Top Conviction Ideas : Buy Ahluwalia Contracts India Ltd for Target Rs. 570 - Axis Securities Ltd
* Robust order book: The company has an order book of Rs 16,582 Cr (as of 30th June, 2025) and a YTD order inflow of Rs 3,889 Cr. The order book is primarily composed of Hospital at 11.5% (Rs 1,902 Cr), Commercial at 16.8% (Rs 2,794 Cr), Institutional at 4.7% (Rs 784 Cr), Residential at 40.7% (Rs 6,752 Cr), Infrastructure at 25.6% (Rs 4,238 Cr), and Hotel at 0.7% (Rs 113 Cr). The robust order book provides revenue visibility for the next 2–2.5 years. Hence, ACIL is expected to deliver a strong revenue growth of 19% CAGR over FY25–FY27E and is likely to post improved margins with better execution.
* Strong Order Inflow: The company reported YTD order inflows of Rs 3,889 Cr and holds L1 status in 2 projects worth Rs 1,796 Cr. For FY26, management has guided for order inflows of over Rs 8,000 Cr. The bidding pipeline stood at Rs 5,000 Cr for the private segment. It aims to keep 50–60% of its order book weighted toward private sector projects, reflecting its strategic focus on private capex, where it sees stronger visibility and more scalable opportunities.
* Pickup in EBITDA margins: As execution improves, especially with the pickup of the CST project in Delhi and India Jewellery Park, the margins are expected to improve. Double-digit margins are expected from H2FY26; however, in Q2FY26, the margins will remain flat due to execution being impacted by the monsoon. We forecast EBITDA and PAT to grow at a 34% and 32% CAGR, respectively, over FY25–27E.
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SEBI Registration number is INZ000161633
