Buy HDIL; target of Rs 225: PINC Research

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Buy HDIL; target of Rs 225: PINC Research

PINC Research is bullish on Housing Development and Infrastructure (HDIL) and has recommended buy rating on the stock with a target of Rs 225 in its June 6, 2011 research report.

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PINC Research is bullish on Housing Development and Infrastructure (HDIL) and has recommended buy rating on the stock with a target of Rs 225 in its June 6, 2011 research report.

"Housing Development and Infrastructure (HDIL)'s Mumbai International Airport Ltd (MIAL) project got a green signal as the issue with respect to 'eligibility criteria' has been sorted and MMRDA has commenced the shifting of eligible slum dwellers from MIAL slums to Kurla Premier Compound. This decision of MMRDA is a positive move for HDIL as (1)it paves way for Phase-II of the project leading to ramp up in phase-I & II of the project.(2) the development work in phases is likely to help increase TDR generation. We expect TDR generation to exceed 1 msf post two quarters; this is higher from company's earlier guidance of 0.75-0.9 msf per quarter for FY12 given in their Q4FY11 conference call. (3) Tax rate going forward might be lower than earlier as MAT rate is applicable on TDR sale."

"MMRDA has commenced shifting of all eligible slum dwellers from MIAL slums to Kurla Premier Compound and also have issued allotment letter for flats to eligible slum dwellers. The total slum dwellering families is ~28,000 families. We believe that almost 75% of the construction work has been completed and most of the buildings are in ready to shift stage. This shifting clears the cloud over the work on the MIAL project. The management, in Q4FY11 conference call, had given a guidance of 0.75-0.9 msf per quarter TDR recognition for FY12. Post the current development, we expect that work on other phases of MIAL project to ramp up and see TDR generation exceed 1 msf post two quarters. This is likely to lead to higher cash generation. Higher TDR generation is likely to make tax rate fall marginally as TDR is taxed at MAT. We maintain a 'BUY' on the stock with a NAV based target price of Rs 225 post 20% discount to NAV. Gross airport valuation is at Rs 132 per share," says PINC Research report.

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