Derivative and Equity Calls

21 Jun 2010 |

Technical Stock Picks

Stock recommendations

21 Jun 2010 |

Techno Fundamental Stock Pick -

Strides Acrolab ltd






Derivative calls: Tata Power, Ambuja Cement, Apollo Tyres


Technical calls: SKF India, IDFC

Heard on the Street

Jhunjhunwala seen buying VIP Inds shares
High net worth investor Rakesh Jhunjhunwala is mopping up shares of VIP Industries. Jhunjhunwala, who is also one of the major shareholders of VIP Inds, bought a sizeable quantity of the company’s shares on Monday. VIP shares jumped 8.2% to close at Rs 297.50 after scaling a new high of Rs 312.4 during intra-day trading on the BSE. The counter attracted significantly higher volumes of 22.8 lakh shares, compared to two-week average of 3.9 lakh shares. The acquisition of fresh shares led to an increase in Jhunjhunwala’s stake from 4.5% as on March 31, ’10 to 5.8% of the company’s equity.

Top i-bankers in demand despite weak market
The market has been largely tepid, of late. And fund-raising deals have slowed, but that has hardly dented demand for investment bankers. In the past many months, many top deal-makers have changed jobs. The latest buzz is that Sunil Sanghai of Goldman Sachs has quit. He is believed to be joining HSBC as managing director, global banking-corporate and investment banking. Tarun Kataria, who has been appointed by Religare Capital Markets as CEO, was the head of HSBC’s global banking and markets. Goldman Sachs’s India head Brooks Entwistle had roped in Sanghai when he was building the US-based financial services player’s Mumbai team.

Carrefour may get hold of Pantaloon’s ‘Bazaar’
Speculation that Pantaloon Retail is close to selling a large stake to French retailer Carrefour refuses to die. If market grapevine is to be believed, Carrefour will bring Pantaloon’s retail segments like ‘Big Bazaar’ and ‘Food Bazaar’ under its fold. While officials at Pantaloon denied any such development, analysts tracking the company are not discounting a “surprise announcement” over the next few weeks. Shares of Pantaloon ended marginally higher at Rs 415.20 on the BSE on Monday.

(Contributed by Vijay Gurav, Reena Zachariah & Shailesh Menon)

**************************

Provogue

Patni Computers - margins under pressure

Daily Technicals - June 22 2010

Top Recommendations

Genus Power Infrastructure

Daily Market Outlook - June 22 2010

Kale Consultants

STOCK ANALYSIS: Essar Shipping

Note: Some Stock Tips/Articles may be 1-2 days old.



Src: HDFCSec, Economictimes, DP blog and Smartinvestor

Check out India's Top 10 great companies to work for

Check out India's Top 10 great companies to work for

ET Bureau

As before, the 2010 edition of "India's Best Companies To Work For" presents profiles the best. Our writers have spent time inside these organisations, interviewed CEOs, HR heads and employees to gauge what it takes to be the best company to work for.

The 2010 study reports on how companies have nurtured their human capital in the face of the downturn, while taking some bold initiatives to maintain the topline and bottomline growth.

There are companies out there which believe in the age-old 'home-away-from-home' principle and go all out to create a 'family' of workers, while others maintain a high fun quotient around their core activity.

Check out the top ten India's best companies to work for 2010:

Location: Bangalore

Profile: Online Search, Online Advertising & Online Applications

Number of employees: 1,259

Founded in India: 1998

Gender Ratio (F/M): 1:0.99

Voluntary turnover: 30%

It was an accidental misspelling that got Google its name but that's where the accidents end at the Google headquarters in RMZ Infinity, Bangalore. "Any good place to work is no accident," says Manoj Varghese, the APAC HR director. "And it's not just about beanbags."

