Reliance Securities is bullish on Ahluwalia Contracts has recommended buy rating on the stock with a target price of Rs 320 in its research report dated August 23, 2017
Reliance Securities' research report on Ahluwalia Contracts
Led by improved execution, Ahluwalia Contracts (ACIL) has reported a strong and a betterthan- expected performance in 1QFY18. While its revenue surged by 65% YoY and 7% QoQ to Rs5.0bn, EBITDA grew by 26% YoY and 24% QoQ to Rs536mn vs. our estimate of Rs404mn.EBITDA margin stood 10.6% (-325bps YoY and +150 bps QoQ). Notably, higher sub-contractors expenses led to YoY decline in margins. Net profit surged by 37% YoY and 45% QoQ to Rs295mn vs. our estimate of Rs200mn.
We upgrade our recommendation on the stock to BUY from HOLD with anunrevised Target Price of Rs320.
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