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classyfoxdestiny · 3 years

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ASK AJIT: Are these stocks good to hold for one year?

‘Should I hold , exit or accumulate in 1-3 months short term and 1+ year long term?’

Ajit Mishra, vice president, Research, Religare Broking, answers your queries:

Chidambarasamy Manickam: Can you let me know if I should hold or exit the below scripts please?

Ajit Mishra:

Company No of shares Price Recommendation HCL Info Systems 1,905 Rs 18.50 Exit Indian Railway Finance Corporation 575 Rs 26 Hold ONGC 85 Rs 145 Hold Sun TV 255 Rs 566 Exit South Indian Bank Limited 3,360 Rs 18.50 Prefer ICICI Bank TV18 Broadcast Limited 1,575 Rs 36 Exit Yes Bank 225 Rs 55 Exit if not under lock-in

Sriparna Mondal: I have the following stocks for the past 4-5 years. Other than the ETF, almost all are down 50 per cent from the purchase price. Does it make sense to hold the stocks any longer or how should I exit and what stocks I can buy in lieu? Please advise.

Ajit Mishra:

Company No of shares Price Recommendation BSE 90 Rs 1,013 Hold ICICI ETF 1,152 Rs 113 NA (Which ETF?) JK Tyre 250 Rs 173 Hold SML Isuzu 50 Rs 1,006 Prefer Ashok Leyland Tata Motors 100 @442 Prefer Ashok Leyland

Deepti Ambadipudi: Bought 100 shares of Bambino Agrotech at Rs 211. Should I hold, exit or add? Please guide me.

Ajit Mishra: Exit

Srinu Kodi: I have been seeing your opinion on many people’s portfolios and I am thankful for your unbiased review.

Recently, I have purchased these stocks with some conviction, wrt long term like 2-3 years as of now or more. I would like to have your view once if possible.

I am not in panic mode looking at market conditions as of now as I know these are quality stocks I have invested in.

Note: I purchased Gland Pharma for the short term recently as I see some potential till the time Covid is there, as it is doing vaccine manufacturing for Sputnik. I am thinking about profits for Gland Pharma.

Could you please tell me if I can hold this or sell after it reaches Rs 2,800 level? Please tell me if I can hold this for the long term.

Ajit Mishra: Yes, one can hold for long term

Company No of shares Price Recommendation AUBANK 20 Rs 1,008.40 Hold BAJFINANCE 3 Rs 4,411.30 Hold DFM 56 Rs 333.86 Prefer Britannia DIXON 14 Rs 3,643.18 Hold DMART 9 Rs 2,854.99 Hold GLAND 39 Rs 2,542.81 Hold HDFCBANK 15 Rs 1,399.54 Hold ICICIGI 29 Rs 1,354.63 Hold INDIAMART 5 Rs 7,873.97 Hold JUBLFOOD 7 Rs 2,757.75 Hold MCDOWELL-N 51 Rs 513.71 Hold MUTHOOTFIN EVENT 17 Rs 1,129.30 Hold NAUKRI 10 Rs 4,622.06 Hold RELIANCE 12 Rs 1,911.23 Hold SYNGENE 70 Rs 602.38 Hold

Sukanta Mandal: Need your suggestion on these — whether to hold, exit or accumulate — in 1-3 months short term and 1+ year long term. Awaiting your thoughts and views.

Ajit Mishra:

Company Recommendation Ashok Leyland Hold JK Tyre Hold Bank of Baroda Prefer SBI HDFC bank Hold Shree Digvijay Cement Prefer Ultratech/Ambuja Coal India Exit Gujarat Mineral Development Co Hold Indian Railway Catering and Tourism Corporation Hold Jaiprakash Power Exit NTPC Hold NHPC Hold HFCL Ltd Hold United Spirits Hold EIH Exit JSW Energy Ltd Hold

Rohith Adiga: I am a starter in the stock market and trading from the last six months. Below is the list of stocks I have purchased. Advise me about buying additional stock, or holding or selling.

