BSE / NSE Shares analysis 25 May 2009

BSE / NSE Shares analysis 25 May 2009

Jet Airways has posted a net profit of Rs 529.90 million for the quarter ended March 31, 2009 as compared to net loss of Rs 2211.80 million for the quarter ended March 31, 2008.Total income has decreased from Rs 27964.70 million for the quarter ended March 31, 2008 to Rs 25662.10 million for the quarter ended March 31, 2009.

For the year ended March 31, 2009, the company has posted a net loss of Rs 4023.40 million as compared to net loss of Rs 2530.60 million for the year ended March 31, 2008.

The Jet Airways stock is up 2.25% at Rs 310. In early March this year, the stock was struggling around Rs 115.

Omnitech Infosolutions has posted a net profit of Rs 33.10 crore for the year ended 31 March 2009. The firm had posted a net profit of Rs 25.57 crore in the previous year. The stock has gained 7.2% at Rs 91 now. It had touched a low of Rs 29.55 in late February this year. The stock's 52-week high is Rs 198.50 it had touched in end May last year.

Bharti Airtel has taken a severe beating today following a remark by Sunil Mittal that the MTN deal will dilute Bharti's earnings in the first year.

As per the deal, the South African firm and its shareholders would acquire an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders. Bharti would acquire an approximate 49% shareholding in MTN.

The current price of Rs 809 discounts the company's year ended March 2009 EPS of Rs 40.79, by a PE multiple of around 19.75.

Infrastructure and cement stocks may see some good upside in the near to medium term. One holding quality stocks from these sectors can stay invested and look at increasing exposure at sharp declines.

Investors looking at medium term can also go in for PSU bank stocks at dips.

BHEL has bagged an order for the main plant package at the upcoming Bela Thermal Power Project (TPP) in Maharashtra, involving one new-rating unit of 270 MW.

The order, valued at Rs 703 crore, is for the greenfield power project, located at Bela in Nagpur district, has been placed on BHEL by Ideal Energy Projects Ltd (IEPL) reflecting the customer’s confidence in the company’s technological excellence and project execution capabilities.

The PSU stock, traded at Rs 1995, had hit a high of Rs 2334 last week. One can buy the stock at declines.

Analysts feel MRPL is a good buy at current levels. The stock, currenty traded at Rs 66, can give a return of 15 - 20% over the next couple of months. One looking at long term can hold the stock with a stop loss near Rs 55.

One can pick up Maruti, Tata Motors and Mahindra & Mahindra in small quantities at declines. Though some weak spells are not ruled out in the near term, the medium to long term prospects for these stocks remain fairly bright. Hero Honda is likely to be a winner as well.

Hindustan Dorr Oliver has bagged an order valued at Rs 24.5 crore from Nalco for their Phase II expansion project at Alumina Refinery, Damanjodi, Orissa.

The civil and structural contract, to be completed in six months, involves PCC & RCC works for sub structure/super structure in substation/control station including structural steel fabrication and erection work for tankages, piperack, lifts, and cable trays etc. of this project.

Hindustan Dorr Oliver is firmly locked at its 5% upper circuit at Rs 72.50 now.

HDIL (cmp Rs 297) has come a long way from a low of Rs 62.50 it had touched in early March this year. Though the stock is likely to remain a bit slippery at these levels, it can move closer to Rs 400 if it manages to make a decisive breakout at Rs 315 where it is likely to encounter some stiff resistance.

Investors willing to wait long term can go in for Ranbaxy (cmp Rs 235) at declines. The stock may face some stiff resistance at 255 - 265 levels but a decisive breakout there can result in a surge to Rs 345 - 350. Long term investors can hold the stock with a stop loss at Rs 175.

One can stay invested in PSU bank stocks for fairly good returns over a medium term. IOB, Indian Bank, UCO Bank, Bank of India and Bank of Baroda can be picked up at declines in a staggered way. Those long in Syndicate Bank, Union Bank of India and Canara Bank can also look at increasing exposure at sharp falls.

Market Outlook

The market is likely to open on a flat to negative note this morning. Price movements will remain rangebound for a major part of the session. Some volatility is not ruled out as expiry of May series derivatives contracts is just a few sessions away.

Sector Watch

Realty, bank and auto stocks may see some strong buying at lower levels. Information technology and capital goods stocks may remain a bit sluggish and oil stocks may feel some pressure following the sharp rise in crude oil prices.

Scrip Watch

Shares of infrastructure firm Era Infra Engineering will attract attention following the company bagging a contract worth over Rs 81 crore from Central Public Works Department for development of Minto Road Area.

Malvinder Mohan Singh has stepped down with immediate effect as chairman, chief executive and managing director of Ranbaxy Laboratories. The promoter group, it may be recalled, had sold its stakes to the Japanese drug maker Daaichi Sankyo last year.

The Satyam Computer Services counter will see some action on reports that the management is likely to sack most of its non-billable staff working in the marketing, human resource and administrative departments.

Reliance Infrastructure will be in focus following an announcement from the company that the board of directors approved a proposal for new equity capital infusion of around Rs 4,300 crore. The increase will significantly enhance the company's net worth to over Rs 16,000 crore and further augment its borrowing capabilities to Rs 32,000 crore at even a debt equity ratio of 2:1.

Karnataka Bank, RECL, Jet Airways, Omnitech and Dishmarn Pharma will announce their quarterly results today.

Macro and Market Factors

Cues from Wall Street and Asian markets are not any positive this morning. While Wall Street ended almost flat following a late sell-off on Friday, Asian markets have declined after an early surge today on the back of North Korea's nuclear test.

The arrival of south-west monsoon is likely to aid the sentiment to an extent. For any rally to sustain, institutional investors will have to stay invested and refrain from indulging in heavy selling.