Accumulate GSK Consumer; target of Rs 5988: Prabhudas Lilladher

GSK 2Q results were disappointing with 3% decline in MFD volumes amidst continuous pressure on discretionary spending by the consumers. 

GSK is adopting an aggressive strategy to boost volumes by 
1) re‐launch of Horlicks and Boost sachets at Rs5 
2) Re‐launch of Women’s Horlicks and Junior Horlicks and 
3) launch of Horlicks Growth plus to compete with players like Pediasure in the premium segment. 

While we expect gradual recovery in demand in line with our discretionary products, input cost pressures are likely to emerge due to increase in prices of SMP, Sugar and Malted Barley. GSK Asia has reduced the marketing margin on its sales from 16.75% to 15% which will have some impact on Business Auxiliary Income. We expect stunted profit growth in near term and estimate 7.6% CAGR in PAT over FY16‐19. GSK trades at 31.4xFY18 EPS of Rs 183 which is 20% discount to coverage universe which limits downside. Retain “Accumulate”.

Sell Bayer CropScience: East India Securities

Bayer CropScience (BCS) registered sales of Rs 10.8Bn, a growth of 9.2% YoY and 35.2% QoQ, indicating pick up in growth. We believe post healthy monsoon, market demand is picking up. Overall performance of BCS was encouraging on back of improving monsoon condition, we believe as season picks up, 3Q & 4Q numbers should improve. 

We expect BCS to post CAGR of 16% in Revenue & 17% growth in PAT over FY16 18E. At current valuation of 43x & 37x FY17 & FY18 expected earnings, we believe stock is overvalued, however managements regular buy back & lower trading volume would support higher price. We maintain our Sell rating on stock with Target price of Rs 4,038.

Sell Rallis India: East India Securities

Rallis, on standalone basis, posted growth of 17.8% in Net Sales for the quarter, as domestic business picked up on back of strong monsoon and spillover of export order from previous quarter. Domestic business was struggling on account of two back to back droughts and high channel inventory. Other business (majorly seed) posted strong growth of 66% for the quarter. Rallis’s Q2FY17 numbers were in-line with our expectation.

 Even thought Rallis has one of the best distribution network, company seems to be unable to capitalize on it. Given stellar performance by peers, Rallis’s lowering innovation index and declining growth in domestic business indicate urgent need for business restructuring & focus. 

Overall, we estimate Rallis to register a CAGR of 9% in Net Sales and Profit over FY2016-18E, respectively. On the valuation front, the stock is trading at 29x & 26x FY2017 & FY2018 Estimated Earnings. We recommend Sell on stock with a Target Price of Rs 223.

Sell stocks of TCS, HCL Tech.

“IT should be utilized to sell. Whenever we see that bounce back and we saw that bounce back in the last two months despite poor results from some of them. But December quarter results will still be poor or maybe poorer than what we saw in September.”

“At these levels one should be exiting stocks like TCS and HCL Tech. Infosys anyway I have been negative for the last six-seven months. Wipro , I don’t think because of that news Wipro should move up, anyway that belongs to that segment which is going to be demerge. I don’t think Wipro should move up because of that news.”

Sell stocks of Asian Paints at current level

Asian Paints:-

“Asian Paints’ Q1FY13 consolidated revenues at Rs 2,539.3 crore, grew by 12.3% yoy, largely led by price hikes and favorable product mix; however volumes declined by 2% yoy. The decline in volume can also be attributed to the effect of high base in both Q1FY12 and Q4FY12 due to dealer stocking ahead of price hikes in addition to slowdown in GDP. The management admitted that volume decline was much below their expectation. Both, the urban demand and rural demand grew at a similar pace. Despite the negative volume surprise, management remains confident of demand reviving as the retailer and dealer feedback regards future expectations remains optimistic However, we are circumspect about their optimism and maintain a cautious stance. On a standalone basis, the net sales grew by a mere 6.7% yoy in value terms to Rs 2,035 crore while the EBITDA grew by 12.2% yoy despite a 6% rise in material index on the back of favourable product mix. The gross margins expanded by 315 bps yoy. The company continues to see a favourable shift towards premium segment from the lower end supported by favourable consumer demographics.”

