Sell Reliance Capital, Petronet LNG, REC: Mukadam

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

Sell Reliance Capital with a target of Rs 352 and keep a stoploss at Rs 375. It is a high beta stock. So if the market corrects, this stock is definitely going to correct and it has got that negative overhang of its numbers two days down the line. In terms of actual performance, on a sequential basis, maybe there could be a slight improvement but on a year-on-year (Y-o-Y) basis, there is going to be a huge decline in profits as well as in revenues. Sell Petronet LNG with a target is Rs 136 and a stop loss is Rs 146. The numbers were declared last month-end and the profits were pretty flat. It did show some pressure in the business and this is likely to continue. There is some delay at the Kochi terminal. So volumes will continue to be under pressure and also there is that additional competition coming in from Shell. At 10 times valuation FY14 P/E, I think it is fairly priced. Sell Rural Electrification Corporation (REC) with a target of Rs 215 and a stop loss of Rs 230. A lot of the business of REC is to state electricity boards (SEBs) and they are in pretty bad shape and there is an issue with regarding to the type of provisions the company would have to make going forward. In terms of raising funds also I believe with interest rates not coming down, it is going to be difficult for REC to raise funds at competitive rates. The last is Rolta India, which is a call that I continue from yesterday. In fact the closing was pretty good but my stop loss was triggered during the day. I continue liking the stock. It is a buy with a target of Rs 63 and a stop loss of Rs 58.50.