Hold stock of Oriental Bank

“Oriental Bank of Commerce, net profit down by 24% to Rs. 1,141.56 crores in FY12 as against of Rs 1,502.9 crores in FY11. OBC has high amount of slippages in this fiscal year but going forward the slippages are expected to be subdued as compared to the current year and recoveries are anticipated to increase. At current market price of Rs 220, the stock quotes at 0.55x adjusted book value FY13 at Rs 406.00. However we revise our PAT estimates by 3% and 5% for FY13 and FY14 respectively. The management is confident of achieving industry average growth along with improved margins in near future but the concern is the asset quality for a bank. We value the bank at Rs 223 at 0.65x ABV FY13; we rate the stock as a NEUTRAL with a target of Rs 263,” says Magnum research report.

Sell stocks of Godrej Consumer

“Godrej Consumer Products Ltd (GCPL) reported a strong set of numbers for the quarter and the year ended March 2012. On a quarterly consolidated basis, Y-o-Y, the company registered a topline growth of 31% from `10,110.4 Mn to `13,230.4 Mn. The numbers are not fully comparable because of the acquisitions during the course of last 12 months. At the domestic level, the household insecticides and soaps business continued to grow well while hair care continued to face headwinds. Household insecticides sales have grown by 28% while the category grew at 9%. Domestic soaps business grew by 30% over Q4FY11. 17% of this was volume-led. Hair Colors business however grew slower than the category. It grew by 13% while category growth was 22%. The Indonesian business (Megasari Group) continued its impressive performance. Sales grew by 30% (20% in local currency). EBITDA stood at 20.7% with Revenues of ` 2,550 Mn. Business did well in Africa, Latin America and Europe too. Africa registered sales of ` 1,280 Mn. Overall EBITDA (Africa) stood at 19.3%. Sales in Latin America grew by 29% to ` 820 mn with EBITDA at 16.3%. Revenues for Europe grew by 21% to ` 480 Mn and EBITDA was 10.5%.”

“Overall Expenditure has been lower than the sales growth. This was partly due to expanded Gross margins. Operating Profits were up by 44% at ` 2,481 Mn as compared to the same period last year. Interest costs continued to be high. This should come down over the coming quarters as the Company has reduced its debt partially. Consolidated PAT increased by 36% at `1,926.5 Mn. EPS stood at ` 5.8. On an annualized consolidated basis, the Company registered a topline growth of 32% from ` 36,763.1 Mn to `48,509.4 Mn. Operating margins stood at 17.74%, higher by 45bps than FY11. The year also saw some inflows through exceptional items due to termination of license of Kiwi and Brylcreem brands. Overall PAT was higher by 41% at `7,267.2 Mn. EPS stood at ` 22.3. The company has declared a final dividend of ` 1.75. This takes the total for the year to ` 4.75. At the CMP of `566.75, GCPL trades at a PE(TTM) of 25.4 times. Excluding the one time exceptional gain during the year, adjusted PE however would be in excess of 34. Even if one were to account for the earnings that will get added from the acquisitions in the last 12 months and which do not yet show up in the TTM numbers, PE would still be around 31 times. Valuations are very high.”

“To understand future growth, on the domestic front, household insecticides business is doing well and may continue the good run. However soaps is a mature category and this may not grow at rates experienced for most part of this year. Hair colors too has become very competitive with the entry of MNCs. Growth here may be uncertain. On the international front, all the businesses seem to be in good stead. Excluding the currency aspect though, their growth rates (based on last 3 to 5 year data) may be in the range of 15%-20%. We believe that valuations are too high for the kind of growth that we may see in the near to mid-term. Hence recommend investors to 'Exit',” says Parag Parikh Financial Advisory Services research report.

Buy stocks of Ranbaxy Labs

Sukhani told CNBC-TV18, “I would still buy Ranbaxy Labs. It was in my buy list in the morning and this tells viewers that we go wrong all the time. In fact Apollo Tyres and Ranbaxy were both in my buy list and both surprisingly are down today. That’s the markets for you.”

He further added, “The view has not changed, because Ranbaxy is now coming out of a long base. It’s breaking out. It’s doing all the right things. So I would be a buyer on every dip. Dip doesn’t mean just because we are speaking about it, we have to go and buy it. It means when the stock price stops falling then the trade here is to go long in it. Don’t go short.”

