Today's Calls

1. Buy Engineers India Ltd at Rs.150.30, T: Rs.175, SL: Rs.146. Engineers India Limited (EIL) is an engineering, procurement, engineering consultancy and construction (EPC) company in the petrochemicals and hydrocarbons industry.

The buyback price has been fixed at Rs.157 per equity share for a total aggregate of Rs 658.80 crore.  Board of Directors of Engineers India Ltd in its Board Meeting held on March 16, 2017 have declared an Interim Dividend of Rs.2.50 per share (on the face value of Rs. 5 each).

2. Those who are holding DLF Ltd (Rs.154.20) are suggested to keep a SL at Rs.153. But for medium term I would like to shift to Idea Cellular Ltd (Rs.87.40), if DLF Ltd continues to underperform.

Today's Calls

1. Buy Punjab National Bank at Rs.150.50 (BSE), for targets of Rs.157-161. Today many of my earlier recommended bank stocks (Dena Bank, UCO Bank, Federal Bank, etc) are all up; after the RBI decided to keep the repo rate unchanged.

2. Those who have entered Jet Airways Ltd are suggested to exit the counter if Rs.109 is broken on closing basis and Rs.104 is broken, intra - day.

3. Those who are holding Idea Cellular Ltd (Rs.88.40) can continue to add th scrip on declines. Today also the stock is moving up with huge volumes. The targets of Rs.123-127 are still intact.

4. Buy DLF Ltd at Rs.156-157, for very short term weekly targets of Rs.161-162.

5. Those who have been accumulating Gammon India Ltd must be happy today, as the stock touched my first target of Rs.12 and is now trading at Rs.11.70, up more than 11% intraday. The investors can do well to book profits at Rs.11.70-12 and wait for dips for re-entry.

Today's Calls

1. Buy Jet Airways Ltd at Rs.522-534, T: Rs.542The Oil Marketing Companies (OMCs) have cut the Aviation Turbine Fuel (ATF) price by 5.2% to Rs 51,482/kL in Delhi from April 1, 2017 -- this is likely to have significant positive effects on the bottom lines of Aviation companies, like Jet Airways. Meanwhile, Jet Airways, one of the fastest growing airlines of the country, has reportedly decided to start morning flights from Bhopal to New Delhi from April 12, 2017. The company had earlier announced its plans to further strengthen its domestic network and provide guests with greater choice to connect between Metro cities and Tier-II towns.
Jet Airways is India’s premier international airline which operates flights to 67 destinations, including India and overseas. The company’s robust domestic India network spans the length and breadth of the country covering metro cities, state capitals and emerging destinations.

2. Those who are holding the shares of Idea Cellular Ltd (Rs.87) should continue to add the scrip on all declines. The Free Service of Reliance RJio is coming to an end on 15th April, 2017. This is a big trigger for the telecom sector.

Winning Strokes: Think Different

1.Today, my recommended Idea Cellular Ltd at Rs.85.10, today touched Rs.88.10 in the BSE,

before closing at Rs.87.65, up more than 3%. The stock today moved up with volume which is around 4-times yesterday's volume. Accumulate the scrip with a price target of Rs.123. Today most of the Aditya Birla group stocks were up.

2. My recommended Future Enterprises Ltd at around Rs.18-18.50, today reached my 3rd and final short term target of Rs.32 (intraday: Rs.32.60), before closing at Rs.30.70 in the BSE. The traders can book profits and invest in Idea Cellular Ltd, as the it Gets Set To Take On Airtel With Its Own Payments Bank.

3. Today Gammon India Ltd (Rs.10.28) closed above a major resistance at Rs.10.20. The investors should do well to hold the scrip with a SL at Rs.10.10. On the fundamental front, the company is doing fine. However, unless and until it closes above Rs.10.45, in both the exchanges, it may remain rangebound.

4. Today, my recommended Reliance Power Ltd (Rs.50.35) touched Rs.50.80 in the BSE. The stock was recommended around Rs.44. Those who have still not booked profits can look for targets of Rs.52-53, in the coming days. However, please keep a SL of Rs.48.60 for any short term trade.

5. Rolta India Ltd recommended at around Rs.58-59, today touched my first target of Rs.62, in the BSE. The investor can hold the scrip with 5% trailing SL.

6. Another, ADA Group company today made a huge upmove and closed above Rs.40.50, in the NSE after a long time. Those who were not so happy seeing me recommending even at near Rs.31 or near 52-week price, might be a little relieved today. The worst in the Indian telecom sector seems to be over.

Today's Calls

1. Buy Idea Cellular Ltd at Rs.85.10, T: Rs.123, SL: Rs.81. Aditya Birla Nuvo Ltd. has got the final nod from the Reserve Bank of India (RBI) to start a payments bank in India, the company said in a stock exchange filing on Tuesday. The stock is currently trading above its 150D SMA. Today it needs to close above Rs.85.35, to confirm its uptrend. Fundamentally the stock is ripe for investment.

