Rationale for Picks• Undervalued relative to • Consensus Valuations • Previous Peaks • Sectoral Cycle = The Right Price at The Right Time• Low Possibility of unpleasant (non financial) surprises• Industry and Index Leadership
CMP : Rs 184352 Week L/H : Rs 1571-2688 State Bank of IndiaMid Term View• Negatives Behind – Stock suppressed despite positive result surprises except Dec 2011• Consensus Valuations far higher than current levelsNear Term View• Available at discount to PSU Index and other heavyweights like HDFC Bank• Near Term fall due to FnO speculative activity – Results in May 2012 to act as trigger• Our Target – Rs 2400
CMP : Rs 234452 Week L/H : Rs 2161-Rs 3023 Infosys TechnologiesMid Term View• Turnaround in business with time as management settles down and demand picks up for key products cyclically• Maintaining Premia / Rates evident of confidence in products and services• Short term issues like Visa investigation, employee dissatisfaction putting pressure on stock – Industry issues and not specific to InfyNear Term View• Over reaction to fall in guidance – Price down by 30% plus for a 5-6% drop in guidance• Our Target – Rs 3000
CMP : Rs 115452 Week L/H : Rs 969-Rs 1868 L&TMid Term View• Short term issues in power segment and construction etc putting pressure on long term value – order book slowdown and currency movements cyclical in nature• Diversified conglomerate capable of extracting value from the ‘India growth story’ – best proxy• Long term outperformance against closest competitor BHELNear Term View• Stock down ~ 50% from peak• Our Target – Rs 1500
CMP : Rs 1503 52 Week L/H : Rs 1260-Rs 1843 Bajaj AutoMid Term View• Rupee expected to remain on a long term depreciation mode – Benefits Bajaj Auto in export markets (25%+ of sales)• Wide distribution network, diversified product basket and established capabilities in technology• Available around fair value estimates – more stable than Hero / higher discountNear Term View• Long term outperformance marred by short term market cyclicals / increased competitive intensity• Our Target – Rs 1800
CMP : Rs 517 52 Week L/H : Rs 400 -Rs 553 HDFC BankMid Term View• High NIMs / Capital Adequacy to ensure outperformance of bank index continues• A proxy for banking for FIIs in ETF portfolios• Premium to sector may come in question from time to time but markets willing to give premium for more than a decade now – likely to continueNear Term View• Movements correlated to index but has maintained a 20% plus lead of indices• Our Target – Rs 625
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