Stocks we love

Gift your valentine a House. Among Indians real estate is considered to be the best Investment avenue where the returns are always secured. But with soaring real estate prices it has been difficult for even an decent Income earner to afford buying a property.

So, Forget flowers and chocolates. Gift your valentine stocks in real estate and Infrastructure sector which are available in cheap valuation and can secure your future returns. Check out our picks for this year's most lovable stocks in real estate and Infrastructure Sector.

How we chose the stocks

In honor of Valentine's Day, we carefully selected two stocks in the booming Indian Real estate and Infrastructure Sector that will make your portfolio swoon.

We screened thousands of stocks to come up with the most appealing combination of earnings and sales growth, reasonable valuations and having huge land bank or Order Book.

But we know how easy it is to get your heart broken in a market as volatile as this. So we picked stocks that we think you'll want to commit to for the long term.

If you want some financial love this Valentine's Day, look no further. Invest right away.

1) Omaxe Limited (CMP Rs. 269/-)

Omaxe is one of the largest Real Estate Development company in India. The company currently has 52 projects under development. These include 21 group housing projects,16 integrated townships,14 shopping malls and commercial complexes and 1 hotel. The company is at present developing over 150 million sq ft of saleable area across 30 towns in 9 states in Northern and Central India. The total valuation of the land bank stands at around Rs. 13,000 crores.

The stock currently trades at less than 10 times it's FY08E EPS of 28 and around 6 times it's FY09E EPS of 45. The stock is available at a extreme cheap valuation compared to it's peers (DLF, Parsvnath Developers etc)

Future Growth

1) The company is expecting to develop 40 million sq ft of land in FY09 double from 20 million sq ft in FY08.
2) The company has won 25 acre development land in Hyderabad for which the work is expected to commence in March' 08. The project value for the same is around USD 450 million.
3) The current project value for Omaxe is in excess of Rs. 28000 crores.

2) Hindustan Construction Company (HCC) (CMP Rs. 169/-)

HCC is a large private sector construction company with high value projects across segments like transportation, power, marine projects, oil and gas pipeline constructions, irrigation and water supply, utilities and urban infrastructure.

The stock currently trades at around 51 times it's FY08E EPS of 3.3. The stock valuation seems to be extremely attractive based on the current order book position and the revenue supposed to go on stream by the current fiscal from it's 100% subsidiary HCC Reality.

Future Growth

1) HCC current order book stands at around 9000 crore of which 2000 crore is pending High Court Decision. The current order book constitutes to around 2 times it's expected FY08 sales.
2) The first phase of Lavasa project a hill station developed by HCC at a hour drive from pune is expected to go on stream in the current year.
3) Mumbai's largest IT park constructed by HCC in Vikhroli is expected to be Operation by March' 09. This is supposed to earn a return of 100 crores yearly.

HCC has already booked losses to a tune of 350 crores in the much delayed Bandra-Worli sealink. We do not see any further loses due to the same.

Risk associated with both the firms are in similar lines

1) Reality price crashes.
2) Economical down trend.
3) Huge Interest Rate burden.

But considering the Huge Infrastructure and Urbanization growth in India for the next 20 years these stocks will be one of the few multibaggers in the reality space.