-------- Forwarded Message --------
Subject: Ultratech Cem: Need To Stay Abv 2875-2930 For Further Strength
Date: Tue, 1 Mar 2016 09:09:31 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*For Ultratech, only consecutive closing above 2875-2930, expect 3300-3400;*
* Otherwise, it will be weak and sustaining below 2745-2660 zone, *
*may fall up to 2580-2385*
Recent cement deal with JP for Rs.16500 cr may face various regulatory
hurdle
And may also be EPS dilutive in the initial years
due to interest pay out for the assumed debt
Actual consolidated TTM EPS is at 80.94
and present PE of around 34 may be bit expensive;
Whereas 25 may be a ideal PE for the cement industry under the current
market scenario
*Trading Idea:*
CMP: 2769
Sell either below 2745 or on rise around 2850-2875-2905;
TGT1: 2660-2580*-2460-2385 (1-3M)
TGT2: 2320-2275-2195-1950 (12-24M)
TSL> 2930
Note: Consecutive closing (3 days) above 2930 zone, Ultratech may rally
up to 3015-3105-3145 & 3200-3255 and 3280/3300-3400 in the short/mid to
long term (alternative bullish case scenario).
Although cement & steel industry apparently benefited form the
yesterday's (2016) "Rural" budget due to some infra push, but lots will
depend up on the actual implementation and its effect of the earnings on
the beneficiary companies.
The 2016 budget may be termed as "Political" budget aimed at wooing the
rural voters in the series of forthcoming state elections and even
eyeing the groundwork for the 2019 parliament election.
The only positive & surprising thing is the FRBM roadmap & reported
fiscal deficit figure amid projected unrealistic tax & telecom spectrum
revenue expectations. As balance sheet of telecos are already stretched
quite significantly and PSBS may be not in a position to fund those
ambitious telecom spectrum auction target (around Rs.92000 cr), it may
be quite difficult for the Govt to meet the revenue target.
The only immediate driver for the market may be the expected rate cut
(0.25-0.50) by the RBI in the near future (another Holi Gift to the
nation ?). But given the current tepid sentiment of the global as well
as the local market, it is very doubtful, how its going to help our
market significantly. Also there will be question of proper
transmissions by the banks as only 60% of previous rate cut actually
transmitted to the borrowing consumers/economy.
In the present scenario, 7000 may be the new normal of the Nifty
(6300-7000-7700) in the near term.
*As par BG metrics & current market scenario:*
(based on actual TTM & projected FWD EPS with average PE of 25)
Current median valuation of Ultratech may be around: 2390 (FY:15/TTM)
Projected fair valuations might be around: 2335-2470-2650 (FY:16-18/FWD)
SCRIP EPS(TTM) BV(Act) P/E(AVG) Low High Median
200-DEMA 10-DEMA
ULTRACEMCO 80.94 693.85 25 2390.17 2382.30 2386.23
2823.29 2804.71
ULTRACEMCO 77.25 766.7 25 2335.05 2327.36 2331.21
2823.29 2804.71
ULTRACEMCO 86.44 847.25 25 2470.05 2461.91 2465.98
2823.29 2804.71
ULTRACEMCO 99.45 936.15 25 2649.42 2640.68 2645.05
2823.29 2804.71
*Analytical Charts:*
<https://4.bp.blogspot.com/-53U_RgNsMBA/VtUM9SX4oBI/AAAAAAAAGTg/qD2RIwoV55c/s1600/UT-29-02-2016.png>
<https://3.bp.blogspot.com/-01UCnPEL_qY/VtUM_E2X_iI/AAAAAAAAGTk/LQ9FlPPoOuU/s1600/UT-FIBB-29-02-2016.png>
<https://1.bp.blogspot.com/-acFInkRoqLk/VtUNBKJKGeI/AAAAAAAAGTo/qbJdDTeGAok/s1600/UT-WK-29-02-2016.png>
<https://3.bp.blogspot.com/-KxzIc54NPx8/VtUNDiUXldI/AAAAAAAAGTs/rdWaxedOuEc/s1600/UT-PATTERN-29-02-2016.png>
<https://4.bp.blogspot.com/-21Kzq0Ha5uA/VtUNH5XF8sI/AAAAAAAAGTw/Qx9YWs_Vpew/s1600/UT-TL-LT-29-02-2016.png>
<https://1.bp.blogspot.com/-QfG9lGKh1cs/VtUNTOnqZvI/AAAAAAAAGT0/72x0kKqxd-g/s1600/UL-TL-29-02-2016.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
NCFM-TA Certified
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