Tuesday, February 21, 2017

Today's Calls
1. Buy 63 Moons Technologies (Financial Tech) at Rs.82, T: Rs.93, SL: Rs.79.63 Moons Technologies, formerly Financial Technologies (India),  earlier set up an investment committee and has  now a new policy to protect the company’s wealth. The company, is sitting on around Rs .2,000 crore cash after selling its stakes in various firms.

2. Those who are holding Punj Lloyd should now keep.a SL of Rs.21.40 and keep holding for targets of Rs.27-29.

3. Those who are holding Rolta Ltd should book profit at Rs.64.40 and exit the counter, the stock.is not performing.


Friday, February 17, 2017

Today's Calls
1. Buy Dena Bank Ltd at Rs.37.30-37.50, T: Rs.40-41, SL: Rs.36.60. Dena Bank, like all other
banks, has had a dream-run on the deposits front during the 50 days following demonetisation. Copious deposit inflows in the form of scrapped high-denomination notes helped the bank shed bulk deposits amounting to about ₹9,000 crore. Meanwhile, Dena Bank reported a net profit of Rs.35.31 crore inQ3FY17, as compared to Rs.662.85 crore loss reported last year for the same period. Public sector Dena Bank is also in talks with few insurance companies to raise capital, its CMD Ashwini Kumar said, this week. Kumar said for Dena Bank, the worst was over. "For my bank, the worst phase is over. Things postdemonetisation is now improving", he said. 


2. Those who are holding the shares of Reliance Communications Ltd (Rs.32.95), can look for good days ahead, as the company goes for merger with Aircel -- SSTL and Telenor. It will also get the backing of Mukhesh Ambani, following infrastructure and spectrum tie ups. We can look forward for levels of Rs.47-55 in the coming days; from where it fell.

3. Those who are holding the shares of JSW Energy (Rs.61), can continue to hold with a SL at Rs.57, for targets of Rs.67-68. However, the problem with this scrip, inspite of having fundamental, is the lack of interest from retail players. The company has a complex business model, which many retail investors cannot fathom.

4. Those who have invested in Punj Lloyd Ltd (Rs.20.10), should wait for the scrip to give a closing above Rs.20.50, before taking fresh entry. However, those who are already invested should keep a SL of Rs.19.60.

5. Brokerage Call: Buy IDFC Bank Ltd at Rs.63.50, T: Rs.68-72, SL: Rs.60.

Thursday, February 16, 2017

Today's Calls
1. Buy JSW Energy Ltd at Rs.60 -- 60.50, T: Rs.67-68, SL: Rs.57. The good
news is that the Vijaynagar plant has commenced a short-term PPA at Rs.4.18/unit approved by the regulator. The company said that it is raising long term funds through the issuance of redeemable non-convertible debentures upto Rs 1,000 crore by way of a private placement.
The company said its wholly-owned subsidiary, Karcham Wangtoo Hydro project of Himachal Baspa Power Company has filed a petition for determination of final tariff with Central Electricity Regulatory Commission (CERC). Pending the receipt of final tariff order, the revenue from sale of power under long term power purchase agreements are being recognised in terms of expected tariff as per the available guideline. The hydro projects were acquired during September 2015, it said.
Though JSW Energy Ltd still has 1160MW open-ended capacities, it is likely to get a good value, as the demand for power increases, post demonetisation. 

2. Those who are holding Reliance Communications Ltd (Rs.33.10) can continue to do the same for a shirt term target of Rs.37-38. Reliable Communications Ltd is now virtually (Unofficially) RJIO.

3. Those who have taken position in Punj Lloyd Ltd (Rs.20.20) yesterday should wait to see if it crosses above Rs.20.50 or not to take fresh entry. On breaking of Rs.19.60, it becomes a sell.

4. Those who have entered Reliance Power Ltd, should continue to hold with SL of Rs.41.80.
The power sector is set to do well as the economy picks up steam, post demonetisation.

