Stock Picks from Packaging and Construction Industry

HSIL | BSE CODE: 500187 | VOLUME: 10169 | CMP: Rs. 334.50

HSIL is a leading sanitaryware company with a dominant 40 per cent market share in India. At the end of Q4 FY15, HSIL raised Rs 250 crore from the market via QIP to repay its working capital loan and to reduce interest cost. The working capital loan has reduced to Rs 217.6 crore from Rs 396.6 crore as of FY14. After the repayment, the net debt equity ratio of the company has reduced to 1.1x as of FY15 from 1.4x in FY14 and this will further improve to 0.5x in the next two years. There is no major capex in the near future and so the balance-sheet of the company is likely to become stronger. After the recent correction, the stock has also started trading pretty attractively at around 26 times its FY15 reported EPS of Rs 12.88.

J KUMAR INFRAPROJECTS | BSE CODE: 500870 | VOLUME: 55310 | CMP: Rs. 468.00

J Kumar Infraprojects (JKIL) is a civil engineering and infrastructure development company primarily focused on developing roads, flyovers, bridges, metro projects, irrigation projects, commercial and residential buildings, railway buildings, sports complexes, etc. For FY15, JKIL registered revenue of Rs 2 crore with a growth of 13.2 per cent. Its EBITDA grew by 22 per cent at Rs 251 crore due to the EBITDA margin having improved by 130 bps to 18.7 per cent. At the end of FY15, JKIL’s order book was at Rs 4,154 crore, including L1 orders of around Rs 1,130 crore. The company has already submitted bids for the Mumbai Metro Line’s three projects, the results of which are expected to be out by August 2015. There also are large numbers of other infra projects like Trans Harbour Link, Coastal Road Project, Navi Mumbai Airport, etc. slated to be awarded in the Mumbai region. If it will grab two to three projects then JKIL’s order book will post a sharp jump.