Alpine Housing Development Corporation Ltd FV Rs. 10 (BSE 526519) 34.90

Alpine Housing Development Corporation Ltd FV Rs. 10 (BSE 526519) 34.90

Alpine Housing Development Corporation Ltd (AHDCL) is a 25 year old Bangalore based company engaged into Property Development business, which contributes 97% of the revenue. Other business is Railway Concrete Sleepers 2.4% (High growth expected in coming years) and Alloy & Casting which contributes close to 1%.

In property development AHDCL has earned a stellar reputation for itself based on their sheer dedication to the construction of superior quality homes, which can easily be distinguished by sophisticated design and luxurious amenities. The company uses Latest tools, waterproofing techniques and follows high standard in all its construction activities, Alpine uses both indigenous and imported technologies for implementation at all its projects

The company has mainly been in the residential segment and the projects are in the vicinity of big IT companies, as main clients of the company are IT Professionals. The real estate market of Bangalore is stable as it consists of end users and not that of investors with that the fluctuations in the rate of real estate prices is not high. The company will benefit going forward due to various steps taken by the government in the current budget and also by falling interest rates from the last few quarters, which will incentivize the real end user to purchase property.

The closely held company where promoter hold 73.6% stake (And have lent 13.7 Cr interest free to the company, speaks quality of Promoters & Ethical and Transperant Corporate Governance), having equity capital of 12.99 Cr and reserve of 44Cr, Debt to Equity ratio of comfortable 0.72:1 & book value of 43.8 Rs per share, has reported a revenue of 16.8 Cr in the first half, and profit of 2.17 Cr giving an EPS of Rs 1.7 per share, the company can report for the second half, revenue and profit of 30 Cr and 5 Cr, which translate into FY 18 revenue of 46 Cr (Previous Year 25.3) profit of near 7 Cr (Previous Year 4 Cr), and EPS of Rs 5.4 per share (Previous Year 3.10). The company has able to remain in profit in the last 11 years, and no quarterly loss since last 12 quarters.

At current price of 34.9 the share is available at PE of just 6.5 (Industry PE 25) and Price to Book value of less than 1. The company has inventory of under construction / Ready to Move Apartments worth 96 Cr at cost basis, the sale value of which should be not less than minimum 150 to 160 Cr, plus new launches on the cards, it gives enough earning visibility for the next 4 to 5 years. If giving half of industry PE of 25, i.e. 12.5 for EPS of 5.4, the stock should trade at 67, which is double the current price.

 

Good analasys but real estate companies in predictable