NTPC: Buy (The Hindu Business Line 25th Feb 2008)Investors seeking a defensive play in the run-up to the Budget can consider putting their money into the NTPC stock. The stock is now trading at more reasonable valuations compared to the peak of the market euphoria over power stocks barely a month ago. At the current market price of Rs 197, the stock trades at 20 times the projected earnings for 2007-08; down from over 26 at its height.
While the pace of appreciation from current levels could be slower compared to the recent past, the downside appears minimal. There’s likely to be little in the Budget to affect the stock adversely; if anything, it could make things brighter for the company through a sharper focus on the power sector accompanied by higher allocations.
NTPC plans to scale up its present capacity of around 27,000 MW to over 50,000 MW in the next five years. The company will also be commissioning by early-2009 its first hydro power plant at Kol Dam in Himachal Pradesh. More
3i Infotech: Buy(The Hindu Business Line 25th Feb 2008) Investors with a one-two year perspective can consider buying the shares of 3i Infotech in the light of its good business prospects and reasonable valuations.
At Rs 126, the stock trades at 13 times its current year earnings and 10 times its estimated FY-09 earnings. This is a discount to MindTree Consulting and Polaris Software, but a slight premium to Zylog Systems and Hexaware Technologies, all of which have substantial banking and financial services industry (BFSI) exposure. But a niche BFSI focus and superior earnings before tax, depreciation and amortisation (EBITDA) margin (25 per cent) make the stock an attractive ‘buy’ among Tier-2 IT players.
3i Infotech has a robust business model because of a high-margin product-driven business, a healthy geographic spread that includes a significant domestic focus and selective acquisitions to tap new clientele.
A lower dependence on the US and a presence in the critical aspects of the BFSI industry will lead to 3i Infotech being minimally affected, certainly less than its Tier-2 peers, due to the sub-prime crisis. More
Ultra Tech Cement:Buy (The Hindu Business Line 25th Feb 2008)The Ultra Tech Cement stock seems a reasonable investment option for investors with a medium-term investment horizon. The company has ambitious plans for capacity addition that could support volume growth, cost-saving measures that may improve margins and solid financials.
The company’s 4.9-million-tonne capacity in Andhra Pradesh will be fully operational by this March. Ultra Tech has also planned an additional Rs 3,300-crore capex on de-bottlenecking exercises and setting up captive power plants that would further improve operating margins. At the current market price of Rs 889, the stock trades at 13 times its FY-08 earnings which, compared to peers — ACC and Ambuja Cements — is at a discount. Investors with a one-two year perspective can consider exposure in the stock.
The company has reported a 19.5 per cent growth in net sales in the nine months between April and December 2007, with a 36 per cent increase in operating profits and a 3.80 percentage point expansion in margin. The southern and western regions, the main target markets for the company may witness stronger demand growth for cement in the year ahead on account of an expected increase in demand from the infrastructure sector. More
While the pace of appreciation from current levels could be slower compared to the recent past, the downside appears minimal. There’s likely to be little in the Budget to affect the stock adversely; if anything, it could make things brighter for the company through a sharper focus on the power sector accompanied by higher allocations.
NTPC plans to scale up its present capacity of around 27,000 MW to over 50,000 MW in the next five years. The company will also be commissioning by early-2009 its first hydro power plant at Kol Dam in Himachal Pradesh. More
3i Infotech: Buy(The Hindu Business Line 25th Feb 2008) Investors with a one-two year perspective can consider buying the shares of 3i Infotech in the light of its good business prospects and reasonable valuations.
At Rs 126, the stock trades at 13 times its current year earnings and 10 times its estimated FY-09 earnings. This is a discount to MindTree Consulting and Polaris Software, but a slight premium to Zylog Systems and Hexaware Technologies, all of which have substantial banking and financial services industry (BFSI) exposure. But a niche BFSI focus and superior earnings before tax, depreciation and amortisation (EBITDA) margin (25 per cent) make the stock an attractive ‘buy’ among Tier-2 IT players.
3i Infotech has a robust business model because of a high-margin product-driven business, a healthy geographic spread that includes a significant domestic focus and selective acquisitions to tap new clientele.
A lower dependence on the US and a presence in the critical aspects of the BFSI industry will lead to 3i Infotech being minimally affected, certainly less than its Tier-2 peers, due to the sub-prime crisis. More
Ultra Tech Cement:Buy (The Hindu Business Line 25th Feb 2008)The Ultra Tech Cement stock seems a reasonable investment option for investors with a medium-term investment horizon. The company has ambitious plans for capacity addition that could support volume growth, cost-saving measures that may improve margins and solid financials.
The company’s 4.9-million-tonne capacity in Andhra Pradesh will be fully operational by this March. Ultra Tech has also planned an additional Rs 3,300-crore capex on de-bottlenecking exercises and setting up captive power plants that would further improve operating margins. At the current market price of Rs 889, the stock trades at 13 times its FY-08 earnings which, compared to peers — ACC and Ambuja Cements — is at a discount. Investors with a one-two year perspective can consider exposure in the stock.
The company has reported a 19.5 per cent growth in net sales in the nine months between April and December 2007, with a 36 per cent increase in operating profits and a 3.80 percentage point expansion in margin. The southern and western regions, the main target markets for the company may witness stronger demand growth for cement in the year ahead on account of an expected increase in demand from the infrastructure sector. More
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