Ahluwalia Contracts (India) Ltd., incorporated in the year 1979, is a Small Cap company (having a market cap of Rs 2535.14 Crore) operating in Construction sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 765.18 Crore, up 41.46 % from last quarter Total Income of Rs 540.91 Crore and up 38.59 % from last year same quarter Total Income of Rs 552.12 Crore. Company reported net profit after tax of Rs 37.05 Crore in latest quarter.
Investment Rationale
AHLU is finally showing the much awaited acceleration in execution of its strong order backlog. While execution in Q1FY22 is likely to be weak again due to Covid 2nd wave impact, we expect recovery starting Q2FY22 and estimate 21% revenue CAGR over FY21-23. The healthcare sector comprises 58% of AHLU’s order backlog and is likely to be a key driver of both fresh inflows and execution in FY22/FY23. With the adverse impact of provisions and write-offs in legacy projects behind, the brokerage expects a return of historical margin levels of 12-13% in FY22/FY23, leading to a robust 70% CAGR in earnings. The stock trades at 11.7x FY23E EPS and offers potential to re-rate further. It values AHLU at 15x FY23E EPS and have a price target of Rs500.
(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.
