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Thursday, January 18, 2007

Results Calendar - Jan 20 2007

Jan 20 2007 Abhishek Industries Ltd
Jan 20 2007 Andhra Petrochemicals Ltd
Jan 20 2007 Bank of Rajasthan Ltd
Jan 20 2007 Chemplast Sanmar Ltd
Jan 20 2007 Compulink Systems Ltd
Jan 20 2007 E.Com Infotech (India) Ltd
Jan 20 2007 Garware-Wall Ropes Ltd
Jan 20 2007 Gati Ltd
Jan 20 2007 GIC Housing Finance Ltd
Jan 20 2007 Golden Legand Leasing & Finance Ltd
Jan 20 2007 Gujarat Alkalies & Chemicals Ltd
Jan 20 2007 Gujarat State Fertilizers & Chemicals Ltd
Jan 20 2007 Gujarat Themis Biosyn Ltd
Jan 20 2007 H P Cotton Textile Mills Ltd
Jan 20 2007 Havells India Ltd
Jan 20 2007 Hillock Agro Foods (India) Ltd
Jan 20 2007 IEC Softwares Ltd
Jan 20 2007 IMP Powers Ltd
Jan 20 2007 Kamat Hotels (India) Ltd
Jan 20 2007 Karan Woo-Sin Ltd
Jan 20 2007 Kirloskar Pneumatic Company Ltd
Jan 20 2007 Nagarjuna Fertilizers & Chemicals Ltd
Jan 20 2007 Nava Bharat Ventures Ltd
Jan 20 2007 NCL Industries Ltd
Jan 20 2007 Nucent Estates Ltd
Jan 20 2007 Plastiblends India Ltd
Jan 20 2007 PSI Data Systems Ltd
Jan 20 2007 Sandesh Ltd
Jan 20 2007 Shiva Cement Ltd
Jan 20 2007 Sinclairs Hotels Ltd
Jan 20 2007 SKP Securities Ltd
Jan 20 2007 SRF Ltd
Jan 20 2007 Subhkam Capital Ltd
Jan 20 2007 Tamarai Mills Ltd
Jan 20 2007 Torrent Cables Ltd
Jan 20 2007 Transpek Finance Ltd
Jan 20 2007 VBC Ferro Alloys Ltd
Jan 20 2007 VBC Industries Ltd
Jan 20 2007 Vybra Automet Ltd
Jan 20 2007 Yash Management & Satelite Ltd
Jan 20 2007 Zen Technologies Ltd
Jan 20 2007 Zenith Fibres Ltd
Jan 20 2007 Zicom Electronic Security Systems Ltd
Jan 20 2007 Zodiac Clothing Company Ltd

Results Calendar - Jan 19 2007

Jan 19 2007 ABC Bearings Ltd
Jan 19 2007 Aftek Ltd
Jan 19 2007 Asian CERC Information Technology Ltd
Jan 19 2007 Bharat Immunological & Biological Corporation Ltd
Jan 19 2007 Dhruv Estates Ltd
Jan 19 2007 Infotech Ltd
Jan 19 2007 Entertainment Network (India) Ltd
Jan 19 2007 Godawari Power & Ispat Ltd
Jan 19 2007 Gowra Leasing & Finance Ltd
Jan 19 2007 Granules India Ltd
Jan 19 2007 Gujarat Narmada Valley Fertilisers Company Ltd
Jan 19 2007 High Energy Batteries (India) Ltd
Jan 19 2007 Hindustan Construction Company Ltd
Jan 19 2007 I-Flex Solutions Ltd
Jan 19 2007 Ind Tra Deco Ltd
Jan 19 2007 India Gelatine & Chemicals Ltd
Jan 19 2007 J.K.Investo Trade (India) Ltd
Jan 19 2007 Jain Irrigation Systems Ltd
Jan 19 2007 Jolly Board Ltd
Jan 19 2007 Kabra Extrusion Technik Ltd
Jan 19 2007 Lakshmi Energy & Foods Ltd
Jan 19 2007 Lynx Machinery & Commercials Ltd
Jan 19 2007 M M Forgings Ltd
Jan 19 2007 Mangalam Timber Products Ltd
Jan 19 2007 Midpoint Software & Electro Systems Ltd
Jan 19 2007 Mipco Seamless Rings (Gujarat) Ltd
Jan 19 2007 NIIT Ltd
Jan 19 2007 Nivi Trading Ltd
Jan 19 2007 Omega Interactive Technologies Ltd
Jan 19 2007 Orient Ceramics & Industries Ltd
Jan 19 2007 PNB Gilts Ltd
Jan 19 2007 Ponni Sugars (Erode) Ltd
Jan 19 2007 Porritts & Spencer (Asia) Ltd
Jan 19 2007 PTC India Ltd
Jan 19 2007 Ramkrishna Forgings Ltd
Jan 19 2007 Rishabh Digha Steel & Allied Products Ltd
Jan 19 2007 Sanjay Leasing Ltd
Jan 19 2007 Shringar Cinemas Ltd
Jan 19 2007 Shyam Star Gems Ltd
Jan 19 2007 Silverline Technologies Ltd
Jan 19 2007 Sonata Software Ltd
Jan 19 2007 State Bank of Bikaner and Jaipur
Jan 19 2007 Taparia Tools Ltd
Jan 19 2007 Tata Teleservices (Maharashtra) Ltd
Jan 19 2007 Texmaco Ltd
Jan 19 2007 Torrent Gujarat Biotech Ltd
Jan 19 2007 Ushdev International Ltd
Jan 19 2007 Welcast Steels Ltd
Jan 19 2007 Zensar Technologies Ltd

ENAM - Kirloskar Oil Engines, BRICS PCG - Bajaj Auto

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Two reasons for a correction !


