Bull's Eye: Buy Asahi India, HUL, DCB; short UCO Bank

Bull's Eye, CNBC-TV18's popular game show, where market experts come together to dish out trading strategies for you to make your week more exciting and compete with each other to see whose portfolio is the strongest.

Remember these are midcap ideas not just for the day, but stocks that look attractive in the medium-term as well.
This week, Rajesh Agarwal of Eastern Financiers, Ashish Kapur of Investshoppe and Lancelot D Cunha of ITI Wealth Management battle it out for top honours. Below their top stock picks and analysis: Rajesh Agarwal of Eastern Financiers
We would like to recommend Banco Products for intraday with a stop loss of Rs 68 and a target of Rs 78. Buoyancy in auto segment is likely to aid to the performance of this company in coming quarters. The numbers have been quite good. Even the European subsidiary has been doing very well considering the fact that European CV (Commercial Vehicle) segment is doing well. December quarter numbers have been very impressive with around 28% jump in top-line and around 58% jump in bottom-line. Currently trading at a PE of less that 6, the counter looks quite impressive and hence we recommend a buy.
The second stock is Asahi India. This again is from the auto ancillary segment. The first nine months numbers have been not that good because of the slowdown in auto sector and raw material cost as we all know but going forward considering the buoyancy in auto sector once again we believe that these kind of companies are going to do well. On the valuation parameter also it’s trading at a very low valuation. Hence we recommend this for a buy. For intraday one can buy this with a stop loss of Rs 66 with a target of Rs 74.
The third stock in our list today is Swan Energy. One can buy this with a stop loss of Rs 121 and a target of Rs 137. They are one of the largest shareholder in GSPC, Gujarat State Pipavav Power Projects with around 49% stake. The deal has been structured in such a way that the carbon credits arising out of the project, 70% of the CER (Certified Emission Reduction) would be given to Swan Energy for the next 10 years and that’s going to be a trigger for this stock. We think that with the promoters holding around 76% and a small equity base of Rs 19 crore, the floating stock is also very low and hence we think this stock can give good returns in the short to medium-term.
The fourth and the last stock is Pitti Laminations. One can buy this with a stop loss of Rs 81 and a target of Rs 94. This company manufactures electrical lamination which is used in defense, aerospace and all those sectors and GE is their main client. 50% of their product is exported. They reported strong numbers in December quarter. Top-line grew by 52% and PAT grew by almost 134%. Valuations are very attractive with PE of less than 6 and price-to-book value of 1. Hence we recommend this as a buy.
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  Ashish Kapur of Investshoppe
My first pick for the day is a long call on HUL. In a very uncertain scenario which we are existing today, HUL along with other defensive bets remains a favorite place to park money for investors. This along with certain triggers like the assignment of leasehold rights for their Worli property to Ajay Piramal Group. As far as introduction of various international brands like Brylcreem into India makes us feel that despite the run up, which it has over the last couple of months, HUL should remains a favorite place for investors to park even for the near term.
My second call for the day is a long position on Apollo Tyres with a target of Rs 96.5 and a stop loss at Rs 86.50. This company has been doing very well in the last few quarters. Going ahead we expect this performance to continue. Their national business has a huge traction and which will sustain going forward. Even the domestic market being the leader in the commercial vehicle segment is a big positive for this company. Given the high growth in the OEM, sales between 2004 to 2009 we expect the replacement market for tyres to continue growing very rapidly.
My third call for the day is short position on UCO Bank with a target of Rs 74 and a stop loss at Rs 82. We are going short on this bank because of concerns on the asset quality. The slippages are quite high including a good amount of exposure to Kingfisher Airlines. Despite the poor quality of assets the bank is going very aggressive in expansion which posses a serious threat going forward to their earnings as well as the overall balance sheet strength. Despite very low CASA ratio the bank has undertaken a very aggressive growth strategy.
My final call for the day is a short position on Patel Engineering with a target of Rs 109 and with a stop loss at Rs 120. The reason for going short on Patel Engineering is a zest nearly two third of the order book is from irrigation and hydropower projects. There has been a continuous delay in execution of these projects and they posses a very strong risk to the earnings going forward. Along with that the company has a huge amount of debt with them carrying on their balance sheet. Their working capital cycle is very stretched and this does not augur well in a regime which has very high interest rate.
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  Lancelot D Cunha of ITI Wealth Management
I have a buy call on DCB. It has corrected post its highs of Rs 53 and after good results were announced, mainly because of the general market conditions and hence I expect some kind of a bounce back from these levels. It is trading at about 1.2 times its FY13 book value, which I think even in the long run offers good value and given the fact that I expect some kind of a market bounce back because even the market is poised at a very crucial level, we should see DCB moving up to its target price of Rs 47.70 during the day.
I have a buy call on Petronet LNG at price of Rs 147.70 with a target price of Rs 154.50 and a stop loss of Rs 142.10. It has seen a massive sell off post the petroleum and gas regulator raising issues about fees by Indraprastha Gas Ltd and yet if you see considering the decline in gas volumes from the KG basin, LNG seems to be the next alternative to filling up these gaps. We have seen good results from Petronet LNG over the last two quarters and results expected today will also be in line with expectations and should be good.
My third call for the day is a buy call on West Coast Paper Mills. It has seen a huge jump in volumes over the last two days and also coupled with price movement. This is based on market news that the company management may be looking to sell out and the valuations would be much higher than this level. Given the fact that buying has happened in the last two days, I expect that momentum to continue.
My fourth call is a buy call on ING Vysya Bank. It has been implementing a strategy of improving on its branch network, which has improved its CASA ratio to about 33%. The bank has come up with very good performance in terms of reduction of NPAs, improvement of NIMs as well as all other operating parameters. Given the fact that its results are expected today, I expect to see some upward movement on ING Vysya Bank and with some positive numbers expected, I think the bank should hit its target price of Rs 374.