SumanSpeaks: The Information Super Highway

India's Bangladeshi Connection: The Textile Industry's Interdependence Introduction: Bangladesh, the world's second-largest exporter of garments, is a key player in the global textile market. Its remarkable success is driven by an efficient supply chain that appeals to major global brands seeking cost-effective production solutions. A significant factor behind this achievement is the strong economic cooperation between Bangladesh and the European Union (EU). Under the EU-Bangladesh Cooperation Agreement of 2001, the partnership extends beyond trade and economic development to include human rights, good governance, and environmental initiatives. Photo : India Today. Bangladesh and WTO: Bangladesh's membership in the World Trade Organization (WTO) since 1995 further bolsters its position. As a least developed country, it benefits from the EU's 'Everything but Arms' (EBA) arrangement, which provides duty-free and quota-free access to the EU market for all expor...

Today's Call  Buy shares of Sangam India Ltd (Rs. 406.25 ) around the current market price for a target of Rs. 442/511. Stop loss: Rs. 391. Overview:    Sangam India Ltd is a leading textile manufacturer and exporter, particularly known for being Asia’s largest producer of PV dyed yarn at a single location. The company also specializes in ready-to-stitch fabrics. Sangam India is well-positioned to benefit from the " China Plus One" strategy, where companies are diversifying their supply chains beyond China.  Sector Outlook:   The textile sector, which has been sluggish for a while, is showing signs of revival. With the recent drop in cotton prices, the industry is expected to see a strong rebound in the second half of 2024. Key Insights:    The company's increased production capacities are set to be fully operational by 2nd half of FY25. This should help in lowering costs through better optimization. Future Projections:    S...

Capital Punishment: A Barbaric Relic in a Modern Society "The degree of civilization in a society can be judged by entering its prisons." – Fyodor Dostoevsky. Introduction to the Landscape of Capital Punishment: Before delving into the discussion on the Trinamool Congress (TMC) of Bengal’s move to enact a law mandating the hanging of rapists, let us first take a sweeping glance at the global landscape of capital punishment—a complex canvas woven with threads of morality, legality, and cultural beliefs. As of August 2024, the world stands divided on the issue of the death penalty. A significant shift has occurred, with 112 countries having abolished this ultimate form of punishment, renouncing it as a relic of a less enlightened past. Meanwhile, 54 countries still uphold the death penalty in both law and practice, holding firm to the belief that such measures serve as a necessary deterrent to the gravest of crimes. Then there are the 23 countries that, while retaining the deat...

The SEBI Shuffle: When the Regulator Plays Catch-Up in Slow Motion "Why close the barn door after the horse has bolted? Because sometimes, it's the only trick SEBI knows . " Debock Industries Ltd (Rs.6.31),  a small-cap company listed on India's NSE, has recently become the center of a regulatory storm, albeit a delayed one. On August 23, 2024, SEBI barred the company’s promoters from accessing the capital markets due to significant financial irregularities.  The action by SEBI, however, comes two years after the alleged malpractices occurred in FY22 and FY23, a delay that raises eyebrows and questions about the efficacy of India's primary market regulator . SEBI's Belated Crackdown: A Case of Too Little, Too Late According to SEBI, Debock Industries’ financials for FY22 and FY23 displayed a suspicious surge in revenue and purchases. This was allegedly a smokescreen, timed to coincide with the company's migration to the NSE main board.  These f...

Debock Industries Ltd (Rs.6.43): Hold. Recent reports have surfaced about the Securities and Exchange Board of India (SEBI) taking action against Debock Industries Ltd following allegations of financial misconduct. The NDTV website reported on August 25, 2024: "Mukhesh Manveer Singh, Chairman and Managing Director of Debock Industries, and Priyanka Sharma, the former Non-Executive Director, have been barred from holding any director or key managerial roles in listed companies or SEBI-registered intermediaries." "Promoter Sunil Kalot is also prohibited from trading or accessing the capital markets. The involved parties are required to deposit Rs 89.24 crore, identified as illicit gains, into an interest-bearing Escrow Account within 15 days. Furthermore, they must return all funds raised from the rights issue, except the amount already impounded, back to the company." "Banks and depositories linked to these individuals have been instructed to freeze ...

