Talking Stock: Hold Premier Explosives, ICICI Prudential; add GIC

By G Chokkalingam
Founder, Equinomics Research & Advisory

I have 1,000 shares of Aksh Optifibre at Rs 36 and 500 shares of Jain Irrigation Rs 124. Should I hold or sell? — VINOD

Hold both for some stability and recovery in the mid-cap space. After around 10 per cent recovery, you may sell both the stocks and shift to other suitable value stocks.

I am holding 200 shares of Anjani Portland Cement at Rs 269 and 250 shares of Navneet Education at Rs 163.What should I do with them? —ARJUN

Yoy may hold Anjani Portland Cement with a target price of around Rs 150 as its valuation has become attractive now and also it is part of good management. You may hold with a target price of around Rs 130 for Navneet Education which is a fair value of around 19 PE on current year’s expected earnings.

I have 3,539 shares of BPL. Should I hold or sell them? — MALAYENDU MUKHERJI

Though the current valuation is stretched, you may hold BPL with a target price of around Rs 50 considering the potential for growth in consumer durable business and also possible realization of dues from the power venture.

I hold NTPC, Premier Explosives, BHEL and Vedanta for more than 5 years. Should I exit any of this or continue to hold. — VENU G

Hold NTPC with a target price of around Rs 195 considering substantial expansion of its capacities and also price being close to its book value. Hold Premier Explosives with a target price of Rs 250 considering significant growth opportunities for explosives demand from mining industry. You may sell Vedanta if it moves beyond Rs 250 considering subdued metal prices and possibility of hike in oil cess by the government due to tight budgetary conditions.

I hold HEG, Graphite India, Goa Carbon and Phillips Carbon Black. Please advise if I should hold or sell these shares. — JIMMY BARIA

Sell Goa Carbon as it has posted significant loss in the September quarter as against substantial rofits a year ago — this poor performance may continue in the short term. If there is any recovery of 5 per cent o 10 per cent, then you may sell remaining three stocks as the prices of graphite electrodes and carbon blacks are highly cyclical in nature and current bull run in these stock prices is not sustainable in the long run.

I have 100 shares of Supreme Petrochemical at Rs 267. What should I do? — ASHISH PATHRABE

Rising oil price is negative for the chemical companies, which use crude derivatives as core inputs — sell the stock whenever there is some recovery in the mid-cap space.

I am holding 100 shares of SP Apparels at Rs 418, 200 shares of Andhra Sugar at Rs 300 and 300 shares of Jocil at Rs 140. Kindly advise. —NITIN SAVE

You may add more shares of SP Apparels to reduce your average cost considering its strong balance sheet and growth potential in apparel business. You may hold both Andhra Sugar, predominantly a chemical company and JOCIL, a small niche chemical input supplier to several MNCs.

Can Aban Offshore at current market price be a multi bagger in next 5-10 year’s time? —NIKHIL SIDDHANTA

In my view, possible only if crude price goes close to $150 a barrel. Also, it is conditional on the company being able to overcome the current crisis within two years as its interest cost alone is close to revenue. Its net losses are also more than revenues.

I am holding 175 shares of GIC Housing at Rs 427, 600 shares of Jagran Prakashan at Rs 151.75 and 50 shares of Cummins India at Rs 825.12. Kindly advise. — CHANDRACHUD G

You may add GIC Housing to reduce your average cost as it trades at mere 1.2 times its current year book value. Hold both Jagran Prakashan and Cummins India with target prices of Rs 145 and Rs 750 respectively.

I am holding Titagarh Wagons at Rs 175, Future Consumer at Rs 62 and ICICI Prudential at Rs 445. Please advise me whether to hold it or book the losses and invest in some other script. — PRAVESH

Even after the crash, Titagarh Wagons seems to be trading at a fair valuation – you may sell this stock and buy Andhra Sugar (predominantly a chemical company) to make up for the losses in the medium to long term. Future Consumer valuation is still stretched at current price also – you may sell it if it recovers 10 per cent from the current level. Please hold ICICI Prudential as after the crash it trades at attractive valuation of around 2 times embedded value for the current year.

I am having 1,000 shares of Snowman Logistics bought at Rs 54. Please advise. — MANJUNATH

Post its listing, Snowman’s net profit deteriorated and valuation is highly stretched even after 50 per cent fall in the stock price. Sell and buy Balmer Lawrie Investment, a holding company of a logistics provider, which can give a dividend yield anywhere from 6 per cent to 8 per cent for FY19.

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