Dec 26, 2012, 01.10 PM | Source: CNBC-TV18
In CNBC-TV18's popular show Bull's Eye, Ashish Kapur of Investshoppe shares trading strategy of the day.
Ashish Kapur (more)
CEO, Invest Shoppe India | Capital Expertise: Equity - Technical
Buy Electrosteel Castings with a target of Rs 27.50 and a stop loss at Rs 25. This is a recommendation which I am retaining from yesterday’s picks. The company is a leader in manufacturing of Ductile Iron (DI) and Cast Iron (CI) pipes used in sanitation and irrigation. We are bullish on this company because the Q2 numbers were very encouraging. Also we have a positive view on the company’s proposed integration model. They are going forward into manufacturing of stainless steel and they are also going backwards into mining of iron ore and coking coal.
Buy Gabriel India with a target of Rs 31 and a stop loss at Rs 28. Gabriel is into manufacturing of ride control products. It has a very strong presence. It has a 40 percent share in the passenger car segment, 80 percent share in the commercial segment and 19 percent share in the two wheeler segment. The Gabriel manufactures and supplies to nearly all the big auto manufacturers. Given its presence and the fact that the auto companies themselves have very good targets going forward we are bullish on this company.
Buy HSIL (Hindustan Sanitaryware) with a target of Rs 140 and a stop loss at Rs 127. HSIL is the largest player in the sanitaryware market and has a very good share of the organized segment of the market. The company is undertaking a significant capacity expansion in both the sanitary ware as well as the faucet division. Also they are about to undertake price hikes to negate the margin pressure due to rise in cost of inputs. All this augers well and compared to other players in the market this share has hardly moved at all.
Buy KCP with a target of Rs 43 and a stop loss at Rs 39. KCP has two businesses - cement and power. Their cement division is valued at USD 40 per metric tonne. This appears to be quite a significant discount to other midcap cement players which are hovering around USD 75 per metric tonne. Besides this the company has the power division which is into thermal as well as wind energy. So overall the business prospects and the valuation look very attractive, hence we are recommending a long here with a target of Rs 43 for the day.