Googlers work hard at making their workplace rock. At a time when break-out spots and recreational zones have started to become almost de rigueur, Googlers have taken it one step further: to the washrooms! (Read Full Story)

MOre @ Check out India's Top 10 great companies to work for

India's top workplaces across industry verticals

Full Coverage

******************************************

List of top 50 companies to work for

The best workplaces have redefined their agenda by improving employee positive perceptions about work life balance by a phenomenal 18% in the last five years. 88% of employees of the Top 25 best workplaces have agreed with the statement, “I am able to take time off from work when I think it’s necessary.” Click on the company names to find out why they love to work with them:

Rank	Name of the Company	Location	Number of Employees	Gender Ratio (F:M)	Voluntary Turnover
1	Google India	Bangalore	1,259	1:0.99	30%
2	MakeMyTrip	Gurgaon	674	1:2.55	23.89%
3	Intel Technology	Bangalore	2,430	1:3.99	4.4%
4	Marriott Hotels	Mumbai	2,433	1:9.01	27.37%
5	NetApp India	Bangalore	1,042	1:4.51	5.95
6	American Express	Gurgaon	5,200	1:1.33	15.00%
7	NTPC	New Delhi	24,708	1:8.11	0.12%
8	PayPal India	Chennai	419	1:3.6	0.48%
9	Ajuba Solutions	Chennai	1,612	1:1.41	23.45%
10	SAS Institute	Mumbai	108	1:5.75	13.89%
11	Crowne Plaza Today	Gurgaon	399	1:5.23	48.87%
12	Dow Corning	Mumbai	241	1:6.3	9.96%
13	Taj Hotels Resorts	Mumbai	13,009	1:6.58	11.55%
14	Godrej Consumer	Mumbai	1,314	1:30.29	6.24%
15	Whirlpool of India	Gurgaon	1,128	1:13.28	8.69%
16	Interglobe Enterprises Ltd	Gurgaon	5,040	1:1.86	12%
17	iNautix Tech	Chennai	2,263	1.21	8.66%
18	Hilti India	Delhi	427	1:13.72	12.88%
19	Titan Industries	Bangalore	4,329	1:3.49	4.87%
20	Intelenet Global	Mumbai	25,810	1:2.27	NA
21	Qualcomm India	Mumbai	1,073	1:6.5	4.38%
22	Federal Express Corp	Mumbai	514	1:4.3	12.65%
23	Kotak Mahindra	Mumbai	6,461	1:4.04	18.77%
24	Domino's Pizza India Ltd	Noida	5,650	1:9.58	53.35%
25	Classic Stripes Ltd	Mumbai	325	1:3.28	6.46%

Click on next button to find out the top 26 to 50 companies to work for 2010.


More @ List of top 50 companies to work for

Src: Economictimes.indiatimes.com

Will Nifty Hit a New Fresh 52 Week High???

Market's intermediate uptrend remains intact
21 Jun 2010, 0454 hrs IST, Deepak Mohoni

The indices recorded respectable gains last week, with the Sensex finishing 2.96% or 505.87 points higher, and the Nifty 2.80% up. The CNX Midcap Index lagged with a more modest 1.26% rise.

Bull's eye: Axis Bank, IRB Infrastructure, M&M, HCL, L&T, BHEL
21 Jun 2010, 0454 hrs IST

Goldman Sachs downgrades Axis Bank to `Neutral’ from `Buy’, as recent share performance has priced in steps taken by management and an economic recovery.

Natural gas players: Attractive for a long term
21 Jun 2010, 0454 hrs IST, Parul Bhatnagar

Valuations of natural gas players appear attractive for a long term, considering the expected growth in profit in the coming years.

Madras Cements: Value pick for long term
21 Jun 2010, 0454 hrs IST, Amrit Mathur

Madras Cements trades at a valuation lower than that of its peers and is a value pick for long term.

Investors should avoid sugar stocks in the short to medium term
21 Jun 2010, 0454 hrs IST, Shikha Sharma

With lower earnings expected in the coming quarters, investors should avoid sugar stocks in the short to medium term.

