Midcap Monitor: 10 stocks to buy at current levels

The broader markets have extended their gains and have outperformed the benchmark indices. The BSE Mid-cap index has advanced 0.86% to 5,946 and the small-cap index is up 1.07% at 5,800.

Sensex reversed direction after hitting its highest level in more than 35 months. The 50-unit CNX Nifty reversed direction after hitting 22-week high.  At 11:55 AM, the 30-share Sensex was down 16 points to trade at 20,867 and the 50-share Nifty was up 5 points at 6,194 levels.

On the global front, Australian shares climbed to a five-year peak on Monday, drawing confidence from another record high on Wall Street as investors bet the Federal Reserve will put off winding back its cheap money policies until next year.

Back home, among the key mid-cap gainers, Federal Bank surged 10.58% to Rs 78.90 at 10:33 IST on BSE after net profit rose 4.97% to Rs 225.81 crore on 11.57% growth in total income to Rs 1857.84 crore in Q2 September 2013 over Q2 September 2012.

Motherson Sumi Systems has moved higher by over 5% at Rs 262 after the company said it is planning to issue free shares to existing shareholders.

Persistent Systems has rallied nearly 5% at Rs 754, also its record high on BSE, after reporting a 8.6% quarter-on-quarter (qoq) growth in dollar revenues at $68.5 million for the quarter ended September 2013 (Q2) led by robust 38% qoq growth in IP-led revenues.

Other notable gainers are Suzlon Energy, Indiabulls Power, Lanco Infratech, Puravankara Projects, Redington India, Indiabulls Real Estate, Schneider Electric Infrastructure, Voltas and Sun Pharma Advanced Research Company, all gaining between 3-9%.

The overall breadth of the BSE midcap remains unhealthy as 158 stocks are declining while 60 are advancing.

STOCKS TO BUY

AK Prabhakar, independent analsyt expects market to trade above all time high in next few months. His top picks are Rallis (Target Rs 234 in next 12 months), MRF (Target Rs 18,000 in next 4-5 months), Radico Khaitan (Target Rs 180 in 6 months), Cadila Healthcare (Target 1000 in 12 months).

Adds Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services,"We have been bullish on Mid Cap banks and had recommended the same in the last and previous interaction as well. We continue to have a bullish view on them but to avoid repetition one can look at Sugar stocks for a quick bounce as they are showing some traction today. Balrampur Chini for 50, Bajaj Hindustan for Rs 16 can be quick trading bets. Apart from these one can also look at NCC for Rs 26 and Punj Lloyd for Rs 32.

Says Rajen Shah, CIO, Angel Broking, "There will be a significant re-rating market is at 20,000 but select mid-cap are quoting 45=50% discount below their peak levels in 2008. Among the mid-cap ideas we like are Finolex Cables, Vardhaman Textiles, United Phosphorous, Essel Propack, EI Hotels, Indian Hotels, Godrej Properties and Tube Investments."