STOCK COMMENTS

Buy Insecticides India:

Soumen Chatterjee

Insecticides India is trading at a trailing P/E 17.8 times. Earnings of the next two quarters will play a major catalyst as: 1. A normal monsoon has been predicted by IMD till June 18; and 2. Minimum support price at 1.5 times cost of production will encourage farmers to strive for higher agricultural output. Insecticides India is trading at a trailing P/E 17.8 times. Earnings of the next two quarters will play a major catalyst as: 1. A normal monsoon has been predicted by IMD till June 18; and 2. Minimum support price at 1.5 times cost of production will encourage farmers to strive for higher agricultural output.

Accumulate Ashok Leyland, target Rs 183: Soumen Chatterjee

Ashok Leyland is trading at 25.8 times its trailing earnings (down from 33-34 times a few months back) with a robust RoE of 22 percent. Uptick in economic growth and pick up in infrastructure activity is seen. Stricter enforcement of overloading norms is a positive development but competitive pressure is likely to remain high. We maintain our accumulate rating with a price target of Rs 183 per share (discounting the stock to trade at 24 times its FY19E earnings of Rs 7.64 per share).

Accumulate JSW Steel, target Rs 435: Soumen Chatterjee

JSW Steel is trading at 12.5 times its trailing earnings (down from 15-16 times a few months back) with robust RoE of 22 percent. The management expects steel demand to grow at 7-7.5 percent in FY19. We expect margins to improve in FY19, if steel prices remain rangebound. We maintain our accumulate rating with a target price of Rs 435 per share (discounting the stock to trade at 15 times FY19e earnings of Rs 29 per share).

Buy Jamna Auto Industries: Soumen Chatterjee

Jamna Auto Industries is trading at 28.5 times its trailing earnings (down from almost 35 times few weeks back). The company maintains its industry leading return on equity of 30 percent and modest debt/EBITDA of 0.3 times. Strong Q4 numbers; safe play to ride the revival in the commercial vehicle sales cycle, with facilities located in close proximity to the plants of original equipment manufacturers; and benefits from lower logistic costs makes it difficult for new entrants to garner market share from OEMs.

Buy Kaveri Seed Company, target Rs 630: Mustafa Nadeem

Kaveri Seed Company has given a breakout after a long consolidation which started in early 2018. A close above resistance zone of previous peaks and higher volume participation is likely to keep the bullish momentum. The upward target for the stock is placed at Rs 625 - 630. At 11:27 hrs Kaveri Seed Company was quoting at Rs 588.50, up Rs 5.15, or 0.88 percent. It has touched an intraday high of Rs 591.95 and an intraday low of Rs 581.60.