Adani Wilmar Ltd (Rs.343.20): A screaming Buy:

Adani Wilmar Ltd (AWL), incorporated in 1999 as a 50:50 joint venture between the Adani Group and Singapore’s Wilmar International is among the largest FMCG companies in India. Photo: Loksatta.

By leveraging Adani Group’s extensive port network connectivity and Wilmar’s sourcing capabilities and technical know-how, Adani Wilmar has become the leading edible oil producer in India. 

It is known for its wide range of offerings in edible oils comprising soya bean, sunflower, mustard and rice bran, among others under its well known “Fortune” brand. The company has 23 plants in India, which are strategically located across 10 states, comprising 10 crushing units and 19 refineries. 

Adani Wilmar Ltd is a leader in the edible oil segment and commands a market share of ~18.7% through its Fortune & other brands. Apart from the oil segment, it also offers products like wheat flour, rice, pulses & sugar under its different brands across a broad price spectrum.  Broadly speaking, its product portfolio spans across 3 - categories: 

💢Edible oil, 

💢Packaged food and, 

💢FMCG & industry essentials with further subcategories in the above three categories.

Triggers: 

💢Since Adani Wilmar is a joint venture between the Adani group and Wilmar group it enjoys the backing and networks of the Adani group. 

💢It also has access to Wilmar group’s global sourcing capabilities and technical know-how.

💢It has successfully managed to develop its “Fortune” brand in the edible oil category with leadership position in the last 20 years.

💢With strong brand recall value under its belt, the company has also leveraged the ‘Fortune’ brand to offer a wide array of packaged foods since 2013, including packaged wheat flour, rice, pulses, besan, sugar, soya chunks and ready-to-cook khichdi.

💢The company is one of the FMCG players to enjoy pan-India coverage with its huge distribution network comprising 5,500 - plus distributors across 28 states and eight union territories throughout India catering to over 1.6 million - plus retail outlets.

💢AWL has 23 manufacturing units in India, which are strategically located across 10 states, comprising 10 crushing units and 19 refineries. 

Out of the 19 refineries, 10 are port-based to facilitate use of imported crude edible oil and reduce transportation costs. The remaining are typically located in the hinterlands in proximity to raw material production bases to reduce storage and transportation costs. 

In addition to the 23 plants, it also uses 36 leased tolling units in India, which provide additional manufacturing capacities.

💢Additionally, AWL enjoys strong competitive advantages due to its ability to engage in price-ladder supported by multiple synergies across all three business segments along with access to Wilmar’s market intelligence, which augurs well for the scale-up of its FMCG business.

💢The company exports its products to Middle East, Africa and South East Asia.

💢In Mundra, AWL operates India’s largest single-location refinery, which has a designed capacity of 5,000 TPD. Wilmar International, a global leader in edible oils enjoys a significant leverage in price negotiations and raw material allocation. Adani group on the other hand owns India's largest private sea - port ensuring seamless supply of raw materials to AWL's facilities in India.

💢AWL is also the largest basic oleochemical manufacturer in India. In 2020, AWL forayed ready-to-cook under its flagship Fortune brand.

💢 Recently, the Brokerage Nuvama though cut its target price to Rs.515, from Rs.600, but has maintained a buy.

💢In the near future there could be Palm Oil Shortage followed by rise in price due to Biodiesel Production: There are rumours that reduced availability of Palm oil could be due to the fact that major producers like Malaysia and Indonesia are diverting it for biodiesel production, potentially leading to increased prices.

💢The share of edible oil segment which used to command 85% of Adani Wilmar's revenues, decreased to 74% by September , 2023, making it a less affected candidate by the vagaries of edible oil prices, which is somewhat linked to crude oil prices. The crude oil prices are likely to remain firm in the coming months, as Summer Driving season begins in the US.

The current market cap of Adani Wilmar Ltd (Rs.343.45) is Rs.44,637 crore = Rs.446.37 billion = $ 5.44 billion. The stock of Adani Wilmar Ltd (Rs.343.45) is currently trading near its 52 -week low price.

According to some media reports, the promoters last year wanted to sell 44% (43.97%) stake in the company at $4 billion, which means that the promoters are looking to value the company at ~$9.10 billion.

The current media report suggest that Adani group has decided to put its plans to divest its stake in Adani Wilmar on the backburner for a while as it is not satisfied with the pricing that it is looking for.

Financials: In the September, 2023 quarter, it came up with a consolidated net loss of Rs.130.73 crore as profitability was badly impacted in the cooking oil business. The company had posted a net profit of Rs.48.76 crore in the year-ago period. But the company bounced back in December quarter. The March quarter results were even better due to stabilisation of the edible oil prices.

The FMCG company Adani Wilmar on reported 67% growth in its consolidated net profit to Rs.157 crore for the quarter ended March 2024. The same stood at Rs.94 crore in the year-ago quarter.

Revenue from operations in the reporting period though fell marginally by 5% year-on-year to Rs.13,238 crore. The company had clocked revenues of Rs.13,872 crore in the corresponding period of last year.

Segment wise, the edible oil segment recorded revenue of Rs.10,195 crore in the fourth quarter while the volume grew by 11% year-on-year.

The domestic branded sales volume grew at a faster clip at 13% Y - I - Y compared to overall growth. This is the second consecutive year with faster growth in the branded portfolio, which has resulted in the market share gains.

The food and FMCG segment recorded revenue of Rs 1,341 crore in Q4, with an underlying volume growth of 9% year-on-year.

The overall food and FMCG revenue increased 23% year-on-year resulting in revenues of Rs.4,944 crore. The revenue from branded products in the domestic market has been growing consistently YoY at over 30% for the last 10 quarters.

The company has also been gaining market share in its key products. In edible oils, ROCP (Refined Oil Consumer Pack) market share of AWL has increased by 60bps to 19.0% on MAT basis. In Wheat Flour, its market share has increased by 60bps to 5.60%.

Conclusion: Despite global challenges such as the Russia-Ukraine war, fluctuations in edible oil prices, and inflation worries, it has sustained its margins. The company is projected to increase its market share due to deeper penetration in rural markets and entry into high-margin packaged products. Additionally, the demand outlook is favorable, driven by the ensuring festive season and increased rural demand from the monsoon.

The management is bullish on the future prospects of AWL, as it is witnessing a robust growth in both edible oil and food and FMCG businesses since the beginning of this financial year (2024-25), particularly in May. Comfortable prices, elections, and harvest-related migration to hometowns is set to  boost rural demand for company's products.

As of 03 May, 2024, out of 4 analysts covering the company, 2 analysts have given a Sell rating, 1 analyst has given a Buy rating, and 1 analyst has given a Strong Buy rating, showcasing a mixed sentiment among analysts.

I am bullish on the future growth of the company due to continuation of government policies, since the BJP and its allies returned in Delhi in the recently concluded Lok Sabha polls.

Thus, looking at the current fundamentals and with suitable discounting the fair value comes around Rs.500 - Rs.550. Also, there was no official statement from the company, regarding its stake sale, raising the possibility of another market rumors.

 Market Mantra

#Buy the shares of Adani Wilmar Ltd near the CMP of Rs.347 for targets above Rs.400, since the 4th quarter of FY25 is expected to be better than Q3FY24.  SL: Rs.330.

The good news is that the union government had some months back allowed the import of edible oils at lower tax rates until March 2025.

The price of the shares of Adani Wilmar went down due to sudden drop in the price of Palm oil which is affected by price movements in related crude oils; as they compete for a share in the global vegetable oils market. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. However, this is past and the company has turned around in the last quarter.

In the recent months the signs of weakening demand growth, and Eight OPEC+ members led by Saudi Arabia and Russia saying they would start phasing out 2.2 million barrels per day in production cuts beginning in October, was the primary cause of fall in Brent Crude prices.

Under the plan, more than 500,000 bpd of crude oil would return to the market by December, and 1.8 million bpd would come back by June of 2025. 

