ET CONTRIBUTORS

G CHOKKALINGAM

MD, Equinomics Research & Advisory

I am holding 840 shares of CDSL at Rs 390 from July 2017 and 180 shares of Rain Industries at Rs 345. I am in a huge loss. Please advise on the future of these two stocks. —NEERAJ GUPTA

Please hold CDSL for the long term. It is engaged in almost perennially growing business and after recent meltdown in the mid-cap stocks, it trades at attractive valuation of around 24 times current year earnings. You may hold Rain Industries with a target price of around Rs 220.

I am holding Vardhman Holding at Rs 5,200, M&M at Rs 984 and Balkrishna Industries at Rs 1,350.What could be the prospects of these shares after two years? —ABHILASHA PALVE

Vardhman Holding trades at an enterprise value, which is about 60% discount to value of investments in Vardhman Textiles and other investments. So hold it with a target price of around Rs 4,000. Hold M&M with a target price of around Rs 1,000 as the tractor industry is expected to post around 9% growth in the current year and its new multi-purpose vehicle Marazzo is expected to help the company in improving its automobile sales in the shortterm. Hold Balkrishna Industries with a target price of Rs 1,100, which is a fair valuation of 20 times FY20 expected earnings.

I have bought 35 shares of Symphony at Rs 1,800. Is there a chance in near future for those shares to reach that price level? —SUNEEL

Unfortunately you have bought the stock at the exorbitant valuation of 66 times FY18 earnings, hence, in my view it is very difficult to get back your cost price. You may hold it till it possibly reaches a price of around Rs 1,100.

Is this a good time to buy Andhra Sugar? The stock is down by 50%, from its 52-week high . — NABHI RAJ

Firmly yes – Andhra Sugar holds rich assets and also attractive investments in JOCIL, AP Petro and AP Gas Power and has impressive track record of consistent profits and pidends for several decades. Recently, it expanded capacities of caustic soda and aspirin, and also set up a captive power plant. It trades at single digit PE on FY19 expected earnings.

I hold 84 Ramky Infra since IPO,120 of Jain Irrigation at Rs 132, NBCC at Rs 311,40 Sadbhav Engineering at Rs 390. Please advise. —CL SURI

Sell Ramky Infra considering the facts that it trades at over 25 PE on FY18 consolidated earnings, and trade receivables and inventories account for 92% and total borrowings account for over 150% of core annual revenues at the consolidated level for FY18. After 56% fall from its 52-week high, Jain Irrigation trades around 14 PE on FY19 earnings and hence, hold the stock with a target price of around Rs 80. Hold NBCC as it has the potential to recover significantly in the long term. Considering net loss at consolidated level for FY18, total debt and other financial liabilities nearing Rs 12,000 crore for a revenue base of around Rs 5,000 crore at consolidated level and rising interest rate regime, I doubt whether Sadbhav can improve its financial performance significantly in the short to medium term. Hence, I suggest a sell on the stock.

I have 200 shares of Gati at Rs 290 & 1250 shares of JP Power at Rs 14 and hold it more than 4 years. Please suggest me should I hold or sell these share. —MOU KOLA

You have bought Gati the peak of play out of logistics theme on the markets at exorbitant valuation. Please never do that in future as such a strategy can wipe out investors’ wealth permanently. Now hold it for a target price of close to Rs 100. I don’t think replacement value of power assets of JP Power would leave anything significant in value to the equity stake holders after meeting the debt obligation of over Rs 20,000 crore. Still you may hold it — having lost nearly 90% of your investment, you may hope for any possible tactical upswing to exit the stock.

I have 500 shares of Rolta at Rs 110 and hold for 3 years & 150 share of ONGC at Rs 418 hold it 4 years. Please advise me on whether I should accumulate more, hold or sell? —RAMA KOLAY

Sell Rolta even if you can recover 50% of your cost. For a revenue base of around Rs 3,000 crore, total intangible assets and goodwill of close to Rs 3,000 crore and total debt of over Rs 5,000 crore at a consolidated level for FY18 and net losses posted in both March and June quarters do not give any confidence in the stock. Hold ONGC with a target price of around Rs 200 as its two subsidiaries viz. HPCL and ONGC Videsh hold positive outlook in the medium to long term.

I hold 3,200 shares of IDFC Bank at Rs 72 since last 3 years. Post announcement of merger with Capital First, the share price has fallen sharply. Are there any chances to retrace my cost? —S VISHWANATHAN

Unfortunately you may have to wait for another three years to recover your cost in IDFC Bank as the equity base post merger also would remain very high. However, it is worth holding as its net NPA is one of the lowest in the industry and trades at significant discount to its adjusted book value.

I am holding 50 stocks of Harita Seating at Rs 710.46 and 11 of Hero Moto at Rs 3,697.90. What should I do? —ASHOK KUMAR

You may hold both stocks for the long term as they have been beaten down more than what they deserve. Harita Seating, with good management and strong balance sheet, trades at an attractive 13 times FY20 expected earnings. Hero MotoCorp also trades at mere 14 times FY20 earnings, after 30% fall from its 52-week high.

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