Although the valuation is a bit high the profitability is also high. Financially the stock is in above average levels.
Pros
By looking at the share holding pattern we can understand that the DIIs and mutual funds are showing considerable interest in the stock for the past few quarters.
The retailers are selling off the share and retailers are mostly the ones who come late to the party. We need to stick with or think ahead of the institutions.
Cons
FIIs are also not showing much enthusiasm in the stock for the past few quarters. Just like the retailers, they have reduced their holdings.
Conclusion
But, considering the technical of the scrip we can see that there is a consolidation taking place at the current levels which can be considered as an initial inflection point. So I'm taking a position in here for about 1.25% of the capital. I don't think that the Indian economy has any major negative sentiments to be bothered about in the near term. So unless the FIIs start a selling spree we are good to go to 21k levels.
There is a potential upside of about 12% to the target levels. But I'm also well aware of the downside risks. If any major crash happens in the IT sector the stock may fall a minimum of 13%. But I'll consider that as a buying opportunity to increase the position size.
Pros
By looking at the share holding pattern we can understand that the DIIs and mutual funds are showing considerable interest in the stock for the past few quarters.
The retailers are selling off the share and retailers are mostly the ones who come late to the party. We need to stick with or think ahead of the institutions.
Cons
FIIs are also not showing much enthusiasm in the stock for the past few quarters. Just like the retailers, they have reduced their holdings.
Conclusion
But, considering the technical of the scrip we can see that there is a consolidation taking place at the current levels which can be considered as an initial inflection point. So I'm taking a position in here for about 1.25% of the capital. I don't think that the Indian economy has any major negative sentiments to be bothered about in the near term. So unless the FIIs start a selling spree we are good to go to 21k levels.
There is a potential upside of about 12% to the target levels. But I'm also well aware of the downside risks. If any major crash happens in the IT sector the stock may fall a minimum of 13%. But I'll consider that as a buying opportunity to increase the position size.
Comment:
Company also announced a share buyback at a price of 4150 which is even higher than my target price. This news may further increase the investor confidence in the stock.
