Stock Picks of Daljeet S Kohli – Head of Research IndiaNivesh Securities
Capital First: The NBFC is growing at a high speed. Its AUM grew at more than 30 per cent in this quarter. It is an indirect play on consumption, finance consumer durables etc. Its return ratio is expected to improve substantially over the next two years. Valuation-wise, it is trading much cheaper than its nearest peer Bajaj Finance. We have a target price of Rs 460 in the next 6-9 months.
HSIL: This stock has performed very well in the last quarter mainly because its glass container division has started performing, which was a loss-making unit. Growth in building products is continuous. The company is launching more value added products which will lead to margins expansion. It could be a big beneficiary of the Swach Bharat Abhiyan and GST. Its building product division is trading at half the valuation of its nearest peer Cera Sanitaryware. Big re-rating can happen in the stock if the management decides to de-merge two businesses. We have a target of Rs 480.
Prism Cement: Although the last quarter was not good, we are still positive on the stock because this company can take advantage of huge operating leverage. Their tiles product division got impacted because of problem in gas supply, resulting in higher input cost. However, the issue is now resolved. The cement plant is doing very well as there is no let-up in demand in central and north India where the company operates. Cost-cutting measures adopted by the company in the last one-and-a-half years for the cement division have started giving results. The RMC division, as of now, is a laggard due to lack of demand. However, once the infrastructure projects pick up, the demand for RMC will be strong. We have a target of Rs 140 on the stock.
Stock Picks of Vaibhav Agrawal, VP & Head of Research, Angel Broking
MBL Infrastructures: We expect a sharp increase in allocations towards roads & highways sector. If we extrapolate the current awarding trends, then there is a high likelihood of continued higher EPC spends, going forward. This — coupled with a strong bid pipeline of Rs 10,000 crore, at a hit rate of ~25 per cent — translates to Rs 2,500 crore worth of project wins for MBL in the next 12 months. Current D/E ratio of ~1.1x should also help MBL to comfortably scale its business. We expect the standalone entity to report ~18 per cent & ~17 per cent top-line and bottom-line CAGR during FY2014-17E. Four BOT projects are likely to commence operations in FY2016-17E. Uptick in EPC business and commencement of BOT projects should help the stock get re-rated from here-on. Based on our SoTP-based valuation, we arrived at FY2017E-based price target of Rs 561. Given a 28.7 per cent upside from the current levels, we maintain BUY rating on the stock with a target price of Rs 561.
Tata Steel: In view of the recent spurt in imports, led by the Chinese slowdown and depreciation of the Russian rouble, we expect the government to increase the import duty on steel products. This will be a huge positive for the domestic steel companies. Also, a thrust to the infrastructure sector and steps to revive the investment cycle in the budget would be positive for the steel sector. We are positive on Tata Steel from the metals space on account of a) strong growth in volume over FY2016-18, led by a 3MT-greenfield expansion project at Kalinganagar and steady improvement in profitability at its European operations. We value Tata Steel on a SOTP basis at Rs. 458 per share, implying a ~24per cent upside from current levels and recommend a BUY on the stock for a target price of Rs 458.
PSU Banks: In January 2015, the RBI started the rate-cutting cycle with a 25bp cut due to structural downward movement in inflation. Further rate cuts also depend on the government sticking to fiscal consolidation targets. We do expect the government to meet the fiscal deficit target in this budget, which is expected to provide room for further monetary easing by the RBI. The key issue for PSU banks is the huge pile-up of NPAs and restructured loans. Up to 75-80 per cent of all restructured loans are stemming from problem sectors like metals & mining, infra & engineering, textiles and chemicals/bulk drugs. Government measures to revive these sectors that can accelerate recovery of NPAs would be a major positive, that could come out of this budget for PSU banks. PSU banks are facing capital constraints, requiring an estimated Rs. 15,400cr of capital to increase Common Equity Tier1 (CET 1) to even the bare 8per cent level. A newly-adopted criterion for capital infusion on the basis of a bank’s efficiency in performance is a step in the right direction. More measures that target efficiency improvement in PSU banks would be watched out for. Also, on the off-chance that a structural roadmap for possible consolidation or reduction of government stake in PSU banks is announced, that could be a significant structural re-rating trigger for PSU banks. We are positive on stocks like State Bank of India, Canara Bank, Punjab National Bank, Bank of India and Other PSU banks.
Stock Picks of Hemang Jani, Senior Vice President, Sharekhan
Bharat Electronics: The company is the largest defence player in India with strong know-how on defence technology and manufacturing. BEL will be the biggest beneficiary of Make in India and increase in spending on defence in the upcoming budget. Defence spend is likely to pick up over the next few years given the government focus on the modernization of the defence forces, coupled with the Make In India initiative. We expect BEL to get a huge chunk of incremental pie of government order on defence.
Supreme Industries: The company is well placed to reap across all divisions due to improving industrial cycle, gaining popularity of plastic piping usage and expected revival in building and residential activities. An additional anti-dumping duty on imported PVC products and new government focus on building 100 smart cities, ‘Housing for all mission 2022’ coupled with strong growth in packaging division and industrial segment would improve the volume growth going ahead.
