India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Friday, November 23, 2007
Weekly Close:: FIIs take a break !
Some sign's of correction were yet again seen this week and this time the correction was largely driven by global issues. US economy continues to shed tears on worsening housing market. No one is clear about how much more the housing market has to worsen before it gets better. FIIs have been sellers in a big way and hence caution prevailed across the board. There were talks that SEBI rejected a few applications and that led to disapppointment. We doubt such a case. The rejetions probably meant more information requirement by SEBI. They would eventually they would come back with that. For now the objective for the RBI is to slow down the inflows a bit and they have the leverage to do that. Indian markets pared off gains but as expected it continued to be buoyant and recovered in late trading sessions on each trading day on value buying. There was some hope of the Nuke deal getting finalised as the Left softened their stand on talks with IAEA. But it is really difficult to comment whether the deal will go through or not as politics is remains as unpredictable as ever.
Most large cap counters were down but Banking was the strong one. This is the one counter where is very first to benefit from a rate cut and thats being expected. SBIs was hot on the rights issue. There is also the market hope of acquisition in mid cap banks. All said and done "one thing we believe is that Indian interest rates are unlikely to rise. A cut in CRR / bank rates is what the RBI could be thinking off. The big question is when. We don't see signs for that yet but we expect one certainly before the end of this fiscal. And when you have interest rates headed down.. you wont see a bear market." This is why we hold the opinion that markets will be ranged struggling between valuations in some and flows on the other.
IT continued to be underowned and we don't see any drastic change happening here in short run. ICICI CEO K V Kamath warned that the Rupee would strengthen by 1 or 2 against the dollar each year, irrespective of whatever was done to check the rising Indian currency. We do not disagree with that. However, factors against a strong rupee could be high crude oil prices which will put pressure, lower growth itself for the IT sector where business conditions may not remain as sanguine. Slower growth itself for the economy and to add to that would be coming elections when the Government tends to lose its purse strings and ignores deficits. Do read economy taking stock !
Markets this week: Sensex ended down by 4%; Nifty slipped 5%; Reality cap goods and FMCG ended down by 6%; Oil and gas index ended down 4%; IT index down 3%; Mid cap index down 4%; Banking and Metal index down 4%; Smal Cap index down 2%; Maruti, Suzlon and MTNL down 10%; Bajaj 9% up; IOC 20% down; Nalco down 18%; VSNL and BHEL down 9%; TATA motors up 3%; KEC infra down 22%; UCO up 12%; REL down 5%.
TC was in news. The stock rallied sharply in the last few days followed by some profit taking as well. It was in the news for eyeing Parle's Candy business and earlier Parrys confectionary as well. It is pursuing growth opportunities through acquisitions across categories. Parle Products confectionery basket includes strong heritage brands such as Poppins, Kismi, Melody, Mango Bite, Rol-a-Cola, Mints and Orange Candy, among others. ITC has two confectionery brands, Candyman and Mint-O Fresh in its portfolio. ITC has been extremely aggressive. We have been cautious on ITC largely on the back of its Management which has been at loggerheads with BAT (34% stake in ITC). ITC has been managed as a personal fiefdom with expansions across categories including, FMCG products including agarbattis, Matchboxes, garments and now shampoos, Confectionary apart from its mainstay of cigarettes, Hotels and Paper. The idea is to use the cash thrown up by the strong cashflow business of Cigarettes. The bet is that BAT will come in eventually. However we dont think there is much value even then.
Everest Kanto: CLSA mid cap conference brought in some interest here. Everest Kanto is one of the leading high pressure steel cylinder manufacturers in the world for two main applications - industrial and CNG (compressed natural gas). CNG is expected to be the key growth driver going forward. EKC is uniquely positioned to do so because of its long term raw material sourcing relationship with Tenaris. We agree that EKC has certainly done well. The company has enjoyed first mover advantage and that can be seen from the revenue growth and exponentially high margins. The margins we believe are unsustainable over the longer term. We see no sustainable competitive advantage in this business. Clearly a case of optimistic exuberance.
Bata: Business is doing well here.. and that may deliver. The recent run up we believe has more than priced it in. However, its surprising to note that the company spends less than 1% on brand building. Of course the big upside in this is the realisation from of the property in Calcutta. It?s the quantum and the time frame for receiving that.
Solar Explosives: This company recently acquired a 74% stake in company which is looking to acquire a coal mine and not an explosives company as we had anticipated. Some reason to cheer here.. though valuations we believe are pricing in quite a bit of optimism. The mystery element is the mine it will get. Apparenlty the mine size could be around 30 - 40 mn tonnes. Solar would thus benefit from largesse received from the Government as a coal mine but its core competency is the explosives business and thats where it will do well. We are convinced on that.
We believe that its unwise to pick tops and bottoms and lets just have a strategy in the current environment. We believe that the "Callous" comfort of market direction has the possibility to hit markets badly. Valuations have been stretched in the large cap companies and these excess could cool off. The Companies such as Reliance Energy, Reliance Petroleum, RNRL, Essar Oil where the run ups have been on the back of skewed logic. Of course valuations of Reliance Larsen, BHEL, ABB are others which could be made to eat humble pie.
In such a scenario it will be tough for Mid caps to hold out. There has been a strong run up in the mid caps. Quite a bit of that has already come off on profit taking. We believe Markets could head to the lower level of the range. One crucial support which may sound extremely bearish now is around 15100 levels for the Sensex. But that would be an extreme case of negativism. Its unlikely to be a sharp fall as the underlying Momentum, the cash on the sidelines, the "Left Out" feeling will have supports coming in at each lower level of support which would result in bounce at every fall. But, we would recommend to get into some value stocks with sound fundamentals rather than getting carried away with the rally.
Technically Speaking: As we mentioned of 18900 levels, Sensex failed to cross this levels for the second day. On Monday if it crosses this 18900 levels could take us to 19100+ levels. But If failed we could see 17200 levels.
Market loses ground on FII sales
The market lost ground as foreign investors continued to withdraw funds from Indian markets amidst growing unease over US economic outlook and weakening credit markets in the US. Housing sector slump in United States coupled with weak dollar and surging oil prices weighed on global markets.
The Japanese yen strengthened to a two-year high against the dollar and also gained against the euro as investors reversed carry trades, where they borrow yen to buy high-yielding but risky assets.
Crude oil prices climbed back above $97 a barrel in thin trade on Friday, 23 November 2007 buoyed by the unrelenting decline in the US dollar. London Brent crude rose 35 cents to $94.85 a barrel, while US light crude for January delivery stood at $97.35 a barrel.
The 30-share BSE Sensex fell 845.49 points or 4.29% to 18,852.87 in the week ended Friday, 23 November 2007. The broader S&P CNX Nifty fell 298.25 points or 5.04% to 5608.60.
The BSE Mid-Cap index fell 3.33% to 8,228.50, while the BSE Small-Cap fell 2.02% to 10,171.43.
On Monday, 19 November 2007, the 30-share BSE Sensex lost 64.53 points or 0.33% at 19,633.36. The broader CNX S&P Nifty was up 0.8 points or 0.01% at 5,907.65. The market lost ground in late trade as index heavyweight Reliance Industries dropped and ITC slipped.
On Tuesday, 20 November 2007, the market slipped deep into the red in late trade as IT and metal stocks tumbled. The 30-share BSE Sensex lost 352.56 points or 1.8% at 19,280.80. The S&P CNX Nifty ended down 126.75 points or 2.15% to 5,780.90.
On Wednesday, 21 November 2007, the 30-share BSE Sensex lost 678.18 points or 3.52% at 18,602.62. At day’s low of 18,515.30 Sensex had lost 765.50 points. The broader CNX S&P Nifty was down 219.85 points or 3.8% at 5,561.05.
On Thursday, 22 November 2007, the market bounced back in late trade as banking and auto stocks jumped amidst volatile trade. The Sensex ended down 76.30 points or 0.41% at 18,526.32. The S&P CNX Nifty ended 41.7 points or 0.75% lower at 5,519.35.
