Hyderabad Industries Limited (HIL) is a flagship Company of the C.K. Birla Group of Companies.
HIL is one of the oldest Asbestos cement fibre roof manufacturing companies in India engaged in business of roofing solution – Building Product and Thermal Insulation. HIL being the market leader controls 18%.
Factors like higher MSP’s have led to more money in the hands of rural India thus creating a shift from kutcha house to pucca house – consequently fuelling up demand for CFS. Increased Government spending on rural economy under various schemes like Bharat Nirman, NREGA, SGRS, and IAY has provided a major thrust for the roofing industry.
The roofing Industry deserves a better PE multiple than its 2 yrs forward avg. P/E of – 5.5x and Hyderabad Industries being the industry leader with superior return ratio profile (ROE - 25.1% ROCE - 34.5% FY 2012E) should trade at the upper quartile of the industry P/E. However, valuing the company @ 5.5x
its FY12E EPS, ENAM arrives at a target price of Rs. 814 over a period of 12-15 months.
