The market has been highly volatile and even as there is a slight pullback, it dips to test newer lows. In such a tricky environment, here is help from two brokerages of repute, RBS and Bank of America-Merrill Lynch, to decide what to do with certain stocks to ensure good return on investment.
Bank of America-Merrill Lynch recommends buying Reliance, but has cut its target by 11% to Rs 909. A US recession will hit the petrochemical and refining margins, they say. Bear-case FY12-13 EPS estimates are 17-32% lower than base case. It would mean no growth.
The research house also recommends buying GVK Power, but has cut its target too to Rs 30. BoA-ML believes GVK
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