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.”

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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).

Indowind Energy Ltd: Buy

CMP: 13.45.

Book Value: Rs.25.74.

Market Cap: Rs.169 crore.

Introduction: 

Indowind Energy Limited (IEL) has been in the business of power generation through wind mills since its inception in July 1995. It is one of the pioneers in the renewable energy sector and is managed by professions with experience in diverse fields.

Shri Bala Venckat Kutti, Indus Finance Limited, and Loyal Credit & Investments Limited are the company's promoters. 

Over the course of 27 years, the company has consistently grown in this sector. The Company set up its first wind Mill in Tamil Nadu having a capacity of 225 MW.

Interestingly, the windmills of the company are situated in the highest wind potential areas in the states of Tamil Nadu and Karnataka. As on date,  Indowind Energy Ltd is having 123 windmills having capacity of 49.645 MW spread across the states of Tamil Nadu and Karnataka (Tamil Nadu: 29.55 MW and Karnataka: 20.095 MW). 

Apart from this another 12.50 MW capacity windmill will be operational within the next 6 - months; the capacity of this windmill will be increased to 50 MW, within a couple of years.

Salient features:

💥 Indowind Energy Ltd is the First Independent Power Producer to commercially exploit wind for generation of Electricity.

💥It has nearly 3 decades of experience in the Wind sector.

💥In has proven track record and technical expertise to generate power from wind.

💥It sells power sales to Electricity Boards and large Corporates. Better realisation is achieved through private sale.

💥It is the 1st Wind Energy Company to get carbon credits from UNFCCC and has registered “Green Power” as its trademark.

Shareholding Pattern: 

The promoters hold 44.76%, while  of the general public holds 55.24% of the shares of the company, respectively. 

Among the general public, the Export Import Bank of India holds 4.46% of the shares of the company. On the corporate side Commendam Investments Pvt Ltd holds 1.59% of the shares of the company. 

Financials:

The company came out with good set of numbers for the December 2022, quarter:

💥Revenue: ₹75.7 million (up 80% from 3Q 2022).

💥Net income: ₹1.43 million (up from ₹2.16m loss in 3Q 2022).

💥Profit margin: 1.9% (up from net loss in 3Q 2022). The move to profitability was driven by higher revenue.

💥EPS: ₹0.01 (up from ₹0.024 loss in 3Q 2022).

Source: Simply Wall.

This positivity is expected to continue in the following quarters (post rights issue), as the interest outgo will decrease substantially. 

Rights Issue: The Company has come with Rights issue of 3,58,96,594 shares of Rs.10 each, at a premium of Rs.2 per share; aggregating to Rs.430.8 million (Rs.43.08 crore). 

Details:

Issue Opened: 27 Jan, 2023

Issue Closes: 10 Feb, 2023

Issue Size (shares): 3,58,96,594

Issue Size (amount): Rs.43.08 crore 

Issue Price: Rs.12/share 

Record Date: 13 Jan, 2023 

The main objective of the Rights Issue is to substantially reduce the secured loans and progress towards making the company, DEBT FREE.

National Company Law Appellate Tribunal (NCLAT) Case: 

Few weeks back, the two prominent stock exchanges, the BSE and the NSE decided to stop trading in the scrip, for a couple of days, due to delay made by the company in sending the notice regarding postponement of the hearing to 20 January, 2023, to them.

It will be pertinent to mention here that, in September, 2020, Exim Bank dragged the company to NCLAT for the settlement of its loan. The settlement amount was pegged at Rs.48 crore out of which the company has already paid Rs.15 crore. The company will pay the remaining Rs.33 crore from the proceeds of the Rs.43.08 crore Rights Issue and become almost DEBT FREE – only a small debt of Rs.5.35 crore from a lender will be left.

Cons: 

💥Selling of “Green Power®” given the nature of its business, concentration of the plants in few States and also the issue of shortage of power, demands special marketing setup to cater to the requirements of clients, since the power generated from its wind farms are sold under Group captive scheme to Corporates. 

💥Though there are not many IPP’s in India, in the wind energy space, selling power to corporates puts IEL in direct competition with the SEB’s.

💥 Closing of Accelerated Depreciation Scheme in 2017, has slowed down the wind energy space.

