Small cap Coverage – Kovai Medical Center and Hospital

Yet again i am back with a stock in the healthcare segment -----

After spotting Education and Power sector as stories in 2007 i believe the next one is going to be healthcare/research and so on. But the stocks may not seem exciting on fundamental p/e and other benchmarks but markets should ideally give them a high p/e and stocks may over run.

Our earlier favorite Fortis Health still remains a strong pick and one should hold on 70 to 170 and still strong. Next is Apollo Hospitals which should over perform in 2010-2011.

The next option in the sector comes is

 Kovai Medical Center and Hospital.

The stock is quoting around 105 at almost a p/e of 10 which does not make it expensive on a normal consideration.

The 800 bed hospital as well and another 150 beds in adjoining areas makes it a good bet at 110 crores market cap.

As per market valuations the valuations on the hospital and land could be anywhere between 300-400 crores.

Technically the stock has corrected from a highs of 140 to 105 levels and made a low of sub 90. Any dips in the range of 90-105 is a good buying area with a minimum target price of 125-140 in short to medium term.

An exposure is warranted if someone is looking with a perspective of 6 mths to 2 years. The stock can be a 50-100% mover in the long run.Also to diversify holdings in the healthcare segment a small allocation can be done.

The stock is illiquid so do take care.

DISCLOSURE : Recommended to clients at 100-90 levels in all our plans. Have already booked partial profits at 108 + to reduce acquisition cost.

Previous Stocks :

Accentia Technologies was recommended at 110-120 levels has come up to 280 !! The long term outlook is positive but profit booking to an extent of 75% be done.

Surya Pharma recommended around 135-140 levels is around 165-170.Maintain the strong long term view. Fresh upmove may start on closing above 175-180 levels where one can even add for short term.

PTL Enterprises recommended at 18-19  the valuation play remains but partial booking can be done if rises to 25. Only for patient investors and dont expect quick fire returns.

TECHNICAL ANALYSIS SESSION

CHENNAI  - March 27-28

Tentatively scheduled. Interested people call Nooresh 09819225396 for details/confirmations or mail to analyseindia@gmail.com

Best Regards,

Nooresh

09819225396