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Rudra Shares recommend Hindustan Construction Company as a dark horse

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Investment Rationale:


The revival package for the construction sector by the government will translate into a huge liquidity boost for the system. Under the new arrangement approved by the CCEA, government agencies would pay 75 % of the arbitral award amount to an escrow account against margin free bank guarantee. These initiatives are expected to help in improving the liquidity in the short run and reform the contracting regime in the long run.


Following the proposal from N ITI Ayog, the company will get 75 % of arbitration award amount of approximately Rs. 2,000 crore from NHAI and NHPC within 4-6 weeks. This will help the company to bridge the gap of “Cash flow Timing Mismatch” between claims realization (including its interest) and debt servicing.


HCC continued with its emphasis on sustained improvements in project execution efficiencies by setting norms and adopting a strict monitoring mechanism for key operational parameters across projects. These have resulted in notable gains in terms of inventory turnover, operating margins as well as cash collections.


Company is in lined with the arbitral awards within next 1 year resulting in cash accretive & would help in debt reduction to almost half in coming years ahead, perhaps boost profitability & enhance the share price of the company. Hence, we suggest to accumulate in small quantity for 2-3 years.


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About Rudra Shares and Stock Brokers

RUDRA is one of the growing & dynamic brokerage houses with a strong presence in the Retail and HNI broking segment. With over 25 years of experience and lead by a team with outstanding managerial acumen, RUDRA is a professionally managed company supported by over 100 professionals, including Chartered Accountants, MBAs and other senior executives. RUDRA can thereby cater to its clients' short-term as well as long-term financial needs through a comprehensive bouquet of investment services. RUDRA offers a diverse range of financial services, including institutional and retail brokerage of Equity, Currency, Commodities, Derivatives, Online Trading, Depository Services, Fixed Deposits, IPOs and Mutual Funds Distribution, and Wealth Advisory & Research. RUDRA is looking to become one of the biggest broking houses. RUDRA Securities Limited, is a member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MCX Stock Exchange, and Depository Participant of Central Depository Services (I) Limited. RUDRA can be approached online at www.rudrashares.com.

 

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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.




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