Dear Investors,
According to me, the market lacked courage last week as the sentiment was punctured mainly on account of three factors:
(1) there was widespread media speculation about an Indo-Pak war.
(2) Advance Tax collections were lower than market expectations, which gave a clue to poor Q3 results and
(3) the expiry of F&O contracts that was held a day earlier in view of the Christmas holiday on Thursday, 25 December 2008, resulted in unwinding and squaring up of long December 2008 positions, which resulted in excess sales in the cash market by hedge funds and other market intermediaries.
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* Tata Metaliks (Rs.76.50) : For H1FY09, the company has reported a net profit of Rs.33 cr. on its equity of Rs.25.30 cr. Due to the sharp fall in pig iron prices and raw material fluctuations, we may not see encouraging results for Q3FY09 but long-term outlook of the company is good.
Book value of the share is around Rs.76 while stock price is also around the same level. Going by last year’s dividend of 70%, its dividend yield, too, is attractive. Investors can keep a watch on this stock to buy on dips.
* Bajaj Finserv (Rs.132.45) : The company holds government securities & FMP investments worth of Rs.696 cr. Last week, the stock was recommended around Rs.108 level, and is now trading around Rs.133. Investors can continue to hold this stock with a long-term view.
* Sujana Towers (Rs.21.95) : The demand for the telecom and power transmission towers is expected to be high on account of government policies for the development of telecom industry and electricity transmission. The company has capabilities to quickly adapt to the changing market conditions and sustain the projected growth in sales and profits and benefit from the sharp fall in steel & zinc prices, which are its basic raw materials.
The book value of STL is around Rs.61 while the current market price is around Rs.22 and expected EPS for FY09 is likely to be around Rs.9/10 seeing to the H1FY09 results.
* Manaksia Ltd. (ML) (Code: 532932) (Rs.34.50) are being accumulated by persons in the know. Market grapevine has it that ML is likely to post an EPS of Rs.22 and that the share is going cheap at a P/E multiple of just 1.7. ML had tapped the capital market a year ago in December 2007 with and IPO 1.55 cr. equity.
At the current market price of Rs.35, the share is trading at a P/E of just 1.7 of its FY09 estimated consolidated earnings. Investment in this share is likely to fetch a decent appreciation of about 50% in 6-8 months. The 52-week high/low of the share has been Rs.249/26.
* Accurate Transformers Ltd. (ATL) (Code: 530513) (Rs.28.50) is recommended for decent appreciation in the long-term because of its strong fundamentals. At the CMP of Rs.29, the share is trading at a P/E of 1.3 on FY09 earnings. The share is recommended with target price of Rs.50 in the medium-term. The 52-week high/low of the share has been Rs.242/27.
* Gujarat State Petronet Ltd. Rs.29.50 : Its 52-week high/low is Rs.114/25. At the current level, the stock is available at its 52-week low level with a P/E ratio of just 11.9. Buy at every lower level between Rs.26-28 with a stop loss of Rs.25. On the upper side, the stock may go up to Rs.35 level in the short-term while it may go up to Rs.45 level in the next 3-5 months.
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