Stock Ideas

ITC The share price of ITC has been trading in a primary up trend and is seen sustaining above the rising trend line joining the lows since CY08 signalling strength and positive price structure. During the last 15 months, the stock has been consolidating around the major support area of  265-270. It underperformed other FMCG stocks during the same period. However, the stock recently witnessed a rebound from the major support area  265-270 and is providing fresh entry opportunity with a favourable risk/reward set up.

Action: Buy, Target Price:  313, Time frame: 6 Months UNITED BANK OF INDIA In the recent recovery from 10500, the banking space took the lead once again and were major gainers in the index. At the same time, the midcap and small cap space has also started witnessing some traction. We believe that while the Nifty may continue its consolidation in the range of 10500-11000, stocks from the midcap space are likely to outperform in the near term. Hence, midcap banking stocks like Union Bank of India may witness good upsides on the back of short covering. Action: Buy, Target Price:  102, Time frame: 3 Months EVENT UPDATE:-BANK OF BARODABank of Baroda announced swap ratios for the merger with Vijaya Bank and Dena Bank. As per the announcement, every 1000 shares owned in Vijaya bank & Dena bank will receive 402 & 110 shares respectively of BoB. The swap ratio values Dena bank at ~ 3000 crore (25% discount to 2nd Jan 2018 Mcap) & Vijaya bank at ~ 6266 crore which is close to 5% discount to its market cap. The swap ratios as announced will lead to 22% dilution vs 25% dilution estimated for the merged entity and ~ 29% vs 32% estimated on existing BoB equity capital. MORE WILL UPDATE SOON!!