Monday, May 2, 2011

Stocks in Action for the day: Ajanta Pharma, Camlin, Tata Motors, Infosys

Market Outlook: Indian markets are expected to trade positive terrain on the back of constructive support from the global counters. From a trading point of view we expect profit booking attempts in the upper regions as market is expected to trade volatile this week as we see many economic events like RBI Meet on Tuesday. RBI may take tight steps on Tuesday with an investor-pleasing 25-basis point increase in policy rates to tame the inflation beast that is galloping away. On the global space Asian markets trading higher; Nikkei, Seoul Composite up. Overall outlook for the markets today is that of cautious optimism with 5720levels as a major support and key resistance near 5850.

Results today: Punjab National Bank, Marico, Ceat, Godrej Consumer, Sunteck Realty, NDTV, Alembic, Allahabad Bank, South Indian Bank, Century Textiles, Bank of India, India Overseas Bank, Century Enka, Tube Investments of India, Andhra Sugars, Infomedia.

Global events to watch

Þ ISM Mfg Index

Þ Construction Spending

Global indices Update @ 8:

Dow Jones : 12810 (+47.23)

NASDAQ : 2873 (+01.01)

Nikkei 225 : 9945 (+95.50)

Hang seng : 23720 (- 84.82)

SGX CNX Nifty : 5776 (+24.00)

Gold (USD/t oz.) : 1545.3 (+11.50)

Nymex Crude (F) : 113.2 (- 00.36)

INR / 1 USD : 44.38

Technical Outlook: Market continues to wary ...

The April expiry ended lower than March as prices gave way towards the end of the day. Not that they had shown any spine earlier. We had mentioned yesterday that below 5815 one should keep a bearish bias. For much of the day the 5815 was defended but the fact that no upside rally could emerge from there was a signal that matters would peter out towards the later part of the day. A couple of in-line results and a couple of others that were good but still the reaction to them was not so good, tilted the balance. Banking sector stocks tumbled towards the end and carried the index lower. At the end about 1 cr shares expired in NF and the May series starts with about 2.23cr shares. No major changes in that from the last month. Bank Nifty starts the month with about 7.4 lac shares, again no big change from the start of positions last month. On the options front, 6000 Call and 5600 Put are the strikes with the highest OI (around 35-37L). The size of the positions are sedate.

Yesterday's letter mentioned about how market was not ready to push thru into a trend and that meant we had to remain idle. April has been a choppy month so it would have been difficult for traders to make money. Those who were gamma short of course made some money. But directional players would have lost out. Results flow has not done much for trends. Hence it is unlikely that we would see any big trended action today as sentiments can remain subdued.

Today's chart is the daily chart of NF given yesterday but a zoomed in version. the same resistance line shown yesterday is still there. Note big bearish candle for yesterday. The addition to the chart is three rising support 2x1 angle lines from recent low pivots. it is seen that prices have dropped down into the second one. If prices continue lower today then note that the third angle line is a bit further away and hence support is not near by. That line is placed around 5715. Previous drop stopped at the second 2x1 line (on 19 Apr) so can it work its effect again today? No way to tell except to see how prices fare today. In case it does, then there are two resistances on the way up to negotiate- 5878 and then 5905. No bullish view until market challenges these.

Strategy for the day: With bias shifting to the downside one can expect the downtrend to continue. However with global markets holding on and hence a followthrough is essential for taking up fresh short positions or adding to existing ones. In case of lack of downtrend signals, the market is more likely to consolidate and at such times one can resort to the Table and use the levels mentioned for day trading. Go with the flow and confine to day trades for now. Stock specific action and news based activity should dominate.

Stocks to buy if market is strong:


FMCG Counters have been resilient to the whitewash received last week. Despite the strong sell off this counter showed some promise on Friday to close the week on a positive note. The momentum after hitting critical 40 levels have turned upwards to show some emergence of renewed buying interest. With volumes supporting buying opportunities one can look to go long. Buy




Buy above 102

1.5 points

104 / 106 / 107


Prices have been showing a steady uptrend for the past few sessions indicating that .The steady increase in volumes highlight the steady buying seen in this counter. The momentum is also inching higher and RSI has exceeded above 60 levels suggesting potential buying opportunity in this counter today. Buy.




Buy around 167-168

2 points

170 / 172 / 173

Buy on dips towards 164.50

2 points

167 / 169 / 170

Stocks to sell if market is weak:

Prices witnessed a gap down sell last session and closed near the low of the day as well. The prices cracked down after forming a consolidation indicating intense selling pressure. The down move has pushed the RSI below 40 levels. Expecting a further fall here, go short.




Sell below 244

2.5 points


Or rally near 248-250

2.5 points

244 / 241 /239


Buy Nifty above 5775 stop 5735 for rise to 5840 / 5879.

