4 Stock Ideas for buying in the current market downturn

TCS

TCS is one of the world's leading information technology companies and.is well poised to take advantage of the amazing business opportunity in outsourcing which is set to emerge as the leading companies of the world reorganize themselves after the financial crisis of 2008. It has around 90 clients world over and has been showing good performance over the years. TCS will also benefit from the diversity of its business operations. TCS has reported better than expected volume and profit growth in the recent quarters. We recommend buying TCS as the Stock trades around 19 times FY10E, which is a 15 – 20% discount to the valuation of Infosys.


Tata Steel
Tata Steel is one of the top ten steel producers in the world with an existing annual crude steel production capacity of 30 Million Tonnes Per Annum (MTPA). It is an integrated steel plant and is geographically diversified through investments in Corus, Millennium Steel and NatSteel Holdings, Singapore and a well established marketing network in 50 countries.
The company has impressive expansion plans which have the potential to catapult it to one of the leading players in the steel industry. Steel as a commodity is in a long term bull market and Tata Steel is likely to be one of the major beneficiaries. The demand from Domestic as well as International players is expected to increase with the economic stability in the world.

Maruti Suzuki

Improvement in the overall sentiments has lead to recovery in demand for automobile sector. Excellent results on the back of record volumes, buoyant exports and a richer sales mix with the launch of Estilo are key positives for the company. Sales increased by 46% and profits get almost doubled on YoY basis. Its mainstay segments, i.e. the A2 and the A3 segments, have performed exceptionally well. Strong focus on the economy passenger car segment, the most stable and high growth place in the automobile market, will lead to a robust volume growth going forward. A strong balance sheet and cash reserves of Rs 5300 crore are other positives for this stock.

SBI

With its surplus liquidity and balance sheet size, we believe SBI will be a major beneficiary of the pickup in credit demand going forward. Its non banking subsidiaries - SBI Capital Markets, SBI Mutual Fund and SBI Life Insurance will benefit from uptick in capital markets and corporate activity. Its mammoth branch network (most of it already under Core Banking Solutions), increasing contributions from fee-based activities, comfortable capitalisation, a well-diversified loan book and high proportion of low-cost deposits remain investment positives for the bank. At current market price of Rs 2210 it trades at 2x of its FY10E adjusted book value. In the banking sector it remains our preferred pick and should be bought on any fall.