Ahluwalia Contracts Shares Surge As IDBI Capital Initiates Coverage With "Buy" Rating
IDBI Capital has set a target price of Rs 650 apiece for the company, implying an upside of 50%.
Shares of Ahluwalia Contracts (India) Ltd. surged the most since July 12, after IDBI Capital initiated coverage with 'buy' rating.
Terming the company a "cash flow machine", the brokerage said, Ahluwalia Contracts will close the current financial year with the "highest ever" annual order inflow, which stands at Rs 40 crore year-to-date.
IDBI Capital has set a target price of Rs 650 apiece for the company, implying an upside of 50%. About 29% of analysts have changed their price targets on the stock in the last one-month, according to Bloomberg data.
Shares of the company rose 4.83% to end at Rs 456 on Monday. The total traded volume so far today was 1.4 times its 30-day average.
Out of the 10 analysts tracking the stock, nine maintain a "buy" rating and one suggests "hold", according to Bloomberg data.
IDBI Capital View On Ahluwalia Contracts (India) Ltd.
Ahluwalia Contracts, which benefits from infrastructure and industrial capital expenditures in India, offers a "turnkey" solution for building tall structures.
The brokerage said that future growth will be supported by "management with vast experience, execution ability, steady cash flow, and a lean balance sheet".
Expect revenue at a compound annual growth rate of 17% and profit after tax at a CAGR of 26%, over FY22-25E
Ahluwalia Contracts India is a net debt-free company and has 12% of its market capitalisation as cash in books.
Order inflow has been subdued for the last two years, but is recovering in the current fiscal. The brokerage expects it to close with the highest-ever order inflow and year-end order book at Rs 73 crore, which is 2.3 times the current fiscal's revenue.
(Source: Bloomberg, Brokerage report)