Company: RattanIndia Infrastructure (RIL)
Sector: Power Generation and Distribution
CMP: BSE 4.14 NSE: 4.15
One of the weak areas of our country is its infrastructure. Without proper and enough infra. the county’s economic growth rate also lags a lot. There is a considerable improvement in other areas of infrastructure, like Telecom, Roads, Airoprts and Seaports, except power. Considering the challenging demands for power, power infra companies have a great future ahead.
Since from its inception in 2000, Indiabulls has become the trademark of success and trust. RattanIndia Infrastructure Ltd. being one of the originated wings of Indiabulls, I feel has inherited that success culture and is set ready to fly high.
“RattanIndia is unequivocally committed to all its stakeholders, investors, vendors and policy planners. At RattanIndia, every team member is encouraged to ensure that stakeholders’ interests are uppermost”
They will prove this in the future. Just believe, and proceed to become a partner.
RattanIndia Infrastructure Ltd. is in Diversified Sectors
Currently the company is in three diversified sectors viz. Solar Renewable Energy, Mining and Cements along with the main Thermal Power Generation. All of which are sectors with greater future growth prospects.
In a very short span of time, RattanIndia Infra made its position among the top 500 companies of India. I expect, it will be listed in NIFTY 50 within 5-8 years.
The current economic growth rate of India needs 300 GW of power within 10 years. To meet this requirement, the current production capacity should be increased by 5 fold to 10 fold. RattanIndia Infra, not only being belonged to the Infra Sector, specifically to the Power Infra, but also being managed by the efficient and successful cultured management, undoubtedly has a great future ahead. I hope so.
Solar Power (Green Energy Initiative)
Mining & Cement
These two are also a part of Infrastructure Sector. Growing demand for Infra in India makes these two sectors also a demanding one. Being the related industries the demand will be in coherence with Infra Sector.
A Debt Free Company
One of the important factors to be considered while analyzing a stock value is its Debt. This profit eroding factor has its own impact on the company Financials vis a vis its fundamentals. A debt free company is always preferable over a company with a good amount of debt figure on the balance sheet.
Market Value of Investments is more than the Market Capital
The current market value of RattanIndia Infrastructure is around Rs.1200 Cr, which much more than its average Market Capital of Rs. 574 Cr. Almost double in numbers.Investors are always on the safe side, in companies with investments that costs more in value than the Market Capital.
Good Percentage of Promoter’s Stake
A good 62.23% of promoter share is an indirect indication that they are having their own interest in the business and its growth.
Low Price To Book Value (P/B)
At the current book value of 18.35 and CMP of 4.14, investors are on extremely safe side. No need to worry about their capital loss. P/B of 0.78 ( Based on Standalone Financial Results) highlighting it as a value pick, to buy and hold.
As a start-up company, we should not look at certain characteristics of a good company. Which mostly include, dividend paying structure, ROE (Return on Equity) or any other ratio /property. Once the business started to be fully functional, then we need to analyze in that direction.
My Final Verdict
Target: Anyways, people always look for target price. Calculating the technicals and fundamentals, the minimum 5 year target price would be at least Rs.100.
If you compromise with my target, decorate your portfolio with this Rattan alias Gem. Don’t trade, as it’s currently in the accumulation phase. Just buy and hold for a long period of time. As long as at least 3 years. If you wish, you can engage with the company forever.
Here we can memorize the famous quote of Mr. Warren Buffet,
In the short-term, the market is a popularity contest; in the long-term it is a weighing machine.
How simple he evaluated the market behavior! True, people are greedy and always run behind the popular stocks. But, finally one day the market weighs of each stock and decides and drags to its true intrinsic value.
Mr. Warren Buffet’s success story begins by choosing stocks, based on their overall potential as a company. He looks at the company as a whole. Always seeks for businesses with earning potential and future growth prospects. Never concerned about the market and how it values the stock currently.
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