Sun TV Network: Hold

Shareholders can retain their exposure in the stock of Sun TV Network (Sun TV). We re-visit the stock after our `invest' recommendation during its IPO (Initial Public Offer) last April. Sun TV continues to trade at a substantial premium to its offer price of Rs 875.

The market took a fancy to the stock immediately upon listing and this has sustained since then. The developments, post-offer, such as the inclusion of the group's Kannada and Telugu channels under the Sun TV fold, have cemented its premium positioning in the media space.

The stock trades at a price-earnings multiple of 50 times its annualised per share earnings of 2006-07. The current valuations capture a fair degree of the growth potential and we feel that the stock is richly valued.

The growth story is largely intact, with the network lining up new channel launches for FY-08. It remains a dominant player across the four southern States and is well-placed to take on competition from such new entrants as Star and Zee.

We would, however, watch its progress in the radio business as it forays into the North where it faces competition from Radio Mirchi (Entertainment Network) and Big FM (Adlabs). The progress of the Conditional Access System (CAS) will also play a role in determining subscription revenue growth.

Rising strength

Some of the key developments, post-offer, that have lent strength to the stock are:

A richer bouquet: At the time of its IPO, only the Tamil channels — Sun TV, Sun News, Sun Music and KTV — and Malayalam offerings — Surya and Kiran — were available.

The company has since decided to merge with itself the five Telugu channels under the Gemini banner and the four Kannada channels under the Udaya banner. The flagship channels of Gemini and Udaya also enjoy a dominant presence in their respective markets.

With 15 channels under its fold that tap viewers across all the southern States, Sun TV is the top choice for content providers.

With the southern States accounting for a significant share of regional TV advertising, the combined entity will be an attractive option for investors. This has been largely factored in the stock price.

The 30 per cent expansion in the equity base that will arise from the merger is likely to be earnings-accretive.

Operating margins of the combined entity may, however, dip, although they are still likely to be at robust 70 per cent levels.

Sun TV goes pay: Margins might yet get a fillip, however, from the stronger subscription revenue that will come in from the current quarter onwards, with the network's flagship channel, Sun TV, turning pay (except in Chennai where it remains free-to-air).

Better declaration rates from new platforms such as DTH will drive subscription revenues.

Most of its channels are now pay. With Asianet close at its heels in Kerala, Sun is likely to wait for the viewership gap to widen before it shifts its flagship Malayalam channel Surya channel to pay mode. So far, switching to pay mode has not involved any sacrifices on the advertising revenue front for Sun TV.

Such a move by broadcasters has rarely impacted viewership in non-CAS areas, as viewers have been often forced to pay higher rentals even for channels they did not wish to watch.

Though a way off, it would be interesting to note Sun TV's strategy should CAS be extended to other cities in the South or across Tamil Nadu, where it enjoys its strongest viewership.

While people may be willing to pay for Sun's channels, the initial investment for a set-top box may still be a stumbling block.

Unless CAS makes significant inroads into cable and satellite homes in Tamil Nadu (so far, there has been little offtake for set top boxes in Chennai), the network may again choose to air its channels for free as it has in Chennai. Its strategy may also depend on the success of Sun Direct, the group's DTH service, in penetrating the CAS market.

Ad rate hike: With a dominant presence across markets, Sun TV is well-placed to milk the rising trend in advertising spends.

After a gap of two years, Sun TV announced an across-the-board advertisement rate hike of between 5 per cent and 25 per cent with effect from January.

Additional growth avenues

So far, the offer proceeds have mainly been deployed in its radio business, which is being operated through its subsidiaries. Suryan FM has licences to operate 44 radio stations, mainly in smaller cities.

While Suryan is likely to be more successful in the South, where it has a strong understanding of the market, its foray into the North Indian market is likely to be more challenging.

It recently entered Bangalore, Hyderabad and Jaipur markets. Suryan does not have licences to operate stations in Delhi, Mumbai and Kolkata where in any case it would have encountered stiff competition in Radio Mirchi.

A failure to make a mark in the North could pose a drag on earnings growth and this segment would merit watching. Sun TV has also lined up for launch in fiscal 2008 channels for children, sports and documentaries. The channels are likely to be free-to-air initially.

If the launches go on stream to schedule, the channels should begin to make a contribution to revenues and cash flows from FY-09.

