Punjlloyd is a engineering and construction company having businesses across Defence and Road construction segment also. In last few years, the stock hasn’t participated in the Stock market growth. Four years ago, stock price of Punjlloyd was same as today it is i.e Rs20. However, one thing that has been gradually changed for it is its potential to outperform the market. With the every single day, the infrastructure sector and Stock market is adding some market capital but punjlloyd stock is still around its 21st century low. Quarterly revenue of Rs 1k crore and loss of Rs 200 crore may not look attractive to some investors due to current NPA problem in the Indian banking system. But as I know, company has never defaulted on its loan which looks very impressive in current market scenario. Another attractive fact is that market capital of Punjlloyd is just Rs 600 crore which clearly gives a way to stock to multifold in a single shot or rally.
Before 2010, Punjlloyd was called as a mini L&T. Yes, its true. It had similar business as L&T has. Those who couldn’t afford to buy L&T at that time had option to invest in similar company i.e Punjlloyd. But the whole story of Punjlloyd company changed when its money got heavily stuck in Iraq Businesses. War in Iraq caused huge looses to company from which company has not been able to get recovered.
Now, company is looking to convert its loans into securities so that its burden of liability could come down. As of now, there is no latest update on this corporate decision whether the proposal of conversion of debt into securities has been accepted or not. However, I think without this event, there are still many triggers for the burst in share price of Punjlloyd.
Under the Bhartmala project, distribution of different road projects has been already started by NHAI which will last for few year. Government is aiming to spend over Rs 5 lakh crore under this project. Such projects like BharatMala are the booster dose for those company having expertise in Road construction. And as I have already stated before, Punjlloyd has an significant presence in this business activity. Therefore, I think Punjlloyd has a great future and have numerous opportunities to expand their business in this Road construction line. They can also choose to operate under current condition and then can probably try to achieve maximum margin as much possible. Also, overall outlook on infrastructure sector is very positive and I think those who are planning to invest in growth stories of Indian economy for long-term should give a great weightage in thier portfolio to infrastructure sector.
So, overall I would say that Punjlloyd at current levels could be a great opportunity. I don’t know about how much time its stock would still take to start rising in real terms. But one thing that I know is that whenever it will start rising in real terms, it will definitely give you some multifold return. And i feel that its time for a great burst and rally is very near.
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