*Cmp only 21% of 52 week High:Religare Enterprise Ltd*
Daily traded volumes have touched 1.20-1.30 crore shares with delivery touching 5 million shares. Lenders had invoked pledge of 5+crore shares. And same being sold and hence, such high volumes. And entire selling being absorbed by knowledgeable circles.
_Once selling by lenders finishes, volumes can dry and stock will go up and up_
*SOME BIG ANNOUNCEMENT ABOUT LARGE FUNDS INFUSION POSSIBLE IN NEXT FEW WEEKS*
*TO RAISE 12000 CR: PUNJAB NATIONAL BANK* TP 250
MD Sunil Mehta has stated that country's second largest state run lender PNB is looking to _raise 12000 Crores selling real estate including its headquarters, dilute it's stake in PNB Housing Finance and exit mutual fund business_
Mehta said bank has received permission to sell its 20% stake in PNB Asset Management while reducing its stake in PNB Housing Finance *by 9% from current 39%*. Mehta also said that bank has started process of selling various real estate assets
*AVAILABLE AT 1XBOOK VALUE MOTILAL OSWAL HAS RAISED TP FROM 184 TO 250*
With stronger Balance Sheet, PNB is expected to get large amount from recapitalisation scheme
Best buy in PSU banks
*HUGE TRIGGER FOR POWERGRID: Rly to Electrify 30000 km*
Indian Railways has decided to Electrify 30000 km track @ 8000 km each year at 35000 crore capex.
PowerGrid with existing network of *140000 km of transmission lines will be main contender and LARGEST recipient of Rly order*. PowerGrid had already secured trial tender for 800 km earlier.
*CLSA On Power Grid*
_Best is yet to come_
Raise EPS by 1-2%
*Buy with TP 260*
Pipeline of $20bn is likely to capitalise by FY21
BUY PGRID of India ; 🎯 *TP 252 : Edelweiss*
Edelweiss is bullish on Power Grid Corporation has recommended BUY rating on the stock with a target price of Rs 252 in research report
Denofwealth: PowerGrid is crown jewel of PSUs having finest strongest mgtmnt with vision. *Largest transmission co in the world*
CLSA and Edelweiss TP without potential of Rly orders
*PowerGrid must for every portfolio. Can be 3x in 3 years*
*WHY SO BULLISH on Panchmahal Steel*
In our earlier notes, Denofwealth has given steep TP. Reasons:
1) Present capacity utilisation just 30% which can be 50% next year
2) Production capacity 72000 tonnes with 1.50 lac ton melting shop. It gives fair value of Rs 400/share
3) 10 acres of surplus land ( mkt value 100cr+) can be used for big expansion of capacity in 2020
4) BIG CORPORATE TRIGGER: ABC Bearing-Timken type deal in PSL. PSL promoter *WILL* exit after 12-15 months in favour of *oldest steel giant* and stock will be rerated.
_Not for traders as there can be hiccups of profit booking_
_Investors with 2 year patience can reap rich harvest_
TP 300 in 2 years, barring unforeseen circumstances
P.S.: PSL in specialised technical steel making Rods/Wires, not commodity steel, benefits emerging from GST
SUZLON Q2: WORSE BEYOND ALL BELIEF
Revenues *down 56.5%* at Rs 1193 cr vs Rs 2742 cr
Net profit down 72% at Rs 68 cr vs Rs 243.75 cr
EBITDA down 81% at Rs 107 cr vs Rs 559 cr
Margins at *9% vs 20.4%*
*Actual PBT loss of 374 cr. Vs profit of 251 cr yoy. Exceptional gain of 454 cr converts LOSS in PAT*
_Working capital days up to 94 days (highest is 5 years - big negative)_
*Working capital debt in Q2 at 3244 cr vs 2000 cr in March 17*
Massive FCCBs coversion in the pipeline which will further expand already bloated equity
*EBITDA MARGINS NEGATIVE*
Company in its presentation did not mention Q2 details
FCCB conversion price is 15.46 per share. Management trying to keep shares above 15.5 so that all pending 67 crore shares under FCCBs can get converted. If stock goes below Rs15 stock will see vertical fall
FUNDAMENTALLY HUGELY OVERPRICED. STAY SHORT.
