Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BUY
Ahluwalia Contracts Limited
Ahluwalia Contracts (India) Limited (ACIL) is promoted by Bikramjit Ahluwalia and is
into the construction business with strong backward integration. It is also into the
manufacturing of ready mix concrete (RMC). ACIL is a strong player in the construction
space with highest asset turnover ratio among the peers and enjoys robust clientele. It has
been able to secure repeat orders from several clients such as ITC, Hotel Leela, etc.
KEY INVESTMENT ARGUMENTS
Robust order book gives revenue visibility for next 24 months
Between FY07 and FY10, order book has grown with a CAGR of 48% to Rs 5,300 cr. Its
current net order book stands at Rs 3,200 cr, which is 1.98 times its FY10 net sales and is
to be executed over the next 24 months. The order book is well diversified in terms of
segment, geography and clients.
Strong backward integration to help in timely completion of project
In order to increase the speed of construction, the company has gone for backward
integration. It has six plants to produce ready mix concrete (RMC) with the production
capacity of 1,800 cubic meters of concrete per day with self owned transit of mixers,
stationery and book pumps. The company has over seventy five tower cranes, thirty five
batching Plants, boom & concrete Pumps, load excavators, DG sets, passenger cum
material lift, etc and over forty five transit mixers, one of the largest fleet in Northern India.
Huge opportunities for construction industry
To overcome the infrastructure bottleneck India needs to spend around $ 1 trillion over the
next five years. As a percentage of GDP, there has been an increase in investment in
physical infrastructure from the level of about 5% witnessed during the 10th plan to about
9% of GDP by 2011-12. During the 12th Plan the investment in infrastructure is likely to be
Rs 40.99 lakh crore. Construction industry is likely to grab a sizable chunk of this
investment.
Open for inorganic growth
The company is looking for opportunities in terms of acquisition or joint venture in the
field of water/sewage treatment and power generation. This is mainly to strengthen its
position in the newer segments the company is foraying into.
FINANCIALS AND VALUATIONS
During the last two years, top and bottom line grew at a CAGR of 36% and 26%. Going
ahead, we expect them to grow at a CAGR of 14% and 27% over the next two years.
Operating and net margins are likely to be at 9.2% and 5.74% in FY11 and 9.59% and
6.26% in FY12. It is trading at a price to earning ratio of 11.7. We recommend a “BUY”
on the stock with an investment horizon of 15 to 18 month and target price of Rs 209
based on ten times its FY12E EPS of Rs 20.9.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
BUY
Ahluwalia Contracts Limited
Ahluwalia Contracts (India) Limited (ACIL) is promoted by Bikramjit Ahluwalia and is
into the construction business with strong backward integration. It is also into the
manufacturing of ready mix concrete (RMC). ACIL is a strong player in the construction
space with highest asset turnover ratio among the peers and enjoys robust clientele. It has
been able to secure repeat orders from several clients such as ITC, Hotel Leela, etc.
KEY INVESTMENT ARGUMENTS
Robust order book gives revenue visibility for next 24 months
Between FY07 and FY10, order book has grown with a CAGR of 48% to Rs 5,300 cr. Its
current net order book stands at Rs 3,200 cr, which is 1.98 times its FY10 net sales and is
to be executed over the next 24 months. The order book is well diversified in terms of
segment, geography and clients.
Strong backward integration to help in timely completion of project
In order to increase the speed of construction, the company has gone for backward
integration. It has six plants to produce ready mix concrete (RMC) with the production
capacity of 1,800 cubic meters of concrete per day with self owned transit of mixers,
stationery and book pumps. The company has over seventy five tower cranes, thirty five
batching Plants, boom & concrete Pumps, load excavators, DG sets, passenger cum
material lift, etc and over forty five transit mixers, one of the largest fleet in Northern India.
Huge opportunities for construction industry
To overcome the infrastructure bottleneck India needs to spend around $ 1 trillion over the
next five years. As a percentage of GDP, there has been an increase in investment in
physical infrastructure from the level of about 5% witnessed during the 10th plan to about
9% of GDP by 2011-12. During the 12th Plan the investment in infrastructure is likely to be
Rs 40.99 lakh crore. Construction industry is likely to grab a sizable chunk of this
investment.
Open for inorganic growth
The company is looking for opportunities in terms of acquisition or joint venture in the
field of water/sewage treatment and power generation. This is mainly to strengthen its
position in the newer segments the company is foraying into.
FINANCIALS AND VALUATIONS
During the last two years, top and bottom line grew at a CAGR of 36% and 26%. Going
ahead, we expect them to grow at a CAGR of 14% and 27% over the next two years.
Operating and net margins are likely to be at 9.2% and 5.74% in FY11 and 9.59% and
6.26% in FY12. It is trading at a price to earning ratio of 11.7. We recommend a “BUY”
on the stock with an investment horizon of 15 to 18 month and target price of Rs 209
based on ten times its FY12E EPS of Rs 20.9.
No comments:
Post a Comment