“EBITDA margins for the quarter stood at 17.5%, up 20 bps and 250 bps on yoy and qoq basis. Raw Material costs stood lower by 160 bps to 55.9%. However, increase in other expenses by 100 bps yoy and that of personnel expenses by 40 bps yoy lead to the growth in margins. The material prices have increased by 6.0% over the last year, however better contribution from higher margins products and price hikes have helped the company arrest the decline in margins. Despite increase in depreciation costs, lower other income, and forex losses, lower interest expenses help the company arrest the fall in net profit margins. The net profit margins for Q1FY13 stood at 11.7%, down 30 bps yoy. The net profit grew by 10.1% yoy to Rs 298.9 crore. The net profit adjusted for minority interest stood at Rs 288.4 crore.   The company has given guidance of Rs 750 crore capex for FY13E, which includes Rs 500 crore to be spent on the Khandala plant in Maharashtra.”

“Slowdown in GDP growth, high inflation scenario, weak monsoons and drying up of investment cycle coupled with political inaction on account of coalition politics can lead to the likely fall apart of the Indian consumption story in the near term. Asian Paints, a play in the consumption story and changing consumer preferences, in all respect is likely to be affected by this. Early signs of volume growth falling and dwindling rural growth might indicate weak growth in volume in the near term. Further, volatile crude prices, depreciating rupee and inability to pass on further price hikes would keep margins under pressure. At the CMP of Rs 3,564, Asian Paints trades at a PE multiple of 28.8x and 23.8x FY13 & FY14 consensus earnings estimates and at premium valuations. Considering, unfavorable macro environment and premium valuations, we recommend a SELL on the stock,” says Ventura research report

Sell stocks of Hindustan Unilever; target of Rs 435

Hindustan Unileve:-

“Hindustan Unilever (HUL) reported net sales growth of 14%YoY to Rs 6250 crores for Q1FY13. Domestic consumer business grew at 19%YoY led by underlying volume growth of 9%YoY. On segmental basis Soaps & Detergents registered 24%YoY growth, Personal products 13%, Beverages 8% and Packaged foods 17%. EBITDA margin for Q1FY13 rose 137bps YoY to 13.4% aided by gross margin improvement of 215bps, lower other expenses (down 93bps) partly offset by higher Advertising & Promotions spends (up 160bpsYoY). Net profit for the quarter grew 28%YoY to Rs 726 crores adjusted for income from sale of properties worth Rs 605 crores. We assign SELL rating on the stock with a price target of Rs 435 (25x FY14E EPS of Rs 17.4).”

“HUL continued with strong quarterly performance with topline growth of 14%YoY (up 10%QoQ) driven by 9%YoY underlying volume growth. Domestic consumer business grew by 19%YoY. Both key segments Soaps & Detergents and Personal products contributed with double digit volume growth. HUL reported double digit growth across segments with its key segments Soaps & Detergents (improved volumes & double digit growth across brands), Personal Products(driven by skin & Hair care) and Packaged foods (Kissan Ketchup and soups registering double digit growth led by volumes) leading the pack registering 24%, 13% and 17%YoY revenue growth. Beverages segment reported growth of 8% YoY growth led by strong growth in coffee. EBIT growth was driven by all the segments. EBIT margins for the soaps & detergent category (up 297bps YoY), Beverages (up 213bps YoY), Packaged foods (up 100bps YoY) and personal products (up 41bps YoY) improved on back of increase in prices, global buying efficiencies and lag effect between consuming cost and replacement cost. We believe with judicious price hikes the current EBIT margins are sustainable.”

