Trading desk: Top seven trading ideas

The sensex and the rupee diverged on Thursday with the equity index falling 0.64% to 20415.51 ignoring the end of the crisis over debt ceiling in the US. IT stocks fell on profit booking. But the rupee had its biggest gain in two weeks, rising 60 paise to 61.23 against the dollar on the deal to resolve the US deadlock.

HCL Tech declined 7% to Rs 1,083 even as the company posted a better-thanexpected 63.8% increase in consolidated net profit for the September quarter. The pace of revenue growth disappointed investors who took the opportunity to book profits. HCL shares have risen 75% so far in 2013.

Morgan Stanley has maintained Overweight rating on Mind Tree, a mid-sized IT services company, citing upbeat management commentary, strong order intake and continued net hiring, which the brokerage says are indicative of strong demand environment. Morgan expects Mind Tree to deliver $ revenue growth of 14% in FY14 E. The share of Mind Tree declined 5.15% to Rs 1,307.

Citigroup initiated coverage on Sobha Developers with a ‘Buy’ recommendation and a target price of Rs 426, a 38% upside from current price. Citi expects Sobha’s EPS to grow 23.2% to Rs 27.28 in FY14.

Deutsche Bank has increased TVS Motors target price to Rs 50 from Rs 35 and said the valuation gap with its peers would start to narrow as the firm gains market share. Deutsche has maintained a ‘Hold’ on the stock.

Goldman Sachs has initiated coverage of Motherson Sumi Systems, India’s second-largest auto parts supplier, with a ‘Buy’ and a 12-month target price of Rs 294, a 13% upside from current price.

LKP has increased Bajaj Auto’s FY14 EPS to Rs 123 from Rs 119 and the 12-month target price from Rs 1,983 to Rs 2,050. The new price is 5% lower than Bajaj’s market price of Rs 2,165.

Daiwa Securities has cut HDFC Bank’s net profit forecasts by 2.5% for FY14 and 3.8% for FY15 on lower loan growth but maintained its ‘Outperformer’ rating on the stock. Daiwa’s target price is Rs 722, 11% more than Thursday’s price of Rs 654.

Motilal Oswal has cut Axis Bank’s 12-month target price to Rs 1,300 from Rs 1,575 on macro concerns but said its growing retail business is making it a structurally stronger organisation.