Tuesday, January 16, 2018

WINNING STROKES
Trading for the week started on a jubilant note as key benchmark indices posted decent gains, with indices hitting fresh record highs. The barometer index, the S&P BSE Sensex, rose 251.12 points or 0.73% to settle at 34,843.51. The Nifty 50 index advanced 60.30 points or 0.56% to settle at 10,741.55. Data showing India's industrial production surging at 25-month high pace of 8.4% in November boosted sentiment. Both the Sensex, and the Nifty, hit record highs on intraday as well as on closing basis. Key indices gained for the third straight day.

Stocks of public sector banks nudged higher. Stocks of private sector banks were mixed. IT major Infosys nudged higher after reporting good Q3 December 2017 results. Housing finance major HDFC surged after the company's board approved raising funds upto Rs 13000 crore.

Key indices had opened on a firm note and extended intraday gains till mid-morning trade. Both the key indices hit fresh record highs. Intermittent selling pulled indices off their intraday peaks later during the session.

The Sensex rose 251.12 points or 0.73% to settle at 34,843.51, a record closing high. The index surged 371.30 points, or 1.07%, at the day's high of 34,963.69. The index rose 94.82 points, or 0.27%, at the day's low of 34,687.21.

The Nifty advanced 60.30 points or 0.56% to settle at 10,741.55, a record closing high. The index surged 101.40 points, or 0.95%, at the day's high of 10,782.65. The index advanced 32.55 points, or 0.3%, at the day's low of 10,713.80.

Among the secondary indices, the S&P BSE Mid-Cap index dropped 0.04%. The S&P BSE Small-Cap index advanced 0.25%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,534 shares advanced and 1,386 shares declined. A total of 197 shares were unchanged.

The total turnover on BSE amounted to Rs 5268.62 crore, lower than turnover of Rs 5391.20 crore registered during the previous trading session.

Among the sectoral indices on the BSE, the S&P BSE Bankex index (up 1.25%), the BSE Consumer Durables index (up 1.13%) and the BSE Basic Materials index (up 0.95%) outperformed the Sensex. The BSE IT index (down 0.48%), the BSE Telecom index (down 0.98%), the BSE Auto index (down 0.89%) and the BSE Oil & Gas index (down 0.7%) underperformed the Sensex.

Stocks of public sector banks nudged higher. IDBI Bank (up 3.03%), Indian Bank (up 1.87%), Bank of Baroda (up 0.89%) and State Bank of India (up 0.15%) gained. Punjab National Bank (down 0.75%) and Bank of India (down 0.18%) edged lower.

Stocks of private sector banks were mixed. ICICI Bank (up 3.73%), HDFC Bank (up 1.47%), Kotak Mahindra Bank (up 1.39%) and Axis Bank (up 0.89%) gained. IndusInd Bank (down 1.41%) and Yes Bank (down 1.38%) declined.

IT major Infosys rose 0.19% at Rs 1,080.40 after consolidated net profit rose 37.65% to Rs 5129 crore on 1.29% growth in net sales to Rs 17794 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours on Friday, 12 January 2018.

The sharp jump in Infosys' net profit in Q3 December 2017 is mainly on account of the conclusion of an advance pricing agreement (APA) with the US Internal Revenue Service (IRS). This has also led to an increase in basic earnings per share (EPS) by Rs 6.29 for the quarter.

On a consolidated basis, the company expects its revenues for the fiscal year ending 31 March 2018 (FY 18) to grow 5.5%-6.5% in constant currency terms. The guidance in constant currency is unchanged compared with the revenue growth guidance issued by the company at the time of announcing Q2 September 2017 earnings.

The revenue is expected to grow 6.5%-7.5% in dollar terms in FY 18. The guidance in dollar terms is unchanged compared with the revenue growth guidance issued by the company at the time of announcing Q2 September 2017 earnings.

TCS declined 0.93% at Rs 2,747.20. The company announced an expanded strategic technology partnership with Marks and Spencer plc to enable the iconic retailer to become a digital-first business. As part of the retailer's five-year plan to transform its business, the retailer aims to make its technology function deliver more commercial opportunities. The announcement was made during market hours today, 15 January 2018.

