Buy Ahluwalia Contracts (India); target of Rs 417: Anand Rathi

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26 Aug, 2025 12:21

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Anand Rathi's research report on Ahluwalia Contracts (India)

With its best ever single-year order accretion already and a healthy bid pipeline, Ahluwalia has mostly insulated itself from any lull owing to the ensuing various state and the general elections. With a significant order backlog and a balance sheet in place to meet any working capital / capex needs, the future looks bright. We are positive on the appealing return ratios, a healthy balance sheet and fine revenue assurance, which drive us to maintain our Buy on the stock. Strongest single-year inflows already. In FY19 till now, the company has attained its inflows of ~`31bn, a figure not only greater than the original ~`20bn guidance but even its revised ~`24bn guidance. With L1 status of ~`4bn, and a healthy ~`30bn bid pipeline, even H2 is expected to see healthy accretion. Excl. L1, management is aiming at a further ~`4bn-5bn in H2.

Outlook

Factoring in the longer-than-expected time to get the Alipore and Mohammadpur projects going, and some provisioning for the real-estate inventory held, we lower our FY19e earnings slightly (~6%, and ~1% for FY20). At the ruling price, the stock trades at PER (excl. the Kota asset) at 14x FY19e and 11x FY20e.

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