Buy Emami, HDIL; Sell Sterlite Industries: Shahina Mukadam

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

Buy Emami with a target of Rs 737 and stop loss of Rs 700. We have seen quite a bit of buying that is coming in this stock. Yesterday’s weak market also saw some good buying coming in. That should continue till today. The company is doing pretty well in terms of revenue growth. We are expecting something like 17-20 percent growth coming in over the next one year and part of it is also from price increases which the company has taken in Q4. It is around 4 percent in terms of price increase for the summer brands.
Buy Housing Development Infrastructure (HDIL) with a target of Rs 38.5 and stop loss of Rs 34. The major problem that the company faced in the last couple of weeks which saw a huge price fall was the cancellation of its redevelopment project at Santacruz by the MIAL project and I believe the government has very clearly indicated that it is going to sit with both parties, renegotiate and try to bring back that project on track. This is a positive, the stock has corrected a lot and I expect to see some bit of rebound.
Sell Sterlite Industries. The merger with Vedanta, with Sesa Goa, Cairn India is likely to be a very long-term positive. This consolidated entity will be one of the large global players in the mineral segment at the same time in the shorter to medium term there is going to be some problem. The rupee depreciation is going to impact the overall numbers. As we know Vedanta had raised more than USD 2.8 billion of debt, dollar denominated for its acquisition of Cairn which is likely to impact the consolidated profits going forward.
Short Adani Power with a target of Rs 37. The depreciation of the rupee that we have seen at around Rs 60 is going to be a major problem for Adani Power. The debt equity ratio at six times is pretty high and the debt is about Rs 38000 crore. Large part of it is dollar denominated and this is going to impact its profitability going forward. Despite the good news that we have seen for the Tiroda plant yesterday I believe the stock is likely to continue on its downward journey for some more time.