2. Those who are holding Reliance Power Ltd from Rs.44 levels, are suggested to book profit st Rs.50, and wait for dips around Rs.47-47.50 for fresh entry.

Today's Calls

1. You can take fresh positions in UCO Bank Ltd at Rs.36.40, T: Rs.39-42, SL: Rs.34.70. As

long as the stock is above Rs.36.30, the bulls should not have much problems. The promoters holding in the company stood at 76.67 % while Institutions and Non-Institutions held 16.09 % and 7.25 % respectively. The scrip is currently trading above

Photo: Blomberg

its 21, 50, 100 and 150 DSMAs.
Moreover, strapped for capital, public sector banks are being asked to sell non-core assets as a way to generate funds for growth and to provision against a growing pile of bad loans. 
In another major development, the RBI has advised UCO Bank, IDBI Bank and Indian Overseas Bank to stay off risky assets so that the financial health of these lenders is not stressed further. So, the worst seems to be over for the bank. Meanwhile, the employee unions and Uco Bank management have signed an MoU for a turnaround plan, which will decide the future course of action in the bank’s recapitalization

2. Those who short term traders and have entered Saregama India Ltd (Rs.242), should note that the scrip is finding difficulty to cross Rs.244-245 ranges. One can therefore book some profits and wait for intraday dips to enter. The long/medium term investors can however, hold on with aSL of Rs.231.

3. Fresh positions can be initiated in Tata Motors Ltd at Rs.469, T: Rs.610, SL: Rs.465. The company said its wholly owned subsidiary TAL Manufacturing announced that BRABO-- the first Made-in-India robot -- has received “CE” certification for commercial sale in the European market.

4. Those who are holding the shares of the construction major, Gammon India Ltd (Rs.10) should add in intra-day dips. This stock is likely to give multi-bagger returns in the short to medium term.

Today's Calls

1. Fresh positions can be initiated in Reliance Power Ltd at Rs.48, T: Rs.54, SL: Rs.46. I have been recommending the scrip since Rs.42-43 levels. Now after a brief consolidation the scrip is expected to move up.

2. Yesterday, Saregama India Ltd (Rs 336.50) crossed Rs.240, intraday; today also it touched Rs.244. However, it seems the stock will consolidate around Rs.232-244, before starting the next up.one. The investors can take their trading decisions accordingly.

3. Gammmon India Ltd ( Rs.9.75), has made a bottom of sorts. The investors are suggested to buy in bulk the shares of this construction major.

4. My recommended Reliance Defence and Engineering Ltd (Rs.68.25) today made a high of Rs.69.90, which is near my target of Rs.72.

5. Suzlon Energy Ltd (Rs.19.25), recommended at around Rs

7-8, today made a 52-week high of Rs.19.85. The traders can now look for target of Rs.22, I'm the coming days.

6. Buy Jet Airways Ltd at Rs.529, T: Rs.592, SL: Rs.482. The stock is on a major uptrend. Jet Airways and Air India will benefit from the ban imposed by the US government on large electronic devices from cabin luggage on passenger flights from eight Muslim-majority countries, as business travellers prefer to work on laptops and iPads while on long-duration flights, industry executives told ET. 

Today's Calls

1. Buy Saregama India Ltd at Rs.231-233, T: Rs.290 - 300, SL: Rs.225. According to some

media reports: Saregama, a company from the RP-Sanjiv Goenka group, is turning a new leaf, betting on new technology and its legacy — a huge portfolio of Indian music, with 1.17 lakh tracks. 

Moreover, Saregama India Ltd's share of Indian music Industry is 11% and the Music Industry's growth till 2016 was 100% in four years. Not only that even the expansion of Radio Stations is positive for the shareholders of Saregama India.

2. Those who are holding Rolta India Ltd (Rs.59) could see the scrip touch Rs.71-72 in the short to medium term. So keep accumulating in dips.

3. Those who are holding the shares of Gammon India Ltd can look for immediate targets of Rs.12 - 12.50, as GST gets implemented by July, 2017.

4. Buy Allahabad Bank Ltd at Rs.73.05,  T: Rs.82 - 86, SL: Rs.72.60. 
The Board of Directors of Allahabad Bank had approved raising of BASEL III compliant Additional Tier 1 Perpetual Bonds aggregating up to Rs.1000.00 crore through Private Placement.
The Bank has on March 17, 2017 successfully raised additional Tier 1 (AT 1) capital of bank through private placement of AT1 Perpetual Bonds aggregating to Rs. 300 crores (including green shoe option of Rs. 100 crores) at an annual coupon of 11.15% p.a., discovered through electronic bidding mechanism of NSE (NSE EBP). Meanwhile, the BANKEX is now trading at  24503.73 up 101.79 points or 0.42%.

