GSM subscriber base rises to 77.41 cr in May 

"The GSM subscriber increased by 0.44 million in May 2016, 0.06% increase from previous month" with maximum subscriber addition of 21.2 lakh coming from telecom major Bharti Airtel....

Jun 15, 2016: GSM mobile subscriber base of six telecom operators marginally increased to 77.41 crore in May with net addition of 44 lakh new customers, as per data released by industry body COAI. "The GSM subscriber increased by 0.44 million in May 2016, 0.06 percent increase from previous month" with maximum subscriber addition of 21.2 lakh coming from telecom major Bharti Airtel. 

Vodafone followed Airtel in terms of net subscriber addition with 13.8 lakh new customers. Idea Cellular added 8.6 lakh new customers, Aircel 60,000, Telenor 6.3 lakh and state-run MTNL added 10,000 new customers. The COAI provided September 2015 GSM customer base data of BSNL (7.8 crore), 

Tata Teleservices (4.95 crore), Reliance Communications (8.45 crore) and Quadrant, subsidiary of Videocon Telecom, (29.6 lakh). These companies are not member of COAI and hence the industry body does not report their latest data. After taking in to account these four companies, the total GSM customers base in the country goes above 100.9 crore.

Courtesy: Moneycontrol.com

Today's Recommendations

# Unitech Ltd (Rs.4.80) and Hindustan Construction Company Ltd (Rs.20.50), like many other real estate companies could be benefited by the shortage of homes in major cities, as almost every CEO planning a big infrastructure project which requires large tracks of land, is saying that the land acquisition Bill, passed by Parliament last month, will either make projects unviable or expensive (for large infrastructure or real estate projects) or in other words the Bill is not conducive for investments. This might generate demand for the land and also property pushing the price up. 

Therefore, accumulate the stock Unitech Ltd at the CMP of Rs.4.80, for a price target of Rs.7.5 and HCC Ltd for a price target of Rs.27-29. 

# Lanco Infrastructure Ltd is on a turnaround path. Therefore, we could see upward movement in the scrip in the short term. Buy at Rs.4.95, for a target of Rs.7-8, in the short term. 

# Reliance Telecommunications Ltd  (Rs.47.80), could benefit, as

the NDA government has announced trading and sharing norms for telecom spectrum. Such norms would allow telecom players to transfer their idle spectrum to other service providers who are facing a spectrum crunch, or pool spectrum to bring together their fragmented spectrum holdings, resulting in better spectral efficiency. Buy the stock at the CMP of Rs.47.80 for short term targets of Rs.57-61.

Photo: Business Today

Now according to a report published in Business Today, July 3, Edition, in the telecom sector, the scenario is changing rapidly. Technology - 3G, 4G, WiMAX - is changing fast, and smaller operators are not in a position to invest adequately to upgrade their networks. On the other hand, the strong network holdings and large investments by big telcos have made it difficult for smaller players to survive on their own. As a result, large operators like Bharti Airtel, Vodafone and Idea Cellular are growing their subscriber base at a significant pace, even as most of the smaller ones see their share of the pie shrinking. The impending launch of Reliance Jio's 4G services, expected to be a big draw for consumers, has further queered the pitch for small telecom companies. This will reduce competitions for big players like Reliance Communications Ltd, too. 

Reliance Communications (RCom), is planning a merger with two smaller telcos - Sistema Shyam TeleServices (SSTL) that operates MTS brand, and Aircel. RCom's and MTS's market shares have been dipping for two years whereas Aircel's is showing marginal uptrend in subscriber numbers. If the merger works out, the new entity will have a subscriber base almost on par with the No. 2, Vodafone.

Analysts believe the merger will give a new lease of life to the three operators. "They would have been completely marginalised in the next two to three years," says an analyst. There are other challenges, including the fact that all three entities have significant debt on their books. As on December 31, 2015, RCom had Rs 40,479 crore of debt while Aircel, about Rs,18,000 crore. An analyst points out that Aircel's Rs.3,500-crore deal (for 2,300-MHz spectrum) with Bharti Airtel will help reduce Aircel's debt. The new entity is expected to have debt of around Rs.28,000 crore - with both RCom and Aircel contributing equally - provided RCom successfully reduces its debt by selling tower and optic fibre businesses.

Experts say that RCom's inability to make sufficient investments in its networks can partly be resolved with its impending tie-up with Reliance Jio, which has already spent Rs 1.5 lakh crore in buying spectrum and building an ecosystem of services around 4G. It is expected to use RCom's spectrum as a fallback network.

Today's Recommendations

1. Unitech Ltd (Rs.4.80) and Hindustan Construction Company Ltd (Rs.20.50), like many other real estate companies could be benefited by the shortage of homes in major cities, as almost every CEO planning a big infrastructure project which requires large tracks of land, is saying that the land acquisition Bill, passed by Parliament last month, will either make projects unviable or expensive for large infrastructure or real estate projects or in other words the Bill is not conducive for investments. This might generate demand for the land and also property pushing the price up. 

Therefore, accumulate the stock Unitech Ltd at the CMP of Rs.4.80, for a price target of Rs.7.5 and HCC Ltd for a price target of Rs.27-29. 

2. Lanco Infrastructure Ltd is on a turnaround path. Therefore, we could see upward movement in the scrip in the short term. Buy at Rs.4.95, for a target of Rs.7-8, in the short term. 

Market Mantra: Lack of Follow-on-buying

You must have seen sudden spurt in the stock prices based on the news on a particular sector. The recent fad is to buy the stocks from the NBFC (or to some extent banks) and infrastructure. But what the market is lacking at this point of time is follow on buying or in other words, any short term rally is getting sold. 

