Stock to watch: Satyam, BHEL

Markets were in a euphoric mood, giving big thumbs up to the UPA winning Tuesday's trust vote. Both the frontline indices clocked gains of over 5%. The Nifty closed at 4,476 up 236 points, while the Sensex shut shop 838 points higher at 14,942.

Amar Ambani of India Infoline is bullish on Satyam Computer and Indian Hotels.

Here is how he views the stocks on board:

On Satyam Computer:

We have seen this stock falling considerably after the results, so are the other IT counters like Infosys. We like Satyam Computer because all the negatives are priced in. It is available at a PE of around 10 times. If what the management has guided for Q2 comes true, and assuming that number is posted, then in the second half of FY09, Satyam Computer will only have to grow at a CAGR of 3.5%, which seems pretty conservative and comfortable for the company to achieve. So, the IT major will meet its guidance for FY09. If anything, it will marginally beat it and be higher than the figure that the management has guided for. Given the overall valuations and that it's trading at 10 times PE, and also that IT can be used as a defensive play given the state of the markets, it would be a good buy for retail investors at this point.  

On Indian Hotels:

If investors want to buy anything in the hotel space, then Indian Hotels is the only play that we would recommend. Hotel Leela is a sell as far as we are concerned. There is equity dilution in some of these markets like Bangalore. Other areas will kind of witness a bit of a drop as far as Average Room Rates are concerned. So, we are not overweight on hotels, but if you have to stick to hotels then Indian Hotels would be the stock to be.

On ABG Shipyard:

The business model of ABG Shipyard does appear to be good.

Disclosure:

I personally do not hold Satyam, and Cairn India, but have recommended them to clients.

Deven Choksey of KR Choksey Securities is positive on BHEL and Reliance Communications.

Here is how he views the stocks on board:

On BHEL:

BHEL is in a very interesting position. The reaction of the market today was the post effect of nuclear deal. The company has a good growth prospect of 25%-30%, not just for this year alone but in the subsequent three-four years as well.

This company should be fundamentally well placed even when the nuclear deal happens. The management is well prepared for taking up this challenge. So it is an investment opportunity. The valuations of the company are also quite attractively placed. The price has gone up today but even till yesterday the prices were quite lucrative. L&T and BHEL kind of companies are always good for investment portfolios at least for next three-five years.

On Reliance Communications & Reliance Capital: 

 Nothing has changed between yesterday and today. It is only sentiments that are driving up this particular price. Our expectations increased today. Most of these companies particularly R-Comm, Reliance Capital were below the Rs 1,000 level which was quite attractively placed for investment purpose. We like those companies but I would not rush to buy these stocks. R-Comm still looks positive from an investment point of view.