Ahluwalia Contracts Q3FY18 Concall Summary

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 Financial Highlights

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  • During Q3FY2018, company achieved a turnover of 361.07 Crores and PAT of 29.16 crores compared to the turnover of 358 crores and PAT of 24.39 crores in Q3FY17.
  • Achieved a growth of 1% in revenue and 20% in PAT.
  • EPS of the company is at 4.35 compared to 3.64 in the corresponding quarter of FY17.
  • EBITDA margin for FY18 is 17.30% compared to 13.17% of last year.
  • PAT margin is 8.07% compared to 6.81% of Q3FY17
  • For the Nine months of FY2018, the revenue has posted a growth of about 26% and the FY18 top lines is around 1650 Crores to 1700 Crores and maintaining the projection of 15% to 20% and the EBITDA margin at 13% to 14%
  • Margins are a result of the continuing tightening exercises, company is facing increased competition intensity.
  • Company has achieved historical growths in margins due to good progress on 3 high margin projects which has driven the top-line, but this does not warrant the of projection revision because  of the constant flux in the state of the industry.
  • As per the growth historically, Q4 tends to deliver the highest revenue and hence the company is positive that it would achieve the Y-O-Y growth target of about 15%-20%.
  • Debt stands at 61 Crores and company is projecting a reduction to around 25-30 Crores by 2019.
  • Working capital currently stands at 90 Days and for FY2019 approximately 75-80 Days which has been down trended.

Orders Book

  • Net order book of the company as on 31st December 2017 is 3575 which is scheduled to be executed in the next 2.5 years.
  • Total inflow in the nine months is about 1260 crores out of which 705 Crores is from this quarter alone.
  • Commercial is 8.42%,hospital 19.27%, institutional 32.53%,residential-private 19.41% and residential-government will be 11.04%.
  • HSCC pipeline is about 1000 crores for our orders but the total pipeline for HSCC should be around 5000 crores.
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  • No present L1 orders as of now.
  • The company has increased the bidding intensity in the last 3 to 6 months and the bidding pipeline stands at 2500 crores which includes what has been bid and currently bidding over the next month.
  • Legacy orders from the past stands at about 200 crores.
  • 80% of the orders is government orders comprising of projects which are being tendered out to NBCC, CPWD, HCEC, State PWD and other private prospective orders come from existing clients like Brookfield, Emaar MGD – Private orders is coming from the Metros where there are signs of revival.
  • For orders which are more than a certain size, company is exploring JV routes – 2 orders of NBCC, one was in excess of 1000 crores for which, it had taken a JV with a Russian Company and the second order was around 800 crores for which company qualified on its own.
  • Three possible type of JV – first is where they participate in the execution, second is where they provide technology to Precast and third is where they participate in the Profit sharing.

Jump in Interest provision

  •  The sharp increase in interest provision is due to the one time provision made in the previous quarter which would not be carried on to the next quarter.
  •  The provision stands at around 8 crores on account of DVAT demand and the interest component is around 8.7 crores.

Delight Marketing Private Limited Scandal

  • No relation to the scandal and just were called to answer some of the questions posed by the CBI.

Impact of GST

  • Due to GST, the top line has reduced by about 8%.
  • Adjusting for that the topline growth would have been about 9% to 10%.
  • The number of clients withholding payment till GST clarifies has come down and the resolution of the contracts as far as the overall number has come down.

Competition Intensity

  • Last year the company faced 4 to 5 bids on the largest project, but now it has doubled.
  • Number of regional players who are nowentering out hiring massive ambitions.
  • Bid pricing has come downby nearly 10% or 12% and these are companies who had not really gone through a downturncycle
  • Number should stabilize in next 6 to 9 months.
  • Regional Players like Kunal Infrastructure, Girdharilal, Sam India, Swadeshi constructions are in competition
  • Every tender there are bid ranging from about 8 to 15
  • Technical Criteria has been reduced and the turnover levels has been reduced and in turn net worth will be reduced.


  • Company has been able to maintain our margins because it is a true EPCcompany. It has in-house verticals that helps us vis-à-vis our other competitors.

Residential Sectors

  • Company is seeing some movement in the residential area. Post RERA especially in Gurgaon and Mumbai and even in a metro like Calcutta they are seeing some movement on and some tenders have started coming.
  • 10% of the new orders coming can be from the residential-private side in the next 6 -9 months.

Average composition of the subcontracting projects

  • Subcontracting on average size projects is about 15% to 20%
  • It would be for highly specializedworks in a project which would be lift, be building management systems more IT related etc.


  • CAPEX is approximately 20 crores for this year and for FY2019 it would be around 25 to 30 Crores.