However, there's a silver lining: if at the end of August, fundamental picture looks worse than what we have now, they would pause that addition. So, there's less chance of crude oil going too low from the current market price.

Incidentally, when OPEC+ took the decision it did over the weekend, in a reasonably well-supplied crude market, traders factored in the macro picture alongside a dwindling risk premium, with talk of a ceasefire in Gaza, this actually pushed down the crude oil price. 

Meanwhile, an aide to the Israeli prime minister confirmed on Sunday that Israel had accepted a framework deal for winding down the Gaza war, although the Israeli side called it a flawed deal.

Now the data on U.S. fuel consumption is in focus to chalk the future trajectory of crude oil, especially in light of the start of summer driving season. 

Hence, I feel the brent should rebound and settle above $80 per barrel, triggering a price hike in Palm oil. 

Anyway, Adani Wilmar, is into the manufacturing and selling of cooking oil. Fortune”, its flagship brand, is the largest selling edible oil brand in India. Adani Wilmar is one of the fastest growing packaged food companies in India. Mundra is the one of the largest single location refineries in India with a designed capacity of approximately 5,000 tonnes per day.

#Regarding the domestic stock markets, my personal opinion is that though the Sensex is down 2193 points, but the NDA alliance is comfortably above 272 mark. Thus initial trend do indicate the formation of the next government at the centre by the NDA, albeit with less MP strength. But this will give more teeth to the opposition parties, which is good for democracy. 

#Adani and Ambani group companies would continue to dominate for the next 5 - years. Hence, use dips to buy good stocks.

 Market Mantra

#Buy the shares of P C Jewelers Ltd at Rs.47.70. T: Rs.61, SL: Rs.41. 

Last month P C Jewelers Ltd informed the Exchanges that its board has approved a proposal to raise Rs.2,000 crore through rights issues and preferential allotment of fully convertible warrants. As per media reports, its board has formed a dedicated 'fund raising committee' to decide on the details. 

#Indowind Energy Ltd's (Rs.22.10) Q4FY24 results beat market expectations. Indowind Energy came out with net profit of Rs.61.50 lakh for the March, 2024 quarter. It had posted a loss of Rs.25 crore in the year-ago period. The company's total income shot up to Rs.4.01 crore in the January-March period from Rs.3.93 crore in the same period a year ago. The stock should slowly move towards Rs.41/42, since the following quarter results are likely to be better, due expansion of capacity and reduction of debt.

#Diagnostic Stocks would continue to do well. All my counters, Metropolis Healthcare (Rs.1914.55) Vijaya Diagnostics Ltd (Rs.801.10) and Nidan Laboratories Ltd (Rs.33.85) are up from the Recommended prices.

#The stocks of Zee Entertainment Enterprises Ltd (Rs.152.65) made an intraday high of Rs.160.20. If you are betting for Adani Group, then you can take a look at the Zee group, too. Photo: Live Law

Market Mantra

Buy FCS Software Solutions Ltd (Rs.3.85). T: Rs.7, SL: Rs.3.30.

Financials:

Net Sales of the company came at Rs.9.60 crore in March 2024 up 15.79% from Rs.8.29 crore in March 2023.

Quarterly Net Loss stood at Rs. 1.13 crore in March 2024 Vs Rs.0.13 crore in March 2023.

However, EBITDA stood at Rs.10.74 crore in March 2024 up 445.18% from Rs.1.97 crore in March 2023.

#Book profit in Paytm Ltd (Rs.391). We can again enter later. However, the long term investors can put a SL at Rs.377.

#Debock Industries Ltd (Rs.8) was scheduled to declare March quarter results on 30 May, 2024. But according to my sources, it will probably be declared after 4 June, 2024. 

Additionally, according to my close sources though the company at present is not facing any financial bottleneck and is doing well, but the falling promoter holding from 34.15% in December, 2023 quarter to 9.41% in March, 2024 quarter do raise some concerns. However, there's some silver lining in the cloud which I'll let you know in due course of time. 

Presently, if you are contemplating to take fresh positions, do that only after viewing the March, 2024 quarter results.

#Accumulate the shares of Zee Entertainment Enterprises Ltd (Rs.149.45) for targets of Rs.167/Rs.176.

Zee Entertainment posted Q4FY24 revenue/EBITDA (up 2.7%/38.5% YoY) beating Nuvama’s estimates. Overall, the brokerage increased FY25E/26E revenue forecast by 1.4%/2.6% on the back of improving outlook for FMCG advertisers, but cut EPS by 19%/6% as ZEE is transitioning towards a more focused structure, entailing high one-time costs in FY25. 

Nuvama has upgraded the stock to ‘buy’ from an earlier ‘reduce’ with a revised target of Rs 180.

Paytm Ltd: Looks good:

You can take a look at the shares of Paytm Ltd (One 97 Communications) which is looking attractive at the CMP of Rs.357.90.

You can initiate a buy at the CMP for, T: Rs.427/Rs.478, SL: Rs.317. The company is expected to cut down its employee cost substantially.

The parent company of the fintech giant Paytm (One97 Communications), is reportedly considering trimming employee costs -- cutting around 15-20% of its workforce in the current fiscal year.

Paytm has initiated an employee cost-saving plan of Rs.400-500 Cr, potentially resulting in a workforce reduction ranging from 5,000 to 6,300, according to a Financial Express report.

The company has forecast Q1 revenue at ₹1,500-1,600 crore and is confident of "seeing meaningful improvement starting from Q2FY 2025" from restarting certain paused products and achieving steady growth in operating metrics.

Like ZEEL, Paytm is also in the midst of a restructuring and has seen several top-level exits and layoffs in recent months.

The company's loss narrowed to Rs.1,422.4 crore for the year ended March 31, 2024. The company had recorded a loss of Rs.1,776.5 crore in FY23.

The annual revenue of Paytm increased by about 25% to Rs.9,978 crore for FY24 from Rs 7,990.3 crore in FY23.

In March, 2024, YES Securities gave a 'buy' rating with a target price of Rs.505, which was later reduced to Rs.450.

Jefferies has upgraded Paytm to hold from an underperform. However, the brokerage has trimmed the target to Rs.400 apiece from Rs.500 apiece earlier. It is to be noted the stock was not rated by Jefferies since the RBI issues started.

Meanwhile, Morgan Stanley has maintained an equal-weight rating on the stock with a target of Rs 555 apiece.

The weekly chart of the company is looking slightly BULLISH.

Additional Inputs from: ET Now:

Jefferies and Goldman Sachs have emphasised Paytm's robust cash balance of Rs.8650 Cr, as of March, 2024, which could act as a cushion against short term financial fluctuations and ensure stability.

Jefferies predicts a rapid recovery in Paytm's payments and commerce revenues driven by  increased marketing spend and gradual scale up of lending with positive cash flow from H2FY26.

Paytm saw a robust 58% increase in merchant subscription for device payments, growing from 68 lakhs in March, 2023 to 1.07 crore in March, 2024.

Dolat Capital has maintained a BUY rating in Paytm, citing company's renewed focus on business growth and cost efficiency; as positive indicators of revival.

Goldman Sachs noted that Paytm's GMV and disbursals outperformed expectations predicting a positive trajectory with adjusted EBIDTA breakeven by the end of FY25 and net income profitability by FY27.

Paytm achieved a 48% year on year growth in loan distribution business reaching Rs.52, 390 crore in FY24.

The company is also intensifying its efforts at expanding the insurance distribution portfolio, developed by PIBPL.

 Winning Strokes: Think Different

Though many of my ardent blog readers have been requesting me to update my blog, unfortunately I was not getting the required time to do the same. Today, I thought I would do it by hook and crook.

Anyway, the Indian stock markets witnessed yet another remarkable week, culminating on May 24. The primary indices reached unprecedented peaks, propelled by a 2% surge buoyed by  boosted by select index heavyweights.

