Thursday, May 28, 2009

BSE / NSE Shares Analysis for 28th May 2009

BSE / NSE Shares Analysis for 28th May 2009

Automobile stocks Tata Motors, Maruti Suzuki and Hero Honda can be bought at sharp declines.
These stocks may remain a bit slippery in the near term, but their long term prospects remain quite bright. One should be prepared to wait for 2 - 3 years for fairly strong gains on investments in these stocks.

Realty stocks may see some upside in the next 3 - 6 months. However, one has to remain quite selective with regard to fresh buying in this space. Shares of companies with a proven track record should be identified for modest exposure at current levels.

Praj Industries, Thermax, Areva and Punj Lloyd are stocks for long term. These stock can see some upside in the near run, but are likely to go through some weak spells as well. One holding these stocks with a long term plan can stay invested and look at buying more in small quantities at sharp dips. Last message received on 5/28 at 2:45 PM balakumar subramanian:

One looking at long term can buy Syndicate Bank (Rs 79.70) at 5 - 10% down from current levels. One holding the stock can stay invested with a stop loss around Rs 60 - 63 levels.
UCO Bank, Andhra Bank, Indian Bank, IOB and Union Bank of India can also be picked up at sharp falls.

JSW Steel has vaulted over 12% to Rs 580 today on reports the company is planning to raise around $ 100 billion to fund its expansion and reduce debt. In a communication to BSE, the company has stated that it plans to raise $1 billion (Rs 4,767 crore) to part finance the company's capex and for other general corporate purposes including reducing the leverage. They will raise the additional long term resources through issuance of qualified institutional placement, foreign currency convertible bonds, GDRs, ADRs, warrants or equity shares.

PSU steel maker SAIL has posted a net profit of Rs 14866.80 million for the quarter ended March 31, 2009 as compared to Rs 23767.60 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 138569.50 million for the quarter ended March 31, 2008 to Rs 125901.20 million for the quarter ended March 31, 2009. The stock, a Nifty component, is up nearly 7% at Rs 164.75 now. Last week, the stock had touched a 52-week high of Rs 181.80. It had plunged to Rs 55.25 in mid November 2008.

European market are trading weak and the U.S. index futures are also trending lower. Still, the Indian market remains positive with metal, capital goods, oil and PSU stocks trading firm with sharp gains. Bank stocks remain quite subdued today. FMCG, pharma and power sectors witness stock specific action.

Mahindra & Mahindra has posted a net profit of Rs 4180.70 million for the quarter ended March 31, 2009 as compared to Rs 2211.00 million for the quarter ended March 31, 2008. Total income has increased from Rs 31754.50 million for the quarter ended March 31, 2008 to Rs 37158.80 million for the quarter ended March 31, 2009. The stock, up by over 5% at Rs 657 now, is likely to face some resistance near Rs 685.

A decisive breakout there can take the stock to Rs 750 or even higher in the short run.

1:05 PM: Larsen & Toubro has posted a profit after tax of Rs 9985.20 million for the quarter ended March 31, 2009 as compared to Rs 9667.60 million for the quarter ended March 31, 2008. Total Income has increased from Rs 87372.10 million for the quarter ended March 31, 2008 to Rs 108357.90 million for the quarter ended March 31, 2009.

The stock is up 3.75% at Rs 1360 now.

The United Nations has forecast the world economy to shrink 2.6 per cent in 2009, downgrading the already-pessimistic estimate made five months ago. According to a report from the world body, the world economy is expected to shrink by 2.6 per cent in 2009, according to the pessimistic scenario of the forecast presented in January.. In January, the UN had forecast that the world economy would shrink 0.5 per cent this year.

Coromandel Fertilisers has signed a Joint Venture Agreement with M/s. Soquimich European Holdings BV, Netherlands, a subsidiary of SQM, Chile, for setting up of 15000 MT Water Soluble Fertilisers (NPK Grades) plant at Kakinada at a total investment of Rs 100 Million.

