Market Close: Indices Unchanged as Rate Unchanged

It seems indices have adjusted to the turmoil from the recent past. Although many events like the Fed cut, US Subprime issue, Bank CRR hike and FnO expiry to come which could bring in some of its effects. Following the global cues, Sensex opened on a strong note +300 points. Later, the domestic news and Reserve Bank of India's (RBI) surprised the market in its quarterly monetary policy by not changing any of the rates. This intensified markets to give up all the gains made in the early session as it slipped into negative zone. Rate sensitive sectors like auto , realty and banks witnessed selling pressure. Amidst this, value buying was seen leading to a smart recovery , helping sensex to end marginally in red. Midcaps and small caps were among gainers. Asian indices traded mixed. While Europe is trading in green.

Sensex ended down by 61 points at 18091.93. Weighing on the Sensex were losses in Dr Reddys (539.65,-4 percent), ICICI Bk (1220.3,-4 percent), SBI (2225.1001,-4 percent), HDFC Bk (1531.75,-3 percent) and Bajaj Auto (2378.6499,-3 percent). Losses were restricted by gains in HLL (207.25,+4 percent), Hindalco (179.75,+3 percent), Cipla (190.75,+3 percent), Infosys (1492.85,+3 percent) and TISCO (716.2,+3 percent).

Apar Industries Ltd (Apar) reported good set of numbers for the quarter ended 31st December 2007. The top line grew by 31% to Rs 473 cr and the bottom line grew by 7% to Rs 14 cr on yoy basis. EBIDTA enhanced by 48% to Rs 27 cr while the Ebidta margins stood at 6% higher by 100 bps on annualized basis. Decrease in raw material cost helped partially improvement in the margins. Apar Industries Ltd is a diversified company having presence in Speciality Oil, Aluminium Conductor. Apar is the largest manufacturer of Transformer Oils in India and the second largest manufacturer of high strength overhead power transmission and distribution conductors. The Company earns around 48% of its revenues from the power sector, 42% from Speciality oil and 10% from Polymers. However the company has hived off its polymer division. Two segments of the company are expected to see immense growth due to buoyancy in power sector. Valuation seems to be fair at the current price. Future outlook remains promising with immense growth seen in power sector. Increasing crude and metal prices ramins a big risk as it could impact the margins. Keep watching this space for more updates.

GSPL- Gujarat State Petronet Ltd delivered numbers inline with the expectations. Top line for 3rd quarter 2007 grew by 27% to Rs 111 Cr on y-o-y basis. EBIDTA was up by 29% to Rs 97 Cr. EBIDTA margin increased by 100 bps to 88%. PAT dropped by 11 % to Rs 25 Cr. Since, the company is on expansion mode, high interest and depreciation has hit the margins. Gujarat State Petronet Limited (GSPL) is the first company in India to transport natural gas on open access basis and is a Pure Natural Gas Transmission Company. During the quarter, the Company has allotted 1.873 Cr equity shares as preferential allotment to International Finance Corporation and 1.85 lakh equity shares to eligible employees pursuant to the ESOP Plan 2005 . There by increasing the Equity Capital to 561.8 Cr. We believe that over the next two years the margin pressure would get subsidised. Although, GSPL does not run the risk or marketing gas nor does it invest in gas inventories which makes its safe. GSPL has a 20% stake in GSPC Gas, a city gas distribution company, which attributes some value. But we still feel it is best avoided. Do read our note to know more.

Technically Speaking: Sensex traded in range of 600 points fromdays high as it made an intra day high of 18491 and low of 17928. The breadth was taken over by Advances as there were 1394 Advances against 1348 Declines. Market turnover was very low at Rs 4781 crs. Sensex support lies at 17750 resistance lies at 18800.