On Friday, 23 November 2007, the market shrugged off blasts in Uttar Pradesh and galloped in late trade on a volatile day of trading. It snapped the last six day losses by posting decent gains today. The 30-share BSE Sensex rose 326.55 points or 1.76% at 18,852.87. The S&P CNX Nifty rose 89.25 points or 1.62% to 5,608.60.
The BSE Bankex fell 5.35% to 10,414.36 in the week ended Friday, 23 November 2007. ICICI Bank fell 6.49% to Rs 1140.35 in the week, State Bank of India declined 3.20% to Rs 2251.20 and Axis Bank fell 4.58% to Rs 929.95.
The BSE Capital Goods index fell 6.43% to 19,316.12 in the week. Larsen & Toubro fell 6.29% to Rs 411.50, Bharat Heavy Electricals (Bhel) dropped 8.73% to Rs 2543.20 and Jaiprakash Associates gained 6.93% to Rs 1625.95.
The BSE IT index declined 3.41% to 4,017.10. Infosys Technologies fell 4.03% to Rs 1558, Wipro fell 3.55% to Rs 442.05 and TCS declined 2.26% to Rs 985.50.
The BSE Power index fell 6.74% to 4,282.35. Reliance Energy declined 5.51% to Rs 1725.10, Neyveli Lignite fell 0.60% to Rs 214.30, Power Grid Corporation of India fell 2.92% to Rs 151.20 and NTPC slumped 10.48% to Rs 236.60.
Financial services provider Religare Enterprises debuted on 21 November 2007. The stock debuted at Rs 323.75, a premium of 75% over the IPO price of Rs 185. The stock settled at Rs 521.70 on BSE on that day, a premium of 182% over IPO price.
Varun Industries, a Mumbai-based exporter of stainless steel kitchenware, debuted on exchanges on 22 November 2007. The stock debuted on BSE at Rs 105, a 75% premium compared to its issue price of Rs 60. It ended at Rs 112.65 on BSE, a premium of 87.75% over IPO price.
Allied Computers International, a Mumbai based IT hardware company, debuted on BSE on Friday, 23 November 2007 at Rs 21, a 75% premium compared to its issue price of Rs 12. It settled at Rs 37.70 on BSE, a premium of 214.16% over IPO price.
Barak Valley Cements, which manufactures various grades of ordinary portland cement, debuted on BSE on Friday, 23 November 2007 at Rs 65, a 54.76% premium over IPO price of Rs 42. It settled at Rs 56.05 on BSE, a 33.45% premium compared to IPO price.
Rathi Bars, which manufactures cold twisted deformed (CTD) steel bars and thermo-mechanically treated (TMT) steel bars, debuted on BSE on Friday, 23 November 2007 at Rs 38, an 8.57% premium over IPO price of Rs 35. It settled at Rs 31.90 on BSE, an 8.85% discount as compared to IPO price.
A large number of foreign investors want to register in India to participate in the booming stock market, Securities & Exchange Board of India (Sebi) chief M. Damodaran, told a business conference on Wednesday, 21 November 2007. He said a number of FIIs have approached Sebi for registration in the past one month.
India's wholesale price index rose 3.01% in the 12 months to 10 November 2007, below the previous week's rise of 3.11%, government data released on Friday, 23 November 2007, showed. The annual inflation rate was 5.39% during the corresponding week of the previous year
FII activity holds key
The market may remain volatile in the coming week ahead of expiry of November 2007 derivatives contracts on Thursday, 29 November 2007. Outflow of funds by foreign investors may also weigh on sentiments. The market has been volatile over the past few days on concerns over the impact of the US sub-prime mortgage problems on the US economy. These concerns may continue to cast their shadow on the markets in the weeks to come.
As per provisional data, FIIs sold shares worth a net Rs 2487.71 crore on Thursday, 22 November 2007.
FII selling may continue in the near term as they may resort to year-end profit taking. FIIs follow calendar year as their accounting year.
India's wholesale price index rose 3.01% in the 12 months to 10 November 2007, below the previous week's rise of 3.11%, government data released on Friday, 23 November 2007, showed. The annual inflation rate was 5.39% during the corresponding week of the previous year.
The Q2 September 2007 results of India Inc. were decent to strong, which means that strong fundamentals would support Indian equities at declines. At the macro level, the India’s economy is expected to post decent to strong growth for a long period of time, mainly due to favourable demographics.
IPO Listing Updates
Barak Valley Cements on Friday surged 33.45 per cent over its issue price of Rs 42 to settle at Rs 56.05 on the Bombay Stock Exchange.
The scrip opened at Rs 65 and touched an intra-day high of Rs 72 and a low of Rs 53.10. A total of over 84.73 lakh equity shares changed hands at BSE.
The initial public offer (IPO) of the cement manufacturer had received robust response from investors and was subscribed around 29 times.
The money raised through IPO would be used to fund the production capacity expansion programmes, the company said. BVCL has earmarked an investment of Rs 55 crore for purchasing and upgrading its equipment and other expansion plans in the two units.
While, the scrip of steel manufacturer Rathi Bars fell below its issue price to Rs 31.90. Earlier in the morning, the company got listed with a marginal premium of 8.57 per cent at Rs 38.
The scrip touched an intra-day high of Rs 45 and a total of 62.48 lakh shares changed hands at the BSE.
The company will list its 71.43 lakh equity shares. The proceeds from the issue would be utilised for expansion and modernisation including purchase of plant and machinery, building and civil works, requirement of working capital, preliminary expenses and production launch expenses.
Further, Allied Computers International scrip surged 214 per cent to end at Rs 37.70.
The scrip touched an intra-day high of Rs 41.25 over its issue price of Rs 12. A total of 2.74 crore shares changed hands at the BSE.
Six points to sustain high growth rate
To achieve high and sustained GDP growth rate, the Associated Chamber of Commerce (ASSOCHAM) has proposed making India a common economic market by implementing Goods and Services Tax (GST), reduction in the excise duties, rationalisation of taxes on key infrastructure, encouragement of indigenous R&D, corporatisation of agriculture and promotion of India as a global headquarter of business enterprises.
At the meeting with the officials of the Finance Ministry chaired by Revenue Secretary, P.V. Bhide, the industry chamber has stressed the need to implement GST at the earliest so that cascading effect of taxes is removed form indigenous manufacturing and services cost, transaction cost is reduced and trade and industry grow faster by taking advantage of scale economy and efficient supply chain.
The process of replacing existing complex indirect tax system by GST should be initiated in the forthcoming Union Budget by taking initial steps towards GST, according to ASSOCHAM. It has suggested that the CST rate should be reduced from 3% to 2% as a step towards creating Indian common market. Excise and service tax be integrated into Central GST during 2008-09 and sugar & textiles should be brought from special duty regime to VAT regime, ASSOCHAM adds.
The ASSOCHAM delegation says that the manufactured goods are still quite expensive. Therefore, a reduction in the excise duty rate to 12% will make them affordable to larger population and will boost their demand, accelerating the manufacturing sector’s growth with minimum impact on revenue. Such reduction will also align the tax rates under excise and service tax, facilitating their integration under Central GST. The excise duty rate on automobiles should also be moderated by removing the special excise duty on this sector, the chamber says.
To upgrade the country's infrastructure significantly to sustain economic growth, ASSOCHAM President Venugopal N. Dhoot says that service tax and excise duty on inputs during the investment phase should be exempted from tax or refunded. Tax may be collected once the projects are put to use and start earning revenue, he adds.
At present, a large number of Indian companies are investing overseas for profitable growth and strategic advantage. Any dividend remittance by such foreign companies to India attracts full tax even where such profit from which dividend is remitted has suffered tax in the host country. This has led to Indian companies setting up head offices abroad or parking funds overseas.
Many countries exempt such dividend where the shareholding is substantial (20% to 40%), ASSOCHAM says. India should promote itself as a headquarter of business enterprises and retain long term capital in India by exempting dividend remitted by foreign subsidiaries or associates with 40% or more investment, it adds. Alternatively the tax paid on profit from which dividend is declared should be given credit.
