Mid Term Stock Picks - Aug 16, 2010

Posted by admin in Companies, Mid Term Picks on Aug 15th, 2010 | no responses

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

NTPC

RECOMMENDATION: BUY
Market Price: Rs 196
Target Price: Rs 260
THE MANAGEMENT may add 41GW in FY11. NTPC should trade at 3-3.3x FY11E P/BV, given our expectation of sustainable ROE of 18-19% from FY13E. The earnings growth may be 14% over FY10-17E. With sufficient cash to fund expansion and a dividend yield of nearly 3%, the stock is attractive at 2.4x FY11E and 2.2x FY12E P/BV.

Grasim

RECOMMENDATION: BUY
Market Price: Rs 1,877
Target Price: Rs 2,549
GRASIM INDUSTRIES is a compelling stock with multiple triggers. Given the robust outlook of its VSF business and the unsustainably high holding company discount of above 75% for its 60.4% stake in UltraTech Cements, Grasim is an inexpensive route to play UltraTech Cement. With the recent correction in UltraTech, it seems to offer little downside risk.

PTC India

RECOMMENDATION: BUY
Market Price: Rs 115
Target Price: Rs 171
THERE HAS been a leap in long-term volumes. The higher margins, IPOs of PTC-FS and Ind-Barath Powergencom make the stock attractive. The tolling projects will boost capacity and valuation. The listing of PTC-FS is a value-unlocking opportunity. The monetisation of PTC-FS stake in Ind-Barath will be a potential valuation driver.

Jagran Prakashan

RECOMMENDATION: BUY
Market Price: Rs 116
Target Price: Rs 143
THE STOCK is attractive as there has been a robust growth in advertising revenue and the margins have been better than expected. Synergies are expected from the merger with Mid-Day. The stock trades at 17.8x and 15.2x FY11E EPS of Rs 6.7 and FY12 EPS of Rs 7.9, respectively, which we believe is attractive.

Magma Fincorp

RECOMMENDATION: BUY
Market Price: Rs 81
Target Price: Rs 115.8
THE STOCK is a good pick as the margins are better. The AUM growth, improving loan mix, excellent operating metrics and lowering credit costs, disbursements tilting towards high-yield assets make the stock a good buy. The return ratios continue to be positive with RoA at 1.6%. (nearly 1.4% adjusted for QIP issuance) and RoE at nearly 15%.