Adding to the stock query list :),shilpa also came out with a good set of numbers .Once the subsidiaries starts performing the PAT should increase aggressively .Stock seems to be making new highs everyday.Right time to add it in portfolio?
ankit, sagar, Vst tillers has come out with good numbers for q2 fy 14… half yearly eps of 42… full year should show 80 plus… And all this with a pristine balance sheet… I think there could be some re rating from the current PE levels of 7 PE to close to 10-12 PE and that in itself would provide close to 50% returns. But re rating doesnt happen overnight… But if the company continues with good results as shown in first two quarters of fy 14. its bound to happen sooner or later. Attaching monthly chart of vst tillers showing a flag pattern breakout with potential targets of 1000 plus… But since this is a monthly pattern it will take time in a matter of months and now weeks…
Regarding attractiveness of the stock at cmp, yes its attractive… downside now seems capped at 500 odd levels… And upside potential is close to 800-1000 levels…That provides a huge risk reward benefit. Its not often we can say that a stock is attractive inspite of run up from levels of 330 some months back to current levels of 575… But looking at results that remains a fact.
Another thing in its favor is that in next few quarters company will start getting revenues from expanded facilities and production of small HP tractors. That should also aid the growth… Even after the expansions, company has cash on balance sheet and there fore I expect good dividend payout which always helps the process of re rating.
I wouldnt compare dhanuka and vst tillers… Both look attractive post their last two quarterly results.
@sourabh -------Coming to shilpa, I think one can consider gradual accumulation at cmp and on declines… Sep qtr results have been good. But since I have limited knowledge of Shilpa inspite of it being a pharma company, its difficult to make guesses here. It looks like a good 2-3 year bet looking at developments as mentioned somewhat in the fy 13 AR…
A final piece of advise for buying most stocks is not to chase momentum… Usually most stocks tend to consolidate after the initial froth and hoopla is over post any positive newsflow… Thats the time to add the stock to the portfolio. Usually this approach enables one to get stocks 5-10% cheaper and provides more time for accumulation.
regards
hitesh.
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Of late I have started to have greater respect for technical analysis,remember reading one of your posts about the 1000 target.Mostly happens that,when there’s a positive signal on charts,its followed by some fundamentally good news.Will buy VST on Monday,for sure.
Thanks for the re-assurance 
Hitesh Bhai,
Thanks a lot and I think the last para you wrote is very very important. I have now started realising it after committing some mistakes like these in the past.
Regards,
Ankit
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Hitesh bhai
Which one out of alembic, vst and dhanuka looks the most attractive at this point of time?
Thanks in advance
vst tillers… dhanuka… alembic in that order.
Thanks for the reply
Hitesh Bhai,
with all due respect, just wanted to point out to a notification by the company, where it says that Q3 is expected to be subdued/bad due to overhang of Odisha cyclone and that overall it expects to grow only 20% for the year.
Assuming that the EPS estimates for the year have to be revised to 67-70 odd.
Still assigning a fair PE of 10-11 the price works out to be 700-770 at the upper band.
not aware of the technical patterns though !!
ashwini
I too read the notification by the company… tillers sales according to the company will be affected to some extent due to the cyclone in odisha.
They have guided for 20% growth in sales … Which takes sales to close to 570-580 crores… then it will depend on what kind of NPMs company manages to notch up for full year. If they can maintain 12% NPM shown in first half they can very well end up with net profits of 67-68 cr which provides eps estimates of 78-79 per share… Whereas NPM of 10% will take the eps estimates to 67 or thereabouts.
personally I think growth in tractors segment should take care of any slump in the tillers sales and would still keep my working estimates for fy 14 at eps of 80.
