Values readers have sent in these queries:
Question:
I have 91 shares of Reliance Power at an average price Rs.311.80. Now the current price of this share is Rs.95. What do I do with this share - HOLD or SELL?
Question:
I have 91 shares of Reliance Power at an average price Rs.311.80. Now the current price of this share is Rs.95. What do I do with this share - HOLD or SELL?
Answer:
Reliance Power had a strong December, 12 quarterly result recently with 30 per cent growth in net profit v/s Rs.204 crore in the same period in the previous year. Revenues also doubled to Rs.1,586 crore from Rs.674 crore in the same period.
Several of their large projects like 1,200 MW Rosa power-plant and 40 MW Dhursar solar photovoltaic plant in Rajasthan are generating record power output and another large project 3,960 MW Sasan Mega Power Project is getting ready to be commissioned.
Other projects like 100 MW concentrated solar power (CSP) project in Dhursar, Rajasthan, and 45 MW wind project in Maharashtra will be in action in next few quarters, generating more revenues for the firm.
However, Reliance Power has recently seen negative news flow that Goa government is considering stopping power purchase from them on account of higher tariffs charged by RPower. The average cost of power is Rs 12.74 per unit charged to Goa government. RPower Goa Plant could shut down after government stops buying power from them.
Another thing to note is that FII holding has gone up slightly at 6.55% now and promoter holding has slightly lowered at 75% now from 80.4% earlier.
Technically speaking, good support is at 87, and you can hold till this level is maintained. 110 is a nearby resistance level and breaking this would be tough for some time to come. However, once 110 level is broken, one can aim for 140 in next 12 months timeframe.
Since you bought at highest possible price level at Rs 311, probably in IPO days of 2008, there is very little hope for these stratospheric levels to appear again in near future. What one can possibly do is to average slightly at current levels and bring your holdings to average cost of Rs 140 and exit at cost or at slight profit when Rs 140 is seen in next 12 months.
Question:
I am holding around 2800 Raj Rayons purchased at various times. The currently the cost price is Rs. 9. Where can it go in the next 1 year.
Also I want to invest Rs. 2 lakhs in quality stock, looking for 15 to 20% returns in 1 year
Answer:
Raj Rayons seems to be an underpriced smallcap firm like most of textile firms listed in Indian markets which are having a bad run currently.
The firm is one of the leading manufacturers of Polyester Yarn in India its plants located at Silvassa, Union Territory of Dadra & Nagar Haveli.
Raj Rayons started its operations in 1993 with production capacity of 600 tons per annum (TPA) and has grown to a production capacity to 40000 tons per annum currently.
Annual revenue for RRIL is at 682 crores currently with Rs 1.51 EPS (Earnings per share). Firm has paid miniscule dividend of 3% till 2011. Shareholding is consistent with promoter holding at 37.81%, however public shareholding at 51.37% is pretty high and becomes a issue in scrip scaling new highs. Book Value is at 41 and firm is currently trading at severe 80% discount to its Book Value like most of textile firms in India.
Technically speaking, good support is at 7 and resistance levels are at 11 and 15 for this chart. 20 should be a reasonable price target in next one year or so.
On your other question, in next 1 year, emphasis would be on rate sensitive sectors as interest rates are coming down. So High Beta sectors such as Real estate, Infra and Retail should do well.
You can look at building a portfolio with 5-7 good quality Mid-cap and Large-cap names such as Liberty Shoes, Reliance Industries, Venky’s India, Pantaloon, Shakti Pumps, Hanung Toys and Timbor Homes.
Question:
Can you please throw some light on Gujarat Fluorochemicals (Purchase price 440 , CMP 280) & Lovable Lingerie (Purchase price 465,CMP 330). Should I hold them or switch to some other stocks? I am incurring huge losses in these two scrips. How are the fundamentals? Please suggest.
Answer:
Gujarat Fluorochemicals seems to have found its support at 269, from where it has rebounded at great volumes. It might reach the near resistance levels of 314 and 371 in next few months. The worrying part of this scrip is declining revenues and profits in last few quarters. NSE also dropped this firm from F&O segment, thus putting greater pressure on the scrip.
Fundamentally, there is nothing very wrong with the firm, it’s a leader in segments such as Refrigerants, Chemicals, PFTE and Carbon credits. Promoter holding is very high at 70%, which is a huge positive. Stock is trading close to its Book Value now and Return on Equity has been high at 25%. All of these are positives and firm should bounce back in next few quarters.
Loveable Lingerie is a concept stock and was in very hot uptrend while the trend lasted. The stock started its journey at 245 Rs and reached price levels of Rs 630 or so in a few months timeframe. The issue with this dramatic uptrend is lot of retail Investors buy in at higher levels and remain stuck at these levels if the stock suddenly cools down.
Fundamentally, there is nothing wrong with this firm as well. The revenues are in uptrend and so are profits. The firm is debt-free and has provided strong profit growth and Return on Equity over the years. Promoters have high holding of 67% which is very positive for the stock. Book Value is at 95, hence you purchased the stock at roughly 5 times Book, which is obviously very expensive.
Looking at chart, support is nearby at Rs 306. This level should hold and stock may not fall below this level. Resistance levels are at 348 and 400 and you can see these levels in next few quarters.
Reliance Power had a strong December, 12 quarterly result recently with 30 per cent growth in net profit v/s Rs.204 crore in the same period in the previous year. Revenues also doubled to Rs.1,586 crore from Rs.674 crore in the same period.
