BF Utilities jumps 18% as Deve Gowda withdraws opposition to infra project
BF Utilities, a part of the Baba Kalyani Group, surged as much as 18 per cent to Rs 609 on Wednesday after former Prime Minister HD Deve Gowda decided to withdraw his protest against the Bengaluru-Mysuru Infrastructure Corridor (BMIC), a pet project of BF Utilities. The stock, once the fastest value creator between 2004 and 2006, has stayed on the sidelines due to political and legal battles
Shares of BF Utilities surged a mammoth 13,480 per cent in two years from Rs 25 in November 2004 to an all-time high of Rs 3,395 in November 2006. After six years of successive losses, the company reported a consolidated net profit of Rs 121 crore for the financial year ended September 2015 and a 118 per cent jump in income to Rs 519 crore. "I don't have any idea why Mr. Gowda made that statement suddenly. But on 29th August there is Supreme Court hearing. The court had asked us to settle the matter outside but that has not happened. So we will be going to the court anyway," said Ashok Kheny, managing director, Nandi Infra Corridor Enterprise, a subsidiary of BF Utilities.
The stock is trading at a price-toearnings multiple of 35 times its trailing 12-month earnings, a discount to peers like Sobha Developers and Puravankara. But analysts are not convinced about the growth prospects. "Though the company has a huge land bank, but the stock is highly speculative," said G Chokkalingam, CEO, Equinomics Research and Advisory. "I would not recommend to buy this stock as many other quality real estate players are available".
After a nearly 13-year struggle, Deve Gowda decided to distance himself from his relentless campaign against the BMIC project due to poor health and disillusionment, The Times of India reported on Wednesday.
BFUL is an integrated infrastructure developer engaged in the development of the Bengaluru-Mysuru Infrastructure Corridor, one of the largest integrated infrastructure projects in India entailing the development of a 111-km expressway, 9.1-km link road, 41-km peripheral road and 5 townships along the expressway.
Gowda launched a series of campaigns demanding a CBI probe into irregularities in the project and pressuring the government to withdraw the excess land. The company has sole and exclusive right to develop BMIC, which will comprise expressways, self-sustaining townships and other large mixed-use developments. In addition to the BMIC Project, the company owns and operates the Hubli-Dharwad Bypass Road and a 18.33-MW wind power project in Satara district in Maharashtra.
BF Utilities, a part of the Baba Kalyani Group, surged as much as 18 per cent to Rs 609 on Wednesday after former Prime Minister HD Deve Gowda decided to withdraw his protest against the Bengaluru-Mysuru Infrastructure Corridor (BMIC), a pet project of BF Utilities. The stock, once the fastest value creator between 2004 and 2006, has stayed on the sidelines due to political and legal battles
Shares of BF Utilities surged a mammoth 13,480 per cent in two years from Rs 25 in November 2004 to an all-time high of Rs 3,395 in November 2006. After six years of successive losses, the company reported a consolidated net profit of Rs 121 crore for the financial year ended September 2015 and a 118 per cent jump in income to Rs 519 crore. "I don't have any idea why Mr. Gowda made that statement suddenly. But on 29th August there is Supreme Court hearing. The court had asked us to settle the matter outside but that has not happened. So we will be going to the court anyway," said Ashok Kheny, managing director, Nandi Infra Corridor Enterprise, a subsidiary of BF Utilities.
The stock is trading at a price-toearnings multiple of 35 times its trailing 12-month earnings, a discount to peers like Sobha Developers and Puravankara. But analysts are not convinced about the growth prospects. "Though the company has a huge land bank, but the stock is highly speculative," said G Chokkalingam, CEO, Equinomics Research and Advisory. "I would not recommend to buy this stock as many other quality real estate players are available".
After a nearly 13-year struggle, Deve Gowda decided to distance himself from his relentless campaign against the BMIC project due to poor health and disillusionment, The Times of India reported on Wednesday.
BFUL is an integrated infrastructure developer engaged in the development of the Bengaluru-Mysuru Infrastructure Corridor, one of the largest integrated infrastructure projects in India entailing the development of a 111-km expressway, 9.1-km link road, 41-km peripheral road and 5 townships along the expressway.
Gowda launched a series of campaigns demanding a CBI probe into irregularities in the project and pressuring the government to withdraw the excess land. The company has sole and exclusive right to develop BMIC, which will comprise expressways, self-sustaining townships and other large mixed-use developments. In addition to the BMIC Project, the company owns and operates the Hubli-Dharwad Bypass Road and a 18.33-MW wind power project in Satara district in Maharashtra.
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