Ahluwalia Contracts India Acquired by Buy Recommendation Target: ₹929

Ahluwalia Contracts India: A High-Quality EPC Company Poised for Growth

Ahluwalia Contracts India stands out as one of India's highest-quality Engineering, Procurement, and Construction (EPC) companies, backed by a strong execution track record, a debt-free balance sheet, consistent positive operating cash flow generation, and a robust order book of INR 211 billion (~4.6x TTM revenue). This strong order book provides the company with strong earnings visibility, setting it apart from its road-focused EPC peers.

Unlike its peers, Ahluwalia Contracts India is well-positioned in structurally growing building infrastructure segments such as healthcare, residential townships, educational institutions, commercial complexes, airports, and government infrastructure. This diversified exposure offers the company strong growth opportunities, with a robust pipeline of projects in various sectors. In the current fiscal year, FY26, the company has secured order inflows of INR 103 billion, with additional L1 projects worth INR 16.2 billion.

Management has guided for 15-20% revenue growth in FY27, a significant increase from the previous guidance of 10-15% revenue growth. This growth is expected to be driven by key projects such as the Central Vista redevelopment, CSMT redevelopment, and large residential developments. We expect the company's execution momentum to accelerate in the coming years, supported by a healthy project pipeline, absence of election-related disruptions, improved labour availability, and a favourable execution environment.

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Revenue Growth Projections

We value Ahluwalia Contracts India at 16x FY28E EPS, a discount to its 10-year average multiple of 18x. This valuation reflects an attractive risk-reward proposition, with a BUY rating and a target price of INR 929.