Housing finance major HDFC surged 6.17% at Rs 1,869.95 after the company said that its board approved issuing equity shares up to an aggregate amount not exceeding Rs 13000 crore through a combination of a preferential allotment and qualified institutions placement, subject to shareholders' approval through postal ballot. The announcement was made on Saturday, 13 January 2018.

L&T was down 0.46% at Rs 1,323.10. The company said that its construction division has secured orders worth Rs 1310 crore across various business segments. The announcement was made during market hours today, 15 January 2018.

Lupin dropped 0.39% at Rs 915.60. The company said that it has made a foray into the over the counter segment under the Lupin Life Consumer Healthcare umbrella with the pan India launch of Softovac. It is used to cure constipation and irregular bowel habits. The announcement was made during market hours today, 15 January 2018.

On the macroeconomic data front, India's industrial production surged at 25-month high pace of 8.4% in November 2017 over November 2016, while showing a sharp acceleration in growth from the 2% increase in October 2017.

India's inflation based on consumer price index (CPI) surged to 17-month high of 5.21% in December 2017 compared with 4.88% in November 2017. The core CPI inflation increased to 4.96% in December 2017 compared with 4.75% in November 2017. The cumulative CPI inflation was lower at 3.25% in April-December FY 2018 compared with 4.85% in April-December FY 2017. Both IIP and CPI data was announced after market hours on Friday, 12 January 2018.

The government today, 15 January 2018 said that India's inflation based on monthly wholesale price index (WPI), eased to 3.58% (provisional) for the month of December 2017 as compared to 3.93% (provisional) for the previous month and 2.1% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.21% compared to a build up rate of 3.71% in the corresponding period of the previous year.

Overseas, European stocks edged lower. Most Asian stocks closed higher amid optimism on global growth prospects.

US stock markets will remain shut today, 15 January 2018, for the Martin Luther King Jr. holiday. Better-than-expected quarterly earnings from some financial majors and robust economic data boosted the benchmark US indices to fresh closing highs on Friday, 12 January 2018. Among macro data, US Commerce Department said retail sales increased by 0.4% in December, in-line with estimates.

#TV Vision Ltd hit another buyer freeze today in the opening trade. This stock has been hitting upper circuits from the day it was recommended in this blog at Rs.21. Today it closed at Rs.27.65, in the NSE.

#The share of Housing Development & Infrastructure Ltd or HDIL today made an intraday high of Rs.69.15 in the NSE before giving a close at Rs.65.55 up 2.66%, after a long time. There was news reports that the Finance Committee of the Board at its meeting held on January 12, 2018, approved the allotment of two crore warrants at an issue price of Rs.70.5 per warrant to Sarang Wadhwan, promoter of the company. According to India Infoline: "The promoters had also been allotted two crore warrants on November 14, 2017. The total promoter holding as of Q2FY18 was 36.49% out of which 12.1% is pledged. We believe the total promoter shareholding after the exercise of the warrants would rise to ~42%. This is a positive development for the company. Capital infusion by promoters increases the confidence in future prospects of the company". 
The brokerage house further mentioned that HDIL as of Q2FY18 had Land reserves of 199.29 mn sq.ft. HDIL has operations in the Mumbai Metropolitan Region (MMR) with projects in Residential (65%), Commercial and Retail (6.4%) and SRA (28.6%) as of Q2FY18. It is one of the largest land bank owner in MMR region. Management is now focusing more on affordable housing segment through which it plans to launch apartment in Berkeley square (Ghatkopar) with a price range of Rs.50 lacs to Rs.1 crore from Jan 2018.
India Infoline expects a pickup in pre-sales figures after launch of Mulund Phase II of the Nest and Pant Nagar in Gharkopar under budget homes by FY18E. On a consolidated basis, HDIL's net profit rose 64.32% to Rs.60.88 crore on 26.09% decline in net sales to Rs.161.52 crore in Q2 September 2017 over Q2 September 2016. HDIL has a significant operations in the Mumbai Metropolitan Region.
It is pertinent to mention here that on November 17, 2017 Morgan Stanley (France) S.A.S. bought 29,18,400 shares of Housing Development and Infrastructure (HDIL) at Rs.64.26 on the NSE. We can look forward for immediate targets of Rs.71-77 within this week. Stay invested.