Tech Mahindra: Buy

Investors with a two-year perspective can consider taking an exposure in the Tech Mahindra stock. At the current market price, the stock is trading at a price earnings multiple of 30 times its annualised 2006-07 earnings. While the PEM appears stiff, the $1-billion, five-year contract bagged from BT Global Services in December has enhanced the revenue visibility considerably. The revenues from this contract will start flowing in from April. Even if a slowdown in tech spending were to materialise, working with strategic telecom clients such as BT will help Tech Mahindra mitigate its adverse impact to some extent.

Interaction with the senior BT management recently has strengthened our view that they are comfortable with Tech Mahindra as their preferred vendor and the contract was won in a competitive environment. BT, which is a 32.4-per cent shareholder in Tech Mahindra, is also comfortable with the company expanding its relationships with other telecom players such as AT&T, Alcatel-Lucent or Motorola. Our medium-term recommendation on the stock impounds lower margins in the first year, with margins likely to reach normal levels from the second year. For the third quarter ended December 31, 2006, the operating profit margins from the telecom service provider segment, which accounts for a substantial chunk of its revenues, were fairly robust at 38 per cent.

With Infosys Technologies management guidance for the year 2007-08 round the corner, any turbulence on this front may lead to a PEM derating across the board. But any correction in the markets will be a good opportunity to step up exposures in the Tech Mahindra stock. We are revising our November 2006 recommendation of "Book Profits partially" (especially those who had entered the stock through the IPO) made prior to the BT contract.

The principal risks to our recommendation are: High client concentration, project execution risks, slowdown in telecom spending, wage inflation/attrition in a competitive environment and rupee appreciation.

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Edelweiss - Textile Sector

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Sharekhan Investor's Eye dated March 23, 2007

KSB Pumps
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs650
Current market price: Rs518

Strong performance

Result highlights

• KSB Pumps delivered good results for Q4CY2006. Its net sales grew by 24.9% to Rs108.3 crore during the quarter. There was a delay in the dispatch of certain orders in the previous quarter; the delayed sales got reflected in the fourth quarter, boosting the Q4CY2006 performance.
• On segmental basis, the revenues of the pump business went up by 16.2% to Rs78.9 crore while that of the valve business grew by a strong 57.7% to Rs28.7 crore. However, the margin in the pump business declined to 13.4% from 15.3% last year, while the profit before interest and tax (PBIT) margin in the valve business grew by 120 basis points to 25.4%.
• Overall, the operating profit grew by 24.2% to Rs20 crore, while the operating profit margin (OPM) was stable at 18.5%. This despite a steep hike in the raw material cost, which rose from 41% in the same quarter last year to 46.4%. However, substantial savings were made in the staff cost and other expenses.
• The profit after tax (PAT) for Q4CY2006 rose by 42.4% to Rs12.1 crore. For CY2006, the OPM grew to 20.4% from 18.1%, while the full years' PAT grew by 38.3% to Rs51.6 crore.
• Sales are traditionally better in the first and second quarters for pump makers because of seasonal factors. Hence, we should expect even better results from the company in the coming quarters, both in terms of revenues and margins.
• The pumps industry is set to benefit from the huge investments being planned in the user industries, particularly power and petrochemicals. KSB Pumps, enjoying a 12% market share, would be one of the key beneficiaries of the same and hence we expect the growth momentum to sustain going forward. We are introducing our CY2008 earnings per share (EPS) estimate at Rs46 for KSB Pumps. At the current market price of Rs518, the stock quotes at CY2007E price/earnings ratio (PER) of 11.3x and at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 6.2x. We maintain our Buy recommendation on the stock with a price target of Rs650.

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SECTOR UPDATE

Banking

Revised guidelines on CAR of banks
The revised guidelines on the capital adequacy requirements of banks are broadly in line with the previous guidelines issued in February 2005. However, certain changes have been made which include the introduction of a prudential floor for capital adequacy, increase in the Tier-I ratio and a change in the risk weights for corporate and non-banking finance company (NBFC) exposures. The major changes have been highlighted in a tabular form given below. The revised guidelines would impact some private banks like ICICI Bank, HDFC Bank and UTI Bank as the release of capital has been delayed. An increase in the risk weights for exposure to NBFCs would make the borrowing costs higher for companies like IDFC.

