Hold IVRCL with long term perspective: Sekhar

Phani Sekhar, Fund Manager, Angel Broking is of the view that long term investor can hold IVRCL but from a medium term perspective that is six months to one year, I don’t see much hope in this business.

Sekhar told CNBC-TV18, “In short term these stocks can go anywhere depending on what the sentiment on the street is. There is really not much left in these (infrastructure) businesses. So, on one hand you have a very debt on the balance sheet which is getting difficult to be serviced, order book accretion has slowed down tremendously leading to poor execution. So, the street in a way is celebrating the stake sale in three road projects.”
However if that were to happen what will happen to the cash flows starting from next quarter. There are challenges and answers are not very easy. From a longer term perspective if any investor is willing to be with the business over the next 6-8 quarters and take the downside along with him then as and when this entire infrastructure cycle turns which it will turn at some point in time – IVRCL is now trading at around Rs 670 crore odd market capitalisation, you are going to double or triple your money but that is going to be over a very long period of time. So from an investors point of view over a very long term you can hold it but from a medium term perspective that is six months to one year, I don’t see much hope in this business.”