stocks to pick this week
CMP: Rs 1,707.10
Target price: Rs 2,100
Deutsche Bank has reiterated its buy rating on Bhel, while revising the price target to Rs 2,100. It feels the stock's recent correction is an opportunity for long-term investors, as it expects revenue growth to pick up over the next couple of quarters.
"A detailed analysis of all 40-odd projects being implemented by Bhel suggests that there is a likelihood of bunching up of new capacities for commissioning from 2QFY09 (Sep-08) onwards," the bank said in a client note.
"In addition, commissioning of 5000MW of short cycle industry and export orders as well as Bhel's initiatives to boost its capacity should drive up earnings in the medium term," it added.
CMP: Rs 168.75
Target price: 208
Enam Securities has rated Reliance Petroleum a neutral, with a price target of Rs 208 on belief the company is ready to capture buoyancy in the global refining cycle.
"We expect the refining cycle to remain robust though 2010-11 on the back of strong product demand from emerging economies, tightening capacity and stricter emission norms," the domestic investment bank said in a client note.
Enam expects talk of the company's merger with parent Reliance Industries to gain momentum, post Chevron stake sale. "Based on our price target of Rs 3,315/share for RIL, at a worst case scenario of 20:1 merger, RPL has a bottom at Rs 166/share," it said, while adding that any such merger is unlikely till there is a steep fall in GRMs.
CMP: Rs 84.30
Target price: 120
Merrill Lynch has initiated coverage on Mcleod Russel India with a buy and price target of Rs 120 on expectations tea prices may strengthen further.
"We expect tea prices to rise 24% over FY08-10 following a production slump in Kenya in January-March 2008 and low pipeline stocks in India," the foreign investment bank said in a client note.
"We believe McLeod offers an excellent leverage given its scale and high fixed operating costs. We forecast McLeod's EPS (earnings per share) to grow 5 x (times) over FY08-10 on surge in tea prices," it added.
Merrill forecasts the company's EPS for 2007-08 at Rs 2.39, as against Rs 1.79 in 2006-07. In 2008-09, Mcleod's EPS is estimated at Rs 8.05 and at Rs 12.02 in 2009-10.