Veer Energy and Infrastructure Ltd: A Steady Upmove Expected

CMP: Rs.5.28

Introduction: Veer Energy  and Infrastructure Ltd (VEIL) develops, implements, finances and operates large scale projects in the renewable energy sector, especially in wind energy. Currently, Veer Energy wind farms in operation and construction represent a substantial reduction in carbon dioxide emissions annually. The company is currently active in western region of India with approximately 75 MW successfully commissioned. Significant future growth is expected in both core and new markets, supported by a large development pipeline and Veer Energy’s network of joint development ventures with world class local developers & contractors. Veer Energy’s development of wind energy is consistent with what is prescribed by the Kyoto Protocol. Once in operation, wind farms are a virtually emission free energy source, providing clean and sustainable energy. Veer Energy works to be actively involved in all key phases of wind farm development, finance, construction, and operation.
Basically, the company develops infrastructure for the wind farms and is not into manufacturing of wind turbines. The company identifies a place based on wind analysis. It then develops a complete infrastructure for these wind farms at that location, which are then sold to investors as well as to various wind turbine manufacturers. Investors have an option of selecting the wind turbines they want as the company gives them the required infrastructure.

Shareholding Pattern: The promoters hold 35.51% of the shares of the company,  while the general public holds 64.49% of the shares of the company. Among the general public Shriram Credit Company Ltd (5.13%), Shriram Insight Share Brokers Ltd (1.52%), Sparrow Asia Diversified Opportunity (7.03%) and Anand Rathi Global Finance Ltd (1.82%) holds substantial stakes in the company. 

Financials: For March 2014, the operating income witnessed a growth of 18.3% on a year on year (YoY) basis during the quarter. The expenses were up at a higher rate of 20.2% YoY during the same period. 

• The rise in expenses led to a fall in the operating profit by 17.6% YoY during the quarter. The operating margins declined to 3.5% as compared to 5% in the March 2013 quarter. 
• Depreciation charge increased by 19% YoY, while interest charges declined by 86% YoY for the March 2014 quarter. 
• At the bottom-line level, the company’s net profit declined by 4% YoY to Rs 4.8 m led by higher expenditure in the quarter under review. 
• The company’s board recommended dividend of Re. 0.06 per share for the financial year ending March 2014.
• At the current price of Rs.5.28, the company’s stock trades at 13.89 times its trailing twelve month earnings. The Industry P/E is 16.44.

Triggers: 
(i)  The main Business of the Company is to create infrastructure development facilities for the installation of Wind Turbine Generator. As one of the pioneer in this field, the Company is very well positioned to take advantage of ever increasing demand for the renewable energy resources. According to Hindustan Times, 9 June, 2014:

• The Narendra Modi-led government has started work on a plan to ensure half of all homes in major cities receive some power from solar or wind energy sources by 2019.
• The plan includes fresh incentives to encourage companies and individuals to invest in renewable energy sources and setting up giant solar plants in states such as Rajasthan and Gujarat.
• The decision to give a big push to renewable power sources was behind the Prime Minister’s decision to bring the ministries of conventional and renewable power under Piyush Goyal. Sources told HT that Modi asked Goyal to go big on renewable energy.
• This is keeping in line with the progress made in generating green energy by Gujarat during Modi’s tenure as chief minister. Gujarat implemented the Jyotigram Yojana that provided 24/7 power to each household. The scheme depended on solar, wind, biomass and waste as energy sources to generate about 25,000 MW annually.
• Goyal has promised to replicate this Yojana and was in the state to study Gandhinagar’s success story.  After meeting the PM, lieutenant governor of Delhi Najeeb Jung also sent a team to study the Gujarat model this week that resulted in fresh power proposals for the Capital.

In view of this development, the management is hopeful to achieve better results in the coming years. It is also exploring the possibilities of starting operations in the state of Maharashtra, Gujarat and Rajasthan, in full steam. 

(ii) During FY13, the company has commissioned 28.90 MW in Rajasthan. Total MW commissioned till date is 59.30 MW out of 79.5MW of total order in Rajasthan by March 2013. The balance was commissioned in the year 2013-14.

(iii) Moreover, it has some relation with Southern Wind farm Ltd, which is an ADA Group Company floated by Anil Ambani. It is also a vertically integrated company and at a market cap of only Rs.37.56 Cr, it could be a good takeover candidate

(iv) India is one of the developing country, and the scope for improvement in India’s energy system is vast. Renewable energy currently makes up a negligible share (0.36%) of total primary commercial energy supply while 96.9% of such supplies come from fossil fuels and 2.76% from hydro and nuclear resources. The non-commercial combustible biomass and wastes which contributes to the extent of 24.5% of the total energy supplies are excluded in this balance. Wind Energy is where India competes globally in manufacturing and deployment in the present scenario. With these the market grew to be third largest in the world riding on the success of strong policy and regulatory framework. In 2011, India surpassed 3,000 MW in annual installations. This marked a 138% growth over a two year horizon; a remarkable achievement in times of global economic depression.

(v) Wind Energy is becoming increasingly popular because:

• It is one of the most environment friendly, clean and safe energy resources. 
• It has the lowest gestation period as compared to conventional energy. 
• Equipment erection and commissioning involve only a few months. 
• There is no fuel consumption, hence low operating costs. Maintenance costs are low. 
• The capital cost is comparable with conventional power plants. For a wind farm, the capital cost ranges between 4.5 crores to 5.5 crores, depending on the site and the wind electric generator (WEG) selected for installation.

(v) With the Crude Oil prices shooting above $100 per barrel, the prospects of wind energy looks bright. Also, it has an equity capital of only Rs.7.11 crore and from that around 70% is blocked for trade (or there are very low floating stocks in the market). This gives premium to the stock price. 