This upward momentum was fueled by robust March quarter earnings in crucial sectors, coinciding with the impending Lok Sabha election results slated for June 4. 

Additionally, the market found support from further easing in FII selling, consistent DII buying, RBI's substantial dividend payout, and healthy domestic macro data (including record surge in exports, and employment at a 18-year high in May).

Experts anticipate a buoyant atmosphere to continue, albeit coupled with significant volatility, as the market navigates through the release of exit polls and general election outcomes. Market participants will also monitor monthly automobile sales figures, alongside India and the US's GDP data for the March quarter.

The Nifty 50 surged by 2%, equivalent to 455 points, reaching 22,957, while the BSE Sensex witnessed a gain of 1,404 points, constituting a 1.90% increase, closing at 75,410. However, the broader markets exhibited a mixed performance, with the Nifty Midcap 100 index climbing by 1% and the Smallcap 100 index witnessing a decline of 0.70%.

Meanwhile, I anticipate the mid and small cap indices to pick up as the day of election results progresses.

#The stock of Indiabulls Real Estate Ltd (Rs.138.70) which was recommended around Rs.60 and which made a new 52 - week high at Rs.145.70, few weeks back, may touch Rs.171/177 in the coming months. However, those who have entered near my recommended prices should book some profits.

#The stock of Zomato Ltd (Rs.182.90) which was recommended around Rs.53, went on to give multibagger returns during the last couple of years. This is the fruit of holding a good counter for the long term. Now book complete profits and wait for the scrip to come near Rs.167, to take fresh positions.

#The stock of Zee Entertainment Enterprises Ltd (Rs.151.65) continue to do well, as the company's CEO, Puneet Goenka has embarked on an austerity drive. This revolutionary exercise is expected to further strengthen its Bottomline. The stock has already given a smart rally from its 52 - low price post declaration of March, 2024 quarter results.

However, it is equally necessary for the scrip of ZEEL to give a closing above Rs.152 to further move up. I'm looking for short term targets of Rs.175/211.

#The stock of Indowind Energy Ltd (Rs.22.20) is consolidating around the current ranges for the start of next round of upmove towards Rs.33/42.

The renewable energy sector in India (and likely still is) experiencing growth, driven by increasing awareness of climate change and government incentives for renewable energy project's. This growth potential could make Indowind Energy an attractive investment opportunity. Moreover, with cutting of debts and doing away with two lean seasons (December - March Quarters), we can look forward for superb results from the June, 2024 quarter onwards. Accumulate in market declines.

#The stock of Vodafone Idea Ltd (Rs.15.10) on last Friday rallied to Rs.15.70, achieving Motilal Oswal Securities' target of Rs.15. The should consolidate around Rs.14/15 before moving towards the targets of Rs.18/22/24. Accumulate in declines.

#Deebock Industries Ltd (Rs.7.90), a company into agricultural equipments, real estate, hotels, graphite mining, etc will come up with March, 2024 results on 30 May, 2024. But I don't expect any fireworks in the results, however from June quarter its fundamentals are expected to improve. We can look for targets of Rs.27/31 in the coming days. 

My sources are talking of tentative completion of some of the company's projects in the June, 2024 quarter. The company last year came up with rights issue at Rs.15. 

#The demand for cylinders is going to spike up in the coming years as Indian population surges. The BSE listed Sarthak Industries Ltd (Rs.26.35) is set to give good returns once a full fledged rally in the small and mid cap commences, post declaration of the results of Lok Sabha Elections.

 Winning Strokes

On Monday, the domestic equity indices ended with moderate gains. The Nifty closed above the 22,650 mark. In the broader market, the S&P BSE Mid-Cap index rose 0.26% while the S&P BSE Small-Cap index lost 0.06%. The market breadth was negative.

Meanwhile, India’s foreign exchange reserves shot up from $2.951 billion to $645.583 billion for the week ended March 29, 2024.

Currently, though the investors also awaiting inflation numbers from the U.S. and China. tThe Nifty would continue to trade with positive bias at least till the elections.

#India’s foreign exchange reserves increased from $2.951 billion to $645.583 billion for the week ended March 29, 2024. 

#Accumulate the shares of Debock Industries Ltd (Rs.8.45) for targets of Rs.12/17. Some very good news is coming in the counter. One of them is: the company's 2nd hotel project according to the sources should get completed by May, 2024. By the way, you have waited for a long time, now it seems the good days are ahead.

#The shares of Sarthak Industries Ltd (Rs.26.29) has fallen from around Rs.215, post bonus issue. The stock should at least double from the current price.

The stock of Zee Entertainment Enterprises Ltd (Rs.149.70) is consolidating around the current ranges for the next level of upmove. Accumulate!!

The shares of Nidan Laboratories and Healthcare Ltd (Rs.29.70) is available near its 52 -week low price. The company has appointed a new company secretary and now news flow should again commence. We can expect the share to touch Rs.37/42 before August, 2024.

#The promoters have probably completed purchase of shares of Rajesh Exports Ltd (Rs.304.40). We need to keep a careful watch on the scrip. T₁ : Rs.331 and T₂ : Rs.371.

#As mentioned earlier, a number of times, Indowind Energy Ltd (Rs.23.90) is now almost a debt free company. Both the December and March quarters were lean seasons for the company. From June, 2024, Quarter its fundamentals should again show improvement. Moreover, it is coming with a wind farm within next 9/12 months, in its 300 acres of land. The stock is heading towards Rs.41/42.

#The shares of Eros International Media Ltd (Rs.21.30) is consolidating around the current ranges. We can look forward for targets of Rs.31/37, before Durga Pooja.

Yarn Making Stocks

ICRA’s most recent report predicts that there will be an approximately 10% increase in demand for the cotton yarn industry in terms of volume during FY2024. 

The CareEdge report also provides statistics that support this projection, stating that the Indian cotton yarn industry is expected to experience a sales volume growth of 5-7%.    

Concentrate on purchasing Cotton Yarn Manufacturing Companies at suitable prices: RSWM Ltd (Rs.210.15), Nahar Spinning and Weaving Mills Ltd (Rs.304.40), Nitin Spinners Ltd (Rs.347.90), Alok Industries Ltd (Rs.32.20), Vardhaman Acrylics Ltd (Rs.63)Ambika Cotton Mills Ltd (Rs.1732), Rajapalayam Mills Ltd (Rs.869.50), and so on.    

♦️Rajasthan Spinning & Weaving Mills Ltd: RSWM Limited, the primary organization of the LNJ Bhilwara Group worth USD 1 billion, is a prominent producer and exporter of synthetic and blended spun yarns from India. 

It ships a diverse collection of yarns and fabrics to approximately 90 nations worldwide.

The company operates 11 manufacturing facilities situated in various regions of Rajasthan, which manufacture top-notch cotton, mélange, synthetic, sustainable, greige, dyed, novelty, and value-added yarns, in addition to knitted and denim fabrics.    

In the previous year, RSWM Ltd made a decision to allocate ₹315 crore for the growth of its compact cotton yarn production at the Lodha Unit in Banswara, Rajasthan. 

This investment aimed to increase the unit's spindle capacity from a total of 95,376 to 146,448 by March 2024.    

The increasing need for cotton and the cotton industry has led to the decision to increase capacity.  

♦️Nahar Spinning and Weaving Mills Ltd: Its expansion endeavors are progressing according to plan.

Last year the company successfully completed the expansion of its spinning unit in Lalru village, with machinery being delivered to the site.

Moreover, 10 (ten) ring frames of 1632 spindles each, totaling 16320 spindles, have been installed, and the remaining 14880 spindles are expected to be operational by February, 2024.    

Upon the successful implementation of the company's expansion strategies, the operational capability of the enterprise will be amplified to encompass 5,73,376 spindles and 1080 rotors.