ASSOCHAM suggests the creation of an Agriculture Economic Zone on the line of SEZ, in order to achieve the agriculture growth of at least 4% on the sustainable basis. The Government will have to ensure adequate investments in the areas like pre & post harvest management, food processing, export promotion related activities, specific crop related activities and application of the R&D to the agricultural production, the chamber adds.
In order to ensure that there is adequate quality produce, investment in irrigation, transport, rural electrification and telecom will be required apart from pre and post harvesting activities, feels ASSOCHAM. This will help develop rural infrastructure as well as provide employment to people engaged in agriculture, it adds.
For a strong research base and pool of intellectual properties, ASSOCHAM proposes that scientific research in emerging sectors like bio-technology, nanotechnology, industrial deigns, IT, telecom, food processing, medicines and engineering should be given favourable tax treatment under direct and indirect taxes to encourage such activities and the double taxation of intellectual properties under service tax and VAT regime should be discontinued.
Weekly positional calls
While the Sensex staged a smart recovery on Friday, for the week it closed down 4.3% or 845 points. The Nifty fell by 5% or 298 points to close at 5609. A lot will again depend on global cues in the coming week. To add to the volatility, we have the F&O expiry.
Short-term traders will continue to be the worst hit if wild swings take place. Long-term players can take solace in the fact that any correction gives them an opportunity to get some heavyweights at relatively lower prices. Besides stocks like Reliance, sectors to watch out for would be power and banking.
Buy RPL
Buy HPCL
Buy NTPC
Buy R Com
Buy Bajaj Auto
Govt clears FDI proposals
The government today approved 22 foreign direct investment (FDI) proposals entailing an inflow of Rs 511.5 crore, including that of World Bank's private sector arm IFC and global private equity player Goldman Sachs.
International Finance Corporation will take up 18% stake in domestic stocks and commodities brokerage firm Angel Infin for Rs 152 crore. US-based Goldman Sachs and Australia's Macquarie will pick 40% stake in PTC India Financial Services, a non-banking financial arm of power trading firm PTC India, for Rs 155.74 crore.
The proposals were cleared by finance minister P Chidambaram on the recommendations of Foreign Investment Promotion Board (FIPB), an official statement said.
"The equity investment will support Angel Infin, based in Mumbai, to expand its operations to tier II and III cities in India and introduce new products," official sources said.
However, a proposal of Flemingo to open duty free shops outside airports and in hotels has been rejected. A proposal of leading retailer Dolce & Gabbana to set up a joint venture with 51% stake to undertake single brand retailing of fashion and lifestyle products has been put on hold.
FIPB has also deferred a decision on the proposal of Russia's Sistema Joint Stock Financial Corp to increase its stake from 10% to 74% in a telecom firm.
Brokerage Reports
BHARAT FORGE
Religare Securities believes Bharat Forge valuations are attractive at current levels and has maintained a ‘Buy’ call on the stock with a target price of Rs 404 on a price to earning of 22.5x on FY09 estimate. This makes for an upside of 25 per cent to the current price of Rs 322.
Bharat Forge is currently trading at P/E of 17.9 times and EV/EBIDTA of 8.8 times 2008-09 estimate. The brokerage also valued the company on DCF, which yields a fair value of Rs 406 based on weighted average cost of capital of 13 per cent, beta of 1 per cent and terminal growth of 3 per cent.
The company will be incurring capital expenditure of Rs 330 crore during the current year and in 2008-09 to set up greenfield capacities for non-automotive foray at Pune, Mundwa and Baramati. Construction has already started and is expected to begin trial production in the first and second quarter of 2008-09 (April-March). It expects contribution from the non-automotive business to increase the consolidated revenue from 10 per cent to 17 per cent by end of 2009-10.
Bharat Forge has no immediate plans to increase the forging capacity catering to the automotive industry. The company will instead focus on improving productivity to meet the robust demand. The company’s standalone EBIDTA margin has declined, but has improved on consolidated basis.
It experienced a 150 basis points decline in standalone EBIDTA margin to 24.6 per cent in July-September quarter due to 28 per cent increase in expenditure. As a result, the company reported slower growth in EBIDTA at 18 per cent to Rs 140 crore.
However, the consolidated EBIDTA margin improved 40 basis points year on year and 320 bps quarter on quarter to 16.6 per cent in second quarter of 2007-08 due to high productivity in China operations. Thus, consolidated operating profit increased 11 per cent year on year to Rs 180 crore.
BOMBAY RAYON FASHIONS
Brokerage Prabhudas Lilladher has re-initiated coverage on Bombay Rayon Fashions with a ‘buy’ recommendation for target price of Rs 620. Bombay Rayon Fashions plans to invest Rs 1,100 crore over a span of three years in Maharashtra, to set up six manufacturing units, and this would quadruple and nearly double its fabric and garment manufacturing capacities.
The company has also signed an agreement with the Maharashtra government, to set up its fabric processing and garmenting units in the state. The brokerage expects this initiative to contribute about Rs 1,000 crore in revenue in 2009-10, expanding operating margin by about 500 basis points and net margin by 200 basis points.
Revenue is expected to grow at 73 per cent CAGR and earnings by 77 per cent over 2007-2010. With better government support and greater operational synergies, the company could witness margin expansion of about 740 basis points over 2008-10 estimate, says the brokerage.
At the current price, the stock is trading at 21.3 times, 11.6 times, 6.2 times 2007-08, 2008-09 and 2009-10 estimated earnings per share respectively. The brokerage has derived the target price of Rs 620 (93% upside), by assigning 2009-10 estimated earning per share, an estimate of Rs 51.8, a 12 times PER multiple.
Prabhudas Lilladher believes the true picture of company’s financials would only emerge in 2009-10, once the Maharashtra plans come on-stream.
Post Market Commentary
The market closed on an upbeat note by creating a rally over all the sectoral indices. All the sectotral indices closed in a positive territory. Most buying is seen Metals, Capital goods, Realty and Oil & gas indices scrips. The market pared most of gains at the mid session as the news about the three bomb blasts in UP came but it doesnot put any pressure on the investors mind for long and recovered well to closed the session on a impressive note. The Sensex covers an intraday high of 18,910.46 and low of 18,548.06 during the trading session. Finally, BSE Sensex closed with a hand some gain of 326.55 points at 18,852.87 and NSE Nifty closed up by 89.25 points at 5,608.60. Overall, the market breadth was strong as 1,760 stocks are closed higher while 1034 are closed lower. Both BSE Mid cap and Small cap grew by 137.66 points and 110.56 points to close at 8,228.50 and 10,171.43 respectively.
BSE Auto index closed up by 77.39 points at 5,256.55 as Escorts (8.42%), TVS (4.52%), MICO (4.41%), Bharat Forge (4.09%), Tata Motors (3.27%) and Bajaj Auto (2.46%) closed in green.
BSE Capital Goods index closed higher by 500.94 points at 19,316.12. Pushing it up are Alstom projects (4.75%), Praj industries (4.39%), L&T (4.02%), ABB (3.22%), BHEL (2.34%) and Siemens by (2.23%).
BSE Metal index surged by 548.96 points to closed at 16,594.08. Pushed up by Jindal steel (20.74%), Welspun Gujarat stalh (7.70%), Jindal Stainless (6.68%), Sterlite (4.60%) and SAIL (1.94%).
BSE oil & gas index surged by 295.40 points to closed at 11,987.47. Jumped by Essar oil by (12.50%), RNRL (6.75%), Aban Offshore (3.75%), Reliance industries (3.03%)
BSE Power index grew by 131.28 points to close at 4,282.35. Scrips that grew are Reliance energy (7.48%), Torrent Power (7.39%), Power Grid (6.59%), GMR Infra (4.74%), NTPC (3.98%).