5. Buy UCO Bank at Rs.36.10, T: Rs.39 - 41, SL: Rs.35. There is no need of SL, as the stock should steadily move up, following the Bankex. UCO Bank on 29 May, 2017 announced that its board has approved raising Rs.1,000 crore through issuance of tier 2 bonds to LIC.

Today's Call

1. Those who are still holding the shares of Reliance Defense and  Engineering Ltd, can

continue to add on declines. The scrip is entering the F&O segment, which is expected to give it the required bounce.
Reliance Infrastructure estimates Indian defence business opportunities at Rs.15 trillion over a 15-year period and offset export opportunity at Rs.77,000 crore.

Ambani’s entry into the defence business started with its acquisition of Gujarat-based Pipavav Shipyard about two years ago The Pipavav Shipyard has now been renamed Reliance Defence and Engineering Ltd.
In February, Reliance Infrastructure formed a strategic partnership with Dassault Aviation to form a joint venture, Dassault Reliance Aerospace Ltd, to execute offset contracts worth up to Rs.30,000 crore, the firm said. India had signed an agreement with France to buy 36 Rafale fighter jets from Dassault Aviation.
Moreover, as long as it is above Rs.61.65, there should not be much problem for the bulls. The short term targets of Rs.71-72, are still intact.

2. If IVRCL Ltd (Rs.4.95) does not close above Rs.5 today, then exit the counter, as there could be some problem with the company which, perhaps the market knows.

3. Accumulate the shares of Gammon India Ltd (Rs.10.10) as the company is on the path to recovery, as is evident from the last quarter results.

4. Those who are holding the shares of Tata Motors Ltd (Rs.473.80) can continue to add on declines. Many brokerage houses are bullish on the scrip.

5. Rolta India Ltd is giving opportunities for medium to long term investors for big gains. Accumulate at Rs.58.20, for targets of Rs.97-103.

5. Making money from the market on consistent basis, has become very difficult since last 9-10 months, especially after demonetisation; even for experts. Therefore, if you are a new comer, always consult veterans in this game. Whether, you follow their suggestions or not is a different issue, but at least please do take time to hear the voices of experts in complex trades.

Today's Calls

1. Buy Gammon India Ltd at Rs.10.20, T: Rs.12, SL: Rs.8.70. The stock of Gammon Infrastructure is up more than 5% today. The company reported a narrower losses for the December quarter. Mumbai-based Gammon India Ltd posted a standalone loss of Rs.20.53 crore for the three-month period that ended on December 31, 2016, compared with Rs 119.06 crore for the corresponding period a year ago.

2. Those who are holding IVRCL Ltd (Rs.5.05) should continue to add on intra day dips. The infrastructure stocks will now run up.

IVRCL Ltd: Some Thoughts

CMP: Rs.5.05

Photo: Indian Tollways

The Hyderabad based infrastructure player IVRCL Limited will get Rs.400 crore from the sale of three road projects (Salem Tollways Limited, Kumarapalayam Tollways and Chengapalli Tollways) -- Of this it will receive Rs.315 crore by 31 March and the balance in September 2017, according to some sources.

Though lenders are reluctant to give new loans, last year it was sanctioned a fresh non-fund credit of Rs.1,800 crore in bank guarantees and letter of credit, in addition to a cash credit limit of Rs.200 crore as part of the CDR deal.

The company has an order book of around Rs.18,000 crore.

Apart from monetising the assets, there are six more in line, it has decided to focus on realising the claims amounting to over Rs.6000 crore from various government projects. 

The company wants to utilise the new arbitration law that brings down the time limit for the settlement of a commercial dispute, for this purpose.

At a joint lenders forum meeting for IVRCL, banks had earlier decided to invoke strategic debt restructuring. Around Rs.7,500 crore worth of loans given to IVRCL has been converted into shares by bankers, including State Bank of India and IDBI Ltd, allowing them to own 51%.

SDR allows banks to convert debt into equity and make management changes if the company fails to achieve certain milestones.

Last year the company said: 

“Pursuant to provisions of Companies Act, 2013 and Sebi (Issue of Capital Disclosure Requirement) Regulations, 2009 and implementation of SDR, the company has made an allotment of 6,46,810 equity shares at a price of Rs.8.765 each, to Bank of Nova Scotia".

Those banks that hold a stake in the company are Andhra Bank ICICI Bank, Indian Overseas Bank, IDBI Bank, Canara Bank and Corporation Bank. Now this prove of Rs.8.765 somewhat forms a datum for future price discoveries.

