Wednesday, March 13, 2013

Market Mantra
SBTL is into the Production of Bio-diesel
Southern Online Bio Tech Ltd (SBTL)  HIT another BUYER FREEZE, after the company declared some favourable news which is as follows: "Southern Online Bio Technologies Ltd has informed BSE that the Company’s Biodiesel unit situated at Visakhapatnam, Andhra Pradesh is in a position to start production of Biodiesel upon receipt of raw materials. The delay in implementing the production so far is due to delay in getting the required working capital sanction from the bankers, now the bankers have extended their support by sanctioning of additional working capital for 50% capacity, utilization. Various internationally well reputed Biodiesel buyers are in touch with Company for the purchase of Biodiesel which is going to produce at above quoted unit. Besides this the Company’s first Biodiesel unit, which is situated at Samsthan Narayanpur Village, Nalgonda District is running at 85% capacity utilization for the last few years and it is backed up by well reputed customers from various segments". This company is very much investor friendly.
Buy Sintex Industries Ltd at Rs.57--57.50, T--Rs.62-65, SL---Rs.53.  When a repo rate cut is almost certain now, we can focus on the real estate and construction counters. My belief is more riveted by the fact that Voltas Ltd is doing fine today is now trading at Rs.85.70 (Recommended at Rs.83, some days back). 

Buy Central Bank Ltd at Rs.73, T--Rs.77-80, SL--Rs.71. There were some media speculations that, SEBI might have exempted the government from making an open offer for shares of the bank following preferential allotment of shares, which looks positive to me.
Steel Authority of India Ltd (SAIL) is on fire today. May be because of the fact that the government of India will do its disinvestment earlier and a price might have been fixed. SAIL if you can remember is trading below its book value of Rs.96.38, apart from its huge huge Capex going on at present. CMP: Rs.71.70.
Kohinoor Broadcasting Corporation Ltd hits another buyer freeze in the opening trade. I hope most of you have averaged the scrip, so that you can make a killing when the scrip appreciates.  CMP: Re.0.31.
Buy all the construction counters: Buy IVRCL Ltd (BSE Code: 530773) at Rs.25.70, T--Rs.32, SL--Rs.22. There is some positive news for all the construction counters. This is what writes: Infrastructure is a badly beaten up sector, as you rightly pointed out. Power and road are two of the largest infrastructure segments in India, and recent reports point out that bank loans towards infrastructure projects have died down, resulting in most projects being in limbo now. Awarding of new projects is also at their five year low and many awarded projects have not even taken off, stuck in policy paralysis, high interest costs, bank unwilling to lend and other such issues. However, there are some companies which would outlast this negative scenario. IVRCL is one of the strongest in this segment and would outlast the current policy paralysis to grow as a stronger and better player. HCC is another firm which was deeply hit due to its innovative Lavasa Hill-city project getting stuck in environmental issues which were part politically motivated. Regime changes could positively affect this specific scrip as well, and firm plans to go for Lavasa IPO once overall situation improves.
Punj Llyod is going strong and has not reported losses in past five quarters, unlike most of other infrastructure firms. Its top-line is also showing an improving trend which could result in better bottom-line profits in next few quarters. Markets worry only about bottom-line profits, so the firm could see a re-rating in next few quarters, if the results improve from here. Firm has also paid dividends in 2012 and has not missed dividend payout in past 7 years. So, it is one of the strongest players in this segment on a overall basis. So, some of these stocks can be accumulated at these levels for 12-18 months of time horizon and would provide good returns once the overall situation improves for Infrastructure sector". CLICK HERE

Tulip Telecom Ltd is just witnessing some profit booking but I do not think there is any reason to worry when the CDR Mechanism is on the cards. It is now official: Banks are likely to approve an Rs.18 bln loan restructuring package for the company by March end. So, we can look forward  a series of upper circuits in the coming days. CMP: Rs.10.80. 
Buy Nifty_Futures at 5879, T---5940, SL---5850. As the RBI generally looks at the WPI Inflation, to take rate cut decisions and since the inflation projections are on the southern side (down-side), hence I feel a Repo rate cut of 25 basis points along with a 25 bps, CRR could also be there.