Dark Horse/Multibagger Idea for 2017    

_TRIVENI GLASS LTD_

            H1/FY17 H1/FY16

Sales.      38.50.    27.46

NP.            4.78.       2.16

Equity.      12.62

EPS.           3.80      2.16

Outlook:

                 FY17E.  FY18E

Sales.        80.       90

NP.             11.    14.50

EPSRs.      8.70.  11.50

TGL is mfg Figured/Designer glasses used by Interior designers in Offices, Homes, Hotels for doors, partitions, aesthetic enhancement

_Actual holding of promoters is 36%+. Promoters have FROR to buy equity held by SASF. As and when this transaction takes place, promoter stake can rise to 40%+_

1) TGL had already finalised OTS with IDBI. And has started payments from internal accruals

2)TGL has 72 acres land in Allahabad. Has already recd  25 crores as advance payment against proposed sale of this land

3) Once co gets written confirmation of OTS from IDBI, co will have +ve  networth

Stock is tdg @ 2xFY18Eeps.  Mktcap just 28 cr.
Very tiny qty of promoter holding was physical. Same under dmat. Once dematting is done, stock will be out of T group.

_TP 100+ in 2018_

Top pick in Dark Horse category. Negligible downside but HUGE upside possible

Breaking News: New Year Bonanza:

_CMP 399. TP 432-445 January Series_

Kaveri seeds company Ltd:

Denofwealth has always accurately estimated quarterly results of KSCL. Now another accurate info:

KSCL will _soon_ announce *BuyBack of equity shares. Company is allocating around 100-120 cr for this purpose and buyback price can be 460-480*

KSCL has 535 cr Cash/equivalent in its books.

Fundamentally also, stock has been upgraded by brokerage houses:

MOSL             TP 489
Cholamandalam TP 494

Once Buyback is announced ( we expect before 7th Jan), stock can _definitely_ cross 430

Buy January series TODAY

SL 388

*Cheapest I T Stock ( eGovernance) for Big Returns*.          

_TERA SOFTWARE LTD_

Now I am getting higher conviction that Tera can be best bet in I T sector. TSL appears for a vertical takeoff:

Stock still available below its 52 week high

Stock tdg @ 0.35xFY17Esales

H1 EPS Rs 7.15

FY17Eeps RS 18

*PERatio only 6*

_TSL can register 30% CAGR for next 3 years_

A. GSPS: There will be many players but this is such a huge opportunity that each player will get sizeable biz. But TSL will have first mover advantage and already established setup with proven track record

B. Last Mile connectivity to be provided to *ONE LAKH institutions* in AP. Here again TSL can get biz worth 1000+ crores to execute in 2-3 years

C. Lastly AP govt to provide CPE for Triple Play to *EIGHTY LAKH* households. TSL already got trial order for 50000 households

Above new developments are apart from its regular projects of eGovernance

Barring unforeseen, TSL can be 400 in 3 years

Tera Software Ltd

*Up 18%*

Can be 300-400 in 2 years

Breaking News:

Tera Software Ltd

Stock is getting listed at Bse and trading will start at Nse from tomorrow. Stock should now catch attention of institutional investors

Best bet in Sugar industry:

_Triveni Engineering_

In current crushing season, recovery is nearly 11% ( perhaps highest in sugar industry) as against 9.75% in previous year. It will lead to not only bumper sugar production but also big spike in profit nos in FY18 ( co set to report Eps of 10+ in FY17)

*Mudar Patherya:  small-cap to bet on*

*Kaveri Seed Company*: They said the best days were over for this company. When you see the second-quarter results, you get a different picture. In what is usually a weak quarter, the company reported Rs 20 crore Ebitda, hefty other income (which means raw cash on the books), no interest and a Rs 55 crore bottom-line swing (loss to profit). And, there is always that first quarter to build a dream on: nearly Rs 164 crore in Ebitda. Equity Rs 13.8 crore.

On 17th Dec. I had put out an idea that PN investment by NRI's might have slowed down due to black money drive though I did not have the data to support my view at that time. It now transpires that there is a gradual erosion in PN in the domestic market which plunged to its lowest level in three years to Rs.1.79 lakh crore in Nov. end. With tightening of disclosure norms, the share of PN's has fallen from a high of 25-40% in 2008 & peak of 55% in 2007. Though the effect of demonetisation might have had little impact on PN, it's the squeeze on domestic hot money  (which keeps interchanging b/w Zaveri Bazaar & Dalal Stteet) & flow-back of FPI money to the U.S. which is impacting our market. If the market has still not catapulted to the level seen in 2008 it is possibly due to consistent buying by MFI/LIC/ Private Insurance Cos. & investment in ETF by EPFO. All said, the market sentiment is negative & will slowly open up opportunities for investment. Is it then time to come out with the fishing rod to catch the big fish? I feel not yet though one can start testing the waters before taking the plunge

By Sh GRChari

The technical set-up for Bank Nifty is weak /negative & it will most likely break the support at 18,000 & move down to touch the next support available at 17,000. This will drag not only banking stocks but the broader market as well. You will see a collateral damage in IDFC Bank & other bank stocks also. Expect the price of IDFC Bank to go down from current Rs.60 level to about Rs.50 in the coming days & weeks. Sell on rallies to 65-67.