Now that Banks have already taken control of IVRCL Ltd, the Hyderabad-based construction company and have converted loans into equity, it makes sense to find a buyer sooner rather than later.

The infrastructure fund of multi-asset manager IDFC Alternatives has been one of the most active buyers of operational road assets in India, ahead of peer investors including US-based I Squared Capital and Canada’s Brookfield Asset Management.


On the other side, Piramal Enterprises Ltd, controlled by billionaire Ajay Piramal, which said in 2014 that it was looking to buy a number of road assets, is yet to announce a deal.

The Indian infrastructure sector has an estimated capacity to absorb $1 trillion. India plans to invest almost Rs4 trillion in the next financial year in creating and upgrading infrastructure.

According to a report last year by investment bank Ambit Corporate Finance and the City of London, global pension funds and sovereign wealth funds may invest up to $50 billion in India’s infrastructure sector over the next five years.

Meanwhile, the A$127 billion (Rs6.4 trillion) Australian Government Future Fund is looking to invest in the Indian infrastructure space, including roads, telecommunications and clean energy.

Recently there were media reports that Infrastructure Leasing and Financial Services Ltd (IL&FS) has partnered with global private equity (PE) firm Lone Star to jointly invest in stressed infrastructure projects in India.

Lone Star Funds and IL&FS have collaborated to jointly invest $550 million, which could result in asset purchases of up to $2.5 billion, the companies said in a joint statement.

A interesting point to note is that on November 2008, the Maharashtra (state) PWD, then headed by former minister Chhagan Bhujbal, had proposed to widen the 20 km Sion-Panvel Highway (Mumbai -- Navi Mumbai connectivity) with a new toll naka at Kamothe (Navi Mumbai). In June 2009, a tender notice was issued and the IVRCL-Kakade Infrastructure Pvt Ltd (KIPL) joint venture—Sion-Panvel Tollways Ltd—bagged the contract by offering the lowest viability gap fund of Rs 390 crore. Now KIPL is owned by BJP MP Sanjay Kakade. So, at present IVRCL Ltd (Rs.5.05) has some Narendra Modi (BJP) connections -- both at the centre and in Andhra Pradesh, we have NDA rule.

In mid-February, Finance Minister Arun Jaitley presented his 2017 Union Budget to the Parliament where he outlined his plan for infrastructure and railways.

The funds allow state-owned Indian Railways to modernize its infrastructure and service operations, which includes laying 3,500 kilometers of new tracks in the coming year (2017-18) and feeding 7,000 stations with solar power in the medium term. Jaitley also announced a new Metro Rail Act to streamline existing laws, and allow greater private participation in construction and operation. It is to be remembered that IVRCL Ltd is also a player in the Railway sector.

India's infrastructure development is set to accelerate and meet global benchmarks even if the private sector is not in a hurry to grab the vast investment opportunities that are opening up, top cabinet ministers said at the Economic Times India Infra Summit 2017.

The government has set an ambitious target of laying roads up to 40 km per day in the country. Till February in FY16-17, about 6,500 km of roads construction has been done, seeing a growth from the previous financial year, when just 6,000 km of roads have been laid.

Therefore, we can look forward for the buy out of the stressed assets IVRCL Ltd soon. investors can therefore accumulate the scrip of IVRCL Ltd in dips, for Short term targets of Rs.8-9.

Today's Calls

1. Buy Reliance Defense and Engineering Ltd at Rs.63.70, T: Rs.72-78, SL: Rs.61. The stock

Photo: The Economic Times

has now entered into the F&O segment.

2. Those who still holding the shares of my recommended Suzlon energy Ltd (Rs.19.10), can look for targets of Rs.21-22, in the coming days. This scrip has also entered in the F&O space.

3. Those who have entered JSE Energy Ltd (Rs.62.25) yesterday at around Rs.60.80, can continue to hold with a SL of Rs.59. Recently, there were some positive developments in the company.

4. Buy Hindustan Oil Exploration Ltd at Rs.72.70, T: Rs.78-82, SL: Rs.68.60. The Union Cabinet’s decision on Wednesday to grant extension to production sharing contracts for 10 blocks will benefit Cairn India Ltd (CIL), Oil and Natural Gas Corporation (ONGC), Essar Oil, Focus Energy, Hindustan Oil Exploration Company (HOEC), and Gujarat State Petroleum Corporation Ltd (GSPC).
The contracts for these pre-NELP (New Exploration Licensing Policy) exploratory blocks will be extended for 10 years from the expiry of their contracts. The move, the government said, will help accelerate indigenous production of hydrocarbons from existing blocks and act as a progressive step towards achieving the target of 10 per cent reduction in import of crude oil by 2022.


