Short & Medium Term Stock Market Recommendations

STOCK IN FOCUS

YES Bank closed 2.6% higher, outperforming benchmark NIFTY by 3%. We expect this out performance to continue in the coming month led by the inclusion of stock in FTSE Asia Pacific Index (on 23rd Mar’15) and NIFTY Index (on 27th Mar’15).

Inclusion in benchmark index’s along with relaxation in FDI/FPI norms will help the banks to command better valuations; as it is trading at relatively lower valuation compared to other leading private sector banks. 

The bank has also raised additional funds from the domestic and international bond market at very competitive rate, which will help it to expand at loan book along with maintaining margin at healthy level. 

What is more commendable is that the bank has maintained its asset quality even after consistently outperforming industry credit growth by big margin.

We expect its valuation to move towards its historical average of 2.5x forward P/ABV. At current levels the stock is trading at a 2.6x FY16E and 2.2x FY17E Adjusted P/BV. 

We have a Buy on the stock with a target of Rs890.

INTRADAY PICKS

IDFC (LTP: 170) BUY For today's trade, long position can be initiated only in Rs.167- 165 range for target of Rs.180 with a strict stop loss of Rs164.

HINDALCO (LTP: 133) BUY For today's trade, long position can be initiated only in

Rs.129-126 range for target of Rs.137 with a strict stop loss of Rs.125. 

COX & KINGS Buy Between Rs.322 To 325, Target 336, Stop Loss 317

TATACOMM Buy Between 428 To 433, Targget 447, Stop Loss 422

Positional Stock Recommendations 

Federal Bank closed on a flat note in yesterday's trade on an above average volume. We believe the recent consolidation on the stock price should be used to accumulate the stock on dips for a good upside in short to medium term. 

Stock continues to have multiple supports between level of Rs.135 to 130. On upside, stock faces minor resistance around Rs145 above which we may see stock moving to next crucial hurdle of ~Rs.152.

Thus, for today's trade, long position can be initiated only in Rs.136-132 range for target of Rs.152 with a stop loss of Rs.130.