Unitech upgraded to 'buy' - TP Rs.28 - Geojit BNP Paribas Financial Services

- Unitech has been upgraded to 'buy' from the 'hold' rating earlier. The target price has also been hiked to Rs.28 from Rs.26 earlier.

- In the last six months, the stock has underperformed the broader market index by about 32% and is about 31% down on absolute basis.

- At the current level, it seems that most of the concerns related to funding, execution, corporate governance etc are reflected in the current price.

- It is expected that execution to improve and the liquidity situation to be manageable.

- The key potential catalyst for Unitech is an earnings recovery, for which execution is key. Other potential catalysts are new launches and stable cash flows.

- Over the next two years, the company is expected to improve its annual execution capability to six million sq ft from 3-4 million sq ft. This is expected to drive cashflows.

- At the target price, the share is likely to provide a return of 20% plus from the current level.

Source : Equity Bulls

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