5 best Sensex stocks for long term investment horizon:

1. Larsen and Toubro (L&T):

This is the best stock in Sensex for long term investors. L&T surprised analysts with their
better than expected results. But stock still underperformed to bad market sentiment. As
L&T entered into niche areas, margins will improve in the coming quarters. Upcoming
demergers will improve L&T valuations in the coming quarters. Huge order book is
another plus point. Announcement of bonus is a near term trigger after current turmoil.

CMP: 2,564. EPS: 74.3 P/E: 34.5

Expected EPS for FY2009: 105-110.

Ideal entry price: 2,350-2,400.

1 Year target: 3,600-3,800.
Best investment duration: 3 years to get wonderful returns from this giant.

2. ICICI Bank:
Real strength of ICICI Bank lies in their subsidiaries. ICICI securities IPO is a near term
trigger.

CMP: 733. EPS: 37.3 P/E: 19.6

Expected EPS for FY09: 48-52.

Ideal entry price: 660-680.

1 year target: 1150-1,250.

3. State Bank of India (SBI):

Attractive valuations but unpredictable government interference.

CMP: 1,249. EPS: 106 P/E: 11.7

Expected EPS: 135-140.

Ideal entry price: 1050-1100.

1 year target: 2,000-2,200.
Best investment duration: 18-24 months.

4. Reliance Communications:
Another “Must buy” stock for long term investors if they don’t overly paid for
acquisitions. Reliance Infratel IPO is a short term trigger.

CMP: 491.6 EPS: 12.5 P/E: 39.2

Expected EPS for FY09: 25-28.

Ideal entry price: 470-480.

1 year target: 750-800.
5. Reliance Industries:
This stock holds enormous intrinsic value. Reliance will give good returns for patient
shareholders who invested for long term. Kakinada gas will change fortunes of
shareholders in short term. Invest in Reliance; believe in Ambani; forget about it.

CMP: 2,100 EPS: 138 P/E: 16

Ideal entry price: 1,800-1,900.

1 year target: 3,000-3,200.
Duration: Invest for 2-3 year to get complete benefits.

Infosys, Bharti Airtel and Grasim are good stocks to get safe moderate returns in these
difficult times. Fortunes of DLF and M&M will depend on inflation. Recent salary hikes
may hit the balance sheets of companies like BHEL. Tata Steel is best underdog stock for
FY09. We will get more clarity on these stocks in the next quarter results.
Equity investment should always be done cautiously. Though Financial markets (especially stocks trading)
looks lucrative, if one fails to understand the finance, better you leave it to stock market experts (Mutual
Funds, portfolio management etc.) Invest Wisely,Trade Cautiously !! Happy investing !!