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Saturday, October 29, 2011

IL&FS Engineering & Construction Co Ltd:-Buy/sell/growth prospect and recommendation,news and results,target price and analysis,outlook/multibagger

Calls review:IL&FS Engineering & Construction Co Ltd(Formerly maytas infra)
Recommended price:34(28.06.09)
Present price:92

Scripscan:IL&FS Engineering & Construction Co Ltd(Maytas Infra Ltd)
Duration:6-9 months
Traded in:nse-bse

Story:At these juncture I get a feeling maytas infra may well be a doubler from these levels.Though the risk is high and investors only with a high risk penchant should go for these company.In simple words let me pen down why maytas is worth looking at the present levels.

1)Satyam valued it nearly 3000crs when it announced to acquire maytas infra and maytas properties.Present market cap is barely 180 idd crs.Not many people would be aware but it would be prudent to note that Maytas also holds a 19.20%stake in Gautami which has completed the setting up of the 464MW power project that will go into operation when it begins to get KG Basin gas next month.

2)Scrip fell from 750 to the present levels of 34rs.Over 95% has been eroded and most of the investors who had to exit are gone now.Risk takers like myself are getting good fancy here.At 180crs we are getting the prestigeous hyderbad metro project owner.

3)Maytas does not have many liabilities on its books, as the company had spun off special purpose vehicles (SPVs) for different projects. There are over 50 SPVs as the company had won at least 62 contracts in various sectors. Looking at its order book, any new promoter will have a ready business for the next few years.

4)Maytas also invested Rs209 crore as an equity partner in various power and infrastructure projects. This investment itself is valued at around Rs35 per share.These 209 crores is worth over 1000crores now if I consider the valuations of gvk power,mundra port and all.

5)Various institutions and banks have lent nearly Rs5,000 crore to Maytas.Now they wont sit and just fag.They would make sure that they remains safe.The only way for them to recover their money is to ensure that Maytas completes the projects in hand in the stipulated time.I foresee immense chances of a new management and promoter taking the charge of the company.In case that happens be rest assured it would cross my target comfortably and may even hit a 3 figure mark in the long run.So investors with risk apetite buy the scrip at present levels and dips.

Present update:Not only it achieved my target but went on to hit a high of 254rs on june 2010.Since then its been a struggle for the company and its quoting at 90 odd now.IL&FS has taken management control in Maytas Infra and has rechristened it as IL&FS Engineering & Construction Co Ltd.Future prospects look bright for the company and thus one should hold the company for good returns in the longer duration.

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