(vi) The book value of the shares of the company is Rs.6.16 (CMP: Rs.5.28) while the book values some of its peer group companies like Suzlon Energy Ltd is Rs.9.72 (CMP: Rs.32.5), KSK Energy Ventures Ltd is Rs.64.25 (CMP: Rs.100) and NTPC is Rs.97.49 (CMP: Rs.153.45). This gives the share much room for appreciation. 

(vii) The Company has floated a 100% subsidiary "Veer Enterprise-GMBH" in Germany to explore the possibility of expansion in the field of non conventional energy with the help of collaboration with any company in this field with a wide experience and capital resources. The management hopes to turn this company into black soon. 

(viii) According to Projects Today, Veer Energy  and Infrastructure Ltd, in association with Shruti Power Projects, has been sanctioned a loan from Indian Renewable Energy Development Agency (IREDA) for its wind power project at Vinjalpur, in Jamnagar district of Gujarat. IREDA has signed a loan agreement worth Rs.52.56 crore with Veer Energy’s subsidiary, Shruti Power Projects, for setting up the 12 MW wind-based power project at Vinjalpur.

The project is being set up at a cost of Rs.75.60 crore. The company is expecting to commission the project by 31 August, 2014.

Conclusion: Veer Energy and Infrastructure Ltd, the Mumbai-based wind-power developer, bought solar panels for its first project in India from U.S.-based New Millennium Solar Equipment Corp, in 2012. At that time Veer Energy planned to install 400 thin-film panels of 58.5 watts each for a rooftop project in the Sanand district of the western Indian state of Gujarat. 
However, according to my close sources, now it has decided to concentrate more on the development of Wind Power. 
Besides, the share has not taken part in  a major way in the whirlwind rally post NDA government assuming office in Delhi. Also, the scrip has corrected sharply from its recent high of Rs.7.64 made on 12 June, 2014. The stock could be accumulated near the supports of Rs.5.10-5.20 for targets of Rs.7-8.4 in the short term. It is a Re.1, Face Value scrip. 

Veer Energy and Infrastructure Ltd: The wind beneath its wings

The subsidiary of Veer Energy & Infrastructure Ltd (Rs.3.17), Shruti Power Projects was sanctioned a loan of Rs.52.56 crore by the Indian Renewable Energy Development Agency last year (in parts), for setting up a 12 MW wind farm with project size of Rs.75.60 crore at Vinjalpur Village, District Khambhalia in the State of Gujarat. 

According to the sources, the company is expected to complete the project by August-September, 2015. This is expected to generate an additional revenue of Rs.12 Cr per annum by way of power generation.

Also, from the June, 2015 quarter, there could be a slight increase in both the top and bottomlines of the company, as few ongoing projects could get completed in this quarter. 

Veer Energy & Infrastructure will also take the benefits, of generation based incentive (GBI) as per the policy declared by the central government in the last budget. 

Currently, the company is active in providing infrastructure services for Wind Energy & Other infrastructures as well, and also company has set up Engineering unit at Ahmedabad and started production in the current year. In FY16, it is expecting better results.

Meanwhile, according to a report published in The Economic Times on 14 April, 2015: 

Big wind energy companies in India such as Gamesa, Mytrah and Suzlon are all diversifying into solar space this year with plans to invest several hundred million dollars in the next five years in installing thousands of solar megawatts, given the government's (of India's) impetus to the sector. 

The Union Government is looking at increasing new and renewable energy installation in the country to 175 GW, with the wind energy capacity going up to 65 GW.

Moreover, the company is likely to complete a large number of on-going projects by FY16, which means within the next 9-12 months period, the scrip of Veer Energy and Infrastructure Ltd (Rs..17) could give superb returns. 

Veer Energy and Infrastructure Ltd: Buy

Engaged in the wind energy business, Veer Energy is planning to come up with 40 mw Grid-based Solar Power Infrastructure project on the 200 acres land at Kutch in Gujarat. 

Earlier there were media reports that, Veer Energy has signed Expression of Interest with one of World's leading wind turbine manufacturer for sale of an exclusively, indefeasible right to use the transmission rights granted by GETCO for Power Evacuation of 30 MW WTG, along with government waste land allotted to Veer Energy on lease basis by Hon. Collector for setting up wind farm.

It has a book of Rs.6.08 and has a market cap of only Rs.25.61 Cr at the CMP of Rs.3.57. Also it is a dividend paying company.

One can buy the scrip at around Rs.3.30-3.50 for a target of Rs.5, in the short term. The scrip is today moving up with good volumes. The volume of shares traded in the BSE is nearing half million (414138 shares traded till 12 noon) in the first hour of trade against the 2 (two) week Average Quantity of 1.30 lakhs. 

Since Suzlon Energy Ltd (Rs.17.30) is moving up, by logic this should also move up, albeit with a slightly better fundamental. 

WINNING STROKES: THINK DIFFERENT

Allied Digital Ltd hit the buyer freeze yesterday and closed at Rs.32.85. The scrip reached all my short term target of Rs.31-32. It is time to book short term profits and wait for the scrip to stabilise before fresh positions can be taken. However, medium term investors can look for a target of Rs.41. 

