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Stock to watch: Godrej Cons, Nicolas Piramal, Divi's Lab

Published on Mon, Jun 09, 2008 at 14:50 | Source : CNBC-TV18

Updated at Tue, Jun 10, 2008 at 10:04

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Godrej Consumer

BSE | NSE 28/05/12

Are Mutual Funds betting on Godrej Consumer?

The Nifty has broken 4500 mark (hit new 2008-low) and the Sensex cracked below 15000 during the day but both indices managed to close above those levels and recovered nearly 100 points and 200 points from days low, respectively. In the second half of session, major pharma and metal stocks have got some buying support.

The Sensex closed at 15,128.04, down 2.85% or 444.14 points after hitting an intraday high of 15,202.74 and low of 14,846.18.

Hitesh Agrawal , VP Research at Angel Broking is bullish on Godrej Consumer and PVR.

Here is how Hitesh Agarwal view the stocks on board:

On Godrej Consumers :

Beginning with Godrej Consumers; it's the fastest growing FMCG companies in the country. It is primarily present in two segments that is soaps and personal care. Within the personal care it has other segments such as hair colour, baby care products and liquid detergents, toiletries etc. It must be noted that in both these segments in hair colour as well as the soap category it is amongst the leaders and in the soap category is number two next to Hindustan Unilever in the hair colour segment and in liquid detergents it's a number one player. We have a price target of Rs 165 which is about 25% upside from here.

On PVR :

PVR is the largest player in the multiplex sector and it's been in news lately because of its fund infusion in PVR Pictures which is its 100% subsidiary or rather was its 100% subsidiary. It has diluted 40% of its stake in the company for Rs 120 crore and the PVR Pictures is now valued at close to Rs 300 crore compared to the stand alone entity which itself has a market cap of around Rs 400 crore. Considering the expansion plans of the company and the good traction that we see in its movie production and distribution business, we expect the company to deliver strong 50% growth in the topline and bottomline over the next couple of years and we expect almost 42-45% upside in the target price from here.

Disclosure:

I personally do not hold any of the stocks discussed, but have recommended them to clients.

Siddharth Bhamre, Derivatives Analyst, Angel Broking is bullish on Nicolas Piramal but is negative on HPCL and Cairn

Here is how Siddharth Bhamre view the stocks on board:

On HPCL :

It has shown some kind of unwinding but many people have taken contra calls around support levels of Rs 205-210. And these stocks in fact not just HPCL, all the PSU refineries have breached their long-term support levels and they are trading at multiyear lows. People who had taken contra long positions are squaring off their positions at this point of time and which is fueling the fall in these kinds of counters. Bottom fishing at these kinds of levels, I don't think so it would be advisable at this point in time.

On Cairn :

Cairn again a proxy to crude and I am just surprised because of this market scenario, it is just up by 4.5%. Otherwise last time when crude was around USD 138/bbl, Cairn was around Rs 330 - around those levels. So I feel still some upside is left, so this would be a stock like a lot of analysts are saying, would be buy on dips kind of a stock.

On Nicolas Piramal :

Pharmaceuticals space is quite active. People are hunting for the shelter at this point of time. A lot of stocks have been talked about on your show but this one stock Nicolas Piramal - we have seen good amount of shorting covering in this stock in the last one-week. And since Friday a formation of long is taking place. It is on the verge of breakout. Above Rs 380, we would see further fresh buying in this stock. So this is one stock, which we are liking in the pharma space apart from Ranbaxy .

Deepak Mohoni , trendwatchindia.com, is bullish on Divis Labs.

Here is how Deepak Mohoni view the stocks on board

On Divi's Lab :

It is a midcap to largecap these days. Essentially it's a stock which has been in a steady uptrend ever since it listed and even during this bear market it had correction like other stocks but since March it has once again established a bit of an uptrend, so this looks like a fairly safe pick with not a lot of downside risk.

Disclosure: I have recommended this stock and I personally hold it.

Amitabh Chakraborty of Religare Securities said long-only FIIs are selling. "The problem is that long-only FIIs are selling. Some of them have been invested for three-four years, so for them the actual buying price is very low. If they sell even at 25-30-40% lower than current prices, they are actually making money. So, long only funds are selling. It is another thing that they are facing redemption."

Rajat Bose, rajatkbose.com feels that Nifty's recovery is an ephemeral recovery; it's a temporary one. "Maybe because we have fallen so much in the last few days, that's why you have seen such a sharp pullback. But this pullback is unlikely to sustain. So I would still use these kinds of rallies as exit rallies and instead of accumulating prefer to go short at higher levels. 4,525 would be a level to really see whether it manages to stay above that or not. If it doesn't then another test of 4,400 could be possible within a short period of time."

Rajat Bose 's stock views

On Reliance :

Reliance actually broke for a while - that Rs 2,120 - the crucial support range was between Rs 2,120-2,110 and it has bounced back from that level. Now we need to see whether Reliance can carry this momentum and cross Rs 2,240 then possibly dash at Rs 2,300 possible.

On Cairn India:

I am still bullish on oil. I feel that USD 309 -320 per barrel would be the immediate targets. But those who can bet on oil they can still carryon with Cairn India. If I were in their shoes I would definitely do that I have advised my clients to do so.

