Stock Recommendations

22 Sept, 2011


1) DLF :-

Current Market Price - 203
Target - 217
Duration - Short Term

DLF is selling land in Noida to IDFC and also plans to sell its NTC mill land in Mumbai. The Company has 21,000 crore debt on its book. It is selling land to reduce its debt by 7000 crore. Although outlook of real estate is bleak, the company may in sell more land in future to reduce more debt and reduce interest burden thereby improving its bottomline and debt to equity ratios.

2) Reliance :-

Current Market Price - 786.35
Target - 750
Duration - short term

Till KG basin controversy is not resolved, expect RIL to continue downfall. RIL may have to pay USD 1.8 billion to the Govt. In that case, expect shares to fall rapidly. There is no positive trigger for this scrip in the short term.

3) L & T :-

Current Market Price - 1491.55
Target - 1900
Duration - Long Term

L&T is the poster boy of Infra space. Entire Consumer durable sector is bleeding due to interest rate hike. However, rate hike may not continue in the future as interest rates have peaked and slowdown of economy is expected. It has bagged a 700 crore order today from Omanese gas co. It is expected to develop a huge order pipeline in future and is available at attractive valuation at current levels. One can enter this stock at these levels from a long term perspective. In the long term L&T can outperform giving 40-50 % returns in 1.5 to 2 years.

4) Tree House Education :-

Current Market Price - 161.20
Target - 230
Duration - Medium Term

Tree House is on a rapid expansion mode, setting up preschools across the nation. New students will be joining in the month of June next year lifting Q1 performance for next financial year. In Q1 of next year, it is slotted to clock around 24 crores in sales. So, one can enter this stock with a 9-10 months time horizon to reap good returns. This financial year the company is expected to reach 60-62 crores in sales and 22-25 crores in profit.