HB Stockholding-A Play on JP Industries
BSE 532216; CMP Rs 33.60
Prominent foreign brokerages have pronounced a bullish forecast for the Indian Cement Sector, with Deutsche Bank calling it the "Cement Super Cycle". A key beneficiary of the sustained upturn of the Construction, Hoteliering and Cement cycle would the Delhi based JP Industries (Earlier called Jaiprakash Associates), with certain brokerages placing a 1 year target of Rs 1200 to Rs 1500 on the stock.
Guess who infact, would be making the biggest gains in this counter-another Delhi based investment brokerage HB Stockholdings, which owns 1.2 per cent of the Equity of JP Industries or over 26.06 lakh shares worth at Monday's closing price of Rs 930, a colossal Rs 242.35 crore.
On the other hand, HB Stockholdings has an Equity of Rs 24 crore, which at Monday's closing price of Rs 33.60 works out to a market capitalisation of a mere Rs 73 crore. This is just one third the value of Investment in the JP Industries stock alone, that it holds.
Ignoring the fact that HB Stockholdings has investments in other concerns as well, this is a case of sheer under-valuation. Purely going by Intrinsic Value, the HB Stockholdings stock should be worth over Rs 100 per share.
Stock broker Harish Bhasin, Lalit Bhasin and their close associates own 56 per cent of the Equity of HB Stockholding and so large supply of this stock is unlikely to come, except from all those investors who are un-aware of the true value of the company.
HB Stockholdings, given the uptrend in Cement stocks, could be a multi-bagger of 2007.
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