Godawari Power (GPIL) has done wonderfully well over the last 15 odd months, having appreciated roughly about 150% in this period. The current China slow down if prolonged, could be a big cause of concern for the steel sector in general, & by extension to the iron ore sector as well. This is already evident with continuous fall in the iron ore prices, now having fallen below 100$/T for a high of 140$/T in January this year. As of now, with the GPIL numbers for the June qtr being good, could provide a bottom to the stock, but if September Qtr numbers show any stress on margins, things could change very fast. Sitting on large gains on the counter, I decided to play safe & book profits. Theoretically, any talk by the Chinese Govt. of any stimulus could reverse the scenario very quickly, but that would be living in hope. Besides, like I said, gains have to be preserved!! Six months ago I had planned to hold the stock for 3-5 years. Such are markets!
Due to the Chinese slowdown, Goldman Sachs has just cut the 2025 target price for Copper by 33%!!
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