CMP: 230.9 (BSE) ;; SENSEX 17082
TECHNICALS:
Perusing the 5 year and the 2 year Price Charts, it is evident that the Scrip is in an uptrend albeit not a sharp one. On the downside there is a good reliable support at 208 levels followed by 191 and then at 180 levels. Rock solid multi year support exists at 164 levels which I don't see being even touched by a fair distance barring some catastrophic news flow or macro disater. On the upside, the first resistance is at 245 and then at 257 levels. Once 257 gets taken out it could go all the way up to 280 levels or thereabouts.
FUNDAMENTALS:
At CMP, the Scrip is available at about 2.6x Book which seems reasonable, considering the size of operations and the prospective 20-25% Net Profit CAGR over the next two years. The Corporate performance in the last couple of Quarters has been somewhat marred by the negative news flow which also affected the Project Loans disbursal component adversely. The hard IR regime is also naturally responsible for some of the downticks that the Company's performance evidenced. However, with the increased prospects of the IR cycle peaking out in the next couple of Quarters, this scrip like all other rate-sensitives has already come back strongly on the smart buyers' horizon.
Keeping pure Fundamentals aside for a moment, what really interests me is the surprising resilience the Stock has shown in the mayhem of the last couple of months; never having decisively broken 200 levels on the downside during this period; in fact seemed to be an island of relative stability in the worst of times. Having said all this, it is also true that the Scrip has moved rather sharply in the last ten odd sessions and therefore perhaps a buy on dips approach is warranted.
Thus, in my opinion, the Stock is a BUY ON DIPS in the broad range 200-230, for the long term investor.
Perusing the 5 year and the 2 year Price Charts, it is evident that the Scrip is in an uptrend albeit not a sharp one. On the downside there is a good reliable support at 208 levels followed by 191 and then at 180 levels. Rock solid multi year support exists at 164 levels which I don't see being even touched by a fair distance barring some catastrophic news flow or macro disater. On the upside, the first resistance is at 245 and then at 257 levels. Once 257 gets taken out it could go all the way up to 280 levels or thereabouts.
FUNDAMENTALS:
At CMP, the Scrip is available at about 2.6x Book which seems reasonable, considering the size of operations and the prospective 20-25% Net Profit CAGR over the next two years. The Corporate performance in the last couple of Quarters has been somewhat marred by the negative news flow which also affected the Project Loans disbursal component adversely. The hard IR regime is also naturally responsible for some of the downticks that the Company's performance evidenced. However, with the increased prospects of the IR cycle peaking out in the next couple of Quarters, this scrip like all other rate-sensitives has already come back strongly on the smart buyers' horizon.
Keeping pure Fundamentals aside for a moment, what really interests me is the surprising resilience the Stock has shown in the mayhem of the last couple of months; never having decisively broken 200 levels on the downside during this period; in fact seemed to be an island of relative stability in the worst of times. Having said all this, it is also true that the Scrip has moved rather sharply in the last ten odd sessions and therefore perhaps a buy on dips approach is warranted.
Thus, in my opinion, the Stock is a BUY ON DIPS in the broad range 200-230, for the long term investor.
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