By Sh G R Chari

Technical View:Coal India

Coal India has been trading in downtrend for last one year or so and currently hovering below the resistance zone of its long term average( 100, 200 EMA) on multiple time frames. Chart pattern and resistance of moving average ribbon clearly indicates sideways to negative will continue. It's trend will only reverse above 340 spot while in case of decline, 290/284 would act as support

Technical View: Kaveri seeds company Ltd:.      

Kscl is being accumulated at its annual weighted average price of around 389.60. Scrip is likely to rally towards 428 in the short term. Fresh build up and good cash buying might take scrip to Rs 428 in short term(December Expiry)

Stock faces resistance at Rs 450

KSCL upgrade to BUY with PT of INR489.

**KSCL's rev up 2% to INR678m (est. INR1,261m) in 2QFY17. EBITDA stood at INR34m (est. INR14m), and margins at 34%. Adj PAT at INR77m.

**Cotton seed vol in India declined 15% YoY, but Kaveri's vol moderated by just 4% as it gained market share in states like AP and Telangana.

**KSCL headwinds now behind, majority write-offs already taken, improved outlook for cotton acreage and clarity over distribution of cash in hand through special dividend or *buyback*.

** Expect FY18 rev/PAT growth of 20.5%/25%) and FY19 to continue witnessing healthy growth pace.Upgrade to buy with PT of INR489.

*Our Take: Even MOSL report mentions about Buyback. As per our source, Kscl will announce Buyback worth Rs 100 cr or more @ 480-500 and we estimate FY17 NP at 200+cr*

*Kaveri Seed Company Ltd.*

_Sharply improved results_

Net Sales came at Rs. 67.8 Cr vs YoY Rs. 66.3 Cr

EBIDTA came at Rs. 3.4 Cr vs YoY Rs. -44.6 Cr

EBITDA Margin came at 5%, vs YoY -67.3%

PAT came at Rs. 7.7 Cr vs YoY Rs. -48.2 Cr

Despite excellent nos, stock was hammered down yesterday due to aggressive selling by DII.

Some brokerage houses estimating FY17 NP at 140cr. However denofwealth is confident that *FY17 NP will be 200+crores* ( as per our interaction, Q3 and Q4 will be far better YoY)
FY18 NP can be 240+cr

_Stock is trading @ 13.45xFY17Eeps and 11xFY18Eeps_

Strong upside possible
Investors may add more who bought earlier at higher price on our recommendation.

Another Downgrade:

Coal India Ltd

Macquarie TP Rs 252

Macquarie has rated CIL as _underperform TP 252_

However denofwealth estimates CIL may fall to Rs 225 in less than 6 months.

1. All global brokerage houses have estimated FY17 Dividend to be Rs 18-20 per share and giving TP factoring High Dividend Yield. However we feel that such high Dividend will not happen as recently 3500 Cr drained out by buyback ( co had to break FD) in Oct16

2. Current year EPS to be considerably LOWER. All brokerage houses estimating FY17 eps between Rs 18-21 per share which is completely unrealistic . Looking at H1 NP, CIL can report such high Eps _only if H2 Eps is Rs 13-16 and it is impossible because CIL did not report such high Half yearly Eps when Coal prices were LIFETIME high_

For higher gains, we advise to roll over position to Jan17 series. Stock should make new 52 week low in Jan17

*CLSA ON COAL INDIA:TP260*
Profit drop driven by sharp fall in e-auction ASPs, higher-than-expected mining and staff costs
Believe Coal India's volume growth should improve 2H onwards
Believe pressures from weak e-auction prices and rising costs could continue
See another price hike as unlikely until FY18
see high risk of Coal India cutting dividend payout, which would remove key valuation support
cut FY17-19CL EPS by 7-9% and now forecast -3% EPS Cagr over FY16-19

*MS ON COAL INDIA:TP 268*

miss was led by all-around earnings weakness; realization under FSA, e-auction below estimate
believe volume growth and e-auction realization will improve from current levels
Believe cost per ton will also decline with ramp-up in volumes
believe CIL has not been able to fully pass on impact of regulatory cost increase
Increased capex, ltd price flexibility, looming wage hike will mean muted earnings growth in F17

OUR TAKE: denofwealth was only co in India to accurately forecast Q2 nos and *estimates of all brokerages proved wrong by massive margin* Now brokerage houses are estimating ONLY 6-10% decline in FY17 EPS . Again they will prove wrong in a big way:
A. Coal offtake still not high. You may check Oct Nov despatch at Bse
B. Diesel cost likely to rise which will dent margins
C. SALARY: *In Q2 wage hike on ad-hoc basis 12% which is not final. Actual wage hike may be 18%*. It can significantly reduce profit margins in H2. Original demand of Unions 42%.