Furthermore, Nahar has diligently executed a comprehensive modernization initiative across its spinning units, incorporating the installation of 8 Vortex machines, each equipped with 96 positions, all of which are now fully functional. As a result, the production capacity has risen by 40,000 tons per annum.

♦️Positive News:   In response to the surge of substandard imports, the Indian government instituted a Quality Control Order (QCO) concerning polyester yarn, encompassing both fully drawn yarn (FDY) and partially oriented yarn (POY). Essential in upholding these stipulations, the Bureau of Indian Standards (BIS) performed a pivotal role.   

Originally planned for implementation in April 2023, the BIS rollout was subsequently postponed twice, ultimately taking effect on October 5, 2023. 

As a consequence, September 2023 witnessed a substantial upswing in imports attributable to pre-buying, followed by a noteworthy decline of nearly 60% in November 2023 compared to the preceding year.    

In the future, CareEdge Ratings predicts a decline in the importation of polyester yarn, which could potentially enable Indian industry participants to raise prices and enhance their overall sales performance.   

It is anticipated that the gap between prices of polyester yarn will narrow, and there will be a gradual increase in the margin for Profit Before Interest, Lease, Depreciation, and Tax (PBILDT) starting from the third quarter of the financial year 2024. 

A more substantial improvement is projected for the fourth quarter of the financial year 2024, as a resurgence in domestic demand in critical markets such as China, the United States, and Europe is expected to reduce the discrepancy between supply and demand, thereby reinvigorating the export demand for Indian polyester yarn manufacturers. 

Moreover, a report by the Hindu BusinessLine states that, "Cotton prices are ruling steady over the past month helping in demand improving from spinning mills, traders and multinational trading houses as the general consensus is that the market may not drop any more from here". 

Also, according to data from the GujCot Association, Gujarat has seen around 38 lakh bales (170kg each) from Oct 1 to Jan 15.

The state is seeing about 45,000 bales arrive every day despite cotton prices being significantly lower than last year. Across India, cotton arrivals reached 1.35 crore bales till Jan 15. GujCot Association secretary Ajay Shah said, “By our estimates, Gujarat will have around 85 lakh bales for pressing in the cotton season of 2023-24 (Oct 2023 to Sept 2024). This year, arrivals have been stronger with a daily average of 45,000 bales in Gujarat. Last year, farmers were not selling the crop in volume, so arrivals were low. This year prices have decreased but farmers are selling cotton.”

According to GujCot data, good quality raw cotton is priced at around Rs 1,450 per 20kg while low quality cotton is priced at around Rs 1,250 per 20kg. Processed cotton prices have remained at around Rs 55,000 a candy (356kg) for about a month, which has brought stability to the textile industry.

Cotton prices had reached Rs 1.10 lakh per candy due to low supply in May 2022 and this affected the textile industry badly. Since Dec, cotton yarn export orders have also increased, according to the Spinners Association Gujarat. (SAG).

Naresh Sharma, secretary of Maskati Cloth Market Association, said, “Cotton arrivals have been encouraging for the industry because they have ensured stability in prices. We hope that with improved capacity utilization in the spinning sector, there will be better market conditions for the entire value chain.”

===============================

Sources:  

➡️The Textile Magazine

➡️Fibre2Fashion

➡️The Times of India

➡️Hindu BusinessLine

 Market Mantra

The Indian bourses are on a roll. Today the Nifty traded above 21,650 level in a narrow range. However, action is seen in small and mid cap counters. Banks are also doing well in anticipation of a rate cut in the H2FY25.

#Indowind Energy Ltd (Rs.24.90) hit the buyer freeze, after the fundamentals of the company showed marked improvement. Also, wind energy stocks are expected to do well in future due to government of India's mega - initiatives in the Renewable Energy Sector. T: Rs.41/42.

#Buy Sarthak Industries Ltd (Rs.27.25) near the CMP for targets above Rs.50. The company has the LPG Cylinder manufacturing Unit at Pithampur Industrial Area, Village Akoliya, District Dhar, (M.P.). It is a low debt company.

#Accumulate the stock of Debock Industries Ltd (Rs.9.50) near the CMP for targets of Rs.17/19. The company is into making of farm equipments. The government of India is likely to give impetus to the farm Sector in the ensuring budget.

#The year 2024 will prove to be a notable year for India's domestic cell manufacturing industry. After years of laying the policy and regulatory groundwork for building a domestic cell manufacturing base, India could finally witness several giga factories enter its first phase of commercial operations in 2024.

Rajesh Exports Ltd (Rs.365) is one of the three beneficiaries of the Rs.18,100 crore PLI Scheme for ACC Battery Storage, Rajesh Exports is setting up a battery cell manufacturing facility in the state of Karnataka. In January 2023, the company incorporated a 100 percent subsidiary firm 'ACC Energy Storage Pvt Ltd' for the execution of the 5 GWh project for manufacturing advanced chemistry lithium-ion cells for making battery packs for EVs and energy storage. Accumulate for targets above Rs.500.

#Accumulate the shares of Bandhan Bank Ltd (Rs.230.90) near the CMP for targets of Rs.264/270/290/310.

#If you are interested in Penny Stocks, then you can accumulate the logistic player, MFL India Ltd (Re.0.57) in market declines. But don't invest more than Rs.50,000 in this scrip.

 Winning Strokes 

The domestic bourses witnessed selling pressure yesterday, dragged down by the sectors such as Banking, Financials and IT; due to a combination of factors including mixed global market performance and Moody's downgrade of the US credit rating outlook. Despite that buying was seen in PSU Banks and Metal Shares.

The BSE slipped by 325.58 points or 0.50% to end the day at 64,933.87. The Nifty 50 index lost 82 points or 0.42% to close at 19,443.55.

Incidentally, it is after almost 4 - months that I've decided to put some inputs on my blog. I was not able to upload the blog due to, teething work pressure from all sides. However, I kept on updating on my recommendations in Twitter (X). Let's look at few of my recommended counters.

#RTN Ltd which I recommended around Rs.3/Rs.3.10 made a new 52 - week high at Rs.9.20. All my targets have been achieved. Interstingly those investors who were reluctant to buy the scrip at Rs.3 are now buying at almost 3 - times that price.

#Zomato Ltd (Rs.122.20) made a new 52 week at Rs.126.35. If you remember it was recommended around Rs.50/53 last year. The stock as expected turned out to be a Multibagger. 

#The high tech IT services and VC company XELPMOC Design and Tech Ltd (Rs.84.95) didn't come up with good results in the September, 2023 quarter. However, I'm looking at its investments in start up, which over a period is expected to give good returns. It did cross to Rs.94.70 after my recommendation. We can expect the stock to cross Rs.100 by the end of this year.

#Meanwhile, due to some unknown reasons the stock exchange regulators have put the stock of Indowind Energy Ltd (Rs.16.20) in the ESM category and have not increased the circuit limits even after its impressive September quarter results. The SEBI should explain to the shareholders the reason for such outlandish moves. However, I'm expecting the scrip to make new 52 - week highs in the coming days.

#Those who have money but do not have time, can contact me for managing their demat accounts.

For this you don't have to give me any advance money. All you need to do is to have a portfolio of Rs.2 lakhs (negotiable), open a trading account in my associated Brokerage House and allow me to trade on your behalf. This is will be a safe investment technique with no F&O calls. The investments will be done in good small and mid cap counters. The profits will be shared in the ratio of 60:40 ratio in all portfolios below Rs.10 lakhs. Above Rs.10 lakhs it will be 70:30 and above Rs.1 crore it will be 75:25 between you and me. All your earlier losses will be covered.

#I have recommended MMTC Ltd (Rs.52.95) based on the some media reports. MMTC has recently announced its ambitious mining plans of rare minerals like lithium, cobalt, silicon, etc. The Union Cabinet has also approved amendment of 2nd schedule of Mines & Minerals Act for specifying rate of royalty in respect of Lithium, Niobium and Rare Earth Elements. Once the mining ⛏️ starts, the whole business of MMTC Ltd  will take a dramatic turn. 

