Monday, 17 November 2008

Buy HCC, target of Rs 60: Motilal Oswal

Motilal Oswal has maintained its buy rating on Hindustan Construction Company (HCC) with a target of Rs 60 in its November 12, 2008 research report. "We expect HCC to report net profit of Rs 844 million in FY09 (a downgrade of 21%) and Rs 1.1 billion in FY10 (a downgrade of 37%), largely driven by slower execution and increased interest costs. This translates to an EPS of Rs 3.3/sh in FY09 (up 19% YoY) and Rs 4.4/sh in FY10 (up 34% YoY)."

"Based on SOTP valuation, we arrive at a price target of Rs 60/sh comprising: core business at Rs 35/sh (8x FY10E), Lavasa at Rs 20/sh (50% discount to NAV), Vikhroli Corporate Park Rs 5/sh (25% discount to NAV). HCC is trading at reported PER of 15.2x FY09E and 11.3x FY10E. Maintain Buy," says Motilal Oswal's research report.

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Source: Moneycontrol

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