Ashoka Buildcon is a Construction Company primarily focused on the Road Segments.Given India’s huge demand for infrastructure and roads,the company is growing at 50%+ growth rates.However the quality of management is suspect given tax seizures,criminal cases and related transactions.The valuation of the company is also not cheap at around 22-23x P/E and around 3x P/B.The Company has grown at an excellent rate while maintaining a Net Margin of 8-10%.
Summary
While I like the Road Sector in India and the Company is a well positioned company in this sector,I hate to invest in a company where Management seems untrustworthy.The valuation of the company is not exactly cheap either without being very expensive at around 20x.However if something bad happens Macro wise then expect the stock price to plummet .There are other companies in the Road Sector like IL&FS which operates in the same segment but has a better management trust quotient.