TOWER TALK

Money Times - - Tower Talk -

✓ The gov­ern­ment pro­poses to make REC a sub­sidiary of Power Fi­nance Cor­po­ra­tion. An­a­lysts feel that this move may put fi­nan­cial pres­sure on REC tem­po­rar­ily but it won’t ham­per its busi­ness in the long run. Ac­cu­mu­late both the stocks for good re­turns in the long term.

✓ Tata Steel con­tem­plates to sell its stake in Tata Re­frac­to­ries and its elec­tri­cal unit to pare debt and con­cen­trate on its core busi­ness. A sen­si­ble move. Buy.

✓ Lau­rus Labs has launched a new HIV drug in col­lab­o­ra­tion with Aspen Phar­ma­care of South Africa. A pos­i­tive for the com­pany. Ac­cu­mu­late.

✓ Hous­ing Devel­op­ment Fi­nance Cor­po­ra­tion raised Rs.9000 crore by sale of bonds - the largest so far in the hous­ing sec­tor. This shows the con­fi­dence of in­vestors in this sec­tor. Buy.

✓ With whis­tle blow­ers com­plain­ing to SEBI about ir­reg­u­lar­i­ties at Sun Phar­ma­ceu­ti­cal In­dus­tries, it may be pru­dent to step aside and wait for the dust to set­tle. Sell.

✓ In an at­tempt to turn­around the work­ing of Mon­net Is­pat and the re­cently ac­quired Aferpi mill, JSW Steel plans to merge its busi­ness with both these units.

✓ Yes Bank has re­ceived reg­u­la­tory ap­provals for launch­ing its own Mu­tual Fund. A big pos­i­tive for the bank. An at­trac­tive buy.

✓ Hin­dus­tan Unilever (HUL) plans to merge with GSK’s health­care busi­ness in In­dia. The deal is likely to be EPS ac­cre­tive for HUL. Buy.

✓ Bom­bay Dye­ing & Man­u­fac­tur­ing Co. may soon re­pay its Rs.2370 crore debt on the back of im­proved cash flows from its realty busi­ness. The next few quar­ters could be ex­cit­ing for the com­pany. Ac­cu­mu­late.

✓ State Bank of In­dia has raised Rs.2000 crore through per­pet­ual bonds to meet its long-term needs. A pos­i­tive for the bank. Buy.

✓ The re­cent Rs.920 crore or­der bagged by ONGC has boosted the rev­enue vis­i­bil­ity for Ma­ha­rash­tra Seam­less. Buy for two years to reap good re­turns.

✓ Prakash In­dus­tries has re­ported a good work­ing for the past few quar­ters and be­come a value buy. Its power and steel di­vi­sions are per­form­ing well.

✓ OPEC con­tem­plates a pro­duc­tion cut once again. It may be pru­dent to buy Se­lan Ex­plo­ration Tech­nol­ogy at the cur­rent level.

✓ Wipro shows signs of an im­mi­nent break­out with vol­umes and share price ris­ing. Buy.

✓ Mahin­dra & Mahin­dra plans to ex­pand its re­tail net­work to ex­pand its cus­tomer base. Long-term in­vestors must buy this stock.

✓ Ke­so­ram In­dus­tries may soon spin-off its tyre busi­ness into a sep­a­rate en­tity to re­align and re­cal­i­brate its busi­ness. A wealth creation op­por­tu­nity for in­vestors.

✓ Lupin has launched the generic ver­sion of its Silo­dosin cap­sules, which are used to treat prostate gland com­pli­ca­tions. A pos­i­tive for the com­pany. Buy.

✓ NHPC has en­tered into an agree­ment with State Bank of In­dia for a term loan of Rs.500 crore to fund its long-term capex needs. Buy for the long term.

✓ Aurobindo Pharma may ob­tain USFDA’s ap­proval for its first bio sim­i­lar drug in the next 12-18 months, which will boost its rev­enue and prof­itabil­ity sig­nif­i­cantly. Buy for the long term.

✓ Oberoi Realty may soon make it to the list of top de­vel­op­ers in Mum­bai. It may be pru­dent to add this debt-free com­pany.

✓ Lin­coln Phar­ma­ceu­ti­cals plans to en­hance its ca­pac­ity. It is likely to notch an EPS of Rs.30 in FY19 based on its H1FY19 EPS of Rs.15. The stock has the po­ten­tial to cross Rs.300.

✓ BCL In­dus­tries posted an EPS of Rs.13.7 in H1FY19 on ac­count of good real es­tate busi­ness. Its edi­ble oil and dis­tillery busi­nesses are also do­ing well. A rea­son­able P/E of 7x on FY19E EPS of Rs.20 will take its share price to Rs.140 in the medium-to-long term.

✓ Shreyans In­dus­tries is on course to notch an EPS of Rs.30 in FY19. The stock is avail­able cheap and is likely to cross Rs.280.

✓ Sin­tex In­dus­tries is set to notch an EPS of Rs.3.5-4 in FY19. The stock trades cheap at a P/E of just 4x.

✓ Pokarna is likely to notch an EPS of Rs.22-24 in FY19. A rea­son­able P/E of 10x will take its share price to Rs.200240.

✓ Kriti Nu­tri­ents is ex­pected to notch an EPS of Rs.4.5 in FY19 based on its H1FY19 work­ing. A rea­son­able P/E of 10x will take its share price to Rs.45 in the medium term.

✓ Hin­duja Global So­lu­tions is likely to notch an EPS of Rs.95-100 in FY19 and Rs.105 in FY20. The stock may cross Rs.800.

✓ Eros In­ter­na­tional Me­dia is set to notch an EPS of Rs.27 in FY19. It trades cheap at a P/E of just 3x v/s the in­dus­try P/E of 26x. Buy for de­cent re­turns in the short-to-medium term.

✓ An Ahmed­abad-based an­a­lyst rec­om­mends IOL Chem­i­cals & Phar­ma­ceu­ti­cals, Jag­son­pal Phar­ma­ceu­ti­cals and Shiva Global Agro In­dus­tries.

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