Sunday, October 30, 2005

BSES

I would like some help here. Reliance Energy numbers stun me. The scrip is available at a CMP of 500 rupees, with an NCA of 144 rupees and a cash of 320 rupees per share (THREE HUNDRED AND TWENTY rupees).

Now the flip side. The dividend declared by the company last year was only 4.7 rupees on the ten rupee share. The question arises – what is the company planning with so much of money? (afterall it is not what any thinking company should, give the money back to the shareholders). The profit per year on LY numbers is 30 rupees per share which at current CMP is a handicap.

This is a news driven stock on account of the huge cash reserve, so look out for any announcements made by the company and invest likewise. I would suggest people to have a wait and watch approach here.

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