Two stocks to help in wealth creation: Rajesh Agarwal, AUM Capital
In a chat with ET Now, Rajesh Agarwal, Head of Research, AUM Capital, says CESC and Dredging Corporation of India are two stocks one could invest in.
Edited excerpts :
What is the first stock you will recommend?
The first stock which we would like to discuss today is CESC. This company is basically into four verticals – power, retail, property and IT. Their power distribution business is doing very well. They distribute in Kolkata circle with around 2425 megawatt of generation capacity and 600 megawatt of capacity under development. Recently they tied up with the Rajasthan Government to supply power in Bharatpur and Kota and that speaks well for the company. If they are successful, they can even watch for more such areas.
Their retail venture is going down and we would not be surprised in the near future if the venture shows a complete turnaround.
Property is working decently/ IT under the banner of Firstsource is doing quite well. Even on the valuation parameter, it is trading at a PE of less than 12 which we believe with the kind of verticals and management the company has, are on the lower sid. We recommend this stock for a buy with a target of Rs 900 in the next six to nine months.
What is the second idea that you are working with?
The second idea is Dredging Corporation of India. It is one of the premier and the only PSU dredging companies in India and has been in business from 1976. It is one of the preferred dredging companies for major ports, Indian Navy and the upcoming capital dredging expenses for major ports is going to do well for this company.
The government focus on cleaning the Ganga and interlinking the river bodes well for the company. We believe that it is going to give business to this company. And we have seen complete turnaround in numbers. With a loss of Rs 19.62 crore, it has moved to profit of Rs 14 crore. That is quite a good turn around. Even on shareholding pattern, government holding is around 74%. At 13%, the floating stock is very low. Expected EPS for FY18 we believe the company is going to report a number of Rs 30 and hence we recommend this as a buy because with the kind of equipment, with the kind of manpower and with the kind of expertise this company has, going forward , with the government’s focus on cleaning the Ganga, this company is going to get good business. And even on valuations it is trading at a very low valuation, we recommend this.
Edited excerpts :
What is the first stock you will recommend?
The first stock which we would like to discuss today is CESC. This company is basically into four verticals – power, retail, property and IT. Their power distribution business is doing very well. They distribute in Kolkata circle with around 2425 megawatt of generation capacity and 600 megawatt of capacity under development. Recently they tied up with the Rajasthan Government to supply power in Bharatpur and Kota and that speaks well for the company. If they are successful, they can even watch for more such areas.
Their retail venture is going down and we would not be surprised in the near future if the venture shows a complete turnaround.
Property is working decently/ IT under the banner of Firstsource is doing quite well. Even on the valuation parameter, it is trading at a PE of less than 12 which we believe with the kind of verticals and management the company has, are on the lower sid. We recommend this stock for a buy with a target of Rs 900 in the next six to nine months.
What is the second idea that you are working with?
The second idea is Dredging Corporation of India. It is one of the premier and the only PSU dredging companies in India and has been in business from 1976. It is one of the preferred dredging companies for major ports, Indian Navy and the upcoming capital dredging expenses for major ports is going to do well for this company.
The government focus on cleaning the Ganga and interlinking the river bodes well for the company. We believe that it is going to give business to this company. And we have seen complete turnaround in numbers. With a loss of Rs 19.62 crore, it has moved to profit of Rs 14 crore. That is quite a good turn around. Even on shareholding pattern, government holding is around 74%. At 13%, the floating stock is very low. Expected EPS for FY18 we believe the company is going to report a number of Rs 30 and hence we recommend this as a buy because with the kind of equipment, with the kind of manpower and with the kind of expertise this company has, going forward , with the government’s focus on cleaning the Ganga, this company is going to get good business. And even on valuations it is trading at a very low valuation, we recommend this.
