Kamanwala Housing Construction, a Promising Growth Imperative


Raipur June 2010: Kamanwala Housing Construction Limited (KHCL), a company with a 25-year track record, based at Mumbai is into construction and development of commercial and residential buildings. The company has successfully completed more than 18 projects in and around Mumbai. From the low-cost housing project it started out with, the company has now transitioned to executing prestigious projects of high quality in prime location. Kamanwala was the first company in real estate sector to launch its public issue in March 1986.

Kamanwala Housing Construction a growth imperative reported a 3 fold increase in net profit at Rs. 2.90 cr for the fourth quarter ended 31 March 2010, over the previous quarter. Boosted by strong sales with turnover of Rs.71.46 cr, Kamanwala gave a yearly profit of Rs.5.65cr for 2009-10, nearly double the profit as compare to Rs.2.9 cr given in 2008-09. This quarter result saw an increase of 300% in profit compare to Dec 09 quarters. EPS has shown a yearly rise of 44%.

Kamanwala has clear debt of Rs.50 cr in quarter ending March 2010 which will subsequently decrease their interest paid and thus reflect positively in the coming financial results. They are aiming to be debt free by next quarter i.e by June 2010.

The company is expected to achieve a turnover of Rs 800 crore in two years due to completion of its projects, which totals up to 20 lakh sq feet. Following this, the EPS for 2010-11 is expected at Rs 60 and for 2011-12 this may go up to Rs 100-110, indicative of more than 80 per cent growth. High and sustainable growth forecast for real estate and the construction sector will augur well for the company. The demand in this sector is driven by the increasing level of urbanization, the above-average economic growth in India and the thrust on infrastructure.

India is to be a path of development and has displayed resilient strength and character in sustaining decent growth rates. India’s infrastructure spending at present accounts for 4% of GDP. Investment in reality sector has gained a momentum. This is possible with significant private sector participation. There is no doubt that Indian infrastructure is poised for a great leap forward. The stock price of the realty company by market capitalization has had a remarkable recovery from the July 2009 lows of Rs.22 to the currently Rs.60.

The company is well positioned to take advantage of the industry growth potential, having laid the foundations for taking off into a higher scale of operations. With equity of Rs.14 cr, the market capital stands at around Rs 85 cr currently whereas their land bank itself totals more than Rs 1200cr. This huge difference gives KHCL a very positive edge. Making it an attractive buy at current levels. Furthermore, Kamanwala has been consistent in giving dividend to investors. The scrip is currently trading at Rs 60 and looking at its land bank and ongoing & future projects, we target it to reach Rs.300 by May 2011 and Rs 500 in the next 2 years. Smart Profit Financial Consultancy has rated the company as a Black Horse in the run.

News Sources -VISHAL MEDIA (P.R.Agency), Mobile 098266-23100, Email- pr@vishalmedia.com

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