The markets closed near day's high after a sluggish start. Technology stocks bucked the treand with IT major coming positive set of numbers inline with street expectations. IT index gained a whopping 6% with Infosys, TCS, Wipro, HCL Tech among the top gainers on the bourses. The broader markets also closed higher with breadth is in the favour of advances. Oil, pharma, realty and power sectors also ended higher.
Sensex closed up 346.02 points or 2.19% at 16153.66, and the Nifty up 101.85 points or 2.13% at 4879.65.
Vikas Sethi, MD, Sethi Finmart Private, is bullish on Kalindee Rail Nirman, and ABG Shipyard from the midcap space.
On Kalindee Rail Nirman:
It is engineering and construction company mainly specializing and executing rail projects. The company is likely to be a major beneficiary of the investment projects announced in the Railway Budget like construction of new tracks, modernization of platforms, and commencement of work on dedicated freight corridors. The company already has a very strong order book of around Rs 500 crore and is likely to get another Rs 200-300 crore worth of orders in the next few months. It came out with fantastic results for the last December quarter with net profits nearly doubling at around Rs 6.2 crore. The expected EPS for FY09 would be Rs 29. It is thus available at multiple of 10 times FY09 earnings. I expect the company to achieve a target of Rs 550 in the next 12 months.
On ABG Shipyard:
The company came out with excellent results for the last quarter with its net profits rising around 60% to Rs 47 crore from Rs 29 crore during the previous year’s quarters. The company is actually expected to report an EPS of Rs 56 for FY09 and Rs 76 for FY10. It is thus available at a reasonable valuation today. The company had also recently made a preferential allotment of around 40 lakh convertible warrants to its promoters at the price of Rs 797 per warrant which is significantly higher than the current market price. So, attractive valuations, strong order book, and higher margins compared to its peers would make it s buy with a target price of Rs 1,100 in about 12 months.
Sudarshan Sukhani, Technical Trends feels that Ranbaxy may see doubling of prices from current levels. He is also upbeat on Essar Oils.
On Ranbaxy:
Ranbaxy is in an uptrend, it is in a bull market of its own. The idea should be that every dip whenever the market corrects and the stock corrects, it should be a buying opportunity. This stock-the target from the charts tell us that we are going to see a doubling of prices from current levels. A time is of course a factor but it is a quite strong probability.
On Essar Oil & Balrampur Chini:
Essar Oil belongs to that oil and gas group that is primarily going to lead this market whenever it goes up. So I am pretty upbeat on that.
Balrampur Chini is bouncing up and down; it is still in a trading range. So at this point, I am not very upbeat on sugar as such. I think it probably needs much more time to consolidate before we can say okay sugar is on. But at some point sugar will resume its upward move that point may not have come.
On Reliance Industries:
It has broken out of all the resistance levels, which the Nifty has still not done. At least Nifty has broken only minor resistance today. But Reliance did that last week even the major ones. So clearly there is something going on in Reliance and if at all somebody wants to take a speculative futures position then Reliance is the safest of the bets on the long side and a simple pattern target is more than 3,000 and it is not easy to say it will reach there or cross it but that is what the charts suggest that the trend is very clearly up.
On Gujarat NRE Coke:
Gujarat NRE Coke is a buying opportunity for investors at any point of time. Ideally you have to buy it when it is going through a small dip or correction and when the markets are correcting and not necessarily you do not buy today but the stock itself is worth buying and putting in your portfolio. One should have a little patience I think it will pay off.
Vikas Sethi's Disclosures: I do not hold any of these stocks but would have recommended them to my clients.
Sudarshan Sukhani's Disclosures: It is safe to assume that my clients & I may have an interest in the stocks/sectors discussed.
Source: Moneycontrol.com
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