Talking stock: Sell Graphite India, hold Exide

By G.Chokkalingam

I hold 5,000 shares of DCM Shriram, purchased at Rs 111. Current market price is Rs 511. What is your recommendation?
While anticipated increase in sugar output and revision of cane prices likely to moderate margins of sugar business, cyclical peak in vinyl business is unlikely to sustain. Hence, sell the stock if it recovers 5-10 per cent from the current levels.

I have 18 stocks of Graphite India and 16 of Exide Batteries. Should I sell them?
Sell Graphite India – its business is highly cyclical and the stock has already rewarded phenomenally to the investors with 9-fold jump in its stock price from the 52-week low.

Considering its stake in insurance business and recent re-rating of insurance stocks on the market, hold Exide Industries with a target price of around Rs 225.

I bought Apex Frozen Food at Rs 474 and Sintex Plastics at Rs 96. Please suggest.
Sell Apex Frozen if it is fortunate to hit another one or two upper circuits in its stock price as it has already breached its fair valuation. Considering the debt level, around 35 per cent rise in oil price from its 2017-bottom and current valuation multiple, Sintex Plastics is fairly valued. Sell if the stock recovers another 5 per cent to 10 per cent from the current level.

Could you suggest which one is the better between Britannia and Bombay Burmah for long-term investment at CMP.
Long-term prospects for both companies remain robust. While Britannia could continue to maintain growth momentum in its FMCG business, Bombay Burmah still trades over 62 per cent discount to value of its investments in Britannia and Bombay Dyeing. The average discount for the holding companies has been around 45 per cent.

Hence, going forward Bombay Burmah is likely to get possible double benefits of both rising market cap of Britannia and further reduction in the discount of its investment holdings. Therefore, I prefer Bombay Burmah to Britannia.

I have Pincon Sprirts and Granules India. What should I do?
It is difficult at this moment to take a view on Pincon Spirit without knowing the causes and implications of the recent arrest of its CMD and sealing of its registered office by the authorities.

Considering near-stagnation in its net profits in the past five quarters, its current valuation is quite fair. Sell Granules India stock around Rs 135.