03/09/2019
TOWER TALK
AUGUST 31, 2019
DHFL is likely to issue fresh capital to meet its financial requirements. A positive for this cash-strapped company. Accumulate.
Reports suggest that Philip Morris International, owner of Marlboro ci******es, is likely to enhance stake in Godfrey Philips (India). A positive for the company. Accumulate.
· Power Finance Corporation, a Navratna company, is available at rock bottom prices and it pays good dividends. Buy for the long term.
· NMDC’s share price fell on news of losing some of its mines in Karnataka. However, investors overlooked the fact that it has won a bid for a gold mine in Chittoor, Andhra Pradesh. Accumulate.
· Strides Pharma Science will soon be out of the F&O list. However, its workings remain strong. In fact, it recently acquired a company in Florida. An attractive buy.
· Hindustan Petroleum Corporation has lined up Rs.74000 crore capex over the next 5 years. Its future looks bright. Buy.
· Maruti Suzuki is working overtime to retain its No.1 spot in all segments including product development. The management is optimistic about the company’s future. Accumulate.
· Hindustan Unilever has slashed the prices of some of its major brands in order to retain its market share. It may be prudent to stay away from this counter until the dust settles.
· HSBC recently upgraded Bharat Heavy Electricals on the back of fresh orders worth over Rs.2500 crore. Accumulate.
· Indian Oil Corporation intends to scale up its presence in the e-mobility segment. Buy for the long term.
· PNC Infratech plans to scale up its presence in the Railway and Highway segments, with ~30% growth in revenues. Buy for about 50% returns within a year.
· Ramco Cements has the potential to improve its capacity utilisation on the back of strong demand. Buy for the long term.
· After the CEO of Lakshmi Vilas Bank resigned, the market sentiment for Indiabulls Housing Finance (IBHF) turned bearish. A good opportunity to accumulate IBHF.
· After a sharp fall, Mahindra & Mahindra has started rising again. With rural demand picking up, its future looks bright. An attractive buy.
· CEAT has once again shown breakout patterns. The stock is available at cheap valuations. Buy.
· Bank of Baroda intends to buy Rs.6000 crore NBFC loans in this quarter. Accumulate in small quantities.
· Talwalkars Better Value Fitness has lost ground after its statutory auditor resigned. The stock is on its downward journey. Accumulate later at lower levels.
· Mukesh Ambani holds 72% stake in Hathway Cable & Datacom through Jio distribution companies. He bought stake in February 2019 through an open offer at Rs.32/share. This counter witnessed heightened activity after the broadband/cable plans were announced by Mr. Ambani at the Reliance AGM. Investors should keep an eye on this potential multibagger.
· GNA Axles has grown at a rate of ~25% since 3-4 years and expects similar growth this fiscal as well. The stock trades cheap at 6x. Buy for good returns in the next few months.
· State Trading Corp. (STC) and MMTC are likely to get merged in the upcoming parliament session. If this happens, expect STC to double or even treble from its current level as historically both STC and MMTC trade at similar valuations. STC, which currently trades at 20% valuations of MMTC, is an attractive buy.
