Buzzing Stocks

Mr.Jitendra Gala

Unitech Ltd

CMP-->Rs.27.50

Unitech is one of the two biggest property developers in India and the largest that is listed. The company has a presence in all segments of real estate development viz., residential, commercial, retail and hospitality. The company has a land bank of over 10,300 acres, which is one of the largest in the country.

This provides it strong visibility in respect of future growth. In order to diversify its business from locational risks, the company has entered new markets like Kolkata, Chennai , Kochi, Hyderabad, Mohali, Agra and Varanasi and has plans to start operations in many others.

Although the real estate business remains the mainstay of Unitech, the company intends to diversify into other related areas like hospitality and entertainment. The Group is looking at an annual growth of 30%, led primarily by its new business ventures. Considering the immense opportunities available in the construction and real estate businesses, and Unitech's brand image and quality solutions, the future looks bright for the company. However, rise in costs (of land and raw materials petition from peers, are likely to be the major hurdles. Inspite of current bad scenario for overall economy, and reality sector overall, I feel that Unitech is a good buy at current levels for long term. A famous quote in Stock markets which hardly any one follows is “Buy when others are selling and sell when others are buying" . This is the reason why I am advising to buy Unitech Ltd as many people are selling Unitech and are bearish on this scrip. If you simply go to see the 52 week high and low you will understand. The stock fell down due to following reasons:

• Fall in rates of Real estates/ Properties.

• Global melt down

• Fall in demand of homes

• Land bank value went down.

Positive factors -

• Its subsidiary is starting 2G by 2009.

• Also has a bid for 3G Spectrum

• There is high optimism that the stock can perform well considering their recent hotel project news of Rs.2500cr / $500mn

• Unitech has received offer for its hotel project from Amtek auto

• Selling Telecom business at a higher price

• Falling home loan rates on rate cuts will generate demand for more homes.

Sales and NP for year ended FY07 -08 were 2802.3 Cr & 1001.3 Cr. Sales and NP for latest Quarter.

739.8 Cr & 301.3 Cr. Dividend during year ended 07-08 was 13%.

One can buy this script for a return of 40 - 50 % in short to medium term.