Unitech

Unitech has posted moderetely OK result. The stock has been hammered from highs of 500 to 28.5. It bounced back smartly to 120, it pulled back  to 77, now it is quoting at 87 Rs.

Unitech has debt of 7800 cr. and most pundits were thinking that company is going to go belly up and so would be share holders.

Now with second round of QIP, it was able to raise 350 MUSD easy to get its debts down to 5000 cr which is OK for a company of unitech's size.

It has posted moderetely OK result. It is planning to build lost cost house tragetting lower and middle class people which is the largest chunk of indian population. It will post great results going forward. It is still having PE of 15 which is lower than industry average of 19 as given here. This year's EPS is 4.56. With change in strategy of housing and also diversification in telecom, the EPS should go back to 9 Rs. That should make the price atleast double from the current price. If we factor in that it catches up with the industry PE then it would reach 2.5 times the current price around 150 to 175.

I recommend a buy of unitech at 83 to 86 with a target of 150 to 175 Rs in a period of 1 to 1.5 years from now.

Disclaimer: I have some shares of unitech at 40, please do your own due diligence before buying any shares.

Banking Stock With Momentum...

IFCI (Industrial Financial Cooperation Of India) is a momentum stock, it always touches highes when sensex goes up and goes down with sensex.

With new UPA govt in drivers seat, it is all set to zoom again to new highs. The reasons

1. It is going to get banking license.
2. There would be a stake sale.

Last time when stake sale was scheduled, it touched highs of 140 Rs. It is now quoting at 55 Rs. It has gone up from 15 Rs to 55 Rs over the current bull rally.

If you look at the fundamentals, it is quoting at PE of 8.97 as of today, industry average is 11.42. The source is trusted moneycontrol.com.

It is performing OK in the tough market condition which we witnessed in 2008 as given here.

If the company gets a banking license and stake sale talks gather some steam, a conservative estimate would be 100+ in 12 months. If not then it can again go back to lows of 30 or 40. It has very good potential upside with very less down side.

I recommend it to buy at 50 to 55 range, with buying on dips for sure shot 100% returns in a year or so.

Disclaimer: I have some stocks of IFCI at 15.6 INR. Do your own due diligence before buying any stocks.

Booked Profit In RNRL

I sold 50% of my long position in RNRL. The proceeds are given to HPCL. With fiscal deficit climbing, govt has no option but to divest. I am banking with divestment HPCL would be one of the first on the block.

If that happens, then it may zoom to 4 figures in no time. It has almost same revenues as a RIL but it is quoting almost 1/6 to 1/7th time.

I thinking of moving the remaining 50% of RNRL too in to HPCL as RNRL is more of momentum stock. It is rather good to move to some other oil stock like HPCL.

DISCLAIMER: Do your due diligence before investing.

Reliance Power

Reliance power has won back to back contracts for creating power plants in India. They have the largest portfolio for creating power plans in India.

The book value of stock is 54 and PE is 195 against industry average of 27 as given here. All its plant are going to become operational in or around 2012.

It is more of a sentimental stock right now a little over priced at current value of 194.

Considering its potential, I expect the EPS to move from current .42 to 18 atleast once its power plants are operational. Assuming a PE of 26, it should be quoting around 468 in 2012 or so.

It is a very long term buy. I would recommend a buy on every dips of reliance power. If there is a boost in budget about the power sector (which would be there as India needs power very dearly due to lot of deficits in power), this stock will shoot up.

Disclaimer: Do your own due diligence before buying any stocks.

Booked Profits In Unitech and IFCI

I booked profit partially in IFCI And Unitech, the proceeds from that are moved to Gujarat NRE Coke.


So, if you read between the lines you know which one to buy ;-)....

Disclaimer: Do your due diligence before buying any stocks.