It is primarily because of the lack of clarity, in Government of India's policies as the Prime Narendra Modi hops from one country to another burning India's valuable foreign exchange. Mr.Modi is bent on staying as Prime Minister of India, even if he does not understand the difference in governance between 10 crore population and 120 crore. His next aim is to remove another obstacle in his journey, is to promote, Dr.M M Joshi, as a presidential candidate, just on the even of UP elections; instead of his earlier gamble with Mr. L  K Advani. 

Anyway, since this government has been voted to power, we have to bear its consequences, and work according to the given situations. In such a scenario, I find two more stocks attractive, considering that the current trend is towards, Infrastructure, NBFC and to some extent in the banking counters. However, there are some positive news from the shipping sector too. I have chosen two scrips for you, as given below: 

1. ABG Shipyard Ltd: This is a beaten down shipping counter, which is laden with debts. However, there is some good news. Lenders to ABG Shipyard Ltd is looking at the possibility of putting in place a new management but outside the purview of the SDR. Lenders to ABG include State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB), Central Bank, Dena Bank, Yes Bank and ICICI Bank.. The scrip can be bought at the CMP of Rs.32.70 for a short term target of Rs.39-41. 

2. IDFC Ltd: This is a pure chart based call; pivoted on the optimism on the NBFCs (and some extent on the banking counters). The scrip can be bought at the CMP of Rs.49.50, for a short term target of Rs.53.
3. Hindustan Construction Company Ltd: This is also a company which is into infrastructure. The scrip has today given a break out. Buy at the CMP of Rs.20.50, for short term targets of Rs.27-29-31.

Important: Trend Is Your Friend

Friends, my observation on the current trend in Indian stock market/s, is mainly pivoted on two factors:
(i) Small and Mid cap counters are being bought by the investors/traders (after Mr.Shankar Sharma turned bullish),

(ii) An overall Rally is seen in Infrastructure Stocks (not much on real estate counters). 

Therefore, your focus should be in these spaces, in order to make quick money from the Indian bourses. 

Apart from this you can go full hog on the beaten down telecom counters (Idea Cellular Ltd, Reliance Communications Ltd, etc). 

Let me give you some safe stock ideas, where still you can make some money in the next 10-20 days:  

1. Gammon Infrastructure Projects Ltd: The scrip can move above Rs.10, due to positive development regarding its debt reduction. The share can be bought at the CMP of Rs.5.20. According to me the scrip of Gammon Infrastructure Ltd, is better than Gammon India Ltd (Rs.12).

2. Jaiprakash Associates Ltd: This is one of the most undervalued stocks in the infrastructure sector, considering the mammoth-ness of the company and considering the present optimism regarding setting up on an infrastructure fund to take care of the debts of the companies like Jaiprakash Associates Ltd. The circuit limit of the stock has been increased to 20%, today. So, buy this scrip for a target of Rs.17-18 in the next 6-9 months. 

3. Lanco Infratech Ltd: This is one of the beaten down infrastructure counters. It has been recommended earlier also. I still recommend a buy at the CMP of Rs.5.20, for a target of around Rs.9-10, in the next 15-20 days. 

4. Reliance Communications Ltd: Till now the government has stressed more on setting up an infrastructure fund to help the indebted companies in  the infrastructure sector.

However, if like China, India too comes up with an overall mechanism, to help the debt ridden from all the sectors, then Reliance Communications Ltd (Rs.48.20), with a debt of over Rs.39, 000 Crores would be one biggest beneficiaries. 

Buy this share at the CMP of Rs.48-48.20, for a target of Rs.72, in the next 2 months. Along with this you can also buy the stock of Idea Cellular Ltd at around Rs.100. 

Also, you all know that Reliance Communications Ltd (Rs.48.20) will give decent returns, once the deal with MTS and Aircel gets completed; but some of you are still fearful to enter it....why? It is because the so-called analysts, who hop from one TV channel to another, are creating confusions in your minds, isn't it?

If you want to make money, then either you have to do independent research, which is very costly and time consuming or you can depend on someone (or some such chosen investment gurus). Am I right? So, the decision is yours....I can only show the best alternatives, but the choice of picking up your favorable route, depends on you.  

Those who are holding Union Bank Ltd (Rs.123) or Allahabad Bank Ltd (Rs.53.20), can come out of these two counters and go for infrastructure stocks (not real estate per say). 

Moreover, Unitech Ltd (Rs.5.48), basically a real estate counter is near my 2nd target of Rs.6 and hence you can book some profits and enter any of the above mentioned or your choice-able infrastructure counters. 

Also, avoid stocks like IVRCL Ltd (Rs.5.15). Those who have entered McLeod Russel Ltd (Rs.200) can also book profits and wait for dips to enter. 

Gammon Infrastructure Projects Ltd: Bulls On Charge...

CMP: Rs.4.70
P/E: 7.52
Industry P/E: 49.46

Triggers:

The government of India is going ahead with the idea of creating a stressed asset fund, which in the common parlance is called a bad bank; to take care of the bad assets. A bad bank, as is present in China for instance, buys up all bad loans from other banks. This will provide some relief to the companies like Gammon Infrastructure Projects Ltd, who have substantial amounts of debts in the books. 

The company has recently done a strategic deal by sale of fixed assets, which added to the topline in Q4Fy16. It has further cleaned up its balance sheets and so now it is having cash surplus.

