IVRCL LTD.; BEST ENTRY PRICE

               CMP 35.4                                                                      BSE 16213

Continuing with our theme of looking at beaten down good quality Infra Stocks, in this Post we shall examine IVRCL LTD.

TECHNICALS:

• The 5-year Price Charts clearly indicate a troughing out in the Stock at or around Current levels. To my mind, the Price wise correction, if one might call it that is more or less done.
• The 5-year low of 28.4 intraday on 18/11/2011 is very very unlikely to be violated again.
• The lowest point during the 2008 meltdown was 32 intraday on 24/10/2008; In the 1 year immediately after this 24/10/2008 low, the Stock gave returns of 553%.!!!! (It touched 209 on 21/10/2009.)
• Longer term investors should note that the time-wise correction is by no means over so the Stock could consolidate in the broad 30-40 range for a while.
• Shorter term investors should note that, on the upside, 36.5 levels are a key resistance zone; a decisive break above these levels could take the Stock upto 44 levels provided the broader Market too obliges.

FUNDAMENTALS:

• Frankly, it is almost sadistic to talk Fundamentals at this time since as we all know the kind of Macro headwinds the Sector is facing.
• Anyway,broadly speaking, the Company has wide and varied EPC interests in Water Supply and Environmental Projects, Transportation Projects, Building And Industrial Structures, Power Generation and Transmission projects etc.
• Adverse Investment and Fiscal conditions are a definite bug- bear as we all know,but the easing out of the hard IR Cycle will definitely improve matters over the medium to long term.
• The Order Book is healthy, at almost Rs 23000 cr plus; of course there are execution issues but a softening of the IR regime would be the game changer.
• The Stock at CMP 35 is trading at less than half its Book Value.
• Q2 FY2012 Results have been better than those of its peers despite the adverse conditions referred to above.

Overall, one can say with a reasonable degree of confidence that the Stock is a BUY at CMP 35 and all possible panic dips, for the long term investor. Hold for the long term for super-normal Profits.


Q2 FY2012 RESULTS  SEE THIS  AND THIS

IVRCL WEBSITE LINK  RIGHT HERE