Market Close: Phenomenal rally?But can this hold on?

Great day for the market which started with a gap up of 300 points and moved further into the green zone with every hour of trade as value buying activity intensified in almost all sectors. The 800+ points rally was seen on speculative reports hich said that SEBI has cleared proposals allowing foreign individual investors to invest on Indian bourses. The minimum net worth a Criterion for a foreign individual investor who intends to invest directly is set at $50 million. But still the confirmation was not there from SEBI. The rise was incredible which gradually took it higher making it the biggest ever gain for the Sensex. Capital goods, Power, Realty and Metal stocks were on limelight for the day. Phenomenal bounce back seen in mid caps and Small caps performed well with the heavyweights and closed up by 3% each. Indian market makes over the global cues and had a different story to show. Asian markets ended in green while European markets are trading in mix.

Sensex ended up by 879 points at 18492.84. It was helped up by gains in BHEL (2294.3,+12 percent), Rel Energy (1523.15,+11 percent), NTPC (217.35,+9 percent), Bharti Tele (1005.35,+8 percent) and RIL (2601.55,+8 percent). Restricting the gains were TCS (1064.2,-1 percent), Guj Ambuja (144.55,-1 percent), Wipro (492.2,0 percent), HDFC (2565.8,0 percent) and Infosys (1883.55,0 percent).

Leading media house Zee Entertainment Enterprises reported a phenomenal growth of 4.61 times in consolidated net profit for the quarter ended September 2007. During the quarter the company experienced a rise in consolidated net profit to Rs 97 Cr from Rs 210 Cr in the quarter of the previous year. Consolidated total income during the quarter jumped 15.43% to Rs 421 Cr compared with the same quarter a year earlier. While on standalone basis Zee reported phenomenal growth of 6.33 times in net profit to Rs 69.63 Cr in the quarter compared with Rs 11 Cr a year earlier. Earnings per share for the quarter jumped 6.19 times to Rs 1.61 compared with the same quarter a year ago. Substantial rise in operating margins pushed earnings of the company higher. Operating margin during the quarter jumped of 3,835 basis points to 41.11% compared with 2.75% in the same quarter a year earlier. The net sales for the quarter fell 20.30% to Rs 229 Cr while the total income for the quarter declined 17.98% to Rs 248.72 Cr when compared with the corresponding quarter, a year ago. The results were really good on back of its Advt. earnings as the TRP ratings has been increasing significantly. But the company would be facing the resistance from the advertisers as it intends to hike Ad rates by 25%. However we think that the company would do good in long term. The stock performed well on the results which were in line with the market expectations. The stock ended up by 8%. Do read our note which would update you.

Good numbers were reported by Greenply. Topline grew by 27% to Rs.136crs. EBITDA surged by 120% to Rs.22crs on yoy basis. Margins at EBITDA level improved by 670 bps backed by lower selling and advertising spend. PAT grew by 113% to Rs.11crs as company to same period last year. At the current market price the stock trades 10 times its annualized EPS. Numbers are good and the company will continue to perform well. For now valuations seems fair. Greenply even unveiled plans to acquire two privately held companies Galaxy Decor and Platinum Veneers engaged in manufacturing plywood and allied products. Reacting to the positive development, Greenply stock was in limelight for the day but ended marginally down. We will update you more on this soon.

Jain Irrigation reported healthy second quarter numbers. Net profit of Rs 30 Cr for the quarter ended September 2007 as against Rs 16.2 Cr in same quarter of last year. Net sales stood at Rs 329 Cr versus Rs 226 Cr. Top line was around 45% growth on YoY basis. About 71% growth was from domestic business and 14% came in on the export business. Piping division which is the PVC pipes business grew 27%, while the orders for the same grew by 57%. The only division that did not do that well was the PVC sheets because it had exposure to US homebuilding market. Agriculture remains a key driver. The business is doing well as it has grown about 72%, and this is the most profitable division. It has moved from about Rs 58 Cr to about Rs 100 Cr this quarter. With the good number stock performed well and ended up by 5%

Technically Speaking: Markets traded well on the back of strong positive breadth. Sensex touched intraday high of 18542 and low of 17910. Overall market turnover was healthy for the day at Rs 7390 Cr. Market breadth was in favor of Advances, where the Decliners stood at done 659 against Advances of 2057. Sensex has made a huge gap up opening today. If this momentum fails to gather more upside then we might see a pull back to close in the huge gap left by markets at today's open between 17700 and 17910.