BSE IT index closed up by 57.20 points at 4,017.10 as Educomp solution (9.35%), Tech Mahindra (5.13%), HCL tech (4.42%), NIIT tech (3.68%), and Infosys (1.71%) are closed lower
Sensex gains 327 points on bargain hunting
The market shrugged off blasts in Uttar Pradesh and galloped in late trade on a volatile day of trading. It snapped the last six day losses by posting decent gains today. Reliance Industries surged in late trade. Reports of three blasts in Uttar Pradesh had pulled the market off higher level in mid-afternoon trade. It instantly recovered from lower level later. Earlier, the market had surged in afternoon trade.
Three consecutive blasts outside civil courts in Lucknow, Varanasi and Faizabad in Uttar Pradesh today killed five people and injured many more.
Capital goods, power, realty, metal stocks gained. Reliance Energy and DLF were the major gainers whereas Maruti Suzuki india and HDFC Bank were major losers from Sensex pack. The market breadth was strong. European markets which opened after Indian market were firm. Asian markets, which opened before Indian market, were mixed.
India's wholesale price index rose 3.01% in the 12 months to 10 November 2007, below the previous week's rise of 3.11%, government data released today afternoon showed. The annual inflation rate was 5.39% during the corresponding week of the previous year.
The 30-share BSE Sensex rose 326.55 points or 1.76% at 18,852.87. Sensex hit a low of 18,548.05 in mid-afternoon trade. At day's low, Sensex was up just 21.74 points for the day. Sensex hit a high of 18,910.46 in early afternoon trade. At day’s high of 18,910.46, Sensex had gained 384.14 points.
The S&P CNX Nifty rose 89.25 points or 1.62% to 5,608.60.
BSE clocked a turnover of Rs 6140 crore, lower than Thursday (22 November 2007)'s Rs 7,127.32 crore.
Nifty November 2007 futures were at 5620, at a premium of 11.40 points as compared to spot closing of 5608.60.
NSE’s futures & options (F&O) segment turnover was Rs 66,744.48 crore, which was lower than Rs 71,149.36 crore on Thursday, 22 November 2007.
The market breadth was strong. On BSE, 1,727 stocks advanced, 1,034 stocks declined and 33 stocks were unchanged. 22 out of 30 stocks from the Sensex pack were in the green.
The BSE Mid-Cap index rose 1.7% to 8,228.50 and the BSE Small-Cap index up 1.1% to 10,171.43. Both these indices underperformed Sensex.
BSE Auto index (up 1.49% to 5,256.55), BSE Bankex (up 0.08% to 10,414.36), BSE FMCG (up 0.36% to 2,111.34), BSE Health Care index (up 0.01% to 3,810.92), BSE IT index (up 1.44% to 4,017.10) and BSE PSU index (up 0.81% to 9,502.09) underperformed Sensex.
BSE Capital Goods index (up 2.66% to 19,316.12), BSE Metal index (up 3.42% to 16,594.08), BSE Oil & Gas index (up 2.53% to 11,987.47), BSE Power index (up 3.16% to 4,282.35) and BSE Realty (up 3.45% to 9,783.36) outperformed Sensex.
Index heavyweight and India’s largest private sector firm by market capitalisation Reliance Industries was up 3.03% to Rs 2,811.45.
Metal stocks surged in late trade. Sterlite Industries (up 4.6% to Rs 879.10), Steel Authority of India (up 1.94% to Rs 251.75),Hindalco Industries (up 0.86% to Rs 188.05) and Tata Steel (up 0.19% to Rs 820.50) edged higher.
India’s largest truck maker by sales Tata Motors rose 3.27% to Rs 714.65 after union leaders at Ford Motor Co's Land Rover and Jaguar brands agreed on Thursday, 22 November 2007, to support the Indian firm's bid for the brands. Tata Motors, Mahindra & Mahindra and buyout firm partner Apollo, and JP Morgan-backed One Equity Partners, are reportedly in race to acquire the Ford brands.
Power stocks surged. India's biggest power generation firm by revenue NTPC rose 3.98% to Rs 236.60. NTPC announced after market hours on Thursday, 22 November 2007 that the company and Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) have signed a memorandum of understanding for the formation of a joint venture company (JVC) for establishing and operating a coal based thermal power project at Meja Tehsil or any other suitable site in Allahabad district in the state of Uttar Pradesh.
Reliance Energy (up 7.48% to Rs 1,725.10) and PowerGrid Corporation of India (up 6.59% to Rs 151.20) edged higher.
Realty stocks gained. India’s largest real estate developer by market capitalisation DLF rose 5.58% to Rs 868.65. As per reports, Fortis Healthcare and DLF are close to signing an agreement to set up 15 hospitals in the next five years on lands situated in the real estate giant’s townships in India. As per some other reports, leading US quick service restaurant (QSR) chains Burger King and Wendy's are having talks with India's largest real estate company DLF for a foray into the Indian market.
Indiabulls Real Estate (up 1.86% to Rs 614.05), Unitech (up 3.58% to Rs 339.95) edged higher.
Capital goods stocks surged. Larsen & Toubro (up 4.02% to Rs 4,100.50), Bharat Heavy Electricals (up 2.34% to Rs 2,543.20) and Suzlon Enegy (up 0.14% to Rs 1,859.75) edged higher.
India's biggest dedicated housing finance firm in terms of revenue HDFC rose 4.12% to Rs 2,666.30.
Maruti Suzuki India (down 2.07% to Rs 946.70) Cipla (down 0.93% to Rs 181.25) and ITC (down 0.57% to Rs 184.15), HDFC Bank (down 1.97% to Rs 1,562.70) and ONGC (down 0.32% to Rs 1,145.85) edged lower.
Jindal Steel rose 20.7% to Rs 12,096 and was the top gainer from A group shares on BSE. Neyveli Lignite (up 18.3% to Rs 214.30), Welspun Gujarat Stahl Rohren (up 7.7% to Rs 399.30), Escorts (up 8.42% to Rs 148.15) and Indian Bank (up 10.03% to Rs 166.75) edged higher.
Tata Teleservices Maharashtra rose 7.09% to Rs 48.35 and clocked the highest volume of 2.52 crore shares on BSE. Reliance Petroleum clocked the second highest volume of 1.75 crore and it rose 0.29% to Rs 209.50. Reliance Natural Resources clocked the third highest volume of 1.63 crore and it rose 6.75% to Rs 158.20. Ispat Industries rose1.16% to Rs 39.10 and clocked the fourth highest volume of 1.12 crore shares.Essar Oil rose 12.5% to Rs 194.45 and clocked the fifth highest volume of 1 crore shares.
Reliance Petroleum clocked the highest turnover of Rs 367.34 crore on BSE. Reliance Energy (Rs 291.3 crore), Reliance Natural Resources (Rs 252.75 crore), Reliance Industries (Rs 232.69 crore) and Reliance Capital (Rs 202.84 crore) were other turnover toppers on BSE in that order.
Khaitan Weaving Mills hit 5% upper circuit at 293.45 after it fixed 14 December 2007 as the record date for the purpose of determining the entitlement of right offer of equity shares in the ratio 6:1.
Shares in DCM Shriram Industries hit 5% upper circuit at Rs 88.05 on reports that the founders offered to raise the warrants subscription price to Rs 90 each from Rs 52 at a Company Law Board hearing. The move was in response to a petition from a large shareholder seeking a stay on the preferential issue of warrants due to low pricing.
Asian Oilfield Services hit 5% upper circuit at Rs 205.15. It announced after the market hours on Thursday, 22 November 2007 that a meeting of the board of directors of the company will be held on 23 November 2007, to consider the issue and allotment of equity shares and/or warrants on preferential basis to strategic investors.
European markets were firm. France’s CAC 40 (up 0.63% to 5,450.46), Germany’s DAX (up 0.26% to 7,581.80) and UK’s FTSE 100 (up 0.97% to 6,215.10) edged higher.
Asian markets were trading mixed today, 23 November 2007. Hong Kong's Hang Seng (up 2.06% at 26,541.09), China’s Sanghai Composite (up 0.96% to 5,032.13) and Singapore's Straits Times (up 0.39% to 3,325.89) rose. However, Taiwan's Taiwan Weighted (down 1.85% at 8,342.20) and South Korea's Seoul Composite (down 1.45% at 1,772.88), slipped. Japanese stocks market is closed today for Labour Thanksgiving Day.
