Unicon recommends 8 stocks for long term investment
Unicon Investment has come out with its report on leveraged companies. The broking firm has identified have identified 8 companies with strong growth trajectories and debt to equity ratio less than or equal to one
November 29, 2011 / 14:56 IST
Unicon Investment has come out with its report on leveraged companies.
Corporate India is facing challenges in maintaining their growth momentum in adverse macro economic environment. High interest cost has severely impacted the bottomline of the companies and delayed their capital expenditure plans. We expect this high interest rate regime to continue going forward and hence believe the companies with strong financials and low Debt-to-Equity would capitalize on the growth opportunity in the constrained environment. We have selected BSE 100 (excluding banking and finance) companies for this query and have shortlisted companies with robust business models. We have identified 8 companies with strong growth trajectories and DER less than or equal to one. We recommend BUYACCUMULATE rating on these stocks in the uncertain macro environment. Tata Consultancy Services (TCS): Macro economic conditions will continue to be a concern for TCS as substantial part of their revenue is generated from the US and Europe. Strong volume growth and management confidence in offshore IT service demand in an uncertain economic environment strengthens our confidence in this stock. Good double digit growth in service verticals like BFSI, Retail & Distribution, etc. as well as expansion in emerging markets could improve bottom-line margins going forward. At CMP INR 1064, the stock is trading at 17.2x its FY13E earnings estimate. We recommend ACCUMULATE rating on this stock and maintain our price target of INR 1200. BHEL: At the end of Q2 FY12, BHEL
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