“We maintain our positive outlook on the stock and believe 21% earnings growth over FY12-14E is achievable considering healthy volume growth & improved margins (product mix & price increases). However the stock is currently trading at a P/E of 31x and 27x its FY13E and FY14E earnings. Consequently, we recommend SELL on stock with a target price of Rs. 435, (25x FY14E EPS of Rs 17.4), giving a downside potential of 7%,” says KRChoksey research report.

Sell stocks of Kotak Mahindra Bank; target of Rs 545

Kotak Mahindra Bank:-

"Kotak Mahindra Bank reported muted consolidated earnings of Rs 443 crore which grew 6.6% Y-o-Y & down 14.9% Q-o-Q, below than our expectation. Standalone bank, Kotak prime and Kotak Life continued to be key growth drivers to consolidated PAT. Securities broking, investment banking and asset management businesses continued to see weak earnings and core operating performance. Net earnings from Broking, and investment banking management were down 54% & 40% sequentially reflecting challenging operating environment and falling business volumes. Kotak Life insurance‘s net profits went down 30.4% Y-o-Y to Rs32 crs owing to subdued volume growth."

"On standalone basis, NII increased 27.0% y-o-y & 4.9% q-o-q led by strong loan growth of 30.9% y-o-y & 8.3% Q-o-Q and steady NIM. Standalone PAT grew modestly 12.1% y-o-y and down 4.9% q-o-q mainly due to weaker non interest income and higher loan loss provisions. Asset quality has slipped during the quarter as gross NPAs and net NPAs increased sharply 11.5% Q-o-Q & 43.3% Q-o-Q respectively. Provision coverage ratio (excluding write offs) declined from 61.3% in Q4FY12 to 50.3%. Maintain Reduce."

"Financing businesses’ contribution to consolidated earnings increased 76% in Q4FY12 to 85% in Q1FY13 owing to lower-than-expected earnings capital market linked businesses and weak earnings from Kotak life insurance. Standalone Bank’s NII grew by 27.0% y-o-y and 4.9% on q-o-q to Rs 721 crore led by strong loan growth and steady NIMs. Non-interest income increased only 5.5% Y-o-Y but down 5.1% Q-o-Q mainly due to sluggish fee income growth and lower distressed asset sale (Rs20 crore vs. Rs65 crore in Q1FY12). Net profits reported Rs282 crore growing 12.1% y-o-y & down 4.9% q-o-q. Kotak prime (KP) reported PAT of Rs94 crore vs. Rs97 crore in Q4FY12, down 3.1% Q-o-Q. We expect the bank to deliver 26.5% CAGR in net earnings over FY12-FY14 driven by strong loan growth, steady NIMs and stable asset quality and improving productivity levels."

Sell stocks of Gujarat State Fertilizers; target Rs 350

“Gujarat State Fertilizers Company (GSFC), caprolactam-benzene spreads have declined by 50% in US$ / 30% in INR to $1175/mt by June’12 which is likely to have 30%yoy drop in FY13 earnings. Despite attractive valuations, sharp drop in company’s earnings and absence of any positive trigger will put pressure on the stock in near term. We downgrade our FY13 earnings estimates by 10% to Rs 65.6 (20% below consensus) and downgrade the stock from Accumulate to REDUCE with revised price target of Rs 350. sharp reversal of Caprolactam-Benzene spread and announcement of any special dividend are key risks to our recommendation.”

“Company’s chemicals segment contributes 1/3rd to total revenues while contribution to profit is 2/3rd. Caprolactam contributes ~70% to chemical revenues / profits and hence company’s earnings closely follow its Caprolactam Benzene spread. (Kindly refer to chart on next page). On account of sharp drop in spreads, we expect GSFC to enter into earnings degrowth phase in FY13 with each quarter reporting earnings drop of 20%- 40%. This earnings degrowth phase along with no positive trigger in near term is likely to keep pressure on company’s stock price.”