US markets remained closed for Thanksgiving day yesterday, 22 November 2007.
Crude oil prices climbed back above $97 a barrel in thin trade on Friday, 23 November 2007 buoyed by the unrelenting decline in the US dollar. London Brent crude rose 35 cents to $94.85 a barrel, while U.S. light crude for January delivery stood at $97.35 a barrel.
RIL leads rally
The market shrugged off blasts in Uttar Pradesh and galloped in late trade on a volatile day of trading. Reliance Industries surged in late trade. Reports of three blasts in Uttar Pradesh had pulled the market off higher level in mid-afternoon trade. It instantly recovered from lower level later. Earlier, the market had surged in afternoon trade.
Three consecutive blasts outside civil courts in Lucknow, Varanasi and Faizabad in Uttar Pradesh today killed five people and injured many more.
Capital goods, power, realty, metal stocks gained. Reliance Energy and DLF were the major gainers whereas Maruti Suzuki india and HDFC Bank were major losers from Sensex pack. The market breadth was strong. European markets which opened after Indian market were firm. Asian markets, which opened before Indian market, were mixed.
India's wholesale price index rose 3.01% in the 12 months to 10 November 2007, below the previous week's rise of 3.11%, government data released today afternoon showed. The annual inflation rate was 5.39% during the corresponding week of the previous year.
The 30-share BSE Sensex provisionally ended up 323.32 points or 1.75% at 18,849.64. Sensex hit a low of 18,548.05 in mid-afternoon trade. At day's low, Sensex was up just 21.74 points for the day. Sensex hit a high of 18,910.46 in early afternoon trade. At day’s high of 18,910.46, Sensex had gained 384.14 points.
The S&P CNX Nifty rose 93.9 points or 1.7% to 5,613.25.
BSE clocked a turnover of Rs 6140 crore, lower than Thursday (22 November 2007)'s Rs 7,127.32 crore.
The market breadth was strong. On BSE, 1,726 stocks advanced, 1,038 stocks declined and 32 stocks were unchanged. 22 out of 30 stocks from the Sensex pack were in the green.
The BSE Mid-Cap index rose 1.75% to 8,232.07 and the BSE Small-Cap index up 1.19% to 10,180.59.
Index heavyweight and India’s largest private sector firm by market capitalisation Reliance Industries was up 3.53% to Rs 2,825.
Metal stocks surged in late trade. Sterlite Industries (up 5.53% to Rs 886.90), Steel Authority of India (up 2.41% to Rs 252.90),Hindalco Industries (up 0.8% to Rs 187.95) and Tata Steel (up 0.01% to Rs 819) edged higher.
India’s largest truck maker by sales Tata Motors rose 2.6% to Rs 710 after union leaders at Ford Motor Co's Land Rover and Jaguar brands agreed on Thursday, 22 November 2007, to support the Indian firm's bid for the brands. Tata Motors, Mahindra & Mahindra and buyout firm partner Apollo, and JP Morgan-backed One Equity Partners, are reportedly in race to acquire the Ford brands.
Power stocks surged. India's biggest power generation firm by revenue NTPC rose 3.98% to Rs 236.60. NTPC announced after market hours on Thursday, 22 November 2007 that the company and Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) have signed a memorandum of understanding for the formation of a joint venture company (JVC) for establishing and operating a coal based thermal power project at Meja Tehsil or any other suitable site in Allahabad district in the state of Uttar Pradesh.
Reliance Energy (up 7.48% to Rs 1,725.10) and PowerGrid Corporation of India (up 6.59% to Rs 151.20) edged higher.
Realty stocks gained. India’s largest real estate developer by market capitalisation DLF rose 5.58% to Rs 868.65. As per reports, Fortis Healthcare and DLF are close to signing an agreement to set up 15 hospitals in the next five years on lands situated in the real estate giant’s townships in India. As per some other reports, leading US quick service restaurant (QSR) chains Burger King and Wendy's are having talks with India's largest real estate company DLF for a foray into the Indian market.
Indiabulls Real Estate (up 1.86% to Rs 614.05), Unitech (up 3.58% to Rs 339.95) edged higher.
Capital goods stocks surged. Larsen & Toubro (up 4.02% to Rs 4,100.50), Bharat Heavy Electricals (up 2.34% to Rs 2,543.20) and Suzlon Enegy (up 0.14% to Rs 1,859.75) edged higher.
India's biggest dedicated housing finance firm in terms of revenue HDFC rose 4.12% to Rs 2,666.30.
Maruti Suzuki India (down 2.07% to Rs 946.70) Cipla (down 0.93% to Rs 181.25) and ITC (down 0.57% to Rs 184.15) edged lower.
Jindal Steel rose 20.7% to Rs 12,096 and was the top gainer from A group shares on BSE. Neyveli Lignite (up 18.3% to Rs 214.30), Welspun Gujarat Stahl Rohren (up 7.7% to Rs 399.30), Escorts (up 8.42% to Rs 148.15) and Indian Bank (up 10.03% to Rs 166.75) edged higher.
Khaitan Weaving Mills hit 5% upper circuit at 293.45 after it fixed 14 December 2007 as the record date for the purpose of determining the entitlement of right offer of equity shares in the ratio 6:1.
Shares in DCM Shriram Industries hit 5% upper circuit at Rs 88.05 on reports that the founders offered to raise the warrants subscription price to Rs 90 each from Rs 52 at a Company Law Board hearing. The move was in response to a petition from a large shareholder seeking a stay on the preferential issue of warrants due to low pricing.
Asian Oilfield Services hit 5% upper circuit at Rs 205.15. It announced after the market hours on Thursday, 22 November 2007 that a meeting of the board of directors of the company will be held on 23 November 2007, to consider the issue and allotment of equity shares and/or warrants on preferential basis to strategic investors.
European markets were firm. France’s CAC 40 (up 0.55% to 5,445.62), Germany’s DAX (up 0.15% to 7,572.64) and UK’s FTSE 100 (up 0.9% to 6,210.70) edged higher.
Asian markets were trading mixed today, 23 November 2007. Hong Kong's Hang Seng (up 2.06% at 26,541.09), China’s Sanghai Composite (up 0.96% to 5,032.13) and Singapore's Straits Times (up 0.39% to 3,325.89) rose. However, Taiwan's Taiwan Weighted (down 1.85% at 8,342.20) and South Korea's Seoul Composite (down 1.45% at 1,772.88), slipped. Japanese stocks market is closed today for Labour Thanksgiving Day.
US markets remained closed for Thanksgiving day yesterday, 22 November 2007.
As per provisional data, FIIs sold shares worth a net Rs 2487.71 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 1341.15 crore on Thursday, 22 November 2007.
Foreign institutional investors (FIIs) were net sellers to the tune of Rs 240.07 crore in the futures & options segment on Thursday. According to data released by the NSE, FIIs were net sellers of index futures to the tune of Rs 544.02 crore and bought index options worth Rs 154.75 crore. They were net buyers of stock futures to the tune of Rs 153.02 crore and sold stock options worth Rs 3.82 crore.
Crude oil prices climbed back above $97 a barrel in thin trade on Friday, 23 November 2007 buoyed by the unrelenting decline in the US dollar. London Brent crude rose 35 cents to $94.85 a barrel, while U.S. light crude for January delivery stood at $97.35 a barrel.
Sensex recovers on positive global cues
Tracking firm Asian markets the Sensex opened with a positive gap of 206 points and surged to touch the day's high of 18910 on sustained buying in heavyweights, power, metal and realty stocks. The market witnessed a small correction in the mid-morning trades but recovered on strong buying in the Sensex pivotal stocks. However, strong bout of selling in the afternoon wiped out most of the day's gains and the Sensex touched the day's low of 18548 marginally above its previous close. The sustained buying in the last hour of the trading session helped the market to pare most of its losses and close the session with a gain of 327 points at 18853. The Nifty ended the session at 5609, up 89 points.
