moneycontrol | September 27, 2023, 08:51 IST | Ahmedabad [Ahmedabad]India |
Stocks to sell: The brokerage house has advised short selling of 3 stocks. which belong to different sectors. Your earnings can be halved in these 3 stocks as these stocks may break down as much as 48 percent from their current levels in the near future.
The stock market is full of uncertainties. Even today, the market saw huge ups and downs during the day. However, at the end of the day equity benchmark indices BSE Sensex and Nifty closed with gains of 50 points. Sector-wise, its performance was mixed. If talking about individual shares, the brokerage has advised immediate selling of three shares. These are all stocks of different sectors.
One of them is a civil construction company, one is a cement company and one is a pharma company. According to the brokerage, the stock may fall by 48 percent from the current level. The three stocks that have been advised to sell by market experts include India Cements, NBCC and Glenmark Pharma, all of which closed in the red zone today.
India Cement: India Cement is currently trying to sell its non-core assets. Under which he is currently selling his additional land near Visakhapatnam in Andhra Pradesh to Ultratech Cement, a giant of the cement sector, for Rs. 70 crore is ready to sell. In October 2022, it sold its entire stake in subsidiary Springway Mining to JSW Cement for Rs. 477 crores was sold.
According to brokerage firm ICICI Securities, it is moving in the right direction, but has stressed the process of selling non-core assets to pay off loans faster. According to the data of financial year 2023, the company has a debt of 29 billion dollars.
Given the high debt to EBITDA ratio and low RoE resulting from the slowdown in cement prices in South India, the brokerage has maintained a sell rating on it and a target price of Rs. 122 held, which is about 48 percent downside from current levels. The stock traded on BSE today at Rs. closed at 232.70.
Glenmark Pharma: Glenmark Pharma sold 75 per cent stake in its API (Active Pharma Ingredient) unit Glenmark Life Sciences for approximately Rs. 5650 crores, which Nirma is going to sell for Rs. Will buy at the price of 615. After the sale, Glenmark Pharma’s stake in this API unit will come down to about 7.8 percent. The company will reduce its debt with the proceeds from the sale of shares. Glenmark is nearing a breakout from a long consolidation period. The stock has also seen fresh, built-up positions in the F&O space. If this stock breaks Rs 445 then a move towards Rs 500 can be seen in the near term. Downward Support Rs. appearing in 428.
Let it be known that at the end of the financial year 2023, the company has Rs. 4340 crore was debt. Local brokerage firm ICICI Securities believes the stake sale will hit the company’s revenue by about 10 percent for fiscal 2025. Apart from this, the EBITDA margin may decrease by 1.50 percent. However, this effect can be reduced by reducing debt.
According to the brokerage, the debt burden will be eliminated, but in the long run the company will need to spend around Rs. Along with an annual budget of 1300-1400 crores, the money will be needed for the marketing costs of Ryaltris and the US generic business. Keeping all these in mind the brokerage has maintained its sell rating and has set a Rs. 660, which is about 16 percent downside from current levels. Its share today on BSE is Rs. closed at 785.90.
NBCC: NBCC is a Navaratna company under the Ministry of Urban Development. Its revenue for the first quarter of this financial year April-June 2023 was lower than expected and grew at a rate of 8.5 percent. A slowdown in the PMC (project management consultancy) segment and a 51 per cent year-on-year decline in real estate sales have taken a major hit on its revenues. Meanwhile, its EBITDA margin also declined by 0.32 percent to 3.2 percent due to higher costs and increase in other expenses.
The management in this financial year has Rs. 9,000 crore in revenue, but brokerage Geojit BNB Paribas has cut its revenue estimate for FY2024 by 7 percent and FY25 by 4 percent due to the timing of project acquisition and completion.
Keeping all these in mind the brokerage has maintained its sell rating and has set a Rs. A target price of 53 has been given. Which is more than 8 percent downside from the current level. Today on BSE this share is Rs. has closed at 57.80.
(Disclaimer: The investment advice given here represents the personal views of the experts. Neither News 18 Gujarati nor its management is responsible for the same. Be sure to consult your financial advisor before making any investment.)