Buy Allahabad Bank, can climb to Rs 74-75: Prakash Gaba

Prakash Gaba of prakashgaba.com told CNBC-TV18, "I was looking at one of the PSU banks which is Allahabad Bank. It looks like it is at the place where you can buy it. Good strong support is in the vicinity around Rs 70 or so."

"Looks like it can climb to levels closer to Rs 74-75 in days to come. So, Allahabad Bank certainly is looking good to me," he added.

Source: http://www.moneycontrol.com

Buy Infosys, HCL Technologies: Sudip Bandopadhyay

Sudip Bandopadhyay, Market Expert told CNBC-TV18, "I have been positive on Infosys   even when the whole market was kind of negative. I think we got too much carried away by quarterly result expectations of analysts. It is a fundamentally strong company. They have been tweaking their model to get into IOT, artificial intelligence, digital and have been doing it pretty systematically." "Of course, going forward, US visa costs may go up, but that we believe will more than get compensated by currency depreciation, which we are witnessing currently. So, Infosys definitely is a good buy at current level," he said. "I would also flag off HCL Technologies   for the investors, again it is a great buy, business is rock solid, lot of good things they have done - acquisition of Volvo business unit and setting up a unit in Estonia. All these are excellent steps which will pay them handsome dividends. At current level, I think even HCL Technologies is a good buy."

Hold IRB Infrastructure, says Sharmila Joshi

Sharmila Joshi of sharmilajoshi.com told CNBC-TV18, "The situation that we have on hand where you don't have to pay toll at a lot of places has created a situation where there is a loss to companies like  IRB Infra   which in fact collect toll. If I remember correctly, the figure I had read 4 or 5 days back was Rs 462 crore or in that vicinity. We don't know how they are going to be repaid, how they are going to be compensated etc which definitely means that this quarter is not going to be a great quarter for IRB Infra." 

"However, once this period is over there should not be any real change in the kind of earning visibility that a company like IRB Infra will have for the simple reason that it will be back to business as usual for them while lot of other sectors may actually face the pain of seeing lower off take, lower demand etc. So, from that point of view IRB Infra is okay." "Also we have been hearing that NHAI has been talking of more orders etc. So, from that point of view also within the infra space, I think the road space will be the first to see more orders when government spending sort of picks up in the next couple of months. So, if one is a longer term investor you should stay invested and maybe one can try and average it if you do see the market overall correct more," she added.

Buy cement stocks, advises Ambareesh Baliga

Ambareesh Baliga, Independent Market Expert told CNBC-TV18, "I think it is a good time to buy cement and that is what I have been saying now for the last week or 10 days that get into cement because these stocks have fallen again because of demonetisation, the affect on real estate." "However, then we should remember that finally the government would be richer at the end of this demonetisation exercise and to kick start the economy they will start spending on infrastructure. 

That is when you will again see a decent boom happening in the infrastructure space," he said. "I am sure there would be decent sops for the housing sector in the Budget because that is another way to kick start the economy. So, from that point of view o think after a lull of possibly 2 or 3 months, you will again see the cement sector booming again. So, this is again the right time to start looking at cement especially stocks like UltraTech Cement   and Ambuja Cements   which has corrected decently well."

Sell Ramco Cements; target of Rs 521: SPA Financial

Ramco continued to report impressive set of numbers backed by improving volumes and better operating efficiency. While improving demand scenario in AP & Telangana region resulted in 18.9% YoY growth in volumes, EBIDTA/tonne improved by INR 96/tonne to all time high of INR 1509/tonne (amongst the best in industry). Profitability was further boosted by 38.3% YoY decline in interest expenses owing to INR 3.5 bn of debt repayment in H1FY17. Although Ramco remains one of the best bets to play the cement demand recovery theme across South India, we change our rating on the stock from "HOLD" to "SELL" with a target of INR 521, as current valuation factors in most of the positives. Ramco remains one of our best mid cap bets to play to the cement demand recovery theme in South India. Superior operating profitability, dominant market share backed by strong brand recognition ensures buoyant growth prospects for the company. Having split grinding unit near to high consumption markets minimizes transportation costs and helps in timely servicing of the demand. However despite all these positives, we change our rating on the stock from “HOLD” to “SELL” with a target of INR 521 (based on an avg. of 10x FY18 EV/EBIDTA & FY18 EV/tonne of INR 7475), as valuation of 11.7x FY18E EV/EBIDTA & EV/tonne of INR 9046, factors in most of the positives.

Buy VA Tech Wabag; target of Rs 781: SPA Financial

VA Tech Wabag reported better than expected set of numbers aided by improved performance from standalone operations (57.7% of revenues). Consolidated revenues grew by 31.2% YoY led by 38.2% YoY surge in standalone revenues & 22.7% increase in overseas revenues. Margins deteriorated by 46 bps YoY to 7.4% led by 92 bps decline in overseas margins. Wabag bagged orders worth INR 7167 mn in Q2FY17 leading to total backlog of INR 70653 mn (book to bill of 2.5x). 

Long term story in Wabag continues to remain intact with rising focus on clean water for drinking as well as better effluent treatment. We retain our BUY rating on the stock with a target of 781. WABAG with presence across the value chain of water spectrum is the best play on water scarcity theme. Superior return ratios (RoCE of +19%), cash rich balance sheet, asset light business model and technological & locational advantage places it above its peers. Long term opportunity remains immense in Wabag as upcoming opportunities of over INR 700 bn, alone would more than double its order backlog, even if Wabag maintains a strike rate of mere 10%. We continue to retain our BUY rating on the stock with a target of 781 based on 22x FY18E earnings.

Buy ICICI Bank; target of Rs 338: KR Choksey

Reporting mixed set of performance in Q2FY17, ICICI Bank PAT at INR 31 bn stood sequentially higher largely supported by one-off gains from to the tune of INR 56.82 bn emerging from IPru stake sale that helped beef up provisions against elevated asset quality stress. The stringent balance sheet repair put up elevated slippages at INR 80 bn for second consecutive quarter; however, watch-list exposure declined 16% Q-o-Q to INR 324.9 bn . 

Consequently, the overall stressed assets too tapered down; declining to 10.4% of overall asset base. While the provisioning for the quarter stood exceptionally higher (182% Q-o-Q increase), the bank made additional provisions towards standard loans, loss NPAs and floating provisions and stands adequately provided on the wage related front. While the flat NIMs (3.1% - Q2FY17) and higher delinquencies impacted NII, the improvement in portfolio mix (53% emerges form retail/MSME), strong retail lending accretion (21% Y-o-Y growth), cost efficiencies and significant capital on balance sheet with sufficient cushion from value unlocking in subsidiaries should aid ICICI Bank to put up improved operating metrics ahead. 

UPGRADE BUY. Q2FY17 performance stood mixed with headline asset quality standing elevated; yet receiving major support from the one-off stake sale gains. However, higher provisioning for contingent times coupled with stringent balance sheet repair and ameliorating retail franchise are key positives for the strong operating show ahead. While the asset quality disappointment was on expected lines, reduction in watch-list exposure and resultant decline in overall stress loans coupled with huge provisioning buffer brings respite. While asset quality is not yet out of woods, the improvement in portfolio mix, strong retail lending accretion, cost efficiencies and significant capital on balance sheet with sufficient cushion from subsidiaries should aid ICICI Bank put up consistent quality show on operating metrics.