5. Buy Rolta India Ltd at Rs.63.50, T: Rs.71-72, SL: Rs.61.60. Today most of the IT and defence stocks are doing well and hence Rolta Ltd should also move up in tandem. 
In earnings reported earlier, net profit for Q3FY17 came at Rs 98.7 crore against Rs 127.3 crore quarter-on-quarter, while total income was up 0.2 percent at Rs 343.9 crore versus Rs 343.2 crore.
A share of a company reporting Rs.98.7 Cr quarterly profit should trade above Rs.100 as against the CMP of Rs.63.50. Moreover, yesterday volume of 52,000 in the BSE will be crossed today, as brisk buying is seen in the counter.

Wednesday, February 15, 2017

Today's Calls
1. Prajay Engineers Syndicate Ltd (Rs.12.20) came out with a reasonably good bottom line in Q3FY17.
With affordable housing being the catchphrase of Budget 2017, the focus could well shift from core areas of Hyderabad to its cheaper peripheries, helping the companies like Prajay Engineers Ltd.
The city's outskirts, where land rates are cheaper, are perfect destinations for such ventures that have so far not been economically exploited. The benefits extended to this segment in FY18 budget is very encouraging.
Apart from an increased carpet area, affordable housing was also awarded the 'infrastructure status'. This will result in bigger homes for buyers and lower interest rates for developers. The average projected cost of these homes ia generally around Rs 15- Rs 20 lakh.
This will push more local players (Prajay Engineers Syndicate Ltd is a local player) to take up small projects that they shied away from until now.  The investors are suggested to hold the scrip with a SL of Rs.11.70. The scrip could again attempt to cross Rs.16, in the coming days.

2. Those who are holding Punj Lloyd Ltd (Rs.20.50) can continue to add on declines, for  targets of Rs.27-31. Yesterday, the percentage of deliverable quantity to traded quality was high at 41.41%.
There is speculation that the company is working towards a turn around, leading to profits in the coming quarters. Some experts are of the view that the company expects an increase in construction activities and hopes to bags projects post budget 2017.

3. Those who are still holding the scrip of NBCC Ltd (Rs.286) from Rs.284, can book some profits at Rs.288 and can hold the rest with a SL at Rs.281. 
4. Those who are holding Reliance Power Ltd can continue to add on declines, for targets of Rs.47-51.

Tuesday, February 14, 2017

Today's Call
1. Buy Punj Lloyd Ltd at Rs.20.65, T: Rs.27-28, SL: Rs.19.60.
Punj Lloyd posted its Q3FY17 standalone results on February 11, 2017. Company’s
Photo: The ET
standalone revenue for the quarter came in at Rs. 997 crores, registering marginal 1.1% yoy decrease. This was in the wake of 2.7% yoy decline in revenues from EPC services that contributed nearly 93% to revenues.
EBITDA for the quarter came in at Rs 8.8 crores as against EBITDA loss of Rs 12.3 crores posted in Q3FY16. Company’s total expenses dropped 4.3% yoy to Rs 1018 crores.
Company posted a net loss of Rs 232 crores as against a net loss of Rs 309 crores in Q3FY16. The recovery in losses was driven by 122.5% yoy increase in other income. Company also posted a decline of 13.3% yoy in finance costs. However, finance cost stands very high at Rs 224 crores. [Source: India Infoline]

2. Those who have bought Reliance Infrastructure Ltd (Rs.533) yesterday, at Rs.528, can continue to hold positions for targets of Rs.545-552-571. The company as expected came out with good FY18Q3, numbers, which should propel the stock to higher levels.

3. Those who have entered Reliance Power at Rs.44.60, can continue to add in any intra-day dip for targets of Rs.47-51. There is no need to keep SL.

4. I hope most of you have booked profits in Future Enterprises Ltd at around Rs.30.80. The stock could come down to Rs.20-21, before moving up. The scrip if you remember was recommended at around Rs.17.50-18, last month.

Monday, February 13, 2017

Today's call
1. Buy NBCC Ltd at Rs.284, Rs.298, SL: Rs.277. NBCC Ltd, a Navratna Company has fixed February 21, 2017 as the record date for 1:2 bonus issue of shares. Exit at Rs.284 or near that price, for intra day traders. The stock is not preforming, as expected.

