Steady performance!
About the stock: Ahluwalia Contracts (India) Limited is a leading construction company operating across residential/commercial complex, hotels, hospitals, institutional/corporate offices, IT parks, Railway station redevelopment, metro station/depot, parking lot etc.
• The order book stood at ₹18,680 crore as of Q3FY26 (4.2x book to bill). Ahluwalia enjoys a healthy balance sheet and is a net cash company.
Q3FY26 Performance: Ahluwalia Contracts reported consolidated revenue of ₹1,061 crore in Q3FY26, up 11.4% YoY, driven by steady execution. EBITDA came in at ₹96.1 crore, up 13.9% YoY, with an EBITDA margin of 9.1%, up 20 bps YoY, supported by a healthy executable order book. Reported PAT stood at ₹54 crore, up 9.5% YoY, reflecting strong operating profit growth.
Investment Rationale
• A healthy orderbook paves the way for revenues going forward: Ahluwalia maintains a robust order book of ₹18,680 crore as of Q3 (4.2x book-to-bill). The company received order inflows of ₹9,562 crore in 9MFY26 and is currently the L1 bidder for 4 projects worth ~ ₹2,485 crore. We note that inflows have exceeded earlier guidance of ₹ 9000 crore in FY26. With a current bid pipeline of ~₹7,000 crore, management expects total order inflows of ₹5,000 -6,000 crore for FY27. Given that Delhi-NCR contributes 44% of the total order book, execution was hampered owing to NGT bans. The management has guided for Q4 revenue of ₹1,400 crore but tempered its FY26 growth outlook to 10- 15% (down from 15-20%). Additionally, FY27 guidance is set at 15-20% growth, supported by a healthy order book. We expect healthy revenue CAGR of ~17% over FY25-28E to ₹ 6569 crore.
• Margins to improve in FY27: The company reiterated its guidance of double- digit margins in FY26. Consequently, we expect margins to bounce back to 9.8%, 10.1% and 10.3% in FY26, FY27 and FY28 respectively vs. 8.3% in FY25 led by ramp up in execution, driving 27.5% adjusted earnings CAGR over FY25-28E. The return ratios are also expected to improve with RoCEs to reach 22.2% in FY28vs. 18.6% in FY25.
Rating and Target Price
• Given the expertise, strong order book visibility, history of robust execution and balance sheet strength, Ahluwalia is poised for a healthy growth ahead
• We value Ahluwalia at ₹ 1000 i.e. 16x on FY28E EPS (vs. 19x FY27, earlier) and maintain our BUY rating.
