Medium Term Investment
R Com
I would like to substantiate my liking with following points.
1. It will roll out GSM services from December onwards. This will be a major trigger for new growth opportunities. Reliance Communications is the only national operator providing GSM and CDMA services.
2. Telecom story is still intact. New subscriber numbers are still encouraging.
3. It entered into lucrative IT space by announcing Reliance Technology Services- another growth opportunity.
4. It will soon launch its DTH service through “Big TV” brand.
5. Reliance Communications will list its global arm “Globalcom” as a separate entity.
6. It will list tower business (Reliance Infratel) within a short period of time. Both the above listings will unlock value in this communications giant.
7. Broadband usage will increase in the coming years.
Technically is weak for short term. But an excellent pick for long term.
We would keep a price target of Rs.1100/- in a period of 12 - 18 months.
Hotel Leela.
The company has four fully functional hotels all over
It comes in a luxury Hotel segment. Its
It current market capital is 1805.21 crores (as on 6th May 2008) with a PE ratio of 25+ per share of face value of Rs.2/-.
The company is planing to double the capacity by 2010.
Logically if it starts four new hotels their cost of building, licensing, etc would be approx 500 crores per hotel i.e. 500 x 4 = 2000 crores.
And at present the company's market capital is 1805.21 crores which would add 2000 crores to it.
So assume the market cap is 4000 crores approx which surely double the stocks value by the same period.
Another key factor is the boom in reality segment , the zooming land rates.
Development in economy and development in tourism will add to scrips hidden value.
So keeping the long term factor in mind one can accumulate this scrip at any rate within Rs.50/-.
I would keep a price target of Rs.150/- approx by the end of 2009.
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