I am also looking for a short term plan of 6-10 months starting from June. Please suggest from my existing stock list or a new stock for short term gain. Also would like to know when to purchase the additional stock, when it’s growing or when it dips.

For example, I purchased 50 shares of Tata Motors @ Rs 124, then added another 25 when it went to @ Rs 185 and again purchased 10 @ Rs 290. Now my average pricing is @ Rs 244.

Ajit Mishra:

Company No of shares Price Recommendation HAL 5 Rs 1,100.96 Hold BIOCON 1 Rs 459 Hold ZEEL 5 Rs 224.4 Exit ITC 5 Rs 210.45 Hold HDFCBANK 1 Rs 1,377.60 Hold and buy on dips L&TFH 15 Rs 84.62 Hold ASIANPAINT 3 Rs 2,039.53 Hold HCLTECH 6 Rs 758.96 Hold AXISBANK 6 Rs 547.89 Hold RELIANCE 5 Rs 1,720.75 Hold TATAMOTORS 25 Rs 244.71 Hold for 2-3 years at least KOTAKBANK 5 Rs 1,369.65 Hold INFY 10 Rs 972.27 Hold TCS 5 Rs 2,318.60 Hold BAJFINANCE 2 Rs 3,636.00 Hold

Jasminkumar Maheshbhai Gajjar: I have been following your posts on a regular basis. I have invested for long/mid-term. Request you to advise for the below stocks held by me.

Ajit Mishra:

Company No of shares Price View Recommendation Alok Industries 350 Rs 22.78 Mid-term Exit Bandhan Bank 50 Rs 348.43 Long-term Hold Bharat Elec Ltd 75 Rs 134.71 Mid-term Hold Biocon 30 Rs 410.81 Mid-term Hold Burger King 50 Rs 132.38 Long-term Hold Cyient 15 Rs 690.22 Mid-term Hold Firstsource Sol 80 Rs 116.64 Mid-term Hold India Cements 60 Rs 168.43 Mid-term Hold Inox Leisure 30 Rs 332.34 Mid-term Hold J K Tyre 50 Rs 118.32 Long-term Hold Laurus Labs 20 Rs 468.02 Mid-term Hold Manappuram 50 Rs 159.96 Mid-term Hold Motherson sumi 40 Rs 236.75 Mid-term Hold NMDC 50 Rs 157.46 Long-term Hold Spicejet 130 Rs 86.35 Long-term Hold Sun Pharma Adv 50 Rs 183.02 Mid-term Hold Sundaram Fin ltd 6 Rs 2,528.45 Long-term Hold Tata Chemicals 15 Rs 690.82 Long-term Hold Tata Power 75 Rs 92.85 Long-term Hold Tata Steel BSL 100 Rs 96.18 Long-term Hold Time Technopl 75 Rs 84.34 Mid-term Exit Zen Tech 100 Rs 86.60 Long-term Exit

Rajkumar Dhyani: Namaskar. I’m a small investor who looks for mid and small-cap scrips to invest in. I can invest Rs 5-10K monthly in stocks. I’m looking for a long-term vision, probably 1-2 years vision. Can you please suggest few important scrips which match my requirement?

Ajit Mishra: One can invest in Finolex Industries, Ashok Leyland, INOX Leisure, Exide Industries, Kansai Nerolac.

Marshall: Please review my portfolio, if I can hold, accumulate or exit from these stocks. I’m not sure of the period if I have to hold these stocks. Please advise.

