____ __
Strong Futures
This is list of 10 Strong Futures: Purva, Dish TV, GTL Infra, MLL, SCI, Bhushan Steel, Tech Mahindra, Acc Ltd, Ambuja Cement & Century Text..
Weak Futures
This is the list of 10 Weak Futures: Maruti, Jindal Steel, HDFC, State Bank Of India, Reliance, Hind Uni Lvr, LITL, Canara Bank, Hero Honda & McDowell-N..
Market Trend is up
____________________________________________________________
NIFTY FUTURES (F & O):
Below 5245 level, selling may continue up to 5242-5244 zone and thereafter slide may continue up to 5233-5235 zone by non-stop.
Hurdle at 5264 level. Above this level, expect short covering up to 5278-5280 zone and thereafter expect a jump up to 5289-5291 zone by non-stop.
Cross above 5292-5294 zone, can take it up to 5302-5304 zone by non-stop. Supply expected at around this zone and have caution.
On Negative Side, rebound expected at around 5230-5232 zone. Stop Loss at 5220-5222 zone.
Short-Term Investors:
Bullish Trend. Stop Loss at 5155.00.
Up Side Target at 5339.00.
Equity:
TATA MOTORS (NSE Cash)
Explosive. Do remember that, if breaks & sustains below 789 level, then it can tumble up to 783 level by non-stop. Buy at around this level with a Stop Loss of 775 level.
Rally up to 803-805 zone & 811 level may be possible.
Cross above 818 & 819 levels, this scrip will explode up to 826 level and thereafter expect a jump up to 832-834 zone by non-stop.
ABG SHIPYARD (NSE Cash)
Explosive. Do remember that, if breaks & sustains below 296 level, then it can tumble up to 253 level by non-stop. Buy at around this level with a Stop Loss of 250 level.
Rally up to 300-302 zone & 305 level may be possible.
Cross above 346 level, this scrip will explode up to 351-353 zone by non-stop.
TECH MAHINDRA (NSE Cash)
Explosive. Do remember that, if breaks & sustains below 1126 level, then it can tumble up to 1100 & 1111 levels by non-stop. Buy at around these levels with a Stop Loss of 1086 level.
Rally up to 1148 level may be possible.
Cross above 1158 & 1170 levels, this scrip will explode up to 1195 level and thereafter expect a jump up to 1204 level by non-stop.
BHARTI SHIPYARD (NSE Cash):
Bulls may get trapped at higher levels during intra-day trades today. Expect Negative news within a Month.
SELAN EXPLORATION TECHNOLOGY (NSE Cash):
Bulls may get trapped at higher levels during intra-day trades today. Expect Negative news within a Month.
TATA ELXSI (I) (NSE Cash):
Bulls may get trapped at higher levels during intra-day trades today. Expect Positive news within a Week.
BRIGADE ENTERPRISES (NSE Cash):
Bulls may get trapped at higher levels during intra-day trades today. Expect Positive news within Three Months.
OPTIONS (NSE): NIFTY 5200 PUT OPTION
Trend: Sideways Pattern.
Today's levels: 38 level is the support level & 51 level is the resistance. Will try to trade
between these levels.
Interesting Point: 5 Days Chart indicates rally up to 104 level with a Stop Loss of 41 level.
Conclusion: If 51 level is comfortably crossed, then traders can buy with a Stop Loss of 38 level today. Negative factor is that trend is sideways pattern. Risk of loss is there and take a calculated risk too.
RELIANCE 1110 PUT OPTION
Trend: Sideways Pattern.
Today's levels: 18 level is the support level & 28 level is the resistance. Will try to trade
between these levels.
STOCK FUTURES (NSE): DISH TV (I) FUTURES
Sideways Trend with Positive Bias.
Above 51 level, rally may continue up to 52 level by non-stop.
Below 50 level, expect profit booking up to 48 level and thereafter it can tumble up to 47 level by non-stop.
SCI FUTURES:
Explosive. If Friday's low of 164 level is protected then rally may continue up to 186 level today & within expiry it will zoom up to 193 level.