India has an ambitious plan of mining of rare minerals like, lithium, cobalt, silicon etc, which are critical components towards clean energy. Given the global shift towards clean energy the rare mineral market is expected to witness significant growth.

Moreover, any government will not close any government enterprise just on the eve of elections. This is a simple fact. We can look for immediate targets of Rs.71/96.

#Buy the shares of Adani Transmission Ltd (Rs.759) for targets of Rs.950/Rs.111. Last month, Adani Energy Solutions Ltd inaugurated Warora-Kurnool Transmission Line,  covering 1,756 circuit km across Maharashtra, Telangana & Andhra Pradesh. It's set to reinforce the national grid, enabling power transmission of 4,500 MW between Western & Southern regions.

Adani Energy Solutions Ltd recorded strong set of earnings during the Q2FY24 quarter. Its consolidated profit jumped 46.10% to Rs.284 crore in the quarter that ended on September 30, 2023 as against Rs.194 crore in the year-ago period.

#My recommended FCS Software Solutions Ltd (Rs.2.85) also made a new 52 - week high at Rs.3.45. When a stock makes a new high, the general rule book says to accumulate the scrip in market dips. I'm expecting the scrip to cross Rs.5 in the near future.

#Another of my strongly recommended counters Suzlon Energy Ltd (Rs.39.20) also made a new 52 week high at Rs.40.55. Here also, the investors who were not interested to buy the scrip around Rs.6.10 are now entering at the CMP. Those who have entered the scrip when I recommended must be having an excellent time. Congratulations to you.

#The share of Rajesh Exports Ltd (Rs.438.70) is consolidating at the current levels for the next round of upmoves. The company will come up with September quarter results today.

In June 2023, its net sales came at Rs.1,465.66 crore up 12.91% from Rs..1,298.07 crore in June 2022. Its quarterly Net Profit came at Rs.57.73 crore in June 2023 up 84.8% from Rs.31.24 crore in June 2022.

The EPS of Rajesh Exports has increased to Rs.10.48 in June 2023 from Rs.9.20 in June 2022.

In January this year there was a news report on ETN News that, Bengaluru-based Rajesh Exports, one of the three selected participants in the Government of India's ₹18,100 crore Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage, has signed a tripartite agreement with the Union Ministry of Heavy Industries and the Department of Industries and Commerce, Government of Karnataka, for setting up a battery cell manufacturing facility in the state.

As per the requirement of the PLI Scheme, the company has incorporated a 100 percent subsidiary firm 'ACC Energy Storage Pvt Ltd' for the execution of the 5 GWh project for manufacturing advanced chemistry lithium-ion cells for making battery packs for EVs and energy storage. 

Valcambi, is world’s largest Swiss gold refinery. Rajesh Exports imports gold directly from mines round the world & refines it in India & in Valcambi . 

India’s largest gold refinery in Bengaluru’s Whitefield was set up by city-based Rajesh Exports, one of the world’s largest gold refiners, at Rs 350 Cr. The facility has the capacity to process 600 tonnes per annum, which is about 67% of India’s total gold consumption per year. If its fundamentals are to be believed then the intrinsic value of the scrip comes around Rs.3300.

Infact according to Alphaspread.com, the base case intrinsic valuation of Rajesh Exports Ltd (Rs.437.75) is near my valuable of Rs.3200/3500.

Its profit outlook over the next few years is a strong asset. Its low valuation, with P/E at 8.2 and 4.94 for the ongoing fiscal year and 2024 respectively, makes the stock pretty attractive with regard to earnings multiples.

#My recommended Nahar Spinning Mills Ltd (Rs.259.20) came out with good set of numbers for the September, 2023 quarter. During the coming months the textile stocks are expected to move up, a seasonal move. We can look for targets of Rs.311/320 in the coming days. 

References:

🏵️Live Mint

🏵️ETN News 

🏵️Capital  Market.

🏵️The Business Standard 

NDTV Ltd: Buy

CMP: Rs.227.25

Adani Group's price: Rs.342.65

Face Value: Rs.4

Market Cap: Rs.1466 Cr

TTM EPS: Rs.7.56

The stock of NDTV Ltd looks attractive buy after Adani Enterprises Ltd, through subsidiaries RRPR Holding and Vishvapradhan Commercial, took majority stake in it. Adani Group now owns 64.72% of NDTV, which runs three national TV channels. Photo: IndiaFacts.

This is Adani Group's strategy to gain a greater footprint in India's media sector as a part of its broader diversification binge to grow its empire beyond coal mining and ports into airports, data centres, cement, and digital services.

The CMP of Rs.227.25 is much below what Adani group paid as open offer. Moreover, post acquisition, the Board of Directors of New Delhi Television Limited  on a meeting held on May 17, 2023 granted approval for a proposal to request the Ministry of Information & Broadcasting for permission to launch 9 (nine) news channels in various Indian languages.

According to certain media reports, Gautam Adani has expressed his delight in assisting NDTV by providing top-tier talent and facilities, with the goal of developing it into a successful worldwide news organisation across multiple platforms.

The Media and Entertainment Sector (M&E Sector) usually outperforms the GDP. Now that interest rate cycle has probably peaked out, we can again see a massive GDP growth going forward.

Meanwhile, th advertising revenue was from e-commerce and education sectors, will continue to be money spinners for the media sector, especially for Digital domain, as Indian economy takes off with the advent of festival season.

However, the Business for the current financial year will depend on how the economy recovers, but advertising is expected to iccrease for the festival season and due to Lok Sabha elections due next year.

NDTV is already leveraging its huge leadership position in the online space to expand and grow its business.

NDTV Convergence Limited (“Convergence”) recorded its highest-ever revenue in 2020-21 and its highest-ever PAT of Rs. 27.91 crore and an EBITDA of 27.43%.

Google has partnered with Convergence as a premium publisher to launch its new content format in India,“ Webstories”. Convergence, on account of the credibility and popularity of its content, was also chosen to bea n early partner of the Google Convergence also received support from the Google Journalism Emergency Relief Fund.

On social media, NDTV’s following remains premium. NDTV is the most-popular news handle on Twitter with 17.70 million followers in India on 2nd July, 2023. The number of subscribers continue to soar for the NDTV YouTube channel and so is NDTV India. In Instagram too it is one of the most followed English news account.

Targeting a new younger demographic, Convergence has signed up as the preferred content partner for new platforms like Snap and Glance, which are phone-based.

NDTV videos across online platforms is also growing by leaps and bounds, shattering all previous records.

NDTV Food remains the country’s top online destination in its genre. It is the largest repository of 6000+ recipes from top chefs, restaurants, and home cooks. It is also popular for its restaurant reviews, home remedies and expert tips through articles and videos.

Some Useful Highlights:

1. NDTV 24x7 remains the most widely-distributed Indian News channel outside India.

2. Last year, NDTV launched its channels in Nepal and Bangladesh.

3. NDTV 24x7 is the only Indian English news channel available in the US on Comcast Cable, the world’s largest cable network, Virgin Media in the UK and Multichoice DStv in South Africa.

(e) The Company and its subsidiary NDTV Convergence Limited (“NCL”) have incubated e-commerce verticals to unlock the shareholders’ value and accelerate the Company’s leadership position on internet using transaction based model. 

As a part of incubation of new ecommerce businesses as promoter of these companies, the Company and NCL, had agreed to provide patronage through marketing and promotional support for 3 years including but not limited to advertising on NDTV channels, both domestic and international, bands on NDTV channels only out of unsold inventory, anchor mentions, programme names, night time programming, promotional product launches, access to the homepage, redirection of visitors/traffic from the website of NCL to the website of the ecommerce verticals on no charge, best effort basis. 

The Company & NCL would not be incurring any incremental costs as a result of providing such services but will accommodate and support these new companies by contribution of residuary resources in a gratuitous manner. This is in expectation of future benefits that are expected to flow to all shareholders of the Company and NCL.

