Accumulate Ahluwalia Contracts; target of Rs 266: Dolat Capital

Dolat Capital's research report on Ahluwalia Contracts

ACIL reported results above estimates on all fronts. ACIL posted 38.2%/ 61.1%/ 69.0% YoY de-growth in revenue/ EBITDA/ PAT to Rs2.5 bn/ Rs185 mn/ Rs75 mn in Q1FY21. We increase our revenue/ EBITDA margin estimates by 7.1%/ 297 bps for FY21E factoring Q1FY21 results. Accordingly, we increase our PAT estimates by 674.1% for FY21E. We broadly maintain our FY22E estimates. We estimate 0.6%/ 35.7% revenue/ PAT CAGR over FY20-22E. ACIL should remain a net cash company, with an average RoCE/ RoE of 13.6%/ 9.2% over FY20-22E.

Outlook

Though the stock has increased ~15% since our Q4FY20 result update dated 1 Jul’20, increasing labour availability and healthy orderbook are positives for the company. Thus, we upgrade to Accumulate with an upward revised TP of Rs266 (15x FY22E EPS).