Stocks to watch: SKF India, Coromandel Fert

Markets witnessed huge selling pressure in late trade today due to weakness in oil & gas, realty, banking, capital goods and power stocks. Sensex and Nifty breached their psychological levels of 17,000 and 5,000, respectively.

Technical Analysts Deepak Mohoni of TrendwatchIndia and Gaurang Shah of Geojit Financial Services give their views on the stocks to watch:

Shah on SKF India:

It’s a 53% subsidiary of SKF Sweden and one of the leading manufacturers of both automotive and industrial purpose used bearings. It has got a well-balanced portfolio in both the segments that is automotive and industrial, which partly offsets the slowdown in the automotive sector as far as two-wheelers are concerned. Going forward the parent company is planning to invest round about Rs 270 crore in its Ahmedabad plan to increase the production in the large industrial bearings segment. Also they have got plans to invest round about Rs 100 crore in its Pune and Bangalore plan thereby increasing the total capacity upto 30%. The fact that the reduction in excise duty both on two-wheelers and small cars is going to augment well with the SKF products is because the consumption could go up and possibly bring down the cost also. So keeping these facts in mind and understanding that SKF has also got five different technology platforms to better its products, we have a price target of about Rs 400 with a timeframe of 1-1.5 years on the particular stock.

Shah on Coromandel Fertiliser:

Definitely given the fact that Coromandel Fertiliser is a leading manufacturer of phosphatic and complex fertlisers. Going forward it is got concentration in the Southern side where the agri-community has a lot of focus and acceptance of the fertilisers produced by Coromandel. It captures the market as far as the Southern side is concerned. Also given the kind of fact that the kind of requirement for complex fertilisers is going to grow with thrust on the agri-commodities and the agriculture business. We expect the topline and bottomline of Coromandel Fertiliser to improve to a very great extent and thereby possibly a price target of round about Rs 185 could be attainable. Also the fact that post merger with Godavari Fertilisers and Chemicals Limited (GFCL), I think the product mix and the geographical location will stand to benefit.

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Mohoni on Reliance Industries: 

If you look at Reliance, it closed at 2-week low, so it was holding out quite nicely until yesterday but when you have the Sensex down by 400 points you can be pretty sure that Reliance is down because of the weightage it enjoys.

DISCLAIMER

It is safe to assume that my clients & I may have an interest in the stocks/sectors discussed.