Sector news: The media sector has been growing tremendously since the last few years and this is the reason, this sector has become one of the highest-income grossing sector in India.

Epecially after the COVID-19 outbreak, the media industry has seen rapid growth, when people were forced to sit at their homes, and spent their times watching Netflix and Amazon Prime.

As per a forecast, the Indian media and entertainment industry will reach ₹2.4 lakh crores by 2024, resulting in the growing sales of Smart TVs, digital segments, film segments and animation & VFX segments. 

The Indian media and entertainment sector is seemingly on an upward trajectory. According to a FICCI-EY Report in 2021: While print media witnessed a resurgence, the Television sector maintained its position as the largest segment in Indian media and entertainment with digital media following in second place.

In terms of advertising, digital media is contributing the highest share of advertising in India.

According to another estimate, the media and entertainment sector is set to grow Rs..734 billion to reach Rs.2.83 trillion by 2025 at a compound annual growth rate (CAGR) of 10.5%. 

The contributors to the growth of the media and entertainment segment are believed to be digital, online, gaming, and television which will account for an estimated 65% followed by animation and VFX at 11%, live events, and films at 8% each.

According to the report, the Indian advertising industry grew at 18.1% over 2021 and is expected to witness a compounded growth of 15.07% by the end of 2024. 

Digital advertising in India continued to be at the tip of the iceberg with a substantial spike of 39.5% over 2021, putting TV advertising in a tight spot, the report said.

The report also states that the Indian digital advertising industry stood at a market size of Rs.29,784 crore, growing at 39.5% over 2021, and is predicted to reach Rs.51,110 crore, with a compounded growth rate of 31%, by 2024.

Talking about the increasing digital appetite, the report mentions that digital media is expected to overtake the ad spends share of television in 2023, putting TV advertising in a tight spot. Digital media spends is driven by social media with a contribution of 30%, followed by 28% from online video and 23% from paid search, highlights the report.

The report further shed light on some interesting numbers:

➡️The spend on online video is expected to grow rapidly and be at par with social media spends by 2024.

➡️The FMCG sector contributes 30% of total advertising spends, followed by the e-commerce category at 18%. Hence, the fortune of FMCG sector is related to Indian Media space.

➡️FMCG and e-commerce are the largest contributors to the digital media industry, accounting for 38% and 20%, respectively, followed by consumer durables, pharmaceuticals, and automotive.

Due to the rapid adoption of the next generation of Web3 technologies and the development of mass markets, Indian consumers’ expectations are set to evolve toward convenience, commerce, experiential media, and marketing in the new digital economy.

The evolution of the new digital economy will lead media sector. 

Conclusion: Looking at the above points and considering the stake sell by the promoters of NDTV Ltd at Rs.342.65 against the CMP of Rs.227.25, the stock appears to be a good bet for the short to medium term.

Prudent investors can buy the scrip of NDTV Ltd near the CMP for targets of Rs.400/450 in the coming days. SL: Rs.295.

Bibliography: 

🍥The Financial Express.

🍥 Wikipedia.

🍥 The Business Standard

🍥The Economic Times.

🍥CNBC TV18.

🍥Moneycontrol.com

🍥Daily Mint.

 Market Mantra

In the afternoon trade, the domestic equity benchmark indices reached new intraday highs. The Nifty is currently trading at 19163, up roughly 190.90 points and is hovering around the 19,150 levels. European markets rose, while most Asian markets traded in the green. In this bull market most stocks are likely to rise up. Photo: Swaraja.com

The Nifty and the Sensex hit all-time highs in afternoon trade at 19,160.10 and 64,593.74, respectively. Meanwhile, the Nifty_Bank Index also registered its fresh record high at 44,758.45. 

In an intersting development according to RBI's latest Financial Stability Report, the asset quality of the MSME portfolio of all SCBs showed improvement during FY23 with the gross NPA ratio nosediving from 9.3% in March 2022 to 6.8% in March 2023. At this juncture you need to be patient, pick up good beaten down stocks during market dips and hold on to your positions with appropriate stop losses.

#Today most of the stocks in the Adani pack came under pressure around 3.20% of the equity of Adani Transmission Ltd (Rs.769) changed hands on a block trade in Friday morning at an average price of Rs.795 apiece, taking the total value of the transaction to Rs.3,103 crore, according to exchange data published by CNBC TV18 website.

In another Development, last month, Mahen Kumar Seeruttun, the minister for Financial Services and Good Governance in the Mauritian government, said a company from overseas needs to carry out its core income-generating activities in, or from, Mauritius, as required under the Income Tax Act. Rejecting the claims made by Hindenburg Research, Mauritian Parliamentarian, called the claims of the presence of Shell companies of the Adani Group in Mauritius, to be “false and baseless". The short-seller, Hindenburg in its report, alleged the presence of Adani Group's shell companies in Mauritius, UAE, and the Caribbean islands.

Post Hindenburg torpedoes, the Adani Transmission Ltd's shares are trading at over 80% discount from their 52-week high of Rs.4,236.75. This implies that the stock must surge 5x - times from the CMP to achieve this level. Today's deal was executed at ~Rs.795 which means the share should close above this price. You need to accumulate during market declines.

#The stock of PC Jewelers Ltd (Rs.26.35) today rose to Rs.26.70. The festival season has kicked off with Bakri Eid, and is likely to continue till Christmas, followed by marriage season. You need to buy the shares of Jewellery and Apparel companies and hold at least till Deepawali. 

#The shares of NDTV Ltd (Rs.227.60) today moved to Rs.333.95. It is now an Adani group company. Adni Group acquired Pronnoy and Radhika Roys' stake in NDTV Ltd at the price of Rs.342.65 per share.

#The shares of Nahar Spinning Mills Ltd (Rs.271.25) is hovering around the price band of Rs.267 - 292. However, the ensuring festival demand is likely to push the scrip above Rs.300. You need to buy and keep holding. It is one of the top textile companies in India.

 Market Mantra

In early afternoon trade, the benchmark indices extended their advances and set a new record high -- the Nifty 50 index reached an all-time high of 18,982.05 while the Sensex reached an all-time high of 63,948.84. Photo: Just Dial.

Meanwhile, this trend was seen in broader market too with the S&P BSE Mid-Cap index rinsing 0.39% while the S&P BSE Small-Cap index gaining 0.30%. The market breadth was strong. On the BSE, 1,866 shares rose while1,471 shares fell. A total of 157 shares remained unchanged. The benchmark indices are now expected to trade flat while the action is likely to be seen in the small, mid and micro cap spaces. 

#Buy the shares of NDTV Ltd (Rs.229.70) near the CMP for short term targets of Rs.251/Rs.306. SL: Rs.209. Adani group holds a whopping 64.71% stake in NDTV Ltd. 

It is well known that the Adani has established itself in several Industry verticals, including airports, renewable energy, mining, and data centres, to name a few. Adani has recently widened its horizons to include the media and entertainment sectors, and has chosen the news institution New Delhi Television Limited (NDTV Ltd) probably to help it realise its objective.

Without a question, NDTV has a large digital and offline customer base. As a result, NDTV's massive consumer base, combined with the Adani Group's massive resources, has the potential to revolutionise the media and entertainment industries. Accumulate!!

#Buy the shares of PC Jewelers Ltd (Rs.26.15) near the CMP for short term targets of Rs.31/32.

#The share of RTN Power Ltd (Rs.4.85) which made a new 52 - week high yesterday came in for profit booking. The stock is likely to stabilize near Rs.4/4.30, where Accumulation can be initiated. I have repeatedly asked you to accumulate the scrip when it fell to near Rs.3, citing the reason as improved Fundamentals and the promoters looking to refinance the high cost debt. Congratulations to those who bought the share at those prices and made hefty gains.

