Friday, June 17, 2016

Today's Recommendations
1. Buy Reliance Capital Ltd near the support of Rs.395-396, for a short term target of Rs.414.

The promoters holding in the company stood at 52.13% while Institutions and Non-Institutions held 28.71% and 19.07% respectively.

Reliance Capital, which has completed five years of partnership with Nippon Life, plans to strengthen the association with more products in mutual fund and life insurance spaces going ahead.

Nippon Life’s partnership with Reliance Capital began in 2011 when the Japanese financial services giant picked up 26% stake in Reliance Life Insurance. Subsequently, Nippon picked up 26% stake in Reliance Mutual Fund as well, while the stakes in both the ventures of Reliance Capital have now been hiked to 49% each.

Reliance Capital is a systemically important non-deposit taking NBFC.  Reliance Capital RCL obtained its registration as a Non-banking Finance Company (NBFC) in December 1998.

The company is part of the Reliance group led by Anil Dhirubhai Ambani. It currently operates as the holding company for the group’s entities in the financial services sector.

The book value of the shares of the company is Rs.570.97 and the dividend yield is 2.27%. Its P/E is only 9.11 while the industry P/E 24.10. Hence, a re-rating of the scrip will soon take place, which might take it above Rs.500 in the medium term. 

Max Financial Services Ltd (Rs.484.75) is up 13%, this could have a rub-off effect on all the stocks in this space, including Reliance Capital Ltd.

2. Keep Buying Lanco Infratech Ltd (Rs.4.90) on all declines for targets of Rs.7.5-9. 

3. Buy Adani Power Ltd near the support at Rs.29.80-29.90, SL: Rs.27.50, T: Rs.36.
Rajpura super critical thermal plant owned by Larsen and Toubro is set to have a new owner with Gautam Adani’s Adani Power Limited agreeing to pay Rs.3,300 crore upfront for the 1,400 Megawatt (MW) project and to also bear all loans and debts due on the project.

L&T is one of the largest construction and infrastructure development companies in the country with Adani Power Limited being one of the fastest-growing power generation company.

On a consolidated basis, the company's external debt was Rs.39,000 crore and ICD debt of Rs.6,000 crore. The promoters plan to infuse an additional Rs.1,700 crore in the next one year, which will improve Adani Power's financial metrics.

The Adani Group went on a massive expansion drive in the past two years, buying distressed power plants and ports across India. 

The government of India has recently taken steps to help the companies, who are  having large debts. 
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