Monday, November 28, 2011

DARK HORSE RECOMMENDATION BY SMART PROFIT

DARK HORSE RECOMMENDATION BY SMART PROFIT


BUY KAMANWALA HOUSING CONSTRUCTION (511131)
CMP: 27,
Target: 62

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.

It owns the famous Filmistan studio in partnership and has been in
news recently that it is selling the land for a whooping amount of Rs.
600 cr.
Kamanwala constructing a commercial project "Pinnacle Corporate Park"
at Mumbai's most developing commercial hub Bandra Kurla Complex.
Kamanwala's Savoy Residence, a residential project of 60000 sq ft. in
Santacruz West has been completed. Work at Savoy chambers, a
commercial project of 67000 sq.ft in Santacruz West is completed.
Kamanwala is constructing 5 towers residential project in Malad West.
They are developing SRA project at Mahim. Kamanwala owns 125000 sq ft
of land in Oshiwara area.
They are soon starting with development of 35 acres of land in
Hyderabad. Kamanwala holds huge land in Noida and Turbhe as well.
With total land asset of more than Rs.1000 cr, market is severely
undervalued at 40 with market capital of Rs.55 cr.

Considering the zeroing of debt the company has undertaken, Kamanwala
is currently trading at the CMP of Rs 27, the stock is trading at a
54% discount to our one-year forward NAV of Rs 37. With completion of
its various projects and its land bank, we recommend a STRONG BUY on
Kamanwala with it more than doubling to 62 in 9 months.


BUY FIRSTSOURCE SOLUTION (532809)
CMP: 9
Target: 25

Formerly known as ICICI OneSource, incorporated in 2001, Firstsource
Solutions Limited provides a range of business process outsourcing
services.
It offers business process management services to the banking,
financial services and insurance (BFSI); telecommunications and media;
and healthcare industries. Firstsource has a "rightshore" delivery
model with operations in India, U.S., UK and Philippines.

INVESTMENT VIEW:-
Firstsource Recognized with Top Honors at the International Quality
and Productivity Council (IQPC) Conference
Leadership position in the healthcare industry
About 40% of the revenue comes from its healthcare vertical catering
mainly to US markets
Divestment of Stake
Stable relationships with existing clients
The Company works with more than 1000 clients. 7 of the top 10 clients
have grown during the quarter.
Foreign Exchange Hedges
Outstanding FX hedge at $ 31million and £ 35million for USD and GBP
respectively.
Employee Strength
29,664 (as of 30th, June 2011) added 1,759 employees in this quarter.
Firstsource Solutions has reported a sales turnover of Rs 182.84 crore
and a net profit of Rs 7.17 crore for the quarter ended Jun '11.
For the quarter ended Mar 2011 the sales turnover was Rs 182.96 crore
and net profit was Rs 14.61 crore.

In spite of Q1 being a seasonally weaker Quarter, but considering the
strong performance both on revenues and profitability. We recommend a
Buy on FSL at CMP Rs.9 with a target price of Rs.25 within 9 months.

BUY NATIONAL HYDRO POWER CORPORATION (533098)
CMP: 23
Target: 40 in 6 months
National Hydro Power Corporation, an entity of Government of India, is
country's largest hydro power producer.
NHPC is currently having an installed capacity of more than 5,300 MW
with 14 operational power stations and has a cash surplus of over Rs.
4,000 crore.
National Hydroelectric Power Corporation (NHPC) has reported a net
profit of Rs 966 crore in the second quarter of FY12, a growth of 40%
as compared to Rs 690 crore in the corresponding quarter of last
fiscal.
Net sales jumped 47.66% to Rs 1,831 crore in the July-September period
of 2011 versus Rs 1,240 crore in same quarter the previous year.
The second quarter is a seasonally favorable quarter which contributes
bulk of full-year earnings.
Total revenue shot up 54% to Rs 1,981.5 crore from Rs 1,282.6 crore Y-
o-Y.
Earnings before interest, tax, depreciation and amortization (EBITDA)
rose 35% to Rs 1,416 crore from Rs 1,049 crore during the same period.
The state-run major is engaged in the construction of 10 projects at
various locations in the country, going to have an additional capacity
of 4,502 MW. It is planning to develop two hydro projects in Myanmar.
It plans to increase the capacity to over 10,000 MW by end of 2012.
The coal price has raised, which will forced to increase in power
price by 20%. This will further boost the profit margin of NHPC to a
large extent.
Spanning on Government's increasing emphasis on hydro power and NHPC's
strong hold, we recommend a BUY on NHPC at CMP of Rs 23, with a target
of Rs.40 in 6 months.


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