Talking stock: Sell Deepak Nitrate above Rs 170

Expert: G Chokkalingam, MD, Equinomics Research & Advisory

I hold 2,500 shares of Deepak Nitrite at Rs 100, 500 shares of KNR Construction and 200 shares of Sulzer Electric at Rs 200. What is the future of these companies? Should I hold or sell?
If Deepak Nitrate rallies further above Rs 170, start selling it as its valuation is already stretched over 22 PE on current year earnings. Hold KNR Construction with a target price of around Rs 215. In short-term, upside is limited to around Rs 220; but if you are a longterm investor, then hold Sulzar Electirc for another 2 to 3 years as it has been consistently growing its top line.

I hold 2,500 shares of PNB Gilts at a cost of Rs 62 per share. Should I hold or sell? What is the expected target for 6 months. Can we expect rare cut from RBI?
Hold PNB Gilts as the dividend yield is 5 per cent and you may recover a substantial part of your cost within 6 months. If rainfall performance is good at least in the first two months of the monsoon period, then the RBI is likely to cut down the interest rate before September 2017.

I am holding 2,000 shares of MBECL purchased at Rs 101 each. The shares are currently trading at Rs 40. Please advise whether we should hold or book losses.
Please start booking losses in phases whenever it moves up 3 per cent to 5 per cent. Its performance and balance sheet are quite scary – on a consolidated basis, it has made operating loss of over Rs 400 crore. As of March 31, 2017, its debt at around Rs 2,800 crore exceeds its annual revenues (Rs 2,173 crore) and total receivables and inventories together at Rs 2,092 crore is also close to annual sales.

I have purchased 100 shares of Tata Coffee Rs 131 and 100 shares of Bharat Electronics at Rs 154. Should I hold it or sell it?
Hold Tata Coffee with a target price of around Rs 150/, valuing at 15 times expected earnings in the current year.Sell Bharat Electronics if it goes up even 5 per cent from the current level — on current year expected earnings, it trades at over 24 times.

I am holding 25,000 shares of Dhanlaxmi Bank at Rs 40, 4,000 shares of Nalco at Rs 73, 10,000 Suzlon at Rs 20.50. Should I add more if these stocks fall? I can hold for a year?
Dhanlaxmi Bank with a business size of just around Rs 18,000 crore with 7 per cent year-on-year de-growth in credit in FY2017 trades at 2.4x adjusted book value, which is substantially costlier than some of its peers in the old private sector banking segment. Its size doesn’t give any attraction for any large private banks as their incremental banking branches every year exceeds total number of branches set by Dhanlaxmi Bank historically. Hence, you may sell it if it improves 5 per cent to 10 per cent from the current level. Hold both NALCO and Suzlon with target prices of Rs 75/ and Rs 22, respectively. While NALCO is cash rich and provides good dividend yield, Suzlon has posted much better performance recently.

I have 300 Shree Renuka Sugars bought at Rs 58, 200 ILFS Transportation at Rs 169 ; 200 Jindal Steel at Rs 200; 200 Jaiprakash Associates at Rs 68; 500 Adani Power at Rs 52; All bought two years back. I am also holding for a long time 224 Amal and 100 Superhouse. What are the prospects for these shares? Is it worth holding them ?
Even at the peak of bull run in sugar business, Shree Renuka Sugars couldn’t make profits at net level. So it could face serious constraints once sugar prices start correcting. Hence, sell it. Hold both ILFS Transportation and JSPL as nearly 10 per cent upside is possible in both of them. Sell both Jaiprakash Associates and Adani Power as power stocks will get downgraded in the near future as prices of power and energy sources are expected to fall further significantly in the country. Performance is deteriorating for Superhouse over the last three years – so sell this smallcap if there is any tactical upside in this market.

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