1) Valuation – The Valuation of the company is not cheap at around 3x P/B and around 28-30x P/E .But with companies of the same quality going in for around the same if not higher valuations,why would the company sell the shares at a discount.This however does not make it better for investors who get very little for investing in a newly listed company.This stock is an unlikely candidate to be multibagger
2) Negative Cash Flows – The High WC Requirements of the Sector and Fast Growth has meant that the Operating Cash flows of the company have been negative in the last 3 years.
The Company and the Sector in which it operates is a good one,however the Valuation has discounted most of the good things about the company.The company has very little to be negative about except the high working capital ,negative cash flows and the like.But that is a feature of the Construction Sector rather than anything negative about the company.The high valuation given to the issue makes it avoidable given better opportunities in the Indian market.
The Developers as usual are being brazen about it denying any wrongdoing despite tons of cash and incriminating documents being found.These Raids never result in convictions or prison terms and in India are generally politically motivated.Most of the Government officials are a part of the gravy train and would not touch connected Real Estate Developers without a push from their political masters.Expect these Developers to start their business as usual in a couple of months as India’s Political and Business Elite toys with the country’s laws with impunity.
India’s Real Estate Sector is one of the most unloved sectors in the Stock Market.Even Fund Managers shun this Sector because of the complete lack of trust in the financial statements published by the Real Estate Companies.With the whole industry most unogranized and companies playing with their books,its not a wonder that the sector continues [...]
The Board has lashed out at IL&FS for forgetting the strictures under which the company was given to the management of IL&FS.The government appointed directors had also been silent at the flouting of these norms.Note the company has already sold the preferential shares in the company without the approval of the CLB.Now IL&FS finds its reputation tarnished due to the jinxed Maytas.I am not superstitious by nature but it definitely seems that Maytas brings bad luck to its promoters.
Sikhism’s most Holy Shrine the Golden Temple situated in Amritsar,Punjab will be now a part of the Green Energy Movement.The Punjab Energy Development Agency (PEDA) has awarded a project to retrofit 5 prominent places in the Punjab state with solar PV panels.The award for these projects has gone to Punj Lloyd one of the biggest [...]
Engineers India Follow on Offering (FPO) is a sequel to the government PSU divestment through stake sales in companies with low public float.EIL FPO is going to see a 10% dilution of the government equity in the company on top of the existing 9.6% public float.The 3.36 crore (33.6 million) shares are being offered in [...]