FII: + Rs 91Cr & MF +Rs 89.5 Cr

FII Gross purchases Rs 1716.5 Cr Gross Sellers Rs 1625.3 Cr Net Buyers Rs 91Cr.
MF Gross Purchases Rs 623.7 Cr Gross Sellers Rs 534.12 Cr Net Buyers Rs 89.5 Cr.

Our View:

Markets were ranged and thats what comes across with these FII figures. The issue to be worried about is that the markets have been rallying with not much of FII buying. Really it implies that buyers are not willing to sell. Heavyweights is not where the retail invests though there is activity in the mid caps. It would be tough to attribute the big gains to retail investors buying It would be interesting to look at the provisional FII figures as well for today.

Close: Results cheered as markets make another high !

Market started firm on the back of Japan keeping interest rates steady. It was a big results day and the start was steady with no negative global cues. Mid caps also saw buying along with index heavyweights. The momentum continued as the day progressed and market reached an all time high of 14300. A sharp selloff from those levels had markets looking for excuses but really there were none. Markets finally closed up for the day still leaving investors confused on the reason for the sharp fall. The rally was also supported by Global Indices as Asian Indices ended their day in Green, while European ones were trading in Green.

Cement Stocks have shown superb numbers. Ultra tech Net profit stood at Rs. 212 cr against Rs. 23.8 cr in the same quarter last year. Shree cement Ltd had also had a fantastic set of numbers with the top line up 150% at Rs. 363 cr against Rs. 144 cr in the previous year. Net profits at 104 cr against 28 cr same quarter last year was really good. JK Lakshmi Cement also did not disappoint as its top line grew by 50% Net Profits at Rs 55 cr vs Rs 11.3 Cr left little to be desired. However all cement stocks have been expected to deliver and the stocks have come off post the numbers. So its really a case of meeting expectations. Talks of an oil find by ONGC had the stock flaring up.. though the stock closed off its highs on profit taking.

Sensex closed up by 86 points at 14217. helped up by gains in HDFC (1596.45,+3 percent), ONGC (916.85,+2 percent), L & T (1586.1,+2 percent), ITC (171.95,+2 percent) and HLL (223.95,+1 percent). Restricting the gains are TISCO (475.55,-2 percent), ICICI Bk (971.8,-1 percent), RCVL (436.35,-1 percent), Rel Energy (528.15,-1 percent) and Tata Motors (952.75,-1 percent).

One of the big reasons for the rally was the fact that Japan has kept rates steady as an increase would have disturbed the applecart. The interest rate scenario will be given a relook Feb. The FII flow is affected by that for sure. FII numbers came in a marginal 91 crore positive for Wednesday. The markets have been rallying with not much FII activity and thats some cause for concern.
Siemens has posted a two-fold increase in net profit after tax at Rs 98.07 crore for the quarter ended December 31, from Rs 49.01 crore in the year-ago period. The total income (net of excise) of the company for the first quarter nearly doubled to Rs 1648.24 crore, as against Rs 861 crore recorded in the corresponding period in 2005. Fantastic numbers. The company had announced intention of selling off of the Communication Enterprise Network business (a part of the Information & Communications segment) and also the Siemens Public Communication Networks Ltd (SPCNL), another potential high growth 100% subsidiary. This subsidiary has a 100% export oriented R&D unit, which contributes to the development work for network management solutions for Siemens' worldwide product lines. With the businesses being divested, and Valuations at around PE of 40 for FY07 the stock came under pressure.

Exide Industries net profit at Rs 35 crore against Rs 21 crore on for the quarter was ok but really good in the face of increased lead prices. The company's net sales during the third quarter was up 34% at Rs 458.58 crore from Rs 342 crore as compared to the corresponding quarter previous year. The company announced that it has increased prices by about 5% this month and thats a positive. The stock has had a sharp run up and the near term will continue to face pressure from high lead prices. But performance indicates that it has been able to take it well.

Reliance announced bumper profits for the quarter after markets and that should really be the high point for tomorrow. Net Profit at Rs 2799 cr vs Rs 1776 cr far exceeded the most optimistic expectations. The unbelievable numbers from Reliance were topped up by Gross refining margins which came in at $11.7 / barrel. The through put was higher and exports were up over Rs 16000 cr from Rs 6000 cr. This in an appreciating rupee environment which would have been negative. Also the fact that crude hit the highest levels during the quarter. Its amazing how this company makes money.

Technically Speaking: Sensex rallied between the channels of 14327 - 14419 level. However, the breadth had been marginally in the favor of Advances as there were 1386 advances against 1293 Declines. Volumes were good at 5053 cr. Any upside will face resistance at 14,410 levels.

Federal-Mogul Goetze (India): Sharekhan Stock Idea dated January 18, 2007

Federal-Mogul Goetze (India)
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs559
Current market price: Rs385

The Mogul of the rings

Key points

  • Leader in critical auto components: Federal-Mogul Goetze India (FMGI) is a leading supplier of piston and piston rings to OEMs across vehicle segments. It owns a 65% share of the OEM market and enjoys 70-80% penetration in the CV and tractor segments. The CV industry continues to grow at above 30% in FY2007 and the strong double-digit growth rate is expected to sustain in FY2008. FMGI is also set to ride the wave of dieselisation of Indian cars. It will be the 100% supplier for Maruti Udyog’s soon-to-be-launched diesel Swift.
  • Revamp over, Federal-Mogul gains control: FMGI turned profitable in Q2CY2006, as it restructured and cleaned up its balance sheet over the first and second quarters of 2006. As its operations stabilised under parent Federal-Mogul's new systems, it reported a 14.2% EBITDA margin in Q3CY2006 against 9.1% in Q2CY2006.
  • Huge potential for outsourcing: Federal-Mogul has identified India as a low-cost manufacturing location and is shifting ten manufacturing lines to FMGI's Patiala plant. The resulting outsourcing opportunity is expected to boost FMGI's exports. The export benefits are expected to begin accruing as early as from Q1CY2007, with the company building scale from that point onward.
  • Attractive valuations as compared with its peers: FMGI looks attractively valued as compared to the Tier-I auto-component companies. We think the lower valuations are not justified, considering the strong growth prospects on the back of the buoyancy in its domestic business, rising dieselisation of cars and the huge outsourcing opportunity. At the current market price of Rs385, the stock discounts its CY2008E earnings by 12.4x and trades at 7.5x CY2008 EV/EBIDTA. We recommend a Buy on the stock with a price target of Rs559.
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Market gains, but ends off its high

