HCL Info - What Next ??

The stock has risen more than 60% during the last 3 months.  On Dec 11 the scrip was hovering around Rs.21 levels and the run up to Rs.36 was pretty fast and furious.  While the Nifty rose just 3.23%   during last 3 months, BSE Sensex as well as BSE 50 rose 3.3%    during the same period, this scrip vaulted giving astounding returns to the investors !

Company Back ground :

HCL Infosystems Limited is an information and communication technology (ICT) company. It is engaged in developing and implementing ICT solutions for diverse market segments. It operates in three segments: computer systems and other related products and services, telecommunication and office automation, and Internet and related services. 

The computer systems and other related products and services consists of manufacturing of computer hardware systems, providing comprehensive systems integration, roll out and infrastructure management solutions. This segment also provides information technology (IT) services, including maintenance, facility management and ICT training. On November 10, 2011, it sold its equity stake in HCL Infinet Ltd. Consequently, HCL Infinet Ltd has ceased to be subsidiary of the Company. In August 2012, the Company, through its subsidiary HCL Insys Pte. Ltd., bought the remaining 40% interest held by the NTS Group in HCL Infosystems MEA FZCo.

What Next ?

With the market entering bullish zone all the small and mid cap shares are seeing re-rating and scaling new highs each passing day.  HCL Info may stay subdued in the days to come, taking a pause to jump  higher and higher.  For the time being our Team suggests to adopt a Sell on Rise SOR strategy for playing safe in this volatile counter.

Smart Investor

Equity Research Division

Ravina Consulting
No.24 Pattamal Plaza
3rd Cross Kamannahalli
BANGALORE 560048

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Prestige Estates - Sell

Dear Smart Investors,

Company Background :
Prestige Estates Projects Limited is a real estate development company. The Company’s business segments include Residential, Commercial, Retail, Hospitality and Services. The Company’s residential developments include Prestige Golfshire, Prestige Neptune’s Courtyard, Prestige Oasis, Prestige Bella Vista, Prestige Westholme, Prestige Royal Woods, Prestige White Meadows, Prestige Tranquility and Prestige Ferns Residency. Its commercial buildings include Prestige Dynasty, Prestige Nebula, Prestige Shantiniketan Commercial Precinct, Prestige Atrium, Prestige Meridian, Prestige Towers and Prestige Pegasus. Its retail buildings include UB City, the Forum, the Forum Vijaya Mal and the Forum Value Mall. Its hospitality building include Angsana Oasis Spa & Resort, Oakwood Premier Prestige Bangalore serviced residences and The 24 Tech Hotel. Under the labels of Morph Design Co and Prestige Interiors, the Company offers customized interior design solutions and fit out services.

Q3 Results & forecast :
The debit pile of this company is huge and Management is well aware of this.  Efforts to bring down the debt by QIP preferential offers are in the offing.  25% vs. our estimate of 26.5% (down 506bps YoY) led to EBITDA of Rs 1.2bn and PAT of Rs 0.8bn, ~10% below estimates.  The  lower  margins  were  attributable  to majority  of  revenues  being  recognized  from   mid- income projects such as Tranquility (Rs 1.5bn) and Bella Vista (Rs 1.1bn) during the quarter. Other expenses increased 68% QoQ to Rs 251mn  on  account of re- classification of agent commissions  underoverheads vs. project-level expenses (material expenses).

Technical view : 
Although PEPL continues to have a strong launch pipeline, PEPL continues  to invest in augmenting its land bank through a mix of JDAs and outright acquisitions and is incurring annual capex of Rs 5-6bn on annuity assets. Hence, the key monitorable in our view is the company’s ability to keep debt levels in check in FY14-15E (PEPL’s consolidated net debt increased by Rs 4.0bn in 1HFY14 to Rs 21.9bn). Maintain Sell around Rs.165 stop loss of 170 with TP of Rs 150 /share 


Traders Delight :
The scrip provides enough trading opportunities for the risky traders.  Any fall below Rs.140 should be considered as an opportunity to buy and hold the stock for a target price of Rs.170 

Fore more Trading Ideas get in touch with us.  Avail our premium services to reap huge profits from volatile markets.

Smart Investor
Ravina Consulting
No.24 Pattamal Plaza
3rd Cross Kamannahalli
BANGALORE 560048

For Stock Advise + Ideas
mail to intellinvestor@gmail.com
Talk / SMS 08105737966

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Telecom Sector - Avoid

With the conclusion of Spectrum auction, the GOI has garnered good funds, at the cost of the Telcos and its end users !!

The trend for the last month or so in the telecom sector scrips in the BSE and NSE - down.  It is unlikely to reverse this trend and as we see lower tops and lower bottoms, we expect the slide to continue for the upcoming year. 

Idea Cellular had a recent low of Rs.127 and is likely to halt around Rs.100, failing which it can go all the way upto Rs.75-80 levels which is a compelling buy for long term portfolio investors.

RCom appears to be weakest in the Telco pack its fall is more pronounced when compared to other 2 biggies Idea and Bharti.  Avoid the scrip as it is likely to breach recent low of 110.  The fall could be steep and in our estimates it could hit Rs.75 sooner or later.

Bharti - better placed than the other 2 companies.  Acquisition of Loop Telecom would entail an outflow of Rs.700 crores which will put more pressure on cash flows and could bump up the interest costs for borrowings to fund spectrum fee as well as taking over of loop.  Staring near the 52W low this stock is poised to slide sharply in the coming months.

Smart Investor

Equity Research Division

Ravina Consulting
No.24 Pattamal Plaza
3rd Cross Kamannahalli
BANGALORE 560048

For Stock Advise + Ideas
mail to intellinvestor@gmail.com
Talk / SMS 08105737966

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Sell Bharath Forge

We recommend a sell in the stock of Bharat Forge from a short-term perspective. It is apparent from the charts of the stock that following a medium-term downtrend from its May 2012 peak of Rs 347, the stock took support at around Rs 275 last month. This support level also coincides with the 61.8 per cent fibonacci retracement level of the stock's prior up move. After testing the support at Rs 275, the stock bounced up. 

The stock's reversal is backed by a positive divergence in daily relative strength index and daily price rate of change indicator. Moreover, the stock breached its immediate resistance as well as 21-day moving average at around Rs 290 by gaining almost 3 per cent on Saturday. Both daily and weekly relative strength indices are moving higher in the neutral region towards the bullish zone. The daily price rate of change indicator has entered the negative territory implying buying interest. The daily moving average convergence divergence indicator has signalled a sell. 

We are bearish on the stock from a short-term perspective. We expect the stock’s down move to continue and reach our price target of Rs 250 or Rs 225 in the November month. Traders can consider buying the stock around 250 while maintaining stop-loss at Rs 230 levels.

Bought to you by

Smart Investor

Equity Research Division 

Ravina Consulting

Pattamal Plaza

3rd Cross Kamanahalli

BANGALORE 560084

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