Any public-private partnership (PPP) business -- especially for infrastructure development -- is a capital hungry business; which needs large amounts of debt funding. The debt of the company which was initially in the order of Rs.4,500 crore, was reduced by Rs.2,000 crore after selling off six projects. So, now present level it will be approximately Rs 2,500 crore. The company is presently doing debt servicing.

Its asset basket is in order of around Rs.20,000 crore. Once it sells some of the projects it will deplete by another Rs.3,500 crore. The projects under implementation will be two projects which are likely to be completed in two years time - there are some projects; which are on pre-development stage, so that needs to take shape. It still has around two operational projects in road and two operational in port that should give additional size to operate and add more assets as the opportunity comes in to the basket. So, looking forward the asset baskets of Gammon Infrastructure Projects Ltd, should increase.

Last year the Corporate Debt Restructuring Empowered Group-(CDR EG) in its meeting held on November 23, 2015, discussed and noted the invocation of strategic debt restructuring (SDR) in the company by the CDR Lenders, pursuant to Reserve Bank of India (RBI) circular dated June 08, 2015. 

In March, 2016, Gammon Infrastructure said it had completed the first tranche of stake sale in nine projects on approval from National Highways Authority of India (NHAI) and lenders. The infrastructure firm had announced to sell stakes in 9 projects valued at Rs.6,750 crore to Brookfield and Core Infra India Fund, a deal that will fetch Rs.563 crore on completion as well as reduce its debt considerably. The transaction, one of the largest asset sales at one go in the Indian infrastructure space, was announced barely days after the government last year allowed the highways developers to divest 100% equity in projects two years after the completion; by making additional funds available for investment in projects.

Conclusion: Looking at the above points and taking into account the daily candle stick chart pattern, it is safe to assume that the scrip of Gammon Infrastructure Projects Ltd, will give good returns in the short term. Therefore, fresh positions can be initiated in the stock, with short term targets of Rs.5.20-6.30 and Rs.9. A reasonable P/E re-rating can even take the stock above Rs.15, in the medium term.

State Bank of India Ltd: Buy

CMP: Rs.201.70

Earnings being weaker on the back of higher slippages (1.5x of Q3) is not news. What made headlines is the watch-list, a mere 2.1% of exposure with 70% LGD (loss given default) over the next 12 months. The Street gives only one chance for redemption (e.g. BOB’s flipflop between Q3 and Q4). And, this is SBIN’s moment. We hope they are being realistic, neither optimistic nor subjective. Retain Buy, no PT change.

Defining moment: The bank (parent) disclosed only 2% potential stress with min-max LGD of 30-70% in next 12 mths. If this plays out, our book value estimates could rise 30-40%. As unbelievable as it may sound and the stock could be significantly buoyant in the near term, we wish to sensitise that a flipflop on this could be very damaging and hope the bank is being realistic. 

If this is evidenced by better asset quality trend over next few quarters, we think the medium term upside could be significant (better NIM, loan growth, lower credit costs, etc.). For now, we have largely ignored the watchlist, baked in slightly higher provisions, flat NIMs & forecast 14-15% RoE by FY19e. We continue to factor 100% LGD for NPA & 50% across other impaired assets, although have baked in the optimism through higher multiples.

Cut estimates: We cut standalone EPS estimates by 30% & 22% in FY17 & FY18, consol EPS by 15.6% & 18%. We forecast FY16-19 EPS CAGR of 37% for the standalone & 40.7% for the consol entity. For the parent bank, we pencil in ~3.1% NIM, 50% expense ratio, credit costs of 157bps, 137bps & 113bps for FY17-19, with 15.3% loan growth CAGR over FY16-19.

Valuation/Risks: SBIN trades at 1.5x consol trailing BV (Mar16) & 6.7x EPS (12m to Mar17e). 

We value it at R280, implying P/B-P/E multiples of 1.6x (Mar17e) & 7.8x (12m to Mar18e). This compares with 10-year average of 1.5x & 9x respectively. 

Risks: Asset quality, loan growth.

Other Considerations

Largest liability franchise and CASA/deposit growth remains strong. Stealing retail market share in recent times, although incremental revenue impact could be a lot weaker given the various discounts.

Asset quality–Watch-list much lower than feared

SBI disclosed Rs 313.5 bn as additional stressed exposures to be monitored after undertaking increased recognition in H2FY16. Out of this watch-list of Rs 313.5 bn, the bank expects slippages to the tune of 70% in a poor scenario, and 30% in an optimistic scenario.

Adding the watch-list (2.1% of gross advances) to the disclosed gross NPA of the bank (6.5%), we get a total stressed assets figure as per the bank’s disclosures of 8.6% of gross advances. The additional 2.1% comprises 0.8% from the standard restructured book, 0.2% from the non-NPA 5/25 and SDR book and 1.1% from the currently standard book.

Based on our classification of stressed assets for the bank, i.e., gross NPA + restructured + non-NPA 5/25 + non-NPA SDR, we get a total stressed assets figure of 10.3% of gross advances.

Based on the bank’s watch-list disclosure, we find that the bank sees stress in 30% (R116.6 bn) of its currently outstanding standard restructured book (R390.6 bn), and 14% (R25.8 bn) in its non-NPA 5/25 and non-NPA SDR book (R181.4 bn).

Specific to Q4, there was a sharp spurt in slippages (R303.5 bn, implying a slippage ratio of 9.33%), mainly driven by recognition of stressed accounts from the asset quality review of other banks. R10.4 bn slipped from the SME, agri and personal segment, while R92 bn was the result of the residual AQR impact for the bank from its own list of accounts. 

