Go long on Indiabulls Power: Aashish Tater

One can go long on Indiabulls Power for the first target of Rs 15-15.50, says Aashish Tater, Head of Research, Fortunewizard.com.

Tater told CNBC-TV18, "Indiabulls Power was on our radar right from initial public offer (IPO) where we had an aggressive sell, exit, do not subscribe strategy on this particular stock because we factored in that the execution risk that the company is sitting on is quite high and the price that they were trading at was not tempting enough to go for that risk-off."
He further added, "Now, the stock has almost corrected to 20 percent of their highs. We feel at current levels given the quality project they have, we would like to take a small risk. It is still a risky bet and we do not advise you to go very aggressive on this particular stock at least for this next two quarters."
"In last three months my analysts have gone from neutral hold to bullish on this particular stock where we feel now the  risk reward is favourable for this particular company. The 1,350 megawatt (MW) Amravati Project started its first  phase where it has commenced with 270 MW of operations. There is another project that is near Nagpur, which is also going to start its phase I project by the yearend. That is also 1,350 MW project in a whole 2,700 MW for Indiabulls Power by next year."
"Still, there are issues for which the stock has been beaten down regarding issues in Maharashtra. I still feel that this  particular thing has already been factored into this space. When we go through the quant model that we look at, we felt  that there is a likely possibility that the stock will make a double bottom around current levels of Rs 8.50 and once it  crosses Rs 9.70, this will generate a very strong buy signal, which can take it as high as Rs 15.50."
"When we combine the fundamental report that we are looking at, we felt that the company will be able to do close to  Rs 2-2.50 of EPS once the entire project goes onstream. Even at PLF of not more than 70 percent. So, on  conservative side, if someone has patience for next eight-twelve months perspective, a small amount should be  invested into a stock like Indiabulls Power."
"It is not a penny stock because with Rs 2,200 crore of marketcap and equivalent value of enterprise value of more  than Rs 4,000 crore, we feel this is one stock which is a likely possibility candidate where enterprise value will  eventually go and stabilise around Rs 7,000 crore. That will be very favourable for the equity stock holders."
"Thus, one can go long on this particular stock for the first target of Rs 15-15.50 and let us see how the company on  the performance side in terms of bottomline is able to deliver. So, from next eight-twelve months perspective on risk  reward front, this looks quite attractive at current levels."
Disclosure: Safe to assume that we may have discussed with clients but we do not hold the stock.