Strong Asian markets coupled with expectations of substantial profits by Reliance Industries and Ranbaxy saw the Sensex open with a positive gap of 35 points at 14166. The action in several counters lifted the Sensex to an all-time high of 14326. However, a strong bout of profit taking towards the close saw the index shed 108 points from the day's high. The Sensex ended the session with decent gains of 86 points at 14218, while the Nifty added 33 points to close at 4109.

The breadth of the market was marginally positive. Of the 2,715 stocks traded on the BSE, 1,362 stocks advanced, 1,300 stocks declined and 53 stocks ended unchanged. Among the sectoral indices, the BSE Oil & Gas index advanced 1.62% at 6664 followed by the BSE PSU index (up 1.28% at 6294) and the BSE FMCG index (up 1.13% at 1935). However, the BSE CD index, the BSE Metal index and the BSE Bankex closed in negative territory. The BSE Midcap index hit an all-time high of 6193.37 after a gap of eight months. The major drivers for the mid-cap index were the stocks from the information technology, banking, steel and cement sectors.

Select blue chips notched up significant gains. HDFC surged 3.14% at Rs1,596, ONGC soared 2.49% at Rs916, L&T climbed 2.12% at Rs1,586, ITC rose 1.57% at Rs172, HLL scaled up 1.43% at Rs224, Satyam added 1.27% at Rs515, Reliance Industries jumped 1.27% at Rs1,367, BHEL advanced 1.23% at Rs2,300, Maruti Udyog gained 1.16% at Rs918 and Wipro was up 1.48% at Rs167. Among the laggards HLL tumbled by 4.13% at Rs232 and Grasim dropped 1.10% at Rs641. Tata Steel, ICICI Bank, Reliance Communication, Reliance Energy and Tata Motors ended with marginal losses.

Value-wise Reliance Industries registered a turnover of Rs115 crore on the BSE followed by Ranbaxy (Rs71 crore), Siemens (Rs63 crore), Reliance Communication (Rs62 crore) and ONGC (Rs51 crore).

Sensex at life high; RIL astounds

The market ended firm in volatile trading and may extend gains on Friday, as Reliance Industries (RIL) stunned the market with a much higher-than-expected growth in the December quarter after trading hours. Ahead of the results, RIL hit a record high.

The 30-share BSE Sensex gained 86.41 points (0.6%), to settle at 14,217.75, a record closing. The S&P CNX Nifty advanced 32.60 points (0.8%), at 4,109.05, a lifetime closing high.

A bout of profit-taking gripped the market soon after the BSE benchmark struck an all-time high of 14,325.92 at 13:55 IST. From there, the Sensex fell to 14,140.35 at 14:49 IST, a gain of just 9.01 points for the day. It went on to recover from this lower level later. At the day’s high of 14,325.92, it had spurted 194.58 points for the day.

Late profit-taking was seen in ICICI Bank, Tata Steel, Reliance Communications, and Grasim. Ranbaxy also slipped after a post results' surge.

Although the market-breadth ended positive, it was weak in the latter part of trading. For 1,386 shares rising on BSE, 1293 declined and 57 remained unchanged. Gainers outpaced losers by a ratio of 1.07:1.

The BSE clocked Rs 5053 crore in turnover, higher than Wednesday’s Rs 4746 crore.

Firm Asian markets, overnight gains of Indian ADRs and data showing resumption of FII-buying boosted the market.

Among sectoral indices, BSE Oil &Gas index and BSE FMCG index ended with strong gains, whereas BSE’s banking sector index, the Bankex and BSE Metal index drifted lower. The BSE Oil &Gas index advanced 106.49 points (1.6%), to 6,664.13. The BSE FMCG index advanced 21.70 points (1.1%), to 1,934.65. The BSE IT index gained 32.71 points (0.6%), to 5,408.47. The BSE Metal index lost 65.47 points (0.7%), at 9,069.53 and the Bankex shed 34.88 points (0.47%) at 7,464.89.

Reliance Industries was up 1.5% to Rs 1370. The stock had struck an all-time high of Rs 1383.50 at 13:56 IST. After trading hours today, RIL reported 57.6% surge in net profit in December 2006 quarter to Rs 2799 crore from Rs 1776 crore, much ahead of market expectations. Net sales rose 45.7% to Rs 26472 crore from Rs 18168 crore.

ONGC rose 2.2% to Rs 915, down from the session’s high of Rs 936. ONGC’s natural gas find off India's eastern coast is commercially viable, and further details will be announced at a suitable time, chief R S Sharma said on Thursday. Sharma also said ONGC had offered stakes in its deepwater fields in the eastern Krishna-Godavari basin to Brazil's Petrobras, Italy's ENI, Norway's Norsk Hydro and Malaysia's Petronas.

Ranbaxy Labs dropped 0.2% to Rs 430.50. The stock firmed up to a high of Rs 445 at 13:38 IST, after announcing a surge in net profit in December 2006 quarter during the afternoon. The company reported a surge in consolidated net profit in December 2006 quarter to Rs 186 crore (Rs 68.60 crore). Ranbaxy expects global revenue to rise 15% for the year ended December 2007. The company expects to maintain its operating margins at 16%.

