Exide nearing target & how Ashwani Gujral was proved wrong

powerfulpicks call update: On July 16th, I had given a call on Exide at 134.5 for a 1 year target of 173. The script touched 163 today, up 21% in 2 months after my call. It is quite near my 1 year target and hence you can start booking profits in small tranches of 10% of your holdings at each time. It will meet its target by mid Oct 2010. Enjoy making money with powerfulpicks.

 

Many of you know about famed CNBC analyst Aswani Gujral. Incidentally, on Sep 22nd, Ashwani Sahaab asked investors to short Exide Industries with a target of 145. How wrong could he be?

 

This is another proof that most of these analysts, whom the TV channels pay lakhs of Rupees to express their views on National TV, either know little about market dynamics or they mislead small investors on purpose.

 

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From: powerfulpicks@yahoogroups.co.in [mailto:powerfulpicks@yahoogroups.co.in] On Behalf Of powerfulpicks-owner@yahoogroups.co.in
Sent: Friday, July 16, 2010 8:31 AM
To: powerfulpicks@yahoogroups.co.in
Subject: [powerfulpicks] Marry the battery queen

 

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%).