Tuesday, November 15, 2011

Stocks in action for the day: Tata Motors, JSWSteel, Bharti, Idea, Bank of Baroda.

Market Outlook: Indian markets are expected to see some unconstructive trends following weak global markets. On going pains of stinging prices on the higher inflation adds to negative flows in the market. On the flip side India has pitched for un upgrade to its sovereign ratings citing on strong economic fundamentals despite global concerns. There are several indicators as India outperformed its peers with rating of Baa3 rating which is the lowest investment grade rating with a stable outlook. Support for Nifty is at 5100 and resistance at 5200.

Key earnings to watch: Gati, Prime Securities, Kinetic Motor, Karuturi Global, Zenith Computers, Zenith Infotech, Usher Agro.

US Market: Tata Motors Ltd after the company's profit for the quarter to end-September fell 16 per cent from a year ago, lagging market estimates hit by higher costs and foreign exchange losses.

Global events to watch:

· Euro-zone, French, German GDP data for the third quarter

· U.S. October producer prices, retails sales

Global indices Update @ 8:

Dow Jones : 12078 (-74.70)

NASDAQ : 2657 (-21.53)

Nikkei 225 : 8567 (-36.28)

Hang Seng : 19385 (-122.3)

SGX CNX Nifty : 5120 (-29.50)

Gold (USD/t oz.) : 1782

Nymex Crude (F) : 98.30

INR / 1 USD : 50.08

TECHOUTLOOK : Support for Nifty is at 5100 and resistance at 5200.

Call for the day

Sell JSWSteel SL 668 Target 630.

Sell Tatamotors SL 181 Target 172-170.

Buy Idea Cel SL 95.5 Target 104.

Stocks in action for the day: Tata Motors, JSWSteel, Bharti, Idea, Bank of Baroda.

MSCI rebalance announcement today, changes effective from November 30 -Likely additions – Bharti, Idea, Bank of Baroda -Likely Deletions – Piramal, Indiabulls Real Estate, HDIL

Tata Motors will be watched after the automaker declared its Q2 results post market hours. Tata Motors Ltd after the company's profit for the quarter to end-September fell 16 per cent from a year ago, lagging market estimates hit by higher costs and foreign exchange losses.

JSW Steel posted consolidated net loss of Rs 669.32 crore for quarter ended September 30, 2011 as compared to net profit of Rs 373.26 crore in the same quarter a year ago. Total income increased to Rs 8180.60 crore from Rs 6135.57 crore.

BHEL net rises 24% on strong sales: Helped by strong sales, equipment major Bharat Heavy Electricals Ltd (BHEL) posted a 24 per cent surge in net profit at Rs 1,412 crore for the quarter ended September 30, 2011. The state-owned firm had reported profits of Rs 1,142 crore for the corresponding quarter the previous year. Net sales increased 24 per cent to Rs 10,299 crore (Rs 8,328 crore).

Graphite India net dips on forex losses: India's largest producer of graphite electrode – reported 14 per cent drop in net profit to Rs 42 crore during July-September 2011, compared to the same period previous year. The profit decline was attributed to nearly Rs. 20 crore foreign exchange loss. The company had reported a net profit of Rs 49 crore during the corresponding quarter last fiscal.

Kingfisher crisis: Further conversion of debt into equity not an option now, say banks. Kingfisher turmoil -Lenders to control Kingfisher earnings; revenues to flow into escrow a/c to be controlled by one of the banks (ET) -UB Group companies borrow Rs 400 crore from the NBFC SICOM (ET)

-Delhi & Hyderabad airports threaten to put KFA on cash & carry mode; asks the company to clear half of its Rs 80 crore dues (ET) -Shareholding of UB group may further be diluted (TOI)

SpiceJet CEO Neil Mills says no logic in bailing out Kingfisher (BS)

Petrol price may be cut by Rs 2 a litre on Nov 17: State-run fuel retailers are set to reduce petrol price by as much as Rs 2 a litre from Thursday following a gentle prod from the government to pass on the benefit of recent softening in the fuel's price in bulk markets and a comparatively lower average rate for crude through the better part of the fortnight.

Unitech Ltd will be watched after the real estate major, reported a 47 per cent decline in its consolidated net profit at Rs 92.46 crore for the quarter ended September 30, 2011.

