Stock recommendations for 2008-09

After a long time, I am giving stock picks for my blog readers. All these stocks will give good returns if you give them 1 year time. Forget short term fluctuations in these stocks and invest for long term. Accumulate more of these stocks on every dip.

RBI credit policy once again disappointed Indian stock market investors. Why are you expecting rate cut in the election year? Which government will want to see rise in inflation at this crucial time? Upcoming budget will also disappoint investors. Better prepare for that.

Indian stock markets will see more volatility from February 1st onwards due to short selling by big institutions. 500-1000 point intra-day swings will become common due to SEBI’s new policies. What happens if US Federal will not announce rate cut? Markets will crash. I am waiting for this crucial decision before making fresh investments.

Best Stock picks for long term investors:

1. Reliance Communications:

• Due to its GSM foray, number of subscribers will rise.
• According to rumours, apple may give iphone contract to R-Com. So, it will attract high end customers and ARPUs will rise.
• Due to aggressive management (proven capabilities), it may go any extent to attract GSM subscribers from other networks.
• Its business is less dependent on American financial system. Weakening dollar will boost its other income.
• Indian telecom story will continue for some more time.

2. Reliance Petroleum:

• It is almost like a bank fixed deposit.
• It will unlock its true value 2-3 months before the commencement of refinery.
• You need to forget short term fluctuations.

3. Glenmark Pharma, Educomp solutions and Divis Labs: • All of them have just announced wonderful results.
• All are maintaining good performance for the last 2 years.
• High P/Es are concern. Enter into them on any correction.

4. Wockhardt: • Upcoming IPO will boost this stock price.
• Good stock for short-medium term investors.

5. L&T:
• Only for high risk investors due to its high valuations.
• Demerger of L&T in 2010 will surely benefit long term investors.
• L&T may be risky stock for short-medium term investors.

6. Reliance Industries:
• Accumulate more of this stock (below 2500) and wait for 1 year.
• Reliance Retail and Reliance Life Sciences may list in the markets in the coming days.

7. Welspun Gujarat:

It continues to remain my favourite stock irrespective of market situation. Fundamentally sound stock like this will never give negative returns.

8. Among metal companies, I prefer Jindal Steel while ABG Shipyard is a good one in the shipping sector.

9. IDFC is my stock pick among financial stocks. IFCI is a good bet with risk. If Banking stocks get corrected more, enter into ICICI bank and Axis bank.

10. BHEL and ACC may give decent returns for long term investors.

My views on Stock Markets:

1. SEBI allowed FIIs for short selling in Indian Stock markets from February 1st onwards. So better prepare for more volatile markets.

2. Stock investments may not give you stunning returns but if you invest in accumulating manner for long term, you will get decent returns.

3. Subprime crisis will rise in America will rise in the second half of 2008 due to arrival of floating interest rates. If there is no significant rise in household income, American market will go into recession. If that happens, stock markets will crash (BSE-14,000&NSE-4,000).

4. It is better for short term investors to stay away from markets. After 4 years of Bull Run experience, Indian investors are finding it difficult to change their mindset for bear market situation. They are still expecting miracles due to lack of awareness about looming crisis in the United States.

5. Retail investors should stay away from derivatives and penny stocks. Invest in fundamentally good stocks at reasonable valuations.

6. According to my opinion, upcoming budget may not give boost for stock markets. UPA government may present “Election budget”. In my view, stock markets will crash after the budget. I can’t rule out pre-budget rally.

7. Investors in Tata Steel (corus), Hindalco and Tata Motors (Nano) will need to wait 2-3 years to get real benefits.

8. Tata Chemicals, Matrix Labs, Infosys and Indian hotels are my wild bets for long term investors.

9. Zylog systems is a good stock among the new businesses. I have doubts over Everonn valuations.

10. Gateway Distriparks may bounce back at any time. It has good prospects in the logistics.

Accumulate the above mentioned stocks at reasonable prices and wait for 1 year to get decent returns.

Infosys results are crucial to market movement

Indian stock markets are showing exceptional strength even at 15000 levels. Infosys results will be crucial if markets if markets have to sustain these levels. Inflation data on Friday is another crucial mark along with International crude prices. I booked profits in blue chips and am still holding IFCI and Ispat. I made fresh investments in Fortis with 2 year horizon. I took short term bets on Dr Reddys and Reliance Communications.

Global cues: US markets rose on account of earnings growth.

