Stock Recommendations – Hindustan Zinc & Unitech
This is the Vedanta Group Company working in the areas of Zinc, Lead, and Silver. They are producing refined Zinc and Lead. Company is also the largest producer of Silver in India. Company reported a sales turnover of near Rs 3000 Cr in the first quarter FY 2012. It s sales turn over in the first quarter FY 2011 was near Rs 2000 Cr. Almost 50% growth can be seen in the sales turn over. Company reported a net profit of near Rs 1500 Cr in the first quarter FY 2012. Its net profit in the first quarter FY 2011 was near Rs 900 Cr. A growth rate above 60% can be seen in the net profit.
Market cap of the company is near Rs 50724.95 Cr. Book value is Rs 53.33. Price/Book ratio is 2.25. P/E stands at 9.21. It is clearly below the industry P/E of 10.28. So the company is in attractive valuation. The strengthening U.S. Dollar is a negative factor for commodity players. Mining ban is still a nightmare for Hindustan Zinc. It is a very good buying opportunity for long term investors. Target is Rs 150/
Unitech is the leading real estate player In India. The brand was awarded ‘superbrand’ in 2009. Company offers a product mix of residential, commercial, IT parks, SEZ etc. Company’s name still exists in the 2 G Spectrum case. Company reported a sales turnover of near Rs 280 Cr in the first quarter FY 2012. Its sales turn over in the first quarter FY 2011 was near Rs 620 Cr. Company reported a net profit of near Rs 110 Cr in the first quarter FY 2012. Its net profit in the first quarter FY 2011 was near Rs 180 Cr.
The market cap of the real state giant is about Rs 6985.52 Cr. Book value is Rs 35.48/. Price /Book ratio is 0.75. P/E stands at 15.89. It is slightly above the industry P/E of 14.01. Company has strong land bank. Company’s annual sales in the FY 2011 were near Rs 1800 Cr. The stock price of the company was recorded 52 week high of Rs 101 in 11 October 2011. Company is now trading in the levels of Rs 26.70. If the 2 G spectrum case is over, company can go to the levels of Rs 60 to Rs 70. So it is a contrarian buying opportunity for aggressive investors.
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