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Monday, December 3, 2012

Your questions on Sintex and Sterlite!

A valued reader asks this question:

Question: I have a question regarding Sintex and Sterlite.
I am interested in finding out if they are fundamentally strong companies worth holding.
I have been holding the stocks for around 3 months at prices below

Sterlite - Rs 100
Sintex - Rs 61


Sintex Industries 
Like a lot of companies in this space, Sintex is reeling under debt issued under FCCB program in 2008. Today a news item mentions that these FCCBs would be restructured in another program due in 2017 at rate of 75.6.

This is a welcome development in my view. This means that international investors believe in Sintex to the tune of Rs 75.60 per share.

Also other than debt, there seems to be no issue with Sintex. Firm is growing reasonably, making 2500+ crores worth of revenues each year. Even with so much debt, operating profits are close to 20%, net at 8% or so. Available less than Book Value, low PE ratio of 7.5, and reasonable market cap of Rs 2000 crores, less than one year of revenue.

Technically speaking, support is at 57, and resistance levels at 68, 76 and 92.
75-76 levels are doable in short term, you can take some partial profits then and hold rest for larger gains.

Sterlite Industries

Sterlite is doing reasonable well with decent growth in Annual revenues and quarterly revenues. Interesting thing about Sterlite is that public shareholding is negligible at 4.53% and FIIs are growing their shareholding from last three quarters from 11.9% to 13.3%. This is good news indeed.

Latest quarterly EPS is at 2, annual runrate of EPS ~8 gives, PE ratio at about 12. Steady dividend paying company, I don't see any issue with fundamentals.

Technically speaking, stock has the habit of staying in a range for long time. Looks like this is favorite counter for day traders, so stays in a tight range for months altogether.

Support is close at 95 levels, next resistance is at 112 and then at 124 and then at 138 or so. 138 looks doable in 6 months timeframe.

Keep visiting and writing at


  1. Hello Naren,

    I would like to know your view on usher Agro.what could be the strategy for coming 2-3 month as if look at fundamentals, it is looking great but it had been flat from 3-4 months.

    Also if you dont mind, can you tell us from where do you get the charts that you attach with answers.
    I am really looking forward to it.


  2. Hi Vaibhav,

    I will post a response on Usher Agro shortly. Low but increasing promoter holding. Will cover this by tomorrow.

    I use simple EoD (end of day) charts, so that you can get from multiple sources free of cost. Pl look at or google finance, or moneycontrol site or money.rediff site. EoD charts are also available at BSE, NSE sites. Its free everywhere. Hope this helps.

  3. Hi Naren ,

    It would be great if you could kindly share your views on PVR too,

    It has risen sharply post Cinemax Deal. almost 44% up in 3-4 days.

    PVR will now command a great presence in movie screening business & producers will have to strike deals with PVR promoters to ensure good collections , Also TV Analysts have started giving BUY calls saying the combined EPS is calculated to be around 25-30 Rs in 1 year taking price to above 400-500 per share.

    I am holding PVR shares at 188Rs , looking forward to increase my holdings.

    Though it may reach 400-500 in a year it possible that it may come down in short term because the current rise has been very very steep(44% in 4 Days) & only on speculations of future earnings ? or is it possible that it will continue rising like wockhardt upto 400-500 levels ??

    What do you think about movement of this scrip in short term ??

    thanks a lot,

    1. Hi Rambo,

      I would be careful in investing in PVR at these levels. I briefly looked at chart yesterday and there appears to be a triple top kind of structure on EoD.

      If it breaks 335-340 on high volumes, you can again take a long and keep a trailing stoploss.


    2. Thanks Naren for sharing your views on PVR.

      As i write this , PVR has already fallen from its week's high of 337 to 317(@10am Today)

      I will track it closely and try to re-invest at the right level.

      Thanks a lot again.

  4. hi naren,
    i would like to have your views on HEXAWARE TECH and opto circuit.....thanks....


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