Eye catchers of the day: Titan Company and Swelect Energy

(This is neither a stock advice nor a research report. Readers are requested to do their own research or consult an adviser before investing).
05 June 2017: Few stocks moving more than 10 to 15% in a day is not a rare event in the stock market. There could be many stocks went up by 10 to 20% today. But these two stocks, Titan Company and Swelect Energy caught my attention, as I was watching them since few days.

Titan Company

Titan, a Bangalore-headquartered, a joint venture of Tata Industries with the Tamil Nadu Industrial Development Corporation (TIDCO) is well-known for Tanishq Jewellery, Titan Eyeplus eyewear, SKINN fragrance, Titan, Sonata and Fastrack watches, Fastrack accessories and Fastrack smart watches. Today, the prices of the stock went up by INR 79.75 (16.91%). This is majorly due to the GST rates of 3% on gold.

Titan Company price movement, pic: moneycontrol
Brokerage CLSA upgraded Titan Company, Rakesh Junjhunwala’s favourite stock to ‘buy’. Rakesh Junjhunwala holds 752.07 lakhs of shares of the company as in April 2017. Titan is presently paying a 2 percent in total indirect taxes on Jewellery, which include 1 per cent in excise duty and 1 per cent VAT. What is the plus point of 3% of GST then? The jewellery company can get input tax credit and effective tax could become less than 3% which is the lowest tax bracket under GST.

Though the company’s price to book value is higher at 11.71 and PE of 64.17, the promoter’s holding of 53.05% is a plus point. The today’s delivery quantity is just 16% against the 8 days average delivery quantity of 48%. NSE website says “The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up”. This is not seen in Titan Company today.

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Swelect Energy Systems

Swelect Energy Systems, formerly Numeric Power Systems Ltd (You might have heard Numeric UPS but not Swelect) was locked in 20% upper circuit on 26th May due to the good Q4 result.
The net profit for the Q4 is Rs 13.1 crore against a loss of Rs 1.05 crore a year ago. The investors are rewarding the stock for this turnaround. The company also recommended a dividend of Rs 4/share. It is continuing the upward movement and was up by INR 48.10 (11.36%) to INR 471 today with a fair delivery percentage of 30%.The stock has an attractive PRICE/BOOK ratio of 0.67. The book value of the stock is Rs 701.72 which is higher than the stock price as on today. The promoter’s holding stands at 64.08%.

Swelect Energy price movement, pic: moneycontrol
S P Tulsian also said he had picked up this stock. As per the moneycontrol report, he is positive about the company and the GST impact on the photovoltaic cells business of the Swelect Energy. Click here to read more about his views.

Edited on 09/07/2017: Swelect Energy systems was trading at INR 614.50 on 07/07/2017 up by Rs 143.50 or 30% within one month from the date of posting this article.

Titan was trading at INR 534 on the end of market day 07/07/2017 down by Rs 17 in the same period.

Edited on 20/08/2017: Titan planned to sell its product in US market through Amazon as per the news reports. The Titan made new highs again in last two weeks and presently trading at Rs 623, Rs 72 up from the date of publishing this article. 

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