Telecom sector's long-term fate depends on consolidation & 3G services
21 Jun 2010, 0454 hrs IST, Ranjit Shinde

The telecom sector is likely to suffer from falling profitability in the short term. Its long-term fate depends largely on the consolidation of players and the success of new 3G-related services.

Is buy and hold strategy dead?
21 Jun 2010, 0454 hrs IST, Anup Bagchi

You can make the markets work for you the best by investing regularly in a disciplined manner and with a long-term horizon.

Stagnant markets? Buy beaten down stocks
21 Jun 2010, 0454 hrs IST, Karan Sehgal

At a time when the stock market is stagnant and the valuations seem to be stretched, it can be a better idea to buy the beaten down stocks

*******************************************

Technicals - June 21 2010

Aban Offshore, Mindtree - big win

Lanco Infratech - technicals

Tulip Telecom

Reliance Industries

India Autos, Gas, Pharma

Weekly Technicals, Stocks - June 21 2010

Weekly Technical Calls - June 21 2010

Weekly Technical Calls - June 21 2010

GPIL

Exide Industries - buoyancy in the industry

Src: ET and DP blog

Market and Stock Views

TECHNICAL ANALYSIS: Index Outlook: Bear-squeeze can extend the rally
The Sensex recorded a strong 500-points gain last week. But this move went almost unnoticed since market participants were busy tracking the two Reliance factions and speculating over their next move. The Ambani charisma was on display yet ...

STOCKS: Aurobindo Pharma: Buy
Long-term investments can be considered in the stock of Aurobindo Pharma, a leading API (active pharmaceutical ingredient) and ...

STOCKS: GAIL (India): Buy
Investors with a high-risk appetite can consider buying the stock of GAIL (India), the country's predominant natural gas transmission and ...

STOCKS: HDIL: Buy
The renewed fortunes of the Transferable Development Rights (TDR) market, coupled with HDIL's steady progress in its slum rehabilitation and residential projects add impetus to the company's ...

STOCKS: Pratibha Industries: Buy
Investors with a penchant for risk and a medium-term perspective can buy the stock of construction and infrastructure company Pratibha Industries. At Rs 380, the stock trades at 11.4 times per share earnings for FY-10. Valuations are at ...

MUTUAL FUNDS: HDFC Growth: Invest
Investors can buy the units of HDFC Growth Fund, given the fund's track record in delivering steady returns over the long term. The fund has consistently outperformed its benchmark, the Sensex, over one-, three- and ...

MUTUAL FUNDS: ICICI Pru Child Care Study Plan: Invest
Conservative investors who intend to build a sufficient corpus for their child's education can continue to hold on to ICICI Prudential Child Care-Study plan, an open-ended hybrid fund with a maximum allocation of 25 per cent in equity. The ...

TECHNICAL ANALYSIS: Query Corner: MTNL in long-term downtrend
I bought MIC Electronics at Rs 46. Please advise short-, medium- and long-term prospects of the stock. R. Chandran, Sunil K. Jha, Suresh, ...

TECHNICAL ANALYSIS: Pivotals: Reliance Industries (Rs 1,055.2)
RIL edged higher ahead of its annual general meeting to record the intra-week peak of Rs 1,089.9. But it declined thereafter to close the session 3 per cent lower from its intra-day peak. The stock has key short-term resistance at Rs 1,096. ...

TECHNICAL ANALYSIS: Sizzling stocks: RNRL (Rs 62.7)
All eyes in the market were riveted on RNRL last week as the stock zoomed to the high of Rs 70.2. Expectation of an announcement in the RIL's annual general meeting about RIL buying a stake in RNRL at a high price was the ostensible reason ...

TECHNICAL ANALYSIS: Stock Strategy: Consider short straddle on Reliance Industries
Reliance Industries (Rs 1,058.1): For more than three months, the stock has been moving in a narrow band between Rs 960-1,140. It is unlikely to break this band in the near term. Only a move away from this zone will make a clear trend for ...