ICICI Bank shed 1.3% to Rs 972, and Tata Steel lost 1.6% to Rs 476. Housing finance major HDFC surged 3.3% to Rs 1599.70.

Satyam Computer Services gained 1.8% to Rs 518, on the eve of Q3 results. Five brokerages expect between 4.5 - 10.8% sequential growth in Satyam Computer’s consolidated net profit, between Rs 334.20 crore and Rs 354.30 crore, in December 2006 quarter compared to a net profit of Rs 319.81 crore in September 2006 quarter. All five brokerages expect between 4.9 - 6.7% sequential growth in Satyam’s December 2006 quarter consolidated revenue, between Rs 1680 crore and Rs 1708.90 crore, compared to sales of Rs 1601.88 crore in September 2006 quarter.

Bharti Airtel rose 0.7% to Rs 672, off an all-time high of Rs 685 struck at 13:32 IST.

NIIT Tech jumped 20% to Rs 409.50, extending Wednesday’s post-results' surge. NIIT Technologies’ consolidated net profit rose 92% in December 2006 quarter to Rs 34.60 crore (Rs 18 crore). Topline growth led bottomline growth. Consolidated revenue rose 46% to Rs 231.50 crore from Rs 157.40 crore. NIIT Tech said it had a record fresh order intake of $56 million in December 2006 quarter.

Biocon rose 11% to Rs 413.85, after its December 2006 quarter net profit rose 45% from a year ago to Rs 47.51 crore.

Shree Cement lost 0.3% to Rs 1518. The company today reported a surge in net profit in December 2006 quarter to Rs 104.12 crore (Rs 27.96 crore). Net sales rose 152.6% to Rs 364.54 crore (Rs 144.29 crore).

Siemens lost 1.3% to Rs 1206 in volatile trade. The stock recovered from the lower level after having plunged as much as 4.9%, to a low of Rs 1162 at 14:24 IST, just before the results were out. The company reported 100.1% growth in net profit in Q1 December 2006 to Rs 98.07 crore (Rs 49.01 crore). Net sales rose 91% to Rs 1626.90 crore from Rs 851.12 crore.

Nicholas Piramal India jumped 5% to Rs 275, on 82.3% growth in net profit in December 2006 quarter to Rs 43.30 crore (Rs 23.74 crore). Total income rose 14.2% to Rs 408.04 crore (Rs 357.30 crore).

UltraTech Cement dropped 1% to Rs 1152.10. The company reported a net profit of Rs 212 crore, compared to a net profit of Rs 24 crore in Q3 December 2005.

Tyre shares rose on renewed buying. CEAT gained 4.6% to Rs 143, Goodyear India gained 5% to Rs 178.95, Apollo Tyres gained 3.7% to Rs 352.50, and JK Industries advanced 2.5% to Rs 152.70.

Tata Metaliks plunged 8% to Rs 116. It reported a net loss of Rs 1.12 crore in Q3 December 2006, compared to a net profit of Rs 7.24 crore in Q3 December 2005. Net sales surged to Rs 147.99 crore (Rs 92.64 crore).

Nissan Copper plunged 5% to Rs 76.25. The market regulator Securities & Exchange Board of India (Sebi) asked stock exchanges (SEs) to release the funds and securities pay-out in the matter of Nissan Copper (NCL). Sebi had asked exchanges to freeze the payout of shares and funds for all transactions in the stock on 29 December and 2 January, except the trades done by retail investors who had subscribed to the issue. However, the market watchdog asked exchanges to withhold profits of about 40 entities identified by Sebi in the NCL matter pending investigations into the abnormal rise in price, volume and net deliverable quantity in the Nissan Copper stock on the day of its listing on 29 December 2006.

Subex Azure gained nearly 3% to Rs 754, after it said on Thursday it had entered into a conditional contract to acquire Canada-based Syndesis in an all-cash deal for $164.5 million. "If completed, this acquisition will be a significant milestone in Subex Azure's drive to become the leading global vendor of telecom operations support software services," it said in a statement. The Canadian firm is also a telecom support software services provider.

Exide Industries rose 2.5% to Rs 44, on reporting 62% surge in net profit in December 2006 quarter to Rs 34.85 crore (Rs 21.54 crore). Net sales rose 35.3% to Rs 457.70 crore (Rs 338.14 crore).

Godavari Fertilisers and Chemicals jumped 4% to Rs 115.70, after it reported a surge in net profit in December 2006 quarter to Rs 13.89 crore (Rs 2.68 crore). Net sales rose nearly 10% to Rs 423.54 crore (Rs 385.72 crore).

Plethico Pharma lost 7% to Rs 357. The company reported 6.4% growth in December 2006 quarter net profit, to Rs 19.73 crore (Rs 18.54 crore).

Essar Oil gained slightly by 0.3% to Rs 57.65. The company plans to raise total refining capacity to 32 million tonnes per year by 2011, when its new 16 million tonne refinery in Gujarat shall start operations, Managing Director A N Sinha informed.

Sona Koyo Steering Systems lost 2.8% to Rs 63.95. The company reported an 88% surge in net profit in December 2006 quarter to Rs 6.63 crore (Rs 3.53 crore). Net sales rose 84.4% to Rs 181.12 crore (Rs 98.18 crore).

Panacea Biotec jumped rose 3.4% to Rs 391, after it reported a surge in net profit in December 2006 quarter to Rs 27.10 crore (Rs 5.19 crore). Net sales surged 79% to Rs 197.12 crore from Rs 110.03 crore.

Zuari Industries was flat at Rs 225.50. The company reported 12.5% growth in net profit in December 2006 quarter to Rs 12.25 crore (Rs 10.89 crore). Net sales went up to Rs 640.91 crore (Rs 624.49 crore).

