Shares of Dilip Buildcon slipped nearly 6 percent intraday on August 6 as brokerages cut the price target on the stock after disappointing Q1 numbers reported by the road developer.
The stock shed 57 percent of its value in the last one year. It was quoting at Rs 382, down Rs 8.25, or 2.11 percent on the BSE at 1222 hours IST.
Citi has a buy call on the stock but slashed price target by 21 percent to Rs 514 from Rs 654 earlier as company's June quarter profit fell 51 percent year-on-year on lower sales.
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Hence the brokerage cut its EPS estimates by 9-12 percent over FY20-22 on higher depreciation & interest costs.
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Revenue from operations during the quarter fell by 3.4 percent to Rs 2,436.44 crore compared to year-ago.
Citi said bright spot is the cash flow from operations. "Company is confident of meeting the sales guidance of Rs 10,500-11,000 crore and its backlog provides a decent visibility," it added.
Dilip Buildcon's net order book as of June 2019 stood at Rs 19,029 crore, of which 74.35 percent is constituted by roads and highways project.
Kotak Institutional Equities also maintained its buy rating on the stock, but slashed price target to Rs 665 from Rs 735 earlier after lowering order inflow estimates for FY20.
"Given uncertainty related to NHAI ordering and timing of sale of DBL's 12 HAM projects, we consider it prudent to lower our ordering estimate for FY20 by 10 percent. This yields a similar 10 percent cut in our fair value," the brokerage said.
It further said Q1FY20 comforted on the ability of Dilip Buildcon to delever despite a contracting topline, investment in HAM projects and limited cash flow support from asset sale.
With most projects having received appointed date, Dilip Buildcon would likely achieve around 10 percent revenue growth guidance, it added.
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