April 6, 2011 3:02 pm
I’ve Alok ind 500 shares @ 20.68 & GVK Powers 100 shares @ 28.55.
At what price should i exit?
I can wait for 6-8mths.
GVK Power & Infra, while being a good company, the stock isn’t cheap. It is fundamentally amongst the better Power/ Infra stock to own. It has almost zero debt as of March 2010 balance sheet (a big plus for Infra cos these days) & very healthy EPS Growth. The point is can it give you decent return in next 6-8 months? Given the current valuation, it looks difficult, unless its quarterly earnings shows very high EPS growth. While we don’t give a BUY/SELL recos, upside looks long term & downside is also limited. You can get all the above information & take you own decision here – https://goo.gl/QHI1O
Alok Industries – It looks decently under-valued. The company has m-cap of around Rs. 2,062 Cr, while it has cash on its books of Rs. 1,390 Cr. The company is trading below its book value – another BIG plus. The volumes are showing an decent increase in last 3 months. So there may be a buying interest.
A BIG negative – the company’s current debt is huge – 8,000Cr plus. The payment capability of this debt is not the best in shape – interest coverage being only 2.3!
So, it has a similar fate. Unless, the company grows its EPS or shows signs of debt payment capability, it doesn’t look like a screaming buy. But if you are aware of any bit about its earning estimates – it may just make sense to research this. Simply because its available at dirt cheap valuations. Do check this link for more info – https://goo.gl/rzrsQ
Hope this helps.
Santosh Navlani | moneysights.com
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