The breadth of the market was positive. Of the 2,842 stocks traded on the BSE 1,763 stocks advanced, 1,032 stocks declined and 47 stocks ended unchanged. All the sectoral indices ended in positive territory. The BSE Realty ended firm with gains of 3.45% at 9783 while the BSE Metal index rose 3.42% at 16594 and the BSE Power index added 3.16% at 4282.
Action in several index heavyweights lifted the market. Reliance Energy led the pack and shot up by 7.48% at Rs1725. DLF soared 5.58% at Rs869, HDFC surged 4.12% at Rs2,666, L&T flared up by 4.02% at Rs4101, NTPC jumped by 3.98% at Rs237, Tata Motors added 3.27% at Rs715, Reliance advanced by 3.03% at Rs2811 and Bajaj Auto moved up by 2.46% at Rs2533. However, few index stocks came under sharp selling pressure. Maruti Suzuki shed 2.07% at Rs947, HDFC Bank fell 1.97% at Rs1,563 while, Cipla, ITC, M&M, ONGC, Grasim and Ranbaxy dropped marginally.
Over 2.74 crore Allied Computers shares changed hands on the BSE followed by Tata Teleservices (2.51 crore shares), Reliance Petroleum (1.74 crore shares), Reliance Natural Resources (1.63 crore shares) and Ispat Industries (1.11 crore shares).
Value-wise Reliance Petroleum registered a turnover of Rs366 crore on the BSE followed by Reliance Energy (Rs291 crore), Reliance Natural Resources (Rs252 crore), Reliance Industries (Rs232 crore) and Reliance Capital (Rs202 crore).
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 5510 and 5465 with resis at 5568 and 5610
Intra Day: Buy Relcap above 2346 with a TGT of 2419 and a SL of 2320
Buy BPCL above 404 with a TGT of 430 and a SL of 394
F&O: Buy GMRINFRA above 233 with a TGT of 253 and a SL of 230
Out House :
Markets at a support of 18484 & 18218 levels with resistance at 18986 & 19129 levels .
On Nifty a big support at 5480 and 5460 levels .
Maintain strict stop loss for your trades as markets to be very choppy and volatile .
Buy : RIL
Buy : RELCAP
Buy : JpAsso & JpHydro
Buy : Bhel & Titan
Buy : GeShipping
Buy : IBUllsreal & IBulls
Buy : IciciBnak & SBIN
Dark Horse : Kotak ,JpAsso , Aban , ONGC , RIL , GeShipping , SBIN & JpHydro
TGIF : Thank God Its Friday : Markets at correction mode reduce your position at every rise
Market to stay sideways
The market is expected to stay sideways in absence of near term positive triggers. Market posted losses for sixth straight day yesterday, 22 November 2007. The Sensex slipped 76.30 points or 0.41% at 18,526.32 in highly volatile trade, on Thursday, 22 November 2007. The S&P CNX Nifty ended 41.7 points or 0.75% lower at 5,519.35.
Annual inflation data, based on the wholesale price index (WPI), for the week ended 10 November 2007 due today, 23 November 2007. Inflation was up 3.11% in the week ended 3 November 2007, riven by higher prices of manufactured products and fuel.
Asian markets were trading mixed today, 23 November 2007. Hong Kong's Hang Seng (up 2.47% at 26,647.45), Straits Times (up 0.58% at 3,332.14), and Straits Times (up 0.29% to 3,322.63) rose
However, Taiwan's Taiwan Weighted (down 0.16% at 8,485.66) and South Korea's Seoul Composite (down 1.05% at 1,780.18) slipped.
US markets remained closed for Thanksgiving day yesterday, 22 November 2007.
As per provisional data, FIIs sold shares worth a net Rs 2487.71 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 1341.15 crore on Thursday, 22 November 2007.
Crude oil prices climbed back above $97 a barrel in thin trade on Friday, 23 November 2007 buoyed by the unrelenting decline in the US dollar. London Brent crude rose 35 cents to $94.85 a barrel, while U.S. light crude for January delivery stood at $97.35 a barrel.
Pre Market Watch
Indian market is likely to have flat opening as the Asian Market are trading mixed. On Thursday, a lot of volatility is seen in the markets as the market opened with heavy gains and all of a sudden lost the momentum and fell but manages to pare most of its losses towards the end of the session. Finally, the Indian markets closed in a negative territory as BSE Sensex fell by 76.30 points to close at 18,526.32 and NSE Nifty closed lower by 41.7 points at 5,519.35. We expect that the profit booking may prevail in the market during the trading session but the annual inflation data, which is due today, may give directions on the latter half of the day.
Yesterday, the US market remains closed for the Thanks giving day.
The major stock markets in Asia are trading mixed. Hang Seng is trading strongly at 26,647.45 up by 642.53 points. Singapore Strait times is trading higher by 19.26 points at 3,332.14. Taiwan weighted is trading down by 13.71 points at 8,485.66 and Seoul Composite fell by 18.84 points to trade at 1,780.18.
Yesterday, FIIs stood as the net seller. The gross equity purchased was Rs.3,246.60 (in crores), and the gross debt purchased was Rs.0.00 (in crores) as against the gross equity sold was Rs.5,469.00 (in crores) and the gross debt sold was Rs.242.70 (in crores). The net investment of equity was -Rs2,222.40. (in crores) and the net debt investment was -Rs.242.70 (in crores).Today, Nifty has support at 5,412 and resistance at 5,598 and BSE Sensex has support at 18,130 and resistance at 18,729.
Grey Market - Kolte Patil, Kaushalya, Edelweiss, Renaissance
Reliance Power -- 58 to 60
Edelweiss 725 to 825 700 to 720
Renaissance Jewellery 125 to 150 45 to 48
Kolte Patil 125 to 145 90 to 100
Kaushalya Infra 50 to 60 18 to 20
Jyothi Lab. 620 to 690 350 to 370
Mundra Port & Sez 440 580 to 600
Empee Distilleries 400 35 to 37
Barak Valley Cement 42 20 to 25
Rathi Bars 35 +/- 4
Allied Computers 12 10 to 12
SVPCL 42 - 3 to -5
Trading Calls
Nifty (5519) Sup 5477 Res 5591
Buy Bharti Airtel (907) SL 899 Target 924, 927
Buy Bajaj Auto (2473) SL 2450 Target 2518, 2525
Buy RPL (209) SL 205 Target 217, 220
Buy GMR Infra (233) SL 228 Target 241, 245
Sell Crompton Greaves (398) SL 403 Target 390, 388
Weekend shopping or window shopping?
Christmas is the season when you buy this year's gifts with next year's money
It’s not December as yet but Christmas shopping in the US commences with Black Friday today when huge discounts are offered. Will the bulls start their shopping spree again today? The swinging bounce back late on Thursday may just be an indication from bulls that they intend to hit back.
Despite some weakness in most counters, there are not many stocks which are available at discount prices. For some time, we may see very select counters moving and thereby providing a distorted image of the main indices. With US markets closed and some Asian Markets doing well, it augurs for a good start. Some fresh buying, some cutting of short positions and select propping up of key index heavyweights may make it appear that the bulls have arrived. How long they reign remains to be seen in the coming days. Buying may come in but confidence is lacking. Stay less leveraged and buy only if you have the cash.
Domestic institutions, sitting on fairly large amount of cash were net buyers for Rs13.41bn as they did some shopping at lower levels. While FIIs are selling on some counters they are probably simultaneously getting into other counters. We never really understand how much to make of the FII figures that we read about.
Japan's markets are closed today for a public holiday. US markets were shut yesterday for Thanksgiving. Tech stocks send the The MSCI Asia Pacific excluding Japan Index up by 0.2% to 506.48 in early hours. Stocks in Europe and Latin America were back in the black.
The dollar dropped below 108 yen for the first time since 2005 and fell to a record low against the euro on speculation deepening U.S. credit-market losses will prompt the Federal Reserve to cut interest rates.
