Ahluwalia Contracts’ Rs 210 billion order book supports faster FY27 execution growth

Investment View and Valuation

Prabhudas Lilladher retains a BUY rating on Ahluwalia Contracts (India), viewing it as a high-quality building-infrastructure EPC player with a robust order book, a debt-free balance sheet, a positive operating cash-flow history and a strong execution record.

The company is differentiated from road-focused EPC peers through its exposure to hospitals, healthcare facilities, residential townships, educational institutions, commercial complexes, airports and government infrastructure. The broker values Ahluwalia Contracts at 16 times FY28E EPS, below its 10-year average multiple of 18 times, to derive a target price of Rs 929.

Q4 FY26 and Full-Year Financial Performance

Reported Q4 FY26 performance was steady. Net sales increased 8.8 per cent year-on-year to Rs 13.22 billion and rose 24.7 per cent quarter-on-quarter. EBITDA was flat year-on-year at Rs 1.24 billion, while EBITDA margin declined 82 basis points year-on-year to 9.35 per cent because of cost pressures. Adjusted profit after tax declined 3.6 per cent year-on-year to Rs 801 million, although it increased 48.4 per cent sequentially.

FY26 performance was stronger, with revenue growth of 11.4 per cent, EBITDA growth of 27.1 per cent and adjusted profit after tax growth of 31.2 per cent.

Order Book and Execution Visibility

Management reported a net order book of about Rs 210 billion at March 2026, equivalent to roughly 4.6 times trailing revenue and executable over 24-30 months. Gross order book stood at Rs 297 billion, up about 33 per cent year-on-year.

FY26 order inflow was Rs 102.57 billion, including about Rs 43 billion in Q4. Ahluwalia Contracts also held L1 status for projects worth Rs 16.21 billion, comprising RML Hospital in Delhi and a university project in Bhubaneswar. Management cautioned that these L1 projects are not confirmed and may be rebid or cancelled.

More than 60 per cent of the order book is from private clients, while management is targeting an approximately 50:50 government-private mix over time.

FY27 Growth Outlook

Management raised FY27 revenue-growth guidance to 15-20 per cent from 10-15 per cent earlier. It also expects double-digit EBITDA margins and about Rs 80 billion of order inflow from a matching bid pipeline.

Q1 FY27 is expected to be exceptionally weak because of elections and labour migration, followed by a meaningful execution ramp-up from Q2. Key FY27 execution targets include about Rs 10 billion from Central Vista, Rs 6 billion from CSMT redevelopment, Rs 4 billion from The Dahlias and Rs 1 billion from India Jewellery Park.

Central Vista, awarded in January 2026, has commenced excavation and concrete work. The project is exempt from NGT restrictions and is expected to generate monthly turnover of Rs 1-1.5 billion.

Broker Forecasts

Prabhudas Lilladher forecasts revenue growth to accelerate to a 19 per cent CAGR over FY26-28E, following low single-digit growth over FY24-26.

Balance Sheet and Working Capital

Ahluwalia Contracts remained debt-free, with cash and bank balances of Rs 8.17 billion. However, working-capital days were about 104.

Key Risks

• Delays in approvals, construction or client decisions on major projects.
• Labour shortages.
• Higher input costs.
• Supply-chain disruption and longer lead times for electrical and imported MEP equipment.
• Margin pressure from competition or a lower-margin order mix.
• Weak conversion of L1 opportunities and lower fresh order wins.
• Elevated working-capital requirements and collection delays.
• A slowdown in infrastructure spending, project awards or real-estate activity.