Scripscan:FEDDERS LLOYD CORPORATION LTD
Cmp:51.50
Target:67
Duration:3-4 months
There are lot of rumuors that some big Hnis were forced to sell Fedders Lloyd for some margin call problem.The counter got badly hit as has fallen by over 75% from its highs.Now Fedders Lloyd Corporation is a pioneer in the Airconditioning and Refrigeration industry in India, with operations spanning over four decades. Unlike competitors, the company caters to niche market like railways, defence, telecom operators and various transport companies.The company has also forayed into housing construction projects in non metro cities.It is in the process of acquiring land in Gwalior and Jabalpur cities. It plans to develop 360 acres of land in these 2 cities, which will generate revenue of Rs 8.5 billion during the next three years.Fedders owns a prime plot of land in the Kalkaji area of New Delhi, where it intends to construct a commercial complex.Going by the valuations that a comparable property in the area received recently, the land could be valued in excess of Rs 2.6 billion post development.The value of the property alone, after development, is Rs 69per share.
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Conclusion:-Its for sure lot of buying would take place in the counter and that could make it move very fast.At 46rs rs its not covering the land value only.We are getting the full business for free.Its summer season so airconditioners and refrigerators demand are bound to pick up.The company is trading at less than 4 PE its expected 09 earnings.Its one of the leaders in its segment, a pretty decent company backed by a good management.At these level,I feel it to be one of the safest buy.Go for it.
Regards,
ARUN
I can be reached at: [email protected]
