Prabhudas Lilladher's research report on Ahluwalia Contracts (India)
Ahluwalia Contracts (ACIL) posted strong results in 4Q, with beat on both revenue (up 38.7% YoY) and margin front. Execution witnessed some headwinds amidst Covid second wave, when labour availability across project sites fell to ~30% levels, but improved substantially with ease in lockdown restrictions and fall in cases. Though it is yet to reach pre-covid levels in many sites. Even with healthy order book and rising execution pace, management gave conservative guidance of 10-15% revenue growth in FY22 considering headwinds of second wave (and a possible third wave). EBITDAM is expected to be in 11-12% range, given major provisioning now complete.
At CMP, the stock trades at a P/E of 17.6x/ 12.2x on FY22E/ 23E EPS and is trading at an EV of 8.9x/ 6.6x FY22E/ 23E EBITDA. Due to recent sharp run-up in stock price, we downgrade from ‘BUY’ to ‘ACCUMULATE’ with a TP of Rs410 (Earlier TP of Rs384).
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