🏦 *TOWER TALK* 🏦
_September 17 - 23, 2018_
👍🏻 Rural Electrification Corporation (REC) plans to raise its borrowing limits to Rs.3.5 lakh crore this fiscal. Its business prospects also appear bright. This being a Golden Jubilee year for REC, a bonus issue is also likely. Buy immediately.
👍🏻 Larsen & Toubro and Bharat Forge are likely to receive a big chunk of the air defence guns orders worth Rs.15000 crore. Buy both the stocks for the long-term.
👎🏻 ICICI Bank has filed an insolvency petition against Jai Pprakash Associates (JPA). Considering JPA’s heavily debt-ridden situation, it may be prudent to sell your holdings. Do not get carried away by its turnaround stories.
👍🏻 A2Z Infra Engineering has obtained orders worth Rs.96 crore from Nepal. Investors with a risk appetite may enter.
👍🏻 Ajanta Pharma was unnecessarily beaten down during the recent market correction. A quick rebound is possible. Accumulate.
👍🏻 The government hopes to garnish a big chunk of money via special dividends this year. Power Finance Corporation, which is likely to report better earnings, seems like a good buy.
👍🏻 Alembic Pharmaceuticals has approved a Rs.300 crore NCD issue to funds its expansion plans. Buy.
👍🏻 Suzlon Energy has inked a pact with CLP India (a Hong Kong based company) for two solar projects in Maharashtra. Long-term investors willing to take a risk may enter.
👍🏻 GAIL plans to expand its pipeline network capacity by 50% and also set up 400 gas stations over the next three years. Buy for the long-term.
👍🏻 Mahindra & Mahindra Financial Services is eyeing a 20-25% growth in its loan book this year. A big positive for the company. Buy.
👍🏻 With Brent crude hovering around $80, it may be prudent to buy OIL India, Oil and Natural Gas Corporation andSelan Exploration Technology.
👍🏻 In an attempt to curb crude imports and cut surplus sugar production, the government has raised ethanol prices by 25% to Rs.47.13/litre. Buy Dhampur Sugar.
👍🏻 Coal India produced 12% higher volumes in Q1 and expects volumes to grow further on the back of rising demand from power companies. This cash-rich company also pays good dividends. Buy.
👍🏻 Dr. Reddy’s Laboratories has launched its Neostigmine Methylsulphate injection in USA to improve muscle strength. A positive for the company.
👍🏻 International manganese ore prices are on the rise. It may be prudent to buy MOIL, an efficient PSU, at the current level. The stock has the potential to jump 40% within a year.
👍🏻 Himadri Specialty Chemical aims to commission its speciality carbon black plant by FY20. Majority of its capex was funded by internal accruals. Big gains in the pipeline. Buy immediately.
👍🏻 Indiabulls Real Estate is expected to notch Rs.3000 crore sales volumes from its 14 ongoing projects in Mumbai and the Delhi-NCR region. Buy for the long-term.
👍🏻 NTPC has approved a Rs.9785 crore expansion for its 1,320 MW stage III Talcher thermal power plant at Odisha. A good long-term buy.
👍🏻 The government targets 15% of all automobile sales to come from the electrical vehicle (EV) segment, which will reduce crude imports and at the same time control pollution. Ashok Leyland is expected to gain big. Buy.
👍🏻 Indraprastha Gas may benefit from the widening gap between petrol and CNG prices, leading to higher conversion of vehicles to CNG from alternative auto fuels. The stock has the potential to rise significantly.
👍🏻 Zydus Wellness has guided a 20% CAGR for the next few years. Given the strong revenue guidance, its leadership status in key categories and revamping of its distribution channels augurs well for the company. Buy.
👍🏻 Vindhya Telelinks has posted excellent standalone results for Q1FY19. Based on its working, a consolidated EPS of Rs.160 for FY19 can be anticipated. The stock is poised to cross Rs.2000 at a reasonable P/E of 12.5x.
👍🏻 Godawari Power & Ispat is expected to notch an EPS of Rs.85 in FY19. The stock may rise by 50% in the medium-
term.
👍🏻 Everest Industries is expected to post an EPS of Rs.60 in FY19 based on its Q1FY19 EPS of Rs.18.78. The stock is expected to touch Rs.700.
👍🏻 KSE has posted an EPS of Rs.218 in FY18 and Rs.45.6 for Q1FY19. It is likely to notch an EPS of Rs.260 in FY19. Generally, its second half is always better and it is a strong bonus candidate as well. A forward P/E of 15x against the industry P/E of 35x will take its share price to Rs.3900 in the medium-term.
👍🏻 An Ahmedabad-based analyst recommends Acknit Industries, Crest Ventures, Pressman Advertising, R Systems International, Ruchira Papers, Savera Industries and Smartlink Holdings. From his last week’s recommendations, Crest Ventures jumped 4% from Rs.205.15 to Rs.213.9 while Patel Engineering jumped 5% from Rs.46.80 to Rs.49. From his previous recommendations, Sadhna Nitrochem zoomed 1969% from Rs.59.85 in May 2017 to Rs.1238.35; Tanfac Industries jumped 233% from Rs.113.35 in June 2018 to Rs.377.5; Rishabh Digha Steel & Allied Products jumped 193% from Rs.39.50 in December 2017 to Rs.115.6; Pix Transmission jumped 72% from Rs.164.80 in August 2018 to Rs.284.40; and Makers Laboratories jumped 21% from Rs.80.10 in August 2018 to Rs.97.
*Errata:*
📍 The beneficiary of vehicle insurance in the first Tower Talk published last week is ICICI Lombard and not GIC Housing Finance as published.
📍 The debt portfolio of Jindal Steel & Power in the fifth Tower Talk should be read as Rs.42000 crore not just Rs.42000.
