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Last Updated : Sep 08, 2016 09:21 AM IST | Source: CNBC-TV18

Stocks to watch out for: Tata Motors DVR, ONGC, BHEL, GAIL

Some of the stocks that should be on your radar are: Tata Motors (DVR), Jain Irrigation Systems (DVR), YES Bank, Oil and Natural Gas Corporation, Bharat Heavy Electricals, GAIL India, Ashok Leyland, Motherson Sumi Systems.

Tata Motors DVR up 28 percent this year versus 50 percent for main stock. Discount back to higher end of recent range.

Jain Irrigation DVR trading at 41 percent discount to main stock. Very low float, market cap of Rs 110 crore. 48 percent of 70 percent free-float with institutional investors.

YES Bank said it has received final approval from the exchanges to raise USD 1 billion via a qualified institutional placement (QIP). CNBC-TV18 had been the first to report the planned QIP.

The issue will be led by Goldman Sachs while Motilal Oswal, CLSA will be amongst key bankers apart from 8 other joint book running lead managers. 

Speaking to CNBC-TV18 Managing Director Rana Kapoor said the QIP, with target price at the upper end at Rs 1,410 per share is expected to lead to an equity stake dilution of not more than 10-11 percent.

The funds raised from the issue will be utilised to improve presence in the renewables, pharmaceuticals, healthcare, transport & logistics and small and medium enterprise (SME) sectors, among others, Kapoor said.


While the total capital raised will depend on the final price and number of shares issued, he expects it to add roughly Rs 105-110 to the book value.

State-owned Oil and Natural Gas Corp (ONGC) reported a 21 percent drop in its June quarter net profit as oil prices slumped and its output fell.

Net profit at Rs 4,233 crore in April-June was 21.14 percent lower than Rs 5,368 crore in the same period a year ago, the company said in a statement.

ONGC got USD 46.10 for every barrel of crude oil it produced in the first quarter of current fiscal as compared to net realisation of USD 59.08 a barrel in the year ago period.

In rupee terms, ONGC got 17.78 percent lower price at Rs 3,085 per barrel in April-June this year as opposed to Rs 3,752 a barrel a year ago.

BHEL surprised the street with better-than-expected June quarter results supported by good business in its power segment. Its net profit jumped 54.2 percent to Rs 77.7 crore in April-June from Rs 50.4 crore in corresponding quarter last fiscal. Total income, during the quarter, saw a growth 29 percent at Rs 5622 crore against Rs 4368 crore in year-ago period.  BHEL’s outstanding order book stood at Rs 1.08 lakh crore till June-end.

In Q1 its EBITDA also improved to Rs 71 crore versus EBITDA loss of Rs 183 crore while EBITDA margin was at 1.3 percent on annual basis.

According to a CNBC-TV18 poll, BHEL was expected to post weak June quarter. The company was seen reporting net loss at Rs 15 crore in April-June quarter while revenue was likely to be flat at Rs 4630 crore. Its EBITDA loss in Q1 was expected at Rs 205 crore year-on-year.

State gas utility GAIL India reported a 244 percent jump in its June quarter net profit, boosted by a turnaround in petrochemical business and sale of stake in Mahanagar Gas, which retails CNG in Mumbai.

Net profit in April-June 2016 at Rs 1,335 crore compared with Rs 388 crore in the same period a year ago, the company said in a statement here. This was mostly because of the revenue GAIL got from the IPO of Mahanagar Gas Ltd.

"GAIL's PAT excluding gain from stake sale in Mahanagar Gas Limited is Rs 846 crore, signifying an increase by 118 percent," it said.

During the quarter, GAIL's petrochemical business saw a turnaround with production and sales jumping 149 percent and 121 percent respectively.

Ashok Leyland has signed a restructuring agreement with Nissan Motor under which the company is looking to completely take over the 3 joint ventures it currently has with Nissan, said CFO Gopal Mahadevan. The agreement is subject to regulatory approvals, he noted.

Speaking with CNBC-TV18 Mahadevan clarified that the total investment in the joint ventures was roughly about Rs 500 crore and as a conservative measure Ashok Leyland had booked impairment over the last two financial years.

Auto component major Motherson Sumi Systems Ltd (MSSL) will be acquiring the automotive business unit of Abraham and Co Ltd in Hungary for about Rs 77 crore.

The acquisition is being carried out by MSSL Manufacturing Hungary Kft, an arm of MSSL Gmbh, which again is a subsidiary of MSSL.

"With this transaction, which is expected to be completed in October 2016, MSSL through its 100 per cent subsidiary...would acquire the land, building, and machinery of Abraham and Co Ltd for a purchase price consideration of EUR 10.4 million," MSSL said in a BSE filing.

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First Published on Sep 8, 2016 09:21 am
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