Bulls were on the rampage with the market surging for the seventh week in a row on the back of sustained buying by foreign funds amid signs of improvement in the Indian economy, possibility of further reduction in interest rates with inflation at near zero and on easing credit crunch. The RBI, as part of its Annual Credit Policy, cut its key short-term rates by 25 basis points each on Tuesday, 21 April 2009, to prop up growth amid global economic slowdown. The repo rate, at which the RBI lends to the banks, was cut to 4.75%, and the reverse repo rate, at which the RBI absorbs excess cash from banks, was reduced to 3.25%, effective immediately. The bank rate, used by banks to price long-term loans, remained at 6%. Banks' cash reserve requirements (CRR) were also left unchanged at 5%. Inflation based on the wholesale price index (WPI) rose 0.26% in the year through 11 April 2009, higher than previous week's 0.18% rise, data released by the government on 23 April 2009, showed. FII inflow in April 2009 totaled Rs 4,860.40 crore, while the outflow in calendar year 2009 totaled Rs 1,811.20 crore (till 23 April 2009). The 30-share BSE Sensex jumped 305.96 points or 2.78% to 11,329.05, in week ended 24 April 2009. It was the biggest closing level for the Sensex in more than six months. The broader 50-unit Nifty jumped 96.35 points, or 2.84%, to 3480.75 in the week. The BSE Mid-Cap index gained 127.49 points or 3.67% to 3,600.09 and the BSE Small-Cap index advanced 116.7 points or 2.95% to 4,068.26 in the week. Trading for the week started on a dull note. Key benchmark indices edged lower on 20 April 2009, as investors resorted to profit taking after a recent sharp surge in share prices. The BSE 30-share Sensex fell 43.59 points or 0.4% to 10,979.50. The S&P CNX Nifty fell 7.30 points or 0.22% to 3,377.10. On Tuesday, 21 April 2009, key benchmark indices settled in the red in a day of high volatility triggered volatility in index heavyweight Reliance Industries. Rate sensitive banking and auto stocks fell even as realty stocks gained after the central bank cut short-term interest rates. The BSE 30-share Sensex fell 81.39 points or 0.74% to 10,898.11. The S&P CNX Nifty fell 11.80 points or 0.35% to 3,365.30. The market fell for the third straight day on Wednesday 22 April 2009, led by fall in realty, capital goods and auto stocks. Political uncertainty weighed on the market with polling for India's 15th Lok Sabha underway. The BSE 30-share Sensex fell 80.57 points or 0.74% to 10,817.54. The S&P CNX Nifty fell 35 points or 1.04% to 3,330.30. Bulls were back on Thursday 23 April 2009, as key benchmark indices reversed three days losses on firm global markets. IT, metal, realty, banking and auto stocks jumped that day. The BSE 30-share Sensex rose 317.45 points or 2.93% to 11,134.99. The S&P CNX Nifty rose 93.40 points or 2.8% to 3,423.70. Indices closed higher on 24 April 2009, after sentiments turned bullish with a strong opening of European markets. Rate sensitives like realty and banks lead the rally. The BSE 30-share Sensex rose 194.06 points or 1.74% to 11,329.05. The S&P CNX Nifty rose 57.05 points or 1.67% to 3480.75. India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 3.90% in the week. Its net profit fell 9.35% to Rs 3546 crore on 23.9% fall in sales to Rs 28,362 crore in Q4 March 2009 over Q4 March 2008. The company announced results after the market hours on Thursday, 23 April 2009. Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF (up 5.01%), Indiabulls Real Estate (up 14.56%), and Housing Development & Infrastructure (up 19.32%), spurted. Most of the realty deals including sale of commercial property and housing sales is driven by finance. Banking stocks mostly rose on hopes falling interest rates will boost lending growth. India's largest bank in terms of assets and branch network State Bank of India (SBI) rose 0.11%. SBI chairman O.P. Bhatt on 21 April 2009 said interest rate cuts by the Reserve Bank of India were a signal for commercial banks to lower their rates. He said a decision on whether SBI would lower rates would be taken after a meeting of the bank's asset-liability. SBI's advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008. India's largest private sector bank by net profit ICICI Bank fell 2.03% ahead of its Q4 March 2009 results on 25 April 2009. A total of 13 brokerages expect a between 2.2% to 45.8% fall in net profit to between Rs 623.30 crore to Rs 1124 crore in Q4 March 2009 over Q4 March 2008. Its American depository receipts (ADR) jumped 9.34% on Thursday, 23 April 2009. India's second largest private sector bank by operating income HDFC Bank rose 3.91% on strong Q4 results. The banks' net profit rose 33.9% to Rs 630.88 crore on 53.1% rise in operating income to Rs 5,365,52 crore in Q4 March 2009 over Q4 March 2008. The results were more or less in line with market expectations. The bank announced the results after trading hours on 23 April 2009. Auto shares rose on hopes lower interest rates would spur demand for vehicles which is mainly driven by finance. Mahindra & Mahindra (rose 4.93%), Tata Motors (up 6.81%) and Hero Honda Motors (up 3.29%), spurted. India's largest car maker by sales Maruti Suzki India fell 4.19%. The company's net profit fell 18.32% to Rs 243.13 crore in Q4 March 2009 over Q4 March 2008. The results hit the market on 24 April 2009. Outsourcing focussed IT stocks recovered on hopes aggressive measures by the United States to revive the economy may bear fruit. US is the biggest market for Indian IT firms. India's largest software services exporter by sales TCS rose 1.67%. India's third largest software services exporter Wipro rose 13.71%. Wipro reported 14.8% rise in Q4 consolidated net profit at Rs 1010 crore on 13.5% rise in total income to Rs 6,583.20 crore in Q4 March 2009 over Q4 March 2008. The company