Veer Energy and Infrastructure Ltd (Rs.3.49) was recommended yesterday, after there were news reports that FPIs/FIIs are shifting to this sector. The scrip moved up with huge volume yesterday and closed with a gain of 10.79%, after touching an intra-day high of Rs.3.65. Moreover, the percentage of Deliverable Quantity to Traded Quantity was whooping 78.15%. The total quantity traded in the BSE was 5,21,576 and in it the Deliverable Quantity was 4,07,611. This shows that the investors are entering the scrip in bulk. Since the stock is near its 52-week low price and hence the downside is limited with the current set of fundamentals. Its 52-week high price is Rs.7.64 made on 12/06/2014. Earlier there were media reports that, Shruti Power Projects Pvt Ltd, a wholly-owned subsidiary of Veer Energy & Infrastructure Ltd,  was sanctioned a loan of Rs.52.56 crore by the Indian Renewable Energy Development Agency (IREDA). This loan was sanctioned for setting up a 12 MW wind farm project, worth Rs.75.60 crore, at Vinjalpur village, Khambhalia (Gujarat). The new project is expected to generate additional revenue of Rs.12 crore per annum to the company by way of power generation. Veer Energy & Infrastructure is also expected to take the benefit of generation based incentive (GBI) as per the policy declared by the central government.

The stock of HOUSING DEVELOPMENT & INFRASTRUCTURE LTD, which was recommended around Rs.66-67, a couple of weeks back, yesterday touched Rs.81.15. The scrip is expected to cross the next target of Rs.84, within 30 days.

Rohit Ferro Tech Ltd (Rs.8.07) fell with low volume yesterday, indicating the end of the downtrend. The scrip could shoot up at any time as it has expressed its intent to divest its stake in one of the group companies. The investors are strongly suggested to buy the scrip at this safe price. There cannot be an infra-boom, without a corresponding rise in the stocks of the building materials. 

Suzlon Energy Ltd reached my 2nd target of Rs.17, as the scrip touched an intra-day high of Rs.18, before closing at Rs.17.45. The next medium term target is Rs.20, which the scrip should amble in the next 30 days. But my suggestion for safe traders would be, to shift to either Veer Energy Ltd (Rs.3.49) or to the diversified firm, PVP Ventures Ltd (Rs.7.65).. 

Market Mantra

Veer Energy and Infrastructure Ltd touched Rs.4.15, intra-day and is  now trading at Rs.4.01 in the BSE. Yesterday, the percentage of Deliverable Quantity to Traded Quantity was whooping 78.15%. The total quantity traded in the BSE was 5,21,576 and in it the Deliverable Quantity was 4,07,611.  Today, the volume of the shares traded in the BSE has already crossed one million (10 lakhs). Earlier there were media reports that, Shruti Power Projects Pvt Ltd, a wholly-owned subsidiary of Veer Energy & Infrastructure Ltd,  was sanctioned a loan of Rs.52.56 crore by the Indian Renewable Energy Development Agency (IREDA). This loan was sanctioned for setting up a 12 MW wind farm project, worth Rs.75.60 crore, at Vinjalpur village, Khambhalia (Gujarat). The new project is expected to generate additional revenue of Rs.12 crore per annum to the company by way of power generation. Veer Energy & Infrastructure is also expected to take the benefit of generation based incentive (GBI) as per the policy declared by the central government. The scrip should be hitting the buyer freeze today, by the end of the day. 

Anant Raj Ltd, the real estate giant and having huge land bank today might have completed the consolidation phase.  The scrip should now move up and we can look forward for a target of Rs.55-57 in the short term. The company earns huge income from leasing.

The Dow Jones industrials reached a new 2009 trading high, edging closer to 10,000. A weaker dollar and a spike in oil prices above $73 drove energy and materials prices higher:

My this week's Quickie Call Southern Online Bio Technologies Ltd (SBTL) hit the buyer freeze. SBTL earlier informed that it has successfully completed the financial closure of its 2nd Bio Diesel unit of 250 TPD, which is coming up in VIZAG, in APIIC, Multi-product SEZ. The project is estimated to be Rs.90 Cr. The company had earlier raised the required equity of Rs.36 Cr, through preferential allotment of shares and warrants to promoters/high net worth individuals. The company has also got a term loan and working capital from Bank of India, UCO Bank and State Bank of Hyderabad, under consortium, with BOI acting as the lead banker. The proposed unit is expected to start production from this quarter Q3FY10, as it hopes to start trial production from the plant by January, 2010. The company is hopeful that once the 2nd plant starts operating then the turnover of the company would jump to over Rs.250 Cr/annum. The company's present Bio Diesel plant is running 85% of the capacity and is expected to go up to 100% within a very short time as the government came out with a very good proposal, recently. It has clients in the form of APSRTC, Indian Railways, Hotels and direct customers like KSRTC, Navi Mumbai, etc. The company recently received a LOI from Indian Railways, for the supply of bio-diesel. It seems the stock is all set to cross Rs.50 mark in the next few months time frame.

MOREOVER, THE RISE IN CRUDE OIL PRICES IS ALSO POSITIVE FOR THE RENEWABLE ENERGY COMPANIES like XL Telecom and Energy Ltd, Suzlon Ltd, Indowind Energy Ltd, Southern Online Bio Technologies Ltd, Veer Energy Ltd, etc. XL Telecom and Energy Ltd's September, 2009, quarter (Q2FY10) results will be a little better than the last quarter (sequentially speaking), because of improved conditions in Europe and in the domestic market. The good point is that market cap of the company around the current price is only Rs.93.07 Cr , againt a turnover of Rs.586.8 Cr in FY09. Or in other words, its turnover in FY09, was more than 5 times its market cap, hence one can undertand the price at which its shares price can reach in the days to come. However, the company's business is dependent on the conditions of Europe and in the domestic market, which might take sometime to pick up, full steam.

My earlier recommended Prajay Engineers Syndicate Ltd hit the buyer freeze on opening trade, yesterday due to some positive developments in the counter. Also keep an eye on Refex Refrigerants Ltd's Q2FY10, results; if they are good then the stock would shoot past Rs.50 mark in no time, hitting continuous upper freezes......

