Recommendation From BPO/KPO & Realty Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

FIRST SOURCE SOLUTIONS 

CMP - Rs 53
BSE CODE 532809
Volume 1545707
Face ValueRs 10
Target Rs 59
Stoploss Rs 48.50 

FSL, promoted by Spen Liq, a whollyowned subsidiary of CESC, is engaged in business process and knowledge process management services across customer life cycle. The company’s public shareholders include Rakesh Jhunjhunwala and ICICI Bank. The company generated its FY17 revenue majorly from BFSI (31.8%), telecom and media (32.2%), healthcare (35.8%). On geographical basis, the US contributed 55.3%, UK 38% and India 5.8% to FY17 revenue. Financially, the company posted 10.5% and 7.5% growth in revenue and PAT, respectively. Even December 2017 quarter reported marginal revenue growth and 45% PAT growth amid tax credit amid reduction in the US tax rate. The company could also repay nearly 18% debt during the quarter. The growth in healthcare business offset the repercussions of exiting domestic business. Going forward, the company expects to crack great deals in healthcare and customer engagement segments, with the total contract value of USD 15 mn and USD 75 mn for 3 and 5 years, respectively. we recommend a BUY. 

PURVANKARA PROJECTS 

CMP - Rs 138.85
BSE CODE 532891
Volume 12,148
Face Value Rs 5
Target Rs 158
Stoploss Rs 129 

Purvankara is engaged in the construction and development of residential and commercial properties. Its ongoing projects are in Bangalore (43%), Chennai (8%), Hyderabad (12%), Kochi (18%), West India (8%). New launches include Bangalore (40%), Chennai (26%), Hyderabad (22%), Kochi (13%). The company would invest Rs 500 crore through a subsidiary and penetrate into Goa to develop 32-acre land, which is expected to fetch Rs 1000 crore in five years. It is foraying into a management contract with the Park Hotels for hotel/serviced apartments. The company would invest Rs 3,200 crore for development of more than 15 mn sq.ft. in 12-15 months in different cities. Financially, company’s de-growth of 11.2% in revenue is recovered in TTM revenue, which posted a growth of 11.9% from FY17. PAT came in at 53% higher in FY17, driven by operational efficiency. December quarter posted a revenue and PAT growth of 26% and 21% respectively. We recommend a BUY.