*ABOVE & BEYOND*
Coal India Ltd Q2
Denofwealth had initially estimated Q2 PAT at 450 Crores Vs Bloomberg est of 2031 Cr. Subsequently denofwealth tweeted that PAT can be as low as 360 Crores AND co has declared 369 Crores PAT
We feel that in no part of the world, employee cost eat up 50% of mining co revenue EXCEPT Coal India. Coal has provided only 2300 Cr for wage revision. It means 4300 Cr remains to be provided in H2.
Best part is that in investor presentation, Coal has compared *H1 no's YoY and not mentioning about extremely bad Q2 no's*
Mgtmnt may make lofty promises to sustain share price but they never mentioned in Q1 presentation that Q2 will be bad
BAD DAYS ARE HERE AGAIN:
SUZLON Q2
Suzlon is set to report extremely bad nos with LOSS at Operating level ( after profit of many quarters)
As per Denofwealth estimates, Suzlon can report *LOSS of 12-15 Crores at Ebidta level Vs Bloomberg estimate of PROFIT 450cr Ebidta level Vs Ebidta profit of 550 Cr YoY*
Topline should also miss by 7-8% Vs Bloomberg estimate
_Net Loss can be 250+ Crores unless mgtmnt does one off write back_
With Wind Power tariff hitting rock bottom, near term future of Suzlon should have losses only as entire Wind Power industry is indeed under severe stress( look at Inox wind)
Stock can fall to 13-14 levels
A GOOD SELL OPPORTUNITY
WEAK Q2:Coal India
Coal India is set to report weak financials for Q2.
As per Denofwealth estimates, *PAT can be lower/less than 450cr Vs Bloomberg estimate of 2031 Crores*
_There is no one-time write-off_
Sharp decline in PAT due to wage revision ( annual additional burden of 5600 Crores). *Higher wages is permanent, of recurring nature*. Hence even coming quarter may not see BIG rebound in profits.
Moreover, Q2 can witness miss of 800 Cr in
Topline also Vs Bloomberg estimate
Another Dampener: OFS in pipeline as Govt will offload 1O%. *SBI Capital Market and ICICI Securities recently met Department of Disinvestment, Retail investors may get 2% discount*
Finally, stock had been favourite of mutual funds etc due to high dividend in past. However with lower profits, dividend in current year can be lowered or co will have to dig into reserves for Decent dividend
Stock can see lower levels
Religare Enterprise: Update
Lenders had invoked pledge of promoter shares (25%). And had been selling aggressively in open market which was dragging down the share price.
As per our analysis, selling by lenders getting over. Stock has been accumulated by strong hands as major positive developments should unfold in coming weeks.
We are fairly confident that stock can be in 3 digits in few months
ADD
Denofwealth Exclusive:
*Mktcap 820cr: Expected Cash Inflow 1300cr*
RELIGARE ENTERPRISE LTD
REL has signed agreement with True North ( formerly Value India Fund) to sell its Health Insurance business (RHI) for 1300 Crores. When this agreement was done, stock was trading at 230-240.
As per our reliable sources, *IRDA approval may come as early as next week*
Current mktcap of REL is just 820 Cr whereas co will get 1300 Cr from True North.
Stock is lying low due to selling of pledged shared by banks. Huge volumes as stock being accumulated by knowledgeable sources
Stock should cross 70-75 in next 2 months or so
REL has several other assets. Again valuation of these assets MUCH? MORE than its mktcap
_Buying strongly recommended as stock can cross 100 in 3-6 months_
*PFC: Highlights*
PFC to announce Q2 result today during mkt hours:
1) Denofwealth estimates PAT to beat street estimates. In fact *PAT Q2 WILL be higher Vs CNBC estimate of 1770cr, HIGHER YoY as well QoQ*
2) LOAN BOOK: Can be 2.18 lac Crores Vs 1.85 lac Crores YoY
3) PFC on 15th July has already upgraded NPAs worth 11000 Crores.
