I personally feel that IDFC has been oversold around the current levels of 120 and some bounce is definitely due in this scrip. Nevertheless my buy recommendation for IDFC is not for a trading bounce but as a value investment pick in the current market levels of 5250-5300. I feel IDFC has bottomed out and if at all, very little downside is left in this scrip. One can invest at IDFC at current levels from long term views to maximise their gains.

IDFC is one such largecap stock that has crashed from 220 levels to almost 120. This kind of fall isn’t the main reason why I feel IDFC can be an interesting pick. IDFC has been growing at a good pace for a long time now and is expected to continue growing at a decent pace as we move forward in FY12 and FY13. IDFC is expected to give atleast 25% kind of growth in FY12 and Im expecting an EPS of 11 for FY12. With an EPS of 11 and stock price at 120 gives a P/E multiple of 11 which is cheap. IDFC has enjoyed really high P/E multiples in the past and thus I feel when markets start uptrend again, IDFC is going to give a lot of returns in the long run. Only long term investors are expected to buy IDFC around current levels with a target price of 175 – 180 which comes to 15 – 16 P/E multiple.

Buy IDFC (cmp: 120) with a target price of 175 – 180.

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