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VIEWPOINT

Garware Offshore Services

Fleet expansion to drive growth
Incorporated in 1976, Garware Offshore Services Ltd (GOSL) is part of the Garware group of companies and involved in providing supply and support vessels to oil exploration & production (E&P) companies operating in offshore blocks.

Currently, the company has a fleet of six vessels: four anchor handling tugs (AHTs; deployed with Oil & Natural Gas Corporation [ONGC] with day rates of $4,500) and two platform support vessels (PSVs; one deployed with Transocean [day rate of $15,500] and another with British Gas on long-term charter at day rate of $14,500).

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Money Column - How to make your First Crore

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Stock Market Soufflé

In may 2006, some of the country's key economic indicators looked like this: The trade deficit, which is the difference between exports and imports (with the latter being higher than the former), stood at $3.8 billion or Rs 16,720 crore; the prime lending rate (PLR) of commercial banks stood at 10.8 per cent; 10-year government securities (G-Secs) were yielding 7.6 per cent; and inflation hovered around 6.1 per cent.

Cut to February 2007: The balance of trade is now negative to the tune of $5.8 billion or Rs 25,520 crore; borrowers of all hues (retail as well as medium-sized enterprises) are coughing up more what with the PLR climbing to 12.3 per cent; safe-haven assets like fixed deposits and bonds are back in fashion as 10-year government paper breaches the 8 per cent mark; and, last but not least, the monthly budget of households has shrunk with inflation peaking at 6.7 per cent.

If the scenario on the economic front was steadily deteriorating in the nine months between May and February, it wasn't quite reflected on Dalal Street. In fact, the euphoria persisted. After hitting a new high on May 10, 2006, of 12,612 points, the Bombay Stock Exchange's (BSE's) benchmark index did brutally correct over 26 trading days by 29.20 per cent to hit a low of 8,929 points thanks to fears of a global commodity bubble that looked set to implode. However, after duly riding out that crisis, the Sensex rebounded in style, and came within striking distance of the 15,000 mark in early February, hitting 14,697 by the 8th of that month. That the markets have since corrected is another story (attributable to global factors), but the 2,000-odd point spurt in just 180 trading days made you wonder whether punters had taken into account the dark clouds in the macroeconomic picture. It would appear, from the Sensex's spurt-and the pundits' consequent predictions that stretched from 20k to 50k over varying time-spans-that market men were blinded to these worries.

They weren't.

For a moment try and look beyond the much-hyped Sensex (and indeed other similar benchmark indices), and consider instead the 30 stocks that give it life. Therein hangs a bearish tale: Just six stocks with a collective weightage of 40 per cent have contributed to the rally. The rest didn't participate at all in the run up to 14,600 levels. In fact, 14 of the Sensex shares have been value destroyers in the May-February period, by as much as 30-54 per cent in a few cases. Look beyond the Sensex and the picture isn't brighter, with the BSE's 286-stock mid-cap and 463-stock small cap indices flat as a pancake. And sectors that were till recently the rage-auto, fast-moving consumer goods, public sector undertakings, metals and pharma-are in various states of neglect (see Does the Sensex Make Sense?). Last fortnight, as markets globally slipped into a free fall, unsurprisingly, back home, the stocks that fell the hardest were those that had fuelled the index's heady rise. For instance, HDFC, HDFC Bank, Reliance Communications, and ICICI Bank were responsible for pushing down the Sensex from the 14,600 levels to 12,500 by March 15.

Meanwhile, bearing the brunt of the apathy to India equity (or at least to most of it) are mutual fund schemes that tapped the markets in 2006 (see No Fun for Funds). Almost all of them have registered negative returns since inception. The net asset value-based returns of DSP Merrill Lynch Mid-cap and Small Cap Fund, for instance, are down by 14 per cent since launch in October, even as the Sensex has moved up by 5 per cent since then. UTI Contra Fund is down 13.14 per cent since being flagged off last March.

he big question being asked on Dalal Street these days is: Is the four-year structural/secular/broad-based rally over? Clearly, signs of fatigue have begun to show in the past nine months, and the multi-bagging machine that the Indian market till recently was, is beginning to sputter. "The focus has suddenly shifted back to large caps and even new investors are chasing the frontline stocks. That's the problem we are facing today," explains Hemendra Kothari, Chairman, DSP Merrill Lynch. Adds Asit Koticha, Managing Director, ask Raymond James: "The broader market's behaviour can be attributed to an underperformance in relation to expectations rather than any actual financial (under)performance." A worry is the decline in delivery-based trades, down to 32 per cent, which is the lowest level in years, and which clearly points to the lack of conviction in the long term. This is also reflected in the advance-decline ratio which has been below one for six out of nine months since May (which means there have more stocks falling than rising in these months) for the 1,000 most actively-traded stocks on the National Stock Exchange.

