Real Estate

The latest Buzz in the markets are the Real Estate stocks...hence my first pick would be a Real Estate stock, which, *I think*... can give good returns....without making purists (read Fundamental Analysts) uncomfortable...

Stocks like Mahindra Gesco and Unitech have shown dizzy valuations....which would make any Fundamental analyst go dizzy...

My pick for the sector is: Ansal Housing and Construction Limited
*** Current Market Price: 340
*** EPS for the First Half'07 : 11
*** Last Quarter on Quarter growth in EPS: 22%.
*** Current P/E Ratio: 17.

Notes:
>> The profits have doubled when compared to the same quarter of the last year.
>> One Year Price target for it going forward based purely on earning : 22*22= 484.
(and this target shouldnot make anyone uncomfortable given that the PEG ratio remains 1).
>> Just to add...it plans to invest over 2000 crores in the Real Estate projects in times to come...the valuations can only go up.

More about it: here
>> Value of Land Bank as per Kushagra Ansal, President at Ansal Housing and Constructions : 900 Crore
>> No. Of Outstanding shares : 1.492 crores.
>> The value of land bank works out to be around Rs 600/share.

If one considers the value of the landbank, the price target could work out to be around 1000 with a year's time frame in mind.