Buy Ahluwalia Contracts, target price Rs 286: HDFC Securities

Promoters held 58 per cent stake in the company as of June 30, 2020, while FIIs held 15 per cent, DIIs 23 per cent and public and others 3.81 per cent.

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Promoters held 58 per cent stake in the company as of June 30, 2020, while FIIs held 15 per cent, DIIs 23 per cent and public and others 3.81 per cent.
HDFC Securities has given buy rating to Ahluwalia Contracts with a target price of Rs 286. The share price moved down by 0.83 per cent from its previous close of Rs 252.05. The stock’s last traded price is Rs 249.95.

Ahluwalia Contracts (India) Ltd., incorporated in the year 1979, is a Small Cap company (having a market cap of Rs 1668.66 Crore) operating in Construction sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 249.85 Crore, down 54.51 % from last quarter Sales of Rs 549.22 Crore and down 21.14 % from last year same quarter Sales of Rs 316.80 Crore. The Company reported net profit after tax of Rs 7.47 Crore in latest quarter.

Ahlu-graph

Investment Rationale
Ahluwalia Contracts won new orders worth Rs 3 bn during the quarter, taking the order book to Rs 75bn. Gross debt decreased to Rs 430mn from Rs 520mn at FY20 end. With cash balance at Rs 1.8bn, AHLU remains a net cash company. The brokerage maintains BUY on Ahluwalia Contracts and roll forward the valuation to June-22E with target price of Rs 286 (10x June-22E EPS).

Promoter/FII Holdings
Promoters held 58 per cent stake in the company as of June 30, 2020, while FIIs held 15 per cent, DIIs 23 per cent and public and others 3.81 per cent.
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