Titan Industries Trading Strong in Today's Trading Session on Stock Exchange

We had recommended Titan Industries in our post on 15th January, 2013 for a target of Rs. 286. Unfortunately it touched a low of Rs. 264.71 in last week trading session. Keeping in mind company's strength many investors kept holding the stock. The stock is in focus today ahead of its quarterly results which will be announced today. The company is likely to report a net profit of Rs. 205 crore, estimated to be 25 percent up from last quarter. Titan Industries is trading at Rs. 276 up nearly 2 percent on Bombay Stock Exchange. So hold on for some more time and wait for the action. We are sure that it will cross 280 in next few sessions because of its good results.

Note : TITAN INDUSTRIES is a Shariah Compliant stock also and hence those investors who are following shariah guidelines can also invest in this stock. Its Ethical to invest in this particular stock.

Will the market hit 23000 in 2013 ?

Even at 20,000 the benchmark BSE Sensex is nowhere close to its historical peak valuations of around 22 times earnings. The last time it came close to these valuations was in 2007 and 2010. But this time around a considerable rise in earnings growth shows an upside in valuations even at Sensex 20,000 levels. No wonder, global fund managers see 2013 being a fabulous year for emerging markets like India. But there cannot be anything riskier than considering these opinions to be all encompassing. Learn 10 steps to Profitable Trading in Stock Market for US Investors

The Sensex' rise up to near 20,000 levels has been driven by just a handful of sectors. Prime amongst them being realty, FMCG, consumer durables, auto and healthcare. Now, one can argue that evergreen sectors like FMCG and healthcare tend to find favour when the going gets tough for the economy. But the earnings of realty and auto sectors are not just cyclical. They even react sharply to fall in economic buoyancy. The realty sector in particular also carries the burden of high leverage. This can be poison at a time when cash flows get strained. Anchoring to the possibility of lower interest rates fuelling demand can only take realty and auto sector valuations so far. In fact at price to earning (P/E) valuations in excess of 20 times, we believe investment in each of these sectors warrant caution. Nevertheless a careful look at long term fundamentals could help investors hunt bargains even in these sectors. 

 
 Note: The PE multiple for BSE Healthcare Index is steep due to the extraordinary losses incurred by Dr Reddy's and Sun Pharma which impacted the sector's trailing 12-month earnings.

 Whether or not 2013 turns out to be a fantastic year for Indian stock markets, valuations will eventually run the course of reversal to the mean. Hence use 'margin of safety' to guide you in both directions. Not just in selecting 'what to buy' but also judging 'when to sell'. 

Source Google Finance.

 The market has reached where it was 2 years ago, this suggests we are on an upswing. Although anything could happen lets be optimistic about it.

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Titan Industries LONG TERM point of view : Dont Buy, Counterview.

I would suggest from desisting in buying this stock that is greatly over valued when compared with industry standards. Reasons for this :

1. Watches are not viewed as an important piece of everyday product. I mean how manyof us actually wear watches?
2. Titan has achieved an Operating profit margin increase of just 0.05 %, and thats pathetic.
3. While other players like HMT ,TIMEX are struggling with HMT in loss and Timex just scrapping at .16 rupee per share how is Titan achieving 6.7 per share? Aggressive advertising which is further reducing its operating margins.

Sales are growing but are not sustainable in a market where Chinese players provide the same quality at half the price.

Then the question, why are big research houses advising otherwise? Because they think a increase in stake to 8% by Rakesh Jhunjhunwala is a good sign. No it isnt. They are big players, following them could land small investors in trouble.

Note : The view expressed here by our Equity Researcher Mr. A. J. is for LONG TERM point of view. Recommendation to buy this stock given in the previous post was for short term as a Technical call and not a fundamental call. We expect the price of Titan share to go up till 286 in short term, however if we study the growth of the company in detail based on above research then one can definitely see that there are limited upsides in this particular stock in the Long Term.

Disclaimer : Authors will not be responsible for any loss. Invest at your own risk

TITAN Industries BUY it

Buy and Hold TITAN INDUSTRIES at current levels of Rs. 275.8 for a short term target of Rs. 286 with a stop loss of Rs. 268. Strong company with good fundamentals.

Note : TITAN INDUSTRIES is a Shariah Compliant stock also and hence those investors who are following shariah guidelines can also invest in this stock. Its Ethical to invest in this particular stock.

Buy VA Tech Wabag at current levels of Rs. 568 for a target of Rs. 725

VA Tech Wabag - BUY

CMP Rs568, Target Rs725

Fundamentally strong company into Engineering space VA Tech Wabag is really making waves in Chinese market and expected to grow at a phenomenal rate.

Investment into water management technology is the need in current times. Internationally, water is scarce and rising demand of water fueled by growing population is making it even scarcer.This is because water is unequally distributed all over the world; India contains 17% of world population and has only 4% of the total water resources. VA Tech Wabag (VA Tech) is the biggest player in water management space in India has tried to evolve as a biggest player in India and investment in this space will definitely reap profits.

Healthy order book

It has order book of Rs42bn (2.9x FY12 revenues) which provides strong revenue growth. Also it has well diversified order book.

 

 The company has large cash balance of Rs2.9bn which translates into 20% of its market capitalization and has a very strong balance sheet. VA Tech is planning to leverage the cash for an acquisition, which will definitely take the stock price into skies. We would give it a P/E of 14x to FY15E EPS to arrive at a 7-9 month target price of Rs725. BUY BUY BUY. Invest without any risk and relax and wait for profits to reap in near future.

Note : VA Tech Wabag is a Shariah Compliant stock also and hence those investors who are following shariah guidelines can also invest in this stock. Its Ethical to invest in this particular stock.

Buy Rallis India for Target of Rs. 160

Here is another good stock tip for you all.

Buy and Hold Rallis India (BSE:500355) currently trading at Rs. 152.75 keeping a stop loss of Rs. 148 for a target of Rs. 160. Buy and hold for good return in next few days. Happy investing.

Note : Rallis India is a Shariah Compliant stock also and hence those investors who are following shariah guidelines can also invest in this stock.