Accential Technologies Ltd (BSE Code: 531897), whose FY09, EPS (consolidated basis) was a whooping, Rs.55.24, could hit some more buyer freezes in the days to come.

The name of this week's Sunday Report scrip was mentioned to the Yahoo Group, SumanSpeaks (Free Group) also....Some inputs were also sent there on Sanguine Media Services Ltd, as a good news is expected to hit the stands within a short time.

Investors waiting for earnings reports to flow in traded cautiously Monday, giving up early gains and leaving the market narrowly mixed. The Dow Jones industrials reached a new 2009 trading high, edging closer to 10,000.

Volume was light because of the Columbus Day holiday. Bond markets were closed and there were no economic reports.

A weaker dollar and a spike in oil prices above $73 drove energy and materials prices higher, but weakness in technology and industrial shares held the market back. Stocks got an early boost from a better-than-expected profit report from Dutch company Royal Philips Electronics. That sent Britain's leading stock indicator to its highest level in a year.

Investors looked ahead to the flurry of earnings due this week from key companies including Intel Corp., Johnson & Johnson, IBM Corp. and General Electric Co. Top U.S. banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. will issue reports as well. The Dow traded as high as 9,931, just 69 points away from 10,000, a level not seen in a year. The index rose for the third day in a row and has gained in five out of the last six sessions.

The Dow closed up 20.86, or 0.2 percent, at 9,885.80. The Standard & Poor's 500 index rose 4.70, or 0.4 percent, to 1,076.19. Both indexes had their highest close in a year.

The Nasdaq composite index fell 0.14, or 0.01 percent, to 2,139.14.

Advancing stocks narrowly outpaced declining ones on the New York Stock Exchange, where consolidated volume was very low at 3.76 billion shares versus 3.85 billion on Friday.

Analysts said traders are generally optimistic about the upcoming third-quarter earnings reports, especially after aluminum maker Alcoa Inc. -- the first of the 30 companies that make up the Dow to report earnings -- said last week that it turned a profit for the first time in nine months.

"There is some key stuff coming and the market has anticipated that it's going to be good," said John Wilson, chief technical strategist at Morgan Keegan.

The dollar mostly fell against other major currencies, helping to drive commodity prices higher. A weak dollar makes commodities more attractive to foreign investors. Gold rose $8.90 to $1,057.50 an ounce, while oil prices rose $1.50 to settle at $73.27 a barrel on the New York Mercantile Exchange.

The dollar has fallen steadily over the past few months as investors, more upbeat on the economy take money out of traditional safe-haven assets and put it to work in stocks. The ICE Futures U.S. dollar index, which tracks the dollar against other major currencies, is down about 14 percent since early March. The S&P 500 index is up 59 percent since then.

Better-than-expected first-quarter results from banks set off the stock market's rally seven months ago, and even stronger second-quarter results helped fortify the rally in July.

Analysts say companies' earnings reports will determine where the market heads next. If results exceed expectations and show companies are making money through sales and not just cost cutting, stocks could continue their push higher.

"There's still room here for equities to move up on the back of better-than-expected results," said Craig Peckham, an analyst at Jefferies & Co. "I don't think that positive surprises are fully priced in."

Banks were among the big gainers Monday as investors awaited their earnings. Wells Fargo & Co. rose $1.07, or 3.7 percent, to $30.28, while Citigroup Inc. was up 14 cents, or 3 percent, at $4.77.

In other trading, the Russell 2000 index of smaller companies fell 1.11 to 613.81.

Britain's FTSE 100 rose 0.9 percent, Germany's DAX index jumped 1.3 percent, and France's CAC-40 gained 1.2 percent. In Asia, Hong Kong's Hang Seng index finished down 0.9 percent. Japan's market was closed for a holiday.

Veer Energy and Infrastructure Ltd: On an Exponential Upmove...

The main Business of the Company is to create infrastructure development facilities for the installation of Wind Turbine Generator. As one of the pioneer in this field, Veer Energy and Infrastructure Ltd (Rs.4.40) is very well positioned to take advantage of ever increasing demand for the renewable energy resources.

This is another company like Karuturi Global Ltd which will see the fruits of its new initiatives. The scrip should cross Rs.7-8 by the end of CY2015--remain invested.

DO YOU KNOW?

The new shareholding pattern of Veer Energy and Infrastructure Ltd shows the promoters holding as  33.35 % (in it 8.852 % is pledged or otherwise encumbered) as against 35.59% in September, 2014 quarter. So, the promoters' holding has gone down, isn't it? Am I right?

2ndly, Veer Energy and Infrastructure Ltd is a Re.1, Face Value share and not Rs.10. It means at the CMP of Rs.4.74, it is actually priced at Rs.47.4, considering Rs.10 as Face Value. 

3rdly, the stock has given more than 30% return in the last one week. Now the exchanges might ask for clarification from the company regarding the unusual price rise and volume. The scrip might come down, if the company says there is no  news. So, some caution needs to be maintained in the short term. 

Veer Energy and Infrastructure Ltd: Bullish upmove on the cards

If you go through the latest shareholding pattern of Veer Energy and Infrastructure Ltd, you would find that the promoters' holding has slightly increased to 35.66% in the March, 2015 quarter as against 33.35% in the December, 2014 quarter. Also, the Shares pledged or otherwise encumbered is now only 8.28%. 

WINNING STROKES: THINK DIFFERENT

Rolta India Ltd moved and moved today as it touched Rs.125.30 intra-day while closing near the day's high at Rs.122.85 in the BSE and Rs.123.40 in the NSE, up more than 6% in both the exchanges. The scrip will again be moving towards Rs.170-180 ranges and hence stay invested. It is not only because Bharat Electronics Ltd-Rolta India consortium bagged the Ministry of Defence’s (MoD) development agency order for the Battlefield Management System (BMS) project, worth over Rs.50,000 crore, but due to inherent strength of the company. The BMS project, categorised as a "Make in India" programme under the DPP, will be one of the largest solutions to be indigenously manufactured for the Indian Army.

