Creating Landscape For Growth - Kamanwala Housing Construction

Kamanwala Housing Construction (KHCL), a company with a 20-year track record, based at Mumbai is into construction and development of commercial and residential buildings. The company has successfully completed more than 15 projects in and around Mumbai’s prime locations. From the low cost housing project it started out with, the company has now transitioned to executing prestigious projects of high quality in prime locations. The commercial projects include Pinnaacle Corporate Park and Savoy Chambers in Mumbai while residential project includes Manavsthal located in Mumbai.

Further, the construction work of a highly growth-oriented middle class residential project located at Malad, Mumbai, having total value of Rs 33.30 crore (203000 sq. ft.) has already started and will take 3-year to complete. Meanwhile, a commercial complex at Turbhe, Navi-Mumbai having total value of Rs 15.25 crore on area of 10010 sq. mtrs is expected to start within six months. The required clearance however is awaited from the Special Planning Authority, MIDC, Mahape. The company had bought major land, way back in 1988 like Filmistan studio, Oshiwara, Mahim, in Mumbai which still forms a part of their land bank.  In recent times major projects that have been credited to the company portfolio are “Pinnacle Corporate Park” at Mumbai’s Bandra Kurla Complex, Savoy Residence – a residential project of 60000 sq ft. in Santacruz (West), is almost complete and 53000 sq ft area has already been sold. Savoy chambers, a commercial project of 67000 sq. ft at Santacruz – West. The land cost of which is Rs 35 crore and the company has acquired 50 percent share in the same. 75 per cent of the construction work has already been completed and the project will be completed by September 2010. Additionally, Kamanwala is constructing West whose plinth work is done and 50 per cent area has already been sold. The project will be completed by March 2013.  They are undergoing paper work for their residential SRA project of 32000 sq.ft at Mahim which will start in 2 month. With the company entering into joint venture with M/s. Prajay Engineers & others to construct at Patancheru, Hyderabad will give KHCL a pan India status. This project comprises the development of 35 acres of land.

Coming down to the financials of the company the latest quarter where sales dropped by five per cent to Rs 13.65 crore whereas profit remained flat due to lowering of interest cost. The reason for lower interest was repayment of part of debt by the company. This clearly shows that the company is clearing off its earlier debts to make space for new ones which will help the cash flows of future projects. On a trailing basis the scrip is currently available at 11.35x times its earnings which is decent for a company in this category.