Stock watch: Prajay Engineers

Prajay Engineers Syndicate Ltd stocks are gaining increased investor interest especially from the institutional players. Recently HSBC Financial Services bought about 1.78 lakh shares of the company.

This comprises 1.5 per cent of the company's total equity capital. At Rs 146, the stock has shot up by 8 per cent over the last week. 4.3 lakh shares were traded on Wednesday, up 17 times over the last week. The stock has given a return of about 55 per cent in a month.

The company, engaged in construction and hospitality sector, is coming up with housing and two hotel projects in Hyderabad. It is also expected to start three township projects on 40 acre land in second quarter of 2006.

Analysts expect this as a big boost in the company's revenues and bottomline in 2007. Also, the company's projects are eligible for 100 per cent tax deduction, leading to savings in income-tax.

The company has reported robust performance in the third quarter with sales and net profit zooming by 386 per cent and 3031 per cent respectively, albeit on a lower base.

The stock trades at a price to earnings multiple of 10 times and 9.5 for FY06E and FY07E respectively.