Wednesday, May 27, 2009

BSE / NSE Shares analysis

BSE / NSE SHares analysis

The bulls, with strong global cued aiding them no end, went on a rampage and guided the market to a buoyant close today. Stocks, with the exception of those from the FMCG space, had a splendid run in the positive territory as buying continued right through the session.

Better-than-expected consumer confidence data from the U.S. and strong stimulus by the Chinese government kept the mood in Asian markets pretty upbeat today.

The Sensex ended at 14,095.97 (provisional) with a thumping gain of 506.74 points or 3.73%. The index, which opened nearly 200 points up today, hit a high of 14,122.78. The Nifty closed at 4274.60, up 157.90 points or 3.84% over its previous close.

Realty, bank, power, metal, capital goods and PSU stocks ended with strong gains. IT, consumer durables, oil, auto and pharma stocks also closed on a high note.

Reliance Infrastructure shot up by nearly 15%. Sterlite, ONGC and DLF gained 8.5% - 9.5%. Grasim and Ranbaxy moved up by over 7%.

ICICI Bank, HDFC Bank, SBI, JP Associates, Tata Motors, L&T, HDFC, RComm, RIL, Infosys, TCS, Tata Steel, Tata Power and M&M closed on a high note.

RPower, Idea Cellular, HCL Tech, Siemens, Reliance Capital, Axis Bank, Nalco, Cairn India, Unitech, Suzlon, GAIL India, RPL, BPCL and Power Grid Corporation finished with strong gains.

Buying has gathered tremendous momentum in late afternoon trade and the Sensex now looks set to end on an upbeat note. The barometer, which zoomed to 14,122.78 on aggressibe buying in blue chips, is up by over 500 points or 3.72% at 14,095.22 now. The Nifty is up 154.50 points or 3.75% at 4271.20.

Reliance Infra, RPower, Idea, Sterlite, ONGC, HCL Tech, DLF, Grasim, Reliance Capital and Ranbaxy have gained 7% - 14.5% now. ICICI Bank, SBI, JP Associates, HDFC Bank, Tata Motors, L&T, BHEL, HDFC, RComm, TCS, Infosys, Tata Steel, Tata Power and M&M are also up with strong gains.

Finance minister Pranab Mukherjee has stated that he will present the full budget for 2009-10 in the first week of July and that reviving growth momentum of the economy will be the top priority for the government but revival would not be at the cost of fiscal prudence.

Mukherjee said the UPA had in its manifesto committed to presenting the budget within 45 days of formation of the government. Keeping that deadline in mind, the budget for 2009-10 will be presented in the first week of July, he said, adding the government would endeavour for the budget to be passed before July 31.

GMR Infrastructure Ltd has informed that GMR Kamalanga Energy Ltd, a subsidiary of the Company achieved financial closure. The GMR Infra stock (up 4.2% at Rs 164) is a good buy at 20 - 30% down from its current levels. Though one can expect some decent gains in the near run, a strong corrective spell is not ruled out.

Godfrey Phillips India Ltd, a flagship company of K K Modi group, is planning to invest around Rs 270 crore on distribution, retail and other areas as part of its entry into new markets in the country.
The company is also setting up a manufacturing plant with an investment of around Rs 200 crore in Thane, Mumbai. The cigarette manufacturer today launched its Four Square Kings and Four Square Gold brands for the Tamil Nadu market.

On expectations the Union Budget, to be presented early July, will turn out to be quite market friendly, investors are seen picking up stocks with renewed vigour. Action ahead of May series derivatives expiry has also contributed to the surge.

RNRL (Rs 80) can move on to Rs 93 and some strength there can result in a rise to Rs 105 or even higher. On the downside, the stock has good support near Rs 60. Long term investors can hold the stock with a stop loss there.

Simplex Projects has recently bagged some major contracts for construction of bridges over rivers and Automatic Multi-level Car Parking facility from Government of Tripura for construction of bridges over rivers under different packages for an approximate value of Rs 113 crore and from New Okhla Industrial Development Authority for design, construction, operation and maintenance (for a period of 20 years) Multi-level Automatic Car Parking facility at Sector-38, Noida for an approximate value of Rs 93 crore.

With these orders, the total outstanding order book position, including international orders, stands at Rs 3000 crore as on date. These orders are to be executed over the next three years.

MRPL has posted a net profit of Rs 6076.20 million for the quarter ended March 31, 2009 as compared to Rs 2253.30 million for the quarter ended March 31, 2008. Total Income (net of excise) has decreased from Rs 95320.00 million for the quarter ended March 31, 2008 to Rs 66059.50 million for the quarter ended March 31, 2009. The stock is up by over 6% at Rs 69.70 at present.

