Buy Kalindee Rail Nirman Engineers For Medium Term
Investments with a two-year perspective can be considered in the stock of Kalindee Rail Nirman Engineers, which is engaged in the business of signaling, telecommunications, gauge conversion and track-laying for the Indian Railways. A direct beneficiary of the higher government spending on rail infrastructure, Kalindee stands to benefit significantly from initiatives such as setting up of dedicated freight corridors, increased outlay for gauge conversion and the rollout of Metro rail projects in major cities.
At current market price of Rs 209, the stock trades at a reasonable valuation of about 12 times its likely FY09 per-share earnings. This is attractive considering that the company’s revenues are relatively shielded from slowing economic growth as the investments in rail infrastructure — a must to bolster the economy — may be the last to see any downturn. Given the stock’s small-cap status, investors must consider accumulating the stock in lots.
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