Stock Recommendations

SENSEX (28504) BSE Sensex after a long weekend opened positive with gap up of around 92 points. The index after trading directionless in early trade, gained uptrend and witnessed strong rally in FMCG, Consumer Durables, Realty and Auto sector stocks. It finally ended the session on firm note with gains of around 244 points. Now, it has to hold above 28500 levels to continue the buying interest towards 28750 and psychological 29000 levels while on downside immediate support exists at around 28250 and 28000 levels

STOCK IN FOCUS

Mindtree closed over 7% higher in trade yesterday on 1.8x its 2- week average volume. While 4Q results of the company are expected to be muted due to cross currency impact and clientspecific project delay in retail & CPG vertical, Mindtree’s growth is expected to recover going ahead based on strong deal wins (US$152mn TCV in 3Q) and increase in digital scope (Kellog digital deal). 

Management expects near-term operating margin to remain in a narrow band. We believe that IMS returning to growth ahead will provide impetus to margin. 

We are positive on Mindtree based on 

• Continuity in strong deal wins 
• Increase in average deal size in digital
• Strong hiring outlook indicative of demand (2,000 fresher on-boarding in FY16E) and, 
• IMS growth ahead to provide margin tailwind. At CMP, it trades at 20.1x/ 17.2x its FY16E/FY17E earnings. 

We recommend a Buy on the stock with Target Price of Rs1,600.

INTRADAY PICKS

LIC HSG FIN (LTP: 451) BUY For today's trade, long position can be initiated only in Rs.440-437 range for target of Rs.460 with a strict stop loss of Rs.432.

SYNDICATE BANK (LTP: 102) BUY For today's trade, long position can be initiated only in Rs.101-99 range for target of Rs.107-110 with a strict stop loss of Rs.98.

M&MFIN is turning from the lower band of the trading range as it has been consolidating from last ten weeks and made support base near to 250 zones. It has crossed immediate hurdle of 268 zones and also given the highest daily closing in last three months. It closed above its 50DMA and Relative strength index is also supporting the momentum with rising trading volumes. Traders can buy the stock between 262-265 with stop loss of 258 for the upside target of 274 levels. 

TECHM has corrected by 18% from 738 to 620 levels and now taken support at recent low levels. It has negated the trend of making lower highs - lower lows on daily and weekly chart and now witnessing fresh buying interest with an attractive narrow range price formation. It looks attractive in terms of risk reward ratio so traders can buy the stock between 630-637 with stop loss of 620 for the upside target of 660 levels

Positional Stock Recommendations

Jubilant Foods, closed Wednesday's trade on a positive note with gain of ~3.5%. The recent reversal in the stock price is seen post stock hits its 100 day SMA which is currently placed around level of Rs1,463. We believe 100 day SMA will continue to act as strong support for the stock and presents a good opportunity to create fresh long position on dips. On upside, stock faces minor resistance in the range of 1,540 to Rs1,550 above which, we may observe a sharp up move. On downside, we do not see stock breaking below level of Rs1,400.

Thus, for today's trade, long position can be initiated only in Rs.1,490-1,450 range for target of Rs.1,600 with a stop loss of Rs1,400.