If bulls can't able to protect Friday's low of 164 level then it can tumble up to 157 level within expiry.
INVESTMENT BUY:
MUKTA ARTS (532357)
Recommended to buy and can hold up to end of this month.
Daily Chart: If Friday's low of 62 level is protected, then rally up to 89 level also possible.
Forecast up to 31.01.2010:
If 58 level is protected, then rally up to 94 level also possible.
 | 5252.20 | ( -0.15 %) | -7.70 |  |
| 1 | 2 | 3 | ||
| Resistance | 5273.88 | 5295.57 | 5311.28 | |
| Support | 5236.48 | 5220.77 | 5199.08 | |
 | 17554.30 | ( -0.17 %) | -30.57 | | |
| 1 | 2 | 3 | |||
| Resistance | 17619.73 | 17685.16 | 17730.47 | ||
| Support | 17508.99 | 17463.68 | 17398.25 | ||
INVESTMENT VIEW
Banswara Syntex –BUY
(BSE Code:503722)
Rationale for Recommendation:
Mettle of management is tested when industry is passing through the worst times and, what type of financial performance company dishes out during such times. Due to global overcapacity in spinning sector and also global meltdown, Year 2007 and 2008 had been the worst ever for Indian Textile Industry which led to majority of Cos. in this sector reporting big losses. Still, BSL made decent cash profit and reasonable net profit during these period which shows that BSL, a fully integrated textile co., is one of the most efficient in Indian Textile Sector.
Further, in last 6 months, fortunes of Indian Textile Industry have taken a U-turn which will enable BSL to report best ever performance for 2 years atleast and hence the recommendation because, scrip is still available at very low valuations.
Background:
BSL is an integrated textile co. engaged in the production of cotton yarn, synthetic blended yarn, polywool yarn, fabric weaving, fabric processing, Trouser/Jacket making garment factories and Captive Power Plant. Co. has 1.35 lakh spindles, 206 most modern looms to produce 2.2 mn. meter fabric per month, 2 lakh garment pieces per month, 27 MW Power Plant (18 MW Thermal and 9 MW Furnace Oil) and 30 mn. meters per year Fabric Processing capacity. In its weaving division, company has diversified its fabric business towards jacquard and technical textile like laminated fabric, fire retardant fabrics, water repellent fabrics, anti-fungus and bacterial processing fabric etc. Garment Division is supplier to all major domestic brands like Park Avenue, Louis Phillipe, etc.
Over last 4 years, Co. undertook capex of approx. Rs. 250 crs. for expansion/modernization which has enabled it to significantly expand its capacity of fabric and garments, widen the range into wool mix and cotton yarn. Now, Co. is set to reap benefits of ramped up capacities and revived demand scenario.
Financial Highlights:
2008 - 09 2007-08 2006-07 2005-06
Rs/Cr Rs/Cr Rs/Cr Rs/Cr
Turnover
(including exports) 558.95 451.54 413.43 344.95
Exports 366.44 281.52 256.94 212.18
PBDT 40.69 27.47 39.04 29.02
Depreciation 29.40 21.80 16.26 13.31
PAT 9.59 4.42 14.94 9.26
Dividend % 18% 12% 20% 20%
Equity 13.08 13.08 12.51 7.77
Reserves 76.22 69.45 64.63 52.99
Net worth 89.31 82.53 77.14 60.76
Loans 354.06 332.07 230.39 176.82
Net Block 330.90 319.15 244.52 170.38
Book Value Rs. 68.14 62.97 61.50 50.76
Performance Review 2008-09: During the year, production of Yarn improved by 10%, fabric by 28% and garments by 36%. Gross revenues increased by 24%. Co. increased the sale of fabric and garments, as %age of Gross Income, from 44% in 07-08 to 50% in 08-09. It also sold Power to SEB, generating 4.72 cr. income.
