3 stocks that brokerages are betting on

Business

oi-Sunil

By Sunil Fernandes

Updated: Saturday, February 8, 2014, 10:46 [IST]

Markets have been volatile in the last couple of weeks, with foreign funds selling and domestic institutions stepping in to purchase this week.

Here are 3 stocks that brokerages are recommending.

Karur Vysya Bank

Dolat capital has recommended buying Karur Vysya Bank with a target of Rs 410. The firm has noted that asset quality should now remain stable, the core-operations can show subdued growth as NIMs remain under pressure and cost/income ratio remains high. KVB has sizable portion of differential rate borrowings and can be a beneficiary of softening of bulk deposit rates.

"Valuations at PBR of 1.1x on FY14 and 1xon FY15 ABVPS are attractive from a long term view. Maintain our Buy rating with target price of Rs 410 based on PABR of 1.4x on FY14 and 1.25x on FY15 ABVPS forecasts. Further improvement in stressed assets or higher than expected improvement in NIM, can provide an early re-rating trigger," the firm has stated in its research report.

ICICI Bank

Angel Broking has a positive view on ICICI Bank, given its market-leading businesses across the financial services spectrum.

"At CMP, the bank's core banking business (after adjusting Rs 187/share towards value of the subsidiaries) is trading at 1.4x FY2015E ABV, which is below our fair value estimate for the bank. In the near term, given the weak macro environment and cautious outlook for the sector, stocks such as ICICI Bank may undershoot fair value estimates," the firm has stated.

Jagaran Prakashan

ICICI Direct has recommended buying the stock of Jagaran Prakashan.

"Currently, the stock is trading at 11.5x FY15E EPS of Rs 7.7. We have factored in 12.1 percent and 4.6 percent ad and circulation revenue growth, respectively, for FY15E. Also, the company has indicated it will sell a property in Indore, which can contribute about Rs 38 crore to the bottomline. We have not included proceeds from such sale in our estimates as yet. We value the company at 13x to arrive at a target price of Rs 101 and rate the stock as BUY," says ICICIdirect.com research report.

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