I have bought 100 shares @58.15 per share. Now it is Rs46.60 per share. What is the future of this stock.

Sir,

Add more if it go below Rs.38.50/-. Book value is more than Rs.90/- & promoters have increased their shareholding via preferential allotment. Future is very bright.

High equity dilusion rate is only cause of concern. I see target of Rs.125/- after 3 years.

Take the best decision

This is a buy-and-hold stock and not a fast-mover.

The fall in share price from your purchase has been with reducing volumes, indicating that only few people who are in dire need of cash are selling.

The company expects to do Rs.1000 crore turnover in its first year after winning the BSNL order of Rs.3750 crores. Award of BSNL order to Spanco should be announced soon.

The company expects to have a 15-18% NPM on this turnover meaning a Net Profit of about Rs.150 crores on an annual turnover of Rs.1000 crores.

Promoters have recently allotted themselves 1 crore shares at Rs.40. This will increase their stake in the company to 65% from the present 33.80%. Remember that this means that the promoters are confident of the company`s future and also that Rs.40 is considered cheap price for the share by them.

However, the share capital of the company will also increase to Rs.30 crores from the present Rs.20 crores. If a net profit of Rs.150 crores is achieved in a year, the EPS would be Rs.50 (not considering any further equity dilution).

Keep the stock for a few years. It has a bright future ahead.

Mam,

As per management clarification net profit margin will be 6%.....not 15-18%.

Regards

Thanks My_Multibaggers!

Thanks to you for clarifying the information.

In that case, the net profit would be Rs.60 crore on a Rs.1000 crores turnover yielding an EPS of Rs.20 on a Rs.30 crore equity.

Regards.

When news of "Lowest bidder for BSNLs Rs.3750 crores Order" came in Spanco counter; it come up from Rs.31/- level to Rs.61.90/- level in very short term.

Now confirmation about getting actual order in hands never coming either from Spanco or from BSNL.

Markets are also drifting lower day by day because of upset budget announcements. Govt. increased some taxes, like MAT, etc which will hit EPS of RIL by 6% to 7%. Infosys is likely to downgrade its Rupee earnings tomorrow when it will announce results.

I think after considering all these factors; Spanco can again go to its previous levels of Rs.28/- to Rs.31/- in short term. Volumes are also low. No interest seen from traders.

So wait before averaging.

Take the best decision.