Recommendation From Housing Finance and Cement Products Sector

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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 ....

SRG HOUSING FINANCE 
BSE CODE 534680  
Volume 7,294  
CMP - Rs186
Face Value Rs10

On financial front, SRG Housing Finance’s top line increased 42.17 per cent to Rs14.53 crore in FY17 as compared to the previous financial year. The company’s EBITDA too rose 45.36 per cent to Rs10.03 crore in FY17 on yearly basis. Its bottom line also boosted 44.92 per cent to Rs2.71 crore in FY17 as compared to previous fiscal year. However, SRG Housing Finance’s gross nonperforming assets (NPA) increased and stood at Rs1.28 crore, constituting 1.57 per cent of the total outstanding loans of Rs81.83 crore in FY17. The main reason for increase in NPA is due to demonetisation but the company has managed the NPA levels and the same are under control. SRG Housing Finance also announced its future-plan to expand the business network in Madhya Pradesh, Gujarat, Maharashtra and Rajasthan. We recommend BUY, with a price target of Rs220 with a stop loss of Rs160.

NCL INDUSTRIES
BSE CODE 502168
Volume 26,653
CMP - Rs206
Face Value Rs10 

NCL Industries’ revenue increased 16.01 per cent to Rs883 crore in FY17 as compared to previous fiscal year. However, the company’s EBITDA reduced 5.36 per cent to Rs116 crore in FY17 on yearly basis. Its net profit rose 3.11 per cent to Rs54.73 crore in FY17 as compared to previous financial year. NCL Industries has crossed about 1.5 million tonnes (MT) of cement in FY17. The company’s management is expecting to touch 2 MT of cement sales volume in FY18. It is adding another one MT of clinker and 0.7 MT of grinding in cement division. NCL Industries has two plants of 30,000 tonnes per annum capacity and the company is adding another 30,000 tonnes. Going forward in a month's time, it will be able to commission the third plant with achieving 90,000 tonnes per annum capacity. On organic expansion move, we recommend BUY with a price target of Rs244 with a stop loss of Rs197.