Dilip Buildcon - The best-in-class execution!

(LTInvestor) #164

Agree on the revenue share. But DBL + other EPCs never went down for fundamentals. Purely sentiments + midcap massacre. Any clear win for BJP in MP will help sentiments part.

(himanjim) #165

Ratings update: http://www.careratings.com/upload/CompanyFiles/PR/Dilip%20Buildcon%20Limited-12-12-2018.pdf

main issues are rise in debt, increasing capital intensity compared to peers due to ownership of sizable equipment fleet, tense lending environment

(himanjim) #166

Long-term rating downgraded to ‘CRISIL A/Stable’ ; short-term rating reaffirmed


near full utilisation of bank limits, no mobilization advance for the projects leading to high working capital requirement

(skg) #167

Does anyone think this rating downgrade will impact DBL in long run? I think full utilization of bank limit might be for short term until DBL get advance from NHAI. Thoughts?

(skg) #168

Good results posted by Dilip Buildcon for Q3 FY19

  1. Revenue increased by 28% as comparative to Q3 FY18
  2. EBITDA increased by 27%
  3. Profit after tax increased by 26%

Overall results are good. Only concern is 25% pledging made by shareholders. Did anyone know more detail about it?

(paraa) #169

They have mentioned in the latest investor presentation that
Shares Pledged against Fund based facilities 85,05,000 8.22%
Shares Pledged against Non-fund based facilities 1,77,54,720 17.16%

They had earlier pledged less than 10% of their shares as a collateral but as stock prices started falling,they had pledge more to maintain the margin.Promoters hold 75% in the company and i believe it would get reduced as the stock price goes up.

(skg) #170

Thanks. I didn’t realize that pledge % is increased due to fall in market price. Still learning about these things. I am not sure why stock price is going down and stock is in 6 PE considering DBL has good order book and ROE/ROCE of >20%. Only risk I am seeing with DBL is their association with BJP govt and pledging. Not sure if govt changes(if it happens), will it impact DBL? Budget for Pradhan Mantri Gram Sadak Yojana has been increased from 15,500 cr to 19,000 cr. So I hope DBL will get more projects in upcoming months and their order book will keep growing. Anyone see any other risk with DBL which I am missing above?

Disc- invested

(paraa) #171

Market is valuing all road stocks pretty badly… It feels the elections are a big political risk. Also the road construction businesses are at best,medium quality businesses as lot of things are dependent on factors outside its control (interest rates, longevity of order book, land acquisition issues,political bias etc)… In my opinion companies which manage the things which are in its control (pace of execution, debt, prudent bidding) will do well as India needs road infrastructure and there are few companies who have the balance sheet to do it across India.

(Pratik--Patel9) #172

May be the market has priced in the possibility of non BJP coalition government. But considering the latest developments related to Balakot air attack and mood of people, the chances of BJP has only increased.
At this valuation of 8 pe, I am tempted to take a small but meaningful position here.