Your Stocks is a daily show where market experts answer your specific stock related queries.
In June 19 edition of Your Stocks, Gaurang Shah of Geojit Financial Services Ltd and Prakash Gaba of prakashgaba.com answer your queries on investments in the stock market.
Q: Palash Goklani writes to us from Mumbai. He holds 1,000 shares of IDFC Bank at Rs 52.50 since one and a half years. He is a long-term investor and wants to know whether to hold or sell?
Joshi: Even I have some IDFC Bank and it has really been a bit of a disappointment because the whole idea was that it is a new bank, it is approaching banking in a new way so expected the gains to be better. But the stock has been range bound at best. I just think that at this point in time the Capital First, the whole that, that deal, that merger has got Reserve Bank of India (RBI) approval it seems to be about 5-6 months down the line so definitely at this price the stock is a hold. To add more you just need to really keep your eyes on the news flow the next couple of months and if you really see that Capital First merger playing out for IDFC Bank in a positive manner there I think you add more. Otherwise, I think some of the other private banks very honestly in this last year and a half have given better returns than IDFC Bank. So on that front it has been a bit of a disappointment but at this price it is a hold.
Gaba: He wants to hold for couple of years. To me I need to see a trend for that. So, far I don’t see a trend so I won’t hold.
Q: Suketu Upadhyay writes to us from Ahmedabad. He holds 100 shares of BEL at Rs 137 since a year. He is a long-term investor and wants to know whether to hold or sell?
Joshi: He may well have to, I think the way things have been for the stock because honestly once again a bit of a disappointment. On the fundamental perspective at this valuation the stock looks alright. The disappointment has come in the numbers and the fact that really the execution of the – though they show a large order book the execution, margins etc. these are been issues and not just for BEL. I would say this has been an issue across the sector. That said, but I think going ahead looking at their order book as well as the fact that it is a niche player so a lot of the orders that are in the defence and that kind of government orders they are a surety for BEL and one expects that to have a bit of a pickup in the coming year as well as the fact that hopefully, their execution will also get back on track. With the expectation of that I would really hold on to the stock at this level and hopefully, you should be able to see levels at least of Rs 150-160 over the next couple of years.
Gaba: BEL can see some more downside. Possible support is in the vicinity of Rs 100 zone. Best is to hold now because he has been holding for a while. This is not a place to exit but hold it here. Might see a bounce from closer to these zones, if it happens where does it go? Maybe around Rs 140 zones that happens, one can exit there. So, hold.
Q: Augustin R writes to us from Kerala. He holds 2,500 shares of Tata Motors at Rs 400 for 6 months. He is a medium-term investor and wants to know whether to hold or sell.
Gaba: He has been holding for a very long time and now it is at a place where it is trading near the support zones. So this is not the place to exit. Here I would say that looks like Tata Motors is in the process of bottoming out. Very good chance that it can bottom out from here. If that happens, then this is a good place to buy. Only thing is to have a larger timeframe, increase your timeframe and buy. I would say since he is holding it, hold, and in case he wants to add, he can add.
Joshi: I feel it will continue to remain the cheapest auto stock. I think it is going to underperform the sector, unfortunately, but, yes, the numbers have turned positive. We have seen a very strong performance from JLR and that is actually the bigger piece. So if you want to track the stock, you should be actually seeing what is happening with the JLR rather than getting too concerned over CV and passenger vehicle cars in India though they are getting their act together even as far as that is concerned. My advice to retail investors who are there for the long term is always to get Tata Motors DVR. However, he can continue to hold what he has and as it is he has gone from being short term to long term, so, continue to hold.
Q: Sunil Kumar writes to us from New Delhi. He holds 1,000 shares of NMDC at Rs 120 for 3 years. He is a long-term investor and wants to know whether to hold or sell?
Joshi: If he has bought it as a dividend play then the dividend becomes only more attractive when the price comes down and the dividend yield goes up. So that logic is perfect. Even otherwise if you are looking at fundamentals, I think again because it is a government stock there is always a concern because policy changes, you may not get to increase ore prices in line with markets etc. but that is really not been the case over the last couple of years. I would say it is a hold for me at this level given the fact that I am positive on metals as a play so I think holding on to NMDC is a good thing.
Gaba: At 1:00 clock in the sister channel CNBC Awaaz there was some negative news being broken today. Looks like there was some iron ore price – some issue out there, and I have given a sell there. I think it is going even below Rs 100 zone. For me it is a sell.
Q: PK Sharma writes to us from New Delhi. He holds 2,000 shares of RCF at Rs 88 since 5 months. He is a long-term investor and wants to know whether to hold or sell.
Joshi: If you look at just the fertilizer business, then I think the stock is expensive at this level. So the whole story on this is whether they will sell that land and my guess is that it is not going to be any time soon. So I think if you really want to just look at a pure fertilizer play, I would just exit the stock and get into something else. So my advice would be to sell the stock at this level. In any case I am not too in favour of holding stocks where you are not comfortable with the business that they are in, but you are holding onto them because they have some land parcel which they can sell. I think that we can always buy for a trading pop when and if we get that news.
Q: Kuldeep Singh writes to us from New Delhi. He holds 2,000 shares of Bombay Dyeing at Rs 88 since 2 years. He is a long-term investor and wants to know whether to hold or sell?
Joshi: We were talking of RCF earlier and you had a landmine story and here to there is an expectation that they have land at various location and in this case they probably have monetised a bit of also. I think he has made decent gains from where he has bought it at so I would think that he should book his profits and really sell this because in that sense the story for Bombay Dyeing has played out.
Gaba: Just hold on, he is making money. His cost is so low, he can take a lot of beating if he wants to basically the structure is positive. See some correction. Rs 180-200 is the strong support zone to work with. I think it might start its up journey once again. Rs 180 is a very strong support.
Q: J Ram writes to us from Andhra Pradesh. He holds 2000 shares of Mangalam Drugs and Organics at Rs 300 since 1 year. He is a medium-term investor and wants to know whether to hold or sell.
Joshi: I looked at it just before I came here and I am not particularly impressed with this last quarter numbers. So I think just judging by that and the price that it is at, I think for me the stock is a sell.
Gaba: It is a clear cut sell; weak structure.
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