The rupee rose on speculation an advance in Asian stocks will give investors the confidence to put money back into the region. The rupee strengthened 0.1% to 39.495 against the dollar in early hours
Siemens could be in action after it announced a 126% growth in net profits for the quarter ended September 30, 2007. The company declared a 1:1 bonus and 240 per cent dividend after posting the best ever financial performance. This was of course aided by other income of forex gains and sale of units. This is Siemens’ first bonus offer in two decades after the 1:4 payout in 1987.
Fortis Healthcare and DLF are close to signing an agreement for setting up 15 hospitals over the next five years in townships of the latter.
US-based Burger King likely to tie-up with DLF in a 51:49 JV to enter the Indian market.
Wipro plans to set up a global IT services centre in Sydney, Australia, which would provide consulting, software development and testing services to local and global clients.
Lyka Labs plans preferential allotment up to 3.65mn shares for cash at Rs55/share to foreign investors.
Aurbindo Pharma has received approvals from the US FDA for its five products since October 2007.
Hindustan Copper has earmarked Rs9bn for setting-up two greenfield copper mines in Jharkhand and Rajasthan.
About 8mn mobile users were added in October 2007 while fixed-line subscribers declined over previous month. Total subscriber base reached 256.6mn breaching the 250mn December 2007 target of the Government.Reports say India poised to become a net importer of steel in the current fiscal. During April-October 2007, country imported 3.6mn tons of steel an increase of 79% yoy. India steel production is expected to touch 124 mn tons by 2011-12 beating an earlier estimate of 80 mn tons by a wide margin.
India Railways freight earnings for October 2007 grew 18% yoy to Rs40bn.
Volatility to continue!
A see-saw trading session ended slightly lower as markets witnessed alternate bouts of buying and selling. Markets extended their losing streak to the sixth straight trading session. Bulls were unable to capitalize on the positive start as bears took over immediately dominating for the rest of the trading session.
Weak cues from the international markets coupled with selling in the index heavyweights like L&T, ONGC and REL dragged the benchmark Sensex to hit a low of 18,182. However, late buying in the Banking and the Auto stocks lifted the key indices from their low finally aiding the markets to close on a flat note with marginal losses.
Among the sectoral indices; BSE Bankex index and BSE Auto index were the leading gainers, up 1.75% and 0.2% respectively. While, BSE Realty index was the top loser (down 5%), BSE Capital Good index (down 2.5%) and BSE Power index (down 2.2%).
Even the broader indices i.e. BSE Mid-Cap and the BSE Small-Cap index were down over 1.5% each.
Finally, 30-share Sensex lost 76 points to close at 18,526 and Nifty closed 41 points lower at 5,519.
PNB surged by over 3.5% to Rs573 after the company announced that Gilts secures an approval to work out scheme of merger with Punjab National Bank. The scrip touched an intra-day high of Rs600 and a low of Rs540 and recorded volumes of over 7,00,000 shares on NSE.
BHEL gained 0.5% to Rs2493 after the company declared that they secured Rs21.08bn contract for installing 2 sets of 525MW. The scrip touched an intra-day high of Rs2566 and a low of Rs2385 and recorded volumes of over 12,00,000 shares on NSE.
Hindustan Zinc slipped 2.5% to Rs715 after the company announced that it lowered lead prices to Rs1,35,200 per ton. The scrip touched an intra-day high of Rs733 and a low of Rs701 and recorded volumes of over 57,000 shares on NSE.
Puravankara slipped 2% to Rs390. The company announced that they won 30-acre Hyderabad land deal for Rs7bn. The scrip touched an intra-day high of Rs450 and a low of Rs381 and recorded volumes of over 1,00,000 shares on NSE.
Wipro gained 0.5% to Rs437 after the company announced that it joined hands with GE Fanuc technologies to work together globally to provide solutions for consumer packaged goods and pharmaceutical industry. The scrip touched an intra-day high of Rs440 and a low of Rs429 and recorded volumes of over 8,00,000 shares on NSE.
Sasken Communication lost 2% to Rs264. Reports stated that the company would set up a wholly-owned subsidiary Sasken Japan KK to focus on Japanese market. The scrip touched an intra-day high of Rs278 and a low of Rs262 and recorded volumes of over 39,000 shares on NSE.
Ranbaxy Laboratories slipped 1.3% to Rs392. Reports stated that the company reached an out-of-court settlement to market innovator drug worth over US$1bn in the US. The scrip touched an intra-day high of Rs405 and a low of Rs391 and recorded volumes of over 5,00,000 shares on NSE.
Banking stocks gained momentum in the later half of the session on back of fresh buying. The index heavyweights SBI was up by over 4% to Rs2249, ICICI Bank gained 3.5% to Rs1145 and HDFC Bank added 0.8% to Rs1591. PNB, Andhra Bank and Bank of Baroda were the major gainer among the Mid-Cap stocks.
The Auto stocks also geared up towards the end as the BSE Auto index ended 0.3% higher. Maruti rose over 1.2% to Rs965, M&M was up by over 1.7% to Rs710 and Bajaj Auto advanced 2% to Rs2472.
Upper Circuit:
PNB Gilts, Kothari Products, GTC Industries, Xl Tele, Vipul Ltd, Temptation Foods
Lower Circuit:
HFCL, Bombay Burmah, MMTC, National Fertilizer, Alphageo India, TCI Industries, Marathon Nextgen
Stocks in News:
BHEL has won Rs21bn order for supplying steam generators and turbines for the upcoming Maithon Right Bank Thermal Power Project in Jharkhand.
Nalco plans a follow-on issue including a rights issue to part fund investments of Rs200bn for setting up two greenfield projects in Andhra Pradesh and Orissa.
Hindustan Copper is scouting for overseas partners for setting up two mining ventures.
Tata gets Jaguar-Land Rover’s employees union support for its bid.
Soros’ Quantum Fund has picked up 10% stake in Future Capital Holdings (FCH).
US-based PE fund, Wasserstein Fund has picked up 12% equity stake in Euro ceramics for Rs600mn.
DCM Shriram promoters hike warrant price to Rs90/share for allotment to them.
UP Government has signed a MoU with NTPC for setting up a joint venture 1,320 MW thermal power project in Allahabad.
GAIL is in discussions with Russian gas firm Itera for setting-up city gas distribution network in Moscow to retail CNG.
Cadila Healthcare is planning acquisitions of brands in the domestic skin-care segment.
Reliance Fresh plans to re-enter the UP market under the new format for home solutions.
PVR plans to invest Rs3-4bn for opening up 250 new screens by 2010.
Nalco likely to get a bauxite mining lease in Andhra Pradesh.
FII Investment Trend:
FIIs were net sellers of Rs24.8bn (provisional) in the cash segment on Thursday while the local institutions pumped in Rs13.41bn.
In the F&O segment, FIIs were net sellers of Rs2.4bn.
Bulk Deals
Merrill Lynch bought Lakshmi overseas while, The Master Trust bank of Japan sold it. Kotak Mahindra Bank UK purchased Marg Construction, Citigroup Global offloaded Oswal Chemical and Fertilizer andICICI Bank sold Welspun India
Market may witness a pull-back
The market may take a break from its consecutive 6-session losses and rise in tune with firm Asian markets. The market also witnessed a smart pull-back towards the close likely to help the sentiment turn positive. However, FIIs remaining net sellers of equities in the domestic market may hurt the investors sentiment. On Thursday, US markets were closed on the back of Thanksgiving holiday. The Nifty could test 5400 on the downside and may test 5750 on higher levels , while the Sensex has a likely support at 18250 and may face resistance at 19000.
Jyothy Laboratories IPO - apply!
The Jyothy Laboratories' IPO should bring decent returns to the investor.
FMCG behemoths like Hindustan Unilever, ITC and Dabur India have been big underperformers on the bourses due to intense competition and flat growth. Will the IPO of a relatively smaller FMCG player like Jyothy Laboratories buck the trend?
Strong brands and reach
Jyothy Laboratories has one of the country’s most famous and fast growing brands in its portfolio. The 24-year old flagship brand ‘Ujala’ is the number one in the fabric whitener category with a 72.2 per cent market share in July 2007.