Several of their large projects like 1,200 MW Rosa power-plant and 40 MW Dhursar solar photovoltaic plant in Rajasthan are generating record power output and another large project 3,960 MW Sasan Mega Power Project is getting ready to be commissioned.
Other projects like 100 MW concentrated solar power (CSP) project in Dhursar, Rajasthan, and 45 MW wind project in Maharashtra will be in action in next few quarters, generating more revenues for the firm.
However, Reliance Power has recently seen negative news flow that Goa government is considering stopping power purchase from them on account of higher tariffs charged by RPower. The average cost of power is Rs 12.74 per unit charged to Goa government. RPower Goa Plant could shut down after government stops buying power from them.
Another thing to note is that FII holding has gone up slightly at 6.55% now and promoter holding has slightly lowered at 75% now from 80.4% earlier.
Technically speaking, good support is at 87, and you can hold till this level is maintained. 110 is a nearby resistance level and breaking this would be tough for some time to come. However, once 110 level is broken, one can aim for 140 in next 12 months timeframe.
Since you bought at highest possible price level at Rs 311, probably in IPO days of 2008, there is very little hope for these stratospheric levels to appear again in near future. What one can possibly do is to average slightly at current levels and bring your holdings to average cost of Rs 140 and exit at cost or at slight profit when Rs 140 is seen in next 12 months.
Question:
I am holding around 2800 Raj Rayons purchased at various times. The currently the cost price is Rs. 9. Where can it go in the next 1 year.
Also I want to invest Rs. 2 lakhs in quality stock, looking for 15 to 20% returns in 1 year
Answer:
Raj Rayons seems to be an underpriced smallcap firm like most of textile firms listed in Indian markets which are having a bad run currently.
The firm is one of the leading manufacturers of Polyester Yarn in India its plants located at Silvassa, Union Territory of Dadra & Nagar Haveli.
Raj Rayons started its operations in 1993 with production capacity of 600 tons per annum (TPA) and has grown to a production capacity to 40000 tons per annum currently.
Annual revenue for RRIL is at 682 crores currently with Rs 1.51 EPS (Earnings per share). Firm has paid miniscule dividend of 3% till 2011. Shareholding is consistent with promoter holding at 37.81%, however public shareholding at 51.37% is pretty high and becomes a issue in scrip scaling new highs. Book Value is at 41 and firm is currently trading at severe 80% discount to its Book Value like most of textile firms in India.
Technically speaking, good support is at 7 and resistance levels are at 11 and 15 for this chart. 20 should be a reasonable price target in next one year or so.
On your other question, in next 1 year, emphasis would be on rate sensitive sectors as interest rates are coming down. So High Beta sectors such as Real estate, Infra and Retail should do well.
You can look at building a portfolio with 5-7 good quality Mid-cap and Large-cap names such as Liberty Shoes, Reliance Industries, Venky’s India, Pantaloon, Shakti Pumps, Hanung Toys and Timbor Homes.
Question:
Can you please throw some light on Gujarat Fluorochemicals (Purchase price 440 , CMP 280) & Lovable Lingerie (Purchase price 465,CMP 330). Should I hold them or switch to some other stocks? I am incurring huge losses in these two scrips. How are the fundamentals? Please suggest.
Answer:
Gujarat Fluorochemicals seems to have found its support at 269, from where it has rebounded at great volumes. It might reach the near resistance levels of 314 and 371 in next few months. The worrying part of this scrip is declining revenues and profits in last few quarters. NSE also dropped this firm from F&O segment, thus putting greater pressure on the scrip.
Fundamentally, there is nothing very wrong with the firm, it’s a leader in segments such as Refrigerants, Chemicals, PFTE and Carbon credits. Promoter holding is very high at 70%, which is a huge positive. Stock is trading close to its Book Value now and Return on Equity has been high at 25%. All of these are positives and firm should bounce back in next few quarters.
Loveable Lingerie is a concept stock and was in very hot uptrend while the trend lasted. The stock started its journey at 245 Rs and reached price levels of Rs 630 or so in a few months timeframe. The issue with this dramatic uptrend is lot of retail Investors buy in at higher levels and remain stuck at these levels if the stock suddenly cools down.
Fundamentally, there is nothing wrong with this firm as well. The revenues are in uptrend and so are profits. The firm is debt-free and has provided strong profit growth and Return on Equity over the years. Promoters have high holding of 67% which is very positive for the stock. Book Value is at 95, hence you purchased the stock at roughly 5 times Book, which is obviously very expensive.
Looking at chart, support is nearby at Rs 306. This level should hold and stock may not fall below this level. Resistance levels are at 348 and 400 and you can see these levels in next few quarters.
Hi ,
ReplyDeleteThanks alot for the reply....i have one more query regarding jubilant foodworks....I am holding the stock from 750....in last one month it has corrected almost 25% from 1397 high....Can further investment can be done at current levels , or wait for further fall...since fundamental wise its an excellant bet , but still trading at valuations of 54-55 PE...please suggest....
Thanks in Advance
Sir What to do with Ramky ?? Ramky is being chased by I-T sleuths , ED , CBI all over the place ...its gone to 86.75
ReplyDeletehow much do you think it can go low from here ? am holding at 110 a piece..
Rajesh
I have 3i Infotech with average cost of 8. The company shows some CDR. The management gave good divd and bonus in good times. Now they are talking about exiting from CDR this year. What isyour call on this script?
ReplyDeleteSam