Ansal Housing & Construction Ltd - 203.00 Rs
Incorporated in 1983, Ansal Housing & Construction Ltd (AHCL) – part of the high profile Ansal group is one of the reputed real estate developers with a predominant presence in North India. AHCL has been the pioneer to introduce the concept of large integrated residential townships in the country. Moreover, it has been the first to enter Tier - II & III cities like Ghaziabad, Noida, Allahabad, Lucknow, Ludhiana, Agra, Bhopal, Haridwar etc. Till now company has constructed massive 67.6 million square feet of commercial and residential project across India. Despite residential segment being the biggest contributor, AHCL is now seeing increased activity in commercial division since it has aggressively forayed into shopping malls and retail space. Under the collaboration of Radisson worldwide, company is setting up chain of restaurants across India with “The Great Kebabs Factory” and “Superstars” already operational in Noida. It also owns and manages club houses under the ‘Chancellor’ brand name in Ansal Townships. As a part of diversification, company has also forayed in automobile business thru a joint venture with Itochu Corporation of Japan. And on the back of excellent prospects, it is now setting up state-of-the-art sales cum service centre facility of Honda Cars at Ghaziabad.
Ironically, out of the total development done by the company till today, more than 95% have been carried out in the Tier II or Tier III cities which stands out as the USP of the company. Few of popular townships developed by the company are Aashiana - Lucknow(477 acres), Golf Link I & II - Greater Noida(140 acres), Tronica city - Ghaziabad(87 acres), Bachittar Enclave - Ludhiana(34 acre) etc. In the commercial space, Imperial Tower, Majestic Tower, Classique Tower, Vikas Deep etc in Delhi and Ansal Plaza - Ghaziabad(5,45,000 sq ft), Fortune Arcade - NCR(91,35,000 sq ft), Mega Arcade - Noida(750,00 sq ft) are some of its landmark creations.
On the back of boom in housing sector and strong demand for commercial property, AHCL is aggressively expanding and has launched residential townships branded as “Ansal Town” across seven cities namely Agra, Indore, Jammu, Rewari, Karnal. Meerut and Ghaziabad which are spread over 1400 acres with an investment of Rs 2000 cr. In all, company has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. Interestingly, it has construction plans in much smaller towns like Kurukshetra, Narnaul, Yamuna Nagar & Panchkula in Haryana, Ajmer & Alwer in Rajasthan, Muzzaffer Nagar & Jhansi in UP, Parwanoo & Poanta Sahib in HP. At the same it also has ongoing projects in Mumbai metro whereby it is building two towers under the name “Whispering Meadows” and “Ansal Heights” at Mulund and Worli respectively. Company also intends to develop Holiday Homes in Shahpur - Thane spread over 150 acre. Couple of weeks back, it launched a new residential group housing project named “Ansal’s Woodbury Apartment” at Zirakpur near Chandigarh.
Currently, AHCL has a rich land bank of 2500 acres with about 50% under its own name while the rest under firm collaborators agreement. And more importantly the acquisition cost of these lands is reasonably low, for which company has been able to register better profit margin compare to its peers. Financially, its topline increased by 60% to 199 cr and PAT more than doubled to 42.75 cr for FY07, posting an EPS of 25 Rs on equity of 16.80 cr. Incidentally, AHCL follows the percentage of completion method of accounting and hence the revenue is recognized in proportion to the actual cost incurred. It reported encouraging result for the June qtr registering a healthy OPM of 40%. Conservatively, on a standalone basis it may end FY08 with total revenue of 275 cr and profit of 50 cr i.e. EPS of 29 Rs on fully diluted equity of 17.50 cr. The consolidated nos will be much better with an EPS of more than 32 Rs. However, against order book of 2500 cr, company is available at market cap of 350 cr. With 52 week H/L as 405/190 Rs, it is one of the safe bet in real estate sector. Investors are strongly recommended to buy at current levels as scrip can easily appreciate 50% in a year’s time.
Ironically, out of the total development done by the company till today, more than 95% have been carried out in the Tier II or Tier III cities which stands out as the USP of the company. Few of popular townships developed by the company are Aashiana - Lucknow(477 acres), Golf Link I & II - Greater Noida(140 acres), Tronica city - Ghaziabad(87 acres), Bachittar Enclave - Ludhiana(34 acre) etc. In the commercial space, Imperial Tower, Majestic Tower, Classique Tower, Vikas Deep etc in Delhi and Ansal Plaza - Ghaziabad(5,45,000 sq ft), Fortune Arcade - NCR(91,35,000 sq ft), Mega Arcade - Noida(750,00 sq ft) are some of its landmark creations.
On the back of boom in housing sector and strong demand for commercial property, AHCL is aggressively expanding and has launched residential townships branded as “Ansal Town” across seven cities namely Agra, Indore, Jammu, Rewari, Karnal. Meerut and Ghaziabad which are spread over 1400 acres with an investment of Rs 2000 cr. In all, company has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. Interestingly, it has construction plans in much smaller towns like Kurukshetra, Narnaul, Yamuna Nagar & Panchkula in Haryana, Ajmer & Alwer in Rajasthan, Muzzaffer Nagar & Jhansi in UP, Parwanoo & Poanta Sahib in HP. At the same it also has ongoing projects in Mumbai metro whereby it is building two towers under the name “Whispering Meadows” and “Ansal Heights” at Mulund and Worli respectively. Company also intends to develop Holiday Homes in Shahpur - Thane spread over 150 acre. Couple of weeks back, it launched a new residential group housing project named “Ansal’s Woodbury Apartment” at Zirakpur near Chandigarh.
Currently, AHCL has a rich land bank of 2500 acres with about 50% under its own name while the rest under firm collaborators agreement. And more importantly the acquisition cost of these lands is reasonably low, for which company has been able to register better profit margin compare to its peers. Financially, its topline increased by 60% to 199 cr and PAT more than doubled to 42.75 cr for FY07, posting an EPS of 25 Rs on equity of 16.80 cr. Incidentally, AHCL follows the percentage of completion method of accounting and hence the revenue is recognized in proportion to the actual cost incurred. It reported encouraging result for the June qtr registering a healthy OPM of 40%. Conservatively, on a standalone basis it may end FY08 with total revenue of 275 cr and profit of 50 cr i.e. EPS of 29 Rs on fully diluted equity of 17.50 cr. The consolidated nos will be much better with an EPS of more than 32 Rs. However, against order book of 2500 cr, company is available at market cap of 350 cr. With 52 week H/L as 405/190 Rs, it is one of the safe bet in real estate sector. Investors are strongly recommended to buy at current levels as scrip can easily appreciate 50% in a year’s time.
1 comment:
Thank you for such detailed information. I am following this stock for last 4 months and I am highly convinced with your valuation. One more information I want to share that promoters took preferencial allotment at Rs. 208 per share in nov.07.
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