Evening Reports

Nifty closes below 5100; L&T, Siemens down


MUMBAI: Sustained selling pressure across the board saw benchmarks close near lowest levels of the day. All the sectoral indices ended in the red

How to invest in 2010 Sectors with potential in 2010 Investment resolutions for 2010 Risks you'll be running in 2010

with capital goods and power stocks worst hit.

National Stock Exchange’s Nifty ended at 5093.60, down 128.10 points or 2.45 per cent. The broader index touched a low of 5085.45 and high of 5220.35.

Bombay Stock Exchange’s Sensex closed at 17050.67, down 423.82 points or 2.43 per cent. The 30-share index hit a low of 17025.26 and high of 17474.49.

BSE Midcap Index was down 2.34 per cent and BSE Smallcap Index slipped 2.47 per cent.

All the sectoral indices were in the red. BSE Capital Goods Index was down 5.17 per cent, BSE Power Index declined 3.52 per cent and BSE Realty Index slipped 2.88 per cent.

L&T (-6.59%), Siemens (-6.41%), Tata Power (-4.73%), BHEL (-4.51%) and Suzlon Energy (-3.83%) were amongst the top Sensex losers.

Shares of Larsen & Toubro fell following disappointing results. The company’s standalone net profit rose to Rs 758.82 crore for the quarter ended December against Rs 1520.44 crore in the same quarter a year ago. Net sales stood at Rs 8071.37 crore against Rs 8593.96 crore .

BHEL reported net profit of Rs 1072.59 crore for the quarter ended December against Rs 790.56 crore in the same quarter a year ago. Net sales grew to Rs 7100.34 crore for the quarter against Rs 6022.25 crore a year ago.

Mahindra & Mahindra, up 0.31 per cent, was the lone gainer in the 50-share index.

Market breadth on BSE was sharply negative with 2369 declines against 537 advances.

(All figures are provisional)

Sensex ends 2.4% down on L&T nos; cap goods dips 5%

The benchmark Sensex today closed down by over 400 points on the back of disappointing Q3FY10 numbers from the infrastructure major Larsen & Toubro. The company's Q3 adjusted PAT (profit after tax) was up 15.21% to Rs 696 crore and net sales were down 6% at Rs 8,071 crore, which were below the market expectations.

Wholetime Director and Chief Financial Officer YM Deosthalee said, “De-growth [in sales] is mainly due to delays seen in certain projects though there are no cancellation of orders. Some irrigation projects were delayed due to fund constraints, road projects have seen a slow pick-up and decision-making in some jobs was slow.”

L&T also saw difficulty in financial closure for some projects, he said. “We did not foresee the execution capabilities in a few orders.” However, “Growth in the fourth quarter would be much higher than in the third,” Deosthalee said.

The 30-share BSE Sensex closed at 17,050, down 423 points and the Nifty was at 5,093, down 128 points, as per provisional data.

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Q3 earnings: BHEL, Biocon, L&T, Dr Reddy's, JSW Steel, Wipro, TVS Motors

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ICICI Bank Q3 net falls 13.4%; smaller than forecast

BANGALORE: ICICI Bank, India's No.2 lender, reported a smaller-than-expected 13.4 percent drop in quarterly net profit, as demand for retail

Q3 Earnings Q3 Earnings Impact

loans helped offset the impact of a drop in treasury income.

ICICI said its October-December net profit fell to Rs 1,101 crore ($239 million) from Rs 1,272 crore a year earlier. A Reuters poll of analysts had forecast net profit of Rs 1,055 crore.

Indian banks were mostly insulated from the direct impact of the global credit crisis, but the world downturn hit the country harder than expected leading to a sharp slowdown in credit growth in the current financial year.

Demand for credit is expected to pick up in the near future, as improving business and consumer confidence brings back corporate, housing, auto and retail demand in Asia's third-largest economy.

Shares in ICICI Bank, valued at $21 billion, fell 3 percent in October-December, lagging a small gain in the sector index.

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• Biocon Q3 net jumps three-fold to Rs 81 cr
• L&T Q3 net up 26%, beats forecast
• Dr Reddy’s takes Rs 233-cr knock
• JSW Steel posts Rs 422-cr profit
• Spice Communications suffers Rs 67-cr net loss
• TVS Motor Q3 net at Rs 24 cr

• BHEL Q3 net up 35 pc to Rs 1,072 cr
  21 Jan 2010, 1436 hrs IST

  Bharat Heavy Electricals Ltd today reported a growth of 35.67 per cent in its net profit at Rs 1,072.5 crore for third quarter ending December 31, 2009, over the same period last year.