Ajit Mishra:

Company No of shares Price Recommendation Balaji Amines 20 10 @ Rs 824 and 10 @ Rs 2,500 Hold Laurus Labs 100 50 @ Rs 400 and 50 @ Rs 490 Hold Sun Pharma 10 Rs 60 Hold Wock Pharma 10 Rs 590 Hold Eicher Motors 10 Rs 2,520 Hold Titan 10 5 @ Rs 1,126 and 5 @ Rs 1450 Hold Tech Mahindra 10 Rs 1,000 Hold TataSTLBSL 50 Rs 100 Hold Poly Cab 10 Rs 1,480 Hold SUN TV 10 Rs 520 Exit Adani Power 100 Rs 100 Exit Larsen and Turbo 10 Rs 1,450 Hold

Rane Tushar: I hold following stocks. Which should I hold and which should I exit?

Ajit Mishra:

Company No of shares Recommendation IOB 60 Exit URJA 5,000 Exit TTML 700 Hold for 2-3 years DHFL 203 Exit GMBREW 85 Hold GRAPHITE 96 Hold NOCIL 942 Hold PRAKASH 965 Exit

Sunil: I want to invest Rs 2 lakhs rupees for long term. Please suggest and guide me about some good equity shares.

Ajit Mishra: Bharti Airtel, ICICI Bank, Nippon AMC, Britannia Industries, Maruti Suzuki

GOPAL CHAKRABORTY: I am holding the following mentioned stocks for the long term. Kindly advise.

Ajit Mishra:

Company No of shares Price Recommendation Tata Steel 220 Rs 470 Hold Suzlon Energy 2,300 Rs 5.70 Exit Tilaknagar Industries 600 Rs 72 Exit Clariant Chemicals 59 Rs 598 Hold NCC Ltd 213 Rs 67 Exit Suven Lifescience 175 Rs 62 Hold HCC Ltd. 180 Rs 57 Exit Andhra cements 1,200 Rs 23 Prefer Ultratech Educomp 2,200 Rs 190 Exit Yes Bank 2,500 Rs 17.50 Exit Gufic Bioscience 135 Rs 167 Hold

Shyam Kannacham Veettil: I would like to have hold/exit strategy for following stocks. I can hold long term

Ajit Mishra:

Stock Unit holding Average price Recommendation Bandhan Bank 30 Rs 303 Hold Federal Bank 500 Rs 57 Hold HDFC AMC 60 Rs 1,733 Hold HDFC Standard Life 260 Rs 300 Hold SBI Card 30 Rs 770 Hold Yes bank 1,000 Rs 116 Exit if not under lock-in. Dixon Tchnology 100 Rs 917 Hold Havells 600 Rs 302 Hold V guard 550 Rs 185 Hold L&T 105 Rs 1,117 Hold Tata consumer products 160 Rs 367 Hold Varun Beverages 380 Rs 435 Hold Jubilant food 25 Rs 1,846 Hold First source solutions 1,000 Rs 55 Hold Tata elxi 30 Rs 851 Hold IRCTC 20 Rs 1,309 Hold Berger Paints 90 Rs 560 Hold Petronet LNG 925 Rs 115 Hold Adani Port 100 Rs 230 Hold

Rajesh Nair: I have 50 shares of Dixon Technologies at an average price of Rs 3,742. If I am looking at holding these for a horizon of three years, should I hold/accumulate or exit these ?

Ajit Mishra: Hold the stock. Accumulate on dips only.

Nitesh Shah: I have these shares. Can you advise if I can hold, sell or buy more?

Ajit Mishra:

