Ahluwalia Contracts India Ltd. Q2 FY24 profit after tax came higher than our estimate by 15% and H1 FY24 earnings per share forms 40% of our FY24E estimate.
Beat in the result is led by better execution, as revenue increased by 45% YoY in Q2. Despite beat in the result, we retain our estimate. As pollution led construction ban, impact could impact revenue growth in H2 FY24. We have modeled H2 FY24E revenue growth of 17%.
Ahluwalia Contracts’ consistency in order win has continued in FY24E. Company till date has won orders of Rs 52 billion (in FY23 order inflow was Rs 50 billion) and is level one in a orders.
Company was declared level one in gems and jewellery park in Navi Mumbai but the quote is more than the budget of the project so the redesigning of park project is in process.
We have valued Ahluwalia Contracts at 15 times FY25E EPS (+1STD mean) to arrive at target price of Rs 772. Retain ‘Hold’ rating due to rich valuation.