View On Exide (your retirement stock) and MINDTREE

Sujay,

 

EXIDE IS YOUR RETIREMENT STOCK. If you have a child, you can plan his or her future, by buying EXIDE on dips. But of course, some of us would like to make a 20-30% profit and move on. Personally, I am not selling Exide, even if it falls by 30 Rs; in fact, I will buy more towards to the correction bottom.

 

Technically, a slightly round top and a dipping MACD implies that it may correct to 141 in the short term; but it should be near 158-160 in about 3 months.

 

I gave a long term buy call on Exide on July 16th. You can read it below:

 

MINDTREE: You can buy small amounts at current market price of 515, it has bottomed out...you can get 560 in 3 months time.

 

- M, pp

I have been recommending Exide to my close friends for some time now. Even now, this stock is cheap compared to the near future prospects.

Exide Industries Ltd has stepped up capital expenditure for capacity addition to the tune of Rs 600 crores because the demand is so strong that they cannot meet it with their existing production capacity. Acquisition of Leadage Alloys India Ltd will also add more book value to the script.

Exide rides indirectly on the growing automobile sales, which is likely to continue for the next 1 year. Exide has a 62% share in the cars and truck battery segment. Exide's core return on capital employed (ROCE) is at 85%. And the NEXT BIG OPPORTUNITY FOR EXIDE WILL BE ELECTRIC VEHICLES AND HYBRID VEHICLES (RUNS BOTH ON PETROL/BATTERY), WHERE  THE MARGIN WILL BE MUCH HIGHER.

Buy at CMP of 134.5 and hold with a 1 year investment horizon for a target of 173 (+29%).