Buy Hyderabad Industries; target of Rs 593: SKP Securities

3104 Investors following Hyderabad Ind. Share this News with them.

0

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

Buy Hyderabad Industries; target of Rs 593: SKP Securities

SKP Securities is bullish on Hyderabad Industries and has recommended buy rating on the stock with a target of Rs 593 in its March 31, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Glenmark Pharma; target of Rs 379: KRChoksey Buy Divis Laboratories; target of Rs 833: Emkay PINC Research positive on Financial Technologies ALSO READ See previous views by SKP Securities See what other Experts & Brokerages are saying about Hyderabad Ind See messages about Hyderabad Ind Hyderabad Ind BSE | NSE 31/05/12 Are Mutual Funds betting on Hyderabad Ind?

SKP Securities is bullish on Hyderabad Industries and has recommended buy rating on the stock with a target of Rs 593 in its March 31, 2011 research report.

"Hyderabad Industries (HIL) is a flagship company of C K Birla Group. HIL's product range include Fibre Cement roofing sheets (Charminar), Autoclaved Aerated Concrete Blocks and Panels (Aerocon) and Calcium Silicate insulation product (HYSIL) and Jointing material for gaskets. It enjoys 21% market share of AC roofing industry in India with a capacity of 854500 MT."

"In union budget 2011-12, government has increased expenditure on rural and infrastructure development. The spending on social sector has been increased to Rs 1,60,887 crore in 2011-12 and Rs 2,14,000 crore has been provided for infrastructure development. Increased focus of government towards rural and infrastructure development and implementation of the various programs are expected to boost the income of the people in rural area thereby increasing the potential market for usage of fibre cement sheets in rural areas.  In FY11 the company set up a green field plant at Golan, Gujarat to manufacture AAC Blocks with a capacity of 2,00,000 Cu M. It will help the company to cater the growing market for AAC Blocks in the western part of the country. Demand for green building products is increasing in world on account of serious concerns about the environment and the impact on energy consumption; it shows immense potential for HIL's green building product division."

"We expect high margin AAC Blocks to register a top line of Rs. 112.4 crore and Rs. 120.9 crore in FY12E and FY13E respectively, and revenue contribution from this product division will improve to 13.6% by FY13E from mere 4.1% in FY10. HIL is the market leader in the asbestos-based roofing industry, with an estimated market share of 21% and its famous brand 'Charminar' established over six decades and enjoys a premium over others in the market. HIL has the most extensive distribution network with nearly 5000 sales points spread across the country, which is serviced by its 12 manufacturing locations and 40 depots."

"At current market price of Rs 352, HIL is trading at P/E of 3.9x and 3.6x of FY12E and FY13E earnings of Rs. 89.5 and 98.8 respectively. We recommend BUY rating on the stock with a target price of Rs 593 (68% upside) in 15 months at the P/E of 6x on FY13 earnings," says SKP Securities research report. 

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment