ICICI Direct’s top 7 picks for Muhurat Trading

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Muhurat Trading in India will be held for an hour on Oct 23, on Diwali Day. Stock markets have rallied almost 25 per cent since last Diwali. Here are 7 stock picks that ICICI Direct is suggesting to buy on Muhurat Trading.

State Bank of India

ICICI Direct believes that strong franchisee (14,000 plus branches) makes SBI's cost of funds among the lowest in the industry, which enables a healthy NIM.

"We assign a target price of Rs 3234, valuing the core book at 2x FY16E ABV (i.e. 1.4x P/BV) and adding Rs 450 for associate banks and subsidiaries (life and general insurance, AMC, etc.)", ICICI Direct has said in its research report.

Ultratech Cement

ICICI Direct's research reports says that the low capacity addition & demand recovery should lift cement utilisation levels from hereon given the cyclical upturn in the economy coupled with an expected policy
push to drive investments in infrastructure sector. "We forecast pan-India utilisation at 78% by FY16E that may offer pricing power. Given the scenario, we expect UltraTech, as an industry leader with strong balance sheet, to trade at premium valuations".

Rallis India

ICICI Direct says that Rallis India has a lean balance sheet with strong returning ratios. "We expect sales and PAT to grow at a CAGR of 16.8% and 21.6%, respectively, in FY14-17E. We have valued the company at 24x P/E on an average FY16E and FY17E EPS of Rs 12.6 and arrived at a target price of Rs 302 with a long term (18-24 months) investment horizon," the firm says. 

Exide Industries

"With strong replacement demand likely to continue and OEM demand also likely to pick up, Exide's financial performance is likely to remain on an uptrend, with topline, bottomline growth. ICICI Direct has set a target price of Rs 220 on the stock.

SKF India

 ICICI Direct has said that SKF has a healthy balance sheet, robust cash flow generation, strong parentage & product profile/ strong distribution reach are other key positives. The research firm sees good growth going forward and has set a price target of Rs 1148 on the stock.

ICICI Direct

ICICI Direct has set a target price of Rs 430 on the stock. "We have valued the company at 6x FY16E EV/EBITDA and arrived at a target price of Rs 430 with a long term (18-24 months) investment horizon.
Maharashtra Seamless has a strong balance sheet, healthy cash flow and net cash status, which augur well for the company," the firm has said.

Target of Rs 2396

ICICI Direct has set a target price of Rs 2396 on Kansai Nerolac. "At the CMP, the stock is trading at 27.4 x its FY16E earnings and 22.2 x its FY17E earnings. We value the stock on 28x multiple to arrive at a target price of Rs  2396/share," the firm has said.

Story first published: Monday, October 13, 2014, 8:36 [IST]
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