Sep 26, 2011, 08.32 AM IST | Source: Moneycontrol.com

KYI: Your stock queries answered

KYI's back! Here is the reply to the stock queries you sent us on our Facebook page, answered by our expert for the week- Anand Kuchelan, Vice President – Research, Padmakshi Financial Services Ltd.

KYI: Your stock queries answered

The market plummeted at high speed over the week, resulting in quite some bloodied nose. The Nifty lost 209 points in just one day (Thursday) and followed it up with another 50 point loss the very next day, which came as quite a surprise to the street. Investors pressed the panic-button and fled as weak global cues saw selling pressure in India even from the FIIs. The Nifty finally dragged the week to a close at 4867 and the Sensex closed at 16162 on Friday.

In fact, negative news flow internally such as delay in urea decontrol cost the fertilizer companies much with their stocks tanking up to 9% while companies such as banks and IT too saw loses on account of high interest rate and slowdown in demand outlook.

Experts on CNBC-TV18 say that the market is likely to grind lower, and probably retest those 4720 lows earlier seen.  In such a scenario, which are the safe pockets among equities? Is your portfolio protected well enough?

Moneycontrol.com initiative, Know Your Investment (KYI), provides solutions to your worries.  Here is the reply to the stock queries you sent us on our Facebook page , answered by our expert for the week- Anand Kuchelan, Vice President – Research, Padmakshi Financial Services Ltd.

Below is the edited question and answer.

Jay Parikh: Which shares can I buy now?

Kuchelan: ITC , NTPC , Hindalco , Tata Motors , HUL , Dabur , SBI are the stocks which I feel would outperform the market with a years timeframe.

Niraj Agarwal: Do you think investing in JP Associates is safe right now?

Kuchelan: Niraj, you can enter it around Rs 63 with a stop loss of Rs 58.

Ananya Chatterjee: Is it right to invest in UCO Bank with a six-month perspective?

Kuchelan: I would rather buy Dena Bank instead of UCO, as Dena is likely to perform better in the next 6 months.

Hemal Shah: Does BHEL make for a good buy at current levels?

Kuchelan: Fundamentally, BHEL is a good buy. However, the news of FPO will keep adding pressure on the stock. The stock has a chance of falling till the 1500 mark. You can enter the stock at those levels.

Uday Kalgaonkar: I want to buy Ashok Leyland for a term of three years. What target can I expect?

Kuchelan: Uday, Ashok Leyland is one of the strong players in the heavy vehicles space. The current price seems a good level to enter the stock. The maximum downside should be till Rs 23.5-24. Since your investment horizon is three years, it should not bother you that much. I suggest you to look at Tata Motors too as the size and scale and the way the JLR has turned around, it is likely to offer much better returns than Ashok Leyland.

Rajanikanth Bejinavemula: Can I buy KS Oils and Southern Ispat & Energy ?

Kuchelan: There are much better stocks in that space, Rajanikanth. Take a look at JSW Ispat or even SAIL , instead of Southern Ispat. KS Oil, I would recommend you to buy as the stake sale deal, if it goes through, can result in strong recovery for the stock.

Mahesh Bajaj: I hold 50 shares of Aban at Rs 800 and 200 of Allahabad Bank at Rs 210, and 500 shares of India Infoline at Rs 157. What should I expect from them going forward?

Kuchelan: I suggest you to hold on to Aban . As far as Allahabad Bank is concerned, you can look to average it as the stock is available at attractive levels. It can perform better and your previous cost price of Rs 210 is likely to be achieved in a year’s time. India Infoline has a strong support around Rs 70. I suggest you to keep a tight stop loss of Rs 68 in the stock. If it gets triggered, you can switch to stocks like IDFC .

Mayank Shandilya: Please tell me about Astra Microwave . How are its fundamentals? I have 750 shares of this company, but unfortunately, it never went up since I bought them.

Kuchelan: Mayank, the stock is a good one, but since the market itself is not performing, you cannot expect these small stocks to attract investors. I guess there are plenty of opportunities in the largecap space. I suggest you shift to those stocks as I don’t expect these smallcap stocks to move, even if market gives a bounceback.

Ashish Rathore: Will GVK break the 52-week low? What are the fundamentals of the stock?

Kuchelan:  The stock is already at a 52-week low. Unless things picks up at the macro level on the infrastructure front, I don't foresee stocks like GVK to perform. However, considering their huge asset size one should keep an eye on it. It may be wise to enter the stock around Rs 14 as the risk reward ratio is more likely to favour the bulls.

Nilesh Ekhande: I have 200 shares of Sterlite Industries at Rs 133.When should I sell them?

Kuchelan: Hold on to Sterlite. The stock doesn't seem to have too much downside from current levels. The only thing is you have to manage intraday volatility.

Aniruddha Kinjawadekar: I hold 55 L&T shares at an average rate of Rs 1,400 per share. What is the future of this stock?

Kuchelan: This stock might underperform in the near-term but it is a good prospect in the future. I suggest you hold onto it.

Suvil Susvirkar: I have 400 shares of MRPL . Do you think I should hold on to them?

Kuchelan: Rs 60 could be a good base for the stock. Hold on to it.

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Jaiprakash Asso UCO Bank Dena Bank
BHEL Ashok Leyland Tata Motors
KS Oils Southern Ispat JSW ISPAT Steel
SAIL Aban Offshore Allahabad Bank
IIFL Holdings IDFC Astra Microwave
GVK Power Sterlite Ind Larsen
ITC NTPC Hindalco
HUL Dabur India SBI
MRPL

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