2. Buy Reliance Infrastructure at Rs.528, T: Rs.545, SL: Rs. 526. Temporary bottom seems to have been formed on daily chart.

3. Buy Reliance Power at Rs.43.60, T: Rs.45-47, SL: Rs.42. The Anil Ambani-led power producer reported a consolidated net profit of Rs275.70 crore, against Rs241.06 crore a year ago. Net sales rose 14.2% to Rs2,456.31 crore in the quarter from Rs2,150.49 crore a year earlier.

Reliance Power's Sasan project is the world's largest power generation plant to be registered under the UN framework, entitling the company to earn 22.4 million carbon credits.

Arun Jaitley’s 10% tax on income from carbon credits is good for companies like Reliance Power Ltd.

According to the explanatory memorandum to the Finance Bill, the income tax (I-T) department has been treating the income earned on transfer of carbon credits as business income subject to tax at the rate of 30%. 


Now Direct taxes code had recommended that income from sale of carbon credits be treated as business income. Therefore, the tax levy of 10% may be considered to be beneficial, for companies like Reliance Power Ltd (Rs.43.60).

Thursday, February 09, 2017

Punj Lloyd Ltd: Buy
CMP: Rs.21.95
Last quarter saw some acceleration in execution in their projects. The management is positive on gradually improving macro environment and an enabling policy framework of the present government,  which is likely to improve the performance of the sector.  

A key development at the end of last year was the Cabinet decision on payment of arbitration awards by government agencies to EPC companies. This, the company, believe is a significant positive for the industry and will go a long way towards reducing debt.

Thus, implementation of the measures taken by the government like release of 75% of arbitral award to construction companies will help improve prospects over the medium term. Some construction companies have already received this payment in their escrow accounts against bank guarantees.

According to a recent  (rating agency) ICRA Report: the order book of construction companies is expected to improve with the government awarding sizable infrastructure projects over the last two years and many in the pipeline,

"The Government of Indias focus on infrastructure sector, particularly roads, railways, and urban infrastructure segments, is evident from the increased budgetary allocation to these sectors as well as the slew of measures taken to revive the sector," ICRA said in a statement.

Of all the infrastructure segments, the Railways have the highest planned capital outlay with Rs.8.56 trillion over the five-year period of 2015-2019. To keep up with this plan, the annual capital outlays for FY2016 and FY2017 was increased significantly.

The two ongoing dedicated freight corridors (eastern and western) are worth over Rs. 0.81 trillion. The other major capex planned is towards station modernisation and redevelopment and the high speed rail corridor (HSR) or bullet train project.

"These are likely to offer sizeable opportunities for the construction sector," the statement said.

"The budgeted capital outlay for the Railways is expected to increase from Rs 1.2 trillion in FY2017 to Rs 1.4 trillion in FY2018. However, given the 5-year plan this still would require to be ramped-up significantly in the remaining years. "The merger of the Railway budget with the central budget will provide an additional leeway for an increased outlay. While a major part of the outlay is expected to be towards the ongoing projects, sizeable newer projects are also expected to be awarded, providing construction opportunities, particularly for large players," said K Ravichandran, Senior Vice-President and Group-Head, Corporate Ratings, ICRA.

Moreover, valued at $180 million per annum in the 1970s, Indo-UAE trade is today around $50 billion, making the UAE India's third largest trading partner for the year 2015-16, after China and the US --- among the several private and public sector, Indian companies, working in the UAE, Punj Lloyd Ltd also figures in the list. 

Besides, a section of the market believes that Punj Ltd like HCC Ltd (Rs.41.80) is a BJP company; the former paying Rs.1 Crore in 2009 elections to the BJP. 

The promoters holding in the company stood at 36.14% while Institutions and Non-Institutions held 9.08% and 54.79% respectively. The total public holding stands at 63.86%. The stock is currently trading below its 50, 100, 150 nd 200 D SMA.

Therefore, buy the shares of Punj Lloyd Ltd around R.21.75-21.95 for short targets of Rs.27-28. The company is coming up with results on 11 February, 2017, where I am expecting a turnaround.

