Ahluwalia Contracts Shares Surge 18% On ₹572 Crore Order Win; Up 624% In Four Years

(Source – Mint).

Shares of Ahluwalia Contracts (India) Ltd. soared by 18% during today’s intraday trading session, achieving a new all-time high of ₹1,542 per share. This remarkable surge follows the announcement that the company secured a significant ₹572 crore construction order from the Airports Authority of India. The stock opened significantly higher at ₹1,337 per share, up from the previous day’s closing price of ₹1,306.

Major Contract Win

On Thursday, Ahluwalia Contracts revealed through an exchange filing that it had been awarded a ₹572 crore contract for the construction of a new terminal building, along with allied structures and external development works, under the Engineering Procurement and Construction (EPC) model. This contract represents a substantial addition to the company’s growing portfolio and has bolstered investor confidence, driving the stock’s impressive gains.

This latest order is the company’s second major win in just over a month. On June 10, Ahluwalia Contracts secured a ₹98.80 crore contract from Indian Financial Technology and Allied Services for mechanical, electrical, and plumbing (MEP) work at the Enterprise Computing and Cybersecurity Training Institute in Bhubaneshwar. Earlier in June, the company also received an ₹88.15 crore order from Daffodil Hotel Private Limited for civil work at Park Hyatt Goa. These consecutive order wins underscore the company’s robust operational capabilities and market reputation.

Stellar Stock Performance and Financial Growth

Ahluwalia Contracts has demonstrated extraordinary stock performance, with shares surging by 91% year-to-date. Over the past four years, the company’s stock has achieved a phenomenal 624% gain. This year alone, the company has already surpassed the 63% return recorded in 2023 within the first six months, reflecting strong investor confidence and market momentum.

In the fiscal year 2024 (FY24), Ahluwalia Contracts reported a gross order book of ₹111,799 million, up from ₹81,627 million in FY23, representing a 37% year-over-year growth. The distribution of its order book includes 38% from central government projects, 23.5% from state governments, 34.9% from the private sector, and 3.4% from overseas government projects. This diversified order book showcases the company’s strategic focus and resilience in the infrastructure sector.

Ahluwalia Contracts Thrives in Promising Industry Outlook

The Indian construction sector is on a trajectory for substantial growth, projected to reach $1.4 trillion by 2025. The sector is expected to require an investment of US$966 million by 2040. There is a growing demand for commercial spaces such as office buildings, hotels, retail centers, and entertainment units. In 2020 alone, 31.9 million square feet of office space was absorbed across India’s six largest cities.

Urbanization trends indicate that by 2030, over 40% of India’s population is expected to reside in urban areas, up from the current 33%. This shift is anticipated to drive the demand for an additional 25 million mid-end and affordable housing units.

National Infrastructure Pipeline

Under the National Infrastructure Pipeline (NIP), India has earmarked a $1.4 trillion investment budget. This includes allocations of 24% for renewable energy, 18% for roads and highways, 17% for urban infrastructure, and 12% for railways. These investments are expected to create a robust pipeline of opportunities for construction companies like Ahluwalia Contracts.

Ahluwalia Contracts’ recent order win and its stellar stock performance underscore the company’s strong market position and growth potential. With a diversified order book and a robust industry outlook, the company is well-positioned to capitalize on the opportunities in India’s burgeoning construction sector. Investors and stakeholders are optimistic about the company’s future, buoyed by its strategic wins and impressive financial performance.