Stock Average of investment price Recommendation Aarvee Denim Rs 19.4 Exit AB Capital Rs 59.9 Exit Aditya Birla F Rs 136 Prefer Titan AFL Rs 13.7 Exit Aishwarya Tech Rs 34.3 Exit Albert David Rs 464 Exit Alok Industries Rs 60.9 Exit Amara Raja Batteries Rs 873 Hold Arvind Rs 55.8 Exit Arvind Smart Rs 91 Exit Ashtavinayak Rs 6 Exit Aster DM Health Rs 174 Hold Avenue Supermarts Rs 299 Hold Bajaj Consumer Rs 316 Hold Bandhan Bank Rs 340 Hold Bank of Baroda Rs 46.5 Exit BEML Rs 762 Exit Berger Paints Rs 160 Hold Bharti Airtel Rs 537 Hold BHEL Rs 37.5 Exit Binani Cement Rs 85 Exit Canara Bank Rs 168 Exit Cigniti Tech Rs 430 Exit Cipla Rs 474 Hold Coal India Rs 143 Exit Cosmo Films Rs 633 Exit CreditAccess Grameen Rs 702 Hold Cummins Rs 732 Hold Dalmia Bharat Rs 789 Hold Deepak Nitrite Rs 668 Hold Digjam — BSE Rs 26.4 Exit Diligent Media Re 1 Exit Dishman Carbogen Rs 161 Hold Divis Labs Rs 2,484 Hold D-Link India Rs 113 Exit Dollar Industries Rs 450 Hold Endurance Technologies Rs 1,444 Hold Eveready Industries Rs 374 Hold Fortis Health Rs 108 Hold Ganesha Ecosphere Rs 18.7 Exit General Insurance Rs 456 Prefer ICICI Lombard Glenmark Rs 515 Hold Godawari Power Rs 201 Exit Granules India Rs 343 Hold Grasim Rs 667 Hold GTL Infra

Rs 80.5

Exit GV Films Rs 7.75 Exit GVK Power Rs 35.1 Exit HBL Power Rs 57.7 Exit HCL Tech Rs 348 Hold HDFC Rs 1,217 Hold HDFC Life Rs 688 Hold HFCL Rs 27.9 Hold Hindustan Construction Rs 43 Exit Hindustan Zinc Rs 218 Hold HUDCO Rs 82.9 Hold ICICI Lombard Rs 661 Hold ICICI Prudential Rs 402 Hold IDFC First Bank Rs 57.8 Exit IFCI Rs 18 Exit IKF Tech – BSE Rs 6.93 Exit Indian Acrylics Rs 10 Exit Indo Count Rs 85.5 Exit Indostar Capita Rs 572 Hold Infomedia Press Rs 24.4 Exit Infosys Rs 555 Hold Interworld Rs 3.89 Exit IOB Rs 42.4 Exit IOC Rs 125 Hold Ion Exchange Rs 677 Hold IRFC Rs 26 Hold ITC Rs 216 Hold Jenson Nicholson Rs 16.2 Exit Jindal SAW Rs 80.8 Hold JSW Steel Rs 228 Hold Kajaria Ceramics Rs 422 Hold L&T Finance Rs 82.8 Hold Larsen Rs 837 Hold LIC Housing Finance Rs 353 Hold M&M Financial Rs 165 Hold Maharashtra Seamless Rs 500 Exit Marathon Realty Rs 67.6 Exit Maruti Suzuki Rs 6,632 Hold Max Healthcare Rs 78.9 Hold Max India Rs 391 Hold Mirc Electronic Rs 51.1 Exit MOIL Rs 156 Hold Munjal Showa Rs 61.4 Exit Nahar Poly Film Rs 48.1 Exit National Steel Rs 27 Exit Network 18 Rs 33 Exit New India Assurance Rs 400 Prefer HDFC Life Newgen Software Rs 245 Hold NHPC Rs 31.5 Hold Nippon ETF Gold Rs 35.5 Hold NOCIL Rs 157 Hold NTPC Rs 146 Hold ONGC Rs 139 Hold Paramount Communications Rs 28 Exit Pennar Industries Rs 23.3 Exit Pidilite Industries Rs 1,773 Hold Power Grid Corporation Rs 145 Hold Precision Electricals Rs 14.7 Exit Precision Wires Rs 80 Exit Raj Oil Mills Rs 10 Exit Rajapalayam Rs 348 Hold RBL Bank Rs 526 Hold Reliance Rs 1,482 Hold Reliance Communications Rs 2.55 Exit Reliance Power Rs 232 Exit Rico Auto Rs 38 Exit Saregama India Rs 767 Exit SBI Rs 270 Hold SBI Life Insurance Rs 700 Hold SGN Cable Rs 0.42 Exit Siti Networks Rs 32.5 Exit South Indian Bank Rs 25.8 Exit Sumeet Industries Rs 14.2 Exit Sun Pharma Rs 893 Hold TAEL Rs 0.24 Exit Talbros Auto Rs 307 Exit TCS Rs 198 Hold Tech Mahindra Rs 574 Hold Terruzzi Fercalx Rs 50.7 Exit Tirupati Foam Rs 10 Exit TV18 Broadcast Rs 48.1 Hold Unitech Rs 1.95 Exit Usha Martin Rs 1.25 Exit Usha Martin Edu Rs 1.25 Exit UTI AMC Rs 554 Prefer HDFC AMC or Nippon AMC Varroc Engineer Rs 421 Hold Vascon Engineer Rs 46.7 Exit Visa Steel Rs 53.5 Exit VRL Logistics Rs 432 Hold Wipro Rs 254 Hold Zee Media Rs 41.1 Exit

