Talking stock: Add ONGC, hold Axis Bank




Expect banking stocks to do very well post March 2018, says our expert. NSEBSEONGCLoading data…

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                    ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESAndhra BankLoading data…

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                        ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESL&TKarnataka BankICICI bankHPCLBPCLAxis BankAndhra BankAllcargoEXPAND TO VIEW ALL By G.Chokkalingam, Founder, Equinomics Research & Advisory

                        I am holding 6,500 shares of ONGC at Rs 165, 2,000 shares of Allcargo Logistic at Rs 173, 10,000 shares of PTC India Financial at Rs 42 and 2,000 shares of PFC at Rs 130. Kindly advise.
                        Add ONGC to reduce average cost as it is trading below its book value at consolidated level and holds a strong balance sheet. Hence, it is in a bet ter position to acquire HPCL which will give a lot of stabilit and growth in its consolidated earnings in future.

                        Hold Allcar go as it has become quite attractive in terms of valuation after its recent correction. Sell PTC India Financial if it improves near your cost and shift to banking stock like Karnataka Bank which is a diversi fied lender. Hold PFC with a target price of Rs 145 as it now trades close to its book value.

                        I bought 1,400 Dredging Corp at Rs 714. What shall I do?
                        Sell the stock if it goes over 5 per cent from the current levels ­ at current price, its enterprise value at Rs 2,200 crore exceeds by 20 per cent, its reported fixed assets of Rs 1,833 crore (as of March 31, 2017).

                        Dredgers are depreciating assets and hence, it is most unlikely that the po tential buyer would give any substantial premium to acquire this company through proposed stake sale.

                        BPCL or HPCL: which is better for long-term investment keeping in mind the merger of HPCL with ONGC?
                        You may consider ONGC instead of both BPCL and HPCL ­ both marketing companies have almost tripled their market caps in the last couple of years while ONGC trades near 52-week low.

                        Investment holding and free cash are enough to finance acquisition of HPCL which will act as a trigger for stable earnings growth of ONGC at consolidated level.

                        I have 100 shares of Wockhardt.
                        You may hold Wockhardt at least for another 10 per cent upside as the stock is highly volatile over the past 5 years and gives such upsides on positive news flow.Fundamentally, it might take another year or so to come back to significant earnings.

                        I own 5,000 shares of ICICI Bank, 1,000 shares of Axis Bank and 780 shares of L&T.
                        Hold all three stocks ­ banks’ NPAs (bad assets) are expect ed to peak out by March 2018 and hence, expect banking stocks to do very well post that period. L&T is a good longterm defensive bet.

                        I have about 100,000 shares of Vikas Ecotech. Is it the right time to exit?
                        Despite over an 8-fold jump in its net profits in the last two years as compared to previous years, the company hasn’t increased dividend beyond five paisa per share. This results in the lack of confidence in the stocks. Stock trades over 20 times expected earnings in FY2018. Exit Vikas Ecotech if it moves close to Rs 24.

                        I bought 300 shares of Andhra Bank at Rs 64.65. What should I do with these?
                        If there is any recovery close to your cost price, please sell i ­ with net NPA of over 8 per cent, poor credit growth of less tha 5 per cent as of March 2017 and outstanding net NPA being so close to net worth, the stock is stretched in valuation terms.

                        Please send your queries on Stocks to et.stocks@timesgroup.com; Mutual Funds to et.mfs@timesgrouwp.com; Tax to et.tax@timesgroup.com; Insurance to et.insurance@timesgroup.com; Realty to et.realty@timesgroup.com




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