The relatively new brands namely Maxo (mosquito repellent) and Exo (dishwashing product) are also growing rapidly.
Launched in 2000, Maxo has become a Rs 180-crore brand today with about 21 per cent market share, and is the third largest after Mortein (Reckitt Benckiser) and Good Night (Godrej). Exo has an 18 per cent share in south India and will go national in 2008.
Besides strong brands, Jyothy has a wide reach--a key success factor for an FMCG company--due to its focus on rural markets (constituting 50 per cent of FMCG sales) and proximity of its plants to the consuming market. Its national products are available in 2.8 million outlets. Over 40 per cent of its 3,400 employees are in the sales team, which service 2,500 distributors.
The company has 21 manufacturing units spread in 14 locations across the country with eight of them being in tax-free zones.
Says K Ullas Kamath, deputy managing director, “Our focus is to provide value-for-money products and sell what the consumer wants and be where the consumer is.” The company wants to further extend its reach to supermarkets and hypermarkets though that is not its major focus.
Brand extensions and new initiatives
The key trigger is its relatively new brands (other than Ujala) and its efforts of coming out with brand extensions and penetrating new markets.
While Ujala is going through a consolidation phase, the company is trying out various extensions such as fabric stiffener (Stiff n Shine) and washing powder and is likely to come out with more extensions like stain removers, softeners and conditioners and liquid detergent.
Further, Jyothy has undertaken new initiatives in the recent past like JVs in manufacturing and marketing Ujala and Maxo in Bangladesh and marketing and distributing tea (Godrej tea), coffee (Continental Speciale-CCL products) and dhoop (Balaji Telebrands), which will bring incremental sales.
Financials
The issue has been assigned grade 4 (on a scale of 5) by rating agency Care indicating above average fundamentals. Jyothy’s financial performance for the past few years is in line with its peers.
Going ahead, net sales are expected to grow at a decent rate buoyed by Maxo’s growth, Exo’s all-India launch, its joint venture initiatives and its plans to grow inorganically.
However, the margins will depend on several factors--prices of packaging polymers are on a rise, employee costs have consistently grown at a faster pace and advertising and promotional expenses will increase due to launch of its brands and entry in new markets.
| Valuation Jyothy is attractively priced at 17-19 times and 15-17 times its estimated earnings for FY08 and FY09 respectively. Its closest peers (in terms of margins and growth rates), Godrej and Marico trade at 23 times and 15 times for FY09 estimated earnings. |
| Market participants are positive on the company and expect a decent upside after the IPO. Issue opens: November 22 |
Montek - Let customers pay!
Rising crude oil prices if not passed on to consumer will kill the domestic oil producers says Planning Commission Deputy Chairman Montek Singh Ahluwalia.
Speaking at the sidelines of the employment summit organised by CII, Ahluwalia said, "Rising crude oil prices is a much serious problem, which is not sustainable. The only sustainable policy is, while protecting the needs of the really poor, if you do not pass on high crude oil prices to the consumers you will kill your oil producers. And that is what happening presently".
When asked, whether the possible recession in the US economy will affect India’s growth prospects, Ahluwalia said, "The real issue is, what happens to the global economy ? A short term slow down in the world economy will not affect our medium term growth prospects".
Ahluwalia further said the Union Cabinet will take up the skill development mission in early December.
"This will be an inter-ministerial mission, which will lay out the agenda for skill development in the country", he said. He also hinted that the group may be headed by Prime Minister Manmohan Singh.
The cabinet will take up 11th Plan draft document in the meeting expected to be held on Monday (November 26), Ahluwalia said.
Frost and Sullivan - India Telecom to grow at over 26%
The Indian telecom industry is expected to reach a size of Rs 344,921 crore by 2012 at a growth rate of over 26%, and generate employment opportunities for about 10 million people during the same period, according to a report.
The telecom industry had a market size of Rs 105,287 crore in 2006.
The sector would create direct employment for 2.8 million people and for 7 million indirectly, according to a Frost and Sullivan report.
"This growth is expected to be fuelled by addition of 400 million subscribers as well as by growth of ARPU from applications facilitated through VAS services," the report said.
India currently has 250 million telephone subscribers and the numbers are expected to reach 500 million by 2010 and 650 million by 2012.
Midcaps continue to fall
A late recovery in frontline shares pared the losses in the Nifty and the Sensex, but bears had a free run at mid-cap and small counters on Thursday. The session was marked by volatility as the sentiment in world markets continues to be fragile. The 30-share Sensex bounced from an intra-day low of 18,182.83 to close at 18,526.32, down 76.30 points or 0.4% over its previous close. The 50-share Nifty closed at 5,519.35, down 41.70 points over Wednesday. Midcap indices on both the exchanges took a beating, ending nearly 2% lower.
Near term signals are confusing, say market watchers. Nifty November futures closed at a 17-point premium. However, with foreign institutional investors steadily pulling out money, stock prices are likely to be under pressure for some time, feel a section of players. According to provisional data on the BSE, FIIs net sold Rs 2487 crore worth of shares on Thursday.
Players expect volatility over the next week in the run up to the expiry of the current month derivative contracts. According to Hiten Sampat of Parag Parikh Financial Advisory Services, bulls usually spread bearish rumours on the eve of the expiry so that they can rollover their positions at a cheaper cost.
While rolling over a derivatives position, if the price difference between the futures contract for the next month and the current one is lesser, the costs of the transaction are lower. Mr Sampat expects the market to remain volatile with a “downward bias” until the expiry of derivatives contracts coming Thursday.
Despite the sell-off in second line shares on Thursday, leading brokerages feel these shares are likely to outperform their large-cap counterparts in the near to medium term. CLSA, the French broking giant, recently held its annual forum where it pointed out that with mid caps trading at a discount to the large caps, there was strong investor interest in these shares.
Educomp, Everest Kanto, Jain Irrigation, Opto Circuits and Shriram Transport are some of its top picks in this space, the brokerage said in a note to its clients.
However, the key question is whether there are sufficient triggers for the market regain lost ground near term. “While the Q-o-Q (quarter-on-quarter) growth momentum should be positive given the pickup in industrial activity in 2HFY08, the YoY(year-on-year) growth should be slower due to higher base effect, lagged effect of interest rate hikes earlier this year, along with adverse impact of currency appreciation for some sectors,” said a note by brokerage house Deutsche Equities to clients.
“In FY09, given increasing risks of a US-led global slowdown we think the chances of meaningful earnings upgrade are rather slim at this stage — though we note that India is not as vulnerable as many other emerging markets,” the note added.
PVR expansion plans
PVR gained 1.43% to Rs 198.30 at 14:24 IST on BSE, on reports it will invest Rs 400 crore in the next three years to set up 250 new screens across the country.
Meanwhile, BSE Sensex was down 279.83 points or 1.50% to 18,322.79.
On BSE 13,858 shares were traded in the counter. The scrip had an average daily volume of 21,663 shares in the past one quarter.
The stock hit a high of Rs 205.70 and a low of Rs 195.50 so far during the day. The stock had a 52-week high of Rs 267.90 on 23 November 2006 and a 52-week low of Rs 148.35 on 8 March 2007.
PVR had outperformed the market over the past one month till 21 November 2007, gaining 9.83% compared to the Sensex’s return of 0.59%. It had underperformed the market in the past one quarter, rising 9.46% compared to Sensex’s rise of 31.34%.
The company’s current equity is Rs 23.01 crore. Face value per share is Rs 10.
The current price of Rs 198.30 discounts Q2 September 2007 annualized EPS of Rs 10.86 by a PE multiple of 12.26.
The company today launched its premium brand of multiplex PVR Premiere. The company is targeting metros and cosmopolitan cities in the country to set up 30-40 screens of the new brand by 2010.
The company would fund expansion through a mix of equity, debt and internal accruals.
PVR’s net profit rose 86% to Rs 6.25 crore on 42.3% growth in net sales to Rs 61.89 crore in Q2 September 2007 over Q2 September 2006.
The company is engaged in operating multiplex cinemas.
Subscribe to:
Posts (Atom)