Ashiana Housing & Finance - Rs.78.00

Incorporated in 1986 and promoted by B P Gupta, O.P. Gupta and R K Modi, Ashiana Housing and Finance (I) Ltd (AHFL) belongs to the Ashiana Group with diversified interests in food processing, engineering, edible oil and leather garment exports. AHFL is in housing development for the last two decades and has established its reputation as a real estate developer that provides quality of construction, safety of investment and integrity of commitment. Starting from Patna, the company has extended its residential as well as commercial activities to Jamshedpur (Jharkhand), Bhiwadi (Rajasthan), Ghaziabad (UP), Gurgaon, Greater Noida and the National Capital Region(NCR) around Delhi. AHFL can boast of developing 40 lakh sq. ft. of construction and buildings. Some of the reputed residential complexes are Ashiana Villa, Ashiana Garden, Gulmohar Park, Ashiana Bageecha, Ashiana Greens etc in Bhiwadi.

Changing demographics, low interest rate regime, rising disposable incomes and fiscal incentives have all created a huge demand for housing.. The real estate boom has gradually percolated from the big metros to tier II cities and AHFL is taking full advantage of this boom with its various projects under construction or nearing completion. Its Project Ashiana Rangoli is nearly completed and the hand over of possession has already started. The construction of the company's dream project 'Ashiana Utsav' comprising 640 units has already started and running as per schedule. Market response of the project is very encouraging as this project is planned to cater to the needs of senior persons of the society. Its Jamshedpur project ‘Ashiana Residency Greens’ comprising 149 units is nearing completion and the hand over possession of the flats has started. Due to the flourishing demand for housing in the Neemrana region (Rajasthan), AHFL has opened booking of 60 flats in its residential project ‘Ashiana Green Hill’. It also has a couple of projects under construction in Indirapuram, Ghaziabad by the name ‘Ashiana Upvan’ and ‘Ashiana Greens’. In Greater Noida, its project ‘Ashiana Orchid’ is completely sold out. Interestingly, AHFL is constructing an ultra modern hitech recreational club called ‘Ashiana Gymkhana’ in Bhiwadi with multi cuisine restaurants, banquet hall, conference room, lawn tennis, billiards, basketball ground etc.

The growth trajectory of the real estate sector could move up sharply in coming months due to the gradual opening up of the sector to FDI. Demand for real estate is on an upward swing and this is reflected in the higher prices despite the increase in supply. For its future projects, AHFL has acquired 27 acres of land in Bhiwadi and another 23 acres for a new residential complex called ‘Ashiana Angan’. Some more residential projects in Bhiwadi are in the pipeline. It has also acquired 9 acres of land for setting up a new township named as ‘Ashiana Woodland’ at Jamshedpur in Jharkhand. The company is also planning to enter another rapidly growing city viz. Pune. Surprisingly, the company is nearly debt-free and has an investment of Rs.19 cr. as on 31 March 2005. More importantly, it paid a dividend of 10% in spite of reporting a net loss for FY05, which shows it is a cash rich company. For the nine months ending 30 Sept 2005, its total revenue quadrupled to Rs.24 cr. and NP stood at Rs.2.98 cr. against Rs.0.13 cr. last year. For FY06, it may earn Rs.4 cr. profit on a topline of Rs.35 cr. which may shoot up to Rs.6 cr. on sales of Rs.50 cr. by FY07. This works out to an EPS of Rs.7 and Rs.11 respectively on its tiny equity of Rs.5.35 cr. With a 52W high at Rs.134 and current market of Rs.45 cr., the scrip is trading reasonably cheap and can give 100% return in 12~15 months. Investors are strongly recommended to buy at current levels and hold it for 2~3 years to earn handsome returns.