Tata Power Ltd after the company posted a consolidated net loss of Rs. 1,218.86 crore for three months ended September, bogged down by provision for impairment charge and forex loss amounting to Rs. 1,461.96 crore related to its upcoming Mundra UMPP.

JP Associates Ltd after the company reported over 11 per cent rise in its standalone net profit at Rs 128.66 crore for the second quarter of the current fiscal.

Diamond Power Infra has won an order for supply and erection of 220 KV D/C lines from Gujarat Energy Transmission Company aggregating 380.15 kms

Larsen & Toubro has executed the first order of dry shielded canisters from Transnuclear Inc., USA for storage of radioactive waste.

Gitanjali Gems reported consolidated net profit of Rs 132.24 crore for quarter ended September 2011 against Rs 123.23 crore a quarter ago. Net sales were at Rs 3167.64 crore as compared to Rs 2595.32 in last quarter.

Areva T&D India has bagged Rs 200 crore contracts from Power Grid Corporation for a 765 kv substation and transformers at Bareily, Uttar Pradesh.

Eros International's Hindi movie 'Rockstar' collected Rs 64 crore gross worldwide on on opening weekend.

How to trade in Renuka Sugars, Reliance Capital & Jet Airways? Source: IRIS (14-NOV-11)


In an interview with myiris.com, Prashanth Tapse, AVP Research, Mehta Equities gave views on three stocks which were buzzing on Monday, November 14. The same is as follows:

Shree Renuka Sugars: Renuka Sugars is been in action in last couple of days on the back of its dismissal earnings, which was hit by huge foreign exchange losses which turns bottom line into deep red. The company reported a net loss of Rs 6.19 billion Vs Net profits of Rs 1.28 billion for the quarter ended September 30. The performance for the quarter was not expected to be so worsen due to unexpected depreciation Indian rupee (9.5%) and Brazilian Real (18.8%) against the US dollar during the quarter, which took a tool on the overall performance. Technically worst case it can test 34 in a day or two looking at the negative sentiments. On the overall basis, we would like to accumulate the stock near to its support levels. We expect stock to bounce back from the support and trade in the range of 48-50 on the better than expected December 2011 earnings as compared to September 2011 earnings.

Shares of the company declined Rs 14.5, or 28.05%, to trade at Rs 37.20. The total volume of shares traded was 12,100,549 at the BSE (1.27 p.m., Monday).

Reliance Capital: The counter has underperformed from the recent high near 375+ and started reflecting the earnings, which is lower than expected. Top line reported an increase of 19% in total income at Rs 15.46 billion for the quarter ended Sep 30 against Rs 13 billion during the previous corresponding period. Net profit during the quarter under review stood at Rs 0.33 billion compared to Rs 112 during the like period of 2010-11, While its general insurance business reported a decrease in loss at Rs 0.29 billion against a loss of Rs 0.30 billion June 30, 2010 reflecting successful steps taken towards writing only profitable business. Weak financial markets and high interest rates have impacted its overall businesses reflecting in significant pressure on the AMC, retail lending and securities businesses. Technically the stock is trading 350, which acts as support which if breaks on closing basis it can test 330, which is also a target for short-term trade. Hence, we remain negative on the counter.

Shares of the company declined Rs 13.85, or 3.86%, to trade at Rs 345.05. The total volume of shares traded was 463,460 at the BSE (1.27 p.m., Monday).

Jet Airways (India): With the ongoing turbulence scenario in the airlines industry Jet Airways has no excuse to perform well as against the sector performance. Jet Airways (India) India`s top airline by market share was in action last week mainly on the back of its underperformance in the last September quarter 2011. It has swung to a net loss, compared with profit a year ago, due to rising fuel prices and a forex loss in the quarter. For the quarter ended September, it has reported a net loss of Rs 7.14 billion, compared to Rs 0.12 billion in the same period last year. Earnings were also hit by an exceptional forex loss of USD 52.7 million due to depreciation of the rupee. Fuel prices went up by 41% on year, hitting profitability; hence we expect the scenario to remain subdued for the coming quarters as well. Overall we expect some sort of positive demand on Jet flights as rival, Kingfisher Airlines, has been forced to cancel scores of flights this week to cut losses, as it does not have money to fly full capacity and State-run Air India is operating on government life support which in turn will benefit Jet to get the passenger flow going forward. Technically the stock has given a negative breakout at 266 level with a target of Rs 237.


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