HDIL (housing development and Infrastructure limited) stock report

May 10, 2012

The business is involved with construction, contracting and slum rehabilitation projects. Though most of its projects are based in suburban Mumbai and nearby Thane, it is expanding its presence in cities like Hyderabad and Kochi. But the USP of the company is its slum rehabilitation projects. 85% of India’s largest slum rehabilitation project has been completed, signaling revenue generation is on the cards.

It has been in the news for the number of resistances it has broken since January 2012 with the support of rally of market rallying from a price around Rs 52 to 135 in February 2011. Return was more than 2.5 times the amount invested. It was among the turnover toppers in the recent days indicating a strong amount of liquidity in this housing firm. Even though its financials have nothing to boast about it is a good for a short to medium term investor. Its Dec’ 2011 quarter numbers were dismal on a (YOY) basis. This was the case a quarter back and things are looking better even for a long term player. The reason behind it is the rate cut by the RBI, persuading the aam admi to go for loans. This will be a breather for its luxury apartment segment.

Fundamentally PE ratio is at 3.33 which is very less compared to the leader of real estate DLF which stands at 25.40 in the current market scenario. Technically with R.S.I indicating that it is just going to enter oversold condition, a further downside is possible but the room for it is very less. A buying on dips formula should be applied for those gaming for the short term. If it breaks the Rs 70 the next plce where it will get possibly get stuck is 60-63 range owing to its high beta nature. Those going in for more than 1 year should not wait for further fall as the reward side is weighing more.

Editor:- Rahul

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