“We downgrade our FY13E EPS est by 10% to Rs 65.6, which is 20% below consensus est, on account of sharp decline in chemical segment margins. Historically we have seen company’s stock price following its chemical business profitability and downward pressure on chemical segment margins is likely to keep the stock price under pressure. We downgrade our recommendation from Accumulate to REDUCE and wait for improvement in Caprolactam-Benzene spread. However we expect GSFC to benefit marginally from higher ammonia prices,” says Emkay Global Financial Services research report.

Sell stocks of Rallis India; target of Rs 144

"Rallis has an extensive network across India through its distributors and retailers, covering around 80% of India’s districts. Through this network, it supplies innovative products and services to maximize crop protection and production in response to evolving needs of farmers. Rallis Kisan Kutumb (RKK) now has 700,000 farmers enrolled and the company has launched “Samrudh Krishi” program in FY12, as a means to leverage on this database."

"Domestic Agrochem industry witnessed a deceleration in FY12 and Rallis was no exception to this trend (domestic pesticides sales down 3.3% YoY). During the year, the company opted to focus on cash generation (reflected in prudent working capital management) over revenue growth. Also, the company discontinued red triangle products from the portfolio (10% of sales in FY11) which further weighed on topline growth. The downtrend was restricted by healthy growth in exports (up 49.5% YoY). We anticipate the ramp-up in Dahej facility to catapult export growth. Over the years, Rallis aims to expand its product offerings and scale up its newly added adjacent businesses (Metahelix Lifesciences and Zero Waste Agro Organics). The company is on course to transform itself from a mere agrochem company to a complete agri-service provider."

Industry Snapshot:

Rising world population and economic growth in developing nations have led to significantly higher global food demand. Domestic agrochemical industry declined during the year; global counterpart grew 17% to USD 44.9bn. The Indian seed industry, world’s sixth largest (>` 70bn) has grown at 12% p.a. in the past couple of years compared to 6-7% internationally. In India, commercial seeds account for only 25% of the potential, providing tremendous opportunity in this space.

Valuations

"We expect revenue growth from domestic market to moderate in the near term. Increased cultivation costs and low pest incidence is a cause for deceleration in volume off-take. Scale-up in Metahelix business and increased contribution from exports in the interim are growth drivers. The performance of Kharif season in course shall be an important determinant for future growth in domestic agro business. At CMP, the stock trades at 18.3x FY13E and 14.6x FY14E earnings. We believe there is limited upside from these levels and recommend Reduce on the stock, with target price of ` 144 (15x FY14E EPS)," says Dolat Capital 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.

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.

Sell stocks of Axis Bank, PFC & Reliance

Jain told CNBC-TV18, “Maruti Suzuki is on our buy list considering that the volume traction has been decent and the recent launch of Ertiga and the success of the new Dzire and the new Swift models have been very good and again this traction in volumes will continue further the margins are also expected to improve. The story is very similar to Hero Motocorp, both have a very high contribution from rural areas.”

He further added, “Both these are in our buy list and with respect to Bajaj Auto I think we’ll have a market performer rating considering that it’s not fairing well in the domestic markets and further there are some pressures in the international markets where it has been operating like Sri Lanka has seen an exceptional increase in customs duties and so in that terms I think Bajaj Auto will be a market performer for us.”

Sell stocks of HCC; target of Rs 17

“HCC’s Q4FY12 performance was dismal led by poor EBITDA margins (7.6% vs. our expectation of 12%) and higher net interest cost (Rs 122.8 crore vs. our estimates of Rs 109.9 crore). Consequently, the company reported a loss of Rs 54.2 crore vs. our estimates of Rs 22.2 crore. During the quarter, HCC has also applied for CDR cell for re-alignment of debt wherein the company is looking to apply for repayment structure of (2+8) wherein it is seeking 2 years of moratorium and 8 years of repayment period as well as marginal reduction in interest rates. With EPC business remaining a drag, Lavasa sales & execution pick yet to be seen and CDR issue is pending, we assign a SELL rating on the stock.”