Genus Overseas Electronics rose 3% to Rs 260. The company reported a surge in net profit in December 2006 quarter to Rs 6.26 crore (Rs 1.66 crore). Net sales rose to Rs 89.52 crore (Rs 26.29 crore).

Unichem Laboratories dropped nearly 1% to Rs 270. The company reported a marginal 3.2% growth in net profit in December 2006 quarter to Rs 19.18 crore (Rs 18.58 crore). Net sales rose to Rs 131.32 crore (Rs 111.86 crore).

Premier jumped nearly 10% to Rs 45.75. Premier said a meeting of the board of directors of the company will be held on 23 January 2006 to consider a proposal to issue convertible warrants or other securities to the promoter group on a preferential basis.

Goldiam International jumped 5% to Rs 128.70. The company today said it had signed a memorandum of understanding (MoU) with Lifestyle International for retailing silver jewellery under the brand name "OLA" through its retail stores.

PSL lost 0.3% to Rs 226.10, after reporting 53.5% growth in net profit in December 2006 quarter to Rs 20.80 crore (Rs 13.46 crore). Net sales have gone up 22.2% to Rs 498.84 crore (Rs 408.11 crore).

European markets opened positive. Key benchmark indices in London, Germany and France were up between 0.3 - 0.5%. Asian markets were in the green. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up between 0.2 - 1%. As expected, Bank of Japan kept interest rates unchanged at 0.25%.

Nymex crude was hovering higher at about $52.50 a barrel on Thursday. It had rebounded on Wednesday from a 20-month low.

FII inflow was Rs 101.30 crore on Tuesday (16 January), the day when the Sensex shed 15 points. FIIs were net buyers in three out of four trading sessions, from 11 January 2007 to 16 January 2007.

The Q3 results announced thus far have been strong. Results from IT and cement sector have been robust. A number of firms are yet to unveil their results, which will dictate the near-term trend on the bourses. After results, the focus is likely to shift to the Union Budget 2007-08. Market players are likely to start building up fresh positions expecting a favourable policy for businesses in the budget.

Emkay - Ansal Housing Investsmart - South Indian Bank

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Sharekhan Highnoon dated January 18, 2007

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Sharekhan Commodities Buzz dated January 18, 2007

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PowerYourTrade Trading Calls

Ashwani Gujral

Buy Zensar Technologies with stop loss of Rs 225 for target of Rs 300
Buy Vakrangee Software with stop loss of Rs 230 for target of Rs 325

Deepak Mohoni

Buy Tech Mahindra below Rs 1975 with stop loss of Rs 1945; Its an intra-day recommendation.
Short sell Maruti above Rs 906 with stop loss of Rs 914; Its an intra-day recommendation

Rajat K Bose

Buy MRPL around the last close with a stop below 45, target 53.50

Buy Midday Multimedia around last close with a stop loss below Rs 53.90 for target of Rs 62.

Daily Reports - Anand Rathi and more!

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Motilal Oswal - Madhucon Projects

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Emkay Morning Notes + Other Reports

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ICICl - Reliance Capital

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RIL, Ranbaxy results to set the tone

Major December quarter results scheduled today are Reliance Industries (RIL) and Ranbaxy Laboratories. Due to RIL’s substantial weightage in key indices, the Sensex and Nifty, RIL results will impact the market trend today. The other big results for the day are Reliance Energy, UltraTech Cement and Siemens.

Three brokerages expect between 7.2 - 27% growth in RIL’s Q3 net profit, between Rs 1904.20 crore and Rs 2255.80 crore, compared to a net profit of Rs 1776 crore in Q3 December 2005. The three brokerages expect between 21.1 - 46.1% growth in RIL’s Q3 sales, between Rs 22000 crore and Rs 26542 crore, compared to sales of Rs 18168 crore in Q3 December 2005.

According to analysts, though RIL’s refining margins will be lower in the December 2006 quarter, the shut down of the refinery in Q3 December 2005 offset a fall in refining margins of the company. RIL had a 40-day refinery shutdown in Q3 December 2005. They also reckon that performance of RIL’s petrochemicals division will be strong due to higher margins and strong volume growth aided by capacity expansion at this division.

Ranbaxy is expected to report a surge in net profit in December 2006 quarter. Ranbaxy's performance will be boosted in the December 2006 quarter mainly by a 180-day exclusivity of generic Zocor 80mg and the acquisition of Terapia. In March 2006, Ranbaxy acquired Romanian company Terapia. Foreign brokerage CLSA Securities expects a strong 161.7% growth in Ranbaxy’s consolidated net profit, to Rs 179.50 crore in December 2006 quarter from Rs 68.60 crore in December 2005 quarter.

FII inflow was Rs 101.30 crore on Tuesday (16 January), the day when the Sensex shed 15 points. FIIs were net buyers in three out of four trading sessions, from 11 January 2007 to 16 January 2007.

As per provisional data, FIIs were net buyers to the tune of Rs 11.87 crore on Wednesday (17 January), the day when the Sensex rose 17 points. They were net sellers to the tune of Rs 50 crore in index-based futures that day and net sellers to the tune of Rs 127 crore in individual stock futures.

Mutual funds are in buying mode. They were net buyers to the tune of Rs 72 crore on 16 January. Their net inflow was a substantial Rs 637 crore on 12 January and Rs 103.51 crore on 15 January.

Asian shares were in the green on Thursday. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up between 0.04 - 0.4%.

Tech shares led US stocks lower on Wednesday, after Intel, the world's largest microchip maker, said late on Tuesday that quarterly profit fell 40% and gross margins will not improve. The Dow Jones industrial average slipped 5.44 points, or 0.04%, to end at 12,577.15. The Standard & Poor's 500 Index dipped 1.28 points, or 0.09%, to close at 1,430.62. The Nasdaq Composite Index fell 18.36 points, or 0.74%, to finish at 2,479.42.

