Ahluwalia Contracts has target of Rs 260: S Ranganathan

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Ahluwalia Contracts has target of Rs 260: S Ranganathan

Ahluwalia Contracts has target of Rs 260, says S Ranganathan, Head Of Research, LKP Shares.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See previous views by S Ranganathan See what other Experts & Brokerages are saying about Ahluwalia See messages about Ahluwalia Ahluwalia BSE | NSE 31/05/12 Are Mutual Funds betting on Ahluwalia?

Ahluwalia Contracts has target of Rs 260, says S Ranganathan , Head Of Research, LKP Shares.

Ranganathan told CNBC-TV18, "Ahluwalia Contracts is a visible name in construction and we are basically looking at riding the macro environment in the construction space. Especially in urban infrastructure where we believe there are very good opportunities for Ahluwalia going forward."

He further added, "Last year was a good year for them and the Q4 of last year you did witness steep margin contractions where the EBITDA margins almost fell below 7%, which we believe is the bottom and we should see an up tick starting Q1 this year. So the story here is very good RoI of about 38%, free cash flow positive company and valuations comforting at 9.5 times FY12 projected earnings. We believe that this stock can scale up nicely and can offer a price target of about Rs 260."

Disclosures: We and our clients would be having interest in the above stock.