Ahluwalia Contracts (India) Ltd. share price target

Ahluwalia Contracts (India) Ltd (ACIL), for Q2FY18, reported good numbers. Revenue grew 15% YoY to 335 crore, on the back of better execution. EBITDA margins expanded by 101bps to 14.9%, aided by lower raw material cost (declined by 1,250 bps to 35.1% of sales) and employee expense (declined by 454bps to 10.3%). Good operational performance along with decline in interest cost (down 35% to 5 crore), led to net profit growth of 29% to 26 crore. As of Sept'17, debt stood at 63 crore (vs 80 crore in Jun'17). Management Guidance: For FY18, the management has revised revenue growth...

While ACIL lost revenue of Rs120mn (including Rs30mn due to non-billing) due to transitory impact of GST, a 15% YoY growth in top-line to Rs3.3bn reflects a decent execution despite seasonal overhang. Further, EBITDA grew by 24% YoY to Rs498 and margin stood at a robust 14.9% mainly on account of inventory/stock adjustments. However, as GST hurdles seem to be behind and considering likely pick-up in execution from new projects, ACIL has upwardly...

We maintain BUY with a SOTP of Rs 415/sh (EPC segment at 18x Sep-19E EPS, Kota BOT 1x P/BV). AHLUs revenue net of GST (Rs 270mn impact) came in 15.7% lower than our estimates. EBIDTA margins expanded 102bps to 14.9%, which led to EBIDTA/PAT beat of 13/11.3% respectively. Based on the companys 1HFY18 performance, AHLU has raised EBIDTA margins guidance to 13-14% vs 12-13% earlier. Management sounded confident on delivering 15%+ revenue growth in FY18E.

We maintain BUY with an SOTP of Rs 393/sh (EPC segment at 18x Mar-19E EPS, Kota BOT 1x P/BV). AHLUs delivered strong 1QFY18 earnings beat of 84.6% led by robust execution and higher bill certification by clients (Rs 400mn) ahead of GST implementation. Revenue/EBIDTA beat came in 48.4/50.6% respectively. EBIDTA margin remained soft, in line with guidance, though improved 151bps QoQ. Demonetisation effect on labour shortage seems to be wearing off and is expected to get normalized by 3QFY18E. On back of robust execution AHLU has raised FY18E revenue growth to 15-20% vs 12-15% earlier. B/S is healthy, with standalone gross debt at Rs 800mn (-Rs 90mn QoQ). AHLU expects to retire entire debt by FY19E. Order intake guidance for FY18E moderated to Rs 11-12bn vs Rs 12-15bn earlier as competitive intensity remains high. FY18E EBIDTA margin -12.5%

We had initiated Ahluwalia Contracts Ltd with a Buy rating as on 31th March, 2017 at a CMP of Rs300, further we had updated with a quarterly report (Q4FY17) with a Buy rating as on 6th June with a target of Rs385. We decide to drop coverage on Ahluwalia Contracts Ltd since the legal outcome and extent of the impact is unknown....

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...

AHLU?s standalone 4QFY17 revenue/EBIDTA/APAT grew 23/(19.3)/(23.8)% respectively. EBIDTA margin contracted 478bps YoY to 9.1% (8-quarter low). This was on account of 939bps expansion in other exp

Ahluwalia Contracts (ACIL) has delivered a healthy performance in 3QFY17 on the backdrop of pick-up in execution post monsoon notwithstanding the impact of demonetization. Its top-line grew by ~12% YoY and 23% QoQ to Rs3.57bn (vs. our estimate of Rs3.5bn) mainly owing to pick-up in execution after seasonal overhang. Operating profit surged by ~18% YoY (+19% QoQ) to Rs463mn (vs. our estimate of Rs452mn). EBITDA margin rose by 65bps YoY to 13.0%, while net profit zoomed by strong ~23% YoY to Rs244mn. Looking ahead, we believe that ACIL is set to witness a healthy traction on the backdrop of healthy order book, sound return ratios, improving...

Q2FY17 Revenue/EBITDA/PAT of Rs 2.9bn/Rs 398 mn/Rs 197 mn were lower than our estimates by 8-10% due to slower than expected execution. However, EBITDA margin at 13.7% (+124 bps YoY) was in-line with estimate. Going ahead, the company expects some delay in execution in private residential projects (which contributes ~ 20% to the order book) considering de-monetization impact and cut their revenue guidance to ~ 15% YoY growth in FY17E (earlier 20-25%). We revise downwards our earnings estimates by ~ 4%/~ 9% for FY17E/18E to factor in weaker performance in Q2FY17E and lower guidance by the company. Current valuation at 14.1x P/E on FY18 earnings looks fail and factors in most of the positives. Maintain Hold.

Ahluwalia Contracts' (ACIL) top-line grew by ~3% yoy to Rs2.89bn (vs. our estimate of Rs3.0bn), while the Company's operating profit surged ~14% yoy to Rs391mn (vs. our estimate of Rs399mn) in 2QFY17. Its EBITDA margin stood at strong 13.5% (+123 bps yoy & -39bps qoq), while net profit grew by merely ~3% yoy to Rs197mn. We believe that ACIL is set to witness a healthy traction on the backdrop of healthy order book, sound return ratios, improving balance-sheet amid positive indications on macroeconomic front. Its current order backlog stands at Rs43.6bn (3.4x TTM revenue), which provides healthy revenue visibility. Though we have trimmed down...