announced the results on 22 April 2009. Wipro has forecast between $1.009 billion and $1.025 billion in revenue from information technology services in the quarter ending 30 June 2009, lower than the $1.058 billion posted in the three months ended 31 March 2009. Wipro Chairman Azim Premji said the company did a major re-organization of its software business at the beginning of the last financial year and hopes to emerge stronger than before. Chief Financial Officer Suresh Senapaty said operating margins for the software business expanded to 21.8% during the quarter from 21% in year-earlier period, in spite of lower business volumes. India's second largest software services exporter Infosys Technologies rose 3.98%. Its consolidated net profit as per Indian GAAP declined 1.7% to Rs 1613 crore on a 2.6% decline in sales to Rs 5635 crore in Q4 March 2009 over Q3 December 2008. Sectors to watch : Positive - IT,Cement,Banking & Metal may witness continued buying Negative - Realty and Capital Goods may witness profit booking. Compiled and Brought to you by Equity Research Team Intelligent Investor - Invest Advisory Arm of Ravina Consulting Bangalore India Read - www.intelligentinvestor1.blogspot.com Follow - www.twitter.com/SmartInvestor
Showing posts with label Portfolio Advisory. Show all posts
Showing posts with label Portfolio Advisory. Show all posts
Saturday, April 25, 2009
Thursday, April 23, 2009
Closing Bell 23 April 2009
Closing Bell 23 April 2009
Strong buying activity led the indices to spike upwards during the final hour of trade as the BSE-Sensex ended the day with gains of around 320 points (2.9%), while the NSE-Nifty closed higher by about 90 points (2.8%). Stocks from the mid-cap and small-cap space also ended the day on a positive note, higher on an average by 1.5% and 0.9% respectively. Buying activity was witnessed in stocks across sectors led by IT, metals and realty. At the time of closing, the overall advance to decline ratio was poised at 1.4 to 1 on the BSE.
Other Asian markets also ended on a firm note today. The European indices are currently trading strong as well. Rupee was trading at 50.06 to the US dollar at the time of writing.
Undeterred by the slowdown in growth of companies in the near to medium term, stocks from the IT sector closed strong today. The pack of gainers was led by Wipro, whose management had shown a bullish stance for the industry in its conference call held yesterday. The stock was followed by Tech Mahindra, Infosys and TCS in that order on the gainers’ pedestal. Factoring in the short term concerns surrounding offshoring, a report from the consulting major, McKinsey, has projected the Indian IT sector to miss its US$ 60 bn export target set for 2010 by around a year. However, McKinsey has also put forward its belief in the value proposition that Indian IT companies can provide to their clients in the long run, while predicting that the industry is sitting on a potential opportunity to treble exports from the current level by the year 2020. That might bring some sigh of relief for long term investors in IT stocks.
Stocks from the telecom sector closed mixed today. While gains were seen in Reliance Communication and Idea Cellular, weakness marked trading in Bharti Airtel. In fact, selling in Bharti came in despite the company’s announcement earlier today that it might consider giving out a dividend to shareholders this year. What is remarkable here is that, if recommended by the board of directors, this would be the first time Bharti will give a dividend to its shareholders since it got listed in the year 2001. As is widely known, the company has grown strongly over the past few years but has ploughed back a lot of the profits back to the business to spread its network across the length and breadth of the country. Today, the company is India’s largest mobile services provider with around 93 m GSM subscribers and covering towns and villages with around 79% of India’s total population. The company’s announcement of the maiden dividend might definitely bring some cheer to investors who have held the stock for many years, only benefiting in terms of capital gains.
Latest inflation figures came in today. As reported, inflation measured by the wholesale price index or WPI rose to 0.26% for the week ended April 11, from 0.18% in the previous week. Rise in prices of essential food articles like cereals, eggs, salt, fruits, and vegetable is reported to be the reason for the rise in inflation for the said week. But did the prices of these essential items did fall anytime in the recent past while inflation was on a decline? We wonder!
While investors and analysts around the world and in India remain worried about the ‘E’ in the P/E as companies come out with their quarterly results, there are some companies that do not seem perturbed by the slowdown or so it seems. Take the case of McDonald’s, your neighbourhood fast food joint. As reported in the international media, while the company’s global sales grew by 4.3%, growth in Asia, the Middle East and Africa combined stood at 5.5%. And here is what the company’s CEO Jim Skinner had to say, "Our well-known value proposition and unparalleled convenience continue to resonate with customers."
The markets continued to trade higher into the positive territory on account of sustained buying activity witnessed during the previous two hours of trade. Stocks from the auto, metals and cement sectors are trading higher, while select stocks from the construction, pharma and software sectors are trading lower on the Nifty. The overall advance to decline ratio is evenly poised on the BSE.
The BSE-Sensex and NSE-Nifty indices are trading higher, up by around 170 points and 50 points respectively. The BSE-Midcap and BSE-Smallcap indices are trading higher, up by 0.3% each. The rupee is trading at 50.17 to the dollar.
