Prabhudas Lilladher has maintained a buy rating on Ahluwalia Contracts India with a revised target price of ₹930 in its research report dated August 17, 2026. According to the brokerage firm's analysis, the stock currently trades at approximately 15x revised EPS, which is below its 10-year average of ~18x, making it attractive for investors despite recent challenges. However, ICICI Securities has taken a more cautious stance, downgrading the stock to Hold with a target price of ₹780 in its August 18, 2026 report, citing weaker near-term earnings trajectory.
Ahluwalia Contracts India reported a sharp earnings miss in Q1FY27, with revenue growing 12% YoY to ₹11,258 million, which was broadly in line with estimates. However, EBITDA declined 44% YoY to ₹482 million, with margins collapsing to a historic low of 4.3% compared to 8.6% YoY. As reported by Prabhudas Lilladher, the margin pressure was driven by three key factors: approximately 260 basis points impact from a one-off reduction in the AIIMS Jammu bill, 150 basis points impact from an unexpected 35-40% increase in NCR labour costs, and elevated staff and IDC costs related to mobilisation for large projects. The margin impact was further compounded by minimum wage hikes in Haryana and UP, which inflated labour costs in NCR projects, and higher interest and depreciation costs that pulled earnings down 78% YoY.
According to latest market data, Ahluwalia Contracts shares are trading at ₹790.00 as of August 18, 2026, representing a 0.49% decline from the previous closing price of ₹793.85. The stock has experienced a 5.27% decline over the past week, with a 52-week high of ₹1,077.95 and 52-week low of ₹645.15. The company maintains a market capitalization of ₹5,317.81 crore and operates within the Construction sector with a PE ratio of 23.63 and PB ratio of 2.58.
Management has significantly lowered its FY27 guidance, with revenue growth now pegged at 15% versus the earlier projection of 15-20%. The company has also ruled out achieving double-digit EBITDA margins and cut its order inflow guidance to ₹40-50 billion from the earlier estimate of ₹80 billion. According to Prabhudas Lilladher, management expects margins to recover to approximately 8.6% over the coming quarters and return to double-digit levels in FY28, while flagging potential NGT-related risks in Q3. ICICI Securities notes that near-term cost pressures cloud the outlook, with management guiding for ~15% revenue growth with downside risk from potentially stricter construction curbs in NCR in Q3.
Following the results, Prabhudas Lilladher has cut its revenue and margin estimates, resulting in a 24% reduction in FY27 EPS estimates and an 11% reduction in FY28 EPS estimates. The brokerage firm has revised its target price to ₹930 from ₹1,045 earlier. Despite the earnings miss, the firm maintains its positive outlook citing the company's debt-free balance sheet and strong order book of ₹206.6 billion, which represents approximately 4.6x TTM revenue, providing comfort on medium-term growth prospects. The order book remains the bright spot at ₹207 billion as of June 2026, with a strong book-to-bill ratio of 4.4x, and execution on marquee projects such as Central Vista expected to ramp up through FY27-28.
