IVRCL is the promoter of Hindustan Dorr Oliver having 55 per cent stake in it. Presently IVRCL is facing a huge cash crunch and because of this they are divesting stakes in its various infrastructure projects. A few months ago they confirmed that they are interested in selling their 55 per cent stake in Hindustan Dorr Oliver.
Hindustan Dorr Oliver is an industrial Engineering, Procurement & Construction (EPC) Company which renders services to core industries such as power, fertilizer, waste management, water, water management etc. They manufacture industrial equipments like storage tanks, heat exchangers, solid & liquid separation equipments etc.
Hindustan Dorr Oliver performance is also healthy and it posted a top line of 950 crore for FY11, with an earnings per share (EPS) close to around Rs7. The company’s performance is most likely to remain in the same trend because of its good order book position. Presently the share is trading at a PE less than 6 times. In the last trading week the share price moved from 36 levels to 44-45 rupees.
The past week indicates that there must been something cooking up & we may soon hear the news of a stake sale by its promoter. We should not be surprised to see the price in a range of Rs 70 to 75 as the promoters might intent to sale its 55 per cent stake in it. An open offer may also re-rate the stock.
“Bell the bull Says: An investor can invest in the company for a short to medium term and we may expect a price ofrupees 60 and above.”