Fews stocks which are a value buy - Part 2

LIC Housing - Targeting gross NPA of 1.5% for FY09 and disbursement growth of 40%.

Currently trading at 0.8 times of its book value. Attractively valued at 2.8x and 2.2x of FY09E and FY10E EPS. Dividend yield of around 5% makes it quite attractive bet providing consistent performance.

Indian Hotels - Diversified portfolio of rooms spread across India and abroad. At current market price of Rs 46, the stock trades at 6.5x and 5.0x of its FY09E and FY10E earnings, respectively.

Attractive valuations keeping in mind its future expansion of properties and stability in ARRs and occupancy rates in the cities like Delhi & Mumbai. Certain major events like the Commonwealth Games planned in Delhi in 2010 would require addition to the inventory of rooms which would again help the company having good exposure in the capital.

The current market capitalization of less than Rs 3,500 crore is at a steep discount to the 86 hotel properties it owns and operates across India and abroad. In addition, it is developing various new hotel properties in different locations in India, South Africa, Dubai and Morocco.

Chennai Petro - Good track record of paying hefty dividends for past few years. Pure refining player with no marketing losses unlike IOC, BPCL and HPCL. Attractive dividend yield – around 14% on FY08 annualized dividend of 170%.

Currently trading at half of its book value. Capacity expansion by 1 mn tpa of Manali refinery to provide further boost to the business. Available at just 1.5x FY10E EPS.

Ambuja Cement - Strong balance sheet and low financial leverage with debt to equity ratio of 0.10. Attractive dividend yield of around 5% in the current calendar year.

Stock can get further fillip as Holcim is likely to further increase its stake in the company. Higher key return ratios like ROCE compared to peers. Cement company with the best operating parameters. Currently trading at 1.8 times of its book value.

Sterlite Industry - At the current price of Hindustan Zinc, the 64.9% stake of Sterlite Industries in Hindustan Zinc is valued at around Rs 9,000 crore.

Cash on book around Rs 9,900 crore after deducting debt. Current market capitalisation of Rs 15,400 crore is less than the sum of its stake value in Hindustan Zinc and cash on book. Current market capitalisation is just 1.7 times of its FY08 operating cash flows. The values that are expected to be realised from the energy business, zinc and aluminium expansion plans will certainly add much more value.

Last but certainly not the least, their existing business of aluminium and copper is not being valued at all by the market. Deeply undervalued stock of a very well established and diversified non ferrous metals player.

Praj Ind - It is a leading equipment manufacturer of ethanol and other chemicals.

Very strong order book, good technology platform and strong alliances in the US and other markets makes this company a very strong bet in the non-conventional energy space.- ET