STOCK MARKETS: Heard in the studio
The folks at the Studio were on their toes the past week too. Here's some of the chatter we caugh

Irda wins Ulip battle

Capital gains tax: There's still hope

Wkly Tech Analysis: Further strength above 5300

The markets moved from strength to strength for most part of the week before witnessing some profit-taking on Friday. The fact that the Sensex was able to cross 17,300 with ease signals more hope for the bulls. The 17,300-level can now be watched as a support for the current upmove. On the upside, the index is likely to target 18,000-18,300 in the coming sessions.

This week, the Sensex finished with a gain of 506 points to 17,571. DLF led the gainers, up nearly 8 per cent at Rs 282. Larsen & Toubro, Reliance Communications and Sterlite rallied 7 per cent each. Infosys, Jindal Steel, ITC, Jaiprakash Associates, Tata Motors and HDFC were the other major gainers. Bharti Airtel, however, shed 3.5 per cent to Rs 265.

Next week, the Sensex is likely to face resistance around 17,800-17,870-17,945. On the downside, the index is likely to seek support around 17,340-17,270-17,195. Daily charts indicate near support around 17,480 (20-day daily moving average) and far off support around 17,021 on the weekly charts.

The NSE Nifty moved in a range of 182 points. From a low of 5,120, the index rallied to a high of 5,302, and finally settled with a gain of 143 points at 5,263.

Given the recovery in the world markets and renewed optimism among global investors, the bias continues to be positive. However, one needs to watch out for negative surprises in the form of either a surprise RBI rate action or poor monsoon for a change in bias.

The Nifty has been treading higher with support along its short-term (20-days DMA, or daily moving average), which is currently at 5,238. If the index breaks it, it could probably test its next significant support around 5,183. On the upside, the Nifty needs to close above the 5,300-mark for further strength.

From a medium-term perspective, the Nifty has considerable support around 5,100, and the upside target could be close to 5,400.

Two rocket stocks

Profit Track

18 June 2010

Oriental Carbon and Chemicals:
DOCCL has reported excellent results for year ended March 2010 wherein its PAT has zoomed by nearly 300%. EPS for Q4 alone is Rs 10. Stock is trading at just 4.62XFy10 EPS which is extremely low considering that OCCL is operating in a seller's market.

Further, OCCL has started implementation of new factory in SEZ in Gujarat which should be completed in 12 months. OCCL may achieve EPS of Rs 36-38 in 2010-11 and EPS of Rs 42-44 in 2011-12. Although, share price has touched a new high, still fundamentally OCCL is underpriced considering that company will continue to do well due to buoyant demand from tyre industry, expansion underway and payment of 3 dividends in 2009-10. Book Value is Rs 90 which should rise to above Rs 120/ as on March 2011.

Our price target Rs 175 in less than 6 months and investors holding it for medium term may get much higher appreciation.

Nahar Spinning Mills
Nahar has achieved phenomenal turnaround in 2009-10 wherein Nahar has achieved PAT of 53.49 cr and CASH Profit of Rs 123 cr (after paying income tax of Rs 27 cr). At PBT level, Nahar has achieved turnaround of Rs 105 cr as its PBT in 2009-10 stands at 80.60 cr as against loss of 25 cr in previous year.

Nahar is likely to earn Cash Profit of Rs 265-270 cr in 2 years (09-10 and 10-11) and current market cap is just Rs 290 crores. One of the top picks in booming textile sector. Investors may reap more than 50% appreciation in next few months. Scrip can even double in 12-15 months.

Click here to download report

Src: Businessline, Valuenotes and etc

Some Blogger Templates Websites

I have given Few Blogger Templates Design Websites.

http://btemplates.com/



http://www.bloggertemplatesfree.com/



http://www.freetemplates.blogspot.com/


http://www.eblogtemplates.com/

RIL plans mega foray into India's power sector

MUMBAI: Billionaire Mukesh Ambani today said his firm Reliance Industries will supply natural gas to Anil Ambani Group's power plants as and when they are ready to receive the gas. ( Watch )

Addressing company shareholders, Ambani mentioned the Supreme Court judgment upholding the company's stand that government has a major say in pricing and allocation of gas produced from RIL's eastern offshore KG-D6 fields and that RIL would supply gas to Anil Ambani group in accordance with government policy.

