Winning Strokes

Yesterday, the domestic bourses closed in the red following the Ukraine - Russia border tussle. The BSE Sensex closed at 57,683.59 down 149.38 points (-0.26%), while the Nifty ended the day almost flat at 17,206.65 down 69.65 points (-0.40%). However, the selling was more pronounced in the small and mid cap segments, due to the IMAGINARY FEAR of escalation of the crisis.

Interestingly, this kind of border skirmishes are regular in India (with Pakistan) in the north western and western side of Indian border. Kashmir Issue continues to drain India's resources, but we see no impact on the world economy.

But surprisingly, this issue between Ukraine & Russia is getting blown out of proportion, due to highhandedness of the media. The world media should behave responsibly, so that peace returns smoothly.

It is pertinent to mention that Ukraine is a very small country, with its GDP size [184.92 billion (nominal, 2022 est.)] of less than that of Uttar Pradesh [₹17.05 trillion (US$230 billion) (2020-21)].

Hence, how can any future war with Russia affect the world economy except creating HOT AIR is beyond my comprehension and understanding. Therefore, my suggestion would be to accumulate/average good stocks at reasonable valuations for 3/4 months perspective.

#A2Z Infra Engineering Ltd (Rs.9.20) could benefit from the launch of 5G Services in India. Company has tied up with Telesonic Network Ltd (an Airtel group company) for work to be carried out on continuing basis at various circles including obtaining permission from applicable authority for HDD/Open Trench/Moiling/First level restoration/Duct Pulling up to 4 number/

DIT/All Fiber Blowing & Pulling/Splicing/Manhole and Hand hole Supply and installation/ODF and OTB installation/AT Testing and sign off/Handover to O&M Team and such other work as may be specified/required from time to time. Photo: Indiainfoline.

In the Renewable Energy space, Company collaborated with sugar mills for setting up 3 (three) power plants on Built, Own, Operate and Transfer (BOOT) basis for a period of 15 years in the state of Punjab and to ensure continuous supply of Refuse derived Fuel (RDF) to the said Power Plants, Company developed an indigenous waste processing plant for running the said Plants on Refuse Derived Fuel (RDF) from Municipal Solid Waste.

Non- supply of bagasse by the Co-operative Sugar Mills, various implied delays in approvals and execution of aagreements including delay in handing over of land, and there are disputes between the concerned parties with ongoing arbitration proceedings, the execution of Project by the Company has become unviable despite its best bona fide and consistent efforts.

Due to these disputes with sugar mills in respect of cogeneration power plants, the management of the Company may decide to shift these power plants to other locations subject to availability of RDF at that location(s).

However, due to Covid and above mentioned issues all 3 (three) power plants are non - operational. Once they become operational and become EPS accretive, the stock would shoot up like a Rocket. At the moment it is on the Asset side of the Balance Sheet.

By the way, the cost of setting up (or the price of) a RDF Technology plant in India is Rs.3 crore/unit, which will give you a rough estimate of the valuation of the 3 (three) Power Plants. 

The Company has its overseas presence in #Nepal, #Uganda and #Tanzania.

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#Telecom #Infrastructure #Projects is the main business activity of the Company. Major offerings by Company in Telecom Infrastructure EPC are supplying, laying and maintaining of Optical Fibre Cables (OFC) networks. EPC services offered by the Company under this segment include:

• Optical Fiber Cable NLD/Access Networking Construction & Maintenance.

• Network Integration.

• Telecom Infrastructure Operation & MaintenanceServices.

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Under Engineering Services segment A2Z Infra Engineering Ltd pursues infrastructure projects like Sewage Network & Treatment Plants, Gas Distribution Networks, and Metro projects in select cities.

It also completed projects in various states of India including Jammu & Kashmir, Rajasthan, Orissa, Bihar, Arunachal Pradesh, Jharkhand, Kerala, Chhattisgarh, Haryana, Uttar Pradesh and Himachal Pradesh.

The stock which is also into Renewable Energy space (compare it with Suzlon Energy Ltd) is trading at around half its Book Value (Rs.18.08), which is absolutely a misnomer. The current market cap of Rs.162 crore also doesn't make any sense.

#The stock of Shriram EPC Ltd (Rs.8.76) closed in the Green yesterday, after I confirmed that the company is not looking to sell its renewable energy company, Orient Green Power Ltd (Rs.12.70). The stock of Orient Green Power needs to hold Rs.11.70/11.90, for any sustained upside from the current price.

#Global Vectra Helicorp Ltd (Rs.51.90) closed flat yesterday. I feel most of the market has probably not understood the December 2021 quarter results. 

In the Q3FY22, the total income of the company came as Rs.91.58 Cr as against Rs.87.26 Cr in the September, 2021 quarter and Rs.91.55 in the December, 2020 quarter. The profit before tax in Q3FY22 came as Rs.1.37 Cr against a loss of Rs.9.01 Cr in the September, 2021 quarter and loss of Rs.2.93 Cr in the December, 2020 quarter, showing a marked improvement in the fundamentals. However, though the OPM came at 29.47% (24.73%), the Cash EPS remained flat at Rs.12 for the December, 2021 quarter.

I would therefore, suggest you to accumulate the shares of this Helicopter company during the market declines, for targets of Rs.120/180. 

I feel the stock is unnecessarily languishing in the T - group since more than a couple of months, due to faulty surveillance mechanism.