“HCC topline came at Rs 1155.7 crore came higher than our estimates of Rs 1057.9 crore. It, however, reported net losses of Rs 54.2 crore vs. our expectations of Rs 22.2 crore in Q4FY12 mainly due to lower margins (7.6% vs. our expectation of 12%) and higher net interest cost (Rs 122.8 crore vs. our estimates of Rs 109.9 crore). The Board has approved for re-alignment of debt of HCC through CDR process. The same has been referred to CDR cell and consequently the proposal has been admitted. The company is looking to apply for repayment structure of (2+8) wherein it is seeking 2 years of moratorium and 8 years of repayment period. It is also looking for marginal reduction in interest rates as well as additional working capital. HCC expects decision on the same in next couple of months. The net Interest expenses at ~140% of EBITDA means that the operating profits are not enough to service debts. With the stretched working capital, lower operating margin and execution rate yet to pick up, HCC’s EPC business remains a major drag and a reason for concern.”

“At the CMP, the stock is trading at 1.2x FY13 P/BV. With the EPC business remaining a major drag due to stretched working capital, sluggish execution, and clarity on debt restructuring yet to emerge, we believe that stock would continue to remain under pressure. We have assigned a SELL rating to the stock with a target price of Rs 17/share,” says ICICIdirect.com research report.

Exit Idea Cellular on upside

Kulkarni told CNBC-TV18, "Incase of the telecom stocks Idea has been consistently falling from the levels of Rs 100-101 right upto Rs 75-76. Does it make a case to go long because of today’s recovery? No, I am afraid not because the weekly chart structure is quite disturbing and I would expect further selling pressure incase of Idea Cellular. So we are expecting that stock may go sub Rs 70 levels over the next 3-6 weeks going forward. So the recommendation would be that any rise in case of Idea Cellular should be used to move out of the stock."

He further added, " Bharti Airtel on the other hand has a support at around Rs 300 if it manages to close above Rs 300. If that does not sustain then you may see the levels of Rs 280 being tested once more in case of Bharti Airtel."

Exit Sesa Goa around Rs 200-210

Thunuguntla told CNBC-TV18, "Stay invested in Sesa Goa and whenever next wave of bounce comes maybe around Rs 200-210 or so book the profit and move on because Sesa Goa is facing a lot of challenges on the corporate governance side and lot of litigations related issues. So it may not be an exciting time to stay invested but whenever the next bounce comes try to exit."

The company's trailing 12-month (TTM) EPS was at Rs 39.50 per share. (Dec, 2011). The stock's price-to-earnings (P/E) ratio was 4.62. The latest book value of the company is Rs 133.34 per share. At current value, the price-to-book value of the company was 1.37. The dividend yield of the company was 1.92%.

Sell Infosys on rally

Sukhani told CNBC-TV18, "I wouldn’t touch Tata Consultancy Services (TCS) for buying. It will come down quite dramatically and that will be the time for us to go long in it and for investors to buy it. HCL Technologies is the only one among the four where a buy is possible.”

He further added, “Infosys remains a sell on rallies. Technically, Infosys stopped falling and then hold on for not just a couple of days, for week altogether. So since that process has not started, I cannot make a call where it will stop. There is no sanctity to Rs 2,200. Earlier we used to talk about Rs 2,200 for State Bank of India (SBI), it fell all the way to Rs 1,700. So it is quite possible Infosys can follow the same track."

Sell Tata Steel Future; target of Rs 427

“Tata steel has been trend downwards with formation of lower tops and lower bottom with Rs455 acting as major resistance. On Friday`s trading session Tata steel formed a ‘shooting star’ pattern which is a short term trend reversal and thus engulfing previous doji pattern. A move below Rs448 would negate the bullish implication of the same confirmed with MACD indicating a downward crossover. Adding to it, the 200 DMA has been convincingly broken which supports selling argument in the counter. We recommend going short on Tata Steel April Futures below Rs 447 with stop loss of Rs 457 for target of Rs 427,” says IIFL research report.

