Dilip Buildcon shares zoom 20% to hit upper circuit; here's what brokerage & tech charts suggest
Dilip Buildcon share price: The counter's 14-day relative strength index (RSI) came at 75.36. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 11.15. It has a price-to-book (P/B) value of 0.54.
- May 30, 2023,
- Updated May 30, 2023 2:06 PM IST
Shares of Dilip Buildcon rose sharply in Tuesday's trade amid heavy volumes. The stock surged 20 per cent to hit its upper price band of Rs 202.95 against a previous close of Rs 169.15. Around 3.73 lakh shares changed hands today on BSE, which was more than 10 times compared to the two-week average volume of 37,000 shares. Turnover on the counter stood at Rs 7.13 crore, commanding a market capitalisation (m-cap) of Rs 2,967.43 crore.
The company's net loss widened by 31.80 per cent on a year-on-year (YoY) basis. It reported a consolidated net loss of Rs 73.16 crore in the March 2023 quarter (Q4 FY23) as compared to Rs 55.51 crore a year earlier. However, total income rose by 6.84 per cent to Rs 2,851.39 crore in Q4 FY23 from Rs 2,668.90 crore in the year-ago period.
Brokerage AnandRathi has assigned a 'Buy' call on the counter with a one-year target price of Rs 255. The suggested target is just 2.26 per cent lower than Dilip Buildcon's 52-week high of Rs 260.75, hit on August 2 last year.
"De-levering and a comforting pace of execution were two key notables from Dilip's Q4 FY23. With around Rs 220 crore, sequentially, lower net debt in Q4 to Rs 2,380 crore, FY23 de-levering was at Rs 360 crore. Operating profitability was subpar, but the progressively depleting margin-drag older order book and rising contribution from recent orders suggest potential. Recognising that aggressive revenue growth could necessitate further working capital, it looks to grow in a measured manner. FY24 inflow guidance too appears to conform to this. This, and continuing efforts to prune working capital cycle and the restrained guidance to capex suggest cash flow generation is still a priority. Monetisation efforts to continue," the brokerage stated.
"Though management sees margins to scale up to 13-14 per cent in FY24, and we have baked in around 11.90 per cent for FY24 and 12.40 per cent for FY25, we do not rule out a risk to our estimates. Consequently, to build in this risk, we lower our valuation multiple for the construction division to 4x (from 5x earlier). Asset valuations have been adjusted for the recent stake transfers to Shrem InvIT and revised equity infusion schedule. The asset-ownership business has been considered at 0.8x equity investments envisaged by FY25," AnandRathi further mentioned.
On the technical setup, the stock was last seen trading higher than the 5-day, 20-, 50- and 100-day moving averages but lower than the 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 75.36. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 11.15. It has a price-to-book (P/B) value of 0.54.
"Reduction in debt coupled with improved full-year FY23 results has led to a sharp uptrend in Dilip Buildcon stock price with daily resistance at Rs 205.50. Investors should be booking profits at current levels and wait for a dip near support of Rs 180 to initiate fresh buy positions for better returns," said AR Ramachandran from Tips2trades.
The scrip has an average target price of Rs 234, Trendlyne data showed, suggesting a potential upside of 15 per cent. It has a one-year beta of 1.15, indicating high volatility on the counter.
Dilip Buildcon is one of the leading full-service infrastructure companies with construction capabilities in roads and bridges, mining water, sanitation, sewage, dams, irrigation, industrial, commercial and residential buildings.
Meanwhile, Indian equity benchmarks traded higher in afternoon deals today, led by gains in consumer goods and private lenders.
Also Read | Adani Ports, ITC, Patanjali Foods, Brightcom group, other stocks to watch on May 30, 2023
Shares of Dilip Buildcon rose sharply in Tuesday's trade amid heavy volumes. The stock surged 20 per cent to hit its upper price band of Rs 202.95 against a previous close of Rs 169.15. Around 3.73 lakh shares changed hands today on BSE, which was more than 10 times compared to the two-week average volume of 37,000 shares. Turnover on the counter stood at Rs 7.13 crore, commanding a market capitalisation (m-cap) of Rs 2,967.43 crore.
The company's net loss widened by 31.80 per cent on a year-on-year (YoY) basis. It reported a consolidated net loss of Rs 73.16 crore in the March 2023 quarter (Q4 FY23) as compared to Rs 55.51 crore a year earlier. However, total income rose by 6.84 per cent to Rs 2,851.39 crore in Q4 FY23 from Rs 2,668.90 crore in the year-ago period.
Brokerage AnandRathi has assigned a 'Buy' call on the counter with a one-year target price of Rs 255. The suggested target is just 2.26 per cent lower than Dilip Buildcon's 52-week high of Rs 260.75, hit on August 2 last year.
"De-levering and a comforting pace of execution were two key notables from Dilip's Q4 FY23. With around Rs 220 crore, sequentially, lower net debt in Q4 to Rs 2,380 crore, FY23 de-levering was at Rs 360 crore. Operating profitability was subpar, but the progressively depleting margin-drag older order book and rising contribution from recent orders suggest potential. Recognising that aggressive revenue growth could necessitate further working capital, it looks to grow in a measured manner. FY24 inflow guidance too appears to conform to this. This, and continuing efforts to prune working capital cycle and the restrained guidance to capex suggest cash flow generation is still a priority. Monetisation efforts to continue," the brokerage stated.
"Though management sees margins to scale up to 13-14 per cent in FY24, and we have baked in around 11.90 per cent for FY24 and 12.40 per cent for FY25, we do not rule out a risk to our estimates. Consequently, to build in this risk, we lower our valuation multiple for the construction division to 4x (from 5x earlier). Asset valuations have been adjusted for the recent stake transfers to Shrem InvIT and revised equity infusion schedule. The asset-ownership business has been considered at 0.8x equity investments envisaged by FY25," AnandRathi further mentioned.
On the technical setup, the stock was last seen trading higher than the 5-day, 20-, 50- and 100-day moving averages but lower than the 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 75.36. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 11.15. It has a price-to-book (P/B) value of 0.54.
"Reduction in debt coupled with improved full-year FY23 results has led to a sharp uptrend in Dilip Buildcon stock price with daily resistance at Rs 205.50. Investors should be booking profits at current levels and wait for a dip near support of Rs 180 to initiate fresh buy positions for better returns," said AR Ramachandran from Tips2trades.
The scrip has an average target price of Rs 234, Trendlyne data showed, suggesting a potential upside of 15 per cent. It has a one-year beta of 1.15, indicating high volatility on the counter.
Dilip Buildcon is one of the leading full-service infrastructure companies with construction capabilities in roads and bridges, mining water, sanitation, sewage, dams, irrigation, industrial, commercial and residential buildings.
Meanwhile, Indian equity benchmarks traded higher in afternoon deals today, led by gains in consumer goods and private lenders.
Also Read | Adani Ports, ITC, Patanjali Foods, Brightcom group, other stocks to watch on May 30, 2023