Wipro (BUY, CMP Rs432, Target Rs470)
IT stocks have been in the limelight following fall of rupee to a five- month low. Expectations are high that the Finance Minister will give due importance to the sector while finalizing the annual budget. Among the IT pack, Wipro has been on a steady downtrend since last week of December. However, the stock has found support around Rs412 levels and bounced
back sharply. We expect this momentum to continue in the near term. The daily momentum indicator has entered the bullish zone and the daily RSI has also recovered from the oversold position. The daily MACD has also shown a positive crossover. Investors with short term perspective can buy the stock for a target of Rs470. A stop loss of Rs412 is to be maintained for all long positions.
Hindalco (Reiterate BUY, CMP Rs188, Target Rs220)
Hindalco is on a massive expansion plan in its aluminum business with capacities increasing 3x over the next 3-4 years. The company has announced expansion projects, both greenfield and brownfield, increasing its aluminum capacity to ~1.5mn tons. Most of the large projects are likely to go on stream only after FY09. The company recently announced a price hike for the second time this month after the metal prices advanced in LME. We expect the stock to consolidate in
the near term, and may gain as its capacities start production. On a sum of parts valuation method, we recommend a buy with a price target of Rs220.
Among the major bulk deals on Thursday, Macquarie Bank purchased 20 lac shares of Bank of Rajasthan at an average price of Rs165 and T Rowe Price Asia bought over 9 lac shares of Kalindee Rail Nirman.
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