Profit before extraordinary items, depreciation and tax at 48.22 crs. was up by 76% as against 27.47 crs. in 07-08. It booked forex loss of 7.53 crs. (MTM, not involving cash outgo) during the year.
Export performance has improved every year for last 5 years, cumulative growth at 129%.
BSL also has a JV named Carreman Fabrics India Ltd. with weaving Plant of 60 looms in which BSL has 50% stake. JV earned Net Profit of Rs. 95 lakhs during the year. BSL re-started production of Power on Furnace Oil based Power Plant, after considering commercial viability. In 2008-09, EPS stood at 7.33 but Cash EPS was 29.80.
Future Outlook:
H A L F Y E A R E N D E D
30/09/2009 30/09/2008
Rs/Cr Rs/Cr
Net Sales 310.46 271.62
Depreciation 14.98 14.56
Net Profit 13.86 0.09
EPS Rs. 10.58 0.07
Cash EPS Rs. 22.03 11.83
Banswara has reported fabulous results for H1 wherein, its PAT is 13.86 crs. as against near 9 lacs in H1 of previous year. Cash EPS for H1 is 22.03.
2 0 0 9 - 10E 2 0 1 0 - 1 1E
Revenues 630.00 750.00
Depreciation 30.00 33.00
Net Profit 31.00 53.00
Equity 13.08 14.73
EPS Rs. 23.97 35.94
Cash EPS Rs. 46.38 57.68
P.E. Ratio 3.51 2.42
Cash P.E. Ratio 1.82 1.50
BSL is likely to witness dramatic and quantitative improvement in its working in current and next year atleast due to various factors. Firstly, since the beginning of 2009, Yarn selling realization have gone up by nearly 20% whereas, Fibre (R/M) prices have gone up just 7-8%. Secondly, there will be inherent improvement in profitability driven by superior revenue mix in the form of substantially higher contribution of fabric/garment divisions. In Textile Industry, in order to be more competitive, value addition is the only answer and BSL is constantly adding to its weaving and garmenting capacity. Co. is increasing consumption of self-produced yarn for fabric and own fabric for garments. Presently, 35% of Yarn is consumed for fabrics and 15% of fabric production is consumed by its garment factory.
Future Plans:
a) Company has decided to set up one more 18 MW Power Plant at capex of just Rs. 50 crs. (less than Rs. 3/- Cr per MW. Part of the generation will be for captive use to meet enhanced energy requirement in future and more than 50% should be for merchant sale. It should generate Cash Profit of Rs. 15 cr. on annual basis from Q1FY12 onwards.
b) Company has also chalked out expansion, modernization and diversification programme involving Rs. 60 crs. Out of it, 9.55 Cr. will be spent to enhance readymade garment production, 8.07 Cr. for increasing dyeing capacity, 6.29 Cr. for yarn dyeing plant, 8.19 Cr. to increase fabric weaving capacity and 18.68 Cr. for spinning capacity.
Valuations:
BSL has emerged as one of the finest textile cos. in India as is evident from financial highlights of last 4 years wherein, its total sales, exports have been going up at a decent pace and promoters had vision of forward integration which prevented BSL from plunging into losses (like so many other standalone spinning mills). Stock is trading at:
1. 3.51 x FY10E EPS.
2. 1.82 x FY10E Cash EPS.
3. 2.40 x FY11E EPS.
4. 1.50 x FY11E Cash EPS.
Current Market Cap of BSL is Rs. 113 crs. Where as, Co. is likely to make cumulative Cash Profit of 147 crs. in 2009 - 11. Further, current market cap is 16% and 15% of FY10E and FY11E sales. B.V. will rise to Rs. 81-84 at the end of current year and, Rs. 110 - 112 as on March 2011. Significant appreciation of Indian currency is the main risk which can impact its margins.
In International Market, Co. has established a strong name for itself in terms of delivery schedule, reliability and quality which enables BSL to fetch higher realization.
BSL is a value buy.
(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice).
Day Trading Guide
DLF
The stock is experiencing selling pressure at higher levels. Fresh short position can be initiated if it slips below Rs 380 with tight stop-loss.
