Stock Recommendations – Idea Cellular & Infosys
Two stocks are recommended here. One is Idea cellular and other is Infosys. Idea cellular is the prominent mobile service operator in the country. Infosys is the most respected company in India. Investors can buy those stocks with a long term view.
It is the third largest mobile service operator in India by Revenue. It is an Aditya Birla Group company. Company reported a total sales turnover of near Rs 4500 Cr in the first quarter FY 2012. Company’s sales turn over were near Rs 3600 Cr in the first quarter FY 2011. We can see a sales growth rate above 20%. There is a fall in the net profit witnessed in the first quarter FY 2012. Company’s net profit in the first quarter FY 2012 was Rs 149.73 Cr. It was Rs 201.64 Cr in the same period FY 2011.
Company’s market cap is near RS 33,000 Cr. This is one of the performing stocks even in the correction. Company was creating new highs in Aug 2011. Company’s P/E stands at 41. The P/E stands double of the industry P/E. it is not a matter for pure long term players. Fundamentals of the company are very strong. Company’s sales are expected to increase in the coming years. The technology culture is changing. Company’s presence in 3G will help the company to make good profit in future. The coming decade will be for Wireless Broadband. The business can be believed, even if the Indian Communication Sector is in the consolidated phase. Company gives excellent long term buying opportunity for investors. Long term target is Rs 125.
It is the second largest IT Company in India by market capitalization. Smart and professional management is the specialty of the company. Management is very aggressive to give dividend to the investors. Company created a 52 week low of Rs 2161 on 25 Aug 2011. Company is defensive which may not give big corrections to the investors. Company reported net sales of Rs 6,905 Cr in the first quarter FY 2012. Company’s total sales in the same period FY 2011 was Rs 5758 Cr. Almost 20% growth can be seen in the total sales.
The market cap of the company is Rs 1,34,000 Cr. P/E stands at 20. It is slightly above the industry P/E. Book value is Rs 426.71. Price/book ratio is 5.49. Company was established by Narayana Murthy and six Engineeres in 1981. Company has employees of 1,33,000 at the end of first quarter FY 2012. Company reported a net profit of Rs 1,654 Cr in the first quarter FY 2012. Company’s net profit in the first quarter FY 2011 was Rs 1,431 Cr. Smart growth rate can be seen in the books. Long term target of the stock is Rs 3,000.
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