Monday 3 November 2008

Buy HCC, target of Rs 75: PINC Research

PINC Research has maintained its buy rating on Hindustan Construction Company (HCC) with a target of Rs 75 in its October 31, 2008 research report. "Hindustan Construction Company Ltd’s (HCC) sales grew 18% YoY to Rs 6.5 billion in Q2FY09, on back of a strong order book and increasing contribution from its power division. OPM expanded by 185bps to 12.9% while a change in accounting policy for forex fluctuations relating to FCCBs led to a net profit growth of 72% to Rs 199 million."

"We have valued HCC using SOTP method at Rs 76 per share, where the core construction business is valued at 6x FY10E EPS of Rs 4.8. While we expect slowdown in fresh orders in hydro power segment, irrigation works can sustain growth momentum in the orderbook. Also, Lavasa has received a good response during its recent soft launch. We maintain a ‘BUY’ recommendation with a 12-month price target of Rs 75," says PINC's research report.

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Source: Moneycontrol

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