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Khambatta Securities
Coral India (Buy)
Target: ₹62
CMP: ₹46
One of the fastest growing housing-development and -investment companies in India, Coral India Finance and Housing Limited’s business is divided into two main segments: construction and investment, the latter bringing nearly 80 per cent to operating revenue in FY21. Rental income accounts for more than 50 per cent of investment income, with a 5 per cent escalation clause annually.
The company has commenced a residential project at Deolali, Nashik, which includes flats, and bungalows of about 40,000 sq. ft. The Nashik real-estate market presents immense opportunities, given its location and robust infrastructure. We expect the company to benefit significantly from growth in the city’s real-estate market. It has a 3,00,000 sq. ft project of a five-residential-building complex and one commercial complex at Ghodbunder, Thane. Property prices in Thane have steeply risen due to proximity to nature and the fast pace of development, coupled with the government’s proposed plan to enhance Thane’s connectivity to Navi Mumbai as well as the eastern and western suburbs of Mumbai.
The stock now trades at an attractive P/E multiple of 8.7x FY23 EPS. We assign a target multiple of 12x FY23 EPS. A complete debt-free entity with a strong financial base and a positive bottom line since inception makes it a promising investment.
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