Keep An Eye On Ashiana Housing. There May Be Hefty Gains In Store For Us

When Daljeet Kohli dramatically declared in his Initiating Coverage report of 19th September that Ashiana Housing is “All set for manifold growth over next 2 years”, I knew we had to pay attention.

Then, when I looked at Ashiana Housing’s list of major shareholders, I was pleasantly surprised to see that whiz-kids Westbridge Capital/ Jwalamukhi Holdings, Ashish Kacholia and Prof. Sanjay Bakshi are sitting pretty in it with huge chunks of shareholding.

Later, Daljeet put Ashiana in his “Diwali Dhamaka Stock Picks”. At that stage, I commented that Ashiana Housing is a “no brainer” stock given the pedigree of the shareholders who are betting big on it, the logic being that savvy investors like Jwalamukhi, Ashish Kacholia and Prof. Sanjay Bakshi would not entrust large chunks of their capital to a company if they are not fully convinced about the prospects of making hefty gains from it.

Daljeet has already made a packet from the stock. When he first recommended it in September 2014, the price was Rs. 159. Today, it is at Rs. 200, giving a gain of 25% in just a couple of weeks.

Now, Religare Institutional Research has issued an initiating coverage research report recommending a buy of Ashiana on the basis that it has a:

(1) mid-income product positioning (sub-Rs 5.5mn ticket size),

(2) strong brand and customer-centric approach,

(3) lean B/S (net cash of Rs 876mn in Mar’14), and

(4) superior ROE profile (20%/37% in FY15/FY16).

Ashiana Housing’s top brass, Varun Gupta, came on CNBC TV18 a few days ago to explain the prospects of the Company. He pointed out that revenues of Rs. 650 crore would get recognized soon. He added that the company would enjoy a ROE of 20% in 2015. He also detailed the other projects undertaken by the company.

Arun Aggarwal of Religare Capital also gave interesting pointers in the same interview on why Ashiana Housing is a good buy at this point.

Gautam Trivedi, CEO of Religare, also came on record a few days ago to state that “Ashiana Housing is a great story”.

Ashiana Housing has also issued a detailed investors presentation which gives you the nitty-gritty information about the company.

Now, the onus is on you to carefully ponder over the data and take an informed decision in the matter.