Sunday, June 14, 2015
Torrent Power Ltd @ 140.65 ( Below 119 Strong buy)
1.Torrent Power is a 10 Rupee face value Electric Utilities Stock which currently traded at 140.65.
2. Year High ( 52 week High) of Torrent Power is 186.5 and Year low (52 Week low) is 121, So as per my 52 week high/low ratio formula this ratio is 1.54, If you read my book then you may knew that If any stock year high/low ratio is below 2 then stock price is stable for buying read more details of this term here.
3. Torrent Power have total 454668881 shares, Promoters hold 53.44 % FII hold 3.62% and DII hold 21.28% shares.Good promoters holding with no any pledged stock so this is a good point.
4. Torrent Power Net sales on FY 2014-15 is 10273.9 Cr., So when we divided total shares 454668881 in FY 2014-15 sales then we get a ratio “Net sale per share per year” which is 225.96.
5. So If we compare this 225.96 from current market price 140.65 then we find that CMP is belowe Net sale per share per year, So as per my formula of valuation CMP is a fair value of stock.
6. Base Price (3 Year Average Price) of Torrent Power is 140.41 So Stock traded near his base price, as I publish JSW Steel article when it traded at 973.10 but I advice to buy JSW steel below 884 and now market prove my theory because JSW steel is available below 884 for long term buyers.
Read this article about JSW Steel here
This time we wait Torrent power for 15 % below of base price ( Near 119 for fresh buying).
7.Book value of Torrent Power is 146.44 , So CMP is discounted to book value, price/book value ratio is 0.9574.
8. Overall I think Torrent Power Ltd is a good value buy at CMP 140.65 but if available near or below 119 then this is a strong buying call.
9. Discloser:- I Mahesh Chander Kaushik author of this research report is an existing research analyst and passed NISM certification for research analysts. I am also applied for a grant of registration under SEBI(RESEARCH ANALYSTS) REGULATIONS, 2014 hereby disclose about my financial interest in the subject company and the nature of such financial interest:- 1 Me and my associates or relatives already hold 6 stocks of JSW Steel ltd company so my personal interest is included in this stock. and Me and my associates or relatives have no any stocks of Torrent Power Ltd company so my personal interest is not included in this stock. 2. Me and my associates or relatives have/have not any actual/beneficial ownership of one percent or more securities of the subject company(Torrent Power Ltd). 3. Me and my associates or relatives have /have not any other material conflict of interest at the time of publication of the research report. 4. Me and my associates or relatives have/have not not received any type of compensation from the subject company(Torrent Power Ltd) in the past twelve months. 5. I am not served as an officer, director or employee of the subject company(Torrent Power Ltd). 6. I have been not engaged in market making activity for the subject company(Torrent Power Ltd).
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