Sector of the day: IT stocks as Infosys will announce results tomorrow. Will Infosys surprise us again?

Stock of the day: Tata Motors – 1 lakh car will be rolled out according to schedule.

Positive stock news:

1. Dishman Pharma will acquire vitamin and fine chemicals business of Solvay Pharma.
2. Wockhardt got tentative approval for Fosphenytoin injections.
3. IDBI will sell stake in state finance corporations.
4. DCM Shriram will sell stake in Hariyali Kisan.
5. Tata Motors will list its profit making subsidiaries like TDCV and TELCON.
6. Divis Labs announced stock split from Rs 10 to Rs 2. It is the first stock to undergo heavy correction if markets see correction. Invest only on dips.
7. Sugar stocks will see some gains in the coming days on account of govt. Subsidies (will be announced). Long term outlook is looking dismal for this sector.
8. Hindustan zinc will increase capacity on massive scale. Sterlite may buy some stake in this stock.

Negative stock news:

1. Q1 earnings of major IT companies will decline by 10%. Wednesday is the D-day for IT stocks.
2. Auto companies will announce disappointing results.

Stock advice:

1. Lanco Infra will continue its positive momentum in short term.
2. Reliance Communications may bounce back today.
3. Bonus rumours are surrounding NTPC and HUL.
4. Tata Tea is a safe bet for medium term investors.
5. Raymond is looking as safe bet for long term investors.
6. Bharti Shipyard and Areva T&D are good long stocks.

Note: Markets will crash at any time. Caution advised.

Indian share Markets may range-bound

Indian share markets are continuing their volatile sessions. Stock Markets may range bound today due losses in the past trading sessions. Most of the stocks are seeing heavy selling/buying without any specific reason. Investors in these stocks may suffer the fate of Teledata investors. Oil refining stocks (BPCL, HPCL and IOC) may rise due to drop in crude prices.

NSE: 4111
Support: 4090 and 4070
Resistance: 4144 and 4178.

Warning News:

1. RBI may increase CRR but not Repo rates – JPMorgan.
2. Business confidence was down in Q4 – FICCI Survey.
3. RBI sent strong warning note to banks. Stay away from public sector bank stocks.
4. Copper price fell on ending of Peru strike and profit booking. Be careful with Hindalco and Sterlite.
5. Indian ADRs lost yesterday despite rise in DOW.

Stock Picks for Day Traders:

1. Reliance Capital
CMP: 742.9
Resistance: 757, 772 and 781.
Support: 734
Global investment firms eye stake in Reliance Capital. This is a best stock for Long term investors. It may touch 1200 within 2 years. Forget short term fluctuations in Reliance Capital.

2. Reliance Communications
CMP: 466.5
Resistance: 474 and 481
Support: 461

Stay away from following stocks:

1. Real estate stocks may see some selling due to DLF IPO clearance from SEBI.
2. Deccan Aviation will not sell stake to King Fisher.
3. Public sector bank stocks may lose heavily due to RBI letter.

Stock picks for Long term Investors:

1. Reliance Communications
Enter into this stock at 400-430 level. It has big plans for the future growth. It plans nationwide rollout of DTH and Metro IPTV. It will spend 2.5 billion US Dollar in network expansion.

2. Stay away from Auto and Real Estate stocks. Oversupply of office space is a concern.


Rupee impact on Stocks (Credit Suisse report):

1. Gainers: Engineering and Construction Stocks, Reliance Communications, Oil refining stocks like BPCL, HPCL, IOC, Container Corporation, HT Media, United Breweries, Sterlite, Titan, Zee, Exide and Adani Enterprises.

2. Losers: IT Stocks, Pharma Stocks, Hotel and Tourism Stocks and some oil stocks like Essar Oil.

Share your ideas on the movements of Indian stock markets.

Volatile Indian Share Markets

Indian Share markets were highly volatile yesterday due to ending of derivative contracts. Long term investors should stay away from the Stock Markets. Markets seem to be in uncertain mood. It is better for investors to wait and watch. If inflation will rose, markets will suffer heavy losses in the late trading session. Watch out for inflation mark.

News of the day:

1. India is showing ‘classic signs of an overheating economy,’ with high growth and accelerating inflation – Moody Investor services.
2. India entered into $ 1 trillion GDP economy list.

