Prabhudas Lilladher: Ahluwalia Contracts - Higher Provisions Dent Margins 
On a construction site. (Image: Company website) 

Prabhudas Lilladher: Ahluwalia Contracts - Higher Provisions Dent Margins 

BQ Blue’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 BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Prabhudas Lilladher Report

Ahluwalia Contracts (ACIL) posted a strong quarterly performance with execution rising 4.1% YoY (vs PLe 23% decline) led by rise in labour availability. Labour availability stands 80% pre-covid levels (up from 60% in Sep’20). Margins were weak despite healthy execution and several cost control measures primarily due to provision of Rs50 million towards receivables and similar trend is expected to continue in Q3 and Q4.

Considering uncertainty regarding pandemic, management cited caution on execution. However, management indicated that working capital has improved as disbursements have started from state authorities primarily in West Bengal and Bihar and expects normalcy by Dec ’20.

ACIL is among few EPC companies which have turned around with significant improvement in profitability through sound business strategy, focus on asset light business model, prudent selection of orders (state and central agencies) and better working capital management.

Click on the attachment to read the full report:

AHLU-18-11-20-PL (1).pdf

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