I may be crucified for saying this. But i'd rather say. I think there is some value in buying Unitech at the current levels. Mmarkets always have the habit of over-reacting to externals and macros. Not too long ago this stock was trading at 550Rs, and i am sure some 'analyst' would've predicted this stock would soon reach four figures!
The way i see it, Unitech is still one of the biggest realty companies in India. That has not changed. The company is currently doing the right things albeit in bad times, but there is no wrong time to do the right thing.
For one, they've got a sucker to pay Rs. 6000 crores for their telecom licence.
A substantial portion of this would go towards settling debts. From what i read, Sanjay Chandra is on record saying at least Rs. 2000 Crores will be moved off its balance sheet. The markets, i believe has not factored this adequately.
Secondly, the management is looking to sell off its hotel venture to some PE players, which again is the right thing to do in the high interest rate environment.
I am sure, they will look to settle some dues out of this as well.
So yes, the times are bad, but the management is taking the right path and that augurs good for the company in the days to come. All the other atrocious decisions they took are already factored in the prices.
If i had any money, i would put it in Unitech, there is very little to lose at current prices of Rs. 26.
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