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Sunday, September 05, 2010

Overall bias to remain positive

Despite an intra-day dip to 5,350, the Nifty more or less moved in the trading band of 5,400-5,550. It ended with a gain of 71 points at 5,479 and looks likely to continue its range-bound movement.


Investors can consider exiting the stock of Bharat Petroleum Corporation Ltd (BPCL), given that its sharp run-up since the partial fuel price reforms in late June seems to be ahead of fundamentals, and ignores the low earnings visibility due to the subsidy burden. At its current market price of Rs 768, the stock has gained as much as 39 per cent in a couple of months and trades at around 17 times FY10 consolidated earnings, much higher than its peers, HPCL (12 times) and Indian Oil Corporation (10 times).


With the revival in capex activity in sectors such as steel, port, power and other infrastructure segments, the fortunes of engineering equipment maker TRF stand renewed. Investors with a two-three year perspective can consider investing in the stock of TRF.

Amara Raja Batteries

Investors with an appetite for risk and a long-term perspective can consider an exposure to the Amara Raja Batteries stock. The company is a pioneer in VRLA (Valve Regulated Lead Acid) batteries. Buoyant automobile sales, promising long-term outlook for telecom batteries and a diversified presence in the industrial segment signify good earnings visibility.

PVR Cinemas

Investors with a two-year horizon can consider buying the shares of PVR, a leading multiplex operator, given the revival in the movie exhibition business, increasing average ticket price as well as occupancies.

Panasonic Home Appliances

The stock of Panasonic Home Appliances has been steadily moving northwards over the last one year riding the wave of optimism on consumer businesses.

Direct Taxes Code - Implications

The much awaited Direct Taxes Code Bill, introduced this week in Parliament, has set high expectations in the minds of taxpayers of the country — individuals and businesses alike.