Friday, October 24, 2014

Winning Strokes: Think Different
Photo: The Economic Times
Yesterday, J P Power Ventures Ltd recommended around Rs.12.05--12.28, touched Rs.12.77 intra-day. The Indian government on 20th October, 2014, announced that it will auction 74 coal-mining licenses to private companies in the next three to four months after the Supreme Court last month canceled 214 coal licenses issued to private and public companies since 1993. The move came after the government freed diesel from price controls and increased natural-gas tariffs over the weekend to curb subsidies and cut the fiscal deficit. Moreover, the coal block auctions will reduce uncertainty regarding power generation companies that depend on the dry fuel--this augurs well for the shares of J P Power Ltd. 
Tata Steel Ltd which was recommended around Rs.450, some days back, yesterday touched Rs.461.90 intra-day. The company is scheduled to come up with Q2FY15 results on November 1, 2014.
My recommended Country Club (I) Ltd, at around Rs.7, yesterday made a new 52-week high as the scrip touched Rs.16.90. Congratulations to those who bought the scrip on my recommendation made money yesterday. 
A couple of days back J P Associates Ltd was recommended around Rs.29.70, for a short term target of Rs.35-37. The scrip yesterday touched Rs.30.45, before closing at Rs.30.10. A sharp cut in diesel price on Saturday, 18 October 2014, is expected to bring down freight rates which in turn could reduce consumer price inflation. Lower consumer price inflation (CPI) could  provide room for Reserve Bank of India (RBI) to cut interest rates. This might  in turn, bring cheers in the Realty, Construction, Banking and Auto shares. In between, there were media reports on September, 26, 2014 that, Jaiprakash Power Ventures (JPVL) had stroked a new deal to sell, three of its power assets to JSW Energy. JPVL signed a binding memorandum of understanding (MoU) with Sajjan Jindal controlled JSW Energy to sell three of its operating power plants with an aggregate capacity of 1,891 MW. The three power plants are Baspa II plant having 300 MW capacity, Karcham Wangtoo plant with 1,091 MW capacity and Bina thermal plant with 500 MW capacity. Jaiprakash Group has been trying to sell its assets to pay off its huge debt. Jaipraksh Group has a total debt of around Rs.60,000 crore on its books, which represents a debt to equity ratio of 6.8 times. It means against every one rupee of equity it has Rs.6.8 of debt. Its annual interest cost is 1.1 times its EBIDTA. However, the book value of the shares of J P Associates Ltd is Rs.56.69 and the company has a market cap of only Rs.7,321.70 Cr, which is almost half its FY14 earnings of Rs.13,327.02 crores. This gives much room for the appreciation of the share price, from the CMP of Rs.30.10.
Resurgere Mines and Minerals Ltd, yesterday hit another buyer freeze in the opening trade, at Rs.1.64. The scrip has a good future ahead--the investors need to have patience, to generate superb returns from the share.. 
The Reserve Bank of India (RBI) is scheduled to undertake its fifth bi-monthly monetary policy review on 2nd December 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 6.46% in September 2014, from 7.73% in August 2014. Meanwhile, the Nifty_Spot, closed at 8,014.55 yesterday, which gives fresh ammunition to the bulls. The rally is  now expected to get more fierce in the coming days, till 8000 holds on the downside on a closing basis 
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