4) ASSET QUALITY:Hence, Gnpa and Nnpa bound to decline
5) *BOOK VALUE 143*
6) _Cost to Income Ratio just 1.75%_
7) Business per Employee: Around 500cr
8) Profit per Employee: Around 15 crore
9) PUBLIC SECTOR accounts for 83-85% of Loan portfolio. Hence *80% of NPAs likely to be standard by FY19*
10) DIVIDEND YIELD: At cmp, tax free *Dividend yield for FY18 can be 7-8%*
BEST BUY IN NBFC SPACE
Can be 155 November end
*KOTAK on POWERGRID: BUY*
Powergrid’s earnings were better than our estimates- company reported revenues of Rs72.5bn (16% yoy, 1% qoq), EBITDA of Rs64.7bn (16% yoy, 4% qoq) and net income of Rs20.6bn (10% yoy, 4% qoq) against our estimates of Rs71.8bn, Rs62bn and Rs 19.8bn respectively. Powergrid reported a strong 10% yoy growth in net income at Rs20.6 bn.
Asset capitalization for the quarter remained strong at Rs100 bn (+50% yoy, +186% qoq) and capex of Rs56.5 bn (+7% yoy, -10% qoq), that likely took gross block to Rs1.9 tn and reduces CWIP to Rs433 bn. Investment approvals of Rs21.3 bn were given during the quarter.
Asset capitalisation is double of our expectation and more than 2.5X of last qtr (36bn) and gives strong visibility to earnings, which remains on strong growth track.
We currently have BUY rating on the stock
*Denofwealth: PowerGrid can be 450-500 in 2 years. World's largest power transmission utility co but Most Undervalued*
Denofwealth Exclusive:
*Mktcap 820cr: Expected Cash Inflow 1300cr*
RELIGARE ENTERPRISE LTD
REL has signed agreement with True North ( formerly Value India Fund) to sell its Health Insurance business (RHI) for 1300 Crores. When this agreement was done, stock was trading at 230-240.
As per our reliable sources, *IRDA approval may come as early as next week*
Current mktcap of REL is just 820 Cr whereas co will get 1300 Cr from True North.
Stock is lying low due to selling of pledged shared by banks. Huge volumes as stock being accumulated by knowledgeable sources
Stock should cross 70-75 in next 2 months or so
REL has several other assets. Again valuation of these assets MUCH? MORE than its mktcap
_Buying strongly recommended as stock can cross 100 in 3-6 months_
Q2: PowerGrid Corpn
POWERGRID is set to announce to announce BUMPER no's for Q2
As per Denofwealth est, POWERGRID can declare PAT of *2155 Cr Vs 1801 Cr , spurt of 19+% YoY*
With target to commission assets worth 35000 Cr in current year, co will report mind-blowing no's for FY19
Co is on course to commission *projects worth 1.24 lac Crores in 4 years*
PowerGrid has most bright future considering proposed integration of Wind energy 30000 MW, Solar 20000 MW and 7000 MW
Investors (not traders) can make huge gains either by taking delivery and roll over in FnO for few months
_TP 300+ in 12 months_
Important Update:
PANCHMAHAL STEEL LTD:
PSL has *SURPLUS* land. _Conservative market value of same is estimated to be MORE than co's mktcap_
Presently plant operating at *just 30% capacity*. With higher demand post GST, PSL targeting to enhance it's sales by 50% next year, PSL can report EPS of 12.
Recently got ISO18001 which will enable exports to Europe
*Most undervalued specialty steel stock TP 150* by 2018-end.
We expect *big corporate action* in 2018. As and when it happens, then PSL will be strongly rerated, will come on radar of brokerage houses and CAN BE 300+ in 2-3 years from now
Stock recommended for genuine investors with patience and not for traders
