Stock market analysts have maintained ‘buy’ rating on Hindustan Construction Company stock with a short term of Rs 68 in 2-3 weeks.

According to analysts, investors with a short-term horizon can purchase the stock around Rs 59 with a stop at Rs 55. If the stock market remains positive in the coming days, the stock pricing becomes more attractive, and reach above Rs 72 within the said time period.
 
Today (Nov 11), the company’s shares opened at Rs 59.50 on the Bombay Stock Exchange (BSE), as against its last closure at Rs 58.80 on Monday (Sep 02). Current EPS & P/E ratio stood at 4.41 and 13.12 respectively. The share price has seen a 52-week high of Rs 278.90 and a low of Rs 30.10 on BSE.

The stock bottomed at Rs 30.1 on October 27 after a protracted down trend. It had rebounded from this support in January 2005 too. Weekly candlestick chart patterns imply that a medium-term trough could have been formed at the recent trough at Rs 30.

Ten-day rate of change oscillator has moved firmly into the positive zone and the moving average convergence divergence oscillator too is signaling a buy. The implication is that the current up trend can sustain to take the stock higher.

HCC declared a phenomenal increase in standalone net profit for the three-month period ended September 30, 2008. During the period, the company’s profit surged 71.49% to Rs 199.44 million, as against Rs 116.30 million during the same quarter previous year.

Net sales for the period increased 18.31% to Rs 6,491.59 million, whereas total income for the quarter rose 20.86% to Rs 6,759.85 million, when compared with the prior year period.

The company reported earnings of Rs 0.78 a share during the quarter, registering 73.33% growth over previous year period.

During the quarter, the company’s operating margin rose by 193.64 basis points to 12.89% as compared with the previous year period. Interest cost zoomed 43.89% to Rs 491.96 million, whereas depreciation cost increased 31.05% to Rs 296.31 million over previous year period.

On Oct 21, HCC pocketed an order worth Rs 3.60 billion from Lanco Infratech for Teesta-VI hydroelectric project, Sikkim.

The scope of the order includes execution of all civil works of twin head race tunnels of 16.5 kms including adit-II at Kalej Khola and adit-III for Teesta -VI hydroelectric project.

The company received a Letter of Intent (LoI) from Lanco Infratech, Gurgaon. The project is to be completed in 45 calendar months from the date of LoI.

Moreover, Bank of India has invested Rs 1.50 billion in Lavasa Corporation (LAVASA), a subsidiary of Hindustan Construction Company, in the form of convertible debentures. Based on the above investment, the equity valuation of LAVASA gets reconfirmed at Rs 100 billion.

Other stocks from the same sector that looks good for short-term as well as long-term trading includes Unitech, IRB Infra and IVRCL Infra.