Good buys or dark horses?

1059 Investors following Ashiana Housing. Share this News with them.

0

Like this story, share it with millions of investors on M3

Good buys or dark horses?

Investment Analyst, Ashish Chugh, discusses two of his interesting ideas for the New Year- Ashiana Housing and Automotive Stampings.

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Expected profitability in '07-08 to be Rs 30 cr:Ashiana Hsg ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Automotive Stampings and Assemblies |

Investment Analyst, Ashish Chugh, discusses two of his interesting ideas for the New Year - Ashiana Housing and Automotive Stampings .

Ashiana Housing is a Delhi based company, known for its housing projects in Bhiwadi, which is about one hour drive from Delhi. This company has got several ongoing projects in Bhiwadi, including Ashiana Utsav, a retirement resort, amongst others.

"Besides these projects the company has also other residential projects going on in Bhiwadi and Jamshedpur. As regards the future plans of the company, it has acquired 23 acres of land in Bhiwadi and they are launching a project called Ashiana Angan which comprises of 1,300 units and it's valued at about Rs 300 crore in Bhiwadi," he informs.

"We can expect a very good growth in the sales and profitability of the company. This company has got a small equity of just about Rs 5.5 crore. The management is holding close to 65%," he adds.

"Now this is good and bad for its shareholders because in the short term the company is not getting the discounting which it should deserve because the market is valuing the real estate companies mostly on their land banks and other factors like execution capability and other things have probably taken a backseat. But I think over a longer term period the ability to execute the project will be a parameter which will be probably equally important as the land bank. Once market realizes that and as the company starts showing revenues and profits in the coming quarters, I think the stock is due for a re-rating," he concludes.

Moving on, Ashish Chugh also has a liking for Automotive Stampings which is a lesser known company belonging to the Tata Group which holds 81% stake in it. The company is primarily involved in the manufacture of sheet metals components and assemblies. Their major customers include Telco, Mahindra & Mahindra, General Motors, Volvo, Fiat,  with overseas clients like Ford motor company of Europe, John Deere (US) and Trelleborg (Germany).

The company's sales have gone up from less than Rs 100 crore in '01-'02 to sales of Rs 275 crore for'05-'06. Its profits have also risen. As against a loss of about Rs 2.5 crore in '01-'02 it has made a profit of around Rs 4.6 crore in '05-'06.

The company has recently completed two expansions at their Chakan plant in Pune. They are setting up a new plant in Uttaranchal with a total capital outlay of close to Rs 16 crore. Chugh feels that at the current market cap of Rs 80 crore the stock looks undervalued.