Wednesday, October 08, 2014

Winning Strokes: Think Different
IVRCL Ltd, which was recommended in this blog some days back around Rs.15-15.50, reached the first target of Rs.17 (Intra-day, Rs.17.35) yesterday. According to the Business Standard, October 8, 2014: Indian companies and banks have some reasons to cheer. Stalled projects are finally showing signs of traction, with the Modi government taking steps to revive those projects which were stuck due to policy paralysis and land acquisition problems. Therefore, the time has come to take a more bullish view on Infastructure stocks like IVRCL Ltd, HCC Ltd (Rs.31.20), IRB Infrastructure Ltd (Rs.220.45), etc. 
Gitanjali Gems Ltd today rose to Rs.64.20, before closing at Rs.63, in the BSE. During the last few months the company has taken lot of steps to revamp its operations. But, one thing which needs to be highlighted here is that: Gitanjali Gems Ltd having a face value of Rs.10, Book value Rs.287.39 and market cap of Rs.618.16 Cr is trading only at Rs.63, while Rajesh Exports Ltd of face value, Rs.1 (Not Rs.10), Book Value of Rs.88 (only) has a CMP of Rs.128.50. Moreover, the cash flows in 2013-14,  in the case of Gitanjali Gems Ltd is (negative) Rs.2,966 crore, while in case of Rajesh Exports it is (negative) Rs.2,629 crore. Therefore, it is strange why the share of Gitanjali Gems Ltd is trading at such a low price! Moreover, the silver jewelry exports from India surged by 84.80% year-on-year to touch $234.82 million (Rs.1,430.08 crores) during the month of August this year, while its gold jewelry exports too rose by 10.44% year-on-year to $634.46 million (Rs 3,863.85 crores), in accordance with the latest data released by the Gems and Jewelry Export Promotion Council (GJEPC). With a strong dollar currently depressing the precious metals prices, M Partners Mining Analyst Derek Macpherson believes that fundamentals will kick in eventually and bring prices back up--the dollar has rallied, putting pressure on gold and all other commodities. He further said: "I think we could flirt below $1,200/ounce, but I don't think we'll see an extended period of significantly lower gold prices. We're getting very close to the marginal cost of production for most producers. If that situation lasts for an extended period, mines are likely to start shutting down, and it could swing back to being a supply-and-demand story". Thus while low price of the yellow metal could increase the volume of sales, a sudden spike in the gold price, could also perk up the bottomlines of Jewelry companies. 
Resurgere Mines and Minerals Ltd yesterday closed flat at Rs.1.64 in the BSE, even though the SENSEX tanked by more than 296.02 points. This shows that the scrip has probably formed a permanent bottom and is preparing to move up.  
GLOBAL VECTRA HELICORP LTD (Rs.72.35) was jacked up by some MUMBAI (Bombay) based operators by floating some ROSY STORIES. Now the stock is hitting LOWER CIRCUITS almost on a regular basis. In fact the stock has been on the downtrend since it hit the 52-week high of Rs.93.30 from its low of Rs.9--with a NEGATIVE BOOK VALUE of Rs.6.02, don't get surprised if it falls below Rs.30.
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