Exit Lanco Infratech on rallies: Mayuresh Joshi

Mayuresh Joshi, VP- Institution at Angel Broking told CNBC-TV18, "The kind of debt that Lanco Infratech probably has on its book does not augur well for its cash flows and that is very evident from the annual report that we have just seen, losses of Rs 2,200 crore and sales of Rs 10,700 crore does not augur well for cash flows. I think the cash flows in terms of improvement and return ratios both ROEs and ROCs look very difficult unless the asset sales probably start happening and the deleveraging starts coming off, debt of around Rs 34,500 crore on the balance sheet will ensure that the interest in finance cost is pretty high. So it has to keep on deleveraging its balance sheet.”

“Need to ensure that the cash flow start improving but that does not seem likely to happen so soon. So my suggestion is probably to exit the stock on rallies. If one intends to stay in the same sector, I think NCC is something that we have been liking. The company will pose good set of numbers with the kind of rights issues that it has got, the debt should come down and that should have an incremental impact on the EPS and EBITDA margins in the company, so one can look at NCC on declines. My target price on NCC is close to Rs 90 with a 15 months time horizon," he added.