Rasoya Proteins Ltd closed at Re.0.50 up more than 11.11% in the NSE. It hit the upper circuits in both the exchanges. The as I mentioned umpteen number of times, this stock will give superb returns going forward. This is an A-group company and hence the investors should accumulate it in all declines. 

My recommended Hindustan Oil Exploration Ltd today moved to Rs.39.75, before closing at Rs.39.30 up 3.59%. There were earlier media reports that Sun Pharma Ltd's promoter may pick up major stake in the company. The scrip should cross Rs.50 in the next few days, as the Crude Oil prices heads north. 

Gitanjali Gems Ltd moved to Rs.43.55, before closing at Rs.42.90. It is a common perception among the analyst fraternity that USD might rise if the US Fed hikes interest rates and hence outlook for the gold could remain subdued in the next 9-10 months. However, the geo-political situation is fast changing and might help a rise in the gold prices. The rise in the dollar may also provide a cushion to domestic gold prices. Even if the price of gold declines in dollar terms, the weakening of the rupee will keep prices high in rupee terms. Hence, buy the stock is Gitanjali Gems Ltd in all declines and keep holding. 

Veer Energy and Infrastructure Ltd today moved to Rs.3.37 before closing at Rs.3.28. The stock will invariably move towards Rs.5, in the coming days, as the government talks of providing more focus to the renewable energy sector. India’s wind power target of 60 GW by 2022 is easily attainable but solar target of 100 MW requires cost-effective support to be met, says a study report. 
In case of Nifty, today, it was expected that the market could rally, as the market was not only looking oversold but also, FIIs selling looked synthetic, due to rallies in the primary market. Today, the Sensex rallied 479 points while the Nifty posted the biggest daily gain in 2 months. The investors snapped up beaten down blue-chips after the Lower House of Parliament approved the 2015/16 Finance Bill on Thursday. Foreign institutional investors (FIIs) were net buyers in the equity segment worth Rs.605.3 million on both BSE, NSE and MCX-SX on May 04, as per provisional data available at the BSE. They bought equities worth Rs.51.05 billion and sold equities worth Rs.50.45 billion. While domestic institutional investors (DIIs), which include banks, DFIs, insurance and MFs, were net buyers in the equity segment worth Rs.1.46 billion. They bought equities worth Rs.12.53 billion and sold equities worth Rs.11.07 billion.

Market Mantra

The Nifty is  now comfortably above the immediate support and thus it again becomes buy on dips. The Asian markets are not doing too badly. Moreover, any rise in oil price would be positive for the Crude Oil Exploration Companies (RIL, ONGC, Selan Exploration, Shiv-Vani Oil and Gas exploration, etc). The tensions in Iraq is very little to do with India. Hence, these are times to accumulate good stocks, which have fallen from their peaks. 

Today's Call: (i) Buy Suzlon Energy Ltd at Rs.28.20-29.30, T--Rs.34-35, SL--Rs.27. It seems for the moment the scrip has completed the correction. The dip today, seems to be good for buying. 

(ii) Book Profits in Veer Energy and Infrastructure Ltd (Face Value: Re.1) at Rs.6-6.10, because one of their major projects might get delayed. Also, there are some management issues in the company. The scrip might again come down to below Rs.5.5. Invest the same money either in IVRCL Ltd at Rs.25 or Allied Digital Services Ltd at Rs.21-21.40. 

Resurgere Mines and Minerals Ltd hits another buyer freeze in the opening trade at Rs.2.12 in the BSE. The scrip is expected to hit continuous buyer freezes from here. 

The Rights issue of IVRCL Ltd (Rs.24.40) is on the anvil. The investors are suggested to buy the scrip in bulk and keep holding. There are lot of positive news coming in the company. 

Allied Digial Services Ltd, hit the buyer freezes in the afternoon trade at Rs.21.40. The scrip was asked to be accumulated yesterday, in this blog. 

WINNING STROKES: THINK DIFFERENT

IVRCL Ltd recommended today around Rs.24-25.25 hit the upper circuits in the late trade. The scrip might be one of the biggest beneficiaries of the proposed billion dollar infrastructure fund, to be set up by the NDA government. 

There is no stopping of Veer Energy and Infrastructure Ltd. The scrip today touched Rs.6.20 before closing at Rs.6.10. The company is doing some major projects in the renewable energy space. And Indian Prime Minister, Narendra Modi, has talked of giving some special incentive to this space. The scrip could be moving towards Rs.7-8 in the coming  days. 

Resurgere Mines and Minerals Ltd today hit another buyer freeze in the opening trade in the NSE at Rs.1.75 while it hit the Upper Circuits in the BSE, in the fag end of the market  hours, at Rs.2.03. What is the hidden story in the company? However, the authorities (regulators) should see that the price differential of the scrip in the two exchanges comes down. The scrip  has been hitting non-stop upper circuits since it is was recommended some days back.

Join the Paid Service or allow my firm to trade in your account to cover all your losses you made, during the last 5-6 years. The time is running out and hence you need to take quick decisions. When you fall ill or become sick, you go to a doctor, similarly, if  you want to make correct  use of this BULL MARKET, then there is no other alternative other than to seek PROFESSIONAL HELP-the persons, who have spent years, RESEARCHING the STOCK MARKETS. To get something, you need to lose something. One should understand that it is not at all easy to make MONEY from the share markets on a consistent basis; but with the help of experts, you can do that over a period of time. Even if you have made huge losses in the past, that can also be covered up, if you follow the suggestions of SPECIALISTS in this trade. If you are investing funds, above Rs.5 lakhs (half million) plus then where is the problem, if some entity maximizes your returns and in the process you share a part of the profits? Therefore, rush your mails to: suman2005s@rediffmail.com. 

