Sunday, September 05, 2010
Investors can consider exiting the stock of Bharat Petroleum Corporation Ltd (BPCL), given that its sharp run-up since the partial fuel price reforms in late June seems to be ahead of fundamentals, and ignores the low earnings visibility due to the subsidy burden. At its current market price of Rs 768, the stock has gained as much as 39 per cent in a couple of months and trades at around 17 times FY10 consolidated earnings, much higher than its peers, HPCL (12 times) and Indian Oil Corporation (10 times).
With the revival in capex activity in sectors such as steel, port, power and other infrastructure segments, the fortunes of engineering equipment maker TRF stand renewed. Investors with a two-three year perspective can consider investing in the stock of TRF.
Investors with an appetite for risk and a long-term perspective can consider an exposure to the Amara Raja Batteries stock. The company is a pioneer in VRLA (Valve Regulated Lead Acid) batteries. Buoyant automobile sales, promising long-term outlook for telecom batteries and a diversified presence in the industrial segment signify good earnings visibility.