Nifty has touched a new peak of the 15900 marks. Now it's a matter of time. TCS, Infosys, and Wipro have changed the market trend. These companies are not only giving direction to the IT sector, but the entire market is under them. Everyone knows that the Q1 results of FY 2022 will outperform the Q4 results of FY21. It will be in almost every sector – auto, cement, and metal.
Remember, when China said it was opening metal reserve mines, iron ore prices rose from $213 a tonne to $216 a tonne. That's when I said that the prices will go up further. Take the matter of Friday when iron ore prices reached $219 a tonne, which is much higher than the prices jumped after China's announcement. Soon these prices will cross $235 per tonne. A foreign brokerage house has issued an alert this week that iron ore prices will jump up to 30 percent. Western countries are going to levy 40 percent mining tax, which will give an opportunity to Indian metal companies to increase prices. This is going to increase our interest in metal stocks.
NMDC's OFS came at Rs 165 per share. I said this opportunity should be capitalized and NMDC recently closed at Rs 179. The stock will rise further after the first quarter results are out. Some analysts have said that its price will increase by 30 to 50 rupees. If this happens then it will be a matter of benefit. NMDC has invested Rs 18500 crore and will spend another Rs 4500 crore. That is, a total investment of Rs 23000 crore will be made. Analyst expects NMDC to be sold for Rs 9000 crore. But I want to point out that this is not a Holding subsidiary case. If NCLT feels, then it will take some decision. This means that the government will continue to be the promoter of NMDC Steel. The listing of NMDC Steel will be above Rs 75 and if some premium is taken then Rs 98. Thus, 50% of the valuation of the holding subsidiary does not apply here. In a separate story, we had forecast the quarterly results for FY22.
With Zomato issue Rs 3.75 lakh crore got blocked and still it is not affecting the market, which shows the liquidity of this market. Reliance Retail has announced an IPO ahead of LIC's entry into the market. Zomato is only a valuation game as of now and the company is not earning per share and also has a lot of public eye, there could be danger ahead. In any case, given such valuations, we feel that BSE (we have issued a valuation note) is a better stock at a market cap of just Rs 5000 crore. Even though BSE rose 33% after my opinion, still I believe it is very cheap at current market price of Rs 1200 and definitely moving towards our first target of Rs 5000.
Apart from IPOs, the market has also witnessed a boom in mergers and acquisitions. Pharmeasy acquired Thyrocare for around Rs 4600 crore and many more mergers, demergers and acquisitions are happening as if nothing will be left for the latter. Reliance acquired Just Dial. Hearing Starbucks and Larsen are also making some acquisitions. This clearly states that corporate India is in a hurry to ride the bus because they know 4 to 5 years is an exciting time, it may even be 10 years. Keeping this in mind and my prediction for Nifty is 30000 (in 4 years) whereas some other experienced people think Sensex will reach 3 lakhs (in 10 years). So, I suggest you plan your investments and don't miss out on earning opportunities.
We believe many stocks will hit new highs post Q1 results as they are set to beat market estimates. We believe that the large cap stocks which have been in consolidation mode for the last 2 to 3 months will start moving ahead with the results. In small and mid cap, we prefer stock specific rather than mad scramble. We should choose stocks like Emkay Exim, which can be 10 badger as the business model is very strong and the valuations are very cheap even at the current market price. Such stocks come only once in your life. We are in the constant process of finding such James. We found Alpro International for Rs 53 and the stock went up to Rs 70 in no time. All research notes are available on our website www.cniresearchltd.com.
Tata Power has signed an agreement with HPCL to have 18000 petrol pumps where electric vehicle charging stations will be set up by Tata Power. BHEL will become the world's largest electric vehicle battery player. Tata Power will soon become a 100 GW green power company. Tata Power will grow like Tata Motors in this sector. Keep this stock for a long time.