Sesa Goa (Rs 165) has support at Rs 153 - 155. A breach there can result in a fall to Rs 135 or even lower. On the upside, the stock can rise to Rs 193 where it is likely to face some resistance.

NLC (Rs 133.65) can move on to a new 52-week high shortly. The stock had hit a high of Rs 150.75 in late May 2008. It then tumbled to Rs 44.50 on 27 October that year. One looking for some solid gains over a medium or long term can go in for NLC at current levels.

Before the budget, the market is likely to see some big rallies like the one it is witnessing today. One running in profits would do well to book some at sharp rallies. A re-entry can be made later as some corrective spells are not ruled out in the next couple of weeks.

Gammon Infrastructure Projects Ltd has informed that Rajahmundry Godavari Bridge Ltd, the SPV incorporated for implementing the project for designing, constructing, financing, operating and maintaining a major bridge across the river Godavari connecting Rajahmundry and Kovvur in Andhra Pradesh has achieved the 'Financial Closure' for its project with a consortium of bankers for an aggregate loan amount of upto Rs 566 crores.

The Project, costing Rs 861 crore, is entitled to a Central Government grant of Rs 118.6 crore and a grant of Rs 88.95 crore from the Government of Andhra Pradesh. The Project is on BOT basis for a period of 25 years, including a construction period of 3 years.

Anu's Laboratories Ltd has informed that a meeting of the Board of Directors of the Company will be held on June 03, 2009, to consider the issue of bonus shares and raising of additional funds by way of issue of debt, equity or any other security in one or more tranches as the Board may deem fit. The Board will also consider increasing the authorized capital of the Company.

Cummins India (Rs 269) can move up sharply over a medium run. Investors holding the stock can stay invested and look at buying more at sharp declines. Long term investors can place a stop loss near Rs 150.

One can go in for cement and infrastructure stocks with a medium term plan. Ambuja Cements, Ultratech, ACC, Dalmia Cements, India Cements and Rain Commodities look good. A modest exposure can be tried now and more can be bought at declines. Among infra stocks, GTL Infra, Gammon, IVRCL Infrastructure and GMR look set for a sharp upmove.

Nucleus Software has announced that Bank of Philippine Islands has chosen the company's FinnOne Customer Acquisition System - Corporate SMD module to support loans evaluation and origination process for the bank's small and medium enterprise clients.

Nucleus Software has been chosen for the task considering its expertise in technology focused on the SME sector. The stock has gained over 5% at Rs 91.25 at present.

The Sensex zoomed to 13,943.45 after opening nearly 200 points up at 13,780.41. At 13,932.15, the barometer is up by 342.92 points or 2.52% at present.

The Nifty has vaulted to 4220.60, gaining more than 100 points or 2.44%.

On Tuesday, the Sensex and Nifty had ended lower by 3.35% and 2.85% respectively.

Market Outlook

The market is likely to open with a big positive gap this morning on strong global cues. There may be some profit taking at higher levels, but the undertone is likely to remain fairly upbeat right through the day.

Sector Watch

Power stocks are likely to gain ground. Bank stocks may see some listless trades, but are most likely to trade in the positive zone for a better part of the session. Realty and capital goods stocks will be in focus. Select technology and metal stocks may move up.

Scrip Watch

Cummins India Limited has posted a net profit after tax of Rs 118.18 crore for the quarter ended March 31, 2009 where as the same was at Rs 75.6 crore for the quarter ended March 31, 2008. Total income increased to Rs 1072.16 crore for the quarter ended March 31, 2009 from Rs 716.39 crore it had earned for the quarter ended March 31, 2008. The board of the company has recommended a final dividend of Rs 2.60 per share of Rs 2 each (130%) aggregating to Rs 9 per share of Rs 2 each (450%) for the year ended Match 31 2009.

Tata Communications may move up sharply on strong quarterly numbers. The company has reported a sharp rise in standalone net profit for the quarter ended March 2009. During the quarter, the profit of the company rose 5.14 times to Rs 3,023.70 million from Rs 588.60 million in the same quarter last year. The EPS was at 10.61, up by over 5 times year-on-year.

Reliance Power may see action on reports that the company is likely to earn more than Rs 40 billion over the next 10 years by selling carbon credits from its upcoming Sasan power project in Madhya Pradesh.

BHEL, Cairn India, Jindal Steel, NIIT, MRPL, Asahi India, Britannia Industries, Panacea Biotec, Indraprastha Gas, Godrej Industries, Emco and Tamil Nadu Newsprint & Papers will be announcing their results today.

Macro and Market Factors

The strong rally on Wall Street on the back of buoyant consumer confidence data and the resultant surge in Asian markets is likely to bring the bulls back to the ring this morning. Expiry of May series derivatives contracts is not far away and one can expect some hectic short-covering following the huge setback in the previous session.