the last 3-4 quarters.

The company expects margin to further recover as 95 per cent of legacy order is executed by H1-FY23. In line with our expectations, the company guides EBITDA margin of 12-13 per cent for FY23 and 14 per cent+ for H2. Order book of ₹26,300 crore provides visibility of 3x TTM revenue.

Net debt is reduced slightly in Q2-FY23 (₹200 crore), further reduction of ₹400-500 crore is expected, driven by asset monetisation in FY23. Stock catalyst remains uptick in margin and encashment of InvIT units.


Order inflow for the quarter stood at ₹2,800 crore, and till date it stands at ₹6,800 crore. More than 50 per cent of order inflow is from sectors other than roads. . Order book stands at ₹23,600 crore, of which ₹22,000 crore is executable. The company has currently bided for projects worth ₹80,000 crore, of which HAM/EPC stand at 75 per cent/25 per cent. The company has a strike ratio of 11-12 per cent.