  NHPC Ltd (Rs.97.05): Buy Book Value: Rs.37.61 P/E: Rs.26.97 Highlight: 25 power stations across 13 states. It has signed a MoU on 3 Jan 2024 with GPCL for proposed investment of Rs.4000 Cr in Kuppa Pumped Storage Project (750 MW), Chhota Udaipur, Gujarat. Company Profile: NHPC is the largest hydropower company in India and holds the status of a Mini-Ratna Category-I Public Sector Undertaking (PSU).  Photo : Business Standard. The company is involved in every phase of hydropower project development, from initial planning to final commissioning. NHPC has a strong track record, in-house engineering expertise, and consistently strong operational performance.  With the government's goal to reach 500 GW of installed electricity capacity from non-fossil sources by 2030, hydropower is becoming increasingly important to provide grid stability, especially given the intermittent nature of solar and wind power. Hydropower can quickly adjust output, making it valuable ...

  Today's Call  Buy the shares of Indowind Energy Ltd (Rs.26.20)  near the CMP for targets of Rs.32/35. SL: Rs.24. The production suffered a bit in the last quarter due to the wind season starting late by a month (for the current year). This aberration is expected to get optimised in the current quarter.  Furthermore, the power tariff in Tamil Nadu was increased w.e.f 1st July 2024 by TANGEDCO. The resultant revenue benefit will be available from this (June - September) quarter. Hence, we might get to see a sharp uptick in both top and bottomlines from Q2FY25, onwards.

  Winning Strokes: Think Different  The key equity indices barely managed to stay in the green on Thursday, with the Nifty just above 24,800, as the market rode a roller coaster thanks to the weekly F&O expiry. The Sensex added a mere 147.89 points (0.18%) to hit 81,053.19, and the Nifty 50 nudged up by 41.30 points (0.17%) to settle at 24,811.50. Broader markets took the lead, with the Mid-Cap and Small-Cap indices gaining 0.67% and 0.47%, respectively. While European and Asian markets celebrated the possibility of a U.S. rate cut like it was a long-lost friend, a sobering reality check arrived in the form of a massive downward revision in U.S. payrolls data—818,000 fewer jobs than previously thought.  Cue the nervous laughter about a potential recession in the world’s largest economy. Investors are now anxiously awaiting Federal Reserve Chair Jerome Powell's upcoming remarks at the Jackson Hole Symposium on Friday, hoping for some clarity amidst the unce...

  Today's Call  #Buy the shares of Plaza Wires Ltd (Rs.89.60) near the CMP for targets of Rs.117/ Rs.132. Looking back, the past year brought a solid 9.5% increase in revenues for Plaza Wires Ltd.  Impressively, revenue has grown by 38% over the last three years, helped by the recent 12 months of growth.  Consequently, it's fair to conclude that the company's recent revenue growth has been exceptional. #Buy the shares of MTNL Ltd (Rs.67.70) near the CMP for targets of Rs.100+. In recent months, the government has shown a preference for transferring control of MTNL's operations to BSNL without officially merging the two companies. Reports suggested that this approach would avoid some of the logistical challenges of a merger, such as de-listing MTNL and buying back a certain number of shares, which in turn would be beneficial for the shareholders. Recently, the MTNL announced that it has approved this plan, with the new agreement allowing BSNL to manage the operator f...

When Charts Collide With Common Sense!! Let’s start with a little wisdom: "Investing in shares is an art, not a science." We all know that technical analysis often feels like performing a post-mortem on stocks, while true investing requires foresight and correct analysis of the future variables. Photo : VectorStock . In the vibrant world of stock market analysis, the debate between fundamentalists and technicians has been ongoing for ages. It’s like an old comedy act— remember Laurel and Hardy — but with a lot more financial jargon firmly planted on the space. The fundamental analyst is akin to a seasoned sage, armed with balance sheets and income statements, whispering tales of profit margins and debt ratios. These are the experts who can discern whether a company is a goose ready to lay golden eggs or just another lame duck.  Fundamental analysts are like doctors, constantly monitoring a company's health. They delve into financial reports, gauge earnings, an...

