Dec 1, 2010


After the recent fall in Punj LLoyd most of the fund houses coming with buy calls. the valuations looks very attractive for this stock at the current market price.

Angel broking came with a target of Rs.153/- which is more than 50% to the CMP.
Kotal came with a target of Rs.113/-
Share khan with a target of Rs.128/-
Emkay with a target of Rs. 132/-
Religare is the only company with a target Rs.90/-

So, all in all the risk reward ratio is very lucrative. One can have this stock in their portfolio aiming of the medium to long term.

The key thing for the Punj Lloyd, is that they are diversifying their business across various sectors and regions. Now, they betting more on infra rather than oil and gas.

Current order book after Q2FY11 consists :
Pipe line                       11%
Tankage                       2%
Process                        26%
Infrastructure                61%

Geographical diversification of the current order book after Q2FY11:
Middle East                  10%
Europe                         3%
Africa/MiddleEast         27%
SE Asia and Asia Pac   33%
South Asia                    27%

On valuation front also it is very attractive; it is trading 15.5X to FY12E and 6.2X FY13E. Now, the P/BV is also at its historical lows which clearly telling that down side risk is very low for this stock. The key negative for the stock is sentiment, once the sentiment starts coming in.. The same will replicate in the price.

So, those who are aiming the long term can invest with out any doubt at the current levels.

With thanks
Be and make

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