"With the legal dispute behind us, we look forward to harmonious and constructive relationship with ADAG," Ambani said at the meeting, for which Anil did not turn up as speculated in the market and media.

The supplies to Anil Ambani Group's power plants including the one proposed at Dadri near Delhi, will be subject to government approving the allocation of the fuel, Mukesh Ambani said.

The Supreme Court had last month asked the companies headed by the two brothers to rework a gas supply contract keeping the government policy on pricing and allocation in mind.

Mukesh, 53, however did not say when RIL will be entering into a new Gas Sales and Purchase Agreement (GSPA) with Anil's Reliance Natural Resources Ltd (RNRL) as had been ordered by the apex court.

RIL production from KG-D6 block exceeds 60 million standard cubic meters per day and over 30,000 barrels per day, Mukesh Ambani said.

"RIL has intensified exploration campaign off the east coast," added Ambani.

In his speech Mukesh Ambani proposed 70 per cent dividend or Rs 7 a share for 2009-10 fiscal for RIL shareholders.

The court had, on May 7, turned down gas to Anil-led RNRL from RIL's KG-D6 basin at prices arrived at in a 2005 private family agreement.

RIL, which acquired 40 per cent in shale gas assets of Atlas Energy in US, will continue to pursue shale gas opportunities, Mukesh Ambani said. The energy major was also drawing mega investment plans in coal, hydel and nuclear power.

RIL is also looking at expediting developing discoveries in blocks KG-D6 in Krishna Godavari basin, NEC-25 in Mahanadi basin, CB-10 in Cambay basin and Sohagpur CBM block.

"Annulling of non-compete agreement with ADAG was a game changing development that paved the way for Reliance to participate in power sector," added Mukesh Ambani.

Reliance Industries, which has agreed to buy Infotel, the only company to win a nationwide licence in India's wireless broadband auction, will follow an "asset light" approach in telecoms and collaborate with partners.



Reliance Industries' 36th AGM: Analysts views

MUMBAI: Mukesh Ambani, chairman of energy major Reliance Industries, said the firm is ready to provide gas to power plants controlled by his brother Anil Ambani's Reliance ADAG and looks forward to a "harmonious and constructive" relationship with the company. ( Watch )

Following are comments from analysts:

ARUN KEJRIWAL, DIRECTOR OF RESEARCH FIRM KRIS IN MUMBAI: "There were a lot of unrealistic expectations built around Reliance AGM. The hype is now fading, which is reflected in the share price movement."

NITIN ZAMRE, MANAGING DIRECTOR AT CONSULTANCY ICF INTERNATIONAL, NEW DELHI: "The AGM is on expected line. The two brothers coming together throws open opportunity for both RIL and ADAG, but more for RIL. "Given the fact Reliance has core competency in building very large projects, power is the next opportunity mainly ultra mega power Projects, data management and shale gas."

GAJENDRA NAGPAL, CEO OF UNICON FINANCIAL, NEW DELHI: On expansion into power: "They are sitting on so much cash. It's a natural extension of Reliance's business of energy. To that extent, it seems like a well thought of move. I am extremely bullish on the counter in the long run. He is absolutely making all the right moves." On share movement: "Expectations are slowly tickling down. I see no reason why shares should fall now. It's just profit taking. "One would want to hear about his financial services foray. That also seems like a big opportunity."

K.K. MITAL, HEAD OF PORTFOLIO MANAGEMENT SERVICES, GLOBE CAPITAL, NEW DELHI: "Mukesh's vision is quite clear. He wants to concentrate on 4G spectrum; he wants to concentrate on power. He wants to do global acquisitions. "There were lot of speculations that Reliance Industries may buy a stake in Reliance Communications; Mukesh may support Anil's Reliance Power. "There were also speculation that Anil Ambani might turn up at the AGM. But let's remember that this is just the beginning. Going forward there will be many more opportunities (for tie up between the brothers)"

TEJAS DOSHI, HEAD OF RESEARCH, SUSHIL FINANCE IN MUMBAI: "People had built unrealistic expectations that there would be big-bang announcements at the meeting. "The disappointment is showing in the stock price of the companies led by both Ambani brothers."

