Buy Titan Ind, Arvind; sell Canara Bank, HPCL: Mukadam

Aug 05, 2013, 12.28 PM IST

Shahina Mukadam of Varun Capital recommends buying Titan Industries with a target of Rs 297 and advises selling Canara Bank.

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Shahina Mukadam of Varun Capital recommends buying Titan Industries with a target of Rs 297 and advises selling Canara Bank.

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Buy Titan Ind, Arvind; sell Canara Bank, HPCL: Mukadam

Shahina Mukadam of Varun Capital recommends buying Titan Industries with a target of Rs 297 and advises selling Canara Bank.

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In CNBC-TV18's popular show Bull's Eye, Shahina Mukadam of Varun Capital shares her trading strategies for the day.

One may buy Titan Industries with a target of Rs 297. The last week results were pretty good, very strong growth in the jewellery business, almost 47 percent and this was driven actually by lower gold prices. I think this positive growth should continue going forward. The number of stores have gone up substantially. The company has almost 1000 stores. With valuation of around 30 times 2014 earnings it looks like there is some upside still left in the stock.

One may buy Arvind with a target of Rs 77. The relaxation norms for FDI are positive for the company. The company has many tie-ups, partnership with very strong global brands and it benefits two ways. It can either capitalize on some of its tie-ups if the partner wants to work out or there can be a good equity infusion and the brand can be strengthen and good growth by expansion of the number of stores and investments that goes into the brand. In terms of valuation it is about seven times 2014 earnings which is not expensive.

One may sell Canara Bank . The numbers reported on the weekend were very disappointing. Just like other banks, most of the other PSU banks numbers showed a deterioration in asset quality, the net non performing assets of Canara Bank have jumped to almost 2.5 percent despite doubling in provisions. In terms of revenue a lot of revenue growth was cushioned by the jump in treasury income which actually increased by almost 10 times over the previous corresponding last quarter to a level of Rs 510 crore. This is not likely to continue into the next quarter.

One can sell Hindustan Petroleum Corporation (HPCL). It is a sell with a target of Rs 182, high oil prices coupled with weak rupee is likely to continue to show stress on the balance sheet of downstream oil companies like HPCL. While the government has allowed increase in price of diesel and petrol I don't think that is sufficient. The IOC offer for sale is likely to put some pressure in terms of any upside that HPCL could have in the shorter term.

Rokok Kanker