Some sections of the market can't understand why mid-caps are getting the cold shoulder. Earnings growth for this sector is robust (for the December ended quarter, mid-caps showed a 38 per cent growth in profits). And, as Nimesh Kampani, Chairman, JM Financial, puts it: "Mid-caps are tomorrow's large caps. I am not unduly worried.

The ubiquitous foreign institutional investor (FII), and the flows this tribe brings into the country, will have a major hand to play in creating tomorrow's mega caps. After all, it's been largely FII funds-all of $34 billion or Rs 1,49,600 crore in the past four years-that have been instrumental in pulling up the Indian markets from the undervalued stage to one of fair valuation (some would argue to a stage of overvaluation). However, the bad news is that FII inflows are showing distinct signs of flagging. In the last 10 months since May, net inflows have plunged by close to 60 per cent, to Rs 19,408 crore from Rs 46,445 crore in the previous corresponding period. In fact, the last 10 months' inflows are the lowest since 2003. Sushil Muhnot, Managing Director, IDBI Capital Markets, says: "There has been a slowdown in FII inflows, but that has, more or less, been made up by higher FDI (foreign direct investment)." That's cold comfort for investors who've bought shares hoping that foreign money will fuel those shares to dizzier heights. One reason for the subdued FII interest may be that the options for investment for global investors are simply narrowing down. For instance, in a sector like banking, FIIs have reached their respective permissible limits in stocks like ICICI Bank, State Bank of India, Bank of Baroda, Oriental Bank of Commerce, Punjab National Bank and half-a-dozen other state-owned banks. Amongst the Sensex stocks, ICICI Bank and Bharti Tele are two stocks with a total weightage of 17 per cent where the FII limit has been reached. But fewer options may not be the only reason for the dipping FII inflows. It could just be that the Indian markets have run out of steam in the past 10 months, and other emerging markets-particularly in the Asia-Pacific region- have begun to look more attractive. For instance, the Chinese markets had gained 90 per cent since May 10 till last fortnight; the Sensex on the other hand had inched up by only 3.10 per cent in this period. Yet, there are those who believe that few emerging markets can boast of a story like that of India over the longer term. Andrew Holland, Managing Director, DSP Merrill Lynch, says: "India's growth story is compelling. I don't think the Malaysian, Philippines and Vietnamese markets are big enough to force foreign investors to shift money from India." But the billion-dollar question is whether, barring the elite bellwether stocks, the FIIs have enough conviction in the rest of the pack that's listed on the Indian stock exchanges.

Lanco-Jindal may lose Sasan

Bid evaluation committee wants the combine's 'amicable extrication' from the project.

The promise of easy power from the Rs 16,000-crore Sasan ultra mega power project seems distant as the project’s bid evaluation committee has decided to ease out the Lanco-Jindal combine as developers of the project.

The committee, headed by HDFC’s Deepak Parekh, decided to “explore an amicable extrication of Lanco from the project,” said an official closely associated with the 4,000 MW project.

Lanco, with its overseas partner Globeleq, had offered to supply power at an eye-popping Rs 1.196 per unit from the pithead coal-based project in Madhya Pradesh.

This was the lowest of the nine bids received to develop the project, and brought the Hyderabad-based Lanco to the national stage. Its bid was better than those from industry veterans like NTPC (Rs 2.126 per unit), L&T (Rs 2.251 per unit) and Jindal (Rs 1.799 per unit).

There were also some questions raised about the financial strength of Globeleq-Singapore, which was the entity partnering Lanco.

“The next step is a meeting between Lanco and the Power Finance Corporation (the nodal agency for implementing the project),” officials said.

Lanco’s Managing Director Madhusudhan Rao said he was yet to hear from PFC though he reiterated that he was “confident of getting the project.”

The evaluation committee wanted to ensure that the project should not suffer. “We want the project to take off,” said an evaluation committee member, who requested anonymity.