Sell Nifty below 5730 stop 5755 for tgt 5660 / 5630


Buy Hindustan Lever above 284 stop below 281 target 289

Sell Century Textiles below 360 stop 364 target 354

Stocks in Action for the day: Ajanta Pharma, Camlin, Tata Motors, Infosys

Infosys changes from August 21, 2011: -KV Kamath to be chairman -Kris Gopalakrishnan to be executive co-chairman -SD Shibulal to be MD & CEO -No decision yet on COO position

Indiabulls Real Estate Q4 (YoY) (cr - crore, vs - versus, cons - consolidated) -Net profit at Rs 11.7 cr vs Rs 90 lakh -Income at Rs 561 cr vs Rs 60.7 cr Indiabulls Real Estate Q4 (QoQ) -Net profit at Rs 11.7 cr vs Rs 76.6 cr -Income at Rs 561 cr vs Rs 399.7 cr

Onmobile Q4FY11(QoQ) -Revenues: Rs 133.32 cr vs Rs Rs 148.6 cr (vs expectation of Rs 159 cr)
-Revenues lower due to change in contractual scope involving content management responsibilities in one of the major Customers -Adjusted revenue would have been flat at Rs 149.3 cr; flat revenue due to units like Europe and newly acquired Video products business, Jan-Mar period represents first quarter of financial year, which is generally lean in Capex orders + General weakness in European economies -EBIDTA margin at 23% vs 23% -Other Income: Rs 24.27 cr vs Rs 2.84 cr (Q4 income includes Rs 23.5 cr as profit on sale of investment in associate company, Ver se Innovation) -Net Profit: Rs 26.85 cr vs Rs 20.91 cr (vs expectation of Rs 20.03 cr)

Motilal Oswal Financial Services Q4FY11 -Total revenues: Down 24% at Rs 1260 cr -EBIDTA: Down 43% at 43.6 cr -PAT: Down 52% at Rs 24.3 cr

Rallis India Q4 -Net profit at Rs 21.8 cr vs Rs 18.9 cr -Net sales at Rs 192 cr vs Rs 219 cr -EBITDA margin at 18.5% vs 15.1%

IDFC Q4FY11 (YoY) -Income from ops: Rs 1302 cr vs Rs 1023 cr (up 27%) -PAT: Rs 286.6 cr vs Rs 228.5 cr (up 25%); -Gross NPA: 0.21% Vs 0.31%; -Net NPA: 0.17% vs 0.10%

United Spirits Q4 -Net sales: Rs 1596 cr vs Rs 1252cr (up 27%)-Net profit: Rs 77.4 cr vs Rs 56.8 cr (up 36%) -EBIDTA Margins: 14.6% vs 15.6% -Total exp up 29% at Rs 1396 cr vs Rs 1082 cr ((Nomura maintains Buy, target Rs 1800)) ((Macquarie says PAT disappointing, cuts target to Rs 1400 from Rs 1600))

United Phosphorous Q4 -Cons revenues up 23% at Rs 1857 cr -Cons EBITDA up 24% at Rs 367 cr -Cons PAT up 13% at Rs 263 cr ((MS maintains Buy, uptrend to continue)) ((UBS reiterates Buy, EBITDA higher than est))

Sintex Industries Q4FY11 YoY -Total Income up 34% at Rs 1464 cr vs Rs 1093 cr -PAT up 21% at Rs 168 cr vs Rs 139 cr -EBITDA up 60% at Rs 310 cr vs Rs 193 cr -OPM at 21% vs 18% ((Goldman Sachs reiterates Buy, Q4 numbers ahead of estimates))

SAIL Q4FY11 (y-o-y) (Standalone) -Sales flat at Rs 11944 cr vs Rs 11955cr (estimate at Rs 12621 cr)- EBITDA down 24% at Rs.2341 vs Rs 3096cr (estimate at Rs 2557 cr) -EBITDA margin at 20% vs 26% (estimate at 20.3%) -PAT down 28% at Rs 1507 vs Rs 2085 cr (estimate at Rs 1631 cr) -Total expenditure Rs 10211 cr vs Rs 9471 cr (up 8%) -Consumption of raw materials at Rs 5389 cr vs Rs 4272 cr (up 26%)

Jain Irrigation Q4 -Net profit at Rs 117 cr vs Rs 83 cr -Net sales at Rs 1236 cr vs 958 cr -EBITDA margin at21.7% vs 20.7% ((Nomura says nos below est but valuations attractive))

Titan Q4 -Net profit at Rs 83.8 cr vs Rs 51.2 cr -Net sales at Rs 1778 cr vs Rs1311 cr -OPM down 170 bps -Titan Board approves bonus issue of 1:1, stock split from Rs 10 to Re 1, dividend of Rs 25/sh ((Nomura says numbers significantly below estimates, will revise estimates))

