Recommendations From Banking and Shipping Sector

Dalal Street Investment Journal India's no 1 Financial Magazine selects two aggressive stock picks in every issue, with a 15 day horizon based upon the bullish trend during that period. For this issue, we are recommending companies from the Banking and Shipping sectors.

IDBI Bank provides personalised banking and financial solutions to its clients in the retail and corporate banking arena through its network of branches and automated teller machines (ATMs). Union Finance Minister Arun Jaitley in his annual budget 2016-17 announced that the government is looking to divest its investment in IDBI which currently holds 80.16 per cent. Recently, IDBI Bank has allotted 15.8 crore equity shares, equivalent to 7.16 per cent stake, on preferential basis to LIC of India, which now holds over 14 per cent stake in the state-run lender. On financial front, IDBI’s net revenue from operations decreased by 7.23 per cent to Rs 7362 crores in Q3FY16 as compared to same period in previous financial year.  The net interest income (NII) this quarter has increased by 8.74 per cent YoY. The bank reported a net loss of Rs 2184 crores in Q3FY16 against net profit of Rs 103 crore in Q3FY15.

Reliance Defence and Engineering

Reliance Defence and Engineering (RDEL) has developed an integrated shipbuilding; defence ship production and offshore construction. The company operates India's largest integrated shipbuilding facility in Gujarat. Its facility houses the modular shipbuilding facility with a capacity to build fabricated and outfitted blocks. RDEL has delivered seventh offshore supply vessel (OSV) to Oil and Natural Gas Corp (ONGC). The company took over Pipavav Defence and Offshore Engineering Company in the month of January 2016. Its total value of seventh OSV from series of 12 indigenously designed and built ships, valued at Rs 700 crore. RDEL formed joint venture (JV) with Rafael, to take up projects worth USD 10 billion (Rs 663 billion). The company’s new formed JV will operate for specialised areas including air- to-air missiles. The government ruled out 100 per cent privatisation in defence production on Defence Expo 2016 held at Goa. Prevailing positive sentiment across defence sector will improve in future term.