Note: The scrip was recommended to the Premium Group members today and it was displayed in the Premium Blog: http://sumanspeakspremiumservices.blogspot.com.

Sunday, February 05, 2017

Winning Strokes: Think Different
The stock of HDIL (Housing Development & Infrastructure Ltd) was given a buy around the support of Rs.64.50 for a short term target of Rs.72 to the Paid Members on 1st February, 2017; based on the theme that Union Budget 2017 proposed several positive measures for the real estate sector, which includes Infrastructure status to affordable housing, which will reduce the cost of funding for the builders; the benefit of which can be passed on to the customers. The stock touched Rs.66.15, on last Friday. 

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Future Enterprises Ltd was given a buy at around Rs.17.50-18, a couple of days weeks back. The scrip touched Rs.23.15 intra-day on last Friday. The investors are suggested to book some profits. 

Photo: The Hindu
The stock of Reliance Communications Ltd moved to Rs.40.40 in the NSE on last Friday clocking a volume of 87,824,962 shares. A special court last week dismissed the cases against the Maran brothers,  saying saying that the "perception or suspicion" was not backed by concrete evidence. The special CBI Judge O.P. Saini, in scathing observations, said that no minister or senior government officer would be safe if "contradictory oral statements" of witnesses are made legally acceptable. Judge Saini discharged Maran, his brother Kalanithi Maran, Kalanithi's wife Kavery Kalanithi, South Asia FM Ltd (SAFL) Managing Director K. Shanmugam and three companies -- SAFL and Sun Direct TV Pvt Ltd (SDTPL) and South Asia Entertainment Holdings Ltd, Mauritius in two related but different cases. Dismissing the cases against them, the judge said the oral statements, which were used by the CBI and ED to frame charges, were a "dangerous trend" and that if it were allowed "anybody and everybody in the government can be made to face prosecution". 
The court questioned that "If such oral statements, which do not flow from the record or find corroboration from anywhere from any circumstance, are given judicial recognition, what shall be the fate of the rule of law?" "If such a practice is allowed, anybody and everybody in the government can be made to face prosecution. "No Minister or Secretary would remain safe or for that matter anyone working in the department." "This is a dangerous trend and can strike at the root of rule of law and the constitutional democracy as wrongdoers can gang up against those, who, by the perusal of record, are innocent," the court opined.

In another major development, the Chief Justice Khehar of Supreme Court, flanked by Justices N.V. Ramana and D.Y. Chandrachud, orally observed during Aircel-Maxis hearing: "He [Mr. Ananda Krishnan] does not care for the law of this country. He does not care for the Supreme Court of this country... then we will punish him... we will see to it,” 

Mr. Singhvi, the counsel for Aircel, urged caution on the court’s part, saying a restraint order meant to enforce the appearance of the Maxis owner and the other three would harm Aircel. The lawyer said Aircel had no control over Mr. Ananda Krishna and was not his “alterego.” “Why should Your Lordships punish me for something done by Mr. Ananda Krishnan,” asked Mr. Singhvi.

I feel Mr.Sanghvi has a valid point and I would make a humble request to the Honorable Bench of the Supreme Court, to maintain some sanctity of law of the land and act prudently; without any individual bias and whims. The small investors who are holding positions in Reliance Communications Ltd, should not suffer because of one of the promoters did not turn up in a court. This attitude of the honourable Supreme Court Bench to punish "Ram" for the Faults of "Rahim" is very unfortunate and puerile. I would therefore, like to ask the Supreme Court Bench on the basis of which (legal) section, the court is entitled to sell the shares of company, because one of its promoters has failed to appear in a court. The law is blind to emotions and I feel, not only the merger of Aircel - Reliance Communications Ltd, but also the shareholders of both the companies, should not suffer because of some individuals. Besides, this kind of attitude could tarnish the image of the honourable Supreme Court (and make it look like a Rogue) and I strongly feel, it will not set a good precedence for the Indian Jurisprudence's history. The court should instead should ask the Narendra Modi government to request its Malaysian counterpart to find ways to bring Mr.Ananda Krishnan to India, if his presence is absolutely necessary.