  Today's Call  Buy the shares of Sarthak Industries Ltd (Rs.23.91) for targets of Rs.31/37.  Introduction : Incorporated in 1982, Sarthak Industries Ltd is engaged in manufacturing and repairing of LPG Cylinders and merchant trading of agri-commodities, mining and mineral based industry on opportunity basis. Product & Services: a) Industrial and household liquefied petroleum gas (LPG) cylinders of different weights b) Trading of agro-commodities like vanaspati ghee, wheat, chana, Masoor, etc. Manufacturing Unit: Company's unit is located at Pithampur with a manufacturing capacity of 7 lacs cylinders per annum. Clientele : Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., Bharat Petroleum Corporation Ltd. and also to private companies. Revenue Breakup: In Q1FY25 company generated revenue mainly from sale of LPG cylinders Rs.6.79 crore and Trading Business Rs.89 lakhs. Source : Screener. Financials : The reported Standalone quarterly numbers for Sart...

Market Jitters or Misunderstandings: The Queer Case of JP Associates Ltd (Rs.8.74) and MEP Infrastructure Ltd (Rs.8)... In recent times, it appears that some traders are eager to exit scrips that have been placed under restricted trade by the exchanges. This behavior tends to create a ripple effect, influencing the mindset of other investors who may start to believe that something significantly negative is unfolding. Photo : Dreamstime . I feel that many investors, are not familiar with the basic operations of the NCLT (National Company Law Tribunal) and the NCLAT (National Company Law Appellate Tribunal), and this seem to harbor misconceptions about the functioning of these two organisations. There’s a prevailing assumption that once a company is linked with NCLT, it signals the onset of the company’s demise or it is bankrupt. The situation is exacerbated by the role of Hindi vernacular papers, which are notorious for stoking emotions on both ends of the spectrum. They f...

  Today's Call  #Speculative Buy: Coffee Day Enterprises Ltd near the CMP of Rs.40.30, T: Rs.47/51, SL: Rs.37.

  Brief Buzz The trading in the shares of J P Associates Ltd (Rs.9.20) was restricted due to IBC. The stock hit the lower circuit in the last trading session, even though positive news abounds in the counter. This shows how maximum investors are guided by YouTube Videos which are prepared by amateurs. Let's recapitulate some of the recent events surrounding the company. On June 3, 2024 the NCLT initiated insolvency proceedings against Jaypee Associates Limited (JAL) following a petition by a consortium of lenders led by ICICI Bank. The lenders turned to the NCLT because JAL failed to meet its financial commitments. Let's now take a few FAQs.  Q. Why was the insolvency procedures initiated? Ans. The insolvency process is intended to address JAL's debt challenges and find an appropriate solution for the creditors.  Key issues included:  💢 Dispute with land authorities. 💢 Principal repayment due in 2037.  Q. How is J P Associates Ltd addressing the issue? Ans. Th...

Zee Entertainment Enterprises Ltd (Rs.134.52) I want to The likelihood of USD depreciation or appreciation against the INR depends on various economic factors and trends. Here are key considerations for each scenario. a few points here : Q. What is the coupon rate of FCCBs? Ans. The coupon rate is 5%, which will be applicable for 10 years. This is substantially lower than the 11%/12% PLR which is generally available in India.   Q. What is the conversion price of FCCBs after 10 years? Ans. The conversion price is Rs.160 per share.   Q. What is the total consideration under FCCB? Ans. The total amount is$239 million (Rs.1960 Cr) . Q. Is there any problem of equity dilution in the short term? Ans. Let us first read the news on the topic from CNBC TV18 website : The FCCBs will be issued to Resonance Opportunities Fund, St. John's Wood Fund Ltd. and Ebisu Global Opportunities, on terms and conditions mutually decided between the company and the 'proposed' investors. ...

  Today's Call and Other Information   Buy the shares of NMDC Ltd near the CMP of Rs.213.30, T: Rs.151/Rs.270. SL: Rs.192. NMDC is India's single largest iron ore producer. NMDC is operating four Iron Ore mechanized mines viz., Bailadila Iron Ore Mines – Kirandul Complex (Dep-14, 14 NMZ, 11B & 11C), Bailadila Iron Ore Mine – Bacheli Complex (Dep-5,10 & 11A) in the Chhattisgarh State, Donimalai Iron Ore Mine and Kumaraswamy Iron Ore Mine in the Karnataka State. Photo : Egov . Incidentally, a bench led by Chief Justice DY Chandrachud in a recent verdict allowed states to collect past dues in the form of royalty and tax from April 2005. The Chief Justice said that the time for payment of demand for tax shall be staggered in installments over a period of 12 years, starting April 1, 2026. However, according to a report in CNBC TV, the three states who had earlier levied this kind of cess are: Odisha, Jharkhand, and Tamil Nadu. Hence, as per my understanding, ...