Sell Indraprastha Gas; target of Rs 206

“A precipitous fall of 33% in the Indraprastha Gas (IGL) stock after the Petroleum and Natural Gas Regulatory Board’s (PNGRB) downward revision in tariff is regarded as exaggerated reaction by some sections of the market, citing several loopholes in the regulator’s order. We expect the overhang on IGL to continue until the final verdict from the Appellate Tribunal as well as the Delhi High Court. We retain our Sell rating on IGL with a downward revision in the target price by 43% to Rs206 from Rs363. Key upside risk to our TP would be leeway available to IGL for hiking the marketing margin and/or favourable ruling from the court.”

“The PNGRB’s order mandates network and compression tariff of Rs 3.5/scm compared to IGL’s submission of Rs 8.8/scm. There is growing consensus among investors that the difference of Rs5.3/scm may be treated as marketing margin, which would nullify the case against IGL having to refund the amount cumulating over the past four years. We believe IGL’s submission formed the basis of PNGRB’s tariff calculation and to deem excess amount charged as marketing margin post PNGRB’s verdict would dilute IGL’s case before the Appellate Tribunal. We believe IGL will toe the line on reduced network and compression tariff effective from PNGRB’s order date (the implementation will depend upon how soon the Appellate Tribunal gives its verdict).”

“IGL sold ~3.7bn scm of gas in the past four years, implying the company has to shell out Rs11-18bn (assuming Rs3-5/scm) as refund to its customers. While PNG consumers would be able to produce invoices for every purchase made, which can be offset against future consumption, the major task would be in passing on the refund benefits to CNG consumers. IGL’s management maintains that the refund from retrospective effect is unconstitutional. It said IGL will treat the refund amount as a contingent liability until the final verdict. A refund involves reversal of excise duty, income tax and value added tax, making the entire exercise very complex We have cut the gross spread margin for FY13E/14E to Rs5.5/scm compared to Rs8.0/scm earlier. We currently assume a marketing margin of Rs2/scm over and above PNGRB’s tariff of Rs3.5/scm. Lower gross spread would lead the company to post EBITDA/scm in the range of Rs3.0-3.1/scm from Rs5.0/scm currently. We trim our EPS estimates for FY13E/FY14E by 56%/53%, respectively, to Rs10.0/11.6 from Rs22.59/24.97,” says Nirmal Bang research report.

Sell Hindustan Unilever, stop loss at Rs 431

Sukhani told CNBC-TV18, “Hindustan Unilever (HUL) has rallied today and then now it is closing at its lows, that tell us that at least in the short term this rally is over and a fairly decent correction can be expected on the downside. So buy puts or consider selling futures with an appropriate stop loss around Rs 431-432.”

He further added, “Next week I will keep financials on my radar, the banks have to be kept on the radar because they have rallied a lot and there is also a big news event which will affect banks directly. So it’s Axis Bank , ICICI Bank and Bank of Baroda , Canara Bank , all four of them to be mixed, divided into two Axis Bank and ICICI Bank for buying and Bank of Baroda, Canara Bank for selling if the news is against them.”

Sell BEML, says Sukhani

Sukhani told CNBC-TV18, "In BEML chances are that Rs 450 area where it had bottomed out, could be revisited. It made something called a rounding top - slowly circled on the downside and then started falling with a lot of vigor. Nothing in it, the stock has seen very good days in 2007-2008 bull market, it is just a pale shadow of itself. So it hasn't come across something that is going through a correction. The upmove was a correction and the decline is just a renewal of its bear market. So it is probably a positional short not just an intraday you can sell it and wait patiently."

He further added, " Sterlite Ind is one of the weakest of the metal stocks. The chances are that it will crack Rs 100, go below, it is difficult to say how much below but this is not something you want to hold on to as a long position. Every occasion whether it is a breakdown, it consolidates and breaks down, that is a sell or it is simply a continuation of the downtrend and today I think the continuation process will be - yesterday's losses will be simply added to. So it is probably a short sell in the morning, wait for the first 10-15 minutes and look to go if the lows break."