Buy HDIL; target of Rs 365: PINC Research

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Buy HDIL; target of Rs 365: PINC Research

This article was posted on May 28, 2009 and is filed under Stock Views

PINC Research has recommended a buy rating on Housing Development and Infrastructure, (HDIL) with a price target of Rs 365 in its report dated May 25, 2009.

“Housing Development & Infrastructure Ltd’s (HDIL) Q4FY09 results were below our expectations. Its revenues declined 63.3% YoY to Rs 3.6 billion owing to a slowdown in the Mumbai property market. OPM for the period dipped by 3,158bps YoY to 57% owing to higher cost of construction & development (38% of net sales) incurred towards ongoing projects. Despite other income of Rs 309 million, net profits dropped by 91.3% YoY to Rs 619 million impacted by interest cost of Rs 1.4 billion.”

“We have estimated the NAV of HDIL’s projects (ongoing & proposed), including the SEZ land at Vasai/Virar at Rs 338/share. The airport project is expected to add another Rs 150/share, taking the company’s total NAV to Rs 487/share. Considering an up-tick in buyers’ response to its new offerings, infusion of equity, easing interest & debt repayment woes and an expected revival in the TDR market over the next few months, we upgrade our recommendation to ‘BUY’ on the stock, target Rs 365,” says PINC’s research report.

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