March 17, 2011 / 18:01 IST
Indian equity markets are going through a rough patch. Trading becomes very tricky in a market that is so volatile. However, even in this market, three brokerage firms have scoured through their charts and found some value picks for investors. Motilal Oswal, Aditya Birla Money and Nirmal Bang are bullish on Coal India, L&T and Havells India respectively.
Buy Coal India with a target of Rs 356: Motilal Oswal"Coal India (CIL) has seen 10-12% hike in its staff cost due to increase in dearness allowance (has gone up by 50%), while other operating costs (like fuel oil, explosives, etc) have seen average increase of 8-10%. On top of this, the production growth in FY12E is now anticipated at 7m tons, lowering absolute recovery for CIL. The current move by CIL is positive and will protect / improve its profitability. We expect CIL to report an EPS of Rs 22.4 in FY12 and Rs 26 in FY13. At the CMP, the stock quotes at 15x FY12E and 13x FY13E EPS. We maintain Buy with a target price of Rs 356."Buy L&T with a target of Rs 1635/1650: Aditya Birla Money"Larsen & Toubro (L&T), prices are trading mixed holding above the low-low trend line support near 1500 over the last couple of sessions. On the daily time-frame however, the downtrend appears to be losing momentum. Hence an early break above the resistance at Rs 1565 could lead to a short-term recovery in prices which finds next resistance near Rs 1598 and then Rs 1635 subsequently. On the downside, support is seen at Rs 1528 and then at Rs 1506. Only an early break below the latter could aggravate the weakness in prices negating the expected recovery. Buy L&T only above Rs 1565 with a target of Rs 1635/1650 and a stop loss of Rs 1525."Buy Havells India with a target of Rs 450: Nirmal Bang"At CMP of Rs 354, Havells India is trading at a PE of 19.8x in FY11E and 12.7x in FY12E whereas on EV/EBITDA it is trading at 10.5x and 7.5x in FY11E and FY12E respectively. We believe that Havells is well
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