Please mail your questions to [email protected] with the subject line ‘Ask Ajit’, along with your name, and Mr Ajit Mishra will offer his unbiased views.

Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.

Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.

Feature Presentation: Ashish Narsale/ Rediff.com

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swedna · 4 years

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The Indian equity markets climbed off the opening highs on Tuesday although private banks kept the benchmark indices in the green.

The S&P BSE Sensex was up 87 points 31,830 levels after earlier rising as much as 350 points. The Nifty50 index hovered around 9,300 zone. Amond individual stocks, IndusInd Bank surged 10 per cent post the March quarter results. Besides, Axis Bank and HDFC also gained 3 per cent each. Reliance Industries quickly pared the initial gains to slip 1 per cent.

All the sectoral indices, except Nifty Pharma index, gained, led by Nifty Private index, up over 2 per cent.

In the broader market, the S&P BSE MidCap index was up 0.7 per cent and the SmallCap index gained nearly 1 per cent.

RESULTS TODAY Axis Bank is scheduled to announce its March quarter results today. According to analysts, double digit loan growth and high credit cost is likely to cushion against the likely increase in stressed assets due to the Covid-19 outbreak although this could impact the bank's net profit for the quarter. READ MORE CATCH ALL THE LIVE UPDATES Auto Refresh 12:58 PM NEWS ALERT | TVS Motor approves issuing NCDs of up to Rs 500 cr on private placement basis: BSE filing

12:54 PM IEX plans to acquire 15% stake in Reliance ADAG platform ICEX The sources said talks between the two are in an advanced stage but the closing of the deal could take some time because of regulatory hurdles. The IEX is not yet recognised as a stock exchange and, hence under the current law, it can only pick a 5 per cent stake in the ICEX. READ MORE

12:47 PM BROKERAGE VIEW:: Edelweiss Securities on HDFC Life HDFC Life reported mere 1% YoY growth in NBP in Q4FY20. Market share, however, improved 170bps to 14.2% in FY20 (individual WRP basis) as it outperformed the broader industry; under growing pressure on ULIP segment due to national lockdown and fairly weak equity sentiments. Apart from marginal shift from non-par to par and annuity products, business mix remained fairly stable QoQ. The company reported VNB margin of 25.9%, up 130bps YoY, but down 70bps QoQ. Persistency ratios remained stable with slight improvement in a few buckets QoQ. However, maintaining these ratios will pose a significant challenge, especially in the ULIP segment, with expected heightening capital market apathy amongst customers. The company’s disclosure of the Milliman report on non-par savings products builds incremental confidence on interest rate risks. Our target multiple of 3.5x FY22E P/EV continues to include a 10% premium for the inherent value creation opportunities not captured by HDFC Life’s current core. Maintain ‘HOLD’ with TP of Rs 470.

