8 stocks to watch out for in this falling market and Stock Views

8 stocks to watch out for in this falling market

Sanjeev Sinha, ECONOMICTIMES.COM

The stock markets are again in the correction mode. Till Friday (October 30) close, the Sensex had lost over 1,590 points, or 9.12%, since its Diwali day high of 17,493. Investors, at the same time, have lost Rs 4.6 lakh crore with BSE’s market capitalisation now being at Rs 53.5 lakh crore. All, however, is not lost and is not bad for investors at least as experts feel that some quality stocks with 10-30% retracement look more attractive in the present market scenario.

Here we take a look at some good stocks which have witnessed a correction over the last two weeks, in line with the declines in the broader markets, and are attractively placed in terms of investment:

1. Reliance Industries Ltd 2 Nov 2009, 1444 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks (Till Friday morning): 15.7% Outlook: The company has successfully executed its two mega ventures, viz. KG basin gas and the RPL refinery. “We expect them to be the key drivers of profitability over the next few years. We remain positive on RIL’s future growth prospects. After a recent fall at current market price of Rs 1950, RIL is currently trading at 16.8x and 12.5x of FY10E and FY11E earnings, respectively, which appears attractive. We expect RIL to deliver 30.8% CAGR in earnings over next two years (FY09 – FY11E). Historically the stock trades at an average of 15x its 1 year forward earnings. Considering this, our target price for the stock stands at Rs 2,475 (15x of FY11E earnings of Rs 165), providing an upside potential of 20% from current levels,” says Ashish Kapur, CEO, Invest Shoppe. Invest Shoppe recommends a ‘Buy’ on RIL.

2. Tata Steel Ltd 2 Nov 2009, 1442 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks: 19.2% Outlook: Tata Steel is one of the top 10 steel producers in the world with an existing annual crude steel production capacity of 30 mtpa. It is an integrated steel plant and is geographically diversified through investments in Corus, Millennium Steel and NatSteel Holdings, Singapore and a well-established marketing network in 50 countries. “The company has impressive expansion plans which have the potential to catapult it to one of the leading players in the steel industry. Steel as a commodity is in a long-term bull market and Tata Steel is likely to be one of the major beneficiaries. The demand from domestic as well as international players is expected to increase with the economic stability in the world,” says Kapur. Invest Shoppe, therefore, recommends a ‘Buy’ on Tata Steel.

3. Maruti Suzuki India Ltd. 2 Nov 2009, 1441 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks: 9.2% Outlook: “Maruti will continue to be a dominant player in the PV segment, and will enjoy a preferred brand image in the domestic market. Moreover, capacity addition will provide it with additional support to spread its wings further into the overseas markets, and to enhance its exports. At the CMP of Rs 1, 380, the stock is trading at 15x FY2011E EPS,” says Sarabjit Kour Nangra, VP–research, Angel Broking. Angel Broking recommends a ‘Buy’ on the stock, with a Target Price of Rs 1,656.

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