Oil futures rebounded late in New York on Wednesday to end more than a dollar higher, off a 20-month low, as colder weather arriving in the Northeast helped lend support ahead of inventory data due out Thursday. US crude futures settled $1.03 higher at $52.24 a barrel, after slipping as low as $50.28, the lowest level since 25 May 2005.

Market may move sideways

However, the bias remains positive as the FII and MFs continue to remain net buyers in the last couple of days. On the downside, the Nifty has likely supports at 4045 while the Sensex could witness support at 14040 and resistance at 14200.

US indices finished in the red on Wednesday, with the Dow Jones losing five points to close at 12577 while the Nasdaq slipping by 18 points at 2479 respectively.

Indian floats fared better on the US bourses. MTNL moved up 3.27%, Wipro advanced 3.86% and Satyam gained 2.91% while Dr Reddy's Lab, ICICI Bank and Rediff gained over 1% each. Among the losers HDFC Bank and VSNL were down over 1% each.

5 Intra-day Stock Ideas

NIFTY (4076) SUP 4063 RES 4089

SL 156 T 170, 172

SL 215 T 229, 232

SL 372 T 388, 389

@ 214 SL 218 T 204, 202

@367 SL 370 T 357, 355


Bulls’ reliance on Movers & Shakers!

Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information- Peter Drucker.

Numbers don’t lie they say and the market movers and shakers will today reveal what the numbers really are. It’s the turn of some old economy heavyweights. Reliance Industries is most definitely the stock to keep an eye on as it declares its earnings for the Oct-Dec quarter. As it is the index bellwether, any movement in it is likely to have a bearing on the key indices today. Other index majors such as Reliance Energy and Ranbaxy are also reporting their results today. In short, results are likely to drive the market today. Siemens and Tech Mahindra will witness renewed action on account of quarterly numbers.

Bank of Japan is to announce its decision on interest rates today. The Japanese central bank is likely to keep rates on hold, which is a good sign for global liquidity. We expect a cautious to slightly higher opening and another a volatile day.

The bulls may be tiring a bit. Another factor that could be preventing them from getting more aggressive at this juncture is the high valuations, especially in the large cap stocks. Meanwhile, the small- and mid-cap shares have been witnessing much improved action off late. But, as usual we would like to advocate caution as these scrips tend to be much more volatile than their frontline peers. The action is turning more stock specific and in some cases sector centric with the results season now well underway.

Except Satyam, most major IT companies have announced their results. Barring Infosys, which delivered more subdued sort of results, others like TCS, HCL Tech and Wipro have exceeded most expectations. Some mid-cap IT companies like Polaris and 3i Infotech have been in the news recently amid market grapevine of stake sale.

Other Prominent Results: Siemens, Tech Mahindra, Ultratech Cement, Biocon, Canara Bank, Exide, Nicholas Piramal, Bharat Bijli, BOC India, EMCO, Gujarat State Petronet, Indorama Textiles, IOC Exchange, Liberty Shoes, Panacea Biotec, Plethico Pharma, Shree Cement, Sona Koyo, Genus Overseas, JK Lakshmi Cement, Kirloskar Brothers, KPIT Cummins, PSL, Shasun Chemicals and Unichem Labs.

FIIs were net buyers to the tune of Rs118.7mn (provisional) in the cash segment yesterday. In the F&O segment, they were net sellers of Rs168.8mn. Mutual Funds pumped in Rs718.4mn in the cash segment on Tuesday.

The IPO of Cinemax India Ltd. opens today. Among the current ones, Akruti Nirman has been subscribed 3.18 times; Global Broadcast 1.33 times; House of Pearl Fashion 0.25 times and Pochiraju Industries 0.5 times.

Champagne Indage could gain as it has acquired 650,000 shares or 52.6% stake Seabuckthorn Indage Ltd. (SIL), thus making the latter its subsidiary company w.e.f January 17.

Nissan Copper will come under pressure after SEBI asked the exchanges to withhold the profits of about 40 entities, while it probes the abnormal rise in price, volume and net deliverable quantity in the stock on December 29, the day it made its debut. The regulator has also barred brokers Matrix Equitrade, RSS Investments, Park Light Securities, Dimensional Securities, Religare Securities and H Nyalchand Financial Services from trading in the shares of the company.

Selling in technology shares dragged the Nasdaq lower on Wednesday and the Dow Jones Industrial Average gave up early gains. The Nasdaq was down 18.36 to 2,479.42. Intel put pressure on tech stocks after it reported quarterly earnings that fell from a year ago.

The Dow Jones dropped 5.44 to 12,577.15 after touching a record trading high earlier in the session. The blue-chip barometer had closed at record highs for the previous three sessions. The S&P 500 finished flat at 1,430.62 after ending at a more than six year high on Tuesday.

Among the Indian ADRs, Wipro, Satyam, Dr. Reddy's, ICICI Bank and MTNL were up sharply while VSNL and HDFC Bank slumped.

European shares ended lower. The pan-European Dow Jones Stoxx 600 index slipped 0.1% to 371.73. The German DAX Xetra 30 fell 0.2% to 6,701.70, the French CAC-40 declined 0.5% to 5,561.78, and the UK's FTSE 100 fell 0.2% to 6,204.50.

Asian stocks rose this morning on speculation that the Bank of Japan will wait until February to raise borrowing costs.

Woodside Petroleum, Australia's No.2 oil producer, and Inpex Holdings, Japan's No.1, rose after crude oil prices rebounded from the lowest in 19 months. Samsung fell after Apple's profit forecast trailed expectations.

The Morgan Stanley Capital International Asia-Pacific Index gained 0.3% to 140.75 as of 12:15 p.m. in Tokyo, set for its highest since Jan. 4. Nine of the measure's 10 industry groups advanced. Markets rose around the region, except in China, Hong Kong and Thailand.

Japan's Nikkei 225 Stock Average climbed 57 points to 17,318 while the Hang Seng in Hong Kong lost 19 points at 20,044. The Kospi in Seoul added 2 points to 1382 and the Straits Times in Singapore advanced 11 points to 3049.

Insider Trades:
IFCI Limited: Morgan Stanley & Co. International Limited a/c Morgan Stanley Dean Witter Mauritius Co. Ltd has purchased from open market 2,000,000 equity shares of IFCI Limited on 15th January, 2007.

Micro Technologies (India) Limited: Dr. P. Sekhar, Chairman & Managing Director has sold in open market 100000 equity shares of Micro Technologies (India) Limited on 15thn January, 2007.

Market Volumes:
The turnover on NSE was up by 5% to Rs87.66bn. BSE FMCG index was the major loser and lost 0.74%. BSE Metal index (down 0.30%) and BSE Auto index (down 0.26%) were among the other major losers. However, BSE Bank index gained 1.09%.

Volume Toppers:
IFCI, RNRL, SAIL, IDBI, Prism Cement, 3i Infotech, Nagarjuna Fertilizers, IDFC, Cairn India, Balrampur Chini, DCB, R Com, Tech Mahindra, Hindustan Motors, Aftek Ltd, Ispat Industries, Zee News, Unitech, Ashok Leyland and Rolta.

Upper Circuit Filters:
Texmaco, Heritage Food, Goldiam International, ABG Shipyard, Radha Madhav, Tanla, Crest Animation, Ganesh Housing, IOL Broadband, Nirlon and VIP Industries.

Delivery Delight:
3i Infotech, ABG Shipyard, Aurobindo Pharma, Bajaj Hindustan, Balrampur Chini, Bata India, BPCL, Bharati Shipyard, Dr Reddys Laboratories, HPCL, i-Flex Solutions, Indian Overseas Bank, IndusInd Bank, IDFC, ING Vysya Bank, Jet Airways, Larsen & Toubro, Mahindra Gesco, NIIT Technologies, Prithvi, Reliance Communications, Reliance Industries, RPL, Tata Motors, TV Today and Zee Telefilms.

Brokers Recommendations:
HCL Tech - Buy from Emkay with target of Rs810

Bajaj Auto - Outperform from CLSA with target of Rs2827

Long Term Investment:

Major News Headlines:
Krebs Bio to sell 14.9% stake to Ranbaxy at Rs85 per share
ONGC may invest in a US $1bn refinery in Yemen
ABG Shipyard gets major order from Pacific First Shipping
ABG Shipyard plans to raise US $125bn
IFCI to sell 21% stake in ICRA in IPO
L&T in venture with Turki of Saudi Arabia
BHEL to meet on Jan 25 to consider interim dividend
CMC says Board hasn't discussed merger with TCS
BRFL hikes FII investment limit to 40%, raises Rs2.94bn from QIP
LT Overseas signs MoU with MPSIDC
Kale Consultant wins order from Direct Logistics
Citigroup, Goldman Sachs to buy stake in ICSA India
Lupin Q3 profit at Rs560.3mn (26.7%), sales at Rs4.93bn (up 15%)
Lupin to set up 100% subsidiary in Netherlands
Indiabulls promoter Sameer Gehlaut picks up stake in BAG Films

How Market Fared

Results hold the key

The markets witnessed second consecutive flat close as the key indices ended almost right from where they started. The markets were volatile and choppy as selling pressure was witnessed in heavy weights like ONGC, ITC, Infosys, ACC and Bharti Airtel. However, Banking, Capital Good and Technology stocks held the key indices from a huge fall aiding the key indices to close on a flat note. Finally, the BSE benchmark Sensex was marginally up 16 points to close at 14131. NSE Nifty was flat at 4076 hitting an intra-day high of 4196.75 and low of 4071.55. However, some stocks like L&T, Siemens, ABB, ICICI Bank, R Com, SBI and Oil refinery stocks shined in a volatile market.

ICSA India slipped 1.2% to Rs1099. The Board of Directors of the company approved increase of equity holdings of FIIs / FCCBs / FDIs from existing 49% to 74%. The scrip touched an intra-day high of Rs1174 and a low of Rs1071 and recorded volumes of over 80,000 shares on NSE.

Lupin gained 0.2% to Rs579 after the company declared its Q3 result with net profit at Rs560.3mn (26.7%) and net sales at Rs4.93bn (up 15%). The scrip touched an intra-day high of Rs595 and a low of Rs571 and recorded volumes of over 2,00,000 shares on NSE.

ABG Shipyard was locked at its highest permissible limit of 20% to Rs376.70 after the company announced plans to raise $125bn. The scrip touched an intra-day high of Rs376.70 and a low of Rs317.80 and recorded volumes of over 8,00,000 shares on NSE.

HCL Tech gained 1% to Rs646 after the company entered in to a strategic Alliance with Hewlett-Packard. The scrip touched an intra-day high of Rs650 and a low of Rs642 and recorded volumes of over 3,00,000 shares on NSE.

Banking stocks were in the limelight after Government announced that it would issue a presidential decree giving freedom to the central bank to adjust the limit on government securities that banks need to hold by the end of January. The Mid-Cap Bank led from front OBC, PNB and Canara Bank were among the major gainers. Among the heavy weights SBI was up 1% to Rs1222 and ICICI Bank gained 2.8% to Rs986 however, HDFC Bank lost 3.2% to Rs1061.

Capital Good stocks were among the major gainers. Siemens spurred by 2.3% to Rs1223, L&T surged 2.2% to Rs1555, ABB was up by 1.3% to Rs3634 and BHEL added 0.5% to Rs2270.

Metal stocks pared their intra-day gains as selling pressure dragged them down. Hindalco fell 1% to Rs168, SAIL was down 0.2% to Rs96, Sterlite Industries dropped 1.1% to Rs523 and Hindustan Zinc lost 1.7% to Rs800.