SUSHANT GUPTA, SENIOR ANALYST WITH WOOD MACKENZIE, SINGAPORE: "Refinery-wise they are the most competitive in the region. If you look at refining margins, there is a downward trend which I expect to continue for at least next few years. "Even companies like Reliance are finding it challenging to push products in the global markets at better margins. Reliance should diversify and step up focus on petrochemical sector, which is one of the major contributory to its profit."

MITEN MEHTA, FUND MANAGER BELLWETHER CAPITAL, MUMBAI: "Mukesh Ambani words were more or less expected after the end of the non-compete agreement. In fact there were more expectations than what was actually announced. Reliance Industries needs to get into other areas now and power is an obvious choice for them."

GUL TECKCHANDANI, INDEPENDENT ANALYST, MUMBAI: "His announcements on the power sector sound good. Mukesh has the record of being conservative in his announcements but delivering on what he says. "India needs more power and the more people that enter the sector, the better."

Rajesh Jain, Market Strategist: 'Mukesh Ambani’s AGM speech focussed on RIL’s core competencies': Mukesh Ambani’s AGM speech should be signalled out for the fact that he has focussed most of it on driving the core competence and the world class scale that he enjoys in the refining, petrochemical and the exploration business. That is the biggest takeaway from this speech today aside from announcements for the power and the telecom in the broadband space.

Essentially what Mukesh has signalled today is that we are not going to be trading on each others’ stores. We have our domain cut out. We are going to be thinking big in power but it will be nuclear, it will be hydel, it will be the cleaner coal based projects.

******************************************
Mukesh Ambani’s AGM speech focussed on RIL’s core competencies: Rajesh Jain, Market Strategist

RIL bets big on power and telecom

Src: ET and MOneycontrol.com

Morning Calls

Nifty may test 5400-5450 in the short term

Mid-term picks | Top 5 picks |

RIL may buy 26% stake in Pipavav

How does the RIL stock trade post its AGM?


*******************************************
Heard on Street: M&M vaults 22% in 3 weeks

Bankers against French auction for PSU share sales

After the lukewarm response to recent public offers of REC and NTPC, which opted for the French auction method, merchant bankers are suggesting the book-building method to the disinvestment department for future public sector share offerings.

“In the book-building method, you essentially know the price range, which is better but in a French auction you are trying to discover the price of a listed company and investors are not willing to pay a premium as they would prefer to buy from the market,” said a senior banker. Last November, Sebi introduced the pure auction method of book-building in share sales, where institutional bidders could bid at any price above the floor price instead of restricting them to bid in a band fixed by investment bankers.

M&M vaults 22% in 3 weeks on bull bets

Shares of automobile major Mahindra & Mahindra (M&M) have risen 22% in the past three weeks. The buzz is that Rar(e)ing Bull has been active in the stock of late. Brokers said traders have been betting on M&M in the past few weeks on hopes that news of better-than-normal monsoon will enable the stock outperform the market in the short-term. The prospects of M&M, which manufactures tractors, is closely linked to the monsoon, as better-than-expected monsoon could boost demand for tractors. The stock closed marginally higher at Rs 631.65 on Thursday.

Bears tighten grip on steel stocks

Shares of leading steel companies — Tata Steel, Steel Authority of India and JSW Steel — underperformed in a firm market on Thursday. According to grapevine, local steel prices are likely to soften further due to a decline in demand. Bear traders are said to be cautiously building short positions at these counters. In the recent past, most traders who had gone short on steel stocks have been unable to profit to the extent they had hoped to.

