Monday, June 20, 2016

Today's Recommendations...
1. Buy J P Associates Ltd at Rs.7.57, T: Rs.12-14, SL: Rs.6.4. The company should be one of the biggest beneficiaries, if the banks gives go ahead to convert a part of their debts into equities. Moreover, the company is in the process of hiring consultants, for a quick turnaround. As a strategy to shed its debts, the company has increased its focus on high realization markets and has withdrawn from certain markets of Haryana and Delhi where due to low prices and high freights (long lead markets) the net realization was very low and operations unviable.
Photo: The Times of India
Besides, in another significant developemnt, Jaiprakash Associates Ltd and Jaypee Infra are offering land parcels of around 2,200 acres to banks in a bid to buy peace with lenders and settle most of its loans.Banks have shown willingness to take over land parcels to avoid putting a non-performing asset (NPA) tag on the two Jaypee group companies. No project has been launched on these lands so far.

2. Buy Lanco Infrastructure Ltd at Rs.5.88, T: Rs.9, SL: Rs.5.40 (strict). The company is slowly coming into black, after lot of debt restructuring. 

3. Unitech Ltd has nearly touched my second target of Rs.6 (Rs.5.99 intra-day in BSE), therefore, book some profits.

4. Keep accumulating Reliance Communications Ltd (Rs.47.20) and hold for some time, to get some very good returns in the short term (less than 90 days). This is a no-brainer - you need to buy and forget for some time, just like your Fixed Deposits. 

5. Gammon Industries Ltd (Rs.14.89) hit the 20% upper circuits today. And Gammon Infrastructure Ltd (Rs.5.47) is up more than 6%. The infrastructure and real estate stocks should do well, after the news of Dr.Rajan's exit, as the government of India is likely to stop INFLATION TARGETING and focus on GROWTH. 

The Nifty is now as 8184, up ~14%. But I hope by the end of the day, it should close above 8200, with a spurt in the Infrastructure stocks, because of the NDA government now focusing on growth. Which means the interest rates, will now have a more pronounced downward trajectory, compromising a part of the inflation.
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