Infrastructure companies are likely to see some strong rallies in the near to medium term. The government's thrust on infrastructure development and the likelihood of market regulator SEBI relaxing certain fund raising norms for the sector are likely to aid the sentiment towards these stocks.

LIC Housing Finance hit a new high at Rs 500 today. The stock has some more steam left in it and one looking for some strong gains can try this stock even at current levels. Short term players can book profits at rallies and re-enter later at declines.

TCS (Rs 652) can move on to Rs 725 and a strong breakout there can lift the stock to Rs 800 or even higher. One holding the stock with a long term view can stay invested with a stop loss near Rs 550 for now.

Wockhardt is reported to be in advanced talks to sell its German business, Espharma GmbH, to another German player, Lindopharm GmbH. The stock, traded at Rs 125 at present, can move up a bit in the near run. One with a good appetite for risk can try this stock at current levels and have a stop loss in place near Rs 105.

TN Newsprint & Papers (cmp Rs 83.50) can be retained for long term. The stock may not give very high returns but the downside risk for it quite limited. One can expect the stock to rise by around 10 - 12% over the next couple of months.

The market opened on a cautious note this morning amid weak global cues. The Sensex rose to 11,476.71 but has slipped to 14,106.27 now, netting a loss of 3.37 points. The Nifty is down marginally at 4274.85 after moving on to a high of 4295.50 at the bell.

Reliance Infra, ONGC, Hindalco, HDFC Bank, BHEL and SBI have declined sharply. RIL, NTPC, ITC, DLF, ACC and M&M have posted notable gains.

The market is likely to remain cautious today. Though there will be a negative bias initially, some buying at lower levels later on in the session is not ruled out. A moderate to high degree of volatility is in the offing.

Realty and bank stocks may see some sell-off after recent strong gains. Metal and capital goods stocks are also likely to face some pressure. However, buying at lower levels is not ruled out. Information technology stocks are likely to remain subdued.

BHEL has posted a net profit of Rs 1,347.47 crore for the quarter ended March 31, 2009 as compared to Rs 1,110.87 crore it had recorded for the quarter ended March 31, 2008. Total income has increased from Rs 7,626.20 crore for the quarter ended March 31, 2008 to Rs 11,047.24 crore for the quarter ended March 31, 2009. The stock is likely to find fairly good support at lower levels.

Jindal Steel may see some buying thanks to a sharp jump in the company's net profit for the year ended March 31, 2009. The company has posted a net profit of Rs 1,536.48 crore for the year ended March 31, 2009 as compared to Rs 1,236.96 crore for the year ended March 31, 2008.

It will be a highly slippery ride for shares of Cairn India today following weak numbers posted by the company for the quarter ended 31 March 2009. The firm has posted a net loss of Rs 16.90 crore for the quarter ended March 31, 2009 as compared to a net loss of Rs 8.73 crore for the quarter ended March 31, 2008.

Reliance Industries has explored two more gas reserves which are close to D-6 in the Krishna-Godavari basin, with estimates putting the natural gas reserves at 20 trillion cubic feet.

Larsen & Toubro, SAIL, Mahindra & Mahindra, Tata Power, Chennai Petroleum Corporation, Dalmia Cement, Gokaldas Exports, GMDC, Ipca Labs, Karur Vysya Bank, Nagarjuna Construction, Swaraj Mazda and Tata Chemicals will be announcing their quarterly results today.

The market had rallied on strong global cues and on expectations the government would do all its best to boost the sagging economy through Union Budget that is to be presented early July.

But the sentiment is likely to turn weak this morning following a negative close on Wall Street and weakness in Asian markets with concerns over the pace of economic recovery returning to haunt investor sentiment. Rising treasury yields and none too encouraging home sales data triggered heavy selling on Wall Street yesterday and the imminent bankruptcy of auto major General Motors too weighed in.

Action in the F&O segment due to expiry of May series derivatives contracts will have an impact in the cash market.