Ahluwalia Contracts Ltd. traded near fresh highs with company's new business strategies

Ahluwalia Contracts (India) Ltd., a construction major, traded near fresh highs on expectations the company's change of business mix will help it scale newer peaks.

Ahluwalia has an order book in excess of 4,000 crores, which is 3.9 times in annual sales. This gives the company a comfort of at least 2 years worth of sales. It has a bidding order pipeline of 2,200 crore rupees as well.

Ahluwalia is slowly shifting its business to the government sector owing to pricing delays in projects made for the private sector. All new projects have a price escalation clause and the share of fixed price business to overall order book is down to 7 percent of total versus 50 percent earlier.

The company is also in the process of paying off its debt and making the balance sheet debt free. It is a direct play on the government's plans to construct 100 smart cities across India.

Ahluwalia contracts rose 13 percent to 284 rupees on the National Stock Exchange, where 3.12 lakh shares were traded compared with a 1-week average of 40,000 shares.

The company's market capitalisation has grown 86 percent to 1,874 crore rupees in the past one year.

(Image credits: Indiatimes)