TOWER TALK

Money Times - - Tower Talk -

It is manda­tory for new car own­ers to take a 3-year in­sur­ance cover and new 2-wheeler own­ers to take a 5-year in­sur­ance cover Septem­ber on­wards. GIC Hous­ing Fi­nance to ben­e­fit sig­nif­i­cantly.

Ba­jaj Auto plans to ex­pand its 3-wheeler and quadri­cy­cle ca­pac­ity fol­low­ing the gov­ern­ment's de­ci­sion to ex­empt elec­tric ve­hi­cles (EVs) and au­to­mo­biles run on al­ter­na­tive fuel from per­mit re­quire­ments. An ex­cel­lent buy. I.T. ser­vices ma­jor Wipro has ob­tained a $1.5 bil­lion 10-year deal from Alight So­lu­tions. A big pos­i­tive for the com­pany.

Coal In­dia re­ported a 3.2% rise in out­put at 38.8 MMT last month. Coal prices are also on the rise on the back of higher de­mand. To meet the gov­ern­ment’s fi­nan­cial tar­gets, the com­pany is likely to pay a hefty div­i­dend this year as well. Buy. Jin­dal Steel & Power plans to break up its busi­ness into dif­fer­ent en­ti­ties and trim its Rs.42000 debt by sell­ing its Oman unit. This move may turn out to be a wealth cre­at­ing op­por­tu­nity for in­vestors. Maruti Suzuki In­dia re­ported marginally lower sales in Au­gust. A good op­por­tu­nity for in­vestors to ac­cu­mu­late the stock if its share price falls. Buy.

Food ma­jor Bri­tan­nia In­dus­tries is show­ing signs of a break­out on the back of higher sales and im­prov­ing EBITDA.

The stock may touch Rs.7250. Man­pasand Bev­er­ages, which was beaten down due to ad­verse news, seems to be re­cov­er­ing. In­vestors with a risk ap­petite may en­ter. FMCG ma­jor Marico ex­pects a dou­ble-digit vol­ume growth in the next 3-5 years. Buy for the long-term. GAIL, the coun­try’s largest gas trans­porta­tion and mar­ket­ing com­pany, plans to set up bat­tery charg­ing sta­tions for EVs. Buy for the long-term. Mahin­dra & Mahin­dra has in­tro­duced Marazzo (a multi-util­ity ve­hi­cle) priced at Rs.10,00,000 in an at­tempt to com­pete with Toy­ota’s In­nova and Maruti’s Er­tiga. A pos­i­tive for the com­pany. Aurobindo Pharma is close to ac­quir­ing San­doz’s US port­fo­lio der­ma­tol­ogy busi­ness for $1 bil­lion. A big pos­i­tive for the com­pany. ITC plans to com­pete with Amul, Coca Cola and Bri­tan­nia In­dus­tries with the launch of its milk-based drinks. Ac­cu­mu­late.

Re­ports sug­gest that some for­eign in­vestors are keen on buy­ing a stake in Re­liance Home Fi­nance. The stock has cor­rected sharply. Ac­cu­mu­late. Un­con­firmed re­ports about fall­ing prices of Alu­minium have pulled down the share price of Na­tional Alu­minium Com­pany (NALCO). The stock will re­cover soon.

With the US dol­lar be­com­ing stronger, In­dian pharma com­pa­nies stand to gain. Bio­con has al­ready started its up­ward march. Buy. Sa­gar Ce­ments re­ported 24% higher con­sol­i­dated ce­ment sales at 2,47,051 tonnes in Au­gust 2018 over Au­gust 2017. A wor­thy buy.

Sun Phar­ma­ceu­ti­cal In­dus­tries de­rives a ma­jor por­tion of its rev­enue from ex­ports. The strength­en­ing of the US dol­lar will au­gur well for the com­pany. Buy.

JK Paper has lifted the lock­out at one of its plants. Now with its rou­tine op­er­a­tions back on track cou­pled with bright in­dus­try prospects, bet­ter prof­itabil­ity can be ex­pected. Buy for the long-term. Re­ports sug­gest that Page In­dus­tries may en­ter the women’s in­ner­wear mar­ket. Buy.

Amara Raja Batteries, In­dia’s sec­ond largest tra­di­tional bat­tery maker, plans to build a lithium-ion assem­bly plant in Andhra Pradesh to in­crease its mar­ket share. Ac­cu­mu­late.

Megh­mani Or­gan­ics is ex­pected to notch an

EPS of Rs.11 in FY19 and Rs.14 in FY20 post ex­pan­sion. A rea­son­able P/E of 10.80x (in­dus­try P/E is 39.93x) will take its share price to Rs.137.5 in the medium-term and Rs.175 there­after.

Based on its Q1FY19 EPS of Rs.11, In­ter­na­tional Paper APPM is ex­pected to notch an EPS of Rs.50 in FY19. A rea­son­able P/E of 15x will take its share price to Rs.750. Based on its Q1FY19 EPS of Rs.104, Honey­well Au­to­ma­tion is ex­pected to notch an EPS of Rs.390+ in FY19. The stock is poised to cross Rs.25000.

Pa­tel Engi­neer­ing has posted a con­sol­i­dated EPS of Rs.10 in FY18 on an eq­uity cap­i­tal of just Rs.15.7 crore. The stock is poised to touch Rs.75.

Some an­a­lysts are very bullish on Nes­tle In­dia, which posted 50% higher PAT in Q2CY18. The stock is poised to touch Rs.12500.

Yes Bank is ex­pected to post an EPS of Rs.23 in FY19. The stock trades at a for­ward P/E of 16.52x and P/BV of 2.9x. A rea­son­able P/E of 20x will take its share price to Rs.460. The stock trades cheap com­pared to RBL Bank, which trades at a for­ward P/E of 37.73x and P/BV of 3.86x.

An Ahmed­abad based an­a­lyst rec­om­mends Amal, Crest Ven­tures, La­hoti Over­seas, Ruchira Pa­pers, Pa­tel

Engi­neer­ing, Press­man Ad­ver­tis­ing and Sav­era In­dus­tries. From his last week’s rec­om­men­da­tions, In­draprastha Med­i­cal Cor­po­ra­tion jumped from Rs.49.30 to Rs.52 while Vivimed Labs jumped from Rs.65.70 to Rs.69.90 in just 1 week! From his pre­vi­ous rec­om­men­da­tions, Rishabh Digha Steel & Al­lied Prod­ucts ap­pre­ci­ated 165% from Rs.39.50 in De­cem­ber 2017 to Rs.104.90; Globus Spir­its ap­pre­ci­ated 56% from Rs.128.45 in Au­gust 2018 to Rs.200; and Hal­dyn Glass ap­pre­ci­ated 17% from Rs.35.35 in Au­gust 2018 to Rs.41.3 last week!

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