Mid Term Stock Picks - Aug 10, 2010

Posted by admin in Mid Term Picks on Aug 9th, 2010 | no responses

Here are some of the stocks recommended for investment with a medium-term investment period by Broking house Ambit Capital.

Andhra Bank

RECOMMENDATION: BUY
Market Price: Rs 143.95
Target Price: Rs 195
Our analysis suggests that just from the past year’s profits, the bank can achieve a growth of 20% this year. We maintain our ‘BUY’ recommendation on the stock with an FY12E-based target price of `196, that implies a 1.5x multiple on our FY12E ABVPS estimate of Rs 130.

Maruti Suzuki India Ltd.

RECOMMENDATION: BUY
Market Price: Rs 1,232
Target Price: Rs 1,380
With royalty payments, Maruti’s cost structure has shifted upward, but with strong volume growth momentum and better pricing power, its operational performance may improve. The earnings estimate has been cut by 15% each for FY11 and FY12.

City Union Bank Ltd.

RECOMMENDATION: BUY
Market Price: Rs 41.60
Target Price: Rs 55
The bank has an under-leveraged franchise (deposit-heavy), which positions it to capture the incremental lending opportunities that emerge across their key segments. With an increase in the interest rate, the bank is favourably positioned to maintain its NIMs.

Punj Lloyd Ltd.

RECOMMENDATION: BUY
Market Price: Rs 120.10
Target Price: Rs 185
There may be an improvement in Punj Lloyd’s execution and there is positive momentum in Libya. The Q1FY11 order intake at `4,000 crore is positive. We believe consensus was bearish on the stock but bullish on execution, specifically in 1HFY11, resulting in under performance.

Source: Economic Times