On Chambal Fertlisers , Nagarjuna Fertilisers , Suzlon and Jaiprakash Associates :

Jaiprakash Associates for a long-term investor this could be a buying opportunity. But if the Nifty were to tumble further and my feeling is that we might see Nifty testing 4,350 in the interim then Jaiprakash can do down. Further for a trader maybe Rs 170-172 are likely. For a long-term investor, one can start accumulating Jaiprakash at current levels.

Similarly I have a feeling that fertiliser stocks if one is willing to give another 12-months for fertiliser stocks, this could be a buying opportunity. But for traders, I would rather wait for a buying but definitely this is not a level where I would go short in fertiliser stocks.

Regarding Suzlon, I for one would be interested as a trader if it were to cross Rs 284 else I would be looking at it at Rs 245 to Rs 240 odd levels. I am not inclined to buy Suzlon for investment right now.

Disclosure:

I might have given buys or short calls on these stocks, my traders, clients might have given buy calls to investor clients as well on these stocks. These are quite popular stocks.

Ashwani Gujral 's stock views:

Ashwani Gujral , Technical Analyst feels that the market cannot even cross 4,500-4,530, which was the previous significant bottom, the last time it came closer to 4,500. "There is no real reason to cover. All these bull calls, the bull case is failing, and this market has gone below the previous lows that were around 4,450. It never went past 5,500. A bull case would be there if the market was showing strength. So, I think people would see much lower levels particularly on the interest rate sensitives and on capital goods than they can imagine right now."

Gujral feels that if today's lows are broken, one will find support next around 4,200. "I think even if we get those 100-point bouncebacks, they will get sold into so fast that within an hour you will not have any gains left on the Nifty as we have seen at 4,730. So, clearly a market that is not even able to hold up the next psychological level, which in this case is 4,500-4,530, is not showing any kind of strength."

On Nalco :

Right now you would not try to trust this bounceback because each of these bouncebacks have led to further selling. Nalco had a support at Rs 460. Probably the stock can head upto Rs 560-565 but I don't think most of these moves in the last half an hour, are going to sustain a whole lot. Probably intraday, people went overboard in shorting the market and when it did not sustain the lows of March, there is some short covering. So I won't be too serious about this buying. This is just hogwash.

On SBI , PNB , ICICI Bank , HDFC Bank :

They continue to trade at make or break levels. State Bank of India (SBI) can still further go down to about Rs 1,120 to Rs 1,130 - particularly PSU banking is looking very weak now. Even PNB, one could see 100-150 point down moves on these PSU banks because they are breaking down from clear patterns where some sort of rally after some sort of a bullish patterns - those bullish patterns failed and they are now all declining quite sharply. If ICICI Bank maintains below Rs 740, the next target would be quite a bit lower around Rs 625-650. Again with HDFC Bank, Rs 1,150 to about Rs 1,200 is a key support. Once below that one will probably risk going into three-figures. So clearly interest rate sensitives are looking quite weak.

On Neyveli Lignite :

Neyveli Lignite has strong support now between Rs 95-100 but in this sort of a market in case we start going below that 4,450 sort of a zone - that was the place it went to the last time market went to 4450. If that breaks down, Neyveli Lignite will get back to its Rs 65-70 kind of a zone where it has stayed for a long time.

On Hindustan Construction :

Hindustan Construction again Rs 100 is a key support there. One more bad day and then that will start going back down to those Rs 70-75 kinds of zone, so the entire market is pretty close to those levels where the last time it bounced back. So any another 100-point decline on the Nifty and everything will start falling quite sharply.

On Cairn :

The way to trade it is that in case all goes well, which means oil goes to USD 200/bbl - the target on Cairn is Rs 350-355 and then probably even Rs 390. It is likely to move against the market no matter how much the market declines on a given day - Cairn can easily go up 5-6% against the market.

On Ranbaxy :

In pharma, Ranbaxy is doing very well. So, people can go long on that on all declines. Lupin is doing very well; Dr. Reddy's is doing quite well. These are the two or three stocks that are showing strength even in weak markets.

On RPL and Reliance Communications :

Reliance Communications is a bit news based. It has support around Rs 515-520. It can go back up to Rs 600-610, but not much beyond that.

RPL has consistent support around Rs 160-165. It can probably rally back up to Rs 180-185. But on all of these long trades you have to be careful that the main trend of the market is down and these brief rallies can get terminated very easily, the very next day.

Dipan Mehta's stock views

Dipan Mehta, Member of BSE and NSE is bullish on Cairn.

On Cairn and RPL

If oil price correct in the next 2-3 trading sessions then you would get these stocks at lower prices and that would be the price point to get in to these stocks because Cairn in particular is perhaps the only stock available which could act as a hedge against the high oil prices. Therefore it's important that a certain amount of these stocks are there in most portfolios. A lot of investors are looking at increasing their exposure to that particular stock. Oil prices are already down by USD 2/bbl today. Maybe over the next 2-3 trading sessions there maybe a bit of a cooling off over there, then you could see a similar impact in Cairn and that would be a good entry point.