Friday, March 24, 2017

Today's Calls
1. Buy Reliance Defense and Engineering Ltd at Rs.63.70, T: Rs.72-78, SL: Rs.61. The stock
Photo: The Economic Times
has now entered into the F&O segment.

2. Those who still holding the shares of my recommended Suzlon energy Ltd (Rs.19.10), can look for targets of Rs.21-22, in the coming days. This scrip has also entered in the F&O space.

3. Those who have entered JSE Energy Ltd (Rs.62.25) yesterday at around Rs.60.80, can continue to hold with a SL of Rs.59. Recently, there were some positive developments in the company.

4. Buy Hindustan Oil Exploration Ltd at Rs.72.70, T: Rs.78-82, SL: Rs.68.60. The Union Cabinet’s decision on Wednesday to grant extension to production sharing contracts for 10 blocks will benefit Cairn India Ltd (CIL), Oil and Natural Gas Corporation (ONGC), Essar Oil, Focus Energy, Hindustan Oil Exploration Company (HOEC), and Gujarat State Petroleum Corporation Ltd (GSPC).
The contracts for these pre-NELP (New Exploration Licensing Policy) exploratory blocks will be extended for 10 years from the expiry of their contracts. The move, the government said, will help accelerate indigenous production of hydrocarbons from existing blocks and act as a progressive step towards achieving the target of 10 per cent reduction in import of crude oil by 2022.


5. Those who have entered the turnaround infrastructure major, IVRCL Ltd (Rs.5.20), can look for targets of around Rs.7-8, in the coming days.  IVRCL Ltd is now basically (majority stake) owned by a consortium of lenders (Banks), hence accumulated debt is no longer a big problem. However, what seems to be a little bothering is working capital requirements.
Moreover, since the conversion price is around Rs.8.765 (~Rs.9), hence the scrip is likely to move towards this new found datum.

Thursday, March 23, 2017

Today's Calls
1. Buy JSW Energy Ltd at Rs.60.90, T: Rs.66-72, SL; Rs.59. JSW Energy, part of the Sajjan
Jindal-led JSW Group, is believed to be in the race for buying out the thermal power assets of Monnet Power and Jindal India Thermal Power Ltd (JITPL) in Odisha. Monnet Power’s 1,050 Mw coal-based power plant near Angul was in advanced stage of commissioning.  Monnet Power’s parent company, Monnet Ispat & Energy had won the Mandakini coal block in Odisha in competitive bidding, it surrendered the block later on grounds of economic unviability. Monnet Power had accumulated debt in excess of Rs 5,000 crore. 

2. Those who are holding the shares of Tata Motors Ltd (Rs.469.50), can continue to hold the same with a SL: Rs.459. The stock is on an uptrend, and is likely to move above Rs.470, in a short time.

3. Buy IVRCL Ltd at Rs.5.15, T: Rs.7, SL: Rs.4.60.
There were earlier media reports that Essel Infraprojects Ltd is in advanced talks to buy a controlling stake in Hindustan Dorr-Oliver (HDO), a publicly traded unit of infra developer IVRCL Ltd.
Meanwhile, the lenders to IVCRL had decided in December last year to convert their debt in the company to equity under the strategic debt restructuring (SDR) mechanism. On 24 February, IVRCL told stock exchanges that State Bank of India, on behalf of the lenders, has informed the company that lenders have approved the SDR conversion package. Lenders converted part of the firm’s debt into equity at a price of Rs8.765 per share. After the conversion, the lenders collectively hold 51% or more of the total share capital of the company. Infrastructure major IVRCL reported narrowing of its net loss to Rs.249.27 crore for the third quarter ended December 2016. The company had registered a net loss of Rs.345.47 crore in the same period a year ago.
However, net income from operations during the quarter also declined to Rs.397.88 crore as against Rs.501.46 crore in the year-ago period.
Total expenditure fell to Rs.479.88 crore during October-December 2016 as against Rs.700.49 crore in the previous financial year.

4. Those who have entered Panacea Biotech Ltd at Rs.155, can book some profits at Rs.161 and wait for dips to enter.

Wednesday, March 22, 2017

Today's Calls
1. The Nifty (spot) is expected to get support at 9010 - 9030 ranges, which is just arms length
from the current value of Nifty 9,053.45 which is now down 68.05 points or 0.75%. The traders are suggested to cover all your shorts.

2. Fresh positions (or averaging) can be initiated in Rolta India Ltd at Rs.58.80-58.90, for immediately targets of Rs.61.20-61.50.

3. Those who are holding the shares of Panacea Biotech Ltd (Rs.155), should add in every decline for immediate targets of Rs.167-170. The stock is likely to touch Rs.220-250, in the medium term.

