According to reports from Moneycontrol, Prabhudas Lilladher has issued a 'BUY' rating on Ashoka Buildcon with a target price of ₹183 in its research report dated February 03, 2026. The brokerage firm's recommendation comes despite the company's weak performance in Q3FY26 and 9MFY26, with standalone revenue declining 18% YoY and 21% YoY respectively. However, Nirmal Bang has taken a more cautious stance, holding a 'Hold' rating and adjusting their target price to ₹152, citing management's revised guidance and sectoral headwinds.
As reported by Moneycontrol, Ashoka Buildcon maintains a healthy order book of ₹159 billion, representing 2.7x trailing twelve months revenue. The order book is well diversified, with roads and railways accounting for approximately 65%, while power transmission and distribution contributes 32%. During 9MFY26, order inflows stood at ₹50 billion, with management expecting additional ₹30-35 billion inflows in Q4FY26. This robust pipeline provides considerable medium-term revenue visibility, with management guiding for a return to revenue growth in FY27E.
According to the report, the company's balance sheet has undergone significant improvement following the monetization of 5 BOT assets. Consolidated debt reduced from approximately ₹49 billion in September 2025 to ₹27 billion by December 2025. Another tranche of HAM asset monetization is expected to lower net debt to ₹2-3 billion by March/April 2026. The company is also executing ongoing asset sales including four HAM assets expected by March 2026 for over ₹750 crore and two more by June 2026 for ~₹400 crore, which is set to drastically improve financial flexibility and reduce interest expenses that previously constituted 12.41% of operating revenues.
Despite the standalone revenue decline of 18% YoY in Q3FY26, attributed to slower execution and potential deferral of revenue recognition, Ashoka Buildcon has demonstrated significant margin improvement. EBITDA margins expanded to 11.3% in 9MFY26, while consolidated net profit surged substantially in Q3FY26, largely driven by asset monetization gains. The company has also recalibrated its FY26 revenue guidance downwards, now expecting an 8-10% year-on-year decline, a departure from earlier expectations of flat performance. However, this short-term revenue pressure contrasts with the company's strategic focus on improving operational efficiency.
The stock currently presents a compelling valuation, trading below its book value of approximately ₹150 per share. Ashoka Buildcon's trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio is notably low, reported around 1.50x to 4.09x by various sources, indicating significant undervaluation relative to its earnings and peers. This valuation is particularly attractive when contrasted with its strong Return on Equity (ROE), which stands above 43%. Competitors like NCC Ltd trade at a P/E of around 11.5x, and PNC Infratech at approximately 13.9x. The Indian infrastructure sector is poised for growth, buoyed by increased government capital expenditure, with national highway expansion and railway development as key drivers for FY26.