Alok Ind Q4 -Net profit: 22cr vs 14.7cr (up 50%) -Net sales: 160cr vs 95cr (up 68%) -OPM%: 25.3% vs 29%

Sterlite Tech Q4FY11 YoY -Net Sales up 3% at Rs.682cr vs Rs.662cr -PAT down 86% at Rs.10cr vs Rs.72cr -EBITDA down 55% at Rs 49 cr vs Rs 110 cr -OPM at 7% vs 17% ((Nomura says FY11 aberration, FY12 to be strong))

Private carriers have raised fares on metro routes as Air India stopped bookings till May 3, creating a supply shortfall amid peak summer travel demand. Travel industry says the fares have gone up by about 10-20% on metro routes, including Delhi-Mumbai. Jet Airways has increased fares by 20%, SpiceJet about 16% and Kingfisher Airlines by 7 per cent.

Bharat Electronics’ standalone net profit climbed to Rs 448.25 crores for the quarter ended March against Rs 199.74 crores in the same quarter a year ago. Net sales were at Rs 2307.28 crores from Rs 1813.68 crores.

TVS Motor Company’s standalone net profit rose to Rs 41.68 crores for the quarter ended March against Rs 20.29 crores in the same quarter a year ago. Net sales were at Rs 1604.64 crores from Rs 1192.41 crores.

HCC Group’s turnover has crossed Rs 7000 crore mark in FY2010-2011 receiving a single contribution
from the recently acquired Switzerland-based company, Karl Steiner AG.

GTL Infrastructure reported standalone net loss of Rs 41.79 crores for the quarter ended March against loss of Rs 61.99 crores in the previous quarter. Net sales were at Rs 139.09 cores as compared to Rs 123.96 crores.

Lokesh Machines has approved allotment of 20,70,000 secured optionally convertible debentures of Rs 45 each convertible into 20,70,000 equity shares of Rs 10 each, to IFCI Venture Capital Funds.

Kansai Nerolac Paints reported standalone net profit of Rs 205.98 crores for the year ended March 2011 against Rs 165.50 crores a year ago. Net sales were at Rs 2138.73 crores as compared to Rs 1706.38 crores.

Birla Corporation’ consolidated net profit was Rs 320.21 crores for the year ended March 2011 against Rs 557.31 crores in the same period a year ago. Net sales were at Rs 2127.44 crores as compared to Rs 2157.03 crores.

Kesoram Industries reported standalone net loss of Rs 197.98 crores for the quarter ended March 2011 against profit of Rs 26.09 in the same quarter a year ago.Net sales were at Rs 1588.84 crores against Rs 1346.69 crores.

Crompton Greaves reported consolidated net profit of Rs 888.67 crores for the year ended March 2011 as compared to Rs 859.87 crores in the same period a year ago. Net sales were at Rs 10005.11 crores against Rs 9140.87 crores.

Biocon is selling its stake in German drug distributor AxiCorp for a consideration of 40 million euros. The Bangalore based firm had acquired the stake three year ago primarily for distribution of its products, biosimilar insulin and Galrgine in Germany.

GoM on Cairn-Vedanta today

RIL-DGH officials to meet today

Tata Motors-April sales up 13% (YoY) at 64383 vs 57199 units; down 22% (MoM)

TVS Motor total sales up 14% at 1.67 lk units (YoY), down 12.5% (MoM)

F&O Ban: Kingfisher, Videocon Ind

Delhi HC adjourns bail hearing of Vinod Goenka, Sanjay Chandra to May 2

SAIL says looking to raise Rs 3,500-4,000 crore via FPO, aim to launch FPO by June

Jubilant Industries board to look at restructuring agri and performance polymers businesses
Rallis India board recommends dividend of Rs 11 per share, stock split from Rs 10 to Re 1

Bajaj Hindusthan Board approves rights issue of up to Rs 2000 crore
Grabal Alok Impex-Alok Ind merger deferred

RBI may hike 25 bps in policy rates to curb inflation

Japanese based firm Kokuyo to buy 51% stake in Camlin for around Rs 110-115/sh (BS) ((CMP: 70))

Dabur in talks with Ajanta Pharmaceuticals to acquire its over the counter energizer brand 30 plus for under Rs 50 crore (ET)

Sun Pharma plans to enter in the power sector looking to setup a 1000 mw power plant with an investment of around Rs 5000 crore (ET)

PFC plans to acquire stakes in the power projects, plans to sell 15% in fresh equity shares & the govt to divest 5% stake for around Rs 6000 crore (ET)

BP-RIL deal comes under security lens as govt clearance for BP’s acquisition in RIL could get delayed as the petroleum ministry has decided to seek security clearance from the home ministry (FE)


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