The moment overall sentiment changes for the better, the stocks that were beaten down the most, would be the ones to rise the fastest. JSW Steel shares fell 0.8% to close at Rs 1,048.70, Tata Steel Steel ended 0.7% down at Rs 482.20, while Steel Authority shares rose marginally to close at Rs 198.35. Over the past one month, the BSE Metal Index has fallen 5.5%, compared to a 4% rise in the BSE Sensex.

(Contributed by Reena Zachariah, Nishanth Vasudevan & Santosh Nair)

*******************************************

United Phosphorus: Going global

STOCK ANALYSIS: Emami

SRF

India Telecom, Adani Power, Tata Motors

Top SIP Mutual Funds - Best Picks!

Lupin Ltd

Sesa Goa

Asian Paints, TCS

HCL Technologies, IDBI Bank, Murli Industries

Reliance Communications - raising a lot of cash

Monsoon Picks - the best ones for you this rainy season

Src: ET and DP blog and Smartinvestor

Medium Term Investment Portfolio Picks

Medium Term Investment Portfolio Picks

******************

Experts see Nifty at

5300, cherry pick from Reliance pack

It was a quiet session for the markets. The indices moved within a tight range and closed the day absolutely flat. The Nifty ended the day at 5,233, up 11 points. The Sensex shut shop at 17,462, up 50 points. The Midcap index also ended marginally in the green. The gap between the advance and declines narrowed through the session to end at 1:1.

The mood on Dalal Street is getting optimistic. But does that mean a big rally is on its way or will global cues play spoilsport?

Naresh Kothari, President, Edelweiss Capital, sees some amount of optimism returning to the market over the last 3-5 days. "At lower levels, we are seeing continuous buying interest. At 4700-4800, we saw very good interest come in. I guess this continues to remain a period when people are sort of coming out of their shell and starting to look at opportunities and ideas."

He asks investors to be cautious around 5,300-5,400 levels. "The global phenomenon continues to be an overhang on the market. Also, the second half might not be as good as the first half. I think the market is a little bit more cautious on the upside. These two factors are actually ensuring that this will not be a runaway market. I would start buying more of Puts and build some amount of cash in the portfolio."

Ambareesh Baliga of Karvy Stock Broking expects the Nifty to continue in a 5,200-5,300 range. "Crossing this level will be quite difficult. Inspite of all the good news, whether it is advance tax figures, IIP (Index of Industrial Production) data, monsoons, GDP (gross domestic product) estimates, if you are not able to convincingly cross these levels, it clearly shows that there is no conviction inthe market. Over the next two-three months, we will be in the broad range of 4,700-4,800 and to around 5,300."

However, Sudarshan Sukhani of Technical Trends feels the market can see a 70-80 or 100 point correction. He advises investors to buy on dips.

Phani Sekhar, Fund Manager, Angel Broking, too asks investors to buy on dips. But unlike Sukhani he sees another 4-5% upside. "Individual midcaps and stocks will be doing much better than indices and that is where a lot of money is there to be created."

How should you play stocks from the Reliance pack?

On Reliance:
Baliga sees huge upside potential in Reliance Industries. "We have been talking of Rs 1400 levels, which it is refusing to go towards in the last six-eight months. But by January- February next year, once all these things settle down, it should trade over Rs 1400. At these levels, we are quite bullish on Reliance Industries."

Sekhar is betting on Reliance Industries and Reliance Infrastructure from the Mukhesh Ambani stable.

On the ADAG pack:
Reliance Communications, Baliga said, has already moved up decently from lower levels. "I don't think it can move much more looking at the way the telecom sector is doing." On the other stocks in the pack, he feels they are more of a speculative move than a fundamental move. "It is more of traders' pick at this point of time than a fundamental buy."

From the ADAG group, Sekhar likes Reliance Infrastructure. "This is a very young engineering company. The numbers that you see now are not really reflective of the potential numbers that you will see in a couple of years’ time when majority of its current projects come onstream. Valuationswise, it looks pretty attractive. We will give a pass to the rest of the stocks and pick Reliance Infrastructure."



