Stocks to watch: Axis Bank, RPL, BEML

The markets keep trust with the UPA’s ability to sail through tonight's vote. Nifty closed at 4,240 up 81 points, while the Sensex shut shop at 14,104 up 254 points.

Sanjeev Agarwal, Head-Equity, Globe Capital Market sees a range of 4,240-4,395. “The level of 3,850 was the basic short-term bottom formation. We were looking at somewhere around 4,240-4,395 kind of a range, which is minimum kind of bounceback. If we see some positive cues, the most optimistic view will be that we will be going somewhere around 4,600-4,740 and nothing beyond that. If we actually are able to reach somewhere around that top-end of the range, we should be actually short selling for maybe a new bottom somewhere down the line in just around 2 months more.”

Sanjeev Agarwal is positive on Axis Bank and RPL.

Here’s how Sanjeev Agarwal views the stocks on board: 

On Axis Bank:

This bank is showing a very good pattern and is likely to bottom out somewhere around Rs 600. I am very bullish on that for a long-term. In dips, we should be looking to buy it. On the investment front, these banks are really looking very good fundamentally as well as technically. The chart pattern is good. Amongst the banks, Axis Bank is my top pick for a long-term investment.

On RPL:

We like to generally go with the stocks that are actually insensitive to this political turmoil. They are clear beneficiaries in terms of political favors. ADAG has actually done well today whereas JP Associates, which is associated with the Mayawati government or the RIL pack is actually showing some weakness.

RPL has gone down just below its very strong support of Rs 161. They have broken a pattern call intraday. So, I am seeking lower levels for RPL somewhere around Rs 140 to Rs 145.

Jigar Shah, Senior VP and Head of Research, KIM ENG Securities is positive on BEML and Deccan Chronicle Holdings.

Here’s how Jigar Shah views the stocks on board:

On BEML:

It is trading at one of the lowest levels of valuations in recent times. Both its businesses:  construction and mining equipment business as well as the railway coaches and other equipment business, are so buoyant and the performance of the company is only going to strengthen going forward.

The order book is now Rs 4,000 crore and is likely to move upto Rs 5,000 crore as indicated by the company. We expect earnings growth of more than 20% in the current year. The stock is trading at 10-times price earning ratio this year and is looking cheap. Our discounted cash flow estimates suggests a price target of Rs 1,150 per share. So we remain upbeat given the kind of business potential that its segments are throwing opportunity at the moment.

On Deccan Chronicle Holdings:

The price target is Rs 250 against the market price of Rs 103. We are bullish about the print media business, which is growing because of the new addition from Bangalore and the launch of Financial Chronicle.

This will improve the ad space by 15% and the ad rate is already increased from April by 30%. So, the company will benefit from that. As a non-print media business consisting of internet properties and the IPL sponsorship, both are expected to do well. It’s venture with New York Times and managing the internet properties of New York Times should also give some kind of boost to the revenues and profits this year. So, overall at 5-times the stock looks cheap and if we just maintain the payout, the dividend yield could be 6%, which is also very attractive.

Disclosure:

We may have recommendations to our clients on both the stocks. But personally I do not have any holdings.