Buy Ahluwalia Contracts; target of Rs 320: Reliance Securities

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Reliance Securities' research report on Ahluwalia Contracts

Led by improved execution, Ahluwalia Contracts (ACIL) has reported a strong and a betterthan- expected performance in 1QFY18. While its revenue surged by 65% YoY and 7% QoQ to Rs5.0bn, EBITDA grew by 26% YoY and 24% QoQ to Rs536mn vs. our estimate of Rs404mn.EBITDA margin stood 10.6% (-325bps YoY and +150 bps QoQ). Notably, higher sub-contractors expenses led to YoY decline in margins. Net profit surged by 37% YoY and 45% QoQ to Rs295mn vs. our estimate of Rs200mn.

Outlook

We upgrade our recommendation on the stock to BUY from HOLD with anunrevised Target Price of Rs320.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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