New powerfulpicks medium to long term buy call: Unity Infraprojects (NSE: UNITY) is one of the strongest players in the civil construction sector and it has been ding well consistently over the last 3-4 years. Even during the period of recent recession, it posted an increase in sales figure and EPS. It has a healthy debt-equity ratio of nearly 1:1 and a good track record of project completion.
Having studied in Indian Institute of Technology, I know that IITs only give out contracts to companies which has an impeccable track record of project completion. Unity Infraprojects recently bagged a project of Rs 75 crores from one of the IITs, besides other projects it bagged recently. In Q4FY10, it recorded a topline growth of 29% and a profit after tax growth of 22% (Rs 85 crores). An order book position of 2.4 times its last year's revenue looks extremely healthy. Its business model is diversified across segments, providing it a satisfying risk cushion. People say that the company's promoters are close to the government officials in charge of handing out tenders. Low P/E of 9.7 makes it even more attractive.
CMP is at 118. Buy on dips near 114-115 for a target of 152 in 6-7 months (+32%)
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