Stock Recommendations For Your Portfolio
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Earthy Gains
GUJARAT MINERAL DEVELOPMENT CORPORATION | BSE CODE: 532181 | VOLUME: 14116| CMP: Rs.134 | FACE VALUE: Rs.2
Gujarat Mineral Development Corporation (GMDC) is owned by the Government of Gujarat. GMDC derives nearly 80 per cent of its revenue from mining operations especially from the sale of lignite, a type of brown coal used mainly in power plants. GMDC reported 13 per cent rise in net profit at Rs 185.7 crore in H1 FY15 as against of Rs 165 crore in H1 FY14. The total income from operations increased to Rs 758.2 crore in H1 FY15 from Rs 612 crore in H1 FY14, registering 53.01 per cent rise. The company’s businesses are highly profitable, with operating margins of about 45 per cent. Currently, GMDC is trading at TTM PE ratio of 9.33 and on the basis of its price to book value, it trades at 1.41x. It’s a debt-free company and also a regular dividend payer at Rs 3 per share.
On a Smooth Road
IL&FS TRANSPORTATION NETWORKS | BSE CODE: 533177| VOLUME: 41602| CMP: Rs.182 | FACE VALUE: Rs.10
IL&FS Transportation Networks (ITNL) is among the largest road development players. ITNL has gradually diversified into urban infrastructure projects where fresh orders are more forthcoming. ITNL has a rail project which will be completed in May 2016. The construction segment revenues reported a strong 19.6 per cent YoY revenue growth to Rs 880 crore. The growth was mainly contributed on the back of the healthy order book of Rs 13,900. The gross margins in the construction segment stood at 46 per cent in 2Q FY15 as against 35 per cent and 26 per cent in 2Q FY14 and 1Q FY15, respectively. Based on the current order book and portfolio of projects, we expect its construction revenues to start recovering in the coming quarters while the completion of work on under construction projects is expected to increase the toll revenues during this year and going forward. ITNL plans to raise funds through QIP for a further growth plan.