Buy Madhucon Projects - Mid Cap Real Estate Stock

Angel Stock Broking has recommended to buy stocks of Madhucon Projects with a price target of Rs 205 as against the current market price range of Rs 155 - 160.

The broking house commenting on the performance of the company says, in the last three months, Madhucon Projects (MPL) has outperformed its peers and given a return of 83.8%, as against the average return of 27.6% of our infrastructure coverage universe, and vindicated it as the `Top pick` in the sector.

The broking house upon meeting the management of the company got satisfied with the developments taking place at the subsidiary level, though the management agreed that there were delays in payment from the AP government, which would stretch the working capital requirements for the year and would marginally impact the numbers.

Buy Madhucon Projects - Mid Cap Real Estate StockAgainst this backdrop, the broking house has factored in higher valuations for its subsidiary (Madhucon Infra) - on enhanced visibility - and factored in dilution. Therefore, the SOTP Target price stands revised to Rs205 (Rs142), giving a potential upside of 32%.

Market Cap 1,183.67
EPS (TTM) 6.34
* P/E 25.30
* P/C 13.14
* Book Value 72.63
* Price/Book 2.21
Div(%) 40.00
Div Yield(%) 0.25
Market Lot 1.00
Face Value 1.00
Industry P/E 26.43

The interaction of the broking house with the management of MPL reveals that the company is very close to getting the required approvals from the lenders for the transfer of assets (BOT Road, Power and Coal) from MPL to its 100% subsidiary, Madhucon Infra, which would be tapping the markets for raising capital.