4. Those who are holding the shares of RCom (Rs.37.50), should look for targets of Rs.42-47, as RJio has come up with Paid Service, drawing curtains to the Free Services.

Tuesday, March 21, 2017

Today's Calls
1. Buy Panacea Biotech Ltd at Rs.155-156, T: Rs.170, SL: Rs.152.   Renowned cardiologist Dr
.Devi Shetty founded multi-speciality hospital chain Narayana Hrudayalaya is on the prowl to bolster its footprint in the domestic healthcare services market. ET NOW learns from multiple sources privy to ongoing discussions that the Bangalore, Karnataka headquartered firm is in advanced talks to buy out Delhi based drugmaker Panacea Biotec's multi super-speciality hospital located in Gurgaon, Harayana. 
On the other hand, Narayana Hrudalaya confirmed that the company has been in discussions with Panacea Biotec for Gurgaon Hospital since October 2015.
Giving the chronological order of the events, the company said in December 2016, it had signed a non-binding MoU with the counter party and in March this year, due diligence is under progress. The company  in January this year, got the US Food and Drug Administration’s (FDA) approval for Rizatripan Bonzoate tablet, which is used to treat symptoms due to migraine.

The company also entered a long term agreement with UNICEF for suplying Pentavalent vaccine.

2. Those who have entered UCO Bank should keep a strict SL of Rs.35.50 and keep holding. The banking sector is in mess, with Narendra Modi's government till date giving only lip service. That stock did not move much even lafter the announcement of infusion of capital raises further concerns regarding its health/asset quality. If you are not comfortable then exit at Rs.35.90-30, with no profit or with minimum loss near the recommended prices.

3. Those who are holding Tata Motors Ltd can continue to hold with a SL of Rs.466. Most of the brokerage houses are positive on the scrip. However, too much optimism make a stock over but owned, which is also not good.

4. The scrip of BHEL (Rs.169.40) was recommended in this blog around Rs.105-1 107 the scrip made a 52-week high today at Rs.172.10 in the NSE. The investors are suggested to book complete profits and wait on the sidelines, for entry at dips. When I recommended the stock many of the research houses and brokerages were extremely bearish, some were giving targets as low as Rs.70.

Large Scale Capital Infusion: Cure for PSU Banks (PSBs)....
Photo: UCO Bank
The banking sector, which is laden with bad loans, plays a critical role in carrying out the government's development agenda but unfortunately hereto precious little has being done to revive this space.

A recent study found that the gross “non-performing assets” of state banks rose 56% in 2016, and 135% in the last two years. They now account for 11% of all state bank loans.

These are hardly reassuring figures. Yet the Narendra Modi's government—which, after all, owns these banks and thus dominates the Indian financial sector— seens relatively unconcerned. In the most recent budget, the government set aside barely $1.5 billion to recapitalize the banks.

You must have read that off late there were some capital infusion in 10 banks by the government of India. The name of the banks and the amount of capital to be infused by the government are:

Allahabad Bank (Rs.418 cr), Andhra Bank (Rs.1,100 cr), Bank of India (Rs.1,500 cr), Bank of Maharashtra (Rs.300 cr), Central Bank of India (Rs.100 cr), Dena Bank (Rs.600 cr), IDBI Bank (Rs.1,900 cr), Indian Overseas Bank (Rs.1,100 cr), UCO Bank (Rs.1,150 cr), and United Bank of India (Rs.418 cr).

However, Large-scale capital infusion in individual banks, consolidation or culling or even creation of a bad bank is the need of the hour.

Or else as the negative effects of demonetisation slowly tapers down and investment demand picks up in a big way, corporate borrowers will be scrambling for credit, but the banking system will be  find hard put to support India’s growth; leading to borrowings through ECB routes or FCCBs or through PE capital or Equity.

Moreover, while India government’s demonetization exercise which forced citizens to return old high-value notes in November-December period, might have had many side effects, however it the helped banks to grow deposits. 

Also, as a percentage of total loan assets, roughly one-third of all loans of United Bank of India (33.07%) and IOB (32.63%) are stressed. For IDBI Bank, this ratio is 27.76% and Uco, 21.71%. Thus the position of UCO Bank (Rs.36) is the best among the four indebted banks.

Besides, most analysts say that the government will be able to stick to the target of a fiscal deficit of 3.5% of gross domestic product, or GDP, in the current fiscal year that ends in March and aim for at least 3.3% fiscal deficit for 2018. It is to.be noted that successive governments have been diligently lowering the fiscal deficit for several years since 2012 when the deficit touched 5.9% of GDP.








Many of the government-owned banks that have around 70% share of banking assets are laden with bad loans and need capital to stay afloat. 