Today, Insecticide India Ltd crossed Rs.400, the ultimate target. The scrip was recommended around Rs.270-280, some weeks back. The investors should do good, to book some (or complete) profits in the counter and invest the same either in Shiv-Vani Oil and Gas Exploration Ltd or in IVRCL Ltd (Rs.25.25).

As expected Shiv-Vani Oil and Gas Exploration Ltd today hit the buyer freeze in the opening trade. It is a  huge company and has bought sophisticated machinaries for its operation, whose life is around 25 years. The scrip should be moving towards Rs.50, in the coming days. One should accumulate the scrip on all declines. 

The investors are going for mad selling the shares of Western India Shipyard Ltd (Rs.2.62), as if the company is going to close down tomorrow. The fact of the matter is that the company is already getting contracts from the Cruise Ships and other liners. But once the mining in Goa starts, it is expected that it would start getting large orders form cargo ships as well, who would anchor in India's west coast to pick up dry cargo and crude. There were some media reports that Mormugao Port Trust has registered, a robust growth in 2013-14. Mr.Mara Pandiyan, chairperson of MPT, said that Mormugao Port Trust, which was earlier known as the iron ore port, last year had almost 99.9% non iron ore activities and still registered robust growth. The point is significant because, Western India Shipyard Limited (WISL), India's largest composite ship & rig repair facility in the private sector and one of the world's advanced multi-dimensional and multi-purpose yard offering modern, streamlined, sophisticated ship & rig repair facilities and industrial services is strategically located at Mormugao Port Goa along the west coast of India at 15° 25' North and 73° 47' East and is geographically best positioned to offer a complete range of ship repair services. The shipyard has ISO 9001:2008 Quality Certification.The port is an international customs Port. Therefore there is no reason for any PANIC SELLING . 

Market Mantra

Yesterday the Nifty rallied and closed with a gain of 72 points. Buying interest below 8200 level pulled it to 8308 and it finally settled at 8285. Bank index was the best performer which was lead by ICICI Bank. 

After correcting 660 points, market has witnessed buying interest at 200 DEMA support. Yesterday, the traders purchased shares across the board. Today, the Premium Members were given Buy call on Nifty  at around 8,224.45 (corresponding spot price) when it was down 61.15 points or 0.74% points; for a target of 8260. Now the Nifty is trading at 8,285.15 down only 0.45 points or 0.01%. I feel most of the Paid Members made money in my Nifty call today. Meanwhile, the Hourly Trend in case of Nifty has again turned positive. 

Today's call: 

(i) Buy Veer Energy Ltd at Rs.3.30-3.40 for a target of Rs.4.9. Since the crude oil prices have started to move up, the renewal energy sector is expected to do well.

(ii) Buy Hindustan Oil Exploration Ltd at around Rs.38.50--39 for a target of Rs.46.  Yesterday there werew media reports that Barclays has raises crude oil price forecasts citing geopolitical tensions, unplanned outages and lower natural gas prices in the US. Bank of America Merrill Lynch and Societe Generale are the other two major banks that have made upward revisions to oil forecasts amid a rally in US oil prices.

Rolta India Ltd (Rs.116) should be moving towards Rs.140-144 in the next few week. Kindly add on all declines. 

DO YOU KNOW?

Buying was witnessed across the board, yesterday and despite a negative close, advance/decline ratio remained Positive at 4:3  with Small-cap index and Bank Index closing in the green.

Also, Crude oil closed at $58.58 with a gain of $1.52 yesterday. It made a new 4 month high of $59.33 after trading sideways for 7 trading sessions. Crude had crossed the supply level of $55 few days back. The next supply level is $65--thus the Bulls have good room for appreciation. 

This gives the Bulls enough ammunition to invest in the small cap space. Accumulate Veer Energy and Infrastructure Ltd (Rs.3.19) and Hindustan Oil Exploration Ltd (Rs.38.50) in view of the positive development in the crude oil front.

WINNING STROKES: THINK DIFFERENT

Source: www.economictimes.com

Today's recommendation Veer Energy and Infrastructure Ltd at Rs.5.28, moved to Rs.5.78, intra-day before closing at Rs.5.71. The charts are looking good for the scrip. There is a brief report on the company on my sister blog: SumanSpeaksPlus. 

Relentless selling in going on Western India Shipyard Ltd (Rs.2.75) and Jai Balaji Industries Ltd (Rs.26.40) as if both the companies are going to close down. What an irony!! According to my assessment, while the former can fall upto Rs.2.60 in the short term, the latter, can correct to Rs.23.50 in the short term. Therefore you can take your buy or sell call decisions accordingly. There is no  need to panic, as both shipping and steel sectors are going to benefit, in the coming days, due to pragmatic government policies. 
Richa Industries Ltd a company into textile and construction, today moved to Rs.22.75, before closing at Rs.22.30. This is a solid company with FY14, EPS of around Rs.4.22. The scrip is trading very cheap compared to its peers. It is also a dividend paying company. 
Surprisingly the shares of Shiv-Vani Oil and Gas Exploration Ltd came down to Rs.21.60, when the crude price is moving  up due to escalation of the crisis in Iraq. The scrip should be accumulated on all declines. 

Do you know?

Veer Energy Ltd (Rs.4.18) was recommended on 14 January, 2015 at Rs.3.30-3.50, for a target of Rs.5. That Target was reached long back. Meanwhile, the scrip made a 52-week high of Rs.6.69 on 5 January, 2016.

