KMC Speciality Hospitals: A Stock That Has Potential To Be A Multibagger

KMC Speciality Hospitals runs a chain of hospitals including those in Trichy, Chennai, Karaikudi, Hosur and Salem. It is a full-fledged hospitals with all major facilities.

The company in the quarter ending Sept 30, 2017 has performed reasonably well and we believe there is a potential for the performance of the company to improve as occupancy rises and healthcare costs rise.

Revenues for the period have jumped to Rs 18 crores, while profit after tax has moved to Rs 2 crores. While the profits may look small, it is important to remember that the company has a very small equity base of Rs 18 crores only.

The EPS for the quarter ending Sept 30, 2017 was Rs 0.13. However, going forward the company can do an EPS of Rs 2 at least for 2018-19. Hospital stocks are highly fancied in the markets and enjoy a p/e of any where between 30 to 50 times. If we apply a similar p/e to KMC there is no reason why the stock should not trade at Rs 50 at the very least. A good buy at the current levels of Rs 24. The shares are listed only on the BSE. Check stock quote here

RCOM

Shares of Reliance Communications (RCOM) have rallied following an announcement in the reduction of debt by Chairman Anil Ambani.

After the debt reduction through sale of assets, the company is likely to have a smaller debt of just Rs 6,000 crores. It will exit the mobile services business, but, will consist of enterprise, GCX, the data center business and the 4G sharing business. 50 percent of its revenue will come from overseas operation. In the existing business, the group is in the middle of bringing in a strategic investor at an enterprise value of Rs 15,000 crore. 

From a longer term perspective the shares have very limited downside risk at the current market price.

IVRCL

This company has been looking to retire debt through sale of its BOT assets and land bank.

Recently, it sold two of its road assets in favour of Singapore-based Cube Highways and Infrastructure for around Rs 725 crore.

The company has recently come out of Strategic Debt Restructuring exercise. The company which has debts of nearly Rs 8,500 crores is looking to prune down the debt dramatically through sale of assets.

IVRCL is engaged in a host of projects including water and environmental projects, power and transmission, construction of roads, mining etc.

The company has got sizeable orders in hand and should debt reduction and turn around work, IVRCL could be an excellent stock to own at Rs 6.

IVRCL: Several Planned Initiatives

The company is taking a number of initiatives to get back on track. Among these include efforts to recover all claims.

IVRCL is also looking at a faster claims and resolution and renegotiation of working capital from banks. Should these efforts bear fruit, we could see some rally in the stock.

The shares of the company saw a marginal recovery in prices from Rs 4.50 to Rs 5.4, following the sale of road assets. The inflow is expected to reduce debts of the company further.

Jaiprakash Associates

This company has over the last few months systematically been reducing its debt. In fact, Jaiprakash Associates is planning to bring down debt to levels of Rs 6,000 crores.

It has already sold several assets, including cements assets to prune down debt. This should result in interest costs coming down substantially in the months to come.

Jaiprakash Associates has substantial orders in hand. With infrastructure being given a thrust in the last few years, it is even possible that the company could turnaround. It still has assets like hotels and real estate that it can sell to cut down on debt.

This is a high risk stock that could be a multibagger if things work out.

Disclaimer

The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any shares in the above mentioned stocks.