5. Those who have entered the turnaround infrastructure major, IVRCL Ltd (Rs.5.20), can look for targets of around Rs.7-8, in the coming days.  IVRCL Ltd is now basically (majority stake) owned by a consortium of lenders (Banks), hence accumulated debt is no longer a big problem. However, what seems to be a little bothering is working capital requirements.
Moreover, since the conversion price is around Rs.8.765 (~Rs.9), hence the scrip is likely to move towards this new found datum.

Today's Calls

1. Buy JSW Energy Ltd at Rs.60.90, T: Rs.66-72, SL; Rs.59. JSW Energy, part of the Sajjan

Jindal-led JSW Group, is believed to be in the race for buying out the thermal power assets of Monnet Power and Jindal India Thermal Power Ltd (JITPL) in Odisha. Monnet Power’s 1,050 Mw coal-based power plant near Angul was in advanced stage of commissioning.  Monnet Power’s parent company, Monnet Ispat & Energy had won the Mandakini coal block in Odisha in competitive bidding, it surrendered the block later on grounds of economic unviability. Monnet Power had accumulated debt in excess of Rs 5,000 crore. 

2. Those who are holding the shares of Tata Motors Ltd (Rs.469.50), can continue to hold the same with a SL: Rs.459. The stock is on an uptrend, and is likely to move above Rs.470, in a short time.

3. Buy IVRCL Ltd at Rs.5.15, T: Rs.7, SL: Rs.4.60.
There were earlier media reports that Essel Infraprojects Ltd is in advanced talks to buy a controlling stake in Hindustan Dorr-Oliver (HDO), a publicly traded unit of infra developer IVRCL Ltd.
Meanwhile, the lenders to IVCRL had decided in December last year to convert their debt in the company to equity under the strategic debt restructuring (SDR) mechanism. On 24 February, IVRCL told stock exchanges that State Bank of India, on behalf of the lenders, has informed the company that lenders have approved the SDR conversion package. Lenders converted part of the firm’s debt into equity at a price of Rs8.765 per share. After the conversion, the lenders collectively hold 51% or more of the total share capital of the company. Infrastructure major IVRCL reported narrowing of its net loss to Rs.249.27 crore for the third quarter ended December 2016. The company had registered a net loss of Rs.345.47 crore in the same period a year ago.

However, net income from operations during the quarter also declined to Rs.397.88 crore as against Rs.501.46 crore in the year-ago period.
Total expenditure fell to Rs.479.88 crore during October-December 2016 as against Rs.700.49 crore in the previous financial year.

4. Those who have entered Panacea Biotech Ltd at Rs.155, can book some profits at Rs.161 and wait for dips to enter.

Today's Calls

1. The Nifty (spot) is expected to get support at 9010 - 9030 ranges, which is just arms length

from the current value of Nifty 9,053.45 which is now down 68.05 points or 0.75%. The traders are suggested to cover all your shorts.

2. Fresh positions (or averaging) can be initiated in Rolta India Ltd at Rs.58.80-58.90, for immediately targets of Rs.61.20-61.50.

3. Those who are holding the shares of Panacea Biotech Ltd (Rs.155), should add in every decline for immediate targets of Rs.167-170. The stock is likely to touch Rs.220-250, in the medium term.

4. Those who are holding the shares of RCom (Rs.37.50), should look for targets of Rs.42-47, as RJio has come up with Paid Service, drawing curtains to the Free Services.

Today's Calls

1. Buy Panacea Biotech Ltd at Rs.155-156, T: Rs.170, SL: Rs.152.   Renowned cardiologist Dr

.Devi Shetty founded multi-speciality hospital chain Narayana Hrudayalaya is on the prowl to bolster its footprint in the domestic healthcare services market. ET NOW learns from multiple sources privy to ongoing discussions that the Bangalore, Karnataka headquartered firm is in advanced talks to buy out Delhi based drugmaker Panacea Biotec's multi super-speciality hospital located in Gurgaon, Harayana. 

On the other hand, Narayana Hrudalaya confirmed that the company has been in discussions with Panacea Biotec for Gurgaon Hospital since October 2015.

Giving the chronological order of the events, the company said in December 2016, it had signed a non-binding MoU with the counter party and in March this year, due diligence is under progress. The company  in January this year, got the US Food and Drug Administration’s (FDA) approval for Rizatripan Bonzoate tablet, which is used to treat symptoms due to migraine.

The company also entered a long term agreement with UNICEF for suplying Pentavalent vaccine.

2. Those who have entered UCO Bank should keep a strict SL of Rs.35.50 and keep holding. The banking sector is in mess, with Narendra Modi's government till date giving only lip service. That stock did not move much even lafter the announcement of infusion of capital raises further concerns regarding its health/asset quality. If you are not comfortable then exit at Rs.35.90-30, with no profit or with minimum loss near the recommended prices.

