Coal India - 400 Target
Sunday, December 19, 2010
Investors with a long-term perspective can buy the stock of Cox and Kings (C&K), a leading travel and tours operator in the country.
The company's entrenched presence in domestic and major international markets puts it at a distinct advantage in the highly-fragmented tourism industry. Rising disposable income, favourable demographics of Indians, with many increasingly seen opting to holiday abroad, in addition to improving trends in inbound and outbound tourism underscore our recommendation. Valuations, given these growth drivers, appear fairly reasonable. At current market price of Rs 543, the stock trades at about 20 times its likely FY12 per share earnings.
Investors can consider accumulating the stock of turnkey engineering solutions provider McNally Bharat Engineering. The stock is among the mid-caps that have fallen steeply as a result of broad market volatility. The correction offers a good opportunity to add the stock. At the current market price of Rs 204, the stock trades at 10 times its expected consolidated per share earnings for FY-12. As the rights issue proposed last year has not shown any signs of taking off, shareholders can use the current weakness to accumulate the stock.
Investors with a two-to-three year perspective can buy the shares of Lumax Industries, a leading player in the automotive lighting business. From its 52-week high of Rs 330 in mid-September, broader market volatility has seen the stock shed about 20 per cent. The current market price of Rs 266 is hence an attractive entry point for investors.
Among the Sensex 30 stocks, Tata Motors zoomed eight per cent to Rs 1,348, and Tata Steel surged seven per cent to Rs 659. Reliance Infrastructure, Tata Consultancy Services, Sterlite, Infosys, Wipro, Hindalco and Bharti Airtel were the other major gainers — up four-six per cent each. On the other hand, Hero Honda and Mahindra & Mahindra plunged nearly six per cent each to Rs 1,679 and Rs 733, respectively. Jindal Steel, Maruti Suzuki and Bajaj Auto were the other prominent losers.