Investors rediscovering price of stock: Ashoka Buildcon

Ashoka Buildcon stock has been rallying for the past two days. Paresh Mehta, CFO of the company believes investors are just rediscovering the price of stock. He says for the company it has been business as usual.

Our business is continuing as usual, projects are on line and EPC work is going well

Paresh Mehta

CFO

Ashoka Buildcon

Ashoka Buildcon , the infrastructure company that builds and operates roads and bridges in the country on a build, operate and transfer ('BOT') basis, has been rallying over the past two days and there doesn't appear to be any particular reason for the same.

Paresh Mehta, CFO of the company believes investors are just rediscovering the price of stock. He says for the company it has been business as usual. "Our business is continuing as usual, projects are on line and EPC work is going well," he adds.

The company currently has 18 highway projects out of which three are premium projects - Dhankuni-Kharagpur then Belgaum-Dharwad and Sambalpur - where premium rescheduling is possible. The overall debt on these three projects stands at Rs 2,300 crore, while the total debt on the book of the company stands at Rs 2800 crore. 

The company, however, has no plans of reducing its debt. Mehta explains: "These are project funding debt and once the projects are completed the debt will be freezed and serviced in due course."

According to National Highways Authority of India (NHAI)'s data, 32 stressed road projects will be eligible for premium rescheduling this year. Ashoka Buildcon plans to approach the NHAI soon. Mehta says he is waiting for some of the other players to decide on a strategy on how to give the proposal.

Premium rescheduling allows the already cash strapped highway developers to defer premium payment to NHAI if they don't have enough funds after servicing their debt and other obligations.

Ashoka Buildcon stock price

On April 10, 2014, Ashoka Buildcon closed at Rs 94.75, up Rs 4.75, or 5.28 percent. The 52-week high of the share was Rs 108.00 and the 52-week low was Rs 41.30.

The company's trailing 12-month (TTM) EPS was at Rs 5.85 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 16.2. The latest book value of the company is Rs 54.06 per share. At current value, the price-to-book value of the company is 1.75.

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