However, members of the committee, which includes the chairman and managing director of both PFC and Punjab National Bank, and the chairman of Central Electricity Authority (CEA), want the power from Sasan to be made available at the amount bid by Lanco-Globeleq.

One of the options being explored is to ask the second-highest bidder — Reliance Energy — to match the Lanco-Globeleq bid. Reliance had bid to supply power at Rs 1.296 per unit.

“The committee could not take a decision on this,” sources said, adding that another meeting would be scheduled shortly.

The other option of inviting fresh bids did not find much favour at the meeting. “The entire bidding procedure followed the guidelines and there’s no question of any wrongdoing,” said a committee member.

However, all members are keen to avoid any litigation that could delay the project.

Sources said the shell company set up by PFC — Sasan Power Ltd — is working on full steam to get the requisite clearances and approvals.

POWER PLAY

Committee undecided on asking second-highest bidder to match Lanco's bid to supply power at Rs 1.196 per unit The option of inviting fresh bids has not found favour Committee keen on avoiding litigation Lanco still confident of bagging the project

Sharekhan Derivatives Info Kit for March 26, 2007

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MoneyTimes

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Advanta India IPO analysis

Adventurous pricing

A subsidiary of United Phosphorus (UPL), Advanta India, held by Advanta Netherlands Holdings, ITC-Zeneca, Syngenta, AgroTech Foods, and private equity investors at various stages, has developed a global portfolio of wide range of hybrid seed varieties including sunflower, rice, corn, rapeseed, mustard, sorghum, canola and oats.

Advanta India has three international subsidiaries in Australia, Thailand and Argentina. The international division of the Australian subsidiary caters to Asia, the Middle East, Africa and Latin America.

The subsidiaries outside India were earlier subsidiaries of Bio-win Corporation, a group company of the promoter group, United Phosphorous. Advanta Holdings B.V., a wholly owned subsidiary of Advanta India, acquired these subsidiaries from Bio-win at euro 95 million, or around Rs 556.52 crore, on 30 March 2006. Of this, Rs 227.44 crore is still outstanding. Advanta India will be using the IPO funds to pay off this liability.

Uniphos Seeds and Bio-Genetics Pvt Ltd (USBPL), one of the promoter group companies, got merged with Advanta India on 1 April 2006. Advanta India issued 33.77 lakh equity shares at par to the shareholders of USBPL: Jai Shroff and Vikram Shroff. USBPL was focused on developing, marketing and selling bio-engineered seeds for cotton crops licensed from Nath Seeds, an Indian company delisted by the stock exchanges.

Strengths:

1. Advanta India has well-developed brands and distribution network in the markets where it operates. The company owns and has access to a broad portfolio of proprietary germplasm, which is necessary for any seed company to gain competitive edge.
2. The company has been developing since the last 12 years a hybrid non-genetically modified sunflower variety in Argentina, named Sunsat. It will have the capability of lower bad cholesterol. Commercial production is slated to start in 2009.

Weaknesses:

1. Advanta India operates in a seasonal industry and is exposed to risks related to weather, disease and pests. Moreover, technology advances (like genetically modified seeds) are changing the dynamics of the industry. Besides, operations in many countries and crops make the performance highly unpredictable.
2. In the present form, the consolidated company has been in existence since March 2006. So comparable financial track record is not available for the past, except for the latest seven-month performance. The different consolidated entities have been growing individually at unexciting rates in the past few years. Not surprisingly, they have also changed hands often.

Valuation:

Advanta India has set a price band of Rs. 600 to Rs 650 per equity share of Rs 10 each, translating into a PE of 30.1x on the lower price band and 32.6x on the higher side of the price band, according to annualised EPS for the seven-month period ended October 2006 on post-issue equity of Rs. 16.83 crore. However, the actual EPS may be significantly different from the annnualised one due to seasonality in business (the impact of which is not ascertainable).

Monsanto India and Syngenta India, the listed Indian subsidiaries of MNCs, derive part of their revenue by selling hybrid and genetically modified seeds to Indian farmers. These companies are presently trading at PE of 21.6 on a trailing 12-month basis.

Hybrid seeds is not a high growth business and also prone to unpredictable fluctuations. Hence, the asking PE is very steep.

Emkay - Weekly Technicals & Derivatives

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Sharekhan Eagle Eye (equities) for March 26, 2007

Bears losing ground
The domestic indices have been trading firm for the last five sessions. Today the market closed a bearish gap on the Sensex and the Nifty also managed to go past 3900 on an intra-day basis...

