Ashoka Buildcon (ASHOKA)

FairStock Score: 37/100 — MIXED

Score breakdown: P/E: 3/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Trades at ₹135.85 against book value of ₹140.66, giving a P/B of 0.97 and modest asset downside support.
• Reported P/E of 3.49 is optically cheap, and debt/equity of 0.44 is moderate for a construction firm.
• Promoter holding of 54.48% means insiders have substantial skin in the game.
• ROCE of 39.70% suggests efficient capital usage at the operating level, though earnings quality needs scrutiny.

Concerns

• Sales growth is -23.48% and profit growth is -71.23%, showing severe operational deterioration.
• Piotroski F-Score of 3/9 indicates weak financial health and poor earnings quality.
• Latest quarterly net profit of ₹2,111 Cr exceeds sales of ₹1,827 Cr, implying a likely non-recurring or extraordinary gain that cannot be used for normal valuation.
• ROE of 8.52% is mediocre and dividend yield is 0.00%, so shareholders are not being paid to wait.

AI Analysis

I am always drawn to a low price-earnings multiple, but Graham taught me that price is what you pay and value is what you get. Ashoka Buildcon shows a headline P/E of 3.49 and a P/B of 0.97, which looks like an investment bargain. But the income statement tells a different story: sales have fallen 23.48% and profit has collapsed 71.23%. A Piotroski score of 3/9 is a warning sign, not an invitation. The latest quarter reports net profit of ₹2,111 Cr against sales of ₹1,827 Cr. That is impossible as ordinary operating income; a construction company cannot earn more than its revenue unless there is a large non-repeating event. I cannot trust that number in my valuation. The balance sheet gives some comfort: book value is ₹140.66 and the share price is ₹135.85, so I am buying at a small discount to stated assets. Debt/equity of 0.44 is moderate, and promoter holding of 54.48% ensures promoters have skin in the game. Yet ROE is only 8.52%; if I buy at book, my return is a mediocre single-digit number. ROCE of 39.70% looks far healthier, but it conflicts with the weak F-score and declining profits, so I suspect accounting noise. With zero dividend, I am not even being paid to wait. Civil construction in India is competitive and cyclical; Ashoka has no obvious moat. In this situation I rely less on earnings and more on balance sheet support. This feels like an asset play, not a predictable compounder. I would wait for evidence of real earning power and cash flow before using my capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer