Buy Core-education. FY 12 target stands at 330, FY 13 target stands at 400

Core-education & Technologies

Core-education and Technologies is one of India's leading company in e-learning space, along with Educomp Technologies.

The domain of e-learning is growing exponentially in India as more and more schools are moving towards digital learning space.

Company's fundamentals are very strong. In FY11, it earned EPS of 20 Rs. In 9-months of FY12, it has attained EPS of 21 Rs and likely to close this financial year with EPS of 30 Rs. Hence, even if we give conservative Price-to-Earning (PE) of 10-11X PE, the scrip should close at 300-330 Rs by this month end.

For FY13, it is expected to earn EPS of 40 Rs and with PE of 10X, the target price for FY13 stands at 400 Rs and hence, shows an upside of 40% from the current levels. DII and FII holdings is increasing gradually which indicates strong belief in this company's fundamentals.

Technically too, the stock is in bullish phase in short term. In weekly charts, the short term trend is on verge of breakout from long term levels which if happens, will take stock to 300 Rs.

Financial Results

Bank of Baroda - Sell at 845 with target price of 770, Stop Loss of 890

Sell Bank of Baroda

1) Bank of Baroda has made a downwards trend line starting from Nov 10 when it made a high of 1050. Similar tops have been made at 980 and then 870.

2) There was a strong support zone in 845-860 range where it traded for 3-4 months before it breaks it down and now acting as a resistance zone.

3) First Support comes at 770 where the current rise started around 10 days back. The second support comes at 730 where the stock has taken support three times.

4) 5 Day exponential moving average is above 34 Day average which is a bullish signal. It indicates that stock might try to enter into resistance zone.

5) RSI is neutral which again indicates bullish for short term.

Overall, the stock is likely to face resistance at around 5% from the current levels from where we anticipate favorable risk-to-reward ratio. Hence, we recommend "Sell" at those levels.

Nifty likely to maintain range, BHEL seems attractive

As another eventful week got ended where RBI has again increased the interest rates, Indian Equity Markets are likely to take a day or two of breather. Nifty (benchmark index) is now stuck in a narrow range of 5060-5200 and would like to break it after a pause.

Fundamentally, the concerns remain valid. High Interest Rates are likely to impact the earnings from now on. Growth will also likely to come down. Globally uncertainty looms larger over Europe and USA. Commodity Prices are going up. Amidst such scenario, the expectations should be tapered down.

Nifty move from 4800 to current levels is likely to resume for a while. It is likely to touch 5200-5270 from where we might see another retracement to 4900-5000. If Nifty is able to breach 5270, then the next level comes at 5400.

On the downside, 5030-5040 is a very crucial level. If this gets breached, we might see Nifty going to 4960 and then, 4870 levels. Thus, as a trader it is wise to work under strict stop-losses. Shorts can be opened at 5020 with target prices of 4960 and stop-loss of 5060.

On both fundamental and technical side, BHEL looks attractive. Technically it is close to its medium level support of 1640. Also it has underperformed Nifty by around 10-15% in last three months which it might try to recover in the coming days. For technical traders, one may go long in 1660-1680 range with target prices of 1730-1780 and Stop-loss of 1630.

Comparison with Nifty index

Fundamentally too, one may buy this stock at around current levels. As it is a part of benchmark index, it was trading at PE of 17X in March with EPS of 122 (Ref: Results). Even if we discount the slow down and put down EPS to 110 for this financial year and reduce PE to 16X, then even, its fair price comes at 1750. At fair valuations of 120 EPS and PE of 17X, the price arrives at 2050.

Thus, long term investors can buy the stock at 1660, 1530 levels with probable targets of 1750, 1900, 2050 levels in next 6 months.

Wishing you a great week...

Buying opportunities in mid cap space. Bharat Forge, Indian Bank Buy - 08th August 2011

The Global Equity Markets had a horrendous time last week. US and European Indices fell by ~ 10%. The ripple effect of USA Debt Downgrade, European default, imminent slowdown in the economies and this list may go on and on and on....

Indian Equity Markets too melt down by 5%. Though the pain on Dalal Street was much more than this. Mid-cap stocks fell down much more than that. Interest Sensitive sectors like Real Estate, Infrastructure fell down too. DLF, Unitech, BHEL, L&T - all big and small names fell down. Reliance too down below 800 Rs mark. One can't count the dead on this battle field.

Amid such scenario, our recommendations did a bit better. Cummins India hit its Buy target of 640. Wow! Rare Buy target achieved in this market. The recommendation is still open @ 605 with target price of 640 and Stop loss of 578.

India Cements fell down but managed to stay above its SL of 64. It closed @ 65. The hope still alive... :) Geodesic Systems too managed to float above its stop loss of 53. It closed @ 55.25. The buy recommendations still intact.

For this week, one may Buy Indian Bank @ 215 with Stop-loss of 208 and target price of 228. The stock has fallen down steeply till Thursday. But on Friday, it shows resilience in the support range of 210-220. Open Interest too was positive too which is a good indication.

Bharat Forge too can be bought at around current levels of 270-275. The stock has fallen steeply from 340 Rs and looks into over sold range. One may buy this stock with Stop-loss of 264 and target price of 292.

Wishing you best of luck for the challenging week!!!