Sell Hindustan Construction: Karvy

Sell Hindustan Construction: KarvyKarvy Stock Broking Limited has suggested investors to 'sell' Hindustan Construction Company (HCC) stock as there are full chances of a downward trend in this stock.

According to Karvy, investors can sell the stock around Rs 102- Rs104 with a strict stop loss of Rs 106 to achieve an intraday target of Rs 95.

Karvy feels that HCC stock would remain under high pressure due to existing market condition.

Today (July 09), the stock opened weak at Rs 100 on the Bombay Stock Exchange (BSE). Current EPS & P/E ratio stood at 4.89 and 20.96 respectively. The share price has seen a 52-week high of Rs 128.90 and a low of Rs 28.80 on BSE.

Karvy also suggested that if the stock fell below Rs 92, it may see more weakness.

So the investors must sell HCC in today's session. After selling the stock, the interested investors can purchase the stock again at a low price, for medium term prospective to make good profits.

HCC, on July 04, announced that it has raised Rs 480.10 crore via the issue of shares to QIBs through private placement.

The board committee has allotted 4.70 crore shares to QIBs through Qualified Institutions Placement at an issue price of Rs 102.15 per piece, aggregating to Rs 480.10 crore.

After issuing shares, the company's paid-up shares capital stands increased to Rs 30.32 crore from earlier Rs 25.63 crore, it added.

At the extra ordinary general meeting (EGM) held on June 22, 2009, HCC declared that the members have sanctioned the issuance of equity shares, GDRs, ADRs, convertible bonds, convertible debentures and, or any other securities convertible into equity shares through public, private offering in domestic, international markets and, or private placement via QIP to qualified institutional buyers resulting in the issue of upto an aggregate amount of Rs 15 billion or its equivalent in any currency.

HCC, which is a private engineering construction company, is involved in the construction of various projects comprising power, dams, highways, bridges, marine structures, water supply, factories and waste treatment plants.

HCC has constructed more than 24 dams in almost all parts of India.