But till date most part of these declarations remained in paper only. The government of the day therefore should do this task on a priority basis, before the things are too late and damage becomes irreversible. If this governmentu is as bold and courageous as it likes to claim, that should be its topmost agenda.

However, inspite  of all these negatives, the banks stocks are on a steady rise since the last few months -- may be market knows something which we do not know. Now that the BJP has improved its position further, we could see a spurt in the Bank Stocks in the near term, as banks are a proxy to any economy.

Monday, March 20, 2017

Today's Calls
1. Buy UCO Bank Ltd at Rs.35.80, T: Rs.42, SL: Rs.35.50. The stock has formed a double
bottom on EOD charts and should move up. The name of the banks and the amount of capital to be infused by the government are:
Allahabad Bank (Rs.418 cr), Andhra Bank (Rs.1,100 cr), Bank of India (Rs.1,500 cr), Bank of Maharashtra (Rs.300 cr), Central Bank of India (Rs.100 cr), Dena Bank (Rs.600 cr), IDBI Bank (Rs.1,900 cr), Indian Overseas Bank (Rs.1,100 cr), UCO Bank (Rs.1,150 cr), and United Bank of India (Rs.418 cr).
Most analysts say that the NDA government will be able to stick to the target of a fiscal deficit of 3.5% of gross domestic product, or GDP, in the current fiscal year that ends in March and aim for at least 3.3% fiscal deficit for 2018. India's successive governments have been diligently lowering the fiscal deficit for seven years since 2012 when the deficit touched 5.9% of GDP. While India government’s demonetization exercise which forced citizens to return old high-value notes in November-December period, might have had many side effects, it the helped banks to grow deposits. Meanwhile, my earlier recommended Dena Bank Ltd (38.70) is up 4.59% today.

2. Those who are holding Tata Motors Ltd (Rs.472), should exit at intra-day highs, and enter banking or IT sectors. The long term holders, can keep a SL of Rs.466.

3. Those who have entered Rolta India Ltd, should give at least 6-9 months to the scrip, to generate some decent returns. This scrip may not perform in the immediate short term.

4. Nifty is now trading at 9,123.60 down 36.45 points or 0.40%. But I feel, a strong government with around two third majority in Uttar Pradesh is positive for the stock market. I am expecting the Nifty to close in the Green today. Let us see....

Saturday, March 18, 2017

An Important Announcement
Photo: iDefigo
I am looking for some investors/traders, who would invest in my (very short term) recommended scrips; after opening a demat/trading account with my associate brokerage house. The profit can be shared in the ratio of 50:50 between my firm and the investor.

The minimum portfolio size should be around Rs.2 lakhs and the duration if trade will be, short term -- 2 weeks or less to 30 days.

The money would be invested in news driven high beta (and high-risk-high gain) mid, small and micro caps only to magnify the profits. I would only give the names of the stocks with entry and exit points (including SL levels), through Whatsapp/Yahoo Messenger/SMS and investors are required to buy immediately. The percentage of profit would be adjusted after every trade. However, on the flip side, since we are in stick market, there are chances that  3 out of 10 trades may go wrong; giving profits in at least 7 - trades. But I will try my level best to generate profits in every investment. If anyone is interested please do send me mails.

Meanwhile, those who have responded to the mega offer of managing your portfolio (Rs.15 lakhs plus) by the CMD of my associate brokerage house, without any extra charge, please give me a little time to streamline the issues. Since, I am there, you need not have to worry. In case you need answers to your urgent queries, please either, Call me (On my mobile) or Whatsapp/ Text me or send me a mail at: sumanm2007s@gmail.com / suman2005s@rediffmail.com.
Reliance Communications: The Future Telecom Godzilla
CMP: Rs.38.25
The stock of RCom has been on a steady upmove since the last few days, as Reliance Jio (RJio) is scheduled to start its Paid Service from next month. This has again brought the stocks of Telecom companies into Focus. The scrip of Idea Cellular (Rs.108) has almost doubled from its 52-week low price of Rs.65.80, due to Vodafone news. Following similar positive trails, the share of RCom is also expected to touch Rs.71-72 in the next 6-9 months time. I have ben saying since sometime that it should not go below Rs.30, and till date, this has not been violated (52-week low: Rs.30.60 in the NSE); which somewhat attests to my buy on declines stand.









RCom already has enough of the luctrative 800 MHz spectrum necessary for 4G transmission, and which it shares with RJio. Also, as RJio expands it will benefit RCom, as the former is using latter's network (infrastructure), at a price.

Now if we look at the chart of RCom, we can see the formation of a Dragonfly Doji like pattern on the uptrend (though, not exactly).  