#Accumulate the shares of D B Realty Ltd (Rs.75) near the CMP. According to earlier news reports, it is on the radar of Adani Group. The stock should give decent returns from here.

#Keep Accumulating the shares of Adani Group companies, especially Adani Enterprises Ltd (Rs.2373.10) and Adani Transmission Ltd (Rs.805.50). Both will give you good returns over a period.

#Hold the shares of Piramal Pharma Ltd (Rs.90.65) for targets above Rs.100. The company is expected to show good performance in Q1FY24. 

#Accumulate the shares of FCS Ltd (Rs.2.10) for targets over Rs.5/6. This is Re.1 Face Value scrip.

The website of FCS Software Ltd says: One of the simplest methods to begin using AI into your organisation is to deploy AI-powered chatbots to handle all customer-facing tasks such as orders, servicing, helpdesk, and so on. These chatbots will be able to deliver real-time information to clients while also interpreting their queries in any language in a very human-like manner.

Market Mantra

The Indian markets are trading with slight loss in absence of any major clue. Meanwhile, the US Fed Chair, Jerome Powell hinted for going to move more slowly in terms of any further interest rate hike.

#Buy 3i Infotech Ltd at Rs.35, for short term targets of Rs.41/46, SL: Rs.31.60. The software companies who are into automation should do well in the near future.

#The scrip of Central Bank Ltd (Rs.27.90) probably completed its correction phase today. With the current set of fundamentals, the stock should double from the current price. Accumulate or average your holding.

#The scrip of RTN Power Ltd (Rs.4.80) touched Rs.5.05, due to improved Fundamentals. The stock should cross Rs.10 in the coming months.

#The share of A2Z Infra Engineering Ltd (Rs.7.56) has been shifted to T - group. However, the company is expected to show a strong come back after few quarters of lackluster performance. Accumulate.

 The Two Scrips and a Few Points

Overseas, Asian stocks are trading lower today as investors await China's rate decision and testimony from US Federal Reserve Chair Jerome Powell for indications on the route ahead. Meanwhile, on June 16, foreign portfolio investors (FPIs) purchased shares worth Rs.794.78 crore, while domestic institutional investors (DIIs) were net purchasers worth Rs.681.33 crore in the Indian equities market.

#Buy Central Bank Ltd (Rs.26.70) near the CMP for short term targets of Rs.32/37. 

Central Bank of India recently said that ICRA Limited, a rating agency has assigned credit ratings for various bonds. The rating agency has assigned "[ICRA]AA- (Stable)" for Basel III Tier II bonds worth Rs 2,000 crores. Further, the filing noted that the rating was upgraded from [ICRA]A+(Positive). It also said that ICRA assigned "[ICRA]AA- (Stable)" to Basel III Tier II bonds worth Rs 1,500 crores and "[ICRA]A+ (Stable)" to Basel III Tier I bonds worth Rs 1,000 crores.

Rationale of the ratings assigned to the bank:

Central Bank of India receives an upgraded long-term rating due to enhanced capitalisation and solvency. Exit from RBI's PCA framework fuels growth, boosting the credit-to-deposit ratio and operating profitability. 

Sovereign ownership, government support, and declining net non-performing advances contribute to the positive rating. CBI's established deposit franchise, strong CASA base, and competitive cost of funds also play a role. 

However, asset quality concerns and stressed exposures in the corporate book remain monitorable. Lower credit costs are expected to improve the return on assets. 

A stable outlook predicts continued profitability, improved asset quality, and regulatory capital compliance.

#Buy the shares of Adani Transmission Ltd (Rs.110.90) near the CMP for short term targets of Rs.1200/1800.

Adani Transmission reported a 17% increase in consolidated revenue of Rs.3031 crore in the quarter ending March 2023. During the period, the earnings of the Ahmedabad-based electricity distributor increased by 85% to Rs.440 crore. The  operational transmission network grew by 1,704 circuit kilometres (ckm), bringing the overall length to 19,779 ckm. Another 4,408 km of transmission lines are in various phases of construction.

Winning Strokes

The trading pattern of the Singapore stock exchange's SGX Nifty suggests that the Nifty could open with a 40-point gap up. Overseas, Asian equities are up on Monday on expectations that the Federal Reserve would stop rate hikes this month following a mixed US jobs report, while crude oil jumped after Saudi Arabia vowed significant output cuts in July. You now have to pick up good small and mid cap stocks for the upcoming June - September rally. Photo: Equity Bulls.

#The stock of Zomato Ltd (Rs.71.15) made an intraday high of Rs.73.20. With this move all the short term targets have been achieved. Book profits and wait for dips to enter.

#The stock of Dhani Services Ltd (Rs.34.35) is consolidating at the current ranges. One of companies, Yaari Digital Integrated Services Ltd (Rs.12.90), whose promoter is Sameer Ghelaut, hit the upper circuit last Friday. This is expected to give a positive rub off to the shares of Dhani Services Ltd, since Dhani Services Ltd (Rs.34.35) also has Sameer as the promoter. Keep accumulating for targets mentioned in Twitter and Facebook.

Wikipedia: Sameer Gehlaut (born 3 March 1974) is an Indian businessman. He is the founder and chairman of the Indiabulls Group, a diversified financial services group with businesses in housing and consumer finance through independent and listed companies in the Indian stock exchanges.

Sameer Gehlaut's Indiabulls Housing Finance is India's second biggest mortgage lender. An engineer from India's elite Indian Institute of Technology, Delhi, Gehlaut started online brokerage Indiabulls with two college pals in 1999. Gehlaut took the company public in 2004 and moved into real estate scooping up prized land in Mumbai in public auctions. Gehlaut is building a Mandarin Oriental hotel in London's Mayfair area.

Dhani offers a range of products across both fintech and healthtech services. On the financial services front, customers can choose from a suite of products to help manage all their financial needs on a daily basis. Dhani is also home to an online store through which customers can get their hands on all daily need items. Its other financial services include investing, trading, and growing their wealth through smart stock broking solutions.

#There were news reports that Prestige Estates has bought out DB Realty Ltd's (Rs.84.10) stake in two ventures that are engaged in real estate projects in Mumbai, for ₹1,176.5 crore.

In DB Realty, Rekha Jhunjhunwala, wife of the late investor Rakesh Jhunjhunwala, hold about 1.4 per cent stake.The stock should cross Rs.100 in the near future as it's debt has come down to ₹976.54 crore. Hold with a SL of Rs.76.

#The share of A2Z Infra Engineering Ltd (Rs.8.15) which is into two happening sectors like Waste Management and erection of Telecom Towers, could be accumulated for targets of Rs.12/14. The 5G telephony service requires lot of telecom towers, especially in cities. Hence, the demand for telecom towers will continue to see an upward trajectory. Accumulate!! 

#Nahar Spinning Mills Ltd (Rs.262.10) should do well in the coming days. According to news reports, Nahar Spinning Mills has last year undertaken an expansion plan of 31200 spindles. The project's construction is proceeding well. Orders for the machinery have already been placed, and the project is planned to be completed by June 2023. After the expansion is completed, the company's spindle capacity will stand at 5,73,376 spindles and 1080 rotors. The stock is expected to cross Rs.400 in the near future. 

In addition, the company is adding 8 Vortex machines with 96 positions each to its spinning unit. The machinery orders have already been placed. The project is expected to be completed by June, 2023.

Furthermore, the Company's upgrading of the spinning and garment facilities is proceeding as planned. Under this plan, the corporation will replace the 33 old Ring Frames with the New Ring Frames. In addition, new Speed Frames, Card Machines, and Contamination and Control Machines are being installed. The machines have already been ordered, and the modernisation is expected to be completed by June, 2023. Accumulate!!

#Since crude oil is showing some positive momentum, you can buy the shares of Aban Offshore Ltd (Rs.40) near the CMP for short term targets of Rs.47/51.