3. Those who are holding Tata Motors Ltd can continue to hold with a SL of Rs.466. Most of the brokerage houses are positive on the scrip. However, too much optimism make a stock over but owned, which is also not good.

4. The scrip of BHEL (Rs.169.40) was recommended in this blog around Rs.105-1 107 the scrip made a 52-week high today at Rs.172.10 in the NSE. The investors are suggested to book complete profits and wait on the sidelines, for entry at dips. When I recommended the stock many of the research houses and brokerages were extremely bearish, some were giving targets as low as Rs.70.

Large Scale Capital Infusion: Cure for PSU Banks (PSBs)....

Photo: UCO Bank

The banking sector, which is laden with bad loans, plays a critical role in carrying out the government's development agenda but unfortunately hereto precious little has being done to revive this space.

A recent study found that the gross “non-performing assets” of state banks rose 56% in 2016, and 135% in the last two years. They now account for 11% of all state bank loans.

These are hardly reassuring figures. Yet the Narendra Modi's government—which, after all, owns these banks and thus dominates the Indian financial sector— seens relatively unconcerned. In the most recent budget, the government set aside barely $1.5 billion to recapitalize the banks.

You must have read that off late there were some capital infusion in 10 banks by the government of India. The name of the banks and the amount of capital to be infused by the government are:

Allahabad Bank (Rs.418 cr), Andhra Bank (Rs.1,100 cr), Bank of India (Rs.1,500 cr), Bank of Maharashtra (Rs.300 cr), Central Bank of India (Rs.100 cr), Dena Bank (Rs.600 cr), IDBI Bank (Rs.1,900 cr), Indian Overseas Bank (Rs.1,100 cr), UCO Bank (Rs.1,150 cr), and United Bank of India (Rs.418 cr).

However, Large-scale capital infusion in individual banks, consolidation or culling or even creation of a bad bank is the need of the hour.

Or else as the negative effects of demonetisation slowly tapers down and investment demand picks up in a big way, corporate borrowers will be scrambling for credit, but the banking system will be  find hard put to support India’s growth; leading to borrowings through ECB routes or FCCBs or through PE capital or Equity.

Moreover, while India government’s demonetization exercise which forced citizens to return old high-value notes in November-December period, might have had many side effects, however it the helped banks to grow deposits. 

Also, as a percentage of total loan assets, roughly one-third of all loans of United Bank of India (33.07%) and IOB (32.63%) are stressed. For IDBI Bank, this ratio is 27.76% and Uco, 21.71%. Thus the position of UCO Bank (Rs.36) is the best among the four indebted banks.

Besides, most analysts say that the government will be able to stick to the target of a fiscal deficit of 3.5% of gross domestic product, or GDP, in the current fiscal year that ends in March and aim for at least 3.3% fiscal deficit for 2018. It is to.be noted that successive governments have been diligently lowering the fiscal deficit for several years since 2012 when the deficit touched 5.9% of GDP.

While no one can question the importance of keeping the fiscal deficit low, the FMO should also focus on smart reforms in the banking industry.

In August 2015, finance minister Arun Jaitley announced the grand Indradhanush plan—the “solution to the problems” of the industry, which Modi explored in Gyan Sangam. It promised to tackle several critical issues, including appointments, capitalization, stress in the system, empowerment, accountability and governance reforms to revamp functioning of the government-owned banks.

Estimating the capital requirement between fiscal year 2015 and 2019 at around Rs1.8 trillion, assuming 12-15% growth in bank credit, the government has committed to pump in Rs70,000 crore in phases till 2019 when the new Basel norms kick in. It also feels that the public sector banks’ (PSBs) market valuations will improve significantly following governance reforms, tight bad loan management and risk controls, significant operating improvements and, of course, capital allocation in successive budgets.

Higher valuations, coupled with sale of non-core assets as well as improvement in performance would enable these banks to raise money from the market, the government had said.

It also issued a circular that said there would be no interference from the government and the banks would be encouraged to take their decisions independently, keeping the commercial interest of the organization in mind. 

Many of the government-owned banks that have around 70% share of banking assets are laden with bad loans and need capital to stay afloat. 

But till date most part of these declarations remained in paper only. The government of the day therefore should do this task on a priority basis, before the things are too late and damage becomes irreversible. If this governmentu is as bold and courageous as it likes to claim, that should be its topmost agenda.

However, inspite  of all these negatives, the banks stocks are on a steady rise since the last few months -- may be market knows something which we do not know. Now that the BJP has improved its position further, we could see a spurt in the Bank Stocks in the near term, as banks are a proxy to any economy.

