Short term - Range-bounds Vs Long-term – Bullish (Nifty 13500 to 15000 by 2016 to 2017)
■ NIFTY range would be 4900 to 5700s for next few months, even if these range is breached market would trade in bigger range of 6000 to 4500s till March 2013.
As per our analysis India’s Bull rally would start from March 2013 where we have a target of 13500-15000 by 2016 to 2017.s
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| Mr. A. K. Prabhakar |
■ Sensex would be trading in a broader range of 15800 to19500 till March2013 from where Mother of all bull run in India could start where I expect Sensex to Target 45000 to 50000 by 2016 or latest by 2017.
Monthly Pick – Bayer Cropscience
Bayer CropScience is a world leader in the areas of crop protection, pest control, seeds and plant biotechnology.
^ Strong parentage from global parent Bayer Germany and with 71 per cent of holding in the company.
^ The company has huge powerful brands and enjoys good branding ins the market. sssssss
^ The revenue contribution is Formulations 59 per cent , Others 20 per cent , Seeds 15 per cent and Active ingredients 6 per cent .
^ The product pipeline is strong enough to enable the launch of 4 to 5 new products every year.
^ On the recent land deal of Thane the management plans to use the cash in distributing special dividend along with in the expansion plans for the company.
^ Healthy balance sheet with good amount of cash Rs. 430 crs on books for the March FY12 and ROE of 22 per cent.
^ Currently it trades at 15.5x PE with a book value for Rs.200 and PB at 4.62x.
Other Picks which look good for 3 months
· REC
· Zydus Wellness
· Tata Coffee
· Cummins India
The approach going forward
· Investors should look for stocks that are on expansion plans in difficult times which will be beneficial for them in future, who have cash on books, low on debt & strong balance sheet and good management, theses stocks can be accumulated slowly for longer term basis.
· Select PSU stocks look good for accumulation like DREDGING CORPORATION, ENGINEERS INDIA, NBCC, NMDC, MOIL, BEL, BHEL, REC, NTPC, POWER GRID CORP, ONGC.
· These all stocks are quoting at attractive valuations & are also good growth stocks for longer term.
By Mr. A. K. Prabhakar, Ananth Rathi
Senior Vice President - Equity Research , A K Prabhakar <akprabhakar@rathi.com>
4th Floor, Silver Metropolis, Jai Coach Compound, Opposite Bimbisar Nagar, Goregaon(East), Mumbai - 400 063. India
Tel No: + 4001 3700 | Direct: + 4001 3999 | Fax No: + 4001 3770 | Website: www.rathi.com
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