Stock Pick From Industrial Machinery and Banking Sector

The scrips in this column have been recommended  with a 15-day investment horizon in mind and carry high risk. Therefore, investors  are advised to take into account their risk appetite before investing,  as fundamentals may or may not back the recommendations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

GREAVES COTTON                                         

Greaves Cotton is among the largest manufacturers of single-cylinder (diesel and gasoline engines) and dual-cylinder engines, which are used in auto rickshaws and small commercial vehicles. On the financial front, the company's topline increased 0.91 per cent to Rs 1819 crore in FY17 as compared to the previous financial year. Its EBITDA declined 8.99 per cent to Rs 243 crore in FY17 on a yearly basis. Greaves Cotton's bottomline reduced 9.91 per cent to Rs 181 crore in FY17 as compared to the previous fiscal. Despite a challenging market scenario and macro-economic changes, the company managed to grow its PAT for the last quarter and maintain revenues over the last financial year. This has been possible due to strategic initiatives like launching new range of solutions, enhancing service quality and higher operational efficiency. We recommend BUY, with a price target of Rs 188 and a stop loss of Rs 156.

SOUTH INDIAN BANK

CMP: Rs.25.70 BSE Code: 532218

South Indian Bank operates in four segments viz. treasury, corporate/ wholesale banking, retail banking and other banking operations. The bank has a network of approximately 830 branches, about 40 extension counters and around 1,290 automated teller machines (ATMs) in India.

On the financial front, South Indian Banks's total income increased 8.46 per cent to Rs 4954 crore in 9MFY17 as compared to the same period in the previous financial year. The bank's operating profit before provisions and contingencies rose 42.13 per cent to Rs 934 crore in 9MFY17 on a yearly basis. Its net profit also boosted 21.77 per cent to Rs 317 crore in 9MFY17 on a yearly basis. From stressed assets point of view, South Indian Bank's gross NPAs stood at 3.98 per cent and net NPAs stood at 2.52 per cent in Q3FY17. On strong financial front, we recommend BUY with a price target of Rs 29 and a stop loss of Rs 23.