Pharma Stocks are trading mixed. While Glenmark Pharma and Aurobindo Pharma are trading higher, Sun Pharma and Ranbaxy are trading lower. As per a leading business daily, Israeli pharma major Teva and Glenmark Pharma have made an out of court settlement over the patent dispute on various generic versions of 'Coreg', a drug used in treating congestive heart failure. Teva had filed a case against Glenmark Generics, a US based subsidiary of Glenmark Pharma, over the process patent for preparing 'Carvedilol', the main pharmaceutical compound used in the generic version of 'Coreg'. In return Glenmark filed a lawsuit challenging two of Teva's patents related to the same drug. It may be noted that annual sales of drugs using 'Carvedilol' as API in the US were around US$ 1.7 bn at end of June 2007. 'Coreg' was GSK's fifth best-selling drug in the second-quarter of 2007. However in 2007 the USFDA approved 14 generic versions of 'Coreg' belonging to various companies that include Aurobindo Pharma, Sun Pharma, Dr Reddy's Laboratories, Lupin, Ranbaxy and Zydus.
Cement stocks are trading mixed. While Ultratech Cement and India Cements are trading lower, Ambuja Cements and ACC are trading higher. Ambuja Cements announced its 1QCY09 results last evening. The standalone topline grew by 12% YoY during 1QCY09 backed by higher volumes and better realisations. While sales volumes were up 5.8% YoY, realisations grew by 5.5% YoY during the same period. Cost of operations outpaced growth in topline resulting into 2.7% contraction in EBITDA margins mainly on account of increase in raw material costs and higher coal prices (opening inventory). During the quarter, profits were flat at the PBT level, while bottomline expanded by 2.4% YoY. If one excludes extraordinary expense incurred in 1QCY08, bottomline growth was also stagnant.
The Indian markets started the day's proceeding on a volatile note. While buying is being witnessed in stocks from the software and energy space, stocks from the realty, consumer durables and banking sector are at the receiving end. The overall decline to advance ratio is poised at 1.2 to 1 on the BSE. As regards global markets, while the US markets ended mixed, the European markets closed in the green. The Asian indices are currently trading in the green.
While the BSE Sensex is trading higher, up by around 30 points, NSE Nifty is trading lower, down by 10 points. The BSE Midcap and Smallcap indices are trading lower by 0.5% and 1% respectively. The rupee is trading at 50.31 to the dollar.
Power sector stocks are trading weak led by NTPC, Tata Power and Reliance Power. As per a leading business daily, NTPC is planning to spin off its coal mines division as a separate unit that will offer consultancy and mining services to companies which have been allotted captive mines. The company is also in talks with Bharat Earth Movers (BEML) to forge an alliance to offer the services. It may be noted that NTPC had signed a MoU with BEML in February 2007 for a long-term strategic and business partnership wherein BEML provides its range of mining equipment and services for NTPC's coal mining operations. This move of spinning off will help NTPC in exploiting opportunities in the area of consultancy and mining services as most of other companies operating in this space have no experience in coal mining.
Engineering stocks are currently trading mixed. While Voltas, Crompton Greaves and Engineers India are garnering investors' interest, Punj Lloyd, ABB and Thermax are at the receiving end. Praj Industries announced its FY09 result yesterday. The sales grew by 10% YoY during FY09, however, it fell by 2% YoY during 4QFY09. The operating margins expanded by 3% YoY during the year. This is largely on account of lower raw material costs as a percentage of sales. During 4QFY09, operating margins contracted by 3.2% YoY. Net profits declined by 16% YoY during FY09 on the back of forex losses (on advances received from customers and extraordinary losses to the tune of Rs 343 m as compared to Rs 218 m forex gain in the previous year). Excluding these adjustments (for both the years), net profit for FY09 has grown by 25% YoY. Order backlog stood at Rs 8 bn, which is slightly higher than the company's FY09 net sales.
IMF's gloomy forecast
Going by the latest projections of the IMF and the World Bank, it looks like the global financial crisis is far from over. The IMF has pegged the losses from the global economic crisis at a mind boggling US$ 4.1 trillion and is of the opinion that around US$ 1.1 trillion will be needed to fix this problem. These numbers more than amply highlight the depth of the crisis. Out of these losses, US$ 2.7 trillion is from loans and assets originating in the US, followed by Western Europe, whose financial institutions will have to write down US$ 1.2 trillion in loans and securities originating there. The silver lining in the cloud is that IMF has spotted the first glimmers of stabilization in the global financial system. But the hard work is not yet over and rather than resting on laurels, the IMF has stressed on the need for "continued decisive and effective action" by governments, banks and institutions like itself if the system has to be prevented from going down under. While many world leaders pledged US$ 1.1 trillion more for the fund this month, the latter's mettle will now be tested as it will have to work out a way of bailing out economies on the brink of a collapse.
Worldwide, banks have been caught in a vicious cycle. Mounting losses translated into serious liquidity problems as a result of which banks became vary of lending further. This in turn impacted the corporate world resulting in shrinking economic activity which in turn has again impacted the balance sheets of banks. India and China, despite the slowdown in their respective economies, seem to be in a better shape than their developed peers. Further as per IMF, Europe is likely to be hit harder than the US as the former has been slower than its American counterpart in addressing the crisis.
Compiled and Brought to you by
Equity Research Team
Intelligent Investor -
Invest Advisory Arm of
Ravina Consulting
Bangalore India
Read - www.intelligentinvestor1.blogspot.com
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BSE / NSE Shares analysis for 23 April 2009
BSE / NSE Shares analysis for 23 April 2009
Shrugging off a listless start, the market rallied sharply on strong global cues and some encouraging report cards from India Inc to end on a buoyant note today.
The Sensex vaulted to 11,203.28 during the fag end of the session and settled at 11,198.28 (provisional) with a thumping gain of 380.74 points or 3.52%. The Nifty ended at 3437.50, up 107.20 points or 3.22%.
IT stocks were on song right through the session. Realty and bank stocks bounced back after initial weakness and closed upbeat. Metal, auto, capital goods, oil and power stocks also ended on a high note. Select pharma, consumer durables and FMCG stocks attracted attention.
