Unitech @ 84 for a target of Rs 113

by khalid on 04/07/2009 · 0 comments

Nomura Financial Advisory and Securities has maintained its ‘buy’ rating on Unitech, saying the market has not fully priced in the positives, in terms of price and volume increases. “We expect Unitech’s discount to DLF to narrow from the current 70% to about 50% in the near term, and even lower over the long term, as balance sheet concerns ease and the advantage of its landbank in terms of geographical spread come to the fore over DLF’s concentration in the National Capital Region,” said a Nomura note to clients.

“After resolving its cashflow problems through a share placement and asset sales, Unitech has sold 3.5 million sq feet of mass housing space in the past three months (out of the 10-million sqft of launches). The move towards mass housing will result in high volumes, which will compensate for lower margins,” the note added.

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