Exit HCC: SP Tulsian

26190 Investors following Hind Constr. Share this News with them.

0

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

Exit HCC: SP Tulsian

Exit HCC, says SP Tulsian, sptulsian.com.

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Hind Constr See messages about Hind Constr

Exit HCC , says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Overall call in HCC is quite negative. For any company which is going for debt restructuring is always seen as positive for the company because obviously they get respite in terms of the repayment. In fact there are reports that for the last six months they are unable to make even the petty payments like the professional fees, like suppliers bill and all that to the extent of Rs 50,000. That means it is certain that the company is unable to hold even their existing business. The load of Lavasa has made the whole company quite vulnerable."

"Apart from that, the kind of investments which we have seen in the Lavasa project by some banks like Axis Bank, they have taken an exposure. I don't have the exact amount. But Axis Bank has taken an equity investment of Rs 250 crore at a valuation of Rs 10,000 crore in Lavasa. Generally always in these kind of investments there are always the put and call options, there are always the conditions of coming out with IPO's and all that. But I don't think that the valuations of Rs 2500-3000 can really be talked for the Lavasa in which the company is holding 64%."

"Apart from that as I said, no cash flows, cash accruals are seen from the core operations of the company. Even if the debt restructuring happens, I wonder what will be the view of the lenders where they will really be falling back. Can they really take a call that the assets held by the company are really tangible to the extent of the overdue amount or can they really take a call that the existing business of the company is capable to generate that kind of cash flow or profitability? So from whatever angle you see, maybe couple of month's back the stock was ruling at Rs 29-30 and see the kind of erosion having taken place. We have not the matching erosion having happened maybe in the stock like IVRCL, GMR, GVK, Lanco which all fall in the same category."

"I will advice to exit from HCC. I don't see any respite for the stock at least happening even in next 12 to 18 months. Even if the loans get reschedule, I don't think that the company will really be able to bounce back at least for the next 12 to 18 months. On a relative basis again you lose the opportunity maybe in some other sectors like health, pharma and so many other things. So my advice is there is no question of averaging. Even one should think of exiting from the stock now by booking the losses."