Infosys and REC

Infosys


Infosys is the second-largest Indian IT services company in India. It provides software development, maintenance and independent validation services to companies in banking, finance, insurance, manufacturing and few other segments. Infosys has a global footprint with offices and development centres across the world.

Infosys is a multinational IT company with a great profit crossing Rs.3k crore. Good presence of company all over the world is the key reason for large number of subsidiaries of company. For the quarter January-March, company posted a total profit of Rs.3,603 crore supported by total income of Rs.17,120 crore. Company also told that they will give Rs.13,000 crore payout to its investors through dividend and Buyback. Company further says that they would try to focus more on getting big deals.

There is no doubt that management is crystal clear towards its investors and always tries to put investors faith at the center of all. Currently, valuations of company is not much expensive, while it also doesn’t seems lower. In short-term, stock can show some downs but i think it would not break any major levels. However stock can also be positive in long-term but would not as much as other stocks could be positive. As according to fundamentals of IT companies, their stocks had already saw good valuations. And i think IT sector had been performed as much as strongly that was expected. Now, IT sector is among the those sectors list which had been caried out with large returns and now are almost stable like Pharma sector and Auto sector.

Great Opportunity in few sectors

Only few sectors have now been remain at cheaper cost. It includes Power sector, Infra sector and Real estate sector. For great return, one should go with these three sectors which have great potential and very few risk. After Jio launch, telecom sector especially Idea and Rcom also seems very attractive for long-term investment. We had seen many companies of telecom sector came in loss after Jio launch. But the best part of Jio launch is that the picture is now very clear on how companies have to work now and how they could place barrier on Call-drop.

With increasing digitality, telecom companies would get more and more works which would affect the balance sheet of every telecom company. At last, i want to say that investing in IT sector, Pharma sector and Auto sector could be a good choice but investment in this four selected sector would be a best choice for long-term.

REC


REC or Rular Electrification Corporation Limited is a leading public Infrastructure Finance Company which promotes rural electrification projects across India. The company provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs and Private Power Developers. REC finances all types of projects including Thermal, Hydel, Renewable Energy, etc. without limit on size or location.

From 2016, we have seen a major buying in most of the Government owned companies. REC is one of the best stock which had became double since 2016. Company is performing good enough to earn Rs.1.5k crore profit. Fundamently, i don’t think that stock is expensive while the stock is also not liquid. However for a new investor, buying stock at current valuations can be very risky. Thus, new investor must avoid this stock. While Investor who had made position in stock below Rs.180 can hold it for target of Rs.225.

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