Anand Rathi has upgraded Ahluwalia Contracts (India) to a BUY rating with an upwardly revised target price of ₹1,009, up from the previous target of ₹982. According to Anand Rathi's research report dated June 04, 2026, the brokerage has marginally tweaked its revenue and EBITDA estimates for FY27 and FY28 while maintaining a positive outlook on the stock. The upgrade reflects improved confidence in the company's growth prospects and operational performance.
Despite multiple headwinds, Ahluwalia Contracts (India) delivered a robust performance in FY26 with all-time high revenue of ~₹46 billion, representing ~11.4% year-on-year growth. As reported by Anand Rathi, the company achieved ~118 basis points expansion in EBITDA margin led by robust order book and accelerated execution of marquee projects. The company's Return on Equity (RoE) improved from ~11.8% in FY25 to ~13.7% in FY26, demonstrating enhanced operational efficiency and profitability.
The company maintains a record order book of ~₹211 billion, representing ~4.6 times the FY26 revenue. According to Anand Rathi's analysis, this substantial order book provides strong revenue visibility for future periods. Additionally, Ahluwalia Contracts maintains a healthy balance sheet with surplus cash of ~₹8.1 billion, providing financial flexibility for growth investments and operational requirements.
Looking ahead, Anand Rathi expects growth momentum to improve further as high-ticket projects of DLF, CSMT, Signature Global, and Central Vista achieve momentum. The management expects EBITDA margin to improve going forward given the order book mix, geography, share of private clients, and in-built escalations, with ~89% of order book having escalation mechanisms. The brokerage notes that increased mechanisation is squeezing execution timelines, contributing to operational efficiency improvements.
Anand Rathi's target price of ₹1,009 is based on a Sum-of-the-Parts (SOTP) valuation methodology, valuing the core EPC business at 19x FY28 estimated earnings per share. The brokerage's positive outlook is substantiated by the company's strong order book, healthy balance sheet, and expected margin expansion driven by project mix and execution capabilities.
