Stock Picks


Following are investment ideas based on readings / recommendations received:

Please take note that all investment decisions made by reading the following has to be at the risk of the investor. Hence investors are advised to go ahead and consult an investment advisor before taking the final decisions.



Name of Scrip


Source or reason for investment recommendation


Mahindra & Mahindra


The Scorpio has been very well received by the auto markets. Also, it is earning through the outsourcing of forging facilities that it has developed for the scorpio. Over and above this there is the hidden worth of its investment in its joint venture MBT Ltd.


Tata Chemicals


This stock is an excellent dividend play which also should appreciate given strengthening in the core sector.




This is an all time favourite. It is specially recommended for those who wish to take a medium to long term position in the IT sector.




Although this scrip has witnessed good gains recently, it is a good play for those willing to bet on the Indian economy. There is still some unrealized potential in the short term which is entirely dependant on the implementation of the provisions of the recently enacted Securitisation Act.


Mahindra & Mahindra


The scrip has almost doubled since the last prediction. But looking at the improved results and the first quarter results (annualized EPS of Rs. 14.7) it still shows scope of upward movement.




Though the scrip has witnessed a spectacular rise to these levels from a price of around Rs. 100 in late April this year, at this price it only discounts the expected EPS of FY04 of Rs. 35 by 6.85 times. With global demand for steel picking up on the back of China’s resurgent demand and the improvement in the Indian auto sector, the margins are expected to be quite solid for this least cost producer of steel. Also savings in interest and manpower expenses will enhance or help maintain the comfortable margins. Price target of around Rs. 300 seems quite realistic given current market sentiment.


Maruti Udyog


A sharp appreciation of nearly 70% over its IPO price of Rs. 125 may seem to indicate full valuation for the time being but with improvement in the demand of automobiles and the mainstay A segment doing unexpectedly well, the company may see further appreciation. Also the fact that it has been added to the MSCI index makes it a default investment by global investors. Given this and the increasing cost efficiencies achieved by the company recently, one can enter with a price target of 250-275 in the short to medium term.




A turnaround case which is riding the improved scenario of steel by reducing manpower costs. One may invest with a short to long term perspective. Look for levels of 55-60 in the medium term as target and Rs. 80 in the long term.


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