The remaining R200 bn slippage was on account of the bank classifying large and mid-corporate accounts which were on the AQR lists of other banks as NPA. Out of the total slippages, R77 bn came from the previously restructured book, while R59.3 bn and R73.5 bn was from the SDR and 5/25 book respectively. The total 5/25 and SDR cases amount to R190 bn and R110 bn respectively, out of which R63.5 bn and R160 bn respectively have already been recognised as NPA.

—Jefferies

Reliance Infrastructure Ltd: Buy

CMP: Rs.532

The Stock of Reliance Infrastructure Ltd (Rs.532) is trading above its 21D, 100D, 150D, 200D SMA. Recently, a brokerage house and a Bombay based business publication has given a buy on the scrip with the targets of Rs.580-582.

Meanwhile, Reliance Infrastructure Ltd reported a 43.7% rise in fourth quarter consolidated net profit helped by lower expenses and a one time gain in its EPC (engineering, procurement and construction) business.

The company has shortlisted two international bidders for monetization of its 11 operational roads assets, said Lalit Jalan, who took over Reliance Infrastructure from 1 January as acting chief executive after heading the company in prior stints for over seven years.

The Anil Ambani Group-led company’s consolidated net profit rose to Rs.659.85 crore for the three months ended March from Rs.459.11 crore in the year-ago period.

Total income from operations remained almost flat at Rs.4,469.28 crore from Rs.4,596.09 crore a year earlier; hurt by a decline in its largest power business. Power business net sales fell 11.7% to Rs.2,748.14 crore due to lower pricing while those in the EPC and contracts business rose 8.4% to Rs.907.44 crore.

Net sales in Infrastructure and cement business rose 31.8% and 35%, respectively.

What is interesting is that total expenditure during the quarter fell 14.5% to Rs.3,520.97 crore.

On a standalone basis, Reliance Infrastructure’s net profit rose 62% to Rs.728.95 crore during the quarter while total income from operations fell by 0.7% to Rs.2,781.47 crore.

The company is in negotiations with global pension funds and investment companies, including the Canada-based Brookfield Asset Management Inc. and CPP Investment Board (formerly the Canada Pension Plan Investment Board) to sell its portfolio of 11 toll-based road assets, the online financial portal Mint reported on 15 February.

In February, the company said agreed to sell its cement assets to Birla Corp. Ltd for Rs.4,800 crore as part of the its efforts to pare debt and expand its new defence manufacturing business.

As on 31 March, Reliance Infrastructure’s consolidated debt stood at Rs.25,000 crore.

Therefore, Buy the share at the CMP of Rs.532, for short term targets of Rs.580-592. Keep a SL of Rs.497, for any short term trade; though the chance of breaking this level, is very very less.

Investors Needed

I am looking for investors, who is ready to park at least Rs.4-5

crores in various projects, which are listed below: 

1. I am looking for investors of a Bollywood Commercial Film, which is 80% complete and the distributors have verbally agreed to pay around Rs.2-2.5 Cr, upon release. The fund needed is only Rs.30-40 lakhs. The release could be done in two months on getting the funds. The director of the film  is personally to me and his daughter is working with a reputed Film and Television production house. 

Also, I am looking for fresh funds, of around Rs.80-90 lakhs for a feature film, which has a wonderful story to tell; apart from the usual commercial kicks. Its songs have the Lyrics and Music from well known Bollywood celebrities (from the Lyrics and Music Fields). I would be the Executive Producer and one of the Directors, and hence you need not worry about transparency. Expected Gains: 100% within 3-4 months. 

2. Investors are needed for government sponsored Television Serials and Telefilms. The fund needed is Rs.50-60 lakhs, on the basis of works obtained from various government agencies. Since, they are obtained through competitive bidding, from government of India, hence the investors' money is secured. 

3. I have few scrips from the A-group and B-group, which could give you stupendous returns on BUY and HOLD basis, for 1-2 years. I am looking for HNI investors, who can park  at least Rs.1-2 crores or may be more in these scrips. 

The returns after one year, would not attract any Capital Gains Tax and at the same, since they are thoroughly researched, the risk would be limited. The profit would be shared in the ratio of 50:50 basis. 

Also, those who want to maximize their returns from the upcoming bull market, can take the help of me, to trade on their behalf. The profit would be shared in the ratio of 75:25% between you and me. Minimum Portfolio size should be Rs.2 lakhs. 

4. I am looking for investors, for some Real Estate Projects in Assam, Kolkata and Bombay. 

By the way, a land parcel of 100 acres, ideal for setting up resorts, Tea Gardens (with solar projects) and Horticulture Projects, is out for sale at Rs.2 Crore (negotiable), in South Assam. The said land is only 30 minutes drive from a newly constructed Broad Gauge Railway Station; from where long distant trains for Delhi, Kolkata, Bombay, etc, are scheduled. 

If you are interested then kindly mail me at: sumanm2007s@gmail.com / suman2005s@rediffmail.com. 

By the way, I have lost my Tab (mobile) and hence I am cut off from Whatsapp - - the inconvenience caused is regretted. 

Residential real estate now a buyer’s market

The residential real estate market, which had witnessed a slump in project launches in 2015, showed a visible comeback in the first quarter.

June 11, 2016: For the last 3-4 years, residential real estate market has seen sluggish demand, which has caused the unsold inventory levels to go up in some of the key Indian geographies. Supply/demand mismatch in terms of price and configurations has been the main reason for the rise in inventory levels.

