Rel : Why every view has an other side

Short term weakness issues with fresh power projects.
This stock will double/tripple if/when the new power projects actually go through
if/then/else always

imagine you can buy a stock at cheap valuations
Now this is good only if the management is good and keeps the capital working efficiently.

Report from citisb.
74% of Rel assets are in cash and the company is at a p.e of 12.....
Its still valued cheaply. All that is required is a bold move by rel to utilize its cash!! As i mentioned in my previous view look , what if rel announces some weird plans. I mean can the ambani's really be so stupid that they don't notice the capital lying around in cash??? I don't know..
We'll know in 2-3 years if this capital is still lying around in cash or not.
The premise of buying stocks at cheap valuations is to get in early before the big parabolic move happens. It can take a while to materialize. Short term pressures will continue in rel so the trading call is negated. Only take in delivery. Punters can trade in tatapower/ntpc/cesc which look stronger.

"
Reliance Energy (RLEN.BO)
Downgrade to Sell: Deconstructing the Enigma
 Disappointing — We are downgrading RELE to Sell (3L) from Buy (1H) and cutting
our target price to Rs510 given its 1) lack of delivery – four years after EA03, RELE
has only 941MW of capacity and distribution licenses in three circles; 2) inefficient
capital deployment – its RoCE is in the 2-4 % range, the lowest in our electric
utilities universe; and 3) modest long-term earnings growth of ~15%.
 Lack of delivery — Many of RELE’s announced projects have hit 1) fuel supply
issues; 2) land allocation problems; or 3) regulatory snags leading to cash and
cash equivalents not being allocated in productive assets.
 Inefficient capital deployment — RELE’s 2-4% RoCE is the lowest in our rated
electric utilities universe because 74% of its assets are in cash and cash
equivalents, a clear case of inefficient capital deployment.
 Not the time to bottom fish — RELE’s stock underperformance versus the BSE
Sensex over the past six years and its expected 35% YoY earnings growth in
FY08E (from a low base) might seem like a good opportunity to bottom fish. We
believe this approach ignores the business realities as RoCE will be low and
long-term earnings growth will likely be a modest ~15%.
 Positive ATE ruling to spur earnings growth — RELE should grow earnings at
20% CAGR over FY07E-10E driven by positive ATE rulings on the Mumbai
business. Despite higher interim growth from a low base, long-term steady state
earnings growth should remain a modest ~ 15%."