It will pertinent to mention here that Thomas N. Bulkowski in his book, Encyclopedia of Candlestick Charts wrote:

"The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal. It is a reversal candle, but only half the time. Random, in other words. If you see a dragonfly doji in the bush, do not be frightened. The 10-day performance after the breakout ranks it 98th out of 103 candles, where 1 is best. In other words, ignore it. Its bite is usually not fatal. Usually.

The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal. It is a reversal candle, but only half the time. Random, in other words. If you see a dragonfly doji in the bush, do not be frightened. The 10-day performance after the breakout ranks it 98th out of 103 candles, where 1 is best. In other words, ignore it. Its bite is usually not fatal. Usually".

Therefore, I feel the traders should continue to accumulate RCom, for immediate targets of Rs.54 - 55 - 57 - 60, from where it fell -- the good days are to return for the shareholders of RCom.

Tuesday, March 14, 2017

Today's Call
1. Buy Rolta India Ltd at Rs.59.10-59.30, T: Rs.72, SL: Rs.56. Rolta Ltd will be one of the biggest
beneficiaries of the BJP win. Defence industry was initially run by a monopoly and it was difficult to take a product to people who were not willing to give something new a try.

However currently, Bharat Electronics Ltd, Rolta India Ltd and Tata are the major suppliers of defence products. In 2015, the BEL-Rolta India consortium bagged the Ministry of Defence’s (MoD) development agency order for the Battlefield Management System (BMS) project, worth over Rs.50,000 crore. BMS is an awareness and visualisation system that aims to optimise the effectiveness of tactical units.

To elaborate, the NDA government's “Make in India” policy got a boost when two Indian consortia were selected for the $5.95 billion. Battlefield Management System (BMS) contract for integrating all surveillance resources available at the battalion or regiment level, including from locally launched UAVs and ground sensors. Fourteen contenders had formed four consortia to vie for this prestigious contract.

The two selected – one comprising Tata Power Strategic Engineering Division (SED) and L&T, and the other, Rolta India and the DPSU, Bharat Electricals Ltd (BEL) – will each develop four BMS prototypes for mountain, jungle, plains and desert operations. The BMS will pinpoint the locations of Indian and enemy troops and key weapons platforms as well as facilitate terrain analysis to achieve improved situational awareness.

Rolta India Limited (Rolta), a leading provider of innovative IP-led IT solutions for many vertical segments, including Defence and Security, announced unaudited financial results for quarter ended December 31, 2016 (Q3 FY -17) last month.

FINANCIAL HIGHLIGHTS:
  • Consolidated Revenue for Q3 FY-17 at Rs. 911.23cr (Rs. 9.11 Billion) against Rs. 736.95 cr (Rs. 7.37 Billion) in Q2 FY-17, registering a growth of 23.6 % Q-o-Q.
  • Consolidated EBITDA for Q3 FY-17 at Rs. 254.75 cr (Rs. 2.55 Billion) against Rs. 217.12 cr (Rs. 2.17 Billion) in Q2 FY-17, registering a growth of 17.3% Q-o-Q.
  • Consolidated profit after tax for Q3 FY-17 at Rs. 36.94 cr (Rs. 3.69 Billion) against Rs. 54.30 cr (Rs. 5.43 Billion) in Q2 FY-17, registering a decline of 32.0% Q-o-Q.
  • Foreign Exchange loss for Q3 FY-17 at Rs. 16.09 cr (Rs. 1.61 Billion) against a gain of Rs. 15.79 cr (Rs. 1.58 Billion) in Q2 FY-17 impacting the profit after tax in Q3 FY-17 versus Q2 FY-17.

Mr. K. K. Singh, Chairman and Managing Director has said, "Rolta has consciously made efforts to remain at the forefront as a solutions provider with a sharp focus on the Digital revolution. Having made significant investments in the recent years, the Company today, is well positioned to address the huge Digital Transformation opportunities in the markets it serves."

2. Those who are holding the shares of Vedanta Ltd (Rs.256) from around Rs.251-252, can continue to hold for a target of Rs.272.

Sunday, March 12, 2017

Holi Offer: Boost Your Portfolio
If anyone is having a portfolio of Rs.15 lakhs plus, then my associate brokerage house, will manage his/her portfolio. You are likely to a get good and hassle free returns, since the MD of the said brokerage house, will take personal care on your investments.

Before, starting the service the MD of my associate brokerage house will have a tephonic meeting/conference/Chat with you discussing the pros and cons of the proposal. I will also be there to help you in this deal and my service will be free.

For more details, please do send me a mail at: sumanm2007s @gmail.com / suman2005s@rediffmail.com.

Happy Holi to all...