Market Close: Ranged sessions but ends strong.

Markets ended the day on a strong note with firm global cues supporting in early sessions and buying momentum was seen across major index heavyweights. Indian indices started the day on a firm note but witnessed some volatility in the last sessions as investors started booking profits at higher levels. All the sectors closed in green with Auto, Banking, Cement and Metal leading the rally with some value buying. Mid caps outperformed the day while the small caps closed inline with front line indices. Educomp rallied for second consecutive day after RBI permitted FII to raise their stake up to 100% in the company. Investors sentiments were also high following the good response to FPO of ICICI Bank which has been subscribed 3.10 times. Major Asian markets closed in green while the Chinese Market closed in red.

Sensex closed up by 116 points at 14411.95. It was helped up by gains in Guj Ambuja (118.2,+5 percent), SBI (1425.2,+4 percent), Tata Motors (686.9,+4 percent), Grasim (2512.8999,+3 percent) and Maruti (768.6,+2 percent). Restricting the gains are Ranbaxy (351.85,-2 percent), TCS (1145.8,-1 percent), NTPC (150.3,0 percent), HLL (188.5,0 percent) and Infosys (1954.1,0 percent).

Elecon Engineering Ltd (Elecon) is one of the India?s leading manufacturers of Material Handling Equipment and Gear boxes. Elecon has delivered fantastic results for Q4 and FY2006-07. For Q4 the Revenues grew by 52% to Rs 285 cr on yoy basis, the Net profit surged up by 54% to Rs 19 cr on yoy basis. The Ebidta stood at 14% which enhanced by 150 bps. Ebidta improved by 68% to Rs 39 cr on yoy basis. For FY2006-07 Revenues grew by 58% to Rs 723 cr and the bottom line grew by 82% to Rs 55 cr on yoy basis. For the year Ebidta stood at 15% to Rs 112 cr enhanced by 85% on yoy basis. At the current market price of Rs 497 the stock trades at 28 times of FY06-07 earnings. We dislike this PE. The management has announced capex plan of Rs 120 -150 cr. Rs 80 cr in Wind mill gear box, capacity of 1mw to 2 mw. Presently, gearboxes for 1MW to 2MW are being imported. Initial turnover of Rs. 100 - 150 cr is expected in first full year of operations that may happen in 2008-09. The balance is in Material handling division. The company has given the guidance of Rs 1000 cr for FY 2007-08. This seems to be a good story for long term investment one can accumulate at dips. The stock closed up by 1.6%.

Auto stocks closed in strong note for the day. Tata Motors launched a mass transport passenger vehicle - Magic, developed on the platform of its popular mini truck Ace, while also unveiling a higher capacity van - Winger. Magic has a sitting capacity of 5-8 people, and priced at Rs 2.6 lakh (ex-showroom Pune) while Winger, an eleven seter sitting arrangements, is competitively pegged at a starting price of Rs 4.7 lakh. We are not too enthused by Magic as Its just a replacement for the Maruti Van, which really did not do well. The Winger could be a threat to the bread and butter UVs of Mahindra. Tata Motors closed up by 3.70% while its peer Maruti and M&M closed up by 2.84% and 1.52% respectively.

ABG Shipyard closed 4% higher for the day on back of good set of numbers reported by the company for the full year ended March 2007. For the fiscal, the company achieved sales growth of 30% yoy. The operating margins of the company expanded by 1.7% to 27.7% led by lower raw material costs (as percentage of sales). The benefits of margin expansion were visible in the company's profitability, with net profits for the fiscal recording a 39% yoy growth. The current order book stands at about Rs 4000 cr which looks good for the company. The Board has recommended a dividend of Rs 1.5 per share (dividend yield of 0.4%). As regards its peers, both G.E. Shipping and SCI (up 1% each) also closed in green.

Technically Speaking: It was a ranged session for whole day before closing on a firm note. Sensex touched intraday high of 14449 levels and low of 14347 levels. Sensex has made an upward breakout and clearly headed uptrend with a gap support of 14300 level. The next resistance can be seen at 14570 levels targeting to 14700 levels. Market turnover was pretty good at Rs 5049 cr. Overall breadth was in favor of Advances, where the Advances to Declines ratio stood 1.5:1.