GMR Infra looks expensive: R Shah

Rajen Shah of Angel Broking is of the opinion that GMR Infrastructure is looking expensive.

Shah told CNBC-TV18, "It’s going to be difficult for GMR to move back to levels of Rs 200 to Rs 210. This stock was always an expensive stock and even if you look at this stock at the current levels of about Rs 54, I think it’s a little expensive and still if it comes down to Rs 40 levels, I may think of getting into it. Almost 40% of GMR’s revenues come from air traffic and it is in a bad shape right now and dropped substantially over the past five months. The scenario is going to be the same for at least 6-7 months, so even if you see the best case scenario it shouldn’t report more than Rs 300 crore of net profits. So EPS would be 27-28 times the current earnings, the growth would be 25% to 27% because post 2010 once gas comes into market GMR’s power business must do well. But it’s a little richly valued stock and if it comes down to about Rs 40 levels then maybe one can buy. But I don’t expect the stock to move beyond Rs 80 or Rs 90 in the next 24 months."

Source: Moneycontrol