Buy Ahluwalia Contracts; target of Rs 453: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Ahluwalia Contracts

ACIL posted 31.3% YoY growth in Q2FY19 revenue (after 2 consecutive quarter of de-growth) to `4.4 bn (9.0% above estimates) led by better execution. EBITDA margin down by 181 bps YoY to 13.1% (24 bps below estimates), primarily due to higher construction cost which is up by 258 bps YoY to 75.9% of revenue and other expenses which was partially offset by fall in employee cost. PAT up 20.9% YoY to `312 mn (2.3% above estimates) led by better operating performance coupled with lower tax rate of 33.4% vs. 35.3% (Q2FY18).

Outlook

We remain positively biased on business model backed by quality management and healthy return ratios. It looks attractive at 13.7x/ 10.5x FY19E/ FY20E EPS and hence we maintain ‘BUY’ with a TP of `453 (15x FY20E EPS.

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