Talking stock: Hold Ipca Lab, sell Bhel, Dabur

Erosion of net worth, borrowings being 125 per cent of annual sales and very low promoters’ stake (around 6 per cent) doesn’t give much confidence. NSEBSESintex Industries Lt…Loading data…

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    ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIEStriveni glassLoading data…

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      ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESSintex industriesLoading data…

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        ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESSintexLoading data…

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          ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESPetronet LNGLoading data…

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            ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESMTNLLoading data…

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              ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESDishmanLoading data…

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                ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESDaburLoading data…

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                  ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESBHELLoading data…

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                    ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESSintexPetronet LNGMTNLDishmanDaburBHELEXPAND TO VIEW ALL By G Chokkalingam Founder & Managing Director, Equinomics

                    I had purchased 370 shares of Dishman Pharma last year. This year, I was allotted 370 shares of amalgamated company Dishman Carbogen Amics. Since the trading has been withdrawn, please advise what to do.
                    Sell it if it is re-listed over Rs 300 as the company has seen substantial fall in profits.

                    I have 100 shares each of Bhel at Rs 172.85, Dabur at Rs 172.8 and Petronet LNG at Rs 42. Please suggest what to do.
                    For BHEL, trade receivable and inventory accounted for about Rs 39,000 crore (as of March 31, 2017), which is substantially more than annual revenue of around Rs 28,000 crore.

                    This kind of working capital stress, along with current structural change wherein costs of power from wind and solar sources falling near or below thermal power cost, may have an adverse impact on companies like Bhel. Therefore, exit the stock if it improves further. Sell Dabur as it is highly overpriced (around 40 PE for FY18 expected earnings). Hold Petronet LNG with a target price of about Rs 240.

                    I hold 100 shares of IPCA lab at Rs 660, and 500 of Triveni Glass at Rs 35 for the past three years. Please advise what I should do with them.
                    Hold IPCA with a target price of around Rs 470 as it is likely to turn around its performance in the remaining three quarters of current fiscal. Sell Triveni Glass unless you like risky speculative bets.

                    Erosion of net worth, borrowings being 125 per cent of annual sales and very low promoters’ stake (around 6 per cent) doesn’t give much confidence.

                    I purchased 2,000 shares each of Sintex Industries at Rs 30 and MTNL at Rs 23.7. Should I keep or sell it?
                    For Sintex, net debt (debt of net of cash) after the restructuring stands at little more than 200 per cent of its annual sales and a lot more conversion of foreign loans into equity will dilute the earnings.

                    Hence, sell the stock if it recovers even 5 per cent to 10 per cent from the current levels. Sell MTNL whenever it moves up. Its total debt is around 5 times, and the employee cost is close to annual revenues.While revenues are not growing even to match with inflation, wage bill is bound to rise along with inflation. Hence, it is extremely difficult to turn around the business.

                    I bought 4,000 shares of SRS at Rs 5.71 and Supreme Infra 100 at Rs 156. Please advise.
                    Sell SRS if it moves up further. It is not worth holding as it is making huge losses and its debt is close to annual revenues at consolidated level.Something is seriously wrong with the company as its receivables, at Rs 1,178 crore, are more than the annual revenue of Rs 1,021 crore in FY17.

                    Sell Supreme Infra ­ debt being and intangible assets being three times and over two times, respectively, the annual revenues (at consolidated level for FY17) indicate things won’t improve for the company soon.

                    (Every week, an expert selected by ET answers queries from our readers on stocks. Please send your queries on Stocks to et.stocks@timesgroup.com; Mutual Funds to et.mfs@timesgroup.com Tax to et.tax@timesgroup.com Insurance to et.insurance@timesgroup.com Realty to et.realty@timesgroup.com)

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