Tuesday, October 28, 2014
WINNING STROKES: THINK DIFFERENT
As expected, Sulon Energy Ltd hit the buyer freeze today at around Rs.12.70. The stock was yesterday recommended to the PAID GROUPS at around Rs.11.99-12.10. The company has a massive order book of around Rs.43, 000 Cr and now less problem, for meeting its working capital needs. Meanwhile, the Hindu, on 27 October, 2014 writes: "The restoration of benefits such as accelerated depreciation (AD) and generation-based incentive (GBI) is expected to invigorate the domestic wind power sector. Crisil Research estimates that 10,000 MW of capacity will be added during 2015-18, entailing investments of Rs.65,000 crore compared with 7,000 MW over the previous three years.GBI and AD (which expired in March, 2012) enable a quantum improvement in the economics of power projects, so it is understandable why capacity additions will go up with their restoration. Crisil Research estimates suggest that projects availing of AD (80 per cent depreciation allowed in the first year of operations) are economically viable at only Rs.3.80 a unit. In comparison, States such as Maharashtra, Rajasthan, Andhra Pradesh and Madhya Pradesh offer preferential tariffs ranging from Rs.3.90 to Rs.5.90 a unit, which make wind power attractive for developers in these States. The salutary impact of these incentives on capacity additions has been seen in the past too. AD propelled capacity additions until it expired in 2011-12; the share of AD in total installed capacity (21,693 MW as on March, 2014) is estimated at 65-70 per cent. That is not all. In States such as Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and West Bengal, where industrial tariffs are high in the range of Rs.7 to Rs.7.50 a unit, wind power is an attractive option since generation costs are significantly lower, particularly in view of the restoration of AD". All these augurs well for Suzlon Energy Ltd.
Pipavav Defence Ltd hit the buyer freeze in the opening trade at around Rs.45.20 before closing at Rs.44.30. There were media reports recently that the Indian government has cleared defence deals worth Rs.80,000 crores. The scrip spurted on this news.
Glodyne Tech Ltd hit another buyer freeze in the opening phase. The company came out with better set of numbers for Q1FY14, speaking sequentially.
Nifty today closed above 8000, giving fresh ammunition to the BULLS. A weekly close above 8000 has resumed the uptrend once again, as the breakdown below 7800 proved to be short lived and false. The investors are suggested to go for the small and mid cap counters as November is approaching.