Mid Term Stock Picks to Buy - July 20

Posted by admin in Advice, Alerts on Jul 19th, 2010 | no responses

Here are a few medium term stock investment options recommended by Broking house Motilal Oswal Financial Services.

Colgate-Palmolive (India)

RECOMMENDATION: BUY
Market Price: Rs 847
Target Price: Rs 930
COLGATE IS the best in the oral care segment. Sustained conversion from toothpowder to toothpaste may enable steady double digit volume growth. Our EPS estimates have been upgraded by 4% for FY11 (2010-11) to Rs 33.5 and by 5% for FY12 (2011-12) to Rs 40.

LIC Housing Finance

RECOMMENDATION: BUY
Market Price: Rs 1,060
Target Price: Rs 1,275
THE MANAGEMENT plans to take outstanding loan portfolio to Rs 50,000 crore. Our EPS estimates have been revised upwards by 6% to Rs 93 for FY11 and Rs 112 for FY12. The stock has been re-rated given the consistent improvement and growth in business despite a challenging environment.

AXIS BANK

RECOMMENDATION: BUY
Market Price: Rs 1,361
Target Price: Rs 1,475
AXIS BANK has increased its reach to 1,050 branches and extension counters, and 4,474 ATMs. We expect the bank to report loan CAGR of 25% and fee income CAGR of 22% over FY10-12. Core operating profitability and decline in credit cost will drive earnings growth in FY11.

South Indian Bank

RECOMMENDATION: BUY
Market Price: Rs 192.40
Target Price: Rs 205
SIB IS an attractive bet as its performance has improved. It is a strategic target for private banks looking for inorganic growth. We expect SIB to report EPS of Rs 23.1 and BV (book value) of Rs 149 in FY11, and EPS of Rs 28.6 and BV of Rs 171 in FY12. The stock trades at 1.1x FY12E BV.

Tata Consultancy Services

RECOMMENDATION: BUY
Market Price: Rs 824
Target Price: Rs 845
OUR ESTIMATES have been revised upwards by 3.3% in FY11 (EPS Rs 40.8) and 4.5% in FY12 (EPS Rs 44.5) due to better-than-expected volume growth, and higher margin expectations. Infosys is prefered for the long-term, due better operational scope, and earnings growth expectations.