Accumulate Ahluwalia Contracts; target of Rs 326: Dolat Capital Market

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Dolat Capital Market's research report on Ahluwalia Contracts

ACIL reported revenue above estimates however EBITDA margins and PAT much below estimates. ACIL posted 7.7%/ -27.3%/ -30.3% YoY growth in revenue/ EBITDA/ APAT to Rs5.4 bn/ Rs317 mn/ Rs147 mn in Q3FY21. We broadly maintain our revenue and decrease EBITDA margins for FY21E factoring 9MFY21 results. Accordingly, we downgrade APAT estimates by 21.4% for FY21E. We broadly maintain our FY22E/ FY23 estimates. We estimate 8.7%/ 34.2% revenue/ APAT CAGR over FY20-23E.

Outlook

ACIL should remain a net cash company, with an average RoCE/ RoE of 15.5%/ 11.6% over FY20-23E. Though company has a sizeable orderbook and revenue visibility with 100% labour available, the stock has increased 30% since our result update note dated 18 Nov'20. Thus, we downgrade to Accumulate with a revised TP of Rs326 (14x FY23E EPS).

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