Commodity and Cyclical Plays


(Jiten Parmar) #143

Currently have been adding to sectors where I am already invested. Metals/Mining/Infra. Cement remains a bit intriguing and adding slowly and on corrections only.

Not tracking SKM Egg.


(Jiten Parmar) #144

As
I had said earlier, I had missed the Ferrochrome sector completely. My entries are never in mid or end-cycle, so am staying away, though sector may do well for some time.

Another sector, where I could enter early was Graphite Electrodes, though I am could not position size in that sector.


(Mridul) #145

Jiten bhai…how long does the cyclical rallies last? For instance, current rally in metals…what are the usual timeframes … obviously no black n white here…but still…steel is touted to be the next big wealth creator in india…well, things have already rallied a lot…but this is said to be a multiyear theme …for next 5 years. You agree?


(Jiten Parmar) #146

Can’t say about 5 years. I think it’s too long. Certainly no plans to stay
invested for this long, as of now.

But steel/metal cycles, are generally not very short. Currently have a 1
year view.


(naravi2011) #147

Thanks for the information.


(mntolia) #148

Where do you see historical prices of commodities?


(Lokesh Chandra Gorrepati) #149

Hi Jiten sir. Found your presentation interesting. Whats your current view on Metals especially on Iron,Aluminium. And which companies do you prefer in Iron. Whats your take on Sunflag Iron. I think Iron ,steel,Aluminum and other metals can be bullish for next one year what do you say?.


(Jiten Parmar) #150

Alumina prices up quiet a bit. Nalco key beneficiary.
MOIL also raised manganese ore prices up by 7.5%

I have added to my metals/mining positions. cycle looks to be on upswing. Especially Aluminium.

Also, do evaluate if u want to add now. I am adding as I have many of these from much lower levels. So risk is different.


(Sudipta Banerjee) #151

Hello,
Could you give me some links/books/resources to learn about investing in cement stocks?


(Shivam) #153

https://www.alphainvesco.com/blog/understanding-indian-cement-industry/


Sector reports for Reference
(Jiten Parmar) #154

Metals/mining playing out. Many big investors now bullish on the sector.


(vijay1981) #155

jiten bro can you please let us know your favorites …which you feel has good potential in metal and mining sector.many thanks


(Lokesh Chandra Gorrepati) #156

Hi Jiten sir. Heard the PET and BOPET film prices are increasing. Of course their raw material crude prices also increasing but still will it be beneficial to film manufacturing firms like JINDAL POLY,MAX VENTURES. Any view on MAX VENTURES sir.


(sivaprakasamp) #157

Hi Vijay, he has already invested in Prakash SAIL and GPIL in steel. And with the miners it’s NMDC NALCO and MOIL.


(Jiten Parmar) #158

I had mentioned quiet a few earlier. The stocks I have/had in my metal/mining basket has been Vedanta, MOIL, Nalco, Prakash Ind, Godawari Power, NMDC, Tata steel.

I had exited Vedanta (due to merger with Cairn) and Tata Steel sometime back.

Added more MIL, Nalco, GPIL, Prakash and NMDC when I was convinced cycle is in upswing.

Following appreciation and allocation gone above my threshold, exited 40% MOIL recently. As, I like adhere to portfolio allocation.


(Jiten Parmar) #159

In polyfilms, I’m invested in Cosmo, Uflex (more of a packaging play) and Polyplex.


(amitjain2711) #160

IMFA

Q2 Results Link: https://nseindia.com/corporate/ImfaUFRandLRReport240917_24102017134721.zip

Tweets by management:
Q2 FY18 impacted by timing of benchmark price finalisation; FeCr prices have since bounced back & Q3 margins will be healthy - S Panda, MD (https://twitter.com/IMFALtd/status/922731525380087808)

Q3 FY18 benchmark has gone up 25% which has been captured in our long terms contracts & will be reflected in the earnings - S Panda, MD (https://twitter.com/IMFALtd/status/922732213619253248)

Foot Notes in results reports:

  1. Revenue from Operations for periods upto 30th June, 2017 is inclusive of excise duty. Post the applicability of Goods and Service Tax (GST) w.e.f 1st July, 2017, Revenue from Operations for the quarter and half year ended 30th September, 2017 is disclosed net of GST, in accordance with ‘Ind AS 18 - Revenue’ and hence not strictly comparable with previous periods.

  2. Special Leave Petitions (SLP) filed by Utka\ Coal Limited (‘UCL’, a Subsidiary of the Company) in respect of compensation for land and mine infrastructure of UCL’s coal block Utkat ‘C’ and change of end use of Utkal ‘C’ before the Hon’b\e Supreme Court, are pending for adjudication. Pending resolution of the said matters, no accounting adjustments have been made by UCL in it’s books of account and no provision is deemed necessary against the Company’s net exposure in UCL as at 30th September, 2017 amounting to Rs 111.42 Crores invested as equity and Rs 263.10 Crores given as unsecured loan.

  3. In view of the circumstances detailed above and considering the probability of economic benefits associated with the transaction flowing to the Company, as envisaged in paragraph 29 of Ind AS 18 on “Revenue”, with effect from 1st October, 2014 the Company has postponed recognition of income from interest on unsecured loan given to UCL.
    Due to this, profit before tax for the quarter and half year ended 30th September, 2017 is Lower by Rs 10.12 crore and Rs 19.84 crore respectively.The interest income would be considered as revenue of the period in which it is properly recognised.

Stock tanked -11.70% today. Way off its historical PE’s. Does it make a case for an investment? Good risk reward?
Seniors please advise…


(Jiten Parmar) #161

Perils of buying a cyclical stock late. I remember some friends buying IMFA at 750 a few months back, Had advised that buying late or mid-cycle may have its perils. IMFA, I would buy only at 400-450 levels. I am very conservative.


(amitjain2711) #162

Thanks for the reply Jiten for the advise.

Had accumulated IMFA around 500 levels in early August. Sold off my holdings today, may enter at lower levels if they come.

Cheers
AJ


(Jiten Parmar) #163

Metals/mining and infra sectors really playing out well.