Morgan Stanley adds HPCL, Sterlite to Focus List of stocks

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Brokerage house has added Hindustan Petroleum Corporation and Sterlite Industries to its 'Focus List' of stocks.

"The simplification of holding structure (of Sterlite) and inclusion of high-return oil and gas business is expected to drive an improvement in earnings quality and investor sentiment. We also see growing possibility of value unlocking as chances of stake purchases in HZL and BALCO are rising,” says the Morgan Stanley note.

The brokerage sees HPCL as a levered play on the fuel price reforms theme, as 60 percent of the company’s earnings comes from the oil marketing business. Also, the stock valuation is attractive at 0.9 times price to book value.

Following is Morgan Stanley's complete Focus List:

• Maruti Suzuki
• Tata Motors 
• Zee Entertainment
• Dabur India
• Hindustan Petroleum
• Bank of Baroda*
• ICICI Bank*
• IDFC*
• Oberoi Realty
• Yes Bank
• Sobha Developers
• Dr. Reddy's
• Ashok Leyland
• Larsen & Toubro*
• Crompton Greaves
• Sterlite Industries
• Tata Steel
• Mindtree
• Infosys Technology

*denotes equal weight rating; the remaining stocks have an overweight rating