Indian Stock Picks : Top Analysts recommendations

Here are some of the recommendations from analysts in recent weeks

ONGC
Research: Citigroup
Target price: Rs 910

Citigroup has rated ONGC a 'sell', with a price target of Rs 910, citing lower crude prices and lack of clarity on fuel subsidy burden. "Weak to moderate crude prices have started hurting ONGC, despite lower subsidy sharing, as realisations on JV (joint venture) and international crude suffer," the foreign brokerage said in a report.

My take: I always prefer trading in ONGC, it has support around 990 so I would be buying at this level if markets are not in a panic mode

Aban Offshore
Research: Macquarie
Target price: Rs 605

Macquarie has raised its price target on Aban to Rs 605 from Rs 315 while reiterating its 'underperform' rating after the company's net profit beat estimates, despite falling. The hike in price target is in the wake of the company's plans to raise capital through share issue.

GMR Infrastructure
Research: Enam
Target price: Rs 171

Enam Securities has maintained its 'outperformer' rating on GMR Infrastructure, relative to the sector, with a price target of Rs 171, post its June quarter earnings.

Unitech
Research: ICICI
Target price: Rs 73

ICICI Securities has downgraded its rating on Unitech to a 'sell' from hold, with a price target of Rs 73, citing expensive valuations.

Genus Power
Reasearch: Sharekhan
Target Price: 338

In its results update note, Sharekhan has maintained ‘Buy’ recommendation on Genus Power with a price target of Rs 338 which is an upside of over 90 per cent from its current market price.

Voltamp Transformers
Reasearch: Religare
Target Price: 884

Religare Securities has maintained ‘Buy’ recommendation on Voltamp Transformers with an upgraded price target of Rs 884.

Kalpataru Power
Reasearch: Kotak Securities
Target Price: 865

Kotak Securities has initiated coverage on Kalpataru Power and Transmission with a price target of Rs 865, which is around 20 per cent upside from current market price of Rs 715.

rk

Stock Picks: Top 20 Indian Stocks to own by Forbes India

The following is the list of 20 stocks that were recommended by Forbes India in their recent release

Page Industries: A small company that makes a small product with big margins

Pidilite Industries: Pidilite has brands like Fevicol, M-Seal, car polish Motomax and other assorted consumer art materials and specialised home paints

Dabur: This company has focus. Five years ago, Dabur got out of the pharmaceutical business and put all its effort, like the best brand companies, behind five of its brands

Procter and Gamble Hygiene: Over the last three years, the money that P&G invested did not translate into market cap gains

Marico: Till 2008-09 came by, the company’s sales and profits had grown for 30 consecutive quarters, indicating a stable track record

Blue Star: Two decades to reach Rs. 1,000 crore in sales; two years to reach Rs. 2,000 crore in 2008

BHEL: For 2009-10, the company is increasing its capacity from 10 GW to 15 GW

Power Finance Corporation: At about 25 per cent, the company’s net profit margin is close to what the best software companies earn at half their price-to-earnings ratio

Mahindra & Mahindra: Rural India is earning well because of infrastructure boom. M&M’s SUVs are selling briskly and its market share in the SUV space has gone from 51 per cent to 57 per cent in the last two years

Allcargo Global Logistics: This stock was one of the earliest to recover after it fell dramatically in October

Crisil: The 800-pound gorilla of rating agencies, it rates 1,000 firms today

ICRA: There is room for both Crisil and ICRA in the space

HDFC Bank: A cautious and solid bank, it is safe because its government bond holdings are 3 per cent over the statutory liquidity ratio (SLR) requirement

Kingfisher Airlines: The company has a debt-equity ratio of 3:1

Oracle Financial: It suffered when foreign banks went broke

Suzlon: Debt is high and so are the receivables.

Ranbaxy: The last 12 months have been bad. Sales are down, research hasn’t paid off and US FDA is after it for manufacturing lapses

NIIT: As IT crashed so did the IT trainer. Its stock fell 85 per cent to Rs. 14

Wockhardt: Its core business is in fine fettle. Its problems are foreign loan repayments and derivative losses

Hindalco: The acquisition of Novelis tripled Hindalco’s sales but caused an 11 per cent decline in net profits

RK

Nifty adopts Free Float market cap calculation methodology

Nifty has moved on to free float method for calculating the weights of the companies in the index. I just checked on investopedia for the definition of free-float methodology and this is what it says

Free-float methodology market capitalization is calculated by taking the equity's price and multiplying it by the number of shares readily available in the market. Instead of using all of the shares outstanding like the full-market capitalization method, the free-float method excludes locked-in shares such as those held by promoters and governments.

Calculated as:

And it also goes on to say that "The free-float method is seen as a better way of calculating market capitalization because it provides a more accurate reflection of market movements."

And what was the impact of this?

"stocks that will lose their weightage in the index have seen sharp falls in share prices in the past few days," says a report from business line. It also points out that the selling is from the index funds who have to realign their portfolios based on the new weights assigned. Some of the companies that have lost weightage are NTPC, ONGC, Power Grid, SAIL and Bharti Airtel.

In general I think this is a move in the right direction for NSE and Nifty.

rk

Warren Buffet's funny and sensible quote

Warren Buffet is supposed to have quoted the following during an interview on US economic recovery

"You can't produce a baby in one month by getting nine women pregnant."

it does make sense, doesn't it?

Top 10 challenges for India to overcome!!

Goldman Sachs Economic Research has come out with a list of challenges that India needs to overcome if she has to achieve her true potential. The paper titled Global Economics Paper contains the following list

1. Improve governance
2. Raise basic educational achievement
3. Increase quality and quantity of universities
4. Control inflation: Try Inflation Targeting?
5. Introduce a credible fiscal policy: a medium-term strategy
6. Liberalize financial markets
7. Increase trade with neighbors
8. Increase agricultural productivity
9. Improve infrastructure
10. Improve environmental quality

Well, there are no surprises in this list. They are more or less obvious and they are definitely the areas to invest in.

RK