TOWER TALK

Money Times - - Tower Talk -

Lit­tle known spe­cial­ity chem­i­cal man­u­fac­tur­ing com­pany Amal is go­ing great guns and is now in the fold of the Lalb­hai group. Buy for bumper re­turns.

LIC Hous­ing Fi­nance dis­ap­pointed the mar­ket by re­port­ing higher NPAs. Its NIM was also the low­est in the last 11 quar­ters. Stay away from this counter till some clar­ity is re­ceived.

As per the new debt re­pay­ment plan, Reliance Com­mu­ni­ca­tions en­vis­ages eq­uity sway from some its lenders of ~Rs.100 crore apart from sale of cer­tain as­sets worth Rs.17500 crore. Steps to cut down the debt (as­set mon­eti­sa­tion) may ex­cite in­vestors with a risk ap­petite.

The gov­ern­ment is ag­gres­sive about con­vert­ing all its au­to­mo­biles into e-ve­hi­cles over the next few years. PSUs will fol­low suit. A good time to buy Tata Mo­tors and Mahin­dra & Mahin­dra.

Max Life In­surance is keen to ac­quire up to 10% stake in Lak­shmi Vi­las Bank. The stock could surge if that hap­pens. De­bot­tle­neck­ing at IG Petro­chem­i­cals is over. With all its plants func­tion­ing well, the stock could take a big leap any time. Buy im­me­di­ately.

USFDA is likely to lift its ban on the im­port alert on Divi’s Lab­o­ra­to­ries’ Vizag plant. The com­pany should be on a come­back trail very soon. Buy.

Tor­rent Phar­ma­ceu­ti­cals is re­port­edly buy­ing out Unichem for ~Rs.3250 crore, which will place it amongst the cov­eted pharma com­pa­nies in In­dia. It makes sense to buy. Trans­mis­sion gi­ant Power Grid Cor­po­ra­tion of In­dia con­tin­ues to re­port sus­tain­able growth. A sta­ble long-term in­vest­ment bet.

The de­mand for cop­per is likely to dou­ble by 2020. Hin­dus­tan Cop­per can be bought for stel­lar gins.

Rama Steel Tubes has won two orders worth Rs.288 crore for the sup­ply and erec­tion of trans­mis­sion lines for ru­ral elec­tri­fi­ca­tion in its JV com­pany Pir Pan­chal Con­struc­tion from Ut­tark­hand Power Cor­po­ra­tion and Hi­machal Pradesh Elec­tric­ity Board for ex­e­cu­tion in 24 months.

Sanco In­dus­tries, man­u­fac­turer of PVC pipes & al­lied prod­ucts is in lime­light on re­ports of ma­jor ex­pan­sion and likely ex­port or­der.

The Cab­i­net has ap­proved the sale of gov­ern­ment's en­tire 73.47% stake in Dredg­ing Cor­po­ra­tion of In­dia. A bumper div­i­dend may be an­nounced. A good buy even at the cur­rent level.

ITC is pur­su­ing to re-launch some of its pres­ti­gious and high mar­gin per­sonal care prod­ucts and brands. Keep ac­cu­mu­lat­ing in small lots.

SRF, a man­u­fac­turer of re­frig­er­ants, has signed a deal to buy Mexi­chem’s HFC, which is into zero ozone de­plet­ing hy­dro­car­bons. A big pos­i­tive for the com­pany. Buy. Mer­chant banker, De­von­shire Cap­i­tal, plans to buy 51% stake in Ruchi Soya In­dus­tries for ~Rs.4000 crore. A pos­i­tive for its share­hold­ers. Trans­port Cor­po­ra­tion of In­dia posted ex­cel­lent re­sults for Q2. The man­age­ment is con­fi­dent of bet­ter fig­ures in H2FY18. A good buy. Tech Mahin­dra re­ported good num­bers for Q2 with 30% higher PAT. It has added 1,250 em­ploy­ees, which is in­dica­tive of bet­ter busi­ness in the com­ing few quar­ters. A safe bet.

Alem­bic Phar­ma­ceu­ti­cals has com­pleted its ac­qui­si­tion of US-based Orit. The next few months are likely to be good for the en­tire pharma sec­tor. Buy for sure shot gains. Asian Gran­ito In­dia has formed a JV with a Gu­jarat-based com­pany to set up a green­field plant. The af­ford­able hous­ing sec­tor is boom­ing and this com­pany should ben­e­fit by this move. There is no stop­ping for Hero Mo­torcorp (In­dia’s largest two-wheeler maker), which posted PAT of Rs.1010 crore for Q2FY18. Buy for the long-term. TVS Mo­tor Com­pany posted good Q2 re­sults with 20% higher PAT. Its fu­ture looks equally good. The stock can still be ac­cu­mu­lated. Tata Steel has shown strong in­vest­ment sup­port on the back of de­clin­ing risks in Corus, which is on a come­back trail. Ac­cu­mu­late in small lots.

With oil prices slowly ris­ing, the de­mand for rigs will also rise. It would make sense to buy Aban Off­shore at the cur­rent beaten down share price.

United Brew­eries Ltd (UBL) has moved up from Rs.840 to Rs.1140 within a month. But its hold­ing com­pany, McDow­ell Hold­ings, which holds 61 lakh shares of UBL, has not moved yet. Buy for 50% re­turns in the short-term. Be cau­tious on Sai Baba In­vest­ment & Com­mer­cial En­ter­prises, which is be­ing cir­cu­lated as mass SMS by op­er­a­tors. There is noth­ing in the com­pany’s fun­da­men­tals. An Ahmed­abad-based an­a­lyst rec­om­mends Amal, Mindteck (In­dia), IOL Chem­i­cals & Phar­ma­ceu­ti­cals, Kushal, Lac­tose (In­dia), Sun Phar­ma­ceu­ti­cal In­dus­tries and Tanla So­lu­tions. From his past rec­om­men­da­tions, Su­per Crop Safe rec­om­mended at Rs.153.20 on 23 Oc­to­ber 2017, zoomed to Rs.180 last week; Chandni Tex­tiles & En­gi­neer­ing In­dus­tries rec­om­mended at Rs.39.30 on 23 Oc­to­ber 2017, zoomed to Rs.60.7 last week; Sree Ray­alaseema Al­ka­lies & Al­lied Chem­i­cals rec­om­mended at Rs.30.3 on 28 Au­gust 2017, zoomed to Rs.59.80 last week; Ul­tra­ma­rine & Pig­ments rec­om­mended at Rs.173.65 on 26 June 2017, zoomed to Rs.282.90 last week; Megh­mani Or­gan­ics rec­om­mended at Rs.46.2 on 19 June 2017, hit a high of Rs.123.5 last week.

The lat­est grey mar­ket pre­mium for Reliance Nip­pon Life As­set Man­age­ment Co. IPO is Rs.45-47; Mahin­dra

Lo­gis­tics IPO is Rs.3-4 and HDFC Stan­dard Life In­surance Co. is Rs.14-15.

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