From developers’ point of view, this has eventually resulted in:

* Correction of prices in many markets to improve sales velocity of unsold products

* Increased project launches with the right configurations to cater to existing demand.

Interestingly, 2016 had started on a sunny note. The residential real estate market, which had witnessed a slump in project launches in 2015, showed a visible comeback in the first quarter. There was a six-fold increase in launches of the affordable housing projects, as developers predicted greater demand in this highly price-sensitive segment.

One way or the other, factors have now transpired to make residential real estate a buyer’s market that gives buyers the upper hand. They have a lot of options to choose from, with the added benefit of flexible rates and attractive payment plans.

Gains of a buyer’s market

Real estate prices usually drop as inventory increases — but even if they don’t, negotiation power goes up. Some realtors refuse to understand the realities of a slow market and will not accept any offers less than what they feel they should get. If a buyer feels that he is not getting the best possible deal, he should be confident enough to walk away and look at the next option on the list. 

Remember that in a buyers’ market, it is the buyer who has the power. It pays to be aware of about one’s bargaining power. 

If the home has been in the market for several weeks or months, has perhaps already undergone some price reductions and is still unsold, it strongly suggests that the seller is hoping to sell it as soon as possible. In such a situation, it makes sense to ask the seller for add-ons such additional furniture or fixtures, apart from a heavy discount on the listed price.

Avoiding confusion

Another inevitable result of heavy housing inventory on the market is that prospective buyers are confused about which options to focus on. This ‘problem of plenty’ can be resolved by looking only at select projects by reputed developers — it is surprising how quickly the range can narrow down if one eliminates anonymous smaller players from the field of vision.

Guidelines for buyers

* In the case of under-construction projects, buyers should only consider those which are likely to be completed in next 12-18 months.

*  Again, going with developers who have a healthy track record of delivery will mitigate the risks related to timely delivery.

* It is also essential to undertake good diligence in terms of the project’s market response and inventory sold, which will ensure that project is delivered.

* One should look only at established housing corridors where social and physical infrastructure are in place.

The writer is CEO – Operations & International Director, JLL India.

Courtesy: Indian Express

Union Bank Ltd: Buy

CMP: Rs.123

State-run Union Bank of India came out with a profit of Rs 96.12 crore in March, 2016 quarter, due to higher provisions for bad loans.  

As many as 11 accounts worth Rs.2,520 crore were restructured under the 5/25 scheme, out of which four accounts were in the power sector and three from the steel sector. Both the sectors have started to perform. 

The bank wrote off loans worth Rs.785 crore during the year, while it recovered Rs.2,204 crore from written off accounts, out of which Rs.395 crore were in the Q4FY16, up from Rs.196 crore in the three months to December. 

Loans worth Rs.1,835 crore have gone into SDR during the March quarter, while it sold Rs.177 crore of NPAs to asset reconstruction companies in the quarter. 

Net interest income for the March quarter stood at Rs.2,085 crore, marginally down from Rs.2,122 crore a year ago, and non-interest income also slipped to Rs.997 crore from Rs.1,143 crore.

Share of Casa deposits rose by 310 bps to 32.3% and the bank has set a target of taking this to over 33% in the current fiscal. 

Savings deposit grew 13.4%, while share of high cost deposits declined to 2.1% from 3%. 

Higher Casa helped the bank improve its NIM by 10 bps to 2.32%. Non-interest income for the full year rose to 3.1%. 

Total advances increased 5.7% to Rs.2,77,725 crore, while domestic advances rose 4.3% to Rs.251653 crore. 

The bank has kept a target of 9.3% advances growth in the current fiscal and a deposit growth of 7%. 

The provision coverage slipped to 50.98% from 59.23% in the same period of 2014-15. 

The bank's capital adequacy ratio under Basel III improved to 10.56% from 10.22% in March last year, with the tier I being at 8.14%. 

Moreover, if we look at the daily candle stick chart then we would find that the share of Union Bank of India Ltd is trading above its 21D and 50D EMAs, adding further to the overall bullishness, to the counter. 

Therefore, buy the stock of Union Bank of India Ltd at the CMP of Rs.123, for a short term target of Rs.141. Please keep a SL of Rs.119. 

DO YOU KNOW?

The Open Interest (OI) in the stock of Reliance Communications Ltd (Rs.49.50) has hit a 10-year high as tower biz sale and its merger with Aircel has entered into a decisive phase. 

There are multiple media reports, during the last couple of days, stating that both these deals would be completed between the end of June and July, 2016. 

If this deal is completed then according to an earlier news, about 75% of the company's debt, will be cut, boosting the fundamentals tremendously. Post completion of the said issues, the scrip could cross Rs.120 and even break 52-week high made in January, 2016.

Seeing such bright prospects, it seems the prudent investors have started to take LONG positions in the counter (in BULK). The build-up in the stock futures has resulted in the NSE putting the contracts under ban in derivatives for exceeding the permissible limit of positions in the counter. 

Reliance Communications Ltd's shares have been on the rise since yesterday, up more than 2% intra-day (today), with an increase in OI (a very BULLISH indicator). If this rise in OI continues with a rise in the price of the scrip, then we can look for short term target of Rs.60-61.

The investors are therefore suggested to buy at least 10, 000 (ten thousand) shares of the company and keep holding. This share alone will be able to cushion, a majority of your earlier losses (if any). 

DO YOU KNOW?