Today's Calls

1. Buy UCO Bank Ltd at Rs.35.80, T: Rs.42, SL: Rs.35.50. The stock has formed a double

bottom on EOD charts and should move up. The name of the banks and the amount of capital to be infused by the government are:
Allahabad Bank (Rs.418 cr), Andhra Bank (Rs.1,100 cr), Bank of India (Rs.1,500 cr), Bank of Maharashtra (Rs.300 cr), Central Bank of India (Rs.100 cr), Dena Bank (Rs.600 cr), IDBI Bank (Rs.1,900 cr), Indian Overseas Bank (Rs.1,100 cr), UCO Bank (Rs.1,150 cr), and United Bank of India (Rs.418 cr).

Most analysts say that the NDA government will be able to stick to the target of a fiscal deficit of 3.5% of gross domestic product, or GDP, in the current fiscal year that ends in March and aim for at least 3.3% fiscal deficit for 2018. India's successive governments have been diligently lowering the fiscal deficit for seven years since 2012 when the deficit touched 5.9% of GDP. While India government’s demonetization exercise which forced citizens to return old high-value notes in November-December period, might have had many side effects, it the helped banks to grow deposits. Meanwhile, my earlier recommended Dena Bank Ltd (38.70) is up 4.59% today.

2. Those who are holding Tata Motors Ltd (Rs.472), should exit at intra-day highs, and enter banking or IT sectors. The long term holders, can keep a SL of Rs.466.

3. Those who have entered Rolta India Ltd, should give at least 6-9 months to the scrip, to generate some decent returns. This scrip may not perform in the immediate short term.

4. Nifty is now trading at 9,123.60 down 36.45 points or 0.40%. But I feel, a strong government with around two third majority in Uttar Pradesh is positive for the stock market. I am expecting the Nifty to close in the Green today. Let us see....

An Important Announcement

Photo: iDefigo

I am looking for some investors/traders, who would invest in my (very short term) recommended scrips; after opening a demat/trading account with my associate brokerage house. The profit can be shared in the ratio of 50:50 between my firm and the investor.

The minimum portfolio size should be around Rs.2 lakhs and the duration if trade will be, short term -- 2 weeks or less to 30 days.

The money would be invested in news driven high beta (and high-risk-high gain) mid, small and micro caps only to magnify the profits. I would only give the names of the stocks with entry and exit points (including SL levels), through Whatsapp/Yahoo Messenger/SMS and investors are required to buy immediately. The percentage of profit would be adjusted after every trade. However, on the flip side, since we are in stick market, there are chances that  3 out of 10 trades may go wrong; giving profits in at least 7 - trades. But I will try my level best to generate profits in every investment. If anyone is interested please do send me mails.

Meanwhile, those who have responded to the mega offer of managing your portfolio (Rs.15 lakhs plus) by the CMD of my associate brokerage house, without any extra charge, please give me a little time to streamline the issues. Since, I am there, you need not have to worry. In case you need answers to your urgent queries, please either, Call me (On my mobile) or Whatsapp/ Text me or send me a mail at: sumanm2007s@gmail.com / suman2005s@rediffmail.com.

Reliance Communications: The Future Telecom Godzilla

CMP: Rs.38.25

The stock of RCom has been on a steady upmove since the last few days, as Reliance Jio (RJio) is scheduled to start its Paid Service from next month. This has again brought the stocks of Telecom companies into Focus. The scrip of Idea Cellular (Rs.108) has almost doubled from its 52-week low price of Rs.65.80, due to Vodafone news. Following similar positive trails, the share of RCom is also expected to touch Rs.71-72 in the next 6-9 months time. I have ben saying since sometime that it should not go below Rs.30, and till date, this has not been violated (52-week low: Rs.30.60 in the NSE); which somewhat attests to my buy on declines stand.

Meanwhile, there are recent media reports that, Anil Ambani-promoted Reliance Communications Ltd (RCom) has obtained approval from capital markets regulator Securities and Exchange Board of India (Sebi) to spin-off and merge its wireless division with Aircel Ltd and Dishnet Wireless Ltd, as per stock market disclosure.

The proposed merger, which is expected to create India’s third-largest telecom operator by users on completion of the deal, has also received nod from the National Stock Exchange of India Ltd and BSE Ltd.

Following this, RCom has now filed an application with National Company Law Tribunal (NCLT), Mumbai Bench, for its approval, it said in a statement.

Mumbai-based RCom has signed a definitive agreement to merge its wireless business with smaller rival Aircel in September last year. The merged entity will combine RCom’s wireless business and Aircel’s operations in India, including all the spectrum held by the two companies.

The approval takes it one step closer to the deal which will allow RCom, which will retain all the non-wireless business, to streamline its divisions and reduce debt by Rs20,000 crore, or roughly 48% of the Rs41,362.1 crore outstanding as of 31 March 2016.

On the other side, Aircel, owned by Maxis Communications Bhd, will see its debt reduce by Rs4,000 crore, upon completion of the transaction in 2017.

