Mid Term Stocks to Buy - Aug 4, 2010

Posted by admin in Companies, Mid Term Picks on Aug 3rd, 2010 | no responses

Here are a few medium term stock investment options recommended by Broking house ICICI Direct for mid-term investment.

Indian Overseas Bank

RECOMMENDATION: BUY
Market Price: Rs 119.4
Target Price: Rs 142
Early signs of turnaround are visible with Q1 results of FY11 reflecting positives. GNPA ratio of 4.3% (-20 bps Q-o-Q) and NNPA ratio of 1.6% (-160 bps Q-o-Q) reflect asset quality improvement. We expect RoA and RoE of approximately 0.8% and 14% respectively by FY12e and value the stock at 1.1x FY12e.

Apollo Tyres

RECOMMENDATION: BUY
Market Price: Rs 65.9
Target Price: Rs 72
Apollo Tyres’ subsidiaries have performed well in Europe and South Africa along with a burgeoning domestic demand. We expect the company to benefit significantly with the rise in domestic radial-tyre demand and also expect topline growth at a CAGR of 9.7% in FY 10-12.

HCL Technologies

RECOMMENDATION: BUY
Market Price: Rs 391.4
Target Price: Rs 445
IT services growth has paced up with the return of discretionary spend. We expect revenues to grow at 20% CAGR over FY10-FY12e. EBIT margins will remain under pressure in FY11 but will recover only in FY12. We rate the stock as BUY with a target price of Rs 445.

Unity Infraprojects

RECOMMENDATION: BUY
Market Price: Rs 111.4
Target Price: Rs 125
Unity Infraprojects, an engineering and construction company with well-diversified project expertise, has a strong order book of Rs 3,548 crore. The strong order book coupled with government focus on infrastructure spending, provides good visibility and bodes well for its future growth.