Prabhudas Lilladher has given Accumulate recommendation for Ahluwalia Contracts (India) with a target price of Rs. 410 in its research report issued on Jun 28, 2021
Prabhudas Lilladher’s research report on Ahluwalia Contracts (India)
Ahluwalia Contracts (ACIL) posted strong results in 4Q, with beat on both revenue (up 38.7% YoY) and margin front. Execution witnessed some headwinds amidst Covid second wave, when labour availability across project sites fell to ~30% levels, but improved substantially with ease in lockdown restrictions and fall in cases. Though it is yet to reach pre-covid levels in many sites. Even with healthy order book and rising execution pace, management gave conservative guidance of 10-15% revenue growth in FY22 considering headwinds of second wave (and a possible third wave). EBITDAM is expected to be in 11-12% range, given major provisioning now complete.
At CMP, the stock trades at a P/E of 17.6x/ 12.2x on FY22E/ 23E EPS and is trading at an EV of 8.9x/ 6.6x FY22E/ 23E EBITDA. Due to recent sharp run-up in stock price, we downgrade from ‘BUY’ to ‘ACCUMULATE’ with a TP of Rs410 (Earlier TP of Rs384).