Why This Smallcap Infra Stock Trading At Just 18x FY27 EPS Is On Analysts’ Radar This Week?

Ahluwalia Contracts India Ltd (ACIL) is a mid-cap engineering and construction firm that provides clients in India with cutting-edge building and infrastructure projects. The brokerage company Axis Securities has chosen the infra stock, which is trading at 18x FY27E EPS, as its pick of the week and is bullish on the stock with a target price of Rs 1,073 over a period of six to nine months. The main factors behind the stock pick are a robust order book to drive growth, a high order inflow, and a spike in EBITDA margins.

Reasons To Buy The Shares of Ahluwalia Contracts India

2 analysts from Axis Securities, namely Uttam K Srimal, Sr. Research Analyst and Shikha Doshi - Research Associate, have pointed out the investment rationale behind the buy call for Ahluwalia Contracts India.

Robust Order Book to Drive Growth: The company has an order book of Rs 18,057 Cr (as of 30th September, 2025) and a YTD order inflow of Rs 5,262 Cr. The order book is primarily composed of Hospitals at 9% (Rs 1,619 Cr), Commercials at 20.6% (Rs 3,711 Cr), Institutional at 3.7% (Rs 661 Cr), Residential at 43.8% (Rs 7,918 Cr), Infrastructure at 22% (Rs 3,997 Cr), and Hotels at 0.7% (Rs 150 Cr). By geography, East constitutes 15%, North 50%, West 30%, South 4%, and Overseas 1%.

The robust order book provides revenue visibility for the next 2-2.5 years. Hence, ACIL is expected to deliver a strong revenue growth of 19% CAGR over FY25-FY27E and is likely to post improved margins with better execution.

Strong Order Inflow: The company reported YTD order inflows of Rs 5,262 Cr and holds L1 status in 2 projects worth Rs 1,620 Cr. For FY26, management has guided for order inflows of over Rs 8,000 Cr.

The bidding pipeline stood at Rs 6,000 Cr for the private segment. It aims to keep 50-60% of its order book weighted toward private sector projects, reflecting its strategic focus on private CAPEX, where it sees stronger visibility and more scalable opportunities.

Improvement in EBITDA Margins: During Q2FY26, the company reported a sharp improvement in EBITDA margins to 10.9% from 7.3% in the previous year, supported by better execution.

With a large executable order book and better operating conditions in H2FY26, margins are expected to be sustained, especially with the pickup of the CST project in Mumbai and other large projects. Consequently, double-digit margins are expected from H2FY26.

Ahluwalia Contracts India Valuation & Outlook

"Given its large executable order book and favourable attributes-including a strong and diversified order book, a healthy bidding pipeline, steady order inflows, an assetlight operating model, and emerging opportunities in the construction space-ACIL is well-positioned to generate healthy cash flows and is expected to deliver revenue/EBITDA/PAT growth of 19%/35%/34% CAGR over FY25-FY27E," commented the research analysts of Axis Securities.

Ahluwalia Contracts India Share Price Analysis

On Monday, December 22, Ahluwalia Contracts (India), a small-cap stock, began trading on the BSE at Rs 975.40 and reached an intraday high of Rs 1005.

After hitting a 52-week low of Rs 620.65 reached on February 18, 2025, Ahluwalia Contracts India Ltd. has made a major rebound. The stock has risen by about 61% from its yearly low to its current market price of Rs 998.35, indicating a resurgence of investor confidence supported by strong order inflows and margin improvement.

It is still trading around 12% below its 52-week high of Rs 1,134.95 recorded on January 2, 2025, suggesting that even though a major rally has already occurred, there is still space before retesting its peak levels.

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