Tower Talk – March 01 – 07, 2019

  1. The government is adamant to increase the output and sales of Coal India to cater to the rising demand for coal. A good dividend yield is likely soon. Buy.
  2. Lupin has received the ‘European Good Manufacturing Practice’ certificate for its Mammalian facility in Pune where it plans to manufacture a biosimilar drug – Etanercept. A big positive for the company. Accumulate.
  3. MT Educare is in talks with institutional investors to raise funds via a qualified institutional placement (QIP) to pare debt and expand. Buy for the long term.
  4. ICICI Prudential Life Insurance Co., which recently executed an offer for sale (OFS) by promoters, is being accumulated by knowledgeable circles. Buy selectively.
  5. Reports suggest that Jain Irrigation Systems is finding it difficult to repay debts and interest payments. It may be prudent to lighten your investments in this counter.
  6. Yes Bank has started moving up again. With consistence improvement in performance and CASA ratios for the lastmany quarters, its glorious days seem to have come back. Buy.
  7. Uco Bank, which reported losses for many quarters, expects a windfall gain of about Rs.14000 crore due to its monopolistic position of handling oil related payments from Iran. A good contrarian buy.
  8. Bank of Baroda plans to raise $1 billion by selling overseas bonds. This will help the bank meet the regulatoryrequirements before being merged with Vijaya Bank and Dena Bank. A positive for the bank. Buy.
  9. With base metals showing signs of an upswing, Hindustan Zinc looks attractive.
  10. Shrimp majors like Apex Frozen Foods, Avanti Feeds and Waterbase have started their bull run again. Buy before it’s too late.
  11. Housing finance companies (HFCs) may soon be in demand again on the back of lower GST structures. Buy Crest Ventures and Dewan Housing Finance Corporation.
  12. Graphite India, which may soon recover its lost ground on expectations of a good set of numbers for FY19, is a potential bonus candidate. Accumulate.
  13. With the cement boom around the corner, ACC is inching up slowly. Buy selectively.
  14. With the animal feeds business booming, it may be prudent to buy Godrej Agrovet and Prabhat Dairy.
  15. Rubber major Nocil is likely to benefit significantly from the on-going expansions. Buy for the long term.
  16. DLF has raised Rs.3000 crore via a QIP in an attempt to become debt-free. The stock trades cheap at Rs.200. Use this opportunity to make good returns in the long term.
  17. Selan Exploration Technology is likely to benefit from tighter crude supply conditions. The company plans to buy back shares at around Rs.300/share. Its future looks bright. Buy.
  18. Jet Airways witnessed high trading volumes on expectations of better management practices. However, it’s too early to expect a rise in its share price. It may be prudent to exit now and enter later.
  19. KEC International expects big order intakes and higher transmission and distribution spending by electricity boards. A sure shot winner. Buy.
  20. With its rural housing finance and wealth management services business segments doing well, L&T Finance Holdings has the potential to deliver about 50% returns within a year.
  21. Hindustan Construction Company (HCC) plans to raise Rs.1750 crore by monetising its claims in order to pare debt. A positive for the company. Buy.
  22. Sree Rayalaseema Hi-Strength Hypo is likely to notch an EPS of Rs.28 for FY19. A reasonable P/E of 10x will take its share price to Rs.280 in the medium term.
  23. Going by its 9MFY19 numbers, Talwalkar Healthclubs is likely to notch an EPS of Rs.27 for FY19. The stock has the potential to deliver about 50% returns.
  24. Shreyans Industries is on course to notch an EPS of Rs.30 for FY19. The stock trades cheap with a target price of Rs.240.
  25. Pitti Engineering is likely to notch an EPS of Rs.9 for FY19 and Rs.12 for FY20 post expansion. The stock has the potential to double in the medium term.
  26. Going by its 9MFY19 numbers, Torrent Power is likely to notch an EPS of Rs.25 for FY19. A reasonable P/E of 15x will take its share price to Rs.375.
  27. Security & Intelligence Services is set to notch an EPS of Rs.28-30 for FY19. The stock is poised to cross the 4-digit mark.
  28. Based on a consolidated FY19E EPS of Rs.74, HCL Technologies is the cheapest blue-chip stock trading at a P/E of 15x v/s the industry P/E of 24x. A reasonable P/E of 18x will take its share price to Rs.1330+ in the short term.
  29. Kriti Nutrients is likely to notch an EPS of Rs.4.2 for FY19 on a small equity capital of Rs.5 crore. The stock has the potential to cross Rs.40+.
  30. Bombay Dyeing & Manufacturing Co. is an asset unlocking story. This cash cow of the Wadia group is likely to generate about Rs.24000 crore of free cash flows in the next few years from two of its projects in Mumbai. The project received part occupancy certificate last week. Buy for multibagger returns.
  31. Spencer Retail is a debt-free company with cash reserves of about Rs.700 crore. Its market cap stands at Rs.1274 crore against a turnover of Rs.2000 crore. A no-brainer buy.
  32. Although the S&P downgraded its credit rating on Jaguar Land Rover and Tata Motors, the stock rose 5% indicating that the negative news has already been factored in its CMP. Buy.
  33. Sun TV Network seems to have bottomed out. Investors can look for 50% returns in the short-to-medium term.
  34. An Ahmedabad-based analyst recommends Jindal Hotels and Kanpur Plastipack.