  Today's Call  Buy the shares of Integra Essentia Ltd near the CMP of Rs.4.67, for targets of Rs.7/9. SL: Rs.3.97. Last month, Integra Essentia announced that the board of directors had approved the scheme of amalgamation of Integra Essentia (transferee company) and G G Engineering (transferor company). The report further said: Integra Essentia shall issue and allot 48 equity shares of face value of Re.1 each to equity shareholders of G G Engineering for every 100 equity shares of face value of Re.1 each held by them in the transferor company. G G Engineering specializes in producing high-quality infrastructural and structural steel, as well as engineering products, which are utilized in various sectors, including infrastructure, construction, large-scale projects, modern buildings, and high-rise residential and commercial developments. The merger will bolster the infrastructure division of G G Engineering, enhancing its operational efficiency and market competit...

Sadbhav Infrastructure Project Ltd and other Information   Yesterday, I took some shares of Sadbhav  Infra Project Ltd (Rs.7.60)  and also sent this message on Facebook and Twitter (X). The stock initially hit the Upper Circuit, only to open few minutes later, when I believe most of my well-wishers could enter.  Brief description :  Roads are the backbone of any economy, and India's rapid growth has heightened the demand for a robust road infrastructure. While public funds alone cannot meet the needs for upgrading National Highways, the government of India has adopted a policy to involve the private sector through Build-Operate-Transfer (BOT) projects.  Sadbhav Infrastructure Project Limited (SIPL), a subsidiary of Sadbhav Engineering Limited (SEL), was established in 2007 as an asset-holding company for road and infrastructure BOT projects.  SIPL focuses on the development, operation, and maintenance of road infrastructure, aiming to build a siza...

Update on MEP Infrastructure Ltd and other information #The stock of MEP Infrastructure Ltd (Rs.8.89) got suspended temporarily due the action by the surveillance department of the stock exchanges, under the provisions of IBC.  It is to be noted that the National Company Law Tribunal had earlier initiated the corporate insolvency resolution process (CIRP) against MEP Infrastructure Developers Ltd on a plea filed by Bank of India and appointed an interim resolution professional to take control of the company.  Meanwhile, according to a report in ET, MEP Infrastructure is contemplating to submit a plan under section 12A of the IBC and seek settlement with the lenders. Hence, there is no cause for worry. #The shares of 63 Moons Technology Ltd (Rs.364.14) is available at a good price. You can accumulate them in phases. #The shares of J P Associates Ltd (Rs.10.24 ) has hit another buyer freeze. Keep accumulating in market dips, as a big story is floating in the counter. # Devyani....

  Today's Call  Buy the shares of MEP Infrastructure Ltd (Rs. 8.77)  for targets of Rs.17 and Rs.21.  On 17 June, 2024 the ET reported quoting its Chairman that,  MEP Infrastructure Developers (MIDL) will submit a plan under Section 12A of the Insolvency and Bankruptcy Code (IBC) and seek a settlement with lenders. 2nd Photo: The Economic Times. Average/Accumulate the shares of Vodafone Idea Ltd (Rs.15.15), J P Associates Ltd (Rs.9.76), Moons Technology Ltd (Rs.483), Adani Wilmar Ltd (Rs.372) in any market dip. Meanwhile  Devyani International Ltd (Rs.173) came out with impressive set of numbers for the June, 2024 quarter.  The company has reported a consolidated net profit of Rs.22.4 crore in Q1 FY25 as against a net loss of Rs 1.6 crore in Q1 FY24. Revenues from operation increased by 44% year-over-year to Rs.1,221.9 crore in the June’24 quarter. Accumulated! #The selling in Indian bourses is basically due to unrest in Bangladesh. The government of ...