Invest in Unity Infraprojects: IIFL India

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Invest in Unity Infraprojects: IIFL India

Invest in Unity Infraprojects, says Amar Ambani, IIFL India.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See previous views by Amar Ambani See what other Experts & Brokerages are saying about Unity Infraproj See messages about Unity Infraproj Unity Infraproj BSE | NSE 01/06/12 Are Mutual Funds betting on Unity Infraproj?

Invest in Unity Infraprojects , says Amar Ambani, IIFL India.

Ambani told CNBC-TV18, "I believe corporate governance will be top on the agenda. Companies that have promised execution on a certain date and deliver, these companies will do well. I think a focus will also shift towards companies that are profitable generating adequate cash flow and return on investments. I think these will be some of the points which will be looked at and lot of these concept stocks will be thrown out of the window. Going by this theme we like a lot of largecaps because they fit in very well in this theme. Very selective midcaps will fit into this theme and which is why we have seen a lot of under performance in lot the midcaps. In fact in the next quarter too just like in Q2, you will have lot of midcaps not doing well."

He further added, "I do not see a broad rally in midcaps, it will be largely restricted to the top companies. But within the midcaps the ones that fit into this criteria, some of them that we have chosen are Yes Bank in the banking side, there is Unity Infra. I believe there is lot of problem with funding infrastructure but there seems to be a bit of over pessimism when it comes to pure EPC players like Unity and these are the ones that we like, the asset heavy players will continue to suffer but companies like Unity, they have just been beaten down so badly and the valuations are so cheap around 5 times multiple that the risk is simply too low. Even if the weight is slightly longer, one can definitely invest in a company like Unity, which will not be affected by funding constraints, the largely regional players, they have order books of Rs 4000 crore odd which are three times their revenues."

"If you conservatively look at growth number too, assuming not too many order inflows come in with the existing order book itself a 20-25% kind of growth is easily achievable for the next two years. So Unity Infraprojects stays one of our top picks in this space."