We would advice our esteemed readers to be very selective in their investments in 2019 due to global trade escalation worries, forthcoming elections and slowing economic growth. Equity markets are going to be very volatile and hence one has to be very choosy in one’s selection of stocks. We will try and guide you with good and unbiased advice. We pray for a profitable investing future during 2019 to all The Sunday Guardian readers. We have identified public sector enterprise Hudco as a good pick for investment in the next one year. It is a premier techno financing public sector enterprise in the field of housing and urban development. The principal mandate of Hudco is to facilitate housing and infrastructure development in the country. A special thrust is laid on catering to the housing needs of the economically weaker section and low income groups. The company has long standing associations with state governments and state level agencies like housing boards, urban local bodies, development authorities, etc. The company has a rich experience in project financing and appraisal of housing and urban infra projects. It has been a financially sound and a consistent profit making company since inception, having the highest credit ratings. Hudco is also involved in providing technological support for the implementation of Government of India’s flagship programmes through appraisal, monitoring, site inspection and capacity building support in the urban and housing development sector. Urbanisation in the country has become an irreversible process and is an important determinant of national economic growth and poverty reduction. The process of urbanisation is also characterised by an increase in the number of large cities. At the current rate of growth, urban population in India is estimated to reach a staggering 575 million by 2030 and 875 million by 2050. This transition needs to be accompanied by a commensurate increase in the supply of basic urban services, necessitating huge investments in infra development. Government of India has also unveiled a slew of initiatives to revitalise the urban sector through programmes like Pradhan Mantri Awas Yojana (PMAY)—Housing for All, Swachh Bharat Mission and Atal Mission for Rejuvenation and Urban Transformation. All these programmes are likely to catalyse huge investment flows into the urban development and housing sector across the country. Hudco has also been appointed as one of the nodal agencies for the PMAY scheme.
Hudco had posted robust Q2FY2019 numbers with revenue and net profit rising substantially over the last one year period. The Hudco stock quoting at Rs 42 on the stock exchange is near to its 52-week low of Rs 40, while the high over the last 52-week period is Rs 89. With a book value of Rs 49 and a price to book of 0.87, the Hudco stock is a value buy for a 25% price appreciation in the next one year investment time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.