• Kingfisher Airlines Q3 net loss at Rs 419 cr
  21 Jan 2010, 1031 hrs IST

  Kingfisher Airlines today said its net loss for the third quarter ending December 31, 2009, has widened to Rs 419.96 crore.

• HDFC net up 23% on NPA dip, better NIM
  21 Jan 2010, 0231 hrs IST

  The country’s largest mortgage financier, Housing Development Finance Company (HDFC), reported a 23% jump in profits for the third quarter.

and more @ http://economictimes.indiatimes.com/News/News-By-Company/Earnings/articlelist/75410.cms

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Two high beta stocks at 200 dma

Ten things you should know about Jubilant Foodworks

NIFTY: Road to Nowhere

State of Global Markets

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MOrning Calls

	Two Attractive Mid Cap Stocks Sanjay Chhabria Sanjay Chhabria Jan 19, 2009 Manaksia Ltd (Rs 108) (Rs 2 Paid Up) (BSE Code – 532932, NSE Code - MANAKSIA) (P/E - 6.5, FY’09 Net Sales - Rs1,485 cr, Market Cap - Rs750 cr) Manaksia Limited (formerly Hindusthan Seals Ltd., incorporated in 1984) is a multi-division and multi-location conglomerate. It possesses 15 manufacturing plants in India and three abroad; two in Nigeria and one in Ghana. Manaksia specialises in the manufacture of packaging products (crowns, closures and metal containers), metal products and fast moving consumer goods, among others. The company's metal packaging products include crowns, roll-on pilfer-proof closures, expanded polyethylene liners as well as push-open and other metal containers. In the fast moving consumer goods segment, the company is a dependable mosquito repellents outsourcing destination for the Mortein (owned by Reckitt Benckiser (India) Limited) and Maxo (owned by Jyothy Laboratories) brands. The company has now diversified into the production of aluminium rolled products, secondary specification aluminium alloys and galvanised steel. The company’s wholly owned subsidiary in Nigeria, MINL Limited, was set up in 1996 and is the market leader in ROPP caps and crown corks in Nigeria. It has also set up facilities for the manufacture of galvanised steel, metal colour coated sheets and coils and secondary specification aluminium alloys. The company also has subsidiary companies in Ghana (Dynatech Industries Ghana Limited) and Dubai (Euroasian Ventures FZE). Manaksia manufactures value-added metal products and metal packaging products. The Kolkata-headquartered Manaksia Group is India’s largest secondary producer of value-added aluminium rolled products with 15 manufacturing facilities in the country and three abroad. The business of the Manaksia can be categorised into metal products, packaging products, mosquito coils, and engineering and other goods. For funding its expansion plans and general corporate purposes, the company had come with an IPO of Rs 248 cr., comprising fresh issue of 155 lakh shares at Rs 160 per share(Rs 2 paid up) in December 2007. Manaksia has vertically integrated across a number of products, resulting in reduction in manufacturing cost. Its metal-management skills and innovations in manufacturing and product enhancement have enabled it to manufacture advanced metal packaging products and retain and add customers like Hindusthan Coca Cola Beverages (Coke), Reckitt Benckiser, Dabur India, Jyothy Laboratories, Eveready Industries and McDowell Group and other major beer and liquor manufacturers. The aluminium division has attracted reputed alloy ingot users like TVS Motor, Orient Fans and Toyota Tsusho Corporation as customers. The company does the bulk of its business in Nigeria, which offers two main advantages. One, it gets aluminium scraps at a cheaper rate compared to international prices since the export of aluminium scrap is banned by the Nigerian government. Second, it gets cash incentives on export of the finished products. Since the company has been getting this benefit for more than a decade, it expects this trend to continue for the next few years too. In the fiscal 2008-09, Manaksia’s consolidated net sales stood at Rs 1,485.06 cr., up from Rs 1,147.37 cr. in 2007-08. The consolidated profit after tax in 2007-08 was Rs 106.3 cr. (Rs 128.19 cr.). This translated into an EPS of Rs 15.3 on Rs 2 paid up share(Equity-13.9 cr. Promoters’stake- 58.1%) and P/E multiple of 5.3 at its current price of 82. A 110% dividend (Rs 2.2 on equity shares of the face value of Rs 2 each) was declared for 2008-09. For the half year ended Sept. 2009, Manaksia has posted net profit of Rs 56.62 cr. on net sales of Rs 596 cr. on consolidated basis. The EPS for half year stands at Rs 8.14 Going forward, the company plans to focus on its metal business, which mainly consists of steel and aluminium-rolled products. Manaksia claims to be the largest player in secondary aluminium rolling in India. This gives the company economies of scale and helps it to reduce raw material costs, thereby resulting in better operating margins. The company has strong technical know-how in producing value-added metal products and expects to leverage this to generate higher profits. Some of the company’s metal products are also supplied to auto majors like Maruti Suzuki and Toyota. The management expects the metal business will grow at decent rates in coming years on a conservative basis. At current levels, the stock trades at 7 times its FY2009 earnings(Rs 15.3) and 6.5 times its estimated FY 2010 earnings(Rs 16-17). Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months. Repro India Ltd (Rs 113) (BSE Code- 532687 NSE Code- REPRO) (P/E- 7, Promoters’ stake-68.78%, Market Cap - Rs117 cr) Repro India Limited is one of the few integrated print solution provider and a manufacturer and exporter of books in the highly fragmented printing industry. Its solutions include content management, configuration to content delivery and the entire supply chain for publishers. The Indian Printing industry has managed to grow at a CAGR of 14% over the last 25 years. to touch Rs 1100 cr.. That is almost twice the GDP growth rate. Repro has successfully evolved from a printing press to an end-to-end print solutions provider. The company provides value-added printing and prints related solutions to major publishing houses, corporates and software companies. The clients of the company include publishing houses such as Alligator Books, Macmillan, Orient Longman, Oxford University Press ; software companies Microsoft , Oracle, IBM; and Indian corporates including Tata Steel, Infosys, Wipro etc. RIL had come with an IPO in November 2005 at Rs 165 per share and raised Rs 43.2 cr.. RIL’s equity stands at 10.47 cr. out of which promoters hold 68.78% while the public holding is 15.19%. Through content process outsourcing, Repro offers content, creativity and designing. It provides desktop publishing, ideation, content creation, designing, illustration and copywriting. Content Process outsourcing is another large opportunity for India and holds great potential as we have a low cost talent pool, design and creative capabilities and knowledge of English language. Countries like USA and the UK, which are considered among the largest markets for printing industry, are increasingly looking at outsourcing to low cost countries such as India. Repro offers print solutions for educational and children’s books for the publishing industry and annual reports and other corporate print solutions for corporates. Digital printing is utilised for IT industry and print on demand (POD). It also services the insurance industry through POD. Repro is also into contractual publishing—magazine printing and others like replication of CDs and stock management activities For the half year ended Sept. 2009, Repro posted Adjusted net profit of Rs 8.8 cr.(down 23%) on net sales of Rs 103.5 cr. (down 4%). EBIDTA fell 12% to Rs 16.8 cr. and net profit fell 45% to Rs 5.13 cr.. The major reason for fall in sales was that the impact of the global meltdown which led to delay in execution of large no. of export orders on account of Repro waiting for the client to tie up for the money or open the LC’s.. The situation has changed now and the growth prospects look optimistic in the coming quarters. Repro has an order book position of about Rs 130 cr.(of which Rs 35 cr. is domestic and rest is exports) to be executed in the next six months. Repro had posted a healthy 57% growth in topline to Rs. 241 cr, for FY09 while net profit grew just 6.5% at Rs 16.55 cr..(up 6.5%) due to forex losses of 16.5 cr.. On a equity of 10.47 cr., the EPS stood at Rs 15.75 and the dividend declared was 25%. Almost 35% of the company’s turnover comes from exports. Its exports business holds significant revenue upsides as it shifts focus from straight printing to content process outsourcing(CPO). As the company would be focusing on CPO for its foreign clients it expects margins to grow in future. The expansion at Surat SEZ and Vashi units will also bring benefits this year. As the company scales up its business and sets up infrastructure to support its expansion in the exports market, it expects higher realizations in the years to come. The Repro stock appears attractive as it is valued at about 7.5 times expected FY10E(Rs 15) and at 5.6 times FY11E earnings(Rs 20). On account of increasing contribution from higher margin businesses and attractive valuations, the stock holds good potential for appreciation in the medium-long term. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months. valueinv@sify.com 9893200307 Sanjay Chhabria is an equity analyst and investment consultant based at Raipur (Chhattisgarh). At the time of writing this, he doesn’t have any position in the stocks mentioned above. He is bringing a weekly Investment newsletter "Market-View" since April 2001 to help small (retail) investors take an informed investment decision. He invites Readers to send him email to get free 1 week trial offer of "Market –View". He also appears on CNBC TV 18(Mid cap radar). He welcomes comments, feedback & investor queries at valueinv@sify.com. Under no circumstances does the information in this report represent a recommendation to buy or sell stocks. This report has been prepared solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments.
	MTNL: Cash is king Rathin Shah
	IDFC: Buy at CMP Rs158 KRChoksey
	Technical calls: EID Parry, Financial Technologies, Canara Bank HDFC Sec