Wipro ended with a hefty gain of over 13%. Infosys and TCS also finished with big gains. Tata Steel moved up by over 10%. Sterlite Industries and Hindalco also closed firm. Grasim, Maruti Suzuki, Reliance Infra, Tata Motors, L&T, M&M, DLF, JP Associates, RComm, SBI, RIL, ONGC and BHEL also signed off with handsome gains.
SAIL, Axis Bank, PNB, Reliance Capital, Power Grid, Ambuja Cements, Hero Honda and HCL Tech gained 3% - 8%. RPL, Siemens, Cairn, Suzlon, Nalco, Cipla, Idea Cellular and GAIL India too closed on a firm note.
After remaining subdued for a long time, midcap and smallcap stocks rallied during the final hour. The market breadth was fairly strong at close.
Reliance Power Limited has posted a net profit after tax of Rs 2489.038 million for the year ended March 31, 2009 as compared to Rs 946.689 million for the year ended March 31, 2008. Other income has increased from Rs 1328.674 million for the year ended March 31, 2008 to Rs 3347.160 million for the year ended March 31, 2009.
IT majors Wipro, TCS and Infosys may attract some profit taking after their impressive surge today. Still, one willing to wait can stay invested in these stocks. Sharp dips can be utilised to increase exposure. There may be a few weak spells in the next couple of weeks, but these stocks have some strong upside from their current levels.
RNRL has posted a net profit of Rs 698.702 million for the year ended March 31, 2009 as compared to Rs 685.987 million for the year ended March 31, 2008. Total Income has increased from Rs 3673.065 million for the year ended March 31, 2008 to Rs 4167.878 million for the year ended March 31, 2009. The RNRL stock is up marginally at Rs 58.20 now. One holding the stock with a long term plan can stay invested with a stop loss near Rs 35.
Reliance Petroleum Limited has posted a net profit after tax of Rs 840 million for the quarter ended March 31, 2009. Total Income is Rs 37020 million for the quarter ended March 31, 2009. The Company has posted a net profit after tax of Rs 840 million for the year ended March 31, 2009. Total Income is Rs 37020 million for the year ended March 31, 2009.
Intra-day traders can buy LIC Housing Finance (Rs 306) now for some sharp gains. A stop loss can be placed near Rs 298.
Investors with a short to medium outlook can stay invested.
The Nifty (3385) has some good support around 3363. Some sluggish movements around that level can result in a fall to 3345 then even down to 3330 levels. On the upmove, the index will have to stay firm here and decisively breach 3400 to record further gains.
Ambuja Cements (Rs 81) can be retained for long term. The stock is likely to give pretty good returns over the next 18 - 24 months. One can increase exposure at declines from current levels.
Deepak Nitrate Limited will be going ahead with its promising Rs 225 crore Greenfield project at Dahej (Gujarat) to establish substantial additional capacities for chlorination, hydrogenation and nitration. The company has already acquired 60 acres of land at Dahej. The location has proximity to sources of the necessary imputs for the project.
IMF stated yesterday that losses at financial institutions could approach $4.1 trillion worldwide The fund has asked countries to take bolder action to bolster banks or risk an even deeper recession. The bank feels more capital is needed to cushion against further losses.
12:10 PM: Inflation rose 0.26% for the week ended April 11, as against 0.18% in the previous week.
It was above a median forecast of 0.09 per cent. The annual inflation rate was 7.95 per cent during the corresponding week of the previous year.
11:54 AM: Investors with a long term view can stay invested in L&T (cmp Rs 842) and pick up more in small quantities at declines. The stock is not likely to see a sustained slide from here. BHEL, BEL and Siemens also look good for long term.
Automobile stocks are having a good outing this morning. One holding Hero Honda, M&M, Tata Motors and Maruti Suzuki can stay invested for now with proper stop loss triggers. Though some weak outings are not ruled out, a modest rise looks very much on the cards.
KEC International has bagged two new orders worth Rs 95 crore in the Southern Africa region. The orders are for turnkey construction of 110 Kv S/C transmission line and substation in Mozambique and supply & installation of OPGW cable and accessories in Namibia. The stock, currently traded at Rs 218, is a good one for long run. One can pick up the stock at declines.
Investors holding LIC Housing Finance can stay invested and pick up more of it at declines. The stock, currently traded at Rs 304, can move up by 10 - 15% even in the near run.
M&M Financial Services (up nearly 7% at Rs 225) has moved up on strong results. The stock may see further upside in the near run. However, if the overall mood turns bearish, then a fall from current levels is likely. One holding the stock with a medium or long term view, can stay invested. Others can sell at rallies and re-enter later at declines.
Trading got off to a listless start on the Indian bourses this morning amid mixed global cues. The Sensex opened with a positive gap and rose to 10,885.41 but has slipped to 10825.54 (up 8 points) at present. The Nifty moved on to 3353 in opening trade but is down marginally at 3329.40 now.
Sterlite, Wipro, RComm, DLF, M&M, Tata Motors, Infosys, TCS and Reliance Infra have posted sharp gains. Ambuja Cements, RPower, Idea Cellular, Tata Comm, Suzlon, SAIL, Reliance Capital and Siemens are among the prominent gainers in the Nifty pack.
Market Outlook
Amid mixed global cues, the mood is likely to remain somewhat cautious on the Indian bourses today. Quarterly results will have a major say in the market's direction during the course of the session.
The market is likely to remain quite listless today with Reliance Industries, Reliance Infrastructure, Reliance Petroleum, Reliance Natural Resources and Reliance Power slated to announce their quarterly numbers.