ICICI Bank
As long as ICICI Bank trades below Rs 853, the near-term outlook stays negative. We recommend a sell.
Infosys
Fresh long position is recommended only if the stock moves above Rs 2690, with tight stop-loss.
L&T
The near-term stance is bearish for the stock. We recommend a sell with stop at Rs 1665.
ONGC
As long as ONGC hovers above Rs 1200, bullish momentum holds. We recommend a buy with stop at Rs 1200.
Reliance Capital
Fresh short position can be initiated if the stock decline below Rs 884, with tight stop-loss.
Reliance Communications
The near-term outlook is positive for the stock. We recommend a buy.
Reliance Industries
Initiate fresh short position if RIL tumbles below Rs 1094, with stiff stop-loss.
SBI
We recommend a sell as the near-term outlook is bearish.
Nifty Futures
Fresh short position can be initiated if Nifty futures decline below 5225, with stiff stop-loss.
All moves tied to bank rates
| Players bet on continuation of fiscal stimulus, short-term liquidity flow. |
Market players expect the RBI to suck up excess liquidity and keep stimulus steps in place.
Dalal Street may show an upward bias in the short-term. The market has shed its apprehension over an imminent rate hike by the central bank. Players seem to expect that the RBI will not hike policy rates in the Credit Policy, scheduled on January 29, in view of slow growth in credit off-take. Instead, they said, the central bank may mop up excess liquidity or make liquidity dearer to test the waters.
Expectations are that the RBI may increase cash reserve ratio – a percentage of deposits banks must keep with the RBI – by not more than 50 basis points. Also repo or reverse repo rates may also be tinkered with marginally. A repo rate is the interest banks have to pay RBI for borrowing from the central bank. A reverse repo is what the RBI pays banks for funds.
In the fortnight ended December 25, bank credit growth was just 12.2 per cent year-on-year. But Morgan Stanley in a recent note said this number may be misleading. "We believe that underlying credit growth is probably stronger than that implied by the headline year-on-year number. Last year during this period, bank credit growth accelerated sharply for about two months due to the shift in corporate borrowing from fixed income mutual funds and non-banking financial companies. As the base effect should normalise by January-February 2010, bank credit growth should pick up to 15-16 per cent Y-on-Y."
Fiscal Boosters
Moreover, it believed that bank credit growth was a lagging indicator. It reckoned that a sharp pick-up in industrial production growth, continuing since June last year, should be reflected in bank credit demand over the next two months. "We believe that the sequential bank credit growth trend has already started accelerating, indicating that year-on-year growth will move very quickly over the next two months," it added.
The market is assuming that the Government will not withdraw fiscal stimulus in a hurry. The other assumption in the short term is that liquidity flow is going to be steady.
The fiscal and monetary stimuli had helped the corporate sector earn better. The current equity price appreciation is a function of liquidity inflow. However, the medium-term fundamentals may weaken, some analysts said.
Even if the forthcoming monetary policy measures do not hit the interest of the corporate sector, the fiscal measures of the Government, including the Union Budget, may not be as corporate friendly as last year.
The pro-poor policies, which are dismissed by market economists as populist, look like an imperative step for policy makers this year. Certain social, environmental and internal security issues are gaining in economic and political importance. If political rhetoric is any indication, the corporate sector should be ready for a trade-off between lower growth in profit and expansion of the market.
Cost of interest and commodities are likely to put pressure on profit growth. If stock prices remain liquidity-driven like last year, they would overtake the fundamentals faster than anticipated.
But the bulls insist that apprehensions are being overplayed. Their contention is that the Government would generate additional funds through higher dividend and disinvestment of the public sector enterprises. A tilt in favour of growth – particularly in the infrastructure sector – is likely to unleash raw economic power to include all.
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 15-Jan-2010 | 2010.27 | 2940.36 | -930.09 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 15-Jan-2010 | 1945.99 | 1265.04 | 680.95 |
--
Arvind Parekh
+ 91 98432 32381
