CMP Rs 178 BSE 15848
TECHNICALS:
- One look at the available Price Charts, is enough to indicate that the Scrip seems to have bottomed out at 141 levels intraday on 3/1/2012 and at 148 levels on a closing basis on 21/12/2011.
- The short to medium term Charts look good and a close above 184 levels would confirm an uptrend, at least in the medium term , after which a plausible target could be around 225 levels in the medium term.
- On the downside, there is a good support at 166 levels which, to my mind, should hold.
- Briefly, the fundamentals look good with the Company being a well known name in the niche areas of Coal Handling, Ash Handling, Bulk Materials Handling and Pollution Control solutions for Coal-fired TPPs , Steel Plants and other core Infra applicators. In addition, the Company is an integrated EPC play providing turnkey execution in the afore mentioned areas.
- Corporate performance has been good, particularly in Q2 FY2012 and the Company has guided a topline growth of 35-40% in Fy2012 with stable Order inflow during the year.
- The rather high debt levels seems to be a bit of a concern but to be fair, we will be hard pressed to find a single growth oriented infra Company in present times which has optically low debt levels. Obvoiusly, the strong headwinds due to the hard Interest Rate regime thus far have meant tough times on the Bourses for this Company as well as its peers. However, with the Rate Cycle definitely having peaked out, the macros can only improve going ahead.
- The other concern, is that the Stock is rather thinly traded, but I guess, one will have to live with that negative.
- My call is that one can buy into the scrip at CMP 178 and add more on dips, if any. This phased entry is necessary because the Scrip has run up a fair bit in the last ten days and also in case the Markets have another down leg in the offing. We need to keep some masala dry, in a manner of speaking, for adding at lower levels.
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