12:44 PM BROKERAGE VIEW:: Edelweiss Securities on CRISIL While ratings growth is strong and research turned around, we await visibility of new issuances in the domestic bond market and trend in the global research pool. Valuations at 29.4x CY21E remain rich. Maintain ‘REDUCE’ with revised TP of Rs 1,102 based on DCF (6% risk free rate and risk premium rate each) (Rs 1,138 earlier)

12:43 PM EXPERT COMMENT | Kunal Shah, Analyst, YES Securities on Ambuja Cements Although volumes were in-line with expectations, sturdy pricing in North and Gujarat markets combined with lower than expected variable costs led to a beat on EBITDA. For future outlook: Concentrated exposure in price favorable North and Gujarat markets coupled with cash pile on balance sheet (~Rs 46 bn) and reasonable valuations will garner investor interest in current scenario. 12:33 PM Chemical shares in focus; Aarti Industries, Vinati Organics surge over 9% Shares of chemicals companies, mainly specialty and commodity, were in focus in an otherwise range-bound market on Tuesday on hopes of strong earnings for March quarter (Q4FY20) as brokerages expect the disruptions caused by Covid-19 to have been limited to the last few days of the quarter. After securing the supply chain, logistics and mandatory compliance requirements, the chemicals companies have resumed operations at their manufacturing units since the first half of April. READ MORE

12:26 PM Franklin fiasco: Gilt funds emerge as star in troubled debt MF pack Amid the turmoil in the debt mutual fund space, the 10-year government bonds (gilt) segment has emerged as the ace in the pack. Sharper-than-expected rate cuts and liquidity measures by the RBI have helped the category deliver best returns in over a decade. READ MORE

12:14 PM RIL to consider rights issue, announce Q4 nos on April 30. What to expect? "RIL may be worried about the time of the completion of the two mega-deals that it has announced in the last 7-8 months (Saudi Aramco deal and Facebook deal), and their debt-reduction plan could be delayed; hence, rights issue could be an ideal option for them to fund their capex and cut debt given that the hitherto cash cow of Oil & Gas and Petrochem businesses may face tough times for a few months," opines Deepak Jasani, Head of Research at HDFC securities. READ MORE

12:07 PM NEWS ALERT | FMCG cos in talks with JioMart for 3-4 mths for distribution tie-up: sources to CNBC TV18 >> Smaller FMCG cos with weaker distribution may benefit by JioMart Model while larger FMCG cos with strong distribution may be selective w.r.t brand & sku listing on JioMart

>> FMCG cos loking at innovative cost structure, select portfilio to list via JioMart

>> FMCG cos to take decision on product scope depending on demand

>> FMCG cos want to keep all distribution channels engaged

>> FMCG cos expect decline in revenue from modern trade if there is large scale digitisation of Kiranas

11:58 AM BROKERAGE VIEW:: Emkay Global Fin Services on IndusInd Bank TP: Rs 550 | Rating: BUY | Upside: 37.5 % Despite higher PPoP led by strong NIMs, IIB reported lower PAT at Rs3bn due to higher Covid-19-related provisions (Rs2.8bn) and NPA provisions in the quest to improve PCR >60%. It also made initial telecom provision of Rs0.75bn (8% on FB Voda-Idea exposure) After a sharp 7% qoq run-down in Q4, the bank has accelerated deposit mobilization (Rs60bn till date). IIB will unveil PC5 (2020-25) business strategy in Q1 with the focus on retailization of credit/deposits and earnings sustainability by building a higher PCR buffer. As per the stress testing, the bank guides for 80bps jump in GNPA ratio and LLP to 175bps (50bps over BAU LLP of 125bps in FY20) due to Covid-19. We prefer to build higher LLP at 250bps/160bps in FY21/22E as the extended lockdown may lead to higher impairments in retail/corporate book and thus, we expect lower RoAs at 1.4-1.6% over FY21/22E. The bank’s near-term performance will track its ability to manage Covid-19-led disruptions on its growth/asset quality. Maintain Buy, with a revised TP of Rs550 (implying 0.9x FY22 ABV) mainly due to its lower valuations and healthy capital position.