Upcoming Projects: 

The company is in the process of setting up and acquiring wind farms in Karnataka and Tamil Nadu. The company has already acquired land banks in Tamil Nadu & and Karnataka and completed the Micro sitting and Wind Resource Assessment study. The company has around 300 acres of land bank in Tamil Nadu and Karnataka.

Wind Power Sector: 

While the Indian Power Sector is undergoing significant growth, sustained economic growth continues to drive electricity demand in India. 

The Government of India is focussing on attaining “power for all" and this has accelerated capacity addition in all segments of the sector. India is the third largest producer and second largest consumer of electricity worldwide, with an installed power capacity of 401.01 GW as on 30th April 2022.

Wind Power Policy of the Union Government:

💥Concession on import duty on specified wind turbine components.

💥10 year income tax holiday for wind power generation projects.

💥Concessional custom duty exemption on certain components of wind electric generators

💥100% exemption from excise duty on certain wind turbine components.

💥REC Mechanism.

💥Waiver of Inter State Transmission System (ISTS) charges and losses for inter-state sale of solar and wind power for projects to be commissioned up to March, 2022.

💥Permitting Foreign Direct Investment (FDI) up to 100% under the automatic route.

💥Implementation of Green Energy Corridor project to facilitate grid integration of large-scale renewable energy capacity addition.

💥Technical support including wind resource assessment and identification of potential sites through the National Institute of Wind Energy, Chennai.

💥IREDA finance scheme for wind power projects. Now, getting finance has become quite hassle free.

💥Special incentives provided for promotion of exports from India for various renewable energy technologies under renewable sector specific SEZ.

💥Feed-in-Tariff (FIT) scheme for wind projects upto 25 MW.

💥GBI scheme for grid interactive wind power projects commissioned before 31 March 2017.

Source: Indian Wind Energy Association.

Conclusion: Since IEL sells power under the banner “Green Power®”, many triple “A” rated corporates directly buy from IEL to meet their CSR needs. This gives the company, some sort of stability in its earnings.

Moreover, the company maintains high quality while supplying power. It meets the norms of the Grid code so that the electricity produced is fed into the grid at the desired frequency without affecting the regional Grid operations.

Besides, while selecting the wind turbines, proper screening is done based on site and wind conditions to match the appropriate machine to be installed.

Considering the above points, the investors can take position in the shares of Indowind Energy Ltd near the CMP of Rs.13.45 for medium to long term targets of Rs.25 and Rs.32. SL: Rs.12.60.

 Market Mantra

The BSE is now trading at 60,516.48 up 423.51 points (+0.70%), while the Nifty was last seen at 18,007.25 up 112.40 points (+0.63%). However, this green tick in the indices belies the bigger sell off in the broader market.

#Today the shares of Zomato Ltd (Rs.50.70) broke Rs.52/53 ranges. Hence I would suggest to avoid fresh buying, unless it gives a closing above Rs.52.70. Put SL at Rs.47 on closing basis.

I'm finding some pattern in selling. I had tagged SEBI and Mr.Kirit Somaya on Twitter and asked them to look into the matter.

Ironically, the shares of Zomato Ltd is getting sold off at a time when Nationwide Lockdowns have been lifted and intense cold is preventing people from going out. In such a weather it is just a no brainer to think that people will order food through mobile, for home delivery. Moreover, 1 Million plus order on the new year day is not a joke. Even if we take a minimum of Rs.10 as the average net margin per order, the profit could be in crores. 

Interestingly, the average cost of acquisition of Zomato Ltd's shares by Info Edge (India) Ltd, one of the largest shareholders of the company, according to disclosures made in the draft document, is only Rs.1.16. Hold with SL mentioned earlier.

#The stocks of SEPC Ltd (Shriram EPC Ltd) made an intraday high of Rs.14. Those who have bought the share on my recommendations has already doubled their investment values.

#The stock of Piramal Pharma Ltd (Rs.115) is available at dirt cheap price. Accumulate!

#Those who are holding Indowind Energy Ltd (Rs.15.20) are entitled for Rights Issue. There are some positive developments in the  company as per my sources. You can accumulate.

#The shares of BPL Ltd (Rs.75) has again spurted today. You may book some profits and hold the rest with a SL at Rs.72.

