Punj Lloyd finally came with some positive surprise in Q4FY11. The order book is growing in a good rate is the only positive issue despite the cancellation of some orders in Libya.
----------------------------
To get more updates and views on wealth creation visit: http://wealthguru.blogspot.com/
----------------------------
There are concerns still exists,
1. Execution is the key risk for this stock:
Approximately Rs6,300 crore of inactive Libyan orders have been removed from the order book. Despite an order inflow of Rs11,000 crore in FY2011 and Rs4,000 crore in Q4 itself. The order book to sales stands at 2.8x its FY2011 revenues.
2. Increase in auditor’s qualification:
” The auditors’ qualification has increased from Rs243 crore in FY2010 to Rs405 crore in FY2011. The Rs243 crore of FY2010 which was on account of cost overrun in ONGC Heera project continues. The hearing of this case will begin from June 2011. The incremental auditors’ qualification of Rs90 crore is with regards two projects which have faced cost overrun due to a delay in supply of free issue material by the customers. Another Rs72 crore is on account of liquidated damages being charged by some of the clients on account of work executed in the earlier years.
----------------------------
To get 2011 year outlook of be and make visit:
----------------------------
What to expect from this stock?
From last six quarters Punj Lloyd disappointed all, Q4FY11 is the first one to wipe out investors tears. The stock badly hit in the above said period and the bottom is very near to the CMP for the stock. This is the indication that downside is limited in this stock. If you are very long term investor and you want to invest for your child’s future then defiantly Punj Lloyd is good bet. The broader market is also likely to fell more from the current levels; the short term view for the Punj Lloyd is also slightly muted but the long term view considering the current price is attractive. Hence, one can allocate the fund to invest in and go through the SIP mode for the next six months in equal parts.
With thanks
Be and make
No comments:
Post a Comment