Ten Scrip Teases between Rs 20 and Rs 30…any seducing you from these ?

Few forecasts of a Sensex of 30000 from mid to end 2012 have been made recently by known entities in our capital markets…that’s over 60 % inside 18 months from current levels of 18200 as we near the end of May 2011

Got me wondering …if 2012 sees the Sensex between 20000 and 30000,then what would these Ten Scrip Teases priced currently between Rs 20 and Rs 30  be priced next year

These caught my eye on any one or combination of the following criteria

  • Limited Downside from here
  • Defensive Plays
  • Strongly Recommended by Known Brokers
  • Turnarounds
  • Sector Potential

Any of you have any favourites from these ten scrips below…and any targets for them inside 18 months ? 

I must disclose that currently I do not own any of these but some of my clients may own a few  based on my advice with appropriate limited exposure and weight in their Equity Portfolio based on their risk profile

Scrip

Closing Price in Rs  

May 27,2011

Volume

2W Avg Q

Alok Ind

25.15

19.22L

16.75L

GVK Power

21.65

11.81L

9.45L

NHPC

24.80

13.20L

6.54L

Geojit BNP

23.20

0.21L

0.27L

Andrew Yule

24.00

0.36L

0.33L

Emami Infrastructure

29.30

0.14L

0.20L

Entegra

23.85

3,386

9,442

Deccan Gold

20.30

0.30L

0.31L

SJVN

21.20

0.36L

0.71L

Noida Toll

25.45

0.70L

0.49L

 

Cheers !

14 thoughts on “Ten Scrip Teases between Rs 20 and Rs 30…any seducing you from these ?

  1. I don’t know much about the fundamentals of these companies but in terms of management pedigree(quality of promoters) which is my primary yardstick for shortlisting stocks i would only consider further investigation into 3 of them:
    1)NHPC
    2)SJVN
    3)Geojit BNP

    Within this list SJVN is too dependent on one single project to consider and hence doesn’t make the cut
    Geojit has already been taken over by BNP & hence any take-over ‘pop’ is out,unless they decide to delist which seems unlikely as a good chunk is with public(greater than 35%), also broking industry is in for tough times with low volume & very low enthusiasm for equity among investors.
    If you do wanna play for ‘take-over’ play a la ENAM, i would suggest going for India Infoline which is cheap, although with suspect Corp. Gov/Management

    My ‘value picks’ at this juncture would be:
    1)Marg Ltd (They operate a very profitable port at Karaikkal in TN which alone could be worth 900+Crore with IDFC picking up a 30% stake in it). So in effect you are getting the port+thousands of acres of land bank+a reasonably good EPC business with order book in excess of 3000 Cror+Real estate business+upcoming 1Mn sq ft mall in Chennai for a bargain basement price of 350 Cr(market-cap). Only issue here is huge debt on books & pledging by promoters. Recent underperfomance is due to election verdict & public’s misplaced notion of AIADMK being unfavourable for Marg. A great,albeit risky, contra bet.
    2)Sanghvi Movers :India’s largest crane operator & the 10th largest in the world. Is out of favour currently as infrastructure is going through a slowdown & results have been stagnant for close to 3 years. But if you believe in India’s infra growth & the need to put up huge power plants, refineries, wind turbines, etc then this is one pf your best bets!
    The best part of their business model is that they depriciate their cranes rapidly to lower their tax & so they are carrying the assets at a significant discount to their ‘real’ value . The value of cranes alone should be around 1000 crore while mrketcap is just 500cr!
    Company has great return ratios but debt is on the higher side which can easily be pared by selling some old & unnecessary cranes. This one is only for patient investors with confidence in the infra story
    3)NIIT Tech : Great parentage,high cash levels+low debt+ super-low price & a great dividend yield ===great buy!!

    Gaurav would appreciate your feedback on my picks.

    Disclosure: I have positions in all the stocks mentioned

    Cheers!

  2. Swaroop…even God gives a second chance to Promoters !….so if you can assume some risk stepping out of your safe zone for some exposure can be hugely rewarding….your selections are all above Rs 30…and are available near their 52 week lows…Marg is being recommended by many leading brokers…but the volatility is high…52 week was Rs 244…it’s now 92 near.. 52 week low of 87…..there are a few concerns on project execution and debt….I know a few who are holding this from Rs 190 cost…had told them to be wary at the time but they went by glossy reporting and recommending by leading brokers….Quite a few years ago I met the Sanghvi Owners in a one to one meeting…their share price was Rs 16 then and they were growing very fast…but I waited for their results to confirm…was a bit too late by then to pick this multibagger share up…then the brothers had a falling out…..NIIT Tech has the least volatile 52 week spread…looks interesting…Cheers for your long and lovely response