Hence *denofwealth estimates FY17 earnings to decline 20% or even higher*

CIL can decline to 272-276 in 2-3 weeks
Can be 225 in 6 months

Coal India forms committee to revise pay of 3 lakh employees

Coal India Ltd (CIL) has constituted the 10th joint bipartite committee for the coal industry (JBCCI) to revise pay of over three lakh non-executive employees across its subsidiaries.

A decision to this effect was taken at the 15th meeting of the standardization committee of JBCCI-IX held in CIL headquarter in Kolkata last Wednesday. Representatives from five Central Trade Unions — Indian National Trade Union Congress (INTUC) (04), Bharatiya Mazdoor Sangha (BMS) (04), Hind Mazdoor Sabha (HMS) (04), All India Trade Union Congress (AITUC) (03) and Centre of Indian Trade Unions (CITU) (03) and equal number of management representatives will participate in the JBCCI-X to determine the pay revision for workers in CIL.

The first meeting of JBCCI-X is expected later this month to determine the wage structure of (National Coal Wage Agreement) NCWA-X, which will be effective from July 1, 2016.

Over 20,000 non-executives (workers) of Mahanadi Coalfields Ltd (MCL) will be among more three lakh beneficiaries at CIL subsidiaries of — Eastern Coalfields Ltd (ECL), Central Coalfields Ltd (CCL), Bharat Coking Coal Ltd (BCCL), Northern Coalfields Ltd (NCL), Western Coalfields Ltd (WCL), South-Eastern Coalfields Ltd (SECL) and Central Mine Planning and Design Institute Ltd (CMPDI).

It may be noted that the central government has effected a 42% rise in minimum wages of non-agricultural workers in the 'C' area category from Rs 246 to Rs 350. For the first time, there has been simultaneous increase in the minimum wages of all sectors in the central sphere.

Nahar Industrial Enterprises Ltd:

Due to profit booking by traders, stock may consolidate at current level. However cmp is still lower than recent high of 132.
Barring unforeseen, NIEL should make new high in 1-2 weeks.
Much smaller textile stocks trading at much much higher PERatio.
NIEL is large sized and fully integrated with captive power

Sugar industry is doing well. If mgtmnt decides to demerge Sugar division, NIEL can spurt much faster

Stock should easily touch 250 in 2017

Q2 NP ZOOMS _1400%_
H1 NP ZOOMS _700%_

_Nahar Industrial Enterprises Ltd_

Has reported HIGHEST ever NP in Q2 30.21cr vs 2.02cr. H1 NP 49.95cr vs 6.43cr

*A) *Tdg @ 4.15xFY17Eeps and 3.75xFY18Eeps*

*B)Tdg @ 2.45xFY17ECEps and 2.36xFY18ECashEps*

C) *H1 NP rose BY 700% YoY*

*D) Mktcap 395cr vs expected Cash Profit of 328 cr in FY17,18*

*E)Book Value Rs 165*

FINANCIAL:

                 Q2:FY17. FY16
                   Rs/Cr.    Rs/Cr
Sales.        432.        387
PAT.         *30.21.     2.15*
Equity.        39.84
*Eps           7.59.       0.51*

PROSPECTS:

                      FY17.  FY18

Sales.        1875.    1950.  

Dep                   66.    62

NP.                   95.    105

Cash Profit.   161.  167

*EPS.         23.85.  26.35*

Cash EPs.  40.42.    41.92

About NIEL:

271000 spindles
7832 Rotors
53MW power plant
2500 TCD sugar
112 million mtr  Fabric mfg capacity
Huge yarn dyeing: 13 TPD
Spread over 7 plants

Peer Comparison:

                    PERatio

Sangam.        13
KPR.                23
Nahar Spg.     10
*NIEL.            4.15*

Despite being amongst the biggest textile co, NIEL is cheapest textile stock

Even if NIEL gets modest PERatio of 10, stock should be Rs 250

Now I am getting higher conviction that Tera can be best bet in I T sector. TSL appears for a vertical takeoff:

A. GSPS: There will be many players but this is such a huge opportunity that each player will get sizeable biz. But TSL will have first mover advantage and already established setup with proven track record

B. Last Mile connectivity to be provided to ONE LAKH institutions in AP. Here again TSL can get biz worth 1000+ crores to execute in 2-3 years

C. Lastly AP govt to provide CPE for Triple Play to EIGHTY LAKH households. TSL already got trial order for 50000 households

Above new developments are apart from its regular projects of eGovernance

Barring unforeseen, TSL can be 300-400 in 3 years

Big Big development for Tera Software Ltd:

A) TSL has become approved vendor with A P state Fibre Net Ltd to provide Last Mike InterNet Services to Govt entities. _one lac Schools, PHCs, Police, Revenue dptmnts in A P state will be covered_

As per our info, TSL expects orders worth 700-1000 Cr to be executed in 2-3 years

*Most undervalued IT co which may touch 200 by 2017*

More big developments expected