Sector Watch
Information technology stocks are likely to remain in focus. Realty stocks may post gains but are likely to find it tough to hold at higher levels. Selective buying is seen in banking, metal and capital goods sectors.
Scrip Watch
Ambuja Cements Limited has posted a net profit of Rs 3340.50 million for the quarter ended March 31, 2009 as compared to Rs 3262.00 million for the quarter ended March 31, 2008. Total Income has increased from Rs 16968.20 million for the quarter ended March 31, 2008 to Rs 18884.80 million for the quarter ended March 31, 2009.
Yes Bank recorded a sharp jump in its net profit for the quarter ended 31 March 2009. The bank has posted a net profit of Rs 801.10 million for the quarter ended March 31, 2009 as compared to Rs 645.00 million for the quarter ended March 31, 2008. Total Income has increased from Rs 4943.00 million for the quarter ended March 31, 2008 to Rs 6560.70 million for the quarter ended March 31, 2009.
M&M Financial Services is likely to attract attention today. The financial services arm of Mahindra & Mahindra has posted a net profit of Rs 1080.437 million for the quarter ended March 31, 2009 as compared to Rs 753.930 million for the quarter ended March 31, 2008. The company's total income increased from Rs 3613.014 million for the quarter ended March 31, 2008 to Rs 3976.894 million for the quarter ended March 31, 2009.
GTL may struggle for support due to weak quarterly numbers. The company, according to reports, has earmarked Rs 4 billion capital expenditure for the next two financial years, expecting increased contracts from Indian companies. The company expects more contracts during this year from telecom companies, especially from BSNL.
Besides some Reliance group heavyweights, Bajaj Hindustan, HCL Infosys, HDFC Bank, Idea Cellular, LIC Housing Finance, Maharashtra Seamless and SKF India are among the other companies scheduled to announce their results today.
Macro and Market Factors
Cues from Wall Street are not positive with concerns over losses in the banking sector triggering some selling. Asian markets are trading mixed today.
The data on inflation will be eyed. The recent cut in Repo and Reverse Repo rates and hopes several commercial banks will reduce lending rates to spur growth may prevent the market from sliding down sharply.
Compiled and Brought to you by
Equity Research Team
Intelligent Investor -
Invest Advisory Arm of
Ravina Consulting
Bangalore India
Read - www.intelligentinvestor1.blogspot.com
Follow - www.twitter.com/SmartInvestor
Wednesday, April 22, 2009
BSE / Nse Shares analysis 22 April 2009
BSE / Nse Shares analysis 22 April 2009
Power stocks can be retained if one is looking at them with a long term view.Stocks like Areva, CESC, NLC, Tata Power, Power Grid Corporation and PFC can be accumulated in a staggered fashion. Reliance Power can give good returns over a long run, but then, the stock is likely to remain quite slippery in the near term.
Zee Entertainment Enterprises Limited has posted a net profit after tax of Rs 725.40 million for the quarter ended March 31, 2009 where as the same was at Rs 794.50 million for the quarter ended March 31, 2008. Total Income is Rs 3168.10 million for the quarter ended March 31, 2009 where as the same was at Rs 3413.40 million for the quarter ended March 31, 2008. The stock is up nearly 4% at Rs 125.40. One holding the stock with a long term view can stay invested. Fresh exposure can be considered at Rs 110 - 115 levels.
With as many as 50 stocks set to exit from the derivatives section from May 2009, the midcap space is likely to see some listless action over the next few sessions. Investors with little or no appetite for risk would do well to stay away from taking fresh exposure in stocks that comprise the list. A little wait would do no great harm.
Transformers & Rectifiers India Ltd (TRIL) has informed that it has been awarded single order of 55 Nos. of Transformers amounting to by Maharashtra State Electricity Transmission Company Limited. The order, estimated at Rs 122 crore, will significantly augment the current order book position of the firm. At Rs 175, the stock is up marginally over its previous closing price. The stock has come a long way up from a low of Rs 102.60 it had touched in late February 2009.
Notwithstanding a few sharp rallies now and then, the market is likely to find the going a bit tough for the next couple of quarters, if not longer. So, it is better to exit at sharp rallies and stay focused only on a proven blue chip stocks.
Bank, infrastructure, cement and top notch IT stocks are likely to see a significant upmove over the next 12 - 18 months.
One holding Idea Cellular can stay invested for some strong gains over a medium term. The stock, currently traded at Rs 56, can rise to Rs 60 - 63 in the short run. Investors with a short-term plan can book some profits there and re-enter the counter later at declines.
Marico continues to grow despite economic slowdown. The company has recorded a turnover of Rs 2388 crore for the year ended March 31, 2009, a growth of 25% over FY08. The company's profit growth works out to 30% at PBT level and 16% at PAT level if one excludes one time extra-ordinary items from both FY08 and FY09.
Ultratech Cement's net profit for the quarter ended 31 March 2009 rose nearly 16% to Rs 1888.86 crore. The stock is up by a little over a per cent at Rs 572 now. Investors holding the stock with a long term view can stay invested and look to increase exposure at declines. ACC has posted a net profit of Rs 404.76 crore for the quarter ended 31 March 2009. The cement major had posted a net profit of Rs 357.54 crore for the corresponding quarter last fiscal.
One looking at medium to long term can stay invested in ACC, Ambuja Cements and Ultratech. Exposure can be increased at sharp falls. Since construction and infrastructure projects may take off anytime in the next couple of quarters, demand for cement is likely to see a sharp rise later this year.
