Reliance Infra is India’s largest Infrastructure company. In January 2013 its stock price touched a high of Rs 570, but today it is at 323 level. A fall of more than 40%. During 2010 the stock used to trade at the level of Rs 1200, currently it is available at 1/4 of that price. Is it the right time to buy reliance infra ?
Fundamentals of Reliance Infra
Apart from infrastructure sector reliance infra has also presence in power business i.e. Generation, Transmission, Distribution, EPC and Trading. Reliance Infrastructure Ltd had made an strategic long term partnership with Wanda group of China for real estate development in Hyderabad. The company has 11 road projects of 1,000 kms worth 120000 mn rupees. EPC revenue for the last quarter was Rs, 1,841 crore and the Order book of Rs. 121450 mn as on December 31, 2012. Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 22% over 2011 to 2014E respectively. As the government is expected to increase interest in the infrastructure sector, the order book of reliance infra is expected to grow further for the next three years.
Technical view on Reliance Infra
In the month of march reliance infra gave a break down for rounding bottom bearish pattern, whose targets where around 322 Rs. These targets have been achieved now and the stock is currently at 52 week low. The indicators are in oversold zone, which indicates a strong bounce back will come soon.
To conclude Reliance infra is a good stock fundamentally and technically at current level. One should understand that this is a high beta stock, so movements are large in this stock on both the sides. One can invest in this stock at current level and on dips for a price target of 450 Rs in the next 12 months.