HDIL hits two-year high; zooms over 50% in one month

The stock rallied 7% to Rs 123, its highest level since January 2013 on BSE.

Shares of Housing Development & Infrastructure Limited (HDIL) has rallied 7% to Rs 123, its highest level since January 2013 on BSE.

In past one month, the stock of Mumbai-based real estate developer has outperformed the market by surging 58%, on back of overseas investor’s interest and strong earnings growth during the recently concluded quarter. The benchmark S&P BSE Sensex gained 1.3% during the same period.

The company had reported nearly 13-fold jumped in its consolidated net profit at Rs 69.09 crore for the quarter ended December 2014 (Q3) on back of strong growth in operational income. Total sales during the period under review surged four-fold at Rs 359 crore from Rs 90 crore in the corresponding period.

On February 5, 2015 Janus Investment Fund A/c Janus Overseas Fund bought 2.5 million shares of HDIL at Rs 106.08 a share, the NSE bulk deal data shows.

Meanwhile, analysts at JP Morgan and B & K Securities have upgraded the stock with overweight rating with target price of Rs 140 and Rs 145 respectively.

“HDIL has emerged as the largest affordable housing developer in Mumbai. The company has over the last 1 year staged a remarkable comeback by, cutting debt by 30% from peak; increase pre sales run rate by almost 100%; and secure approval for launching arguably Mumbai’s largest affordable housing township (75msf+), one of the key priority areas of the new government,” analyst at JP Morgan said in a report dated February 16, 2015.

“With successfully implemented strategy unlikely to see any sea change, we expect core operations to find further strength in the coming future. Core operations are also likely to find support from inventory liquidation at commercial developments as well as ongoing residential developments and planned new launches,” said analyst at B&K Securities in a report.