Sethi told CNBC-TV18, "Hyderabad Industries is a leading manufacturer of Asbestos roofing sheets, which are actually meant for low cost rural housing. This company manufactures these sheets and sells them under the popular brand Charminar, which command a premium of 4% to 5% over its competitors and has a dominant 20% market share."
He further added, "The company has a very good distribution network of more than 5000 distributors across the country and what I like about the company is that I see a very good demand growth for the companies products because of the governments thrust on rural housing under its various schemes like Indira Awaas Yojna and Pradhanmantri adarsh gram yojna. In addition to that the higher rural disposable income, which would arise due to other policies like NAREGA and the hike in minimum support price for crops, would also be a positive for the company."
"If you look at the financial of the company they are extremely attractive. The company reported excellent set of numbers for FY10; its profits actually went up from Rs 44 crore in FY09 to Rs 90 crore in FY10, which was a growth of 100%. It reported an EPS of Rs 120 for FY10 which means that the current market price is quoting at less than six times its FY10 EPS. So I like this stock and would recommend a buy with target price of Rs 1100 in about 12 months."
Disclosure: It would be safe to assume that I would own the above stock and would have also recommended it to my clients for investment.