Once the deal is completed, which is subject to other necessary approvals, Both RCom and Maxis Communications will hold 50% each in the merged entity and have equal representation on the board and committees.

The merged company’s subscribers will have access to nationwide 4G LTE services in the sub-1GHz band, under RCom’s existing nationwide spectrum sharing and intra-circle roaming arrangements with Reliance Jio Infocomm Ltd.

RCom already has enough of the luctrative 800 MHz spectrum necessary for 4G transmission, and which it shares with RJio. Also, as RJio expands it will benefit RCom, as the former is using latter's network (infrastructure), at a price.

Now if we look at the chart of RCom, we can see the formation of a Dragonfly Doji like pattern on the uptrend (though, not exactly).  

It will pertinent to mention here that Thomas N. Bulkowski in his book, Encyclopedia of Candlestick Charts wrote:

"The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal. It is a reversal candle, but only half the time. Random, in other words. If you see a dragonfly doji in the bush, do not be frightened. The 10-day performance after the breakout ranks it 98th out of 103 candles, where 1 is best. In other words, ignore it. Its bite is usually not fatal. Usually.

The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal. It is a reversal candle, but only half the time. Random, in other words. If you see a dragonfly doji in the bush, do not be frightened. The 10-day performance after the breakout ranks it 98th out of 103 candles, where 1 is best. In other words, ignore it. Its bite is usually not fatal. Usually".

Therefore, I feel the traders should continue to accumulate RCom, for immediate targets of Rs.54 - 55 - 57 - 60, from where it fell -- the good days are to return for the shareholders of RCom.

Today's Call

1. Buy Rolta India Ltd at Rs.59.10-59.30, T: Rs.72, SL: Rs.56. Rolta Ltd will be one of the biggest

beneficiaries of the BJP win. Defence industry was initially run by a monopoly and it was difficult to take a product to people who were not willing to give something new a try.

However currently, Bharat Electronics Ltd, Rolta India Ltd and Tata are the major suppliers of defence products. In 2015, the BEL-Rolta India consortium bagged the Ministry of Defence’s (MoD) development agency order for the Battlefield Management System (BMS) project, worth over Rs.50,000 crore. BMS is an awareness and visualisation system that aims to optimise the effectiveness of tactical units.

To elaborate, the NDA government's “Make in India” policy got a boost when two Indian consortia were selected for the $5.95 billion. Battlefield Management System (BMS) contract for integrating all surveillance resources available at the battalion or regiment level, including from locally launched UAVs and ground sensors. Fourteen contenders had formed four consortia to vie for this prestigious contract.

The two selected – one comprising Tata Power Strategic Engineering Division (SED) and L&T, and the other, Rolta India and the DPSU, Bharat Electricals Ltd (BEL) – will each develop four BMS prototypes for mountain, jungle, plains and desert operations. The BMS will pinpoint the locations of Indian and enemy troops and key weapons platforms as well as facilitate terrain analysis to achieve improved situational awareness.

Rolta India Limited (Rolta), a leading provider of innovative IP-led IT solutions for many vertical segments, including Defence and Security, announced unaudited financial results for quarter ended December 31, 2016 (Q3 FY -17) last month.

FINANCIAL HIGHLIGHTS:

• Consolidated Revenue for Q3 FY-17 at Rs. 911.23cr (Rs. 9.11 Billion) against Rs. 736.95 cr (Rs. 7.37 Billion) in Q2 FY-17, registering a growth of 23.6 % Q-o-Q.
• Consolidated EBITDA for Q3 FY-17 at Rs. 254.75 cr (Rs. 2.55 Billion) against Rs. 217.12 cr (Rs. 2.17 Billion) in Q2 FY-17, registering a growth of 17.3% Q-o-Q.
• Consolidated profit after tax for Q3 FY-17 at Rs. 36.94 cr (Rs. 3.69 Billion) against Rs. 54.30 cr (Rs. 5.43 Billion) in Q2 FY-17, registering a decline of 32.0% Q-o-Q.
• Foreign Exchange loss for Q3 FY-17 at Rs. 16.09 cr (Rs. 1.61 Billion) against a gain of Rs. 15.79 cr (Rs. 1.58 Billion) in Q2 FY-17 impacting the profit after tax in Q3 FY-17 versus Q2 FY-17.

Mr. K. K. Singh, Chairman and Managing Director has said, "Rolta has consciously made efforts to remain at the forefront as a solutions provider with a sharp focus on the Digital revolution. Having made significant investments in the recent years, the Company today, is well positioned to address the huge Digital Transformation opportunities in the markets it serves."

2. Those who are holding the shares of Vedanta Ltd (Rs.256) from around Rs.251-252, can continue to hold for a target of Rs.272.