Photo: The Business Standard

Many investors/traders, invest on the basis of insider trading, as promoters mostly buy on the hope that the company will do well in future. on the other hand the Retail (small) investors are often advised to be wary of insider selling, as this might indicate the company is not in good financial health. After all, who knows the company better than its own promoter? As stock markets were volatile in Jan-Feb 2016, many promoters bought the shares of their companies. 

Some companies that saw huge insider buying were Adani Power, Aditya Birla Nuvo, Bharti Airtel, Grasim, Kansai Nerolac, KPIT Technologies, Lanco Infratech, MRF and Welspun. 

Insider selling was seen at Infrasoft Technologies, Jaiprakash Associates, Max Financial Services, Pipavav Defence and Offshore Engineering, Unitech and Wockhardt.

However, according to some experts, combined with the insider buying data, one should look at management, price/earning ratio, etc, before investing in a stock.

Moreover, sometimes, insider buying and selling could be merely a vesting of options because the vesting period has come to an end. Sometimes, promoters buy only to reduce their cash balance or increase the free-float earnings per share.

According to Prime Database, announcements have been made for buying back shares worth Rs.2,220 crore in 2016 so far. In FY15, the total value of shares bought back was Rs.650 crore.

The Securities and Exchange Board of India (SEBI) amended the buyback rules in 2013 specifying that the minimum amount that a company is required to buy back should be 50% of the offer size, against the earlier practice of 25%. SEBI also limited the buyback period to six months, from the time the approval has been sought from the board or shareholders, because it found that companies typically did not utiilise the entire period of one year to complete the buy back.

Earlier this year, Just Dial, Borosil Glass, Himalaya Granites, Technocraft Industries, Tips Industries successfully completed buying back shares worth `550 crore from investors. While companies like Dr. Reddy’s, OnMobile Global, Excel Industries and ECE Industries currently have their buyback offers ongoing.

A six month old report showed that some companies, including Eveready Industries, Force Motors and Welspun India, have seen their share price increase multifold one-year after an increase in promoter holdings. 

Similarly, others such as Adani Ports, ABG Shipyard and Cox & Kings have seen an erosion in their stock prices after a dip in their promoter holdings. 

Source: Internet (edited)

Winning Strokes: Think Different

Unitech Ltd's Real Estate Projects in India

State Bank of India Ltd recommend around Rs.167 only few weeks back today touched Rs.210.90 in the BSE, giving handsome returns to the Patient Investors. Today, the scrip of SBI moved up during the late hours, purely due to short covering. I would therefore, suggest all to book some profits in the counter and wait for dips to around Rs.96, to enter again. 

Unitech Ltd today moved to Rs.3.93 in the BSE, and then closed at Rs.3.89. The scrip should give decent returns going forward as the company, is contemplating to raise Rs.500 Cr. Today, the percentage of Deliverable Quantity to Traded Quantity was whooping 51.67%. The investors should accumulate the scrip in BULK and keep holding.

Established in 1971 by a group of technocrats, Unitech Limited is one of India's leading Real Estate player. It started business as a consultancy firm for soil and foundation engineering and has grown to have the most diversified product mix in real estate comprising of world-class commercial complexes, IT/ITes parks, SEZs, integrated residential developments, schools, hotels, malls, golf courses and amusement parks.

So far Unitech has built more than 100 residential projects. Nirvana Country in Gurgaon is an integrated development complete with villas, apartments, offices, retail spaces, schools and clubs. Vista Villas, in Greenwood City, is a vast spread of landscaped meadows with villas of magical Mediterranean flair. These spacious homes on varying plot sizes are designed to be elegant as well as functional and blend perfectly into the green surroundings. Unitech continues to build hallmark and luxurious living spaces pan India. Karma Lakelands, nestled amidst pristine surroundings and breathtaking beauty, is spread over approximately 300 acres of nature. Nirvana Country 2, ensconced in the pristine locales of Sohna Road Gurgaon, is a highly sought after 100 acre integrated township. The Unitech Golf and Country Club, which offers 347 acres of ultra-luxury living with unparalleled views of a signature golf course, just off the expressway in Noida, is one of the upcoming prestigious address.

Unitech has experience in developing and leasing IT/ITes and commercial office spaces in its Grade 'A' complexes in Gurgaon like Cyber Park, Signature Towers, Global Business Parks, Unitech Business Park, Unitech Trade Centre, Millenium Plaza, Unitech Corporate Park, etc. Some recent launches have been Nirvana Courtyards II, Signature Towers II, Uniworld Towers and Infospace in Gurgaon, Bhubaneshwar 1 in Bhubaneshwar etc.

Unitech has also developed world-class malls like Metro Walk in Rohini, The Great India Place in Noida, and Central in Gurgaon have been hugely successful. Currently, 4.5 million sq.ft. of retail space is already under construction in cities like Mumbai, Kolkata, Bengaluru, Hyderabad, Chandigarh, Dehradun, Amritsar, Bhopal, Mysore, Mangalore, Lucknow, Kochi, Trivandrum and Siliguri. Some of the recent launches have been Gardens Galleria in Bengaluru, Noida and Mohali, Great India Place in Bhopal and Dehradun and Downtown in Mohali. 

