Infrastructure Sector Calls: Reliance Infrastructure Multibagger if Invested for Long Term

Reliance Infrastructure Ltd. is one of the fastest growing infrastructure company in India, it is company of Anil Ambani’s Led ADA Group. The company is involved in road construction, metro, airport, cement, real estate and SEZ (special economic zone), Power generation, transmission, distribution, trading and engineering & construction. We see that this company has lot of potential in India, as the government has decided to spend billions of amount in India’s infrastructure development. This stock will perform very well when the infra projects will be completed, we are very much bullish in this stock for longer term view mainly 3 to 5 years. During the bull run from 2002 to 2008 we have seen stock appreciating from 170 levels in 2002 to 2650 levels in 2008, when markets were at its peek. So we are sure that when the bulls will return in control we will see huge appreciation in longer term when the global markets will outperform. Taking a look at the technical charts we see that RELINFRA to find support around the 355 levels, so our advice to investors is to look for buying in small quantity in Reliance Infra near 360 level for longer term (3 to 5 years) targets as 1500 and then 2500, we will also recommend investors to place a stop loss for this long positions near 320 level. Technical indicators are still showing trend to be bearish, but we expect support of 355 levels is very strong and thus validates our entry level.

Fundamentals are also attractive at this point of time, as the stock is right now trading at PE of just 7, its annual EPS (Earning per share) stands at 47. Book value is 527, which is very attractive and we also see that stock trades at just 0.79 time of its book value. Best thing about the company is that it is a dividend paying company available at such a discounted rate. A strong buy is recommended at 360 level in RELINFRA stock.