Bull’s Eye: Buy Titan, Bajaj Finserv, Tata Coffee



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Bull's Eye: Buy Titan, Bajaj Finserv, Tata Coffee


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Bull’s Eye, CNBC-TV18’s popular game show, where market experts come together to dish out trading strategies for you to make your week more exciting and compete with each other to see whose portfolio is the strongest.

Remember these are midcap ideas not just for the day, but stocks that look attractive in the medium-term as well.

This week, Rajesh Agarwal of Eastern Financiers, Ashish Kapur of Investshoppe and Lancelot D Cunha of ITI Wealth Management battle it out for top honours.

Rajesh Agarwal, Eastern Financiers

Buy Titan Industries with a stoploss of Rs 227 and a target of Rs 244. The company is doing well both in watches and jewellery division. Even the eye-wear division has started showing good results. They have recently started a new jewellery unit in excise free zone of Pantnagar and the board is meeting on 30th of April, this month for declaring the results. Going forward we believe its strong brand of the company, the retail presence and the growing difference for branded jewellery – this company is going to do better in coming years also.

Buy Natco Pharma with a stop loss of Rs 397 and a target of Rs 445. This company is a leading player in cancer drugs and manufactures whole range of branded and generic drugs not only for domestic market but for international markets also. Recently they have entered into an agreement with the Swiss company that would help them into growing in cancer drugs. This company has recently won a compulsory order license from Bayer to manufacture cancer drugs in India.

Buy Siemens India with a stop loss of Rs 768 and a target of Rs 810. The company reported a strong set of numbers yesterday exceeding market expectations. 23% topline growth and 10% growth in bottom line was reported. The company has secured order worth 18,000 million in this quarter and order back log stands at 1.26 lakh million as on March 31st. We think going forward the company is likely to do well with the kind of management, the kind of parent this has.

The fourth and the last stock that we have in our list today is Jindal Steel and Power. This again has reported a very good set of numbers yesterday with around 42% jump in top line and around 16% jump in bottom line. Growth is witnessed in production of steel and power with around steel and pallets showing a growth of around 24% power grew by 42%. The kind of expansion plan this company has in power sector, the kind of asset this company has in Bolivia – we believe that this company is highly undervalued at the current levels. Trading at around nine times FY13 earnings we believe this company leaves enough scope for appreciation.

Lancelot D’Cunha, ITI Wealth Management

Buy Bajaj Finserv with a target of Rs 779. Bajaj Finserv has been extremely bullish over the last 2-3 months and it has outperformed the market. I have seen the stock move up on volumes and coupled with the increased volumes we have seen an increase in price. This is a very positive trend.

Buy Mcleod Russel . It is the world’s largest tea producer and this stock also has been moving up on volumes over the last few months. It’s come of a bit from its highs and is now moving upwards and we have seen a breakout here at this level so I expect it to move further up and hit its target price of Rs 284.

Buy Pantaloon with a target price of Rs 174. Pantaloon has been trading in a very narrow range and it has recently broken out of that range. Now based on the upward momentum that we are seeing I expect it to move upwards thereafter and we should see it hitting its target price of Rs 174.

Sell Ambuja Cements . It came out with disappointing numbers where the operating profits were lower because of higher employee cost despite increase in revenues and the stock had gone up tremendously on valuations and given the overhang of the CCI investigation on cartelization for cement industry the stock has been continuously falling and has broken its 200 day moving average on the downside. So I expect a momentum to take it further down and may be hit its target of Rs 141.

Ashish Kapur, Investshoppe

My first call for the day is a long position on Tata Coffee with a target of Rs 900 and a stop loss at Rs 838. The company has been reporting good numbers and the growth is likely to sustain going forward as coffee prices stabilize world over. More over their brand Eight O’ Clock has been gradually generating better numbers, getting better acceptability in various markets. We are quite comfortable. It’s a stock which is defensive in nature, is not getting adversely affected by any of the economic vows.

My second pick for the day is a long position on Asian Paints with a target of Rs 3,700 and a stop loss at Rs 3,440. Our reason for being positive on Asian Paints is that this is one company which has delivered strong numbers continuously over the last many quarters. Going forward, we have reason to believe that this momentum will continue. Asian Paints is getting more and more accepted in the decorative paint segment. Moreover the international business is also delivering good growth. The recent acquisition of Berger Paints in Singapore gives then a good footprint in Asia, Middle East and in the Caribbean markets.

Third call for the day is a long position on Cummins India with a target of Rs 507 and a stop loss at Rs 472. My reason for being bullish on this counter is that though it is operating in very highly competitive power as well as in the industrial segment. It has managed to keep its head above water in very diligent –check– times. Moreover, the guidance of the management going forward is very encouraging. They had a very muted performance in the previous quarter but the management has guided around 15% growth both in their domestic as well as in international business going forward. EBITDA is also likely to increase by about 12-15%.

My final call for the day is a short position on JSW Steel with a target of Rs 650 and a stop loss at Rs 704. My reason for being bearish on this counter is that they have a very high proportionate of raw material cost compared to other peers like Tata Steel and SAIL. Moreover, unlike Tata Steel and SAIL, this company is not fully integrated in terms of their raw material supply. It is dependent on import of metallurgical grade coke as well as iron ore. Both these raw materials are in great demand and the prices have soared up.


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Saturday, April 28th, 2012 EN

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