Myiris.com: How Mehta Equities` sees outlook on KS Oils, Sterlite Tech, Strides? Source: IRIS (21-SEP-11)
In an interview with myiris.com, Prashanth Tapse, AVP Research, Mehta Equities gave views on three buzzing stocks on Wednesday. The same is as follows:
KS Oils: The stock is most active in last couple of weeks mainly on the back of stake sale buzz which kept the counter in action. Today the stock is trailing down basically on the reports saying the auditors of the company have found that the company faces a possible loss of a whopping Rs. 4 billion which has not been accounted for. This may be related to trading in mustard oil futures by the promoters. Stake sale reports states that the world`s largest commodities trader Glencore International AG was evaluating a bid for the company. The interest behind the buzz is the USD 145 billion Glencore wants to own assets in the India`s agricultural commodities sector after its record initial public offering (IPO) in London earlier this year. As of now the promoters of KS Oils are looking for a value strategic buyer. It has been seen many funds like Goldman Sachs Investments Mauritius I - has picked up 2.146 million shares of KS Oils through bulk deals at Rs 10.92 a share. We believe that the story remains attractive looking at the India`s edible oil consumption story. It is estimated at 15 million tons-valued at Rs 750 billion and growing at 5 to 7%. Hence, we are positive on the industry as while as KSOIL business restructuring plan for medium to long term investment with a conservative target of Rs 18-20.
Shares of the company declined Rs 1.3, or 10.52%, to settle at Rs 11.06. The total volume of shares traded was 12,180,094 at the BSE.
Sterlite Technologies: Leading provider of transmission solutions, Sterlite Technologies, surges high after state-owned Bharat Sanchar Nigam (BSNL) awarded Rs 1,140 million worth contract to deploy a central office broadband system across all its telecom circles. Being the third-largest global manufacturer of power conductors and a leader in the local market with 25% market share we are positive on the business prospect in the areas of its operations and the end user industries like Power and Telecom are seeing robust growth.
We recommended investors to accumulate the stock with an immediate target of Rs 49-52 in medium term.
Shares of the company gained Rs 1.8, or 4.51%, to settle at Rs 41.70. The total volume of shares traded was 782,657 at the BSE.
Strides Arcolab: Bangalore-based Strides Arcolab (SAL), manufactures of niche pharmaceutical products shoots up out of the blue on reports stating that SAL may sell a part of its non-specialties business to fund the expansion of more-profitable specialty drugs operations. Strides sells branded generic drugs in the local as well as other less-regulated markets, and also supplies AIDS, tuberculosis and malaria drugs to multilateral agencies as part of its non-specialty pharmaceuticals business.
We are not clear with the segment sale buzz how actually it will impact the financial going forward; hence the rally can be an opportunity to investor to book profit. Overall the business sound good while on technicals one can expect the stock to test 372 in the near-term. We are neutral on the recommendation.
Shares of the company gained Rs 36.3, or 11.98%, to settle at Rs 339.30. The total volume of shares traded was 944,034 at the BSE.
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