Karvy recommends Akzo Nobel, Sintex, Dhanuka for Muhurat trading

MUMBAI: R Murali Krishnan, Head – Institutional Broking, Karvy Stock Broking has recommended three picks for Diwali Muhurat trading which may give good returns in next one year.

Akzo Nobel India:

Akzo Nobel India (formerly ICI) – known for its premium segment product Dulux – enjoys market share of 9-10%. Its price performance of Akzo reflects absolute outperformance to Asian Paints and Sensex.

At CMP of Rs. 940, Akzo is trading at 35% discount to Asian Paints. We believe the valuations are justified on back of higher growth in revenue and profits, improved margins and return on networth, and lowest capital employed amongst peers.

Sintex Industries:

Sintex Industries has an order book of Rs. 30 Billion with an execution time of over 2 years in Monolithic Business, which in our view will be a huge boost to top-line and bottom-line of the Company.

With strong visibility in top-line and bottom-line due to robust order book and long-term contracts with diversified industries, we believe Sintex will maintain at least 17% and 20% growth in revenue and net income respectively in FY11-13E. At CMP of Rs. 140, we reiterate our “BUY” recommendation with a price target of Rs 196 per share.

Dhanuka Agritech:

Dhanuka Agritech’s well-established front-end capabilities position it well as a partner of choice for large agrochemical companies for marketing agreements. Dhanuka has doubled its liquid formulation capacity to 20,000 KLPD (Kilolitres per day) with its recent investment of Rs 300 million. At CMP of Rs 101, the stock trades at deep discount of 10x FY12 earnings.