Year: 2007

In a recently conducted London Conference, here are Edelweiss Capitals top picks in India and their target prices.

• Akruti Nirman – NAV basis valuation @ Rs 1,231 per share
• Ashapura Minchem – Target not specified
• Axis Bank – deliver 13-15% RoE and 20% EPS CAGR during FY07-09E. The stock currently trades at 2.8x FY09E book and 23.6x FY09E earnings
• B L Kashyap – Expected to report an EPS of Rs 100 and Rs 131 for FY08 and FY09 respectively.
• Elder Pharma
• Ess Dee Aluminum
• Housing Development Infrastructure Ltd – HDIL – NAV basis valuation @ Rs 597 / share
• Infotech Enterprises – EPS expectations of Rs 17 and Rs 24 for FY08 and FY09 respectively
• Jindal Saw
• JSW Steel
• Kalpataru Power Transmission – EPS estimates of Rs 76.3 and Rs 94.4 for FY08 and FY09
• Mastek
• MIC Electronics – EPS estimates of Rs 24 and Rs 33 for FY08 and FY09
• Reliance Industries – The stock is trading higher than its target price of Rs 2,299
• Unitech

You can research and then enter the stock when the market corrects.

FII, Lehman Brothers just a while ago has released India strategy report.After the recent strong run, market valuations have become quite expensive compared with historical levels. However, the declining global interest rate environment coupled with strong flows could mean that the market remains expensive.

The report said,

We are overweight domestic cyclicals, especially those for which interest rates are key inputs in driving demand and valuations. These include banks, automobiles and utilities as key sector plays. We also recommend overweighting construction stocks given strength in both corporate and infrastructure capex. Moreover, we expect large consumption buoyancy, especially in durables, following the award of Sixth Pay Commission.

One can avoid sectors with INR costs and USD revenues. This means underweighting the technology and pharmaceutical sectors. Also underweight on global cyclicals such as metals at this time..

Ten large cap picks include Reliance Industries, ICICI Bank, Larsen & Toubro, Maruti Udyog, Mahindra & Mahindra, Union Bank, SBI, Nagarjuna Construction, NTPC and Zee Telefilms.