Sunday, June 14, 2009

Rs 2 paid up Book value Rs.135

IVRCL Infrastructures & Projects Ltd is a construction company engaged in construction of buildings, bridges, pipelines, marine construction, canal modernization and road works. Other areas of work include Water & Environment, Power also. IVRCL group is also involved in various real estate projects and also has ownership of many BOOT projects.

Promoter stake dropping to low levels:-
Promoters stake has slowly come down from above 50% in 2000 to just 9.7% now which doesn’t give comfort holding this stock @ such high valuations. In fact in last 5 years itself it has dropped from 30% to current levels. 

The demand scenario for infrastructure has improved after majority government at the helm but the stock has multiplied itself by more than 6.5 times and the best looks priced in for now, a correction will give a better entry point in my view.

Latest Report on IVRCL Infra by Deutsche Bank

Technical Outlook:-
The stock bottomed out at Rs 57 in Oct'08 with Nifty and had a strong rally to post Rs 377.90 as high on 05June2009. But now it shows distribution at higher levles and has formed a double top at Rs 377-375 levels. The stock looks weak and if broader market starts correcting it can underperform when down side Target can be below Rs 300 also and even Rs 250 in deep correction, so caution is advised in this stock for short-term buying and buying is advisable only if it comes below Rs 240.

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