VN Research & Consulting
 Like us on facebook  Follow us on twitter  Follow us on LinkedIn  IndiaNotes on Google Plus  IndiaNotes on Pinterest  IndiaNotes on Stumbleupon  Subscribe to our feeds


Stocks  A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Go
Feedback
You are here : IndiaNotes >> Research & Analysis >> Companies >> Indian Hume Pipe Company Ltd. >> Research

Indian Hume Pipe: Buy for appreciation of almost 30% with medium to long term perspective

Hem Securities | 11 Jul, 2017  | Follow Author | Add to my Favourites 
  • Rate this article
    (Average Rating 3.0 Based on 1 ratings)



Co has shown strong growth during FY’17 as topline of company has grown at CAGR of 28.83% since FY’12, operating profit of company has grown at 42% CAGR from FY’12 to FY17 while bottomline of company has registered whopping CAGR of 44% during the same year.


Co’s financial performance can be gauged from its strong return ratios as co has posted ROE of more than 25% in FY17 while it has generated more than 30% return on capital employed during the same year.


Recently company has won order of more than 400 crore which includes work order of Rs 183.46 crore from Tamilnadu Water Supply & Drainage Board, Coimbatore & work order of Rs.260.75 crore from Public Health Engineering Department, Ajmer, Rajasthan, thus giving strong revenue visibility in coming years.


Co has got client from various State Government & local bodies like Indian Railways, Indian Railway Construction Company (IRCON), Rail India Technical And Engineering Services (RITES), Bharat Heavy Electricals Limited (BHEL), National Hydro Power Corporation (NHPC), National Thermal Power Corporation (NTPC), Indian Farmers Fertiliser Co Operative Limited (IFFCO), Satlaj Jal Vidyut Nigam Limited (SJVN), Delhi Jal Board, Karnataka Water Supply & Drainage Board, Karnataka Power Corporation Ltd., Bhopal Municipal Corporation, Indore Municipal Corporation, Kerala Water Authority, Himachal Pradesh State Electricity Board, Chattisgarh Public Health Engineering Department etc.


With widespreading urbanization. & shortfall of access to drinking water in rural area,. Government of India, State Governments and local bodies are making best efforts to supply safe drinking water. Hence number of water supply schemes are under consideration. Also to make cities and rural areas under more hygienic conditions and endeavour towards Swachha Bharat number of sewerage disposals and drainage schemes are also coming up which provides company an opportunity to cater more projects.


Valuation


Established brand name, healthy balance sheet, robust financial performance , strong order book & pioneer in the field of water supply industry since last 90 years makes the company a strong candidate for investment in medium as well as long run. The company is currently trading at 26x of FY17 eps of Rs 20.37 while it is trading at 21x of FY18E eps of Rs 24.80 & 18x of FY19E eps of Rs 29.40. We recommend “Buy” on the stock with price target of Rs 700 (appreciation of almost 30%) for medium to long term investment horizon.

 


  Read full report Click here to read the full report

logo
BSE
547.00 +12.70
(2.38%)
NSE
547.80 +14.50
(2.72%)
Read More
About Hem Securities
The Hem Securities is one of the leading broking Network in India. It provides trading platform in all the leading exchanges namely - BSE, NSE, MCX , NCDEX & MCX-SX. Their mission is to build wealth for their investors by offering them best financial services through trading & investment strategies and honoring commitment with ethical & transparent business practices.

For more information please write in to [email protected]
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



Technical Calls

What are technical calls?

Other Articles


Have a question?