#Accumulate the shares of TV18 Broadcast Ltd near Rs.36/37. The falling of inflation is positive for TV Channel companies.

 Market Mantra

The benchmark Nifty is down 60.20 points to 17,828.45 after the FPIs went for heavy selling yesterday. However, the Nifty should hold 17,200 on the downside as there are no major negative news on the inflation front. The action should now depend on stock selection, as the days of low hanging fruits 🍓🍓🍑🍑 are probably over. Those who have experience in the market will survive, the rest are likely to burn their fingers. 

Those who have a portfolio size of around Rs.2 lakhs can join my profit sharing scheme of 60:40, between you and my consultancy. The stocks will be chosen basically on fundamental basis, though technical angle can't also be overlooked. 

#Accumulate the shares of Nahar Spinning Mills Ltd near Rs.281, for targets of Rs.320/350. SL: Rs.257. Drastic fall in the price of cotton is positive for the textile companies.

#The stock of Indowind Energy Ltd (Rs.15.70) hit another lower circuit today probably on the fear that the company would become insolvent.

But at present, there are no such issues, and it was just a normal hearing and settlement at a NCLAT court. The prudent investors looking to subscribe to the rights issue at Rs.12,s slowly accumulate the scrip, till the record date.

#Buy Zomato Ltd near Rs.54.20, T: Rs.61/62/67/71. SL: Rs.51.60. 

It tanked heavily on Sentimental issues after one of its Co-founder & Chief Technology Officer, Gunjan Patidar recently resigned. But now the sentiment is improving & it has found a support around Rs.53.80 -- Rs.54.

#Accumulate the shares of A2Z Infra Engineering Ltd (Rs.9.70) in market declines. The company's telecom tower business is expected to pick up steam in the near future. The stock should double from the CMP.

#Accumulate the shares of Piramal Pharma Ltd (Rs.115.90) for targets above Rs.200. A number of brokerage house have given a buy on the stock.

#The scrip of D B Realty Ltd (Rs.89.20) hit the Buyer Freeze today. You should always accumulate such news driven scrips in market declines.

#Accumulate the shares of TV18 Broadcast Ltd near the CMP of Rs.36.70, for short term targets of Rs.41/45. With inflation coming down, the broadcast companies could see more advertisements spendings.

 Indowind Energy Ltd: Some thoughts

Introduction: Indowind Energy Limited develops wind farms for sale, manages the wind assets, and generates Green Power for sale to utilities and corporates. 

It also does turnkey implementation of Wind Power Projects, from concept to commissioning. It also undertakes Wind Asset Management Solution for installed assets, including operations, billing, collection of revenue to project customers. Supply of Green Power to Customers. It is also into CERs (Carbon Credit) Sales and Trading.

Rights Issue and other details: 1st let me start with Carbon Credits, Indian companies have registered 1,669 projects under CDM and earned 246.6 million credits; another 526 projects were registered under the ‘voluntary’ market and these have earned 89 million credits. Thus, in all, Indian companies got roughly 350 million credits.

To begin with, Indian enterprises registered 1,669 projects under the CDM and earned 246.6 million credits; another 526 projects were registered under the 'voluntary' market and received 89 million credits. Thus, Indian firms received approximately 350 million credits in total. These credits are known by different names in different jurisdictions. They are known as 'certified emission reductions,' or CERs, under the CDM.

It is subject to market price, much like stocks. At its peak, they were selling for $25 per CER. Indowind Energy Ltd (Rs.18.10), a wind energy startup based near Chennai, sold some for $15 each. Back then, experts projected that India may profit up to Rs 45,000 crore by selling the credits.

The market then dropped. A CER was valued worth 25 cents in the CDM market and a $1 in the voluntary market in the beginning of last year (2022).

Q. What are Carbon Credits or CERs and are their current prices?

A successful approach for lowering greenhouse gas (GHG) emissions is critical to the success of climate change policy. Policymakers and businesses use carbon pricing to reduce GHG emissions by putting a price on carbon.

Climate change is no longer regarded as a'soft' political issue, because of overwhelming scientific evidence, linking manmade emissions from fossil fuels, such as carbon dioxide and methane, to global warming. Since its inception in the early 1990s, carbon pricing has become an increasingly prominent method in global environmental policy for decreasing GHG emissions.

