Ahluwalia Contracts Q2 Review - Good Quarter, Fair Valuation: Dolat Capital
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Dolat Capital Report
Ahluwalia Contracts India Ltd. reported revenue and adjusted profit after tax above estimate, however Ebitda margin below estimates.
Ahluwalia Contracts posted 60.6%/ 84.7%/ 99.2% YoY growth in revenue/ Ebitda/adjusted profit after tax to Rs 7.0 billion/ Rs 631 million/ Rs 358 million in Q2 FY22.
We increase our revenue estimates by 10.5%/ 11.1% but reduce Ebitda margin estimates by 154 basis points/ 117 bps for FY22E/ FY23E factoring H1 FY22 results.
Accordingly, we broadly maintain our adjusted profit after tax estimates for FY22E/ FY23E. We introduce FY24E. We estimate 20.2%/ 47.6% revenue/ adjusted profit after tax compound annual growth rate over FY21-24E.
Ahluwalia Contracts should remain a net cash company, with an average return on capital employed/return on equity of 21.4%/ 17.5% over FY22-24E.
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