IVRCL below Rs. 5: Should one buy ?

After a sad incident in Kolkatta where the bridge collapsed in a busy area of Burrabazar IVRCL stock has witnessed speedy sell off and the stock price has nose dived to levels where punters may be thinking of buying the stock with a medium to long term view or even a short term view. But is the stock worth buying – is a million dollar question.

The unfortunate incident of bridge collapse happened on 31st March this year. Since then the stock is down by almost 29 percentages when sensex was down by mere 1 percentage during the same period. Interestingly the Nifty Infrastructre index was up by almost 1.5 percentages during the same period. IVRCL now reduced to a mere 353 crore capitalisation is one of the leaders in water industry and has rich capabilities in providing water solutions and installing water distribution systems. The stock has been struggling even before the kolkatta event and debt ridden Hyderabad based Infrastructure Company has been posting negative EPS since June 2012.

On YTD basis the stock is down by almost 47 percentages and if one takes a three year data the stock has given negative 36 percentages returns. IVRCL has been disappointing investors for past 10 years in spite of being operational in a sector hugely promoted by GOI both previous and current. Even if the stock is available at dirt prices the fundamental of the company are shaken and a cautious investor is advised to stay away from such counter.