“SBI at Rs 1,850 if I am a long-term investor I wouldn’t worry about how much lower, I would simply buy a few shares for my portfolio. It’s a dream, this price. How much lower depends broadly on what the Nifty is doing. I sense the Nifty is going lower. I have been telling you that. So my own idea is that SBI can revisit Rs 1,450-1,500 this time.”

“Manappuram we cannot short, it’s not in the F&O list. We have talked about Manappuram many times and I have explained every time I was asked, should we buy now? I said please don’t touch it. That’s the only thing we can do with that one that don’t get into it. Even now it’s not worth buying. Suzlon is a disappointment, because I was very upbeat on the stock and when it rallied towards Rs 30 I thought maybe this is it, but clearly the market has its own wisdom. I am not able to suggest a short in Suzlon. There are many other opportunities elsewhere. So maybe Suzlon can simply be left aside till it decides to build a base.”

Buy Yes Bank; target of Rs 450

“YES intends to strengthen its retail liability franchise and has raised its guidance of overall branch network to 900 branches by FY15 from 750 branches earlier. With rapid branch expansion, differentiated product offerings (6-7% interest rate on SA balances and products like YES Vijay), and leveraging of strong corporate and SME relationships, YES expects to achieve CASA ratio of 30% by FY15 (15% at the end of FY12) and increase the share of retail term deposits to 36% by FY15 as compared to 18% in FY12.”

“Overall loan book guidance remains unchanged at INR1t by FY15, implying a CAGR of ~38% over FY12-15 and 29% if credit substitutes are included. YES also maintained its guidance of increasing its balance sheet size to INR1.5t by FY15, implying a CAGR of ~27% over FY12-15. The incremental growth drivers would be SME and retail segments; managment targets to increase the proportion of commercial banking and branch banking to 30% each as against 22% and 18%, respectively at the end of FY12.”

“Diversified fee income stream, sound ALM (NIM has remained at 2.8-3% irrespective of liquidity conditions) and strong control over opex and asset quality are the key strengths for YES. With deregulated savings deposit rates, strong branch expansion and focused strategies, we expect savings deposit traction to remain healthy. While operating parameters remain strong, any negative surprise on asset quality remains a key risk to RoA and RoE estimates of 1.5%+ and 23%+. We expect EPS CAGR of ~24% over FY12-14 (without assuming dilution), on the back of 42% EPS CAGR over FY08-12. Maintain Buy,” says Motilal Oswal research report

Accumulate HUL; target of Rs 456

“Hindustan Unilever (HUL), we attended analyst day organized by HUVR which focused on it strategy, recent innovation/product launches and sustainability initiatives. With a core focus on volume growth, the company has brought in product innovation (resulting in premiumisation) and improved its supply chain by leveraging technology”

“HUVR has increased its efforts towards understanding consumer and also address the problems of distributors. Increased its reach in the rural market and to expand further through engagement with telecom companies (already implemented in four states). HUVR would continue to focus on its existing product portfolio and expand its offerings in categories where its presence is not broad based (eg:- expand in Hair Care and Foods space). Sustainable living plan with a target to contract 100% of its raw material requirement.”

“We believe sustained volume growth and ability of HUVR to gain market share and improvement in its product mix is encouraging. The company will also benefit from the increase in its rural reach and now plans to focus on “Perfect Store” strategy which would improve its visibility in the interiors. We maintain our estimate and continue to prefer HUVR in the large cap. At a CMP of Rs 428, the stock trades at 30x FY13E and 26x FY14E. We recommend an Accumulate with a price target of Rs 456,” says Dolat Capital research report

Buy Bharti Airtel; target of Rs 370

“Bharti Airtel’s revenue and EBITDA numbers were inline with our estimates however PAT was lower as forex loss hit the net profit. The company reported net sales of Rs 18739cr, marginal growth of 1% QoQ. EBITDA stood at Rs 6233cr, increased by 5% over Q3FY12. The company reported healthy operating margin improvement of 110bps QoQ to 33.3% on account of curtailed operating cost. Net profit for the quarter was Rs 1006cr. Net profit margin dipped 10bps to 5.4% as depreciation & amortization increased. Also the company incurred forex loss of Rs 132 crs in Q4FY12 which dented net profitability. We believe Bharti will continue to post strong revenue growth on the back of increasing subscriber base, higher in data revenue which will help to improve ARPUs and volume growth in Africa business. However stretched balancesheet and regulatory overhang will drag the valuation. The company enjoys leadership position in India and Africa operations are showing steady margin improvement. After steep correction in stock price, it is available at attractive valuations. Maintain BUY.”