#The stock of RTN Power Ltd (Rs.3.50) has started to move up. Accumulate for targets of Rs.4.30/Rs.4.60.

#The stock of the pharma giant Wockhardt Ltd (Rs.169.90) is trading at a dirt cheap price. Accumulate for targets of Rs.221/272.

Wockhardt is a global pharmaceutical and biotechnology organisation providing affordable high quality medicines across the world.

It has 14 comprehensive manufacturing facilities across India, US and Europe which are approved US FDA, UK MHRA and EAMA compliant sites.

Wockhardt is a global pharmaceutical and biotechnology organisation providing affordable high quality medicines across the world. It has 14 comprehensive manufacturing facilities across India, US and Europe which are approved US FDA, UK MHRA and EAMA compliant sites. Wockhardt has a global footprint with 75% of its business outside India. It is present in various segments like generics, biotechnology, injectable and antibiotic discovery. Wockhardt is focusing in 4 areas of business to be the strategic pillars for future growth. 

• First is the pharmaceutical business in UK, India, US and emerging markets. 
• Second is the manufacture of vaccine in UK under collaboration with Serum Institute to supply it globally. 
• Third is the entire injectable insulin portfolio in the diabetes Biologcal space. 
• Lastly is the deep commitment of the company in the research and development space for new drug discovery. 

The company has done an entire restructuring in its US business by closing down its manufacturing facility in Morton Grove in Chicago, USA, which was a significant drain on its financial performance. 

Wockhardt expects to save about USD 12 million in losses which it was incurring. But the company has identified the product portfolio to be now manufactured by a third party at a certified facility and will continue to maintain the sale of the product with approx 40% gross margin. 

The company has also recently concluded an agreement with Serum Institute to manufacture 150 million doses per year of vaccine at its UK facility for a period of 15 years and for which it has received £10 million contribution. 

Additionally, apart from the contract manufacturing there is a joint venture component in the agreement wherein there will be a profit sharing of 51:49, in favour of Wockhardt. 

The company has a significant presence in the antibiotic segment and is among the largest company in the world to have a comprehensive end to end discovery and development program. 

The deleveraging undertaken by the company over the last five years have resulted in the long term external debt going down from a whopping Rs.3,200 crore to about Rs.600 crore.

The Wockhardt stock has been in a downturn over the last few years due to high debt and falling sales. But now with external debt restructuring, fresh capital infusion and new contract agreements the company is poised to do well over the next few years. There is a new vision and energy in the company during the last one year and this should propel the Wockhardt to newer heights. The Wockhardt stock quoting at Rs.169.90 on the bourses can be accumulated by portfolio investors for long term solid gains. It has the potential to become a multibagger.

 Real Estate Sector in India

Given their comfortable leverage, consistent rise in location-agnostic demand, and declining inventory levels, most brokerages expect listed real estate majors to get good buying support.

According to the real estate data and analytics platform PropEquity, the sector grossed sales of 149 million square feet (msf) in the top seven cities in the October-December quarter (third quarter, or Q3) of FY23 – the High quarterly sales in a decade. Sales grew 34% year on year (YoY) to 412 msf in the nine months ending December.

Strong sales, driven by high demand and increased affordability, aided in reducing inventory levels. Unsold inventory levels fell to 839 msf in December 2022, down from 923 msf in December 2021.

Besides, many analysts believe that interest rate cycle has probably peaked out. 

In such circumstances, the prudent investors should buy the stocks of beaten down good real estate companies. 

P.N: I don't upload the blog too often because Google has made the interface too complex. Also, I am not able to update photos on this blog since sometime. Google has also disabled the automatic feedback Button on the blogspot.

Indiabulls Real Estate Ltd: Buy before the merger announcement 

CMP: Rs.52.50

Market Cap: Rs.2843 Cr

Book Value: Rs.80.47

Target: Rs.110 

Time Frame: Next Deepawali.

Introduction:  Indiabulls Real Estate Ltd is one of India's leading real estate enterprises, with a diverse presence in residential projects ranging from affordable to mid-income to premium to super-luxury segments.

Geographically, its area of operation is basically concentrated around  Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) of India. 

The Company is one of the leading real estate companies in India, with 17 ongoing projects totaling 44.59 million square feet. It also has commercial development with a leasable area of 25.5 million sq.ft. under construction.

It possesses 1424 acres of SEZ land at Nasik Maharashtra. 

The Company has delivered over 25 million square feet of commercial and residential projects through its SPVs/subsidiaries, including the renowned Indiabulls Blu Estate & Club residential towers in Worli and commercial properties One Indiabulls Centre and Indiabulls Finance Centre in Lower Parel.

Triggers:  

💥The recent appointments in the company indicate that the Embassy Group, with which the company's merger is in the final stages of National Company Law Tribunal (NCLT) evaluation, now has more authority over the company.

💥The reigns of the Indiabulls Real Estate Ltd will soon fall in the hands of a Sindhi Businessman, Jeetendra (Jeetu) Virani, the CMD of the Embassy Group.

According to the investor presentation by the company, the proposed scheme for the amalgamation of NAM Estates and Embassy One Commercial Property Developments into IBREL is underway. NCLT Bengaluru has concluded the hearing on the merger scheme.

💥After the merger, the entity will have presence in both the commercial and residential verticals in the states of Karnataka and Maharashtra. Post merger, Indiabulls Real Estate #Ltd may have a direct buyer in the form of Embassy Group, who may use those Properties for rentals.

💥Indiabulls Real Estate’s net debt as of December 31, 2022, was #NIL (debt free) and it had a cash surplus of Rs.580 crore as against a cash surplus of Rs.136 crore in the September quarter.

💥In April, 2022, Indiabulls Real Estate Ltd raised Rs.865 crore in the form of QIP at Rs.101.10, for buying land and reducing. Post that we have seen substantial reduction of debt in FY23. The fund raising resulted in an overall 15.8% dilution for the shareholders.

Going forward, the merged conglomerate will have both the scale and resources to take on bigger challenges and deliver.

💥Realty companies remain optimistic on the demand environment on the hope that the rate hike cycle might have peaked out.

💥 Meanwhile, The Mint on 14 February, 2023 wrote:

The residential real estate market in India had astounding progress in 2022, setting new sales records of 68% YoY, further demonstrating the industry's prominence as one of India's fastest-growing industries. 

After two years affected by COVID, Tier 2 and Tier 3 cities have arisen as fresh major real estate trends in 2022, and the real estate market has set unprecedented benchmarks which continued its growth momentum from 2021 amid the global slowdown.

The growing awareness of home ownership and the government’s favourable affordable housing schemes has led to significant growth in the affordable housing segment.

Conclusion: The shares of Indiabulls Real Estate Ltd, post merger will have both the residential and commercial wings.

It is one of the country's largest real estate players, with a significant footprint in and around Mumbai. Its development initiatives are in some of Mumbai's best neighborhoods, including the popular Worli. 

The company owns 1856 acres of land in Mumbai, NCR, and Chennai. The company's entire landbank is 3280 acres. 

Blu Estate & Club, Worli, Sky Forest, Lower Parel, Indiabulls Greens, Panvel, One Indiabulls, Thane, and other projects are under development by the firm.

Buy at the CMP for some stupendous returns by Deepawali.

 I continue to remain Bullish in Textile Yarn companies

Last week, cotton prices had recorded a sharp decline in India and the world.

However, North India’s cotton prices improved yesterday after a crash in ICE cotton on Friday. 

The domestic cotton prices recovered around 1-2% due to improved buying at lower prices

Moreover, Turkey is known as the hub of spinning mills and it got affected by the earthquake. 

Therefore Indian Mills are receiving more trade enquiries from Turkey as well as European nations. 

Therefore, the fall in cotton prices from their peak and the China+1 policy will benefit Indian spinning companies.

Please continue to hold Nahar Spinning Mills Ltd (Rs.273.35) and Nitin Spinners Ltd (Rs.225.10).