#Sensex

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swedna · 6 years

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Acquisition of Binani Cement, subject to approval, is poised to make UltraTech Cement the market leader in the north Indian cement market overtaking the current market leader Shree Cement.

According to sector analysts, Shree Cement’s current market share in the country’s northern zone is around 22 per cent while UltraTech’s share is 19 per cent. In case of a successful takeover, UltraTech’s market share will climb higher to touch around 26 per cent. In turn, it will provide the Aditya Birla Group company greater power on pricing, which in turn, is expected to boost its margins.

“It makes sense for UltraTech to pursue its aggressiveness with Binani Cement as a successful takeover will make them the market leader and help in further consolidation in the cement space”, R R Ravi, sector analyst with Centrum Broking, said.

Nevertheless, in Rajasthan, Shree Cement will continue to lead the market with 18 million tonnes per annum (mtpa) capacity while a successful takeover will boost UltraTech’s capacity to just over 14 mtpa. The latter’s total installed capacity in the northern region is 17.6 mtpa.

ALSO READ: Cement companies under pressure; UltraTech Cement, Ambuja hit 52-week low

Furthermore, according to an analyst with Motilal Oswal, the takeover will also provide UltraTech the necessary means to double the current 6.25 mtpa of Binani Cement. This company, which is currently undergoing insolvency proceedings in the Kolkata bench of NCLT, has “considerable limestone reserves”, which can help the acquirer scale up operations considerably.

“Given the huge limestone reserves of Binani Cement, which will be transferred to the successful acquirer, there is a good chance of doubling the installed capacity”, an analyst with Motilal Oswal said.

This limestone reserve can also be routed to feed UltraTech’s current plants in Rajasthan. However, it has limestone reserves that can feed its existing capacity for over 35 years.

ALSO READ: UltraTech Cement, NTPC among 19 stocks in BSE500 that hit their 52-week low

Sector analysts estimate that the acquisition cost of Binani’s assets, leaving aside its China and UAE plants, will be around $110-130 a tonne.

However, in case UltraTech is eventually able to acquire Binani Cement, its margins from the return on capial, is likely to hover around six per cent for the Binani plants as against its predominant margins of 10-11 per cent. On the contrary, Shree Cement, backed by greenfield and brownfield projects is estimated to register a 20 per cent margin on return on capital.

“However, it will be on a short-term and eventually margins on the capital employed may rise. Even then, it makes sense to acquire Binani Cement as it will make them the market leader”, the analyst with Motilal Oswal said.

ALSO READ: Mapping insolvency: UltraTech may shell out over Rs 79 bn for Binani Cement

UltraTech, however, did not respond to questions put forward.

According to analysts who track the cement sector, Binani Cement acquisition is strategic both for UltraTech as well as Dalmia Bharat.

In an earlier instance, while talking to Business Standard, Dalmia Bharat CEO Mahendra Singhi said that acquisition of Binani plants will give it exposure to the entire north Indian market, including Gujarat, and will help the company emerge as a pan-India cement manufacturer.

ALSO READ: Insolvency: UltraTech Cement to bear cost of Binani's legal proceedings

Currently, its consolidated production capacity stands at 27 mtpa most of which is centred around east and south India. In contrast, UltraTech’s consolidated capacity currently stands at 92.5 mtpa that will increase to 105.9 mtpa once it completes the takeover of 13.4 mtpa cement business of Century Textiles and Industries.

Binani Cement has two kilns and four grinding mills at Binanigram, Pindwara, Sirohi and Sikar in Rajasthan.

Key points

UltraTech currently has 19 per cent market share with Shree Cement commanding 22 per cent of the market Binani Cement acquisition will take UltraTech’s market share to 26 per cent and make it the market leader UltraTech has scope to double Binani Cement plant's capacity backed by huge limestone reserves

#Binani Cement

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