“The company reported 1% revenue growth on sequential quarter in spite of seasonally weak quarter. This growth was driven by 3% subscriber growth and 1% increase in ARPU. Company’s net subscriber base stood at 181.2mn at the end of Q4FY12. ARPU increased from Rs 187 to Rs 189. MoUs increased 3% QoQ to 431mnS from 419mns in Q3FY12. Africa posted revenue growth of 1.3% QoQ led by 4.5% increase in subscriber base to 53.1mn. MVAS improved by 10bps sequentially to 14.3%. In spite of increase in monthly churn to 8.8% from 7.8%, the company reported healthy net subscriber growth. We believe steady subscriber addition and ARPU improvement driven by increased contribution from data services will help to increase net sales in FY13E. Operating margins improved by 110bps QoQ to 33.3% on account of curtailed operating expenses. Africa business reported increase in EBITDA margins by 350bps from 24.3% to 27.8% showing signs of improvement. The management guided strong operating margins to continue in both India and Africa market.”

“Q4FY12 was a strong quarter for Bharti reporting growth in all the parameters. We believe the company is well placed to capture new opportunities in voice as well data segment. Africa business has been showing steady growth in terms of revenue as well as margins. With recent regulatory announcement, the stock has shown steep correction. However strong fundamentals of the company are intact. The stock is trading at 6.7x EV/EBITDA to its FY13E earnings. We maintain our BUY recommendation on the stock with a target price of Rs 370,” says KRChoksey research report.

Buy stocks of Petronet LNG; target of Rs 195

“The Q4FY12 results of Petronet LNG (PLNG) were below our estimates primarily on account of lower than expected regassification volume. In Q4 FY12, the PAT increased 18.8% Y-o-Y but declined 16.9% sequentially to Rs. 2.5 bn as against our expectations of Rs. 2.8 bn. For the quarter, the net sales increased 59.9% Y-o-Y and 0.7% sequentially to Rs. 63.8 bn driven by increase in volume and LNG prices.”

“As against our expectation of 147.4 TBTU of regassification volume the company regassified 134.9 TBTU. The sequential decline in regassification volume was on account of lesser off take from some fertilizer plants due to normal maintenance shut downs and lower demand from power plants. The long term volume declined 5.4% Y-o-Y and 4.6% sequentially to 93.5 TBTU while the tolling volume increased 10.4% Y-o-Y but declined 31.6% sequentially to 15 TBTU. PLNG's 7.5 mmtpa long term contract are on take or pay basis so the volume is likely to pick up in the coming quarters. The gross margin of the company came below expectations as the capacity utilization of the plant came down from ~ 115% in Q3 FY12 to ~106% in 4Q FY12, thus, impacting the efficiencies gains and a likely lower than expected marketing margin on the spot/short term cargoes. The increase in the spot LNG prices could put pressure on the company's ability to charge higher marketing margins.”

“We cut our FY13E and FY14E regassification volume assumption downwards at the Dahej terminal to 10.7 mmt and 11.4 mmt factoring in the lower capacity utilization. We lower our FY13E and FY14E EPS estimates to 13.1 and 15.1 respectively as against the earlier estimates of 14.9 and 15.8 respectively, to factor in the lower than expected capacity utilization at the Dahej terminal. The uncertainty over the regulation of LNG business (regassification and marketing margin) has led to the recent correction in the stock price. However the management reiterated that the LNG business does not fall under the purview of the regulator and, hence, the concerns are unwarranted. At CMP, PLNG is trading at 10.3x FY13E and 9.0x FY14E EPS of Rs. 13.1and Rs. 15.1 respectively and at an EV/EBIDTA of 7.5x FY13E and 5.9x FY14E. We maintain buy rating on PLNG with a revised DCF based target price of Rs 195 per share,” says FinQuest Securities research report.