Indian Hotels (Rs 51.50) can move on to Rs 60 if it continues to trade firm here for a few sessions. A decisive breakout there can result in a surge to Rs 75. On the downside, the stock has good support near Rs 43. One can have a stop loss around that level.
BGR Energy Systems has announced that the Environmental Engineering Division of the company has secured a contract for Design, Engineering, Supply, Erection and Commissioning of large "Total Water System" from Maithon Power Ltd, Jharkhand.
The contract is valued at Rs 15.50 crore. The stock is up 1.5% at Rs 176.50.
Forecast of a near normal monsoon is expected to keep fertilizer stocks in focus. One can stay invested in stocks like Nagarjuna Fertilziers, Chambal Fertilizers, Tata Chemicals, RCF, Deepak Fertilizers and GSFC. Declines can be treated as opportunities to increase exposure to the sector.
Wipro (up 5.4% at Rs 289) has moved up sharply this morning following a sharp jump in the Group's consolidtated net profit for the quarter ended 31 March 2009. On a standalone basis, however, the company's net profit has dropped down by around 6.75% to Rs 842.10 crore. One holding the stock with a long term view can stay invested and pick up more of it at sharp declines.
Riding on the strength of realty, bank, metal, auto and capital goods stocks, the market moved up and posted sharp gains in early trade this morning. Positive global cues have contributed to the early surge today.
The Sensex, which opened at 10,968.80, edged up to 10,992.21 and is currently up with a sharp gain of 77.84 points or 0.71% at 10,975.95. The Nifty is up 23.70 points or 0.7% at 3389. Suzlon, PNB, ICICI Bank, DLF and Tata Steel are up 3% - 6% now.
Unitech, RComm, Axis Bank, Tata Motors, Reliance Capital, Wipro, Siemens, Hindalco and L&T have posted sharp gains. Heavy weight stocks, RIL, SBI and HDFC also trade firm.
Market Outlook
The market is expected to open on a firm note on positive global cues. There may be some profit taking at higher levels but the undertone is likely to remain fairly positive right through the session today.
Sector Watch
Cement stocks will see plenty of action with industry majors ACC and Ambuja Cements scheduled to announce their quarterly results during the course of the day.
Realty and bank stocks are likely to find support. Information technology stocks are expected to surge higher. Selective buying is seen in metal, pharma and capital goods sectors.
Scrip Watch
Wipro has posted a consolidated net profit of Rs 10100 million for the quarter ended March 31, 2009 as compared to Rs 8800 million for the quarter ended March 31, 2008. On a standalone basis, Wipro has posted a net profit of Rs 8421 million for the quarter ended March 31, 2009 where as the same was at Rs 9029 million for the quarter ended March 31, 2008. Total Income is Rs 53966 million for the quarter ended March 31, 2009 where as the same was at Rs 53681 million for the quarter ended March 31, 2008.
HCL Technologies Limited has posted a net profit of Rs 1525.70 million for the quarter ended March 31, 2009 as compared to Rs 2630.80 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 13291.30 million for the quarter ended March 31, 2008 to Rs 10930.70 million for the quarter ended March 31, 2009.
GTL,Hindustan Zinc, Yes Bank, Marico, Macmilan Industries and Zee Entertainment will be announcing their results.
ICICI Bank is likley to be in focus following the bank reducing benchmark lending rates by 50 basis points.
Sesa Goa is likely to attract attention on reports that the company is looking at options of bidding for the controlling stake in an iron ore mine that has been put on the block by Brazil's mining exploration company GME4.
Hero Honda may attract attention following the company reporting a sharp 34.6% jump in net profit for the quarter ended 31 March 2009.
Macro and Market Factors
Stock prices rebounded on Wall Street yesterday after suffering some big losses in the previous session. The US Treasury Secretary's assurance to the Congressional Oversight Panel that there is enough money left in the government's $700 billion financial rescue program to stabilize the financial system brought the bulls back to the ring.
Asian markets are trading mixed now after a positive start. Despite a 25 basis points cut in Repo and Reverse Repo rates, the Indian market had drifted lower yesterday. The RBI governor feels that banks needed to lend to ensure economic activity continues unhindered, reminding banks that in the current environment their challenge was to keep credit flowing, while, at the same time, maintaining portfolio quality.
Compiled and Brought to you by
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Intelligent Investor -
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Bangalore India
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Monday, April 20, 2009
Buy - Reliance Energy for target price of 1000 +
Further progress in existing projects, bifurcation of businesses into separate entities and new orders should prove positive for Reliance Infra.
The stock of Reliance Infrastructure (Reliance Infra), which had underperformed the BSE Sensex for most of the last 12 months, has significantly outperformed in the last one month. Among reasons that could be attributed to the outperformance is it’s recently completed share buyback programme, which partly reflects the management’s belief that the company’s assets are undervalued.
Analysts also attribute some recent developments to the stock’s outperformance. Reliance Power, a 45 per cent subsidiary of Reliance Infra, won the bid to develop the 4,000 mw Tilaiya ultra mega power project (UMPP) in February 2009. The financial closure of the Delhi metro project and Reliance Infra emerging as lowest or sole bidder for three road projects worth Rs 9,440 crore are among other triggers.
Core strengths
Reliance Infra operates in some of the high growth potential sectors. It has presence in the entire value chain of the power sector including EPC, generation, transmission and distribution. In the infrastructure space, it is focused on roads, urban infrastructure, airports, real estate and SEZs.
