Shall I book losses of Supreme Infra?

Query: I am holding 500 shares of Supreme Infrastructure bought @ Rs.190 CMP has gone down to 90 per share, kinldy suggest the future prospects of the company. Shall I book my losses and exit or there is a chance of it bouncing back. (One of the major problems with this share is its pathetic trading volumes) I am ready to wait for the next 6 months but I fear that its prices might come down further. Waiting for your advice. Anurag Gupta

Thebullishtrends: Supre Infra share price closed yesterday at Rs.101.30(-Rs.1.55). Supreme Infra is a medium sized company in the infrastructure segment. It came to IPO market in last year with an offer price of Rs.95-108. The company raised Rs.37.53 crore fromt he public.

Supre Infra was incorporated in the year 1983 as a construction company. Promoters of Supreme Infra is having over 2 decades of experience in the industry. Supreme Infra has completed various projects based on the contracts granted to it by the central and state governments. Some of the clients of SIIL are Airport Authority of India, BMC, National Highway Authority of India, Municipal Corporation, Maharashtra State Road Development Corporation etc.

The Order Book of Supreme Infra is consisting of unbilled portions of ongoing projects and projects for which Supreme Infra has received orders and are yet to commence construction. Supreme Infrastructure’s total value of Order book is around Rs 330 crore. Of the total order book Rs 190 crore is from roadwork, Rs 90 crore is from IT Park to be set up in Powai, and Rs 30 crore is from the RMC segment. Also the company has orders lined up in the pipeline worth around Rs 150 crore.

The company earns major revenues from contracts awarded to it by the central, state government and their agencies. Also it is dependent on the contracts awarded for road projects by the central and state government. Out of the order book of around Rs 330 crore around 62% are orders from NHAI and Sadbhav engineering limited. The order from Sadbhav Engg is part of their contract which has been sub contracted to Supreme infrastructure.

Supreme Infrastructure is a medium Sized Company in the infrastructure sector and is engaged in the business of construction of roads, highways, ready mix concrete and asphalt. Now the company has ventured into the real estate business with an order to set up and IT Park, a Hotel and a residential building in Powai. SIIL has an order book of around Rs 330 crore which is more than 3 times of its current revenue. Margins in Roads and Highways construction is less compared to realty profits. But absed on the valuations you have entered in higher price levels in this scrip the stock price may continue at the present levels for some more time The present price looks to be attractive in comparison to its peers. You are advised to buy some more shares to get the better average price and wait for atleast 6-9 months to get decent gains.