FMCG stocks witness profit booking. Heavy weight ITC slipped 1.3% to Rs169, Marico was down by 0.6% to Rs572, McDowell edged lower 0.5% to Rs815 and Tata Tea lost 0.2% to Rs727.

Way2Wealth - GBN

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Sharekhan Eagle Eye (equities) & Derivatives Info Kit for January 18, 2007

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Sharekhan Investor's Eye dated January 17, 2007

Cluster: Apple Green
Recommendation: Buy
Price target: Rs700
Current market price: Rs636

Price target revised to Rs700

Result highlights

  • Wipro's global information technology (IT) service business reported a growth of 6.2% quarter on quarter (qoq) and of 34.1% year on year (yoy) to Rs2,887 crore. The growth is largely in line with our expectations. In dollar terms, the revenues grew at a reasonably healthy rate of 8.8% sequentially to $640.5 million; the growth was contributed by an 8.9% growth in the IT service business and a 7.1% growth in the business process outsourcing (BPO) business. The sequential growth in the IT service business was driven by a 9.3% volume growth but the average realisation declined by 0.4%, resulting in a net growth of 8.9% sequentially. On the other hand, the sequential growth in the BPO business was purely driven by a 7% improvement in the average realisation with a flat growth in the volume.
  • In terms of the operating profit margin (OPM), the adverse impact of the wage hikes (to part of the offshore work force in September 2006 and to the remaining in November 2006; a net impact of 180 basis points) and the rupee appreciation (a negative impact of 80 basis points) was partially mitigated by the higher employee utilisation, lower losses in the acquired entities and other cost efficiencies. This resulted in a net decline of 80 basis points in the OPM of the global IT service business.
  • The revenue growth guidance of $685 million for Q4FY2007 implies a healthy sequential growth of close to 7% in the revenues of the global IT service business. The guidance does not include any contribution from the possible inorganic initiatives during the quarter. The management indicated that the overall outlook for the coming fiscal is also encouraging.
  • On a consolidated basis, the revenues have grown by 12.8% qoq and 42.9% yoy to Rs3,964 crore under the US GAAP. The OPM has declined by 180 basis points to 19.4% on the back of a sequential decline of 80 basis points in the profitability of the global IT service business and a dip of 40 basis point in the OPM of the Indian IT service business. However, the sequential jump of 49.6% in the other income component (boosted partly by the sale of investments) and a lower tax rate (12.7% as compared with 13.3% in Q2) enabled the company to report a growth of 7% qoq and of 39.9% yoy in its earnings to Rs745 crore under the US GAAP.
  • We have revised upwards Wipro's earnings estimates by 5.1% and 4.3% for FY2007 and FY2008 respectively. At the current market price the scrip trades at 31.7x FY2007 and 25.4x FY2008 estimated earnings. We maintain our Buy call on the stock with a revised price target of Rs700.

NIIT Technologies
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs474
Current market price: Rs341

Price target revised to Rs474

Result highlights

  • NIIT Technologies Ltd (NTL) reported a growth of 5.3% quarter on quarter (qoq) and 47.1% year on year (yoy) in its consolidated revenues to Rs231.5 crore during the third quarter. The organic revenues grew at a rate of 5% sequentially whereas the revenues of Room Solutions (acquired in May 2006) grew at a relatively highe rate of 7% qoq to Rs29.7 crore.
  • The highlight of the performance was the steep improvement of 230 basis points in its operating profit margin (OPM) to 21.2% on a sequential basis. The margin improved in spite of the adverse impact of the appreciation of the rupee against the other major global currencies. The improvement was driven by multiple factors like the absence of the cost related to the integration and transition of Room Solutions (the same was around Rs1 crore in Q2), savings in the overhead cost, higher margins in the business process outsourcing (BPO) business and better profitability of Room Solutions.
  • The increase in the other income (Rs3.3 crore as compared with Rs2.4 crore in Q2) and lower depreciation charges also aided the earnings growth during the quarter. Consequently, the consolidated earnings grew at an explosive rate of 28.6% qoq and 91.9% yoy to Rs34.6 crore. This is the second consecutive quarter of over 20% growth in earnings, which is a commendable performance in a tough quarter by a mid-sized information technology (IT) service company.
  • In terms of the outlook, the company is expected to maintain the growth momentum on the back of the record order intake of $56 million during the quarter. The pending order backlog of $95 million (executable over the next one year) is one of the highest ever reported by the company. The management expects the margin to also improve with the improving profitability of the BPO business, the efforts taken to increase the proportion of the high-margin offshore revenues and other cost levers like a lower overhead cost. There is enough scope for further improvement with the overhead cost currently at 20% of its sales. Consequently, the earnings estimates have been revised upwards by 20.7% and 18.4% for FY2007 and FY2008 respectively.
  • At the current market price the stock trades at 11x FY2007 and 9.4x FY2008 estimated earnings. We re-iterate our Buy call on the stock with an upgraded price target of Rs474 (13x FY2008 earnings).


Sharekhan's top equity fund picks

We have identified the best equity-oriented schemes available in the market today based on the following 3 parameters: the past performance as indicated by the returns, the Sharpe ratio and Fama (net selectivity).

The past performance is measured by the returns generated by the scheme. Sharpe indicates risk-adjusted returns, giving the returns earned in excess of the risk-free rate for each unit of the risk taken. The Sharpe ratio is also indicative of the consistency of the returns as it takes into account the volatility in the returns as measured by the standard deviation.

FAMA measures the returns generated through selectivity, ie the returns generated because of the fund manager's ability to pick the right stocks. A higher value of net selectivity is always preferred as itreflects the stock picking ability of the fund manager.

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Sharekhan's top equity fund picks: Sharekhan Mutual Funds Report dated January 17, 2007

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