Hindustan Construction Company share price (HCC) surged over 8% on Tuesday’s session after domestic brokerage Elara Capital initiated coverage with a buy recommendation, believing that the company has the ability to reclaim its former glory. Elara set a target price of ₹63 per share on HCC, indicating a 54% rise from current levels. HCC share price today opened at an intraday low of ₹41.04 apiece on BSE, the stock touched an intraday high of ₹42.99 apiece.
According to Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One, the HCC share price has experienced a significant gap-up opening and is currently up by 7% with high trading volumes. Historically, the stock price has faced a crucial resistance around the 41 level, which has served as a supply zone for over a decade. A sustained close above this level would indicate a long-term breakout, potentially driving the price towards target levels of 65 and subsequently 79, which correspond to reciprocal retracement levels. Conversely, the bullish gap around 41 now acts as key support.
Elara Capital noted in its report that after a decade and a plethora of steps, including debt restructuring, dispute resolution, and non-core asset monetisation, the business is poised to flex its muscles as India ramps up on significant infra opportunities. HCC’s 10-decade expertise implementing in-house complex and flagship projects, as well as 26% of hydropower capacity and 60% of India’s civil nuclear power capacity, position it to capitalise on the ₹1.5 trillion nuclear potential.
HCC was once the toast of India’s infrastructure arena, but its fortunes dwindled after FY11 owing to policy stagnation and delayed decision-making by the government, which also caused a significant blow to the construction industry.
“Peak consolidated debt including accrued interest was ₹122 billion in FY15, which reduced by 71% to ₹35 billion in FY24. Peak standalone debt of ₹62 billion in FY22 fell by 45% to ₹34 billion in FY24 and stabilised. We are optimistic the company will move into a sustainable high growth phase thereafter. The Vivaad Se Vishwas Scheme to help in faster recovery of outstanding awards worth ₹23 billion in favour of HCC. The historical average award to cash conversion time is four years with average collection at ~87% of claim amount,” the brokerage said.
(more to come)
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Published: 11 Jun 2024, 09:36 AM IST
