Diamond Power Infra finally appears to have got its act together. Fundamentally speaking a number of positives are there for this company
1) The company has turned profitable and the promoters have put out an investors presentation which paints quite a rosy future for the company. It may or may not happen but it appears that atleast the next 2 quarters too the Company may show good results.
2) They have appointed KPMG as auditors to boost investors confidence
3) The promoters have contributed additional equity at 52 rupees
4) There is to be value unlocking by way of IPO for the transformer business
5) The capacity expansion is getting completed at the right time; just when there is a demand pickup
6) The falling raw material prices of Aluminum and Copper will add to its profitability.
And technically too, the stock is showing all the sihns of bottom formation on Monthly and Weekly charts. The detailed technical analysis is as given in the above chart.
For any student of Rational Analysis, this is a good stock for investment…its a good company at a good price and at the takeoff time. If the NIFTY behaves well in September, then there is a good chance of this stock taking off. It becomes a very good buy once it crosses 42.50 – 43 levels.
This stock can be held for the long term with a price target of around 180-190, which is the first resistance level on monthly charts.
Disclosure: I hold a good quantity of the stock at an average of around 44 and will buy more above 43 if the NIFTY stays positive in September 2015. Thus my views are positively biased insofar as Diamond Power Infra is concerned.
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