The company’s stock has already corrected by 25% in the last three months and 33% in the last six months as investors anticipated the weak financials and the softening demand for realty in Mumbai.
Realty firms such as Oberoi Realty, Godrej Properties, HDIL, Unitech and Sobha Developers are likely to post a significant decline in earnings in June.
Flawed government policies and fears of a fresh round of share sales has led to stocks of state-owned metal and mining companies hitting five to seven year lows.
It may well be tempting to buy into a Tata group stock which has corrected by 40% in the past 6 months and is trading at below its book value.
The Indian iron & steel industry, which is struggling to cope up with lower demand and falling steel prices could be further.
“P&G’s India business has been growing at over 20% for a decade, but it is still a small part in its global revenues.”
The proposed real estate bill, if implemented, will hamper cash flows and escalate the cost of capital of realty firms.
The earnings growth of Titan Industries will take a hit due to the recent policy changes effected by the Reserve Bank of India to curb gold imports.
Analysts expect the company will be able to generate a cash flow of close to Rs 5,000 crore over the next five years through land sales and project launches.
However, analysts reckon that the latest deal may not lead to a re-rating of the company's stock as even after the contracts, its debt will remain high.
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