Buy Colgate, Delta Corp, Biocon, Sun Pharma Adv: Jajoo

In CNBC-TV18's popular show Bull's Eye, Vishal Jajoo of Nirmal Bang shares his trading strategies for the day.

One may buy Colgate Palmolive (India). Inspite of new entrants coming into the Indian market Colgate has successfully managed to not only maintain its leadership but also the market share. Very higher Return on Equity (ROE) of more than 100 percent, consistent higher dividend payout ratio and therefore a valuation which is much attractive considering the fact that the stock has corrected from a high of Rs 1580 to the present levels whereas if one compares other big names in the FMCG sector like ITC and Hindustan Unilever (HUL) they are very close to their 52 week high but Colgate has not participated in this rally, so a long way to go. One may buy Delta Corp. The company is increasing its capacity by five fold in this year, the process has already begun with the commencement of the new vessel in the month of August in Goa and the increasing revenues is expected to be more than five fold which will lead to an exponential surge in their earnings on account of the fixed cost business model, the only way to play the casino industry in India. This is an industry which has put Las Vegas and Macaw on the global map and thereby we have only this opportunity to play on this particular sector. Over the long-term we expect it to be a big multibagger however the target for the day stands at Rs 74.50.  One may buy Biocon, a focused pharma company. I would put it in pharma category because in the DPCO (drug price control order) sector we are seeing some problems and that has got reflected in the quarterly earnings of Q1 of this year, which shows that a lot of pharma companies are showing some signs of weakness in the top line growth. The situation could aggravate on account of the DPCO order and therefore we prefer companies like Biocon which is focused more on research and therefore it is a classic play rather than other big pharma names in the industry. One may buy Sun Pharma Advanced Research Company (SPARC). This is a high conviction idea, a unique player in its segment focusing exclusively on pharma research. The target for the day is Rs 126.50. This will take its own set of time, this is the eighth year of the company and over the last two quarters the company has started showing profits. This trend is expected to continue going forward because in a research company it is very difficult to project the earning and this company has a long way to go. It comes from Dilip Shanghvi, the man who has given us one of the biggest multibagger in the pharma space, a company with a market cap of more than Rs 1 lakh crore and the number two player has a market cap of less than Rs 40,000 crore.