Avoid stocks in banking sector at current level

Mehta told CNBC-TV18, “I think generally positive on the banking space and inflation numbers which will be out this month will also drive the trend. But broadly with oil prices correcting and commodity prices also showing a bit a slide, banks could be market performers or even out performers and within the banks preference is clearly for the private sector banks. We have seen all of them come out with excellent set of numbers, some of the issues which were there with the quality of the assets also have been resolved, they have been able to generate decent net interest income growth as well as other income growth as well and valuation wise they are at extremely attractive levels."

He further added, "Infact, if you scan the entire market its only the private sector banks where we are seeing secular growth apart from the FMCG stock and they are attractive levels and markets will tend to reward the performance which has come through. So we would like to be a bit underweight in the private sector banking space. PSU banks are very volatile in their earnings as well as price although the overall banking sector we are positive on a bit difficult to select the right PSU banks and then extract the returns from them. So just like to avoid them at this point in time.”

Stocks of JP Associates may slip to Rs 64-65

Tulsian told CNBC-TV18, “Definitely Rs 100 crore penalty is quite negative for the JP Associates. But more negative I have seen is that High Court has restrained the company from putting this 62 Megawatt captive power plant and in fact we all know that for these energy intensive industries like the non-ferrous metal or may be like the cement. If you don’t have your own captive power plant it will really be a big problem for the company. So, in fact that is seen more negative for the company in fact in my point of view. But in the near term the stock looks negative, but may be at a level of Rs 64-65 one can look to initiate long trades on the stock.”

Kingfisher Airlines may be good short term bet

Tulsian told CNBC-TV18, “For quick and early gains probably I will choose Kingfisher Airlines, because for the simple reason that the 31st March at around that time we have been hearing that Vijay Mallya will really be taking the initiatives to settle the dues or maybe to expedite the process of monetizing some of its assets. We have started hearing that again probably with the Mangalore Chemical Fertilizers. Last week there was buzz in respect to the United Spirits, prior to that it was in United Breweries."

He further added, "So I think now it is a compulsion or Vijay Mallya has been put against the wall and now he will be forced to take the early action and steps in this matter in respect to the liquidations of the liabilities of Kingfisher Airlines and if that happens I think the swift up move or the swift revival of the interest which we will notice is going to be seen in case of Kingfisher Airlines and I won’t be surprised to see the share moving past Rs 20 in next one month or so. So probably that will be my short-term trading pick amongst all three which you have mentioned.”

stocks of Unites Spirits can slip to Rs 630

Patel told CNBC-Awaaz, "One should sell United Spirits at Rs 700-710 with a stoploss of Rs 751. The stock can go down to 630 in next 30-45 days. If stock slips to Rs 630 then we can see level of Rs 575 at downside."

The company touched its 52-week high Rs 1,123.40 and 52-week low Rs 450.00 on 08 Jul, 2011 and 12 Jan, 2012, respectively. Currently, it is trading -35.82% below its 52-week high and 60.22% above its 52-week low.

Hold stocks of Cipla

Bansal told CNBC-Awaaz, "One should hold Cipla with a stoploss of Rs 319. The stock is showing positive indication on chart. We can see level of Rs 342-343 in coming days. One can book profit at that level."

The company touched its 52-week high Rs 359.00 and 52-week low Rs 273.60 on 07 Feb, 2012 and 06 Sep, 2011, respectively. Currently, it is trading -8.86% below its 52-week high and 19.59% above its 52-week low.

Sell stocks of Sintex Industries above Rs 60

Bansal told CNBC-Awaaz, "One should sell Sintex Industries at above Rs 60. The stock has important support at Rs 60. If it goes down from support level then we can see level of Rs 46-45 at downside."

The company touched its 52-week high Rs 195.00 and 52-week low Rs 58.70 on 31 May, 2011 and 19 Dec, 2011, respectively. Currently, it is trading -67.18% below its 52-week high and 9.03% above its 52-week low.

Buy stocks of KPIT Cummins

Sukhani told CNBC-TV18, "For KPIT Cummins, if somebody is a position trader then there is an opportunity even after this tremendous rally. You can buy now, wait for a few weeks, six-eight weeks or 10 weeks and chances are that you will make money, certainly much more than the bank’s fixed deposit rate. But if somebody is looking at a swing trade, today and getting out tomorrow, I don’t think this is a low risk trade for short term traders."