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Top 5 picks of the day I Mid term picks of the day

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Heard on the street

Satyam Computer down over 5% on L&T exit buzz Satyam Computer shares were among the biggest losers on Tuesday, shedding over 5% to close at Rs 110.35. Buzz is that L&T, one of the largest shareholders, is likely to exit its position in Satyam in the next few days. According to market buzz, Dubai-headquartered Legatum Group is among FIIs interested in picking up a slice of L&T’s 4.9% stake in the company. Jubilant IPO door seen shut for many retail clients Jubilant Foodworks’ IPO will close on Wednesday, but for many of a broker’s clients in Mumbai suburbs, the issue is as good as closed on Tuesday. The broker, which is also a mutual fund distributor, has told clients that he won’t not accept applications for this IPO in any of his branches on Wednesday. The reason cited is the logistical difficulties to carry the forms to the head office on the last day before 3 pm. Such reasoning is surprising, as many retail investors usually apply on the last day of an IPO. Stock trading over mobile may soon be a reality Sebi is said to be examining a proposal to introduce equity trading over mobile. Market buzz is that the regulator is considering certain security protocol issues connected to mobile trading and once those are resolved will kick start the facility. When introduced, mobile trading is expected to boost online trading as currently mobile penetration is a lot deeper than personal computers. Bulls lap up ICICI on hopes of strong Q3 numbers SHARES of ICICI Bank have been inching up in the past three trading sessions, defying the sluggish trend in frontline shares in general. On Tuesday, the stock held ground in a falling market, closing flat at Rs 863.40. One of the theories doing the rounds is that traders are loading up on the stock in anticipation that the third quarter numbers due on Thursday will be better than market expectations. But equity analysts feel that looks unlikely at the moment. The other talk is that some of the foreign broking firms are taking a more positive view on the stock of late and have been enthusiastically recommending it to their clients. It is not known if the recommendations have actually translated into buy orders. Contributed by Santosh Nair,Deeptha Rajkumar & Nishanth Vasudevan.

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Tata Power

Daily Newsletters - Jan 20 2010

ENIL

GAIL

Sterlite Industries, Ultratech Cements

Jaiprakash Associates, Sintex Industries

Infotech Enterprises

Bharat Forge, Escorts

Top Picks

Indian Wireless

Src: ET, DP Blog and Valuenotes etc

Morning Calls

Wait for a breakout

The market remained tightly range-bound with only nominal movements among the major indices. The Nifty was up 0.1 per cent at 5,252.2 points while the Sensex gained even less in closing at 17,554 points. The Defty gained 0.3 per cent as the rupee strengthened further.

Volumes were on the low side but advances outnumbered declines, so breadth indicators were not bad. Both FIIs and domestic institutions were net buyers in moderate quantities. The BSE 500 rose by about 0.7 per cent while the Midcaps rose 1.85 per cent. However, the standout performer was the CNXIT index, which was up by a startling 9 per cent.

Outlook: The Nifty stayed locked in the narrow range of 5,170-5,300 and predicting direction will be impossible unless it closes outside say 5,150-5,320. A breakout should trigger a move of around 150-200 points, as and when it comes. There is previous history of very heavy trading between 5,000-5,400, so it will take volume expansion to breakout and establish a trend.

Rationale: The long-term trend is firmly up. But the intermediate trend is difficult to read and the short term trend is neutral. Volatility has been very low for several weeks. Given previous congestion at the current price levels, major volume expansion is required to trigger breakouts. Right now, volume is just not there and direction cannot be established until it occurs.

Counter-view: Low volume is associated with range-trading but also with lack of demand. Hence, one may fear a downtrend. The intermediate trend has been up since late November and is now in week seven. Intermediate trends can mature any time between 4-12 weeks. If the market does slide below 4,950, it will hit the next support at 4,800. Below 4,800, the intermediate trend would be likely to reverse, since a pattern of lower lows will be established.

Bulls & bears: The CNXIT, as mentioned above, saw strong gains. This was driven by decent results and good advisories from Infosys and TCS. All the IT majors appear in bullish mode. Tech Mahindra, Wipro and Financial Technologies could be outperformers. However, further rupee strengthening could also retard the sector's momentum.

