Recommendation From Realty & Industrial Machinery Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

PRESTIGE ESTATES PROJECTS 

CMP - Rs 231.85
BSE CODE 533274
Volume 38210
Face Value Rs 10
Target Rs 270
Stoploss Rs 215 (CLS) 

Prestige Estates Projects Ltd. is a renowned property developer operating in the segments of residential, commercial, retail and hospitality. Net income from operations rose 20.43 per cent YoY to Rs 132.25 crore in Q2FY19. Total collections surged 29 per cent YoY to Rs 102.86 crore in Q2FY19, while EBITDA climbed 35 per cent YoY to Rs 40.63 crore for the same period. Rental income escalated 21 per cent YoY to Rs 18.17 crore in Q2FY19. Average realisation per sq.ft. dropped 10.94 per cent YoY to Rs 61.04 crore in Q2FY19. Net profit grew 12.67 per cent YoY to Rs 10.22 crore. EPS increased to Rs 2.58 in Q2FY19 from Rs 2.16 in Q1FY19. It launched two projects in Kochi with developable area of nearly 0.6 million sq.ft. The stock has a P/E multiple of 25.19x and a dividend yield of 0.51 per cent. Thus, we recommend investors to BUY this stock. 

CUMMINS INDIA 

CMP - Rs 843.25
BSE CODE 500480
Volume 17760
Face Value Rs 2
Target Rs 925
Stoploss Rs 804 (CLS) 

Cummins India Ltd. is a prominent manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets. The company reported the highest ever net sales of Rs 1,452 crore in Q2FY19, posting a growth of 30 per cent YoY. Domestic sales grew 34 per cent YoY to Rs 1,003 crore in Q2FY19, the highest ever sales till date. Exports surged 21 per cent YoY to Rs 448 crore in Q2FY19. The stock has a P/E multiple of 33.13x on its TTM earnings as against the industry P/E of 30.27x. The company has a dividend yield of 1.77 per cent. ROE, ROA and ROCE stood at 15.67 per cent, 11.46 per cent and 20.14 per cent, respectively. The EV/EBITDA multiple stood at 21.50x. PAT margin stood at 13.73 per cent, while sales/total assets stood at 0.98x and assets/equity stood at 1.37x. Thus, we recommend investors to BUY this stock.

(Closing price as of Jan 02, 2019)