Scripscan:Vijay Shanthi Builders Ltd
code:523724
cmp:35
Target:46
Retrurn percentage:30%
Duration:4-6 months
Story:Chennai based Vijay Shanthi Builders is a virtual unknown in the Northern parts of the country, but an established name in Chennai dedicated solely to the slightly non recession proof segment of Residential Real Estate. It has on it's platter close to 10 projects ranging from Premium to Luxury and Affordable Housing.The Premium and Luxury homes are in limited numbers and bring about exclusivity. While Lotus Pond, Infiniti and Park Avenue-all three having received financial closure are going to produce close to 2600 apartments ranging between 365 sq feet to 2000 sq feet over the next two-three years.There is a gestation involved in returns but at Rs 35 a share, this is a risk worth taking.On it's part the management at Vijay Shanthi seems to be playing a constructive role of catering to investor interest by declaring a nominal dividend of 4% on it's Equity. It is obvious Vijay Shanthi is no family play, where gains are meant to be kept by the promoters-rather they intend to grow and share the wealth with the investors.More importantly, they seem to have their head in the right direction having avoided exposure to commercial real estate and concentrating on Residential space, that too in the middle class segment that thrives on cheap bank credit and it's availability.
Conclusion:Vijay Shanthi Builders is quoting at a deep discount of 85% of its 2007 high of 220rs.The company is expected to perform much better going forward.The small sales base last year would make the leap grow sharper these fiscal.Its even trading at a discount to its book value which gives safety in the counter.At 35rs theres hardly any downside but if market remains stable this is one counter where focus would shift for sure.A great buy at present levels.
Regards,
ARUN
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I can be reached at:arunanalyst@rediffmail.com
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Wednesday, September 15, 2010
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