  3. Hi B R Reddy…thanks for your response…this specific blog post listed ten scrips between 20 and 30 and what you think they would be in 2012 if sensex is between 20k and 30k….A few years ago I had cautioned on Birla Power Solutions….I had a quick relook at it at par Rs 1 as this is the FV too …..Volumes are currently 15 lakh shares though average six month daily volumes are 75000 shares…. 52 week high/low is Rs 2/Rs 1…but margins and profits are very low…profits are in a few crs though sales crossed Rs 230 crs last year and will have crossed Rs 250 crs for FY 2011…amusingly it declared a 1:5 Bonus last year as well as a dividend of 7.5%…it carries debt of over Rs 100 crs while funds tied up in Debtors and Inventories last year aggregated over Rs 175 crs..Sales were Rs 238 crs….currently manufacturing portable gensets and engines for gensets it now plans to enter the field of power generation through two subs Birla Energy Infra Ltd and Birla Urja Ltd…it needs funds…has constantly….has raised Authorised Capital to Rs 425 crs….With Profitability in single digit Rs crs and Equity at Rs 215 crs,don’t expect any dividend for FY 11 that just passed….if they do foolishly declare one,they will have to dive into GDR proceeds of earlier years to distribute,if any are yet available….while I feel the downside is 75 paise,any uptick from here will be more on momentum,hype,sentiment and anticipation and blind faith in a Birla Company rather than on fundamentals…Yash Birla Group companies do not command much respect or premium on the bourses or in business…another of his group companies is Birla Shloka ….it is just Rs 15…it has a 52 week high of Rs 94 and the FPO in Jan 2010 was at Rs 50 for a FV Rs 10 share….if you wish to make monies in Birla Power, don’t depend on fundamentals to support upmoves from Rs 1….more likely on collective hype and hope…Cheers !

  4. Vikram,

    I had recommended Sabero very strongly more than once in earlier years from Rs 20m + but got turned off them on some disturbing news on ethical business issues..recommended exit at Rs 65 levels…it fell sharply after this…now this news of Coromandel buying it out for Rs 160 + non compete fee of Rs 38 + is going to propel Sabero very fast…the news was out to insiders a few days ago…see the pattern last week…it had reached new highs every single day virtually….Coromandel will acquire 42 % from Chuganees and also another 31% from remaining shareholders….Sabero is already on upper circuit at Res 97 + on BSE…it should move strongly past Rs 125 now with a more credible and stronger promoter…..it will get rerated strongly too…However expect SEBI to investigate insider trades last week…Cheers….

  5. Amit……Tulsyan NEC suffered from a very high Debt…over Rs 220 crs last year from a Total Capital Employed of Rs @Rs 285 crs…recent 2:1 Rights Issue at Rs 49.50 will Equity to Rs 15 crs and Networth to Rs 120 crs…this will reduce Debt Equity towards 2:1…..Consolidated Turnover is Rs 876 crs for FY 11 but bottomline is a mere Rs 9 crs because of the high Interest outflow…they also faced huge Power cuts…40% in FY 10…affected capacity utilisation…they also faced some price hurdle to source sponge iron….they have since bought out a 35000 MT Sponge Iron Manufacturer Chitrakoot ans are setting up a 35KV Thermal Power Station…Steel sales account for near Rs 700 crs of the turnover…rest is poly packaging division sales…it is a dividend paying company…65% + equity is held by the Promoters….I see little downside from here….Trading Volumes are low….would keep it as a ScripWatch rather than ScripSelect right now…Interestingly Market Cap is only @ Rs 70 crs on enhanced capital with share price in the mid Rs 40s levels…it remains a small company in this sense…sold 1.5 lakh ton of Steel and @ 12000 t on Packaging…has over 1500 employees …..will get re-rated only when Debt levels drop significantly to Rs 100-Rs 150 crs range and therefore Debt/Equity to 1:1….Keep a watch …..Cheers

  6. Dear Mr Gaurav,

    I see that you have mentioned Deccan Gold Mines in your list. I have been holding on to 1000 shares of Deccan Gold Mines for more than 5 years. It has not seen much appreciation barring few sparks in the last few years due to speculative news and grapevine. Just wanting to check when and if they find gold after they get the requisite permissions from the Government, whether DGML will be a multi bagger for the future. Can I accumulate at these levels for a decent appreciation in the next 2-3 years.

  7. Dear Rohit….please don’t read these ten scrips between Rs 20 and Rs 30 as my recommendations….there is a reason why I have termed these Scrip Teases….and Deccan Gold especially…..last October I commented on Deccan Gold while comparing another scrip with it….reproducing my comments below…..

    Deccan Gold Mines

    Quote on BSE
    Rs 23.25

    Face Value
    Rs 1

    Quoted at No of Times FV
    Over 23 times !

    Activities
    Gold Mining in Karnataka

    Networth
    Rs 14 crs

    Equity
    Rs 5.85 crs

    Book Value
    Rs 2.41

    Price/BV
    Nearly 10 times

    Debt
    Nil

    Status
    Yet to Generate Revenues from Gold Mining in Karnataka…reached last stage where Mining Lease will allow commercial extraction of discovered gold ore …therefore expected to begin generating revenues inside a year or two for atleast half a tonne of Gold…that’s Sales of over Rs 100 crs at current Gold Price of Rs 20000/ten grams

  8. Thank you Sir for your response on Deccan Gold Mines. Another Scrip that I have been closely following is Venkys India the listed entity of Venkateshwara Hatcheries. The scrip has seen a huge value unlocking from somewhere near Rs 60 levels two years back to the current level of Rs 634. In the last one year it has even gone to a high of Rs 1000 plus. Your views on the Company as recently it has even bought a international football club and even the product line that they are into will see substantial growth going forward.Is it prudent to have a look at the stock at current cmp.

  9. Dear Mr Gaurav,
    Further to my earlier mail to you querying about Venkys, I referred to your blog on the same scrip in the month of October where you have given a detailed insight of your views with regards to Venkys. At the end you had mentioned that we should wait for the scrip to fall to lower levels before thinking of entering. At that time the scrip was around 800+ levels. Just wanting to confirm whether the timing is good now to enter into this scrip looking at the potential and the always bouncing back nature of the scrip. Thanking you in advance

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