He further added, " Kingfisher Airlines is in my library remains a short sell. I don’t exactly know how you sell such a low price share now. But if there is a small rally, it should be sold into."

Don't buy stocks of Lanco Infra at current level

Bansal told CNBC-Awaaz, "Investors should not buy Lanco Infra at current level. The stock is looking weak on chart. One can sell the stock with a stoploss of Rs 14.5. The stock can go down to Rs 9.4-9.5 in next 30-45 days time."

The company touched its 52-week high Rs 37.00 and 52-week low Rs 8.50 on 04 May, 2011 and 19 Dec, 2011, respectively. Currently, it is trading -63.14% below its 52-week high and 60.47% above its 52-week low

Buy stocks of Hyderabad Ind; target of Rs 510

“HIL, a C K Birla Group incorporated in 1946 is into the business of producing building products, engineering goods and industrial products. HIL is the market leader in its segments. HIL markets its product AC and fibre cement sheets under the well-known brand “Charminar”. The total capacity of the cement sheet is 8.55 lakh tpa, prefab building panels at 4.60 lakh tpa, prefabricated autoclaved capacity at 3.05 lakh tpa and thermal insulation capacity is 6,000 tpa. The commercial production of sheeting line 2 in Uttar Pradesh has started w.e.f. 09 February 2012. HIL is also the largest manufacturer of calcium silicate, insulation blocks, pipe sections and jointing for gasketing, thereby meeting the critical needs of the fertilizer, engineering & chemical industries. It also makes aerocon prefab panels, autoclaved aerated concrete blocks, which find applications in the construction of buildings, malls, shopping complexes and office partitioning etc. HIL’s most modern manufacturing plants are located at 12 locations in 8 states-Andhra Pradesh, Gujarat, Haryana, Jharkhand, Kerala, Maharashtra, Orissa and Uttar Pradesh. HIL has a strong & extensive distribution network with nearly 8000 sales points spread across the country which is serviced by its 45 depots.”

“During Q4FY12, sales rose 29.8% to Rs248.6 crore and net profit by 71.4% to Rs18.0 crore. (YoY). OPM and NPM stood at 13.5% and 7.2% compared to 10.9% and 5.5% respectively in Q4FY11. EPS for Q4FY12 stands at Rs24.0 Vs Rs14 in Q4FY11. During FY12, sales advanced by 18.4% to Rs857.8 crore and net profit rose by 19.8% to Rs60.6 crore. OP and NP margin stood at 13.5% and 7.1% against 13.4% and 7.0% respectively in the corresponding period last year. EPS for FY12 stood at Rs81.1.The DER as at FY12 stood at 0.21:1 (0.29:1) whereas the value of the net block stood at Rs326.4 crore (Rs289.9 crore).”

“At the CMP of Rs381, the share is trading at a P/E of 4.1x on FY12E and 3.5x on FY13E. We recommend BUY with an increased price target of Rs510 in the medium-to-long term,” says Sunidhi Securities research report.

Buy stocks of Godrej Consumer; target of Rs 575

“GCPL’s Q4FY12 consol Net sales, EBITDA and recurring PAT came in at Rs13.2bn (up 32% YoY), Rs2.48bn (up 40% YoY) and Rs1.76bn (up24% YoY) v/s our expectations of Rs13.49bn, Rs2.5bn and Rs1.8bn, respectively. Indian subcontinent posted 21% sales growth, led by Soaps and Household Insecticide which grew 30% and 28%, respectively. Strong Soap performance was aided by low base. However, Soaps category posted a sedate 4% volume growth, per GCPL. Household Insecticide’s performance (eight consecutive quarters of 25% plus growth) reflects the impact of strong distribution synergies with GCPL as well as innovative new launches backed by aggressive brand investments. GCPL has likely gained market share as category grew only 9%. International revenues grew 49% led by Megasari (up 30%) and LATAM division (up 29%) and inorganic growth (Darling). International performance was driven by new launches, distribution expansion and realisation of operational synergies. Operating profitability in international business improved sharply (EBITDA up 2x) on the back of better produc”

“Consolidated operating margins improved 100bps YoY reflecting the impact of recent price hikes as well as improved mix. Net forex impact on standalone and consolidated entity for the quarter stood at Rs(8)m and a gain of Rs17m, respectively. We maintain ‘BUY’ rating, with a revised 12 month forward TP of Rs575 (P/E of 22x FY14e). Continued traction in Household insecticide segment, coupled with improved balance sheet (leverage down to 0.33x) and working capital metrics lead us to revise our P/E multiple to 22x (earlier 20x), still a discount of 10% to other tier II consumer companies. Discount is fair in our view, given the high proportion of overseas revenue (38%),” says Prabhudas Lilladher research report.

