Centrum recommended accumulate rating on Ahluwalia Contracts with a target price of Rs 390 in its research report dated November 21, 2017.
Centrum's research report on Ahluwalia Contracts (India)
Ahluwalia Contracts (India) Ltd (ACIL), for Q2FY18, reported good numbers. Revenue grew 15% YoY to Rs335 crore, on the back of better execution. EBITDA margins expanded by 101bps to 14.9%, aided by lower raw material cost (declined by 1,250 bps to 35.1% of sales) and employee expense (declined by 454bps to 10.3%). Good operational performance along with decline in interest cost (down 35% to Rs5 crore), led to net profit growth of 29% to Rs26 crore. As of Sept’17, debt stood at Rs63 crore (vs Rs80 crore in Jun’17).
We maintain our Accumulate rating with a revised target price of Rs390, valuing it at 18x FY19E EPS.
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