The company has great future ahead. Therefore, the investors are suggested to accumulate the scrip when its price stabilizes, for a target above Rs.10, in the next 18 months.

WINNING STROKES: THINK DIFFERENT

Today Veer Energy and Infrastructure Ltd touched Rs.4.15, intra-day before closing at Rs.4.07. The scrip today moved up with huge volume in the BSE. The volume of the shares traded today was 1,185,534, against 10 and 30 and day average volumes of 162184 and 166237 shares, respectively. And what is more interesting and positive for the BULLS is that, the percentage of Deliverable Quantity to Traded Quantity was whopping 82.81%, which is even higher than yesterday. Today, the stock gave a clear break out and closed above some of its prominent "Moving Averages'. The stock in all probability will touch Rs.5 in this week. Congratulations to those who are holding the scrip. The share was recommended yesterday to the Premium Group members at Rs.3.30-3.50.

My recommended Allied Digital Services Ltd today touched Rs.34.55, before closing at Rs.30.90, after profit booking was suggested in the counter. The scrip reached all its short term targets. 
Meanwhile, I do not know whether you have observed or not: Kohinoor Broadcasting Corporation Ltd (Re.0.22) is hitting continuous upper circuits since the last few days. It seems this time the scrip will touch Re.0.50, let us see......

Rohit Ferro Tech Ltd (Rs.8.10) today, closed above Rs.8 forming slightly positive pattern for the bulls. The company is selling one of its plants (The unit is located at Kalinganagar industrial Complex, District: Jajpur, Orissa) and trying to reduce the debts. It is also implementing the CDR SCHEME. You should buy the scrip when no one is looking at it, but has a story to tell.  Meanwhile, according to The Economic Times, January 5, 2014: 

India is expected to become the world's second largest producer of crude steel in 2015-16, moving up from the fourth position, as its capacity is projected to increase from 100 million tonne (MT) to about 112.5 MT in 2015-16. "All indicators suggest that India will soon move up to the second position both in production and consumption", a sectoral analysis by Frost & Sullivan's Metals & Mining Practice said. 

With infrastructure development and automotive industry driving steel demand, production is expected to hit 140 MT by the end of 2016, while consumption is expected to grow 6.8% to reach 104 MT by 2017.

According to the analysis, the Indian steel industry is forging ahead despite "chronic handicaps like poor infrastructure". It said, "The government is working proactively to provide incentives for economic growth by injecting funds in construction, infrastructure, automotive and power, which will drive the steel industry in the future."

With nearly all major domestic steel producers in the process of adding a mix of brownfield and greenfield capacity, the total planned capacity hike in crude steel production till 2017 is estimated at well over 100 MT. While total installed capacity for crude steel in 2013 was 102 MT, capacity utilisation was about 80%.

Moreover, according to India Ratings & Research (Ind-Ra), the average prices for steel making raw materials are likely to remain low in 2015, in line with 2014, as major global miners are determined to flush small, high-cost producers out of the industry and regain balance in the market. The agency expects steel consuming sectors construction, automobile and mechanical engineering - to grow in FY16 with the softening of interest rates and implementation of government policies on the revival of infrastructure and investment in the country. A better GDP forecast of 6.5% growth in FY16 supported by industrial growth of 6.5% would gradually increase steel demand in the country. Besides, there were media reports today that, according to sources, the steel ministry has sought a revision of import duty on long products and HR coils saying it is necessary to raise import duty rates to safeguard TMT/rebar industry. You should therefore, not only buy the shares of Rohit Ferro Tech Ltd, but also average out or take fresh positions in Jai Balaji Industries Ltd (Rs.15.50). One should remember that without steel, Infrastructure development is not possible. 

Anant Raj Ltd today closed flat at Rs.46.85, in the BSE, after touched Rs.47.75, intra-day. Recently, the company announced that the Credit Analysis & Research (CARE) Limited has reaffirmed the credit ratings of the Company as 'CARE BBB+ (Triple B Plus)’ for the long term bank facilities of Rs.951.32 Crores and outstanding Non Convertible Debentures (NCDs) issue of Rs.150 Crores, which had been issued by the Company on private placement basis. The stock should see Rs.55-57, in the coming days.

MARKET MANTRA

Veer Energy and Infrastructure Ltd (Face Value: Re.1 and not Rs.10) today touched Rs.4.54 and is now trading at around Rs.4.40. The traders who have entered earlier can book some profits and wait for the scrip to stabilize, before taking a fresh entry. The long term investors however can hold the scrip with a SL of Rs.4.20. 

Today's Call: (i) Buy Gitanjali Gems Ltd at Rs.52.70, for a target of Rs.61-62. With the marriage season commencing, the demand for Gems and Jewelries are set to increase in the coming days. Meanwhile, there were media reports that Gitanjali Gems Ltd. (GITG), India’s largest jeweler by revenue, has registered three new trademarks in that country, the Rapaport Report diamond news website reported. The three new trademarks, approved Dec. 22, are “Gitanjali Jewels,” “Giganjali Group,” and ‘Gitanjali Trust Forever,’’ according to the Rapaport Report. The Mumbai-based company said in its application that it has used the terms since July 2011, according to the diamond-industry trade publication. Gitanjali Group was founded in 1977 as a diamond-cutting and polishing operation and has since grown into a diamond and jewelry company, according to the Rapaport Report.
(ii) Buy Mangalore Refinery And Petrochemical Ltd at Rs.49.70-50, for a target of Rs.61-62, in the short term. The medium term target for the scrip is Rs.80. SL-Rs.46.50.

