BY G Chokkalingam
Founder & CIO, Equinomics Research & Advisory
I had bought 100 shares of GIC at Rs 245.74 per share and 200 shares of SAIL at Rs 50.75 per share . Please suggest if I need to average out or hold. -ANKIT SAXENA
Hold GIC with a target price of around Rs 265, which is two times its current book value. Steel industry outlook is not promising due to deflationary signs across the world and also fall in the domestic demand. Hence, it would be better to sell SAIL, if it moves close to your cost price.
I have 18,000 shares of Titagarh Wagons that I purchased at Rs 92; 17,000 shares of Texmaco Rail bought at Rs 76; and 5,000 shares of Vodafone Idea at Rs 39. Please suggest what to do. -SUNIL SENGAR
You may hold Titagarh Wagons with a target price of around Rs 60 and Texmaco Rail with a target price of Rs 50, which are around 15 times their respective current year’s expected earnings.
Between these two, Titagarh looks better as Texmaco has some stress on working capital as inventories and receivables together form close to 75% of annual sales.
With net debt of around Rs 87,000 crore (which is nearly two times its annual revenues) and huge operating losses, it is very difficult to expect the stock price of Vodafone Idea to reach even of half of your purchase cost. Unless the company gets major concession on the past arrears, the stock is unlikely to cross Rs 10.
I am holding Tata Motors at Rs 224, Glenmark Pharma at Rs 540, Trident at Rs 62 and Aditya Birla Capital at Rs 102. Please advise what to do with these. -SWAROOP S
Exit Tata Motors if it moves close to Rs 200 as uncertainties in the global automobile markets in which it operates and cyclical headwinds in the domestic commercial vehicle market will impact the performance of this company in the short to medium term.
I believe in two to three years, you may get back your cost price of investment in Glenmark. Otherwise, its one-year target price could be around Rs 400, which is 16 times current year’s expected earnings.
Sell Trident around Rs 9 (now face value split into Rs 1) which is a fair value of 10 times current year’s expected earnings. Hold AB Capital with a target price of around Rs 115, which is a fair value of 2.5 times its current book value.
I have 2,300 shares of Yes Bank at an average price of Rs 130 and I will be holding them for a period of one year. What is the outlook for this stockRs -VIJAY KUMAR
It is very difficult for an analyst to predict whether any new investor would ultimately come into Yes Bank at a good price with substantial resources. It is also difficult to forecast what would be the exact quantum of incremental stress from the non-performing assets in the next two quarters. Even if the bank faces another 30% dent on its current net worth in terms of additional NPAs, its priceto-adjusted book value would be still around 1times. Hence, if you are a risk-taking investor, you may hold on to Yes Bank for the longterm (two to three years) to possibly recover your cost.
I am holding 25,000 shares of Sanwaria Consumer. My average buying price is Rs 13.40. What should I doRs -NISHANT JHA
Having lost 86% of your capital, you may consider holding it, if you can take the possible risk of losing entire 100% of your investment. Operating loss of 33% on supposed to be “FMCG revenues” and lack of details on current assets in terms of inventories and receivables give rise to fear on the stock.
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Source: Economic Times
