Buy HDIL with Long Term View

Co Name: HDIL Reco: Buy
CMP: Rs 73
Best Buy Level: Dip around Rs 65-70 (accumulate at this level)
Target Price: Rs 90 ( 3-6 months), Rs 140 (12-18 months)

Investment Rational:
1. Fundamentals are good: In the Q1 & Q2 of FY 09 it has posted good results despite all the negative sentiments. Currently, its available at PE of 1.35 and PBV of 0.50. It has prety impressive PAT Margin of 53% and Operating Profit Margin of 88%. Moreover, it has DE ratio below 1.

2. Currently, its trading at all time low level. Though "Rollovers from banks are increasingly becoming difficult for realty players, leading to fund crunch," notes the report, highlighting the fact that "around Rs 5.5 billion (14% of the total debt) is due for repayment in the next six months and land payment dues are currently around Rs 4 billion." Also, rehab construction in Phase-I of MIAL project would require another Rs 3 billion over the next 12 months, it adds, yet the company has valuable assets, but monetising the same at right prices is very crucial in the current tight liquidity situation.

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