Buy UCO Bank, Autoline Ind, Karnataka Bank: Cunha

In CNBC-TV18's popular show Bull's Eye, Lancelot D Cunha, ITI Wealth Management shares trading strategy of the day.

Buy UCO Bank with a target price of Rs 65. Uco Bank has been rising on increased volumes and with this positive trend I expect this trend to continue. From a fundamental basis the bank had been negatively impacted because of the perception of higher Non-Performing Assets (NPA), but I believe the NPA cycle should be through and we should see much better results this quarter. The anticipation of rate cuts is also helping rise in prices which I believe the momentum should take it to its target price of Rs 65.
Buy Autoline Industries. Autoline Industries has seen very large volumes yesterday and that could be on the back of some interested buying. The company is a major supplier to Maruti. Almost 60 percent of its revenues come from Maruti. It has a large land bank in Pune of over 100 acres and maybe there could be some announcements which are coming forth which could lead to this huge surge in both volumes as well as price. I expect this momentum or the interested buying to continue and the price should move to its target price of Rs 99.90.
Buy Karnataka Bank. High interest cost deposits would seem to have got dissipated now given the fact that interest rates have started coming off, so we should see some improvement in Net Interest Margins (NIM). So I believe that there is some interested buying in the bank stock and we have seen this trend continue for the past few days, so it should move to its target price of Rs 149.50.
Sell Jubilant Foodworks. Jubilant has been trading at a significant premium. It trades at about 38 times its FY14 earnings and this premium has been primarily due to the high growth that the company was witnessing in its same store sales. However, over the last one or two quarters we have seen the same store sales moderate and now we are not seeing that high significant growth. In addition with the new stores and the new projects on Dunkin' Donuts opening up I expect growth could probably taper off and that should bring down the premium valuation.