GTL LTD........CLASSIC CASE OF FAST-FURIOUS FALL.
Hello Everyone,
This is not the first time that a "stock" has fallen so fast and furiously. Let me remind few instances which became history in Indian Markets.
Few years back United Spirits had fallen in one single day from 800 levels to 500 levels and recovered in few days.
Few quarters back Orchid Chemicals had fallen to two digits and recovered in same way.
Reliance Infra had fell 23% in one single day and recovered all its losses in few days itself.
Same was with Core Projects, stock had fell to 151 levels and recovered to 235 on the same day and still trading much much above it.
SKS Microfinance fell to 260 levels and recovered and even crossed 400 in these days. Today too the stock is 377.
Same fate was with Sun TV and recovery too is so fresh in our minds.
Now it is GTL.
This is not the first time that a "stock" has fallen so fast and furiously. Let me remind few instances which became history in Indian Markets.
Few years back United Spirits had fallen in one single day from 800 levels to 500 levels and recovered in few days.
Few quarters back Orchid Chemicals had fallen to two digits and recovered in same way.
Reliance Infra had fell 23% in one single day and recovered all its losses in few days itself.
Same was with Core Projects, stock had fell to 151 levels and recovered to 235 on the same day and still trading much much above it.
SKS Microfinance fell to 260 levels and recovered and even crossed 400 in these days. Today too the stock is 377.
Same fate was with Sun TV and recovery too is so fresh in our minds.
Now it is GTL.
On Thursday 16th June stock was 408, on Friday 338, on Monday it fell to 127.95. Tuesday, after making high of 148 closed at 123.30. Wednesday, 22nd June, it has closed at 116.
Fundamentally, nothing is wrong in the company. At this rate the valuations are very attractive. Stock is available below its Book Value! Stock available at 5-Year Low.
So many rumors floating in the market. That might be Mauritius treaty, inability to raise funds, default on FCCB's, sell-off on pledged shares and many more.
What I could understand the basic selling first came from Fear, Speculation, which got converted into proprietary selling. Clients and Big Boys who had got funding in front of this share who were unable to meet the margin requirements were forced of "automatic" selling. Now this type of selling can happen at any rate irrespective of the fundamentalsFundamentally, nothing is wrong in the company. At this rate the valuations are very attractive. Stock is available below its Book Value! Stock available at 5-Year Low.
So many rumors floating in the market. That might be Mauritius treaty, inability to raise funds, default on FCCB's, sell-off on pledged shares and many more.
Such are the cases where we get so ridiculous valuations. During Ketan Parikh era GTL had made high of 3500 and low of 48. At that time GTL was something different, today it is alltogether different. Today stock is available at very low PE multiple. Such are the opportunities for "Accumulation". In today's time hardly any house will recommend. First they will accumulate and then come with "Buy" Report.
I will go with Sir Warren Buffett and his follower Shri Raamdeo Agrawal. Pay a Fair Price to your company. Such opportunities dont come everyday, but when coming grab them.
It is what Price you are paying for a good company and how much time you are holding will determine the rate of return.
I dont mean here that stock cant fall more. Markets can behave irrationally. Stock can fall more, but do use now these rates for accumulation.
Stock should be ACCUMULATED at every 20/- fall.
When accumulating in such cases one should give a decent time period, atleast 2-3 quarters of HOLDING.
I strongly believe at some depressed "Price" all the "uncertainties" and even "bad" news gets discounted. Somewhere the "Value" emerges.
Happy Investing
Kishore
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