HCC has strong revenue visibility, as the order book is almost `21,000 crore, 4.6 times its 2010-11 estimated sales. Besides, it owns seven infrastructure assets worth `5,600 crore. The company aims to expand it's infra asset portfolio to 15,000 crore by 2013-14, which will provide consistent revenue in the form of annuity. Two of its real estate projects in Mumbai have already seen traction and will be completed in a phased manner.
Its largest township project, Lavasa (HCC's stake is 65 per cent), is expected to hit the Initial Public Offer (IPO) market soon. After listing, it could create good value, as HCC's stake could be valued at about `3,500-4500 crore. Analysts conservatively value HCC at `75-80 per share. This does not fully reflect the value of its various assets. For instance, analysts have been cautious in valuing HCC's Lavasa stake, as they await details regarding its IPO,actual pricing and equity dilution. Even otherwise, at `59, the stock offers a favourable risk-reward equation.
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