WINNING STROKES: THINK DIFFERENT

Mangalore Refinery and Petrochemicals Ltd reommended yesterday at around Rs.48.95, today touched Rs.51.20, before closing at Rs.50.50. The stock will give handsome returns to the investors. Please have patience, till it starts to get benefits out of the expansion.

Rohit Ferro Tech Ltd today closed at Rs.7.90, due to weak outlook of the steel sector in the international market and also due to the domestic problems. In an interview with CNBC-TV18, on 22 January, 2015, Kalyani Steel MD RK Goyal said: 

"Just for your information, particularly long products import has gone up by 550 percent in Q3 and in terms of volume it has gone up to the level of 450,000 tonnes in last quarter. On annualised basis it becomes 1.8 million tonne against the total demand of the industry around 4 million tonne and if this continues, I think the local industry will be wiped off. Major imports are coming from China besides from various other countries including Europe, including Russia. The reason is that the economic situation or the slowdown in the growth in China -- since local demand in China is going down, they are trying to find out avenues to export that material and India is a good ground for them where there are practically no restrictions and a reasonable size market for them.The government should introduce some sort of steep import duty so as to deter dumping of products from countries such as China".

Meanwhile, China's apparent crude steel consumption fell (3.4 percent from a year ago to 738.3 million tonnes in 2014), for the first time in three decades in 2014, data from an industry association showed, a further indication of how the country's economic slowdown is hurting industrial demand. Some analysts are of the view that a decline in the use of steel in China, which is both the top consumer and producer of the alloy, will dent iron ore prices that have already been roiled by a global oversupply. Spot rates of the steelmaking ingredient are currently mired near a 5-1/2 year low $65.60 per tonne. It is interesting to note that, struggling with weak demand as economic growth slowed to 7.4 percent in 2014, the lowest since 1990, Chinese steel producers turned to exports, which according to CISA rose 64.5 percent to the equivalent of 84.4 million tonnes of crude steel last year. Overseas sales got a further boost last year as exporters took advantage of a loophole that allowed them to gain tax rebates by adding tiny quantities of boron to their products. However, that loophole has since been closed. CISA said in a report published on its website that around 40 percent of exports in 2014 contained boron, and the decision to cancel the rebate this year will have "a certain impact" on the domestic market. Also, amendments to China's Environmental Protection Law, which came into effect on Jan. 1, 2015, will raise production costs in an industry which is already trying to survive on profit margins of less than 1 percent in 2014. Thus, these two points (on China) are definitely going to have positive effects on the Indian domestic steel sector as well. Moreover, some analysts, warned of a potential squeeze higher, with the market now positioned with the biggest net short since 2008 across the LME and CME Group Inc's Comex contract combined. "With the market oversold and heavily short, the likelihood of a short term squeeze is rising. We would view any further bouts of weakness as prime buying opportunities," said ANZ in a report. 

Besides, stocks and bonds surged worldwide and the euro sank to an 11- year-low on Friday, the day after the European Central Bank announced a quantitative easing plan. Oil rose following the death of the king of Saudi Arabia. European shares were on course for their strongest week since late 2011 and emerging markets headed for their best in almost 10 months. Italian, Spanish bond yields dropped to record lows. Purchasing manager surveys showed the euro zone economy began 2015 in better shape than expected, although companies are still cutting prices.  

The ECB announced on Thursday a programme to buy government bonds, which will pump roughly a trillion euros into the stagnant euro zone economy. Although QE was widely anticipated, the size of the programme was not - markets had already largely priced in QE at about 500 billion euros in total so the package of 1.14 trillion euros easily outpaced market expectations. Now, though most of the analysts are of the view that a strong dollar is negative for the metal sector, but what I feel is that, easy money from the European QE, would soon start to enter the metal (Commodities) sector, sparking the fear of inflation--i.e, this move is likely to  inflate the prices of commodities, as we saw last time. Therefore, I feel we are probably sitting, at the end of a downturn in the metal sector. So, according to my view one should start accumulating steel (and other metal) stocks on any bounce. In another development, the latest producer manufacturing index(PMI) came in better-than-expected from China. Newly released numbers saw China's PMI come in at 49.8, up from 49.6 in December. Japan's PMI was up as well, coming in at 52.1, 0.1 percentage point higher than last month's 52. Later today, a slew of PMI numbers are scheduled for release, including the ones from France, Germany, Eurozone and US. In the latter, existing home sales and the CB leading index will be watched as well. 

Jindal Saw Ltd recommended earlier and also today, rose to Rs.86.90, intra-day before closing at Rs.84.60. The company as mentioned earlier came out with decent set of numbers for the Q3FY15. In Q2FY15, too, the results were impressive. The company is in a commanding position in India's tubular market, being the undisputed leader with turnover in excess of Rs.7500 crores. It is one of the country's largest producers of SAW pipes, which is widely used in the energy sector for the transportation of oil and gas. The investors are suggested to accumulate the same on all declines for a short term target of Rs.91-92, within this week. 

Today, as expected Veer Energy and Infrastructure Ltd corrected to Rs.4.15, intra-day before closing at Rs.4.18. I had mentioned a couple of days back in this blog, to be cautious to on the scrip as it nearly touched my target of Rs.5 (rose to Rs.4.98 intra-day). I will tell you when to enter the counter once again. For the time being the scrip could. fall to Rs.3.70. I had today, asked all the Premium Members to book profits in the counter. 
Nifty today closed at 8,835.60 up 74.20 points. Nifty has appreciated around 780 points or ~9% from the low of 8065 within a few trading sessions. Bulls are in full command of the affairs, in Dalal Street. Moreover, the point that Nifty is in a “Resistance Free Zone”, gives further ammunition to the bulls. The traders are suggested to buy stocks from both the large and small / mid-cap spaces.