Centrum has recommended accumulate rating on Ahluwalia Contracts with a target price of Rs 421 in its research report dated March 08, 2018.
Centrum's research report on Ahluwalia Contracts
Ahluwalia Contracts (India) Ltd (ACIL), for Q3FY18, reported decent numbers. Revenue grew by ~1% YoY to Rs361 crore, growth was muted on the back of GST impact (adjusting for the same, revenue would have been up by 9-10%). Execution of better margin orders led to EBITDA margin expansion of 413bps to 17.3%. Good operational performance aided net profit growth of 20% to Rs29 crore. As of 31 Dec’17 debt was at Rs61 crore (vs Rs63 crore as of 30 Sept’17).
OutlookThe company has a healthy bid pipeline and its focus on higher ticket size projects (+Rs500 crore) could aid future growth. We maintain our Accumulate rating and value the company at 16x FY20E EPS giving a target price of Rs421.
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