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Weekly Close: Highest weekly gains ever !

It was the best week ever for the markets in absolute terms with gains of 6.85% which is a gain of almost 850 points. Such high gains in a week have been registered for the first time ever. Out of the 5 days in the week, market saw gains in the last 4 sessions.

It was a mild start for the week with decent gains but volumes were very muted without conviction. However then a strong bounce in the US had the Indian Markets rallying and that accompanied with some decent volumes.

China Central bank, People's Bank of China (PBOC) raised lending and deposit rates by 0.27 percentage point last week end. The benchmark one-year lending rate was increased to 6.39 % while the deposit rate was set at 2.79 %. Apparently this was to balance growth, stabilise prices and improve the overall structure of the economy. China has been seeing major growth even in a tightening environment. This sets the stage for slower growth. We expected metals / crude to see softness on the back of this. They softened only to make a comeback later.

Inflation last week was 6.46% and this week too the number did not change. We expected the banks to be weak but they rallied. The Banks were the big gainers this week which really remains a surprise. Markets are smart and they realised that this is a temporary phenomenon and probably that brought in the big buying. Inflation remains a bit of a worry in a sense . The rupee was strong this week and touched a low of 43.45 before closing at 43.75. The benefit of that is to an extent due to the inflation and may be thats the reason the RBI has been quite sanguine about it. The software stocks were a bit cautious on this and hence the gains in the large caps softwares were a bit muted.

The gains were across board and the major gainers of the Nifty were Bharti Airtel +8%, BHEL 16%, Cipla 8%, Dabur 9.8%, HDFC 5.4%; HLL 12%; ICICI 10%, Jet 11%, Larsen 12%, Mahindra 7%, Maruti 7%, ONGC 10%, Oriental Bank +16%, PNB + 15%, Rel com +13%, Satyam +6%; SBI 13%; Sail 9%, VSNL 9%. Among the losers were ITC and Tata Power but marginally.

We had a research note on Blue star. The company is into central Airconditioning. We believe that the stock is extremely expensive. The Markets seem to be expecting much stronger growth than they can deliver. At 34 times FY07 we are not convinced on the valuations. Look for lower levels but over the long term things could get better.

It was not a very positive week for cement though hopes were high. The Cement manufacturers met the FM this week but met with little success and the issue of high cement prices still remains hanging. The FM requested the Manufacturers to control the prices and has asked for proposals for the same. We were hoping for a rollback by the FM and thats not happened. However this has brought in some level of discomfort as long as inflation numbers come in high. We believe all this will be forgotten once inflation numbers start coming lower.

ITC was on the receiving end with West Bengal applying 12% Vat on tobacco products and then followed by Maharashtra. This is a hit below the belt for the cigarrette major. Cigarettes account for 60% of revenues and about 80% of profits. ITC will thus diversify less as cashflows are expected to be impacted badly and the plans for expansions in soaps and FMCG products have been put on the backburner. This was seen as a positive for HLL.. ITC lost 1% this week where as HLL gained 12%.

We had a research note on ICRA the second largest Rating agency in India. Moodys is the dominant shareholder here. Sebi norms on IPO grading gave the ICRA IPO a boost in the arm. This brings in another set of grading. So when a company has to raise money either through equity of debt, the rating agencies will get business. ICRA IPO is valued at 18 X FY07 earnings. Important to understand that the business is completely dependent on the macro environment. However its a good service business with annuities. We believe the pricing has been kept low so as to benefit the Employee trust. The big fallout of this IPO would be that the employees could be offered an incentive package. Thats good news. We thing its a good idea to subscribe to the issue. In the current environment where most IPOs have listed below offer price, there is hope of getting what one bids for.



Technically speaking: We maintained that Sensex supports were placed at 12300- 12400 and the resistance was at 13000 and above that around 13300- 13400. Thats where the Sensex has taken resistance. We are near the upper end of the range. Expect Markets to have some level of reversal from here. and supports are around 13000 before the next direction. 13520 is the next resistance level to be crossed with targets of 13804. Clearly the negative trend will be negated above 13520.

Next week is the FNO expiry for March and that should bring in some volatility. Also we are near the year end and some level of NAV propping is a possibility. Volumes are low and the liquiidity will be limited. So its likely to be a lacklustre week.