Balancing the CNXIT, the Bank Nifty lost nearly 2 per cent and few financial sector scrips looked capable of bucking fears of higher rates or CRR hikes. On Friday, it appeared however that a few scrips like Axis Bank and Federal Bank had weathered the bearishness. The real estate sector saw mixed trading with some sell offs but Purvankara and Brigade also did well. Metals including non-ferrous metals were also weak but cement did well with ACC and Ambuja finding buyers.

PSUs did well in general with counters such as REC, Neyveli, SCI, Engineers India, BEML, Concor, NTPC, all finding support as rumours of disinvestment abounded. Winners and losers were scattered randomly outside these sectors. Tata Motors and Power Grid were among the scrips that ended strong as did Lupin and Cipla.

MICRO TECHNICALS

AMBUJA CEMENT
Current Price: Rs 113.25
Target Price: Rs 120

The stock has made an upside breakout backed by strong volumes. It has the potential to run up till around the Rs 120 mark though it will hit strong resistance above Rs 118. Keep a stop at Rs 109 and go long. Start booking profits above Rs 118.

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FINANCIAL TECHNOLOGIES
Current Price: Rs 1,620
Target Price: N.A.

The stock is testing key resistance between Rs 1,625-1,645. If it closes above Rs 1,635, it could move till the Rs 1,750 level. Volumes are good. Keep a stop at Rs 1,600 and go long. Add to the position above Rs 1,635. Book partial profits at Rs 1,700.

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SCI
Current Price: Rs 172.70
Target Price: Rs 185

The stock is benefiting from a focus on PSUs as well as a bounce in the shipping sector. It has risen on volume expansion. There's very little resistance until around Rs 185 and that would be a potential target. Keep a stop at Rs 167 and go long.

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AXIS BANK
Current Price: Rs 1,078
Target Price: Rs 1,120

Axis shows signs of a breakout, which is against the trend in the banking sector. It has cleared resistance at Rs 1,055 and it could run up till somewhere between Rs 1,100-1,130. Keep a stop at Rs 1,065 and go long. Start booking profits above Rs 1,110.

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PURVANKARA PROJECTS
Current Price: Rs 115.75
Target Price: Rs 130

The stock has jumped on volume expansion. It's testing resistance at Rs 120 and will hit that level again, on intra-day basis at least. If it closes above Rs 120, it could run till the Rs 130 level or higher. Keep a stop at Rs 110 and go long. Add to this above Rs 120 and book profits at Rs 130.

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'Stick to bottom-up, buy on dips and hold strategy' 18-JAN-10 In the second series of interviews for Smart Portfolios, Amar Ambani talks about his expectations for 2010, reveals his strategy of sticking to mid-caps and suggests that investors look at individual stocks rather than sectors for the year.

Markets at a glance 18-JAN-10 The markets traded in a narrow range this week in spite of stellar numbers from Infosys.

Analysts' corner 18-JAN-10 The brokerage has revised earnings downwards and thus has cut the company’s 20010-12 EPS estimates by 8-11 per cent.

Premiums drop due to low volatility 18-JAN-10 The market saw practically no change in the major index levels in what is turning into an extended phase of very low volatility.

Wait for a breakout 18-JAN-10 The market remained tightly range-bound with only nominal movements among the major indices.

Alpha India updated 18-JAN-10 The January 4 yearly outlook carried numeric ranking for 50 Nifty Stocks.

Bharti: Looking out 18-JAN-10 India’s largest wireless service provider, Bharti Airtel is expanding its international operations by buying a majority stake in Bangladesh’s fourth largest wireless telephony service provider, Warid Telecom.

Bajaj: Motoring ahead 18-JAN-10 Buoyed by the demand for its Discover range of motorcycles, the country’s second largest two-wheeler maker, Bajaj Auto, posted healthy numbers for the second quarter in a row.

Green shoots are for real 18-JAN-10 Infosys Technologies’ December 2009 quarter results brought an air of optimism into the sector.

Pricey pizza 18-JAN-10 As the frequency of eating out or preference for fast food increases, players in the take-away or home-delivery space should benefit.

The PSU opportunity 18-JAN-10 Many would have reservations about investing in public sectors companies (PSUs) due to reasons such as government interference and so on.

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Weekly Newsletter - Jan 18 2010

Weekly Newsletter - Jan 17 2010

Top 5 picks of the day I Mid-term picks





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