Vijay Shanthi Builders - Rs.36.00

Incorporated in 1992, Vijay Shanthi Builders Ltd (VSBL) was promoted by Mr. V.C. Jain who is in housing construction for over 15 years. Since then the company has successfully positioned itself as a quality builder because of quality construction and timely delivery. VSBL is well-known for offering luxury houses at affordable prices to the discerning citizens of Chennai. Till now, the company has constructed nearly 240 buildings and made 7500 families happy. It is presently handling residential projects to suit middle income and higher income groups of Chennai and in its outskirts.

Due to the sharp upswing in the demand for plush housing in Chennai, VSBL has entered the high end market in 2004-05 as these premium flats easily get sold off due to the demand-supply mismatch. Although it will continue building budget houses for the masses, it is gradually shifting its focus to more luxurious apartments catering to high society. Its elite ongoing projects include Courtyard in Nugambakkam, Astalakshmi - row houses in Adyar, Krsna in Egmore etc. Notably, each flat in these project cost around 50 lakh to 1 crore and all the flats are fully-booked and the company has started giving possession. Another prestigious project of 1,10,000 sq.ft called Rain Tree at Alwarpet is under construction comprising of 42 exclusive lifestyle apartments priced at around Rs.1.25 cr. each. Its other projects are Atrium at Adyar, Whispering Meadows, Habitat, Aradhana, Gangotri etc all at Perungudi. VSBL is also coming with some prominent projects like Patio at Nugambakkam, Four Seasons at Mylapore, Tranquility at Alwarpet, Lake View at Amabattur, Palm Meadows at Velachery, Forest at Pallavaram etc. It is also developing a property at Udaipur by the name Lilly Pond. Moreover, its mineral water division is faring satisfactorily contributing around Rs.2 cr. in topline.

Recently, the company has negotiated and finalised 40 acres of land at Pallavaram and another 15 acres to be finalized soon. Due to the increasing number of software companies, Chennai has become a hub of housing activity. Moreover, with tax benefits, easy home loans and higher standard of living, the demand for housing will continue to rise in the foreseeable future. For FY06, the company is estimated to report a total revenue of Rs.55 cr. with NP of Rs.4.75 cr. which will amount to an EPS of Rs.4 In spite of such strong fundamentals and bright future ahead, the company has a market cap of only Rs.40 cr. and is trading at a cheap valuation of 9 times against its FY06 earning and 7 times against its FY07 earning respectively. Investors are strongly recommended to buy the scrip at CMP with a price target of Rs.75 (100% appreciation) in 12~15 months.