Buy stocks of Titan Industries; target of Rs 290

“Titan’s Q4FY12 Sales, EBITDA and PAT came in at Rs22.8bn (up 28%), Rs2.07bn (up 96%) and Rs1.44bn (up 72%) against our expectations of Rs21.7bn, Rs1.78bn and Rs1.39bn, respectively. Watches volumes were up a robust 14% for Q4 and 15% for FY12, whereas Jewellery volumes declined 7% for Q4 but for the full year it was up 5%. Titan added 41 stores during the quarter, taking the total count to 827 stores with more than 1m sq.ft of operational space. Management in the con-call indicated a pick-up in demand in the last two-three weeks in Jewellery sales though Coins sales remained subdued. Eyewear and Precision Engineering posted 17% sales growth (Eyewear revenue growth of 26% for FY12). Strong volume growth in Watches division remained the key highlight of the quarter.”

“Jewellery EBIT posted 29% YoY growth, while margins remained flat at 10.1%. Studded Jewellery mix improved to 32% for the quarter even though for FY12 it came in at 26%. Titan has started promoting affordable diamond jewellery under the price point of Rs10-25k to attract new customers into the segment. Watches margins improved 40bps QoQ led by price increases. Nonetheless, entire benefit of pricing improvement (13%) did not reflect in margins owing to hedging strategy.”

“We like Titan’s strategy of expanding its presence in Lifestyle segments, essentially categories where demographic dividend can be most leveraged. We reiterate Titan as our top pick in the Retail space and maintain our ‘BUY’ rating, with a one-year forward TP of Rs290 (28x FY14e). Price volatility in Gold can act as a deterrent for volume growth,” says Prabhudas Lilladher research report.

Hold stocks of Maruti Suzuki; target of Rs 1448

“Maruti’s result was mixed with top-line marginally better than expected and margins falling short of expectations. Management's tone has changed from muted outlook last quarter to 'cautiously optimistic' outlook which is driven by rate cuts and new model launches.”

“Net sales increased 49.9% QoQ but declined 16.5% YoY to Rs 11,486 crs in Q4FY12. The company’s production returned to normal levels after being disrupted in Q3FY12. Volumes were up 50.4% QoQ and 4.9% YoY to 360,334 units. Net realizations grew 11% YoY (down 11% QoQ). Although blended realizations look lower sequentially, the management stated that domestic realizations were up ~3% QoQ (driven by better mix). EBITDA declined 15.0% YoY to Rs 858 crs in Q4FY12 primarily due to higher raw material expenses and larger discounts offered to push petrol sales. Consequently, Maruti’s EBITDA margins stood at 7.47% (down 276bps YoY; up 203bps QoQ). The company reported higher other income (up 148% YoY; 85% QoQ) mainly due to maturity of some FMPs during the quarter (to the tune of Rs 200 crs). PAT was above estimates aided by higher other income and lower tax rate.”


“We expect margins to improve from FY12 levels. Volumes will be driven by strong response to Ertiga, new Swift, new Dzire and the ramp up in diesel capacity. Driven by a better product mix (higher shares of lower discount diesel variants) and benefits on the currency front, we believe that Maruti will report strong performance in FY13E. Moreover, consumer sentiment is expected to improve with reduction in interest rates. However, the stock has seen a strong run-up in the last one quarter and we believe that the positives have been factored in the stock price. In our view, upside from these levels will be limited for near term. However, we do suggest buying the stock on decline. At CMP of Rs 1,369 Maruti is trading at 14.66x FY13E EPS of Rs 93.4. We recommend to HOLD the stock with a target price of Rs 1,448 per share and recommend to buy the stock on decline. Our long term outlook continues to remain positive,” says Nirmal Bang research report.