Housing Development & Infrastructure Limited (HDIL) : Stock Recommendations
We initiate coverage on Housing Development & Infrastructure Limited (HDIL) with a BUY rating and a target price of Rs436. We expect the company to speed up execution at its largest project (the Mumbai Airport Slum Rehabilitation Scheme) given its lower debt levels, and maintain momentum at its other residential and commercial projects launched since March 09.
We initiate coverage on HDIL with a BUY rating and a target price of Rs436. We expect the company to speed up execution at its largest project (the Mumbai Airport Slum Rehabilitation Scheme) given its lower debt levels, and maintain momentum at its other residential and commercial projects launched since March 09.
The Mumbai airport slum rehabilitation project (which makes up 51% of its NAV) is progressing steadily. Given an improved TDR outlook and less stress on its balance sheet, we expect the company to speed up execution of the next phase.
After almost 18 months, HDIL re-entered the residential and commercial property markets in Mar ’09. Its lowcost land bank in Mumbai/MMR and its knowledge of the market have already seen it sell more than 2m sq. ft. in these segments since the first launch in Mar ’09.
The company has lowered debt by going the QIP route, delaying SEZ projects, and selling FSI. We expect it to continue FSI and land sales, though on a smaller scale, to maintain a low debt-equity level.
Our target price of Rs436 is on par with its FY11e NAV. We have incorporated the necessary discounts in the model.
Source : Live Mint
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Category: Broker tips
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