HDFC Securities' research report on Ahluwalia Contracts
AHLU posted strong 2QFY19 numbers with Revenue/ EBITDA/ APAT Rs 4.4/ 0.6/ 0.3bn (19/ 15/ 21% beat vs. estimates). Interest cost shot up to Rs 51mn (+10% YoY, +31% QoQ) as debt increased from Rs 340mn to 520mn QoQ. AHLU has managed record inflows of Rs 31bn in YTDFY19 (the order book now stands at Rs ~53bn ex L1 of Rs 4.3bn in the hospital segment). Management has attributed this to improved pre-election tendering, low competitive intensity (especially in the >Rs 7bn segments with 4-5 key players bidding) and to make up for a projected ordering slowdown in 1HFY20E with the elections looming.
Outlook
We have upgraded FY20E Revenue/PAT by 8.5/8.1%. Maintain BUY with an increased SOTP of Rs 465/sh (EPC segment at 18x Mar-20E EPS, Kota BOT – 1x P/BV).
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