Century Plyboard: A leading player with strong brand equity, and superior access to raw material sourcing will benefit strongly with the introduction of the GST as it would create a level playing field between organized and unorganized players who are currently out of tax net. Currently 70 per cent of the industry is unorganized, and the introduction of GST would lead to strong upsurge in transition from the unorganised to the organized segment.
Please stop publishing DK recommendations. His sharon bio pick cannot be excused for 100 yrs. First let him explain why he recommended such a loser. Or let him find some other job.
Relax…the principle of stock investing is take advice from everybody but make your own decision…maybe Daljit made a honest mistake..he misread the company or was misguided by the management…if he misrepresented facts then certainly he is to be blamed..
Whatever happened with sharon… Learning is key word.
I learnt a lot with this planned trap/accident.
Without cross-checking the facts never buy or sell anything even if you loose opportunity… Becoz Market is so fast that it always gives good opportunity to the experienced people…who know the buzinesses and companies…
Bholu! please share ur few picks at the moment…which can give 20% or more in short term OR multibagger in 1-2 yr only.
What is ur thought about playing value buy in below stocks? –
EIL around 215 – I think, this offers quality and safty as well.
BGR around 135 – is in profit, though profit has declined…
Rpower below 65 – increasing capacity and growth in cash generation
EIL is not exactly a value pick but yes its stable…NMDC, HZL, Nalco etc are cheaper …look PSUs stocks cannot beat markets because there is always a discount attached to them because of govt. ownership…PSU Banks might offer greater upside if the govt/ RBI tries to reform the sector and improve efficiency…BGR has high debt…in that sector look at IGL or GS Petronet….no opinion on Reliance group …also look at mid sized IT companies…that is another sector going inexpensive
Such excuse is not acceptable.
Will you back an engineer who says ” I have designed the bridge but use it at your own risk”.
Will you back a doctor who says ” I have prescribed the medicine but take it at your own risk”.
It is his job to recommend stocks and he should be serious about it. Disclaimers are no escape routes. He should atleast have the courtesy to speak out and accept his mistake.
We have a right to know why he has gone wrong.
Stocks are always subject to risk no matter how carefully you select them. At practical level it is not possible that you’ll be right on your every stock pick.
Sharon Bio provided false information to him on which he made his recommendation. It wasn’t his mistake. Wrong info lead to wrong analysis.
At end of the day, if you can’t accept your loss was your own mistake better not invest in stocks.
I know profit n loss. I m a market participant for 8 yrs. I have never come across anyone picking a stock with no fundamentals and backing it repeatedly like dk.
Even now he is running away but not accepting that he made a mistake.
Dear Rao, please note that Daljeet Kohli’s recommendations are not long term. He provides targets for every stock and I can say by my experience that if his 1st target is achieved (which is usually done in 3-6 months time), please exit even if he enhances his target. That way u will never suffer loss.
Its not about loss. Losses are temporary in stock market. But here he has recommended a company with no fundamentals. You have to work day and night to find a loser like sharon-bio.
@Bholu, You have well commented .
But the fact is that when the stock was falling he was come to the scene and raising the target each time it fell.. so there is xxxxxx interest seen to arrest the fall… That can never be condoned…
and had it reaonably proved right had the stock moved North fine..
but finally he himself terminated his coverage
though in market none is perfect and a co can go bad or gud due to lot of unforseen factors.. But the above scenario cannot be justified
Like subramiam swamy once said ” a rape cannot be condoned even if the resultant pregnancy produce an Enstein”
so regardless of the baggers he made or making this is something he himself has to explain
Yes he had truckload….
Normally, he never gives such a big target, he always says if this target is achieved then we can revise the target. But he intentionally gave target buy saying 140 or even more for Sharon, looking at the euphoria to buy a multibagger in the market.
Considering the delay/uncertainty of in USFDA and loosing sales due low capacity after fire in one factory, this was a planned offload. I think it was nexus between promoters+Daljeet OR Only Daljeet might be the culprit. The target itself and delay in giving updates clearly says that Daljeet cheated.
Thanks! Please let me know ur picks in IT midcaps.
NIIT Tech, Mphasis, Polaris, Nucleus, Sasken..but once again patience is the name of game…this is pretty much a speculators market
@Rao, I agree with you. Either Daljeet should let us know how he misjudged OR it is confirmed that he has cheated.
Yes.. He should speak out and not run away…
while i can understand the theory that he relied on the mangaement… but query is as to where they are in market..
is this management new to these guys?
going to an unknown house and making alliance ( marriage )
will he do that? for hisxxxxxxxx?
we do ?????????
those who have not gone to school wonot do that
then… no justification
turning the blame baton to NOW to the mangement!!
while i can understand the theory that he relied on the mangaement… but query is as to where they are in market..
is this management new to these guys?
going to an unknown house and making alliance ( marriage )
will he do that? for hisxxxxxxxx?
we do ?????????
those who have not gone to school wonot do that
then… no justification
turning the blame baton NOW to the management!!