#The scrip of 3i Infotech Ltd, where who's who of the Indian Corporate world and big shots hold around 52.11% stake, even after superb Q3FY18 surprisingly hit the lower circuits at Rs.8.55 in the NSE. The volume as usual in the counter was huge and was around 16,587,945. In absence of any negative news it seems those who entered earlier, at around Rs.5 has offloaded their holdings, leading to the stock hitting the lower boundaries set by the exchanges. However, this is investment grade scrip as it has large institutional investors, whose list is giving below, holding stakes:
  • Financial Institutions/Banks hold 31.61%, 
  • Insurance Companies hold 1.63%, 
  • Foreign banks hold 14.65%,
  • Reliance Capital holds 1.85%, 
  • SREI Equipment Finance Ltd holds 1.01%,
  • Tata Capital Financial Services Ltd holds 1.75%, 
  • MACSF Epargne Retraite hold 3% and 
  • Energy Management hold 3%.
The Company today announced that it has allotted 26,39,09,361 equity shares of Rs.10 each and 44,49,82,211 0.10% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs.5 each ('Class B Preference Shares') at par on a preferential basis to Srei Multiple Asset Investment Trust, a category II alternative investment fund within the meaning of the Securities and Exchange Board of India (Alternative I.nvestment Funds) Regulations, 2012 (on behalf of or for appropriation to its scheme, Vision India Fund) on January 15, 2018. It is a board managed company like ITC Ltd, Subex Ltd, etc and doing fine under the current leadership. The stock would soon start hitting the upper circuits -- accumulate on declines. I am looking for targets of Rs.50-plus in the coming days.

#The stock of MBL Infrastructure Ltd today hit the lower circuits of around Rs.27.35 before closing at Rs.27.55 ahead of the crucial verdict of NCLAT. 
But what most investors I believe don't understand is that the verdict is regarding whether the promoters can bid for their company or not. If the promoters are not allowed then someone or some strategic investors would buy the company and we could have open offers (on this logic my recommended IVRCL Ltd rose 4.69% today and closed at Rs.6.7) coming from the new entity, which will be superb for the shareholders. Hence, I don't understand what is the fear in the minds of some of the investors, regarding MBL Infrastructure Ltd when the company has a manageable debt of around Rs.1700 crore against a humongous order book of around Rs.7500 crore and the stock is trading at the price of dirt, against this backdrop. Anyway, I cannot change your mental stupidities and aberrations overnight, if you yourselves do not rectify them - do what you think is the best according to you. I am still holding my target of Rs.110, in the medium to long term. A stock market is not a machine that, as soon as you put your funds it would start to multiply - investors needs to have patience and should have thorough knowledge of equity investing before he/she could eke out some meaningful gains from the markets.

#The share of Sri Adhikari Brothers Television Network Ltd today hit another buyer freeze at Rs.35.95 today. The next targets are Rs.39-41. 

#I have recommended a small cap stock from the Telecom sector to the Premium  Members. Hope the stock will do well in the coming days. I have another stock which could become 3-4 times in a couple of years. Those who have a fund capacity of at least Rs.5 lakhs can contact me at: suman2005s@rediffmail.com, for investing in the scrip. The money to be shared in this case will be in the ratio 50:50 and not the usual 25% which my firm takes in profit sharing package. There will be minimum risk involved, as it will be pure investment and we will exit at the SL in case the scrip does not perform as expected or goes down and  invest in another  one. 

#Gammon Infrastructure Projects Ltd which was recommended in this blog at around Rs.2.95, today touched Rs.4.60, intraday before closing at Rs.4.45, up 11.25  intraday. The stock is near my 1st target of Rs.5.

#Those who have sent me documents to open  demat accounts with BMA Wealth Creators  Ltd should give me some time for the things to get settled down at my end -- processing takes time. After the account gets activated, you would be required to deposit a cheque of Rs.1.5 lakhs as seed capital to start trading. This minimum amount to get my Premium  Service for FREE is for those  who have already sent me the documents or are slowly sending me the same. From 16th January, '18, the amount is set to rise to Rs.2 lakhs. Also, the price of my Premium Service will increase to Rs.18000 per year from 16th January, 2018.
Moreover,those who lost money due to demonetization, can start in a fresh way with a minimum amount to cover all your losses. I will help you in this case, following the profit sharing model.
~ with inputs from Capital Market - Live News
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