Lets see how things go from here…
Technically earlier tops usually provide some resistane zones… earlier top was at around 625…So if stock starts losing momentum roundabout current market price of 625 or around 650 it may provide attractive buying opportunity on dips… How low the dips go would need to be seen. Currently momentum seems strong…
as mentioned earlier also best buying is when the buying frenzy subsides and stock corrects or atleast consolidates in a range.
regards
hitesh.
hitesh
i would lyk to knw ur views on the sugar cycle. hw much as an investor we shld rely on these commodity cycles. sugar ahs been down and out for 7 years now. sugar as a commodity is going to be here and demand supply things changes as the cycle changes.
what is ur opinion on the sugar industry. renuka and other are now lossmaking (but is it not the tym when no one is interested in them) . PSR theory suggests a turnaround (if) will lead to manyfold returns.
regards
divyansh
Hi hitesh, How does suven life looks fundamentally, Regards,
Hello Hitesh, You mentioned that the best time to buy stocks is when the initial hype is over and the stocks corrects/consolidates. However, when a stock posts a great result like PI and VST tillers recently, the stocks zoomed from 120-130 to 200 for PI and 520 to 625 for VST tillers. I want to ask you that isn’t it better to lap up a fundamentally good stock (as PI and VST are) as it goes up? For ex, VST went up 13% on result day and another 7-8% on second day. I know its easy to say this in hindsight and the stock may even be available at or below pre-result prices. But I want to know whether you as a rule always wait for correction/consolidation? The stock may be up 30% by that time.
Hello Hitesh bhai,
Kindly share your current pf and allocations. I am more interested to know the current allocations in light of current run up/possible upsides remaining in each.
@divyansh… I dont follow cyclicals so no idea or opinion on your query.
@dinesh verma… I havent followed suven much so again no idea about it.
@rohit ojha… There are no fixed rules for picking up stocks… But usually I dont run after stocks which run up sharply unless I see strong upsides even from those levels… I think one needs to be flexible in investing and treat every situation on individual merits… And if one stock runs up and you miss it… its no big deal… try finding out the next one…
@rudra… I wont be able to post the portfolio allocations due to confidentiality reasons… But broadly the stocks mentioned earlier are there in my portfolio… exited alembic and PI a bit early… New stock I bought recently is tata elxsi… Looking at the past 3 quarters it seems the company is getting on track for some good growth after failing to live up to expectations till now… Jan 13 concall mentions that company incurred loss of around 7 crores each quarter in their visual computing division… where they had established a studio in hollywood and things were not working out… In the concall they mentioned that they would stop the bleeding by june qtr… It seems looking at the Sep qtr results they seem to have solved that little blip.
Half yearly eps of around 9… Full year for fy 14 I expect around 20-21 per share and a dividend of around 8-9 Rs per share. (Its always been a high div payout company).
regards
hitesh.
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Hitesh , Can you please share your email id with me? My email id is shrinani0507@gmail.
Hi hitesh,
would it be correct to call the pattern in FDC (mthly) chart a flag pattern?
yes it looks like a monthly flag… Breakout happens on a monthly close above 100-105 levels where there seems to be strong resistance.
Hitesh bhai
Which one out of Unichem, FDC and Navneet looks the best technically at this point of time?
Ashwin
Its a difficult call to make… maybe unichem maybe the best bet but I wont be surprised if any of the three surprise us…
To me these stocks seem to be playing catch up and displaying dead cat bounces which might/might not fizzle out…
I remain more bullish on jb chem which has closed at its all time high on a weekly basis and still appears attractive looking at growth and balance sheet strength. Enterprise value if one deducts cash is close to 400-450 crores and company is likely to do net profit in excess of 100 crores for fy 14… Earlier no value was given to cash due to poor market conditions but it seems with markets improving cash is being accorded atleast some value… Plus company has shown decent growth in first half of this financial year. earlier i had posted charts somewhere showing cup and handle pattern and its relevant targets.
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Hitesh bhai
Which one out of Unichem, FDC and Navneet looks the best technically at this point of time?
Ashwin
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Thanks Hitesh Bhai.I am kicking myself for selling indocco and FDC after holding for a long time. Also suffered big losses with Dishman and Shasun. And missed out on Alembic and J B pharma. But it seems to me that these small pharma companies are the flavor of the season and everything seems to be going up.I feel FDC and Unichem has’nt moved up much compared to its peers and may be these two can play catch up now. You were also holding FDC till recently. Have you sold out fully?
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