One carbon credit certifies that one metric tonne of carbon dioxide has been removed from the atmosphere.

Most prices of carbon credits are below the $40-80 per metric ton of carbon dioxide emitted needed to keep global warming within a 2-point degree, as declared by the Paris agreement.

The World Bank’s latest State and Trends of Carbon Pricing report reveals that carbon prices have risen sharply in the past year, and this is mostly due to increased demand as decarbonization efforts accelerate.

“For the first time, the total value of the voluntary carbon market exceeded more than US$1 billion in November 2021,” the report says. “This rapid increase in value reflects both rising prices and rising demand from corporate buyers leading to higher transacted volumes.”

According to the authors, global average carbon credit prices on the voluntary market moved from US$2.49/tCO2e in 2020 to US$3.82/tCO2e in 2021, and the volume of credits transacted in the voluntary market exceeded 362 million credits last year, 92% more than in 2020.

This growth in demand and upward price trend is attracting investors, who are starting to see carbon credits as an investment product that is set to bring.

So, if the price of CERs shoot up further the companies like Indowind Energy Ltd (Rs.18.10) will make windfall gains.

Q. Why was trading restricted in the scrip of Indowind Energy Ltd?

Ans: It is due to the delay in putting up the notice of a stay in NCLT hearing in the BSE/NSE website. According to my sources the date has been shifted to 23 January, 2023. 

Hence, the investors should not get rattled by the sudden move of the stock exchanges. Thi is just a normal process and there's absolutely NO PROBLEM in the fundamentals of the company.

Infact, post successful implementation of the Rights Issue, the company will almost certainly become DEBT FREE.

Q3FY23 Results:

Indowind Energy Ltd (Rs.18.10) came out with superb December, 2022 quarter Results, when the EPS jumped to ₹0.01 vs ₹0.024 loss in 3Q 2022.

Key Financials:

💥Revenue: ₹75.7m (up 80% from 3Q 2022).

💥Net income: ₹1.43m (up from ₹2.16m loss in 3Q 2022).

💥Profit margin: 1.9% (up from net loss in 3Q 2022). The move to profitability was driven by higher revenue.

💥EPS: ₹0.01 (up from ₹0.024 loss in 3Q 2022).

Source: Simply Wall.

Conclusion: The dates of the proposed Rights Issue has not been changed. Hence, those who want to subscribe to the Right Issue of Indowind Energy Ltd (Rs.18.10) should hold the shares upto the record date mentioned by the company on the BSE website.

Fortunately, the company is moving in the right direction and the prudent investors should do well to accumulate the scrip in market dips.

 Tit - bits

*D B Realty Ltd (Rs.91)* has taken the support at Rs.87/88 ranges and is moving up. We can again see the targets of Rs.131/135, as the company is selling its Andheri East land parcel at a whooping Rs.480 Cr. Also, if the media reports are to be believed then it is a takeover candidate by *Adani Group*. As per market rumour, they are likely to name it *Adani Reality*.

*A2Z Infra Engineering Ltd (Rs.10)* has tied up with Airtel for installation of telecom infrastructure in India. Accumulate!!

*RTN Power Ltd (Rs.4)* the erstwhile Indiabulls Power, an  A - grade power company, is struck up in a range. It will however break out of the current levels as its fundamentals are improving constantly. It has two sprawling factories in Amravati and Nashik, the former is *profitable*, while the latter is slowly coming out of debts. *You can start to accumulate once it gives a closing above Rs.4.20.*

The *Mukhesh Ambani owned media Behemoth, *TV18 Broadcast Ltd (Rs.37)* is consolidating around the current ranges, before charting the next upmove. The fall in inflation is likely to push up advertisement revenues of the company.

-----------------------------

*Important:* When the market is not in Bull 🐂 phase, the prudent investors should accumulate, beaten down small caps to make windfall gains during the Bull run, which generally comes after every couple of years. 

Moreover, the NDA Government could come up with a *Populist Budget* this year in view of the ensuring *Parliamentary elections*, next year. This may give us the required opportunity to make good gains from our investments.