Indian stock market calls-Nitin Gupta(27/Oct/09)

Categorized | Featured, sensex

Indian stock market calls-Nitin Gupta(27/Oct/09)

Posted on 02 November 2009 by Anubhav Arya

Currentopics.com

Market Guru

Full Name : Nitin Gupta

Designation: Managing Director

Company Name: Gupta Consultancy Services

Experience in stock market: 9 years

Company Profile: Portfolio Management Services

Today’s Call

Buy Union Bank

At current price of Rs 264, Union Bank of India is trading at ~1.6 times FY10 expected book value. I maintain a hold on Union Bank with a revised target of Rs 300, giving an upside potential of 6% from the current levels, due to: 1) relatively inexpensive valuations (~1.6x FY10 BV/s) given RoE above 20%; 2) continued strong business growth prospects (management project credit growth of 18% and deposit growth of 20% in FY10); 3) C/D ratio, which currently stands at 65%, will improve as deposit growth decelerates and credit growth accelerates; 4) decline in funding costs after redemption of high cost bulk deposits in Q3 and Q4 FY10; 5) loan loss coverage ratio of 80% remains among the highest among PSU peers and provides cushion to future earnings

Buy Punj Lyod

Punj Lloyd’s topline will continue to grow at a healthy pace given the strong order book the company possesses while I expect the EBIDTA margin improve marginally form current levels, and profitability margin to improve on the back of repayment of high cost debt. At the CMP of Rs 204.5 the stock is trading at 13.5x its FY11E EPS of Rs 15.1 and 6.3x its FY11E EV/EBIDTA. I believe reactions are overdone and negatives have been factored in and thus recommend a “Buy” on the stock with a SOTP target Price of 240.

Levels For nifty

I expect the flat to negative opening on Monday. The support levels are 4680 and 4650 and the resistance levels are 4800 and 4850.

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Disclaimer : These Recommendations are based on technical analysis and Personal observations. Due care has been taken while preparing these comments, no responsibility will be assumed by the author for the consequences what so ever, resulting out of acting on these recommendations.

Disclosure : The calls made herein are for informational purposes and are not recommendations to any person to buy or sell any securities. The information is derived from sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The above calls are based on the theory of technical analysis. The author does not accept any liability for the use of this site. Readers of this site who buy or sell securities based on the information.