Accumulate Dilip Buildcon Ltd For Target Rs. 520 by Prabhudas Liladhar Capital Ltd
Record order book drives FY27 recovery visibility
Dilip Buildcon (DBL) closed FY26 with a muted operational performance due to weak execution, with standalone revenue declining ~22% YoY to Rs70bn; however, the company enters FY27 with significantly improved visibility supported by record order inflows of Rs185.5bn and a multi-year high order book of Rs288.3bn (~4x FY26 revenue). The order book is well diversified across mining, roads, renewables, irrigation and transmission. Management has guided for 30–40% YoY standalone revenue growth in FY27 with EBITDA margins of 11–12%, supported by execution ramp-up across EPC, mining and new energy verticals. Alongside this, DBL continues to accelerate its assetlight “DBL 2.0” strategy through InvIT monetisation, with pending HAM transfers expected to materially strengthen balance sheet liquidity and support its target of a near net-debt-free standalone balance sheet by FY28. The company is also scaling into solar and transmission assets through a capital-efficient structure with limited balance sheet equity commitment, while maintaining selective annual order inflow guidance of Rs 100–120bn, providing revenue visibility extending toward FY30. We model DBL’s revenue CAGR at 29% over FY26–28 and PAT CAGR at 60%, with the stronger PAT growth driven by factoring in dividend income from the InvIT. We retain our Accumulate rating, assigning 8x PER to the standalone FY28E EPC business and 5x FY28E EV/EBITDA (earlier 4x) to the coal MDO segment, while valuing investments at book value. This results in a revised target price of Rs 520/share (earlier Rs 478)
Standalone Financial performance:
DBL reported muted performance in Q4FY26, reflecting lower execution with revenue down ~20% YoY to ~Rs18bn, while EBITDA is at ~Rs1.9bn down -5% YoY, while PAT (adjusted for exceptional items) was up ~95% YoY. On annual basis, revenue declined ~22% YoY to ~Rs70bn, with EBITDA margin slightly improved to 10.50% YoY (10% in FY25) while PAT (adjusted for exceptional items) rose by 34.3% YoY aided by exceptional gains from HAM asset transfers. Management guided FY27 standalone revenue growth of 30–40% YoY off the FY26 base, underpinned by a healthy order book of ~Rs280bn. EBITDA margins are expected to sustain at 11–12% on a standalone basis, with new order inflow guidance of Rs100–120bn for FY27 providing revenue visibility extending to FY30.
Order Book & FY27 Execution Ramp-Up:
DBL’s order book stands at Rs288.3bn - a multi-year high and up sharply from Rs149.2bn in FY25 with its order inflows at Rs185.5bn exceeding their initial guidance of Rs150bn. The book is well-diversified across 11 verticals with mining (20%), roads (19%), renewable energy (18%), irrigation (16%) and power transmission (6%) as key segments; notably, only 3-year rolling MDO orders worth Rs51.5bn are included, masking the true long-tenure visibility of ~Rs965.7bn in total MDO balance contract value. Management guided FY27 new order inflow of Rs100–120bn for, extending revenue visibility to FY30.
Strategy / DBL 2.0 Company has restructured into three verticals:
EPC, MDO, and Assets. EPC is no longer a volume-driven centre but an incubation engine for long-duration asset platforms. By FY29, management targets ~75% of profits from long-term assets (MDO + InvIT) and only ~25% from EPC — a fundamental business model shift away from cyclical contracting.
Please refer disclaimer at https://www.plindia.com/disclaimer/
SEBI Registration No. INH000000271Accumulate Paradeep Phosphates Ltd For Target Rs.141 by Prabhudas Liladhar Capital Ltd
