Ahluwalia Contracts (ACIL) has reported a subdued earnings performance in 4QFY17 despite a healthy 23% YoY top-line growth to Rs4.7bn. While EBITDA declined by 19% YoY and 9% QoQ to Rs431mn, EBITDA margins stood merely at 9.1% (-478bps YoY and -406bps QoQ). Notably, higher expenditures to mobilize labours post demonetization and Rs45mn non-cash provisioning for Kota Project led to margin contraction. However, Management's soft guidance for revenue (+10-15% YoY) and order intake (Rs15bn) for FY18 owing to increased competitive intensity as the peers started bidding aggressively is a major setback. Though we continue to like ACIL on the back of its healthy balance sheet, asset light business model and superior...