Best Stock picks for the Day Traders:

1. Hotel Leela
2. Reliance Industries
3. Reliance Communications
4. Sun TV
5. Sesagova
6. Hindustan Zinc
7. SKF India

My observations:

1. Tata Tea may see some profit booking.
2. Reliance Communications may rise today.
3. Suzlon Energy may lose today due to shut down of 44 wind turbines.
4. Cipla, Deccan Aviation and Marico may lose today due to unimpressive results.
5. TCS and Wipro may lose today due to unexpected rise yesterday.
6. Reliance may rise today due to good results and unexpected loss yesterday.
7. Pharma stocks are in the hot seat due to US approvals and acquisitions.
8. Long term investors should stay away from stocks which are near all time high like SAIL, Sun Pharma, ABB, Air Tel, Ipca labs etc.
9. Medium term outlook for Sugar stocks is not good. Enter into these stocks at low levels but not at this time. Wait for another month.
10. Indian Share Markets are not following their global markets in the recent sessions.
11. Hero Honda is now near 52 week low.
12. Shree Renuka sugars is a good bet for long term investors.
13. Utilize Sesagova open offer.

Positive News of the Day:

1. Reliance Communications and Alcatel –lucent deal.
2. Computer Sciences Corporation (CSC) will acquire Covansys for $1.3 billion.
3. Teledata suffered reverses for the first time in the recent memory.
4. Sun TV will launch a children’s channel.

Negative news of the day:

1. Price of Mind Tree consulting was manipulated on the IPO listing.
2. Low cost airlines Air Deccan posted a loss of Rs 213 crore for the third quarter.
3. 44 wind turbines operated by Suzlon Energy were shutdown yesterday due to protests from local residents.

Please share your ideas.

Indian Stock market guide – April 13, 2007

Indian stock market investors will have very good opportunities in some shares today. Markets will gain around 100-150 points today. Invest in shares which lost heavily in the past 2 days like Ranbaxy Laboratories.

Infosys technologies will announce results in Bangalore today. Its forecast about the growth of IT industry will change the fortunes of IT stocks. Stay away from IT stocks.

Global cues:

US markets and most of the Asian markets gained some of their lost ground. Indian ADRs turned positive. Oil prices rise due to decline in US gas stocks.

News of the Day:

The Index of Industrial Production (IIP) registered an 11 per cent growth during February 2007 as against 8.8 per cent in the same month last year. For April-February 2006-07, IIP improved by 11.1 per cent as against 8.1 per cent in the same period last fiscal.

The manufacturing sector improved by 12.3 per cent in February compared to 9.2 per cent in the same month of 2006. For the April-February period, manufacturing grew by 12.1 per cent as against 9.1 per cent in the corresponding period last fiscal.

Stocks for Indian Day Traders:

1. Rallis India – Superb Q4 results.

Net profit of Rallis India rose 218.57% to Rs 9.78 crore during the quarter ended March 2007 as against Rs 3.07 crore in the previous quarter ended March 2006. It will gain 10-20 points.

2. Ranbaxy – Approvals to market its drugs in US and Canada markets.

RANBAXY RECEIVES APPROVAL TO MARKET CEFPROZIL TABLETS AND CEFPROZIL POWDER FOR ORAL SUSPENSION IN CANADA.


Ranbaxy Laboratories Ltd said it got US Food and Drug Administration approval to market Loratadine antihistamine tablets.

3. ICRA debuts today

It will be listed on the Bombay stock exchange in the ``B1`` group of securities.
The company offered 2,581,100 equity shares of Rs 10 each at a price band between Rs 275 and Rs 330 a share. The cut-off price was fixed at Rs 330 a share.

4. ITC:

Seven ITC hotels will be upgraded to be a part of the 64 premium properties worldwide that are recognised under the `Luxury Collection' brand.

5. Ballarpur Industries Ltd (BILT):
An increase of 21.85 per cent in its net profit for the third quarter ended March 31, 2007, to Rs 64 crore from Rs 52.52 crore in the corresponding period last year.

6. Reliance Communications:
It bagged majority of the Universal Services Obligation (USO) fund-sponsored rural cellular project.

7. Ruchi Soya:
Ruchi group buys palm oil business of Sical Logistics for undisclosed amount

8. Pantaloon Retail:
March sales up 84% at Rs 264 cr

9. SAIL:
It closes to acquire Malvika Steel

10. Alembic:
It undertake expansion worth 100 mn.

Stay away from following stocks:

1. Copper prices are in decline. Stay away from metal stocks.
2. TATA Power