In power, Reliance Infra currently has generation assets of 940 mw. About 80 per cent of its power division’s revenue is on account of generation and distribution of power in different cities including its biggest circles, Mumbai and Delhi. Its Mumbai distribution circle is considered to be most efficient, with Aggregate Technical and Commercial (AT&C) losses of less than 11 per cent, compared to country’s average of about 35 per cent.
| VALUATION: SUM OF PARTS | ||
in Rs per share | Low | High |
| Power * | 120 | 150 |
| Cash and equivalents | 180 | 210 |
| EPC | 40 | 50 |
| Infra projects | 80 | 90 |
| Stake in Reliance Power | 350 | 450 |
| Total value | 770 | 950 |
| * Distribution, Generation & Transmission Analysts estimates | ||
Leveraging its expertise in the business, the company has gradually lowered the AT&C losses in its Delhi distribution circle to about 20 per cent as compared to 55 per cent in FY02. Apart from the usual growth in existing circles, expect growth rates to perk up as and when the company bags new distribution circles. It is now pursuing opportunities in this space given that various states are showing willingness to privatise their electricity distribution operations; about 20 cities in three states are expected to see their distribution operations get privatised.
In power generation, the company is looking at increasing the capacity of its Dahanu power station by 1,200 mw to 1,700 mw, which interestingly will be a part of Reliance Infra’s power generation portfolio (and not Reliance Power).
The huge power generation capacities being added in India will also translate into equally big investment in transmission infrastructure, to evacuate power from the generation point to the customers. The company is currently executing three transmission projects worth Rs 4,000 crore. These projects typically offer a fixed return of 16 per cent on equity, and would ensure sustained cash inflows. Meanwhile, existing operational assets generate annual cash profits of over Rs 1,300 crore, which will help towards financing the company’s ongoing projects and further strengthen its balance sheet.
EPC
The ongoing capacity addition in the power generation business (including Reliance Power) is also providing opportunities for the company’s EPC business, which has seen its order book rise 159 per cent year-on-year to Rs 21,500 crore as on December 31, 2008. Reliance Infra has recently started work on Reliance Power’s 3,960 mw (Sasan) and 300 mw (Butibori) projects.
In totality, the company is currently executing seven projects of totalling 7,200 mw. “In FY08, about 80 per cent of the revenues came from electrical business and remaining was from EPC. However, over the next two years, the revenue contribution from EPC will substantially increase,” says Lalit Jalan, CEO & Whole-time Director, Reliance Infrastructure.
The company believes that the work for several large projects like Sasan will start in full swing in FY10, and double its EPC revenues in FY10 (annualised revenues of EPC for FY09 is Rs 2,200 crore). In terms of future opportunities, the project pipeline should remain robust given that Reliance Power itself has 14 power projects (32,200 mw) to be set up in the long-run. In the near-term, the Krishnapatnam UMPP (EPC value of Rs 12,000 crore) could further push up its order book.
Infrastructure
Among other growth potential segments is the infrastructure space mainly, roads and metro projects. Till now, infrastructure has not contributed in any significant way to revenues, but its contribution is seen increasing gradually. “We are currently having six road projects covering 467 km, of which two projects are almost complete and will start contributing to revenues from FY10. The next three road projects will be operational by Q2 FY11,” says Lalit Jalan.
Off late, the company has emerged as the sole or lowest bidder in three road projects worth Rs 9,440 crore.
Meanwhile, the company’s two metro projects (one each in Mumbai and Delhi) with total cost of Rs 5,250 crore would drive the growth in the future. For both these projects, it has completed the financial closure, ordered critical equipments, awarded contracts and started construction. These two metro projects, which are expected to start operations from Q2 FY11 onwards, have a concession period ranging 30-35 years.
| STEADY NUMBERS | |||
| in Rs crore | FY09E | FY10E | FY11E |
| Sales | 10,000.0 | 9,800.0 | 11,700.0 |
| EBITDA (%) | 12.2 | 9.8 | 9.5 |
| Net profit | 1,045.0 | 990.0 | 1,010.0 |
| EPS (Rs) | 46.1 | 44.0 | 45.0 |
| PE (x) | 13.9 | 14.6 | 14.3 |
| E: Analysts estimates | |||
Investment rationale
The company is in the growth phase and is investing aggressively in its various businesses, the benefits of which should start reflecting over the next 2-3 years. It’s annual cash flow of about Rs 1,300 crore along with cash equivalents of Rs 5,000 crore (adjusted for debt of Rs 5,000 crore) should help meet its medium-term equity funding needs of Rs 2,800 crore.
Nonetheless, the company has lately undertaken a re-organisation plan to transfer its various businesses to seven different 100 per cent subsidiaries. These include Dahanu, Samalkot and Goa power stations, transmission, distribution, EPC, toll-roads and real estate. This move should lead to a transparent structure, enhanced focus and enable the company to unlock value, if required, say analysts.
Meanwhile, analysts expect some near-term pressures, which may lead to a small dip in FY10 earnings. But, since the company operates in different businesses, they prefer to value it on a sum of parts basis and have pegged a value ranging Rs 770-950 per share, which is 20-47 per cent higher than its current market price of Rs 644.
Source : business-standard 20-04-09
Our Recommendation :
Our Research Team Views :
Day High Low Rs.662-712
Monthly High Low Rs.472-733
6M H/L Rs. 426-733
This share has risen sharply more than 50% in the last 2 months. The following
are the ideal ranges for buying and selling :
Buying Range : Rs.550-575
Selling Range : Rs. 1150-1250
Wait for the price to the buying range on correction in the stock markets.
Holding period : 12 months
Returns expected : 100% plus
For best investment ideas get in toch with us we give - One week, One Month, One
Quarter, 6 M / 12 M picks
Get in touch with us for Portfolio Advisory Services.
