Ahluwalia Contracts - Strong Growth Visibility On Healthy Order Inflows: ICICI Direct

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Direct Report.Key Investment Thesis:Strong order book to drive robust execution ahead: Ahluwalia Contracts India Ltd. has a strong order book of Rs 8162.7 crore as of FY23 end (2.9 times book to bill) which was at an all-time high. Furthermore, the company also received orders worth Rs 4178 crore in Q1 FY24. Thereby, taking the order book to ~Rs 12000 plus crore, provides strong growth visibility for the next three years. The company has a bid pipeline of Rs 4000-5000 crore and is targeting further orders worth Rs 2000 plus crore in FY24. We highlight that the company has guided for 20% plus revenues growth in FY24. Given the robust orderbook, we expect strong revenue compound annual growth rate of ~23% over FY23-25E to Rs 4296 crore..Operating leverage led margins improvement to boost profit after tax further: Going ahead, the company has guided for 11% plus margins in FY24 versus 10.7% in FY23 led by operating leverage led benefits and benign raw material regime. With strong execution, stabilised raw material prices, price escalation in ~72% of the order book, we expect margins to improve to 11% and 11.5% in FY24 and FY25, respectively versus 10.7% in FY23. Strong topline growth coupled with margins expansion is likely to drive 31% earnings CAGR over FY23-25E..About the stock: Ahluwalia Contracts is a leading construction company with five decades of expertise.The company largely carries out engineering, procurement and construction spanning residential/commercial complex, hotels, hospitals, institutional/corporate offices, IT parks, railway station redevelopment, metro station/depot, parking lot etc.The order book stood at Rs 8162.7 crore as of FY23 (2.9 times book to bill). Ahluwalia enjoys a healthy balance sheet and is a net cash company (net cash of Rs 585 crore in FY23)..Click on the attachment to read the full report:.Supreme Industries - Confident Of 20% Plus Volume Growth In Plastic Pipes: Yes Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Ahluwalia Contracts - Strong Growth Visibility On Healthy Order Inflows: ICICI Direct

Operating leverage led margins improvement to boost profit after tax further.

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