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Unformatted text preview: upply ris ks , debt-heavy balanc e s heets and m ovem ent of the
rupee. W hile there m ay be s om e near-term s gains due to rupee
s tability and falling pric es of im ported c oal, we believe thes e are not
s us tainable. So, we prefer utilities that have: a) as s ured and regulated bus ines s m odel and
not one bas ed on c om petition; b) fuel linkages and low dependenc e on im ported c oal; c )
s trong balanc e s heets and; d) low-ris k bus ines s m odel. T ata Powe r
T arge t price : Rs 106
Tata Power rec ently c om m is s ioned the full c apac ity of Maithon Power, whic h will add
s ignific antly to revenue and profitability. In our view, valuations are fac toring in all the
negatives . At Rs 92, the s toc k is trading at 1.63 tim es 2014-15 book value. W e have a 'buy'
rating on it with a target of Rs 106.
Re liance Powe r
T arge t price : Rs 90
A pos itive dec is ion by the regulator on tariff revis ion for Sas an and Tilaiya projec ts will boos t
profitability. Rapid c apac ity addition in the las t c ouple of quarters , eas y availability of fuel and
attrac tive valuations provide us c om fort that the s toc k is pois ed for a re-rating.
businesstoday.intoday.in/stor ypr int/201839 14/18 1/2/14 M ar ket exper ts on what to expect fr om var ious sector s in 2014 : Business Today NT PC
T arge t price : Rs 194
NTPC's growth is expec ted to be driven by huge c apac ity addition. W e expec t 12-15% a year
growth in top line due to s ignific ant c apac ity addition in the las t few quarters . At Rs 154, the
s toc k is trading at 1.35 tim es 2014-15 book value, lower than the his toric al average of two
tim es . REAL EST AT E
"The belief of Indians that real es tate is the bes t inv es tm ent
rem ains intac t"
Vik ram Dhawan, Direc tor, Equentis Capital
Real es tate c om panies are fac ing the brunt of high interes t rates ,
tight liquidity, large debts and lending c urbs . A s lowdown in dem and
m eans there has been a s harp s pike in inventory of late. The global
rec es s ion and im pending tapering of the eas y m oney polic y by the US c entral bank do not
augur well for fund flows to the s ec tor.
For inves tors , however, it is not all doom and gloom , as m os t real es tate s toc ks are available
for as low as a frac tion of their book values , m aking them attrac tive from a long-term
pers pec tive. Moreover, the belief of Indians that real es tate is the bes t inves tm ent rem ains
intac t. That m akes us bullis h on the s ec tor for the long term s ubjec t to pic k-up in ec onom ic
growth and revival of the inves tm ent c yc le.
Barring a s pec ulative rally bas ed upon antic ipation of favourable elec tion res ults in May 2014,
we do not expec t the fundam entals of the s ec tor to c hange any tim e before the m iddle of
2014. W e are probably a few quarters away from when the s ec tor s hould bottom out. businesstoday.intoday.in/stor ypr int/201839 15/18 1/2/14 M ar ket exper ts on what to expect fr om var ious sector s in 2014 : Business Today DLF
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This document was uploaded on 02/06/2014.
- Spring '14