DTC 2.0: How will new capital gains tax impact investors?

The revised discussion paper of the direct tax code proposes significant changes to the application of minimum alternate tax, capital gains tax, among others. Tax treatment of investments made by foreign institutional investors and the common man may be tweaked.

In an interview with CNBC-TV18, Ketan Dalal, Joint Head of Tax & Regulatory Services at PwC; Dinesh Kanabar, Deputy CEO & Chairman – Tax at KPMG and Ramesh Damani, Member of BSE reacted to the development.

Below is a verbatim transcript of the interview. Also watch the video.

Q: I am going to come to the broad and the big issues here which is of capital gains and the reason I am not going to minimum alternate tax (MAT) first is because they have said that they propose to compute MAT with reference to book profit which is exactly how life is today so in that sense no change for corporate Indian with reference to MAT. The big change is in capital gains and while the earlier code propose to takeaway any distinction between long-term and short-term capital gains and club all capital gains to be taxed as per year slab rate. In this code they have made or created a certain advantage for long-term holdings. But I will go through them with you one by one. They have said, “Long-term is only long-term if it is held for a period of more than one year from the end of the financial year” That means its no longer 12-months or 365 days. It could in effect be even two years if you end up buying securities on April 3 and that’s the beginning of a new fiscal year. You have to wait till your fiscal year gets over—calculate another whole fiscal year and then be able to avail of long-term benefits. Am I correct?

Dalal: Absolutely right and to that extent the beneficial impact of long-term capital gains has been diluted because you are changing the very definition of long-term capital gains. As you said, it could be 23 months and 29 days for example. So to that extent you are absolutely right and of course the benefit itself has, to that extent, also been reduced because there is an exemption if you sell on the stock exchange that has been replaced by different regime.

Q: What they have suggested is of the total quantum of long-term capital gains there will be a deduction rate, the rate which is not been specified as of now. That amount will be deducted and the rest of the capital gains will be taxed at your slab rate. As far as short-term capital gains goes all of it will be taxed at slab rate and the other important development for the market is that all income arising on the purchase and sale of securities by an foreign institutional investor (FII) will now be income chargeable under the head of capital gains and they will be subject to advance tax and finally they have said Securities Transactions Tax (STT) is proposed to be calibrated based on the revised taxation regime for capital gains. Net, are we better-off with these suggestions on the capital gains regime or do you prefer what we have today which is the current situation or what the first Code put in?

Dalal: It depends on what you are. For example if you are an FII, today most of the FIIs are coming in through the Mauritius route and Mauritius as one knows thecapital gains tax has been exempt. It does not talk specifically of business income but business income if I put it in technical terms would be chargeable to tax if you have a permanent establishment and because of the capital gain exemption FIIs coming through Mauritius claim the capital gain exemption. Now they have said that it will be characterised as capital gains to that extent there is clarity.

The point however is that while there is a treaty override neutralisation in the new discussion paper. It is subject to a carve out of few things but the one which is relevant is a carve out for general anti-avoidance route and in simple words what it means is that you entitle the benefit of the treaty however if you are resorting to what the government considers as anti-avoidance then you will not be entitled to the benefit of the treaty. What my fear is that the general anti-avoidance carve out can be use to attack the benefit of the India-Mauritius Treaty which might be the intention any way. So if you are an FII to that extent you will probably wind up paying tax at the normal rate and if you are long-term.

MOre @ http://www.moneycontrol.com/news/business/dtc-20-how-will-new-capital-gains-tax-impact-investors_464384.html

******************************************

Kalindi Rail Nirman - short term trading

Cummins India

BGR Energy Systems

State Bank of India

Maruti Suzuki India Ltd

Reliance Industries

India Financial Services

Direct Tax Code, Larsen and Tourbo, Bank of India

Top Stock Picks

Power Picks

India Utilities

Reliance Communications, Reliance Infratel

Src: HDFCSec, ET and Moneycontrol and DP blog