Stock Review: Ansal Properties

This is a contrarian buy from a sector which is currently out of favour, from a sector which has virtually been written off by most investors. That is the reason you are getting this stock not just close to its 52-week low, but very close to its five-year low.

The reasons are many. One is that the interest rates are almost at their peak, which is hurting not just home sales, but also hurting the debt servicing capacity of the companies. The other thing is that there is a lack of transparency and corporate governance in the sector as a whole. The other part is that most real estate companies are carrying huge inventories as on date, and most of them are finding it difficult to sell those.

Coming to Ansal Properties, this is a 40-year old company almost as old as Unitech and DLF. It has been credited with developing more than 3,000 acres of land in Gurgaon alone, leave aside other developments. The company has got current land bank of about more than 7,000 acres out of which 3,500 acres is in Lucknow, and Megapolis, Greater Noida is about 2,500 acres. Ansal is doing a 200 acre township in Gurgaon and currently has got about 19 townships under development.