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Strong quarterly numbers for four consecutive quarters did not prevent the stock of HDIL from sliding 53 per cent over the last one year, making it one of the top losers. Besides poor sentiments prevailing in the real estate space, softening of over-heated realty markets in cities such as Mumbai has also resulted in the stock of HDIL receiving the flack. HDIL was highly leveraged during 2009, but thanks to two successful qualified institutional placements, the company brought down its debt equity ratio to 0.7 by FY-10 and 0.45 by September 2010.

However, concerns over fluctuating prices in the Mumbai transferable development right (TDR) market, besides the huge capital that the company is ploughing into the Mumbai airport slum rehabilitation projects have led to market players keeping away from the stock. Slum rehabilitation accounts for close to 54 per cent of its ongoing projects while residential projects account for another 40 per cent.

HDIL's advantage compared with most real estate players is its ability to quickly sell land that it receives from slum rehabilitation projects and generate cash when in need. Recent reports state that the company plans to sell land in Andheri (East) for about Rs 800 crore.

— Vidya Bala

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