Sell JSW Steel, Federal Bank, Adani Power, IGL: Mukadam

In CNBC-TV18's popular show Bull's Eye, Shahina Mukadam of Varun Capital shares her trading strategies for the day.

One may sell JSW Steel today with a target of Rs 480. The quarter number were extremely disappointing. Whatever the company got in terms of revenue growth was lost in terms of higher interest cost and that is going to continue to be a problem with over Rs 30,000 crore of debt which almost 40 percent is in forex. The weak rupee is going to be a problem. Valuations are the most expensive in the industry and the stock is likely to correct from here. One may sell Federal Bank with a day target of Rs 325. Banking stocks are taking a beating and that is likely to continue. The first quarter June numbers saw a huge amount of pressure on profits because of the jump in provisions. I see this pressure continuing on into the remaining part of the year. One can sell Adani Power with a target of Rs 21. This is another company which has a problem of huge debt, around Rs 39,000 crore of debt a large part of which is in forex. The interest cost doubled Y-o-Y to almost Rs 900 crore which resulted in a loss and I think this problem is going to continue on for the next couple of quarters. I sell with a day target of Rs 29. One can sell Indraprastha Gas (IGL) with a target of Rs 226. At current levels this stock is at a very important support level. The input cost of the company have gone up substantially. Gas prices have moved up and it is not really possible for the company to pass on all these increases. It will have to bear some of it as valuation wise at 10 times it is expensive, so I see it correcting.