The scrip of Reliance Communications Ltd (NSE: Rs.48.30) today touched Rs.48.80, in the BSE, intra-day and closed at Rs.48.40. There were some media reports today that Reliance Communications (RCom), the country’s fourth largest telecom operator, which has been looking to create a 50:50 joint venture with Aircel promoted by Maxis Communications, expects to close out the deal by the end of June, 2016. The new entity, a senior executive observed, should kick off operations with revenues of around Rs 25,000 crore. Post the two transactions, RCom’s gross debt burden of Rs 42,651 crore, should be meaningfully lighter; currently, RCom’s debt to ebitda is 5.8 while that of Bharti Airtel is 2.8 times and for Idea Cellular, 3.1 times.Post the two deals, Rcomm will become an enterprise-focussed firm as the mobile business will be transferred to the new JV and tower and optic fibre will be divested.Once its deal with Aircel is concluded, it will have access to spectrum with a validity till 2026-28 and would not need to buy spectrum at the forthcoming auctions. 

The two-way merger between Reliance Communications (RCom) and Aircel is on track, claim sources close to the deal. Since the merger is between two different entities with different technologies even (large part of RCom subscriber base was on CDMA), the merger will take some more time to conclude. By the end of July, Reliance Communications would have migrated its five million CDMA customers to its GSM network, which will also offer 4G services through its partnership with Reliance Jio. The scrip is heading towards Rs.71-72, in the coming days and therefore, do remain invested. The long term target for the scrip is above Rs.100. 

Lanco Infratech Ltd (Rs.4.20), closed near the days high, as its fundamentals have been improving since the last few quarters. The investors should do well to pick the up BULK quantities and keep holding for a target of Rs.9. This is a sure shot counter, so please do not fail to buy. 

Allahabad Bank Ltd (Rs.52.25) today moved above its 100D SMA, after a long time.Today, it moved up with huge volume; however, it needs to close above Rs.53.50, to give bullish breakouts; which can take the scrip near Rs.59-60. 

Join the Paid Services or alternatively you can allow my firm to trade on your behalf on a profit sharing basis; provided you have a minimum portfolio size of Rs.2 lakhs. If your portfolio is more than Rs.50 lakhs, then the profit sharing would be 80:20 between you and my firm. Also, we can go for any such arrangements for mutual benefits; where I will try my level best (using all my experiences) to give you at least 5-10% return each month. Moreover, if you have lost money earlier that can be recovered in this bull run by effective maneuvering (in the share market). Therefore, come and join me to make money from the market - - Make Hay while the Sun Shines...!! 

Lanco Infratech Ltd: Buy

CMP: Rs.4.10

Lanco Infratech Ltd has posted a loss of Rs.200.71 crore for the fourth quarter ended March 31, 2016, against a loss of  Rs.586.29 crore for the corresponding quarter last year.

Turnover for the quarter was Rs.2559.89 crore against Rs.2276.89 crore for the corresponding quarter last year.

The company has managed to bring down its loss to Rs.265.60 crore for the financial year ended March 31, 2016, against a loss of Rs.2036.74 crore for the previous year.

The income for the year was up at  Rs.9762.90 crore against Rs.9542.58 crore for the previous year.

Its EPC order book consisting of power, solar and others stood at Rs.27,079 crore, 80% of which is internal projects.

Lanco is present in EPC, conventional and solar power generation, coal mining and infrastructure and property development.  

The EPC sector and the power sector together contributed to 87% of the gross revenues. EPC and construction sector contributed to 37% of the gross revenue

Power sector contributed to 50 per cent of the gross revenues. The company has a total outstanding receivables of Rs.17,81.6 crore from various state electric utilities as of March 2016. 

Better performance by operational assets helped Lanco Infratech recover from losses in the earlier quarters. 

The Gurgaon-based company had recorded a consolidated profit of Rs.137 crore during the quarter ending December 31, 2015 bringing down its cumulative loss for the first nine months by 95% to Rs.65 crore against Rs.1,412 crore in 2014-15.

The company posted a consolidated net profit of Rs.98.98 crore in the second quarter of the current fiscal after a gap of three years.


In a statement accompanying the results, the group said approved CDR scheme and additional funding to the company and the lenders approvals of the cost overrun proposals for the projects under construction and the effort to bring strategic investors, disposal of assets, would also bring in the additional cash flows into the system.

T Adibabu, Chief Operating Officer, Finance, said, “A number of issues relating to fuel and tariff for power projects have been sorted out, and the funding for ongoing projects is also likely to get better. This will enable the company to run power plants and also help expedite EPC works this year.”

On stake sale talks which the company has been engaged in, Adibabu said, “We are in talks with several potential investors and companies, over the past 24-30 months. The macro economic conditions are just beginning to get better for infra companies. This will enable us to strike couple of deals.”

Once, it has good cash flows and lenders continue to extend their support, it will be able to boost the EPC business as well.

Therefore, buy the shares of Lanco Infratech Ltd at the CMP of Rs.4.10, for targets of Rs.6.5-7.4, in the short term. 

Adani Enterprise Ltd: Buy

CMP: Rs.72
Face Value: Re.1
Book Value: Rs.97.97

Adani Enterprises Limited is an infrastructure company, which is is engaged in coal trading, coal mining, oil and gas exploration, ports, multimodal logistics, power generation and transmission, and gas distribution. Its segments include Trading, Power, Port, Agro and Others. 

It is engaged in resources, logistics, energy and agro businesses. Under the resources business, it obtains coal from mines and trades in them. Under the logistics business, it owns and operates seven ports and terminals, such as Mundra, Dahej, Hazira and Tuna Tekra, Kandla in Gujarat, Dhamra in Orissa, Mormugao in Goa and Visakhapatnam, India. 

Under the energy business, it produces thermal power in India with an installed capacity of around 10,480 megawatts. 

It operates four power projects in Gujarat, Maharashtra, Rajasthan and Karnataka. Under the agro business, the Company offers edible oil. It operates agro business through Adani Wilmar Limited, Adani Agri Logistics Limited and Adani Agri Fresh Limited.

