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.

GNFC

GNFC (Gujarat Narmada Valley Fertiliser) is one those fertiliser company where Govt of Gujarat has majority stake. It got battered down in past due to one of the decision of Gujarat Govt to have PSU use part of their savings for the social cause. This created a knee jerk reaction and GNFC was battered down from highs to 150 Rs to 98 now.

If you look at the company, its book value is 112 Rs, current market price is 98Rs. Its industry peers are quoting at price/book value of more than 1.5. This one is quoting at .85 of its book value.

The PE of the company is 5.85 where in industry PE is 9.82. If we put a conservative PE of 7 for this company then also it should be quoting around 161 Rs (23 being the EPS of share as per 2008 results).

Looking at the balance sheet for past years, its top line and bottom line both are growing quite handsomely. With Gujarat increasing its agriculture output year on year, it augurs good news for fertiliser companies especially which are based out of Gujarat.

Based on the current scenario, I recommend a buy of GNFC below 105 Rs, the target being 200 Rs by Dec 2010.

Disclaimer: Do your own due diligence before buying stocks.

Rolta India

This mid cap IT stock has been battered down like anything by the FIIs during the recent fall of the sensex. It was quoting around 180+ and it went down to 45 in two weeks time.

Let us look at the details of this stock here. It book value is 81, and PE is 5.72. While IT industry PE is 12.29. Comparing it with the competition, you can see that it is quoting at discount to other companies. E.g. HCL tech book value 51 (CMP 167), wipro book value 71 (CMP 316).

It has presence in Global Imaging Software, Engineering related work. It is expected to get major orders from the nuclear deal with US.

On conservative estimates, if we consider its EPS to be 20 Rs/share compared to current 16 Rs/share. With PE of about 9 (if not 12 as per industry average), then it should be quoting at 180.

I recommend a buy or hold on Rolta for a target of 180 to 200 in 6 months.

Disclaimer: I have some stocks of Rolta at 56 Rs. Please do your due diligence before buying or selling a share.