Great Eastern Shipping Ltd has two main businesses viz. shipping and offshore. The shipping business is involved in the transportation of crude oil, petroleum products, gas and dry bulk commodities. On the other side, the offshore business provides services to the oil companies in carrying out offshore exploration and other related activities. The company’s current fleet consists of 32 vessels along with nine dry bulk carriers. As per official data from the Ministry of Shipping, around 95% of India’s trading by volume is done through maritime transport. For 2015, the cargo traffic recorded 1,052 million metric tonne which is expected to grow by more than 50% in the next few years. At the valuation front GE Shipping stock is trading at trailing P/E multiples of 4.5 times which is lower than the industry PE multiple of 8.7 times. At an attractive Book Value of Rs 560 and dividend yield of over 3.5%, the company earnings per share stand at Rs 69 on Rs 10 face value. The GE Shipping stock is an excellent portfolio investment for investors to purchase the stock for smart gains in the next one year.
The long term demand outlook of the cement industry remains quite positive considering the government’s focus on housing, concrete roads, smart cities and infrastructure development. No wonder for the January-March 2016 quarter, the cement demand registered a double digit growth and uptick in prices. Ambuja Cement Ltd is part of the Swiss based Holcim Group which had acquired a controlling stake in Ambuja Cement in the year 2005. With Associated Cement Company (ACC) already in Holcim’s fold, the latter controls one fifth of the total cement capacity in the country. Ambuja Cement is the third largest cement company and the most efficient cement producer in the country. The company also has an equity stake in ACC. Specialised cement for the roof has a huge demand among home owners and building contractors. Ambuja Cement has recently launched a super speciality cement Ambuja Plus that extracts 100% of silicate gel from cement making the concrete stronger, durable and leak proof. The management of the company expects a tremendous response for this product resulting in volume growth in the next quarter numbers. The company reported Q1 CY 16 (it follows January to December as financial year) quarter earnings above market expectations on the back of lower costs. The share is currently trading at its support level of Rs 235 and its fundamentals make Ambuja Cement a value buy. The stock is expected to move up from the present level to a target price of Rs 275 in the next two quarters. Both the above stocks mentioned are pure fundamental and good quality stocks but investors are advised to wait for the correct opportunity considering the market sentiment pertaining to the events happening in the UK - Brexit.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.