HDIL Short Term Buy Call

Technical analyst Ashwani Gujral has maintained ‘buy’ rating on Housing Development HDIL Short Term Buy Call and Infrastructure Limited (HDIL) stock with a short term target of Rs 415.

According to him, interested investors can purchase the stock above Rs 308 with a strict stop loss of Rs 275.

Today (Sep 04), the company’s shares opened at Rs 323.90 on the Bombay Stock Exchange (BSE), as against its last closure at Rs 325.85 on Monday (Sep 02). Current EPS & P/E ratio stood at 55.38 and 5.62 respectively. The share price has seen a 52-week high of Rs 1116.96 and a low of Rs 254.67 on BSE.

Mr. Gujral said that the stock has good potential and it can still exhibit superb surge. It will achieve the target price within a period of 3-4 weeks on the back of its healthy growth plans and tough operating capabilities.

The company’s board, on August 27, through its finance committee conference allotted 61,220,595 equity shares as bonus to the stockholders who get registered as members as on record date i.e. Aug. 22, 2008.

The company is in the process of crediting the shares to the company’s shareowners and it will be credited within two weeks time.

On August 7, the central bank (RBI) announced that under portfolio investment scheme PIS, FIIs, NRIs and PIOs can buy equity shares and convertible debentures of HDIL through primary markets and Indian bourses.

Housing Development and Infrastructures reported its Q1FY09 outcomes that were in proportion to analysts expectations on the revenue front. Revenue for the period stood at Rs 5.7 billion as against to Rs 4.4 billion during Q1FY08.

During the quarter, the company’s operating income was Rs 4.6 billion that represents growth of 96.5%. Increase in inventory fell substantially to Rs 3.4 billion in Q1 FY09 from Rs 22.5 billion in Q4 FY08, primarily because of decline in the land bank payment that the company made in Q1FY09 as compared to Q4FY08.

Interest cost augmented from Rs 681.5 million in Q4FY08 to Rs 1.4 billion in Q1FY09. The company lifted up debt during the end of the fourth quarter owing to which the interest cost increased largely when compared sequentially.

Net profit registered growth of 56.8% to Rs 3.1 billion, primarily due to lower effective tax rate of 5.7%. The analyst anticipate the company to report net profit of Rs 18.9 billion in FY09 and Rs 24.2 billion in FY10.