DO YOU KNOW?

In December 2015, RCOM entered into a non-binding and

Photo: The Telegraph

exclusive agreement to sell towers owned by its subsidiary— Reliance Infratel Limited (RITL, unrated)—to two investment companies, Tillman Global Holdings, LLC (unrated) and TPG Asia, Inc (unrated). 

RCom has made a public commitment to use the entire proceeds from the sale for DEBT REDUCTION.

According to Nidhi Dhruv, Moody’s Vice President and Senior Analyst: "RCom has also re-prioritized its strategies again, and now plans to announce the final binding tower sale transaction within two months from the completion of discussions with Aircel". 

This means that, if the dates are to be taken as sacroscanct, then within two months we can expect, a substantial reduction of Reliance Communication Ltd's debts. 

Cumulatively, these transactions, when consummated, could benefit RCom substantially. Hence any tangible benefit to RCom’s financial and credit profile is now likely to happen within the next 6-9 months.

Upon the completion of the share swap transaction with Sistema Shyam Teleservices (SSTL unrated), RCOM will have adequate spectrum. However, should the company participate in the upcoming spectrum auctions, its leverage metrics will be further pressured.

RCom has about $450 million (Rs.30262.50 C) in debt falling due in the quarter ending 30 June 2016, which includes a $350 million ECB facility at Reliance Infratel (unrated), which is guaranteed by RCOM and has a cross-default with other debt. Management is still in the process of renewing this facility with the banks and expects to complete the refinancing ahead of maturity.

Unless there are some unexpected regulatory developments in the Indian telecommunications sector RCom is likely to continue to grow revenues and earnings of its core-Indian operations by increasing the number of subscribers and data revenue without compromising its EBITDA margins. After the same of its tower business it would be more efficient to generate positive free cash flow on a sustained basis and this will improve its liquidity profile significantly or its adjusted debt/EBITDA could fall to 4.0x-4.5x and its adjusted EBITDA margins could come between 30%-35%, in the next 6-9 months. 

RCom is an integrated telecommunications operator in India (Baa3 stable) with a presence across wireless, enterprise, broadband, tower infrastructure and DTH businesses. Through its wholly-owned subsidiary, GCX Limited (B2 stable), the company also provides data connectivity solutions to major telecommunications carriers and large multinational enterprises in the US, Europe, Middle East and Asia Pacific which need multi-national IP-based solutions and connectivity.

RCom is the fourth-largest mobile operator in India by number of subscribers, which totaled 109.1 million or approximately 10.7% of the total market share by subscribers (pro forma for Sistema acquisition) as of 31 January 2016 according to the Telecom Regulatory Authority of India (TRAI).

Moreover, its tie up, with Mukesh Ambani's Reliance Jio Ltd is likely to work wonders very soon. 

Meanwhile, Mr.Gurdeep Singh, CEO for Consumer Business  said during a conference call: “Integration of MTS business with RCom is on track. We expect to complete the integration in August. We expect to make announcement with respect to Aircel merger anytime in June. Once we complete the Aircel transaction, we will go for the tower deal. With completion of these deals, we expect RCom’s debt to reduce by 75 per cen". 

RCom and Aircel talks, if successful, would lead to a combined entity holding 19.3 per cent of the total spectrum allocated to the industry — the highest by an entity.

The new entity, which is in the works, would hold spectrum across all allocated bands — 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz — for 2G, 3G and 4G services.

RCom also expects approval from the government for spectrum liberalisation in four circles — Kerala, Karnataka, Tamil Nadu and Rajasthan — by tomorrow. The company has paid over Rs 1,200 crore for liberalising spectrum in these circles.

DoT has already approved liberalisation of RCom’s CDMA spectrum in 17 out of 22 telecom circles. The company is using liberalised CDMA spectrum to offer 4G service to its customers. 

Earlier,  Mukesh Ambani’s Reliance Jio Infocomm Ltd and Anil Ambani’s Reliance Communications Ltd signed a Rs.12,000-crore deal that lets Reliance Jio use the telecom towers of RCom to launch its fourth-generation (4G) services — a pointer to the growing camaraderie between the brothers.

Reliance Jio — the telecom arm of Reliance Industries — will use up to 45,000 ground and rooftop-based towers of R-Com’s nationwide network for the rollout of its 4G services.

Reliance Jio will pay Rs 12,000 crore over the entire period of the contract.

Though both the companies were tightlipped about the time frame of the contract, sources put it at 15 years, in which case R-Com will get around Rs 800 crore annually.

A press statement issued by both the groups said they would explore the possibility of building new towers as well.

RCom's consolidated net profit in the last quarter of ended March 31, 2016 declined by about 22% at Rs.177 crore from Rs.228 crore a year ago.

However, coming out with profits, even though it is having huge debts (or in tight liquidity conditions), speaks volumes about the resilience of the company. 

The promoters holding in the company stood at 58.85% while Institutions and Non-Institutions held 28.77% and 11.94% respectively.

A Foreign Institutional Investors (FII) have recently bought nearly 1% stake in this ADA Group telecom company, for about Rs.87 crore through open market.

In such a positive environment, I would suggest you to BUY in BULK, the stock of Reliance Communications Ltd (Rs.48.95), like you are doing in case of Unitech Ltd (Rs.3.89) and keep holding for 4-6 months to MORE than DOUBLE your INVESTMENT CAPITAL.

Courtesy: With inputs from Sanjeeb Kumar Sahoo