KAMANWALA HOUSING CONSTRUCTIONS
BSE:511131
Current Price: 18
Target Price: 90 in 1 year
BSE:511131
Current Price: 18
Target Price: 90 in 1 year
Kamanwala Housing Construction Ltd (KHCL) was originally incorporated in 1984 as Kamanwala Housing Development Finance Company mainly to cater middle class buyers by constructing low cost housing and financing it at nominal rates.
Kamanwala Housing Construction (KHCL) is a reputed small sized player in the housing construction segment. KHCL has a slew of projects lined up which would enable it to register aggressive growth in its revenues and earnings over the next two-three years.
KHCL has several projects lined up in prime localities of Mumbai due for completion in the next two years. KHCL's revenue and earnings will see strong growth trajectory due to the execution of these projects and also enable the company to enhance its image in segment and get into contracts of higher value going ahead.
Derisking business by expanding to new geographies
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings.
Diversification into commercial space
KHCL has entered into commercial segment as well and has drawn up ambitious expansion plan on a much larger scale. In the last couple of years, it has acquired good land bank in Mumbai for future projects.
Good track record
Having a track record of more than two decades, KHCL has completed the execution of 18 projects in Mumbai, with saleable area totaling more than one million square feet.
Recent developments
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings. Moreover KHCL has acquired some land in Mahim under SRA scheme. In a 33% joint venture with Aspen Property Pvt. Ltd., it is developing a property at the famous Filmistan Studio, comprising both residential and commercial units. Meanwhile it is negotiating for few projects at 4 bunglow, Andheri Kurla Road.
Amalgamation of Doongursee Diamond Tools
During Q4Fy08 the company has amalgamated its subsidiary called M/s. Doongursee Diamond Tools Ltd with itself. Notably, this subsidiary is holding one lakh FSI for the Malad project.
Bonus Issue
During Q1FY09, KHCL issued bonus shares in the proportion of one equity share of Rs 10 each for every existing equity share held. The company has also recommended a dividend of 25% for FY08.
Valuation
KHCL is expected to register robust growth in revenues and earnings going forward. It is currently quoting at compelling valuations of 0.8x and 0.7x FY10E and FY11E earnings. The stock has succumbed to the market turmoil and its price has declined significantly in the last 3 months. With a strong project pipeline to drive revenue and earnings growth, the stock has potential to deliver handsome returns to the investors over a period of next one year. Investors can enter into the stock at current level , which is very attractive and should enable investors to earn a healthy return on their investment.