_September 17 - 23, 2018_
👍🏻 Rural Electrification Corporation (REC) plans to raise its borrowing limits to Rs.3.5 lakh crore this fiscal. Its business prospects also appear bright. This being a Golden Jubilee year for REC, a bonus issue is also likely. Buy immediately.
👍🏻 Larsen & Toubro and Bharat Forge are likely to receive a big chunk of the air defence guns orders worth Rs.15000 crore. Buy both the stocks for the long-term.
👎🏻 ICICI Bank has filed an insolvency petition against Jai Pprakash Associates (JPA). Considering JPA’s heavily debt-ridden situation, it may be prudent to sell your holdings. Do not get carried away by its turnaround stories.
👍🏻 A2Z Infra Engineering has obtained orders worth Rs.96 crore from Nepal. Investors with a risk appetite may enter.
👍🏻 Ajanta Pharma was unnecessarily beaten down during the recent market correction. A quick rebound is possible. Accumulate.
👍🏻 The government hopes to garnish a big chunk of money via special dividends this year. Power Finance Corporation, which is likely to report better earnings, seems like a good buy.
👍🏻 Alembic Pharmaceuticals has approved a Rs.300 crore NCD issue to funds its expansion plans. Buy.
👍🏻 Suzlon Energy has inked a pact with CLP India (a Hong Kong based company) for two solar projects in Maharashtra. Long-term investors willing to take a risk may enter.
👍🏻 GAIL plans to expand its pipeline network capacity by 50% and also set up 400 gas stations over the next three years. Buy for the long-term.
👍🏻 Mahindra & Mahindra Financial Services is eyeing a 20-25% growth in its loan book this year. A big positive for the company. Buy.
👍🏻 With Brent crude hovering around $80, it may be prudent to buy OIL India, Oil and Natural Gas Corporation andSelan Exploration Technology.
👍🏻 In an attempt to curb crude imports and cut surplus sugar production, the government has raised ethanol prices by 25% to Rs.47.13/litre. Buy Dhampur Sugar.
👍🏻 Coal India produced 12% higher volumes in Q1 and expects volumes to grow further on the back of rising demand from power companies. This cash-rich company also pays good dividends. Buy.
👍🏻 Dr. Reddy’s Laboratories has launched its Neostigmine Methylsulphate injection in USA to improve muscle strength. A positive for the company.
👍🏻 International manganese ore prices are on the rise. It may be prudent to buy MOIL, an efficient PSU, at the current level. The stock has the potential to jump 40% within a year.
👍🏻 Himadri Specialty Chemical aims to commission its speciality carbon black plant by FY20. Majority of its capex was funded by internal accruals. Big gains in the pipeline. Buy immediately.
👍🏻 Indiabulls Real Estate is expected to notch Rs.3000 crore sales volumes from its 14 ongoing projects in Mumbai and the Delhi-NCR region. Buy for the long-term.
👍🏻 NTPC has approved a Rs.9785 crore expansion for its 1,320 MW stage III Talcher thermal power plant at Odisha. A good long-term buy.
👍🏻 The government targets 15% of all automobile sales to come from the electrical vehicle (EV) segment, which will reduce crude imports and at the same time control pollution. Ashok Leyland is expected to gain big. Buy.
👍🏻 Indraprastha Gas may benefit from the widening gap between petrol and CNG prices, leading to higher conversion of vehicles to CNG from alternative auto fuels. The stock has the potential to rise significantly.
👍🏻 Zydus Wellness has guided a 20% CAGR for the next few years. Given the strong revenue guidance, its leadership status in key categories and revamping of its distribution channels augurs well for the company. Buy.
👍🏻 Vindhya Telelinks has posted excellent standalone results for Q1FY19. Based on its working, a consolidated EPS of Rs.160 for FY19 can be anticipated. The stock is poised to cross Rs.2000 at a reasonable P/E of 12.5x.
👍🏻 Godawari Power & Ispat is expected to notch an EPS of Rs.85 in FY19. The stock may rise by 50% in the medium-
term.
👍🏻 Everest Industries is expected to post an EPS of Rs.60 in FY19 based on its Q1FY19 EPS of Rs.18.78. The stock is expected to touch Rs.700.
👍🏻 KSE has posted an EPS of Rs.218 in FY18 and Rs.45.6 for Q1FY19. It is likely to notch an EPS of Rs.260 in FY19. Generally, its second half is always better and it is a strong bonus candidate as well. A forward P/E of 15x against the industry P/E of 35x will take its share price to Rs.3900 in the medium-term.
👍🏻 An Ahmedabad-based analyst recommends Acknit Industries, Crest Ventures, Pressman Advertising, R Systems International, Ruchira Papers, Savera Industries and Smartlink Holdings. From his last week’s recommendations, Crest Ventures jumped 4% from Rs.205.15 to Rs.213.9 while Patel Engineering jumped 5% from Rs.46.80 to Rs.49. From his previous recommendations, Sadhna Nitrochem zoomed 1969% from Rs.59.85 in May 2017 to Rs.1238.35; Tanfac Industries jumped 233% from Rs.113.35 in June 2018 to Rs.377.5; Rishabh Digha Steel & Allied Products jumped 193% from Rs.39.50 in December 2017 to Rs.115.6; Pix Transmission jumped 72% from Rs.164.80 in August 2018 to Rs.284.40; and Makers Laboratories jumped 21% from Rs.80.10 in August 2018 to Rs.97.
*Errata:*
📍 The beneficiary of vehicle insurance in the first Tower Talk published last week is ICICI Lombard and not GIC Housing Finance as published.
📍 The debt portfolio of Jindal Steel & Power in the fifth Tower Talk should be read as Rs.42000 crore not just Rs.42000.
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