Equity Research Team
Intelligent Investor -
Invest Advisory Arm of
Ravina Consulting
Bangalore India
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Sunday, April 19, 2009
TA - Punj Lloyd
Short-term resistance for the stock is at Rs 130, where it is halting currently. Rally beyond this level will take it to the resistance zone between Rs 170 and Rs 180. Investors with a medium-term perspective can sell some of their holdings on a failure to move above this level.
Key medium-term resistance is in the band between Rs 200 and Rs 220. This can be the upper ceiling for the stock for this year. A strong break-out above this level is required to signal that the long-term outlook has turned positive.
Source : Businessline 19-04-09
Our Recommendation :
Our Research Team Views :
Day High Low Rs.130-115
Monthly High Low Rs.80-135
6M H/L Rs. 215-70
This share has risen sharply more than 90% in the last 6 months. The following
are the ideal ranges for buying and selling :
Buying Range : Rs.85-90
Selling Range : Rs. 125-135
Wait for the price to the buying range on correction in the stock markets.
Holding period : 12 months
Returns expected : 100% plus
For best investment ideas get in toch with us we give - One week, One Month, One
Quarter, 6 M / 12 M picks
Get in touch with us for Portfolio Advisory Services.
Equity Research Team
Intelligent Investor -
Invest Advisory Arm of
Ravina Consulting
Bangalore India
Read - www.intelligentinvestor1.blogspot.com
Follow - www.twitter.com/SmartInvestor
TA - GIPCL
GIPCL
Gujarat Industrial Power Company (Rs 61.4): GIPCL has recorded a very sharp rally since March this year that has taken the stock up from Rs 40 to Rs 73. The stock has already achieved its first short-term target that is at Rs 71.
A reversal is possible from this level. Investors with a short-to-medium term perspective can hold the stock with a stop at Rs 58. The other strategy can be to exit at current levels and re-enter on a strong break above Rs 74. Next target for the stock is Rs 90. The range for the rest of the year is likely to be between Rs 50 and Rs 90.
Source : Businessline 19-04-09
Our Recommendation :
Our Research Team Views :
Day High Low Rs.67-60
Monthly High Low Rs.42-67
6M H/L Rs. 40-67
This share has risen sharply more than 70% in the last 6 months. The following
are the ideal ranges for buying and selling :
Buying Range : Rs.42-45
Selling Range : Rs. 60-67
Wait for the price to the buying range on correction in the stock markets.
Holding period : 12-18 months
Returns expected : 100% plus
For best investment ideas get in toch with us we give - One week, One Month, One
Quarter, 6 M / 12 M picks
Get in touch with us for Portfolio Advisory Services.
Equity Research Team
Intelligent Investor -
Invest Advisory Arm of
Ravina Consulting
Bangalore India
Read - www.intelligentinvestor1.blogspot.com
Follow - www.twitter.com/SmartInvestor
Technical Analysis - Reliance Ind
Reliance
RIL rallied slightly above our medium-term target of Rs 1825 but it turned hesitant at those levels.
The shooting star pattern in the weekly candlestick chart too denotes that the stock is experiencing selling pressure in the band between Rs 1800 and Rs 1850. Since this is 38.2 per cent retracement of the downtrend from the January 2008 peak, the current rally can halt here. Medium-term investors can hold the stock as long as it trades above Rs 1500.
Immediate support will be provided by the 200-day moving average positioned at Rs 1600. Short-term investors can book some profits at current levels. Short-term resistances are Rs 1844 and Rs 1920.
— Lokeshwarri S.K.businessline 19-04-09
Technical Analysis - Infosys
Infosys
It was a volatile week for Infosys as the stock plunged to Rs 1300 following earnings announcement and then rebounded to close the week with less than 3 per cent loss. As we have explained earlier, there is a strong medium-term resistance between Rs 1400 and Rs 1450 since the 200-day moving average is poised here and it is also the upper boundary of our medium-term trading range. A reversal from here can pull Infosys lower towards Rs 1100 over the medium term.
The stock can continue to face resistance at Rs 1450 over the near-term. If it reverses lower from current levels, a decline to Rs 1300 and Rs 1256 would be on the cards. Target on a break above Rs 1450 is Rs 1492.
— Lokeshwarri S.K.businessline 19-04-09
Technical Analysis - Maruti
Maruti Suzuki
Maruti Suzuki continued its upward march and achieved our first medium-term target of Rs 850 last week. Though a mild reaction was witnessed on Friday, the short-term trend in the stock continues to be up.
Short-term supports for the stock are Rs 810 and Rs 770. Short-term traders can hold their long positions until the stock trades above the first support. Medium-term investors can hold with a deeper stop at Rs 740.
Next medium-term target for Maruti Suzuki is Rs 950 that is 61.8 per cent retracement of the long-term down trend from the October 2007 peak. A close above this level would imply that the stock can head towards its life-time high peak once again.
— Lokeshwarri S.K.businessline 19-04-09
Technical Analysis - SBI
SBI
SBI shattered the resistance in the band between Rs 1200 and Rs 1220 and almost achieved our break-out target of Rs 1368. It was one of the stronger performers among the pivotals, with 15 per cent weekly gain. Short-term support for the stock is at Rs 1250 and Rs 1180. Short-term traders can hold the stock as long as it holds above the first support. But it faces strong resistance from the band between Rs 1350 and Rs 1370.
The medium-term view for SBI has however turned positive after last week’s move. If this is a counter-trend rally correcting the down-move from January 2008 peak, the first target is Rs 1356 and the next target is Rs 1476. Fresh longs are advised only on a strong move above Rs 1350.
— Lokeshwarri S.K.businessline 19-04-09
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