Intraday stock trading (26.02.2018)
Following are two stocks picked for next week. since its a very short term call, high risk is involved and requires a strict stop loss.
Ashok Alco-Chem Ltd (BSE Code: 524594) (CMP: Rs.118.40) (FV: Rs.10)
Intraday stock trading (Weekly pick 26.02.2018) will be Ashok Alco-Chem Ltd.(Ashok), a Mumbai based Company Incorporated in 199. The Company is into the business of manufacturing and marketing chemicals in India and international markets. The company offers ethyl acetate, which is used in herbicides; the production of pharmaceuticals and food products; and coating formulations, such as epoxies, urethane, cellulose, acrylics, and vinyls, as well as a solvent in inks for flexographic and rotogravure printing.
The Company has a huge portfolio of products consisting of various chemicals, intermediaries and ancillary products. Company’s major products in chemical segment Ethyl Acetate which is an an organic compound used in used in a variety of coating formulations such as epoxies, urethane, cellulose, acrylics and vinyls. Applications for these coatings are numerous including wood furniture and fixtures, agricultural, construction and mining equipment, auto refinishing, and maintenance and marine uses
One of the other chemical called Glacial Acetic Acid is a second addition of the products portfolio of this Company which is used in paint, varnish, lacquer and related products. Glacial Acetic Acid at diluted concentrations can be used to remove warts or verruca. It can also be used via iontophoresis to treat bone spurs. Industrial uses include photography and the manufacturing of aspirin. It’s a general-purpose Acid. It has thousands of uses.
In Ceramic segment, Company produce Ball Clay which is a member of kaolinite family, is renowned for its plasticity and green strength, and as such it forms a major part of many ceramic applications, including Sanitary ware, Tiles, Tablewares and to an increasing extent non-ceramic applications like functional fillers and advanced application for example technical ceramics
The Company has produced an excellent third quarter for the Financial year 2017-18 posted PAT of Rs.1.57 crore against PAT of Rs.1.24 crore on sales of Rs.43.93 crore fetching an EPS of Rs.3.42. Currently Company is trading at a P/E ratio of 21.97 and recently one of the renowned investment fund has invested a good amount in this stock. Currently stock is trading at 118 and seen a momentum therein. However, a stop loss of 111 is must for any short term trading.
Ambuja Cement: (BSE code– 500425) (NSE code – AMBUJACEM) (CMP: Rs.260) (FV: Rs.2)
One of the leading cement company having pan India presence has presented excellent quarter 4 numbers backed by strong demand in housing and infrastructure sector. The company has recently proposed to set up a 3.1 Million Tonnes (9500 tpd) clinkerisation plant at Marwar Mundwa in Rajasthan. The Company has attractive geographical positioning and excellent market leading brands with large network of dealers/retailers (trade sales >80% of total volume). The potential key drivers for the year 2018 will be:
- Affordable housing fund to be set up under the National Housing Bank.
- Increased allocation of Rs. 31,500 crore for the Pradhan Mantri Awas Yojana – Urban (PMAY-U).
- Outlays for the Ministry of Road Transport and Highways and Railways increased 11% and 22%, respectively
Quarter 4 numbers of CY 2017 reflects a growth of 17% in volume, 61% growth in EBITDA (21% growth on EBITDA margin). The Profit after tax for the period stood at 338 crore, up 89%.
The Company is still working at capacity utilisation of 78% only which provides room to further enhance its volume within same infrastructural framework.
Stock is currently trading at Rs. 260 and traders should have a stop loss at Rs. 251. Long term investors may continue to hold.
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