Ahluwalia Contracts (India) - total construction solutions

 

Ahluwalia Contracts (India)  (AHLU IN, INR 343, Not Rated)

 

Recently, we met the management of Ahluwalia Contracts (India) (ACIL). Key highlights of our interaction are:

 

·          Strong revenue traction to continue given the favourable business environment

·          Robust (INR 28 bn) order book provides income visibility

·          Integrated offerings leading to margin improvement

·          Bullish on urban infra BOT space

·          Margins from ready mix concrete (RMC) segment expected to improve

·          Growth plans: Focus on core contracting and urban infrastructure

·          Valuations: At a CMP of INR 343, the stock is trading at FY07 EV/EBITDA of 30.7x, and a P/E of 69.0x. We do not have a recommendation on the stock currently.