Feb 17, 2017 02:48 PM IST | Source: Moneycontrol.com

Buy Ahluwalia Contracts; target of Rs 353: Systematix

Systematix is bullish on Ahluwalia Contracts has recommended buy rating on the stock with a target price of Rs 353 in its research report dated February 17, 2017.

Buy Ahluwalia Contracts; target of Rs 353: Systematix

Systematix's research report on Ahluwalia Contracts

Ahluwalia Contracts (AHLU) revenue grew 11.9% yoy to Rs 3.6bn, led by recommencement of two Patna projects. OPM expanded 82bps yoy to 13.2%. The lease rental income from Kota BOT project was at Rs 3.2mn/qtr and management expects this to increase to Rs 5mn/month in 1HFY18.

Outlook

But we revise upwards PAT estimates for FY17e-19e by 1-6% to account for healthy EBITDA margins of 13.6% and lower interest cost due to continuous debt (Rs 980mn) reduction from here on. We maintain a Buy rating, with a revised target price of Rs 353, based on 18x Sept ’18 earnings (Rs 340 earlier).

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