Tuesday, April 27, 2010

Market Outlook 27th April 2010


  Corporate News Headline
Sterlite Industries reported a jump of over two-folds in its consolidated net profit of Rs. 13.81 bn for the quarter ended March 31, 2010. (BS)
Maruti Suzuki reported a nearly three-fold jump in net profit at Rs. 6.56 bn for the quarter ending March 31, 2010. (BS)
ONGC said it has added 83 million tonnes of oil and gas reserves in the 2009-10 fiscal, the highest in two decades; even as production was lower than the target. (BS)
  Economic and Political Headline
The government said as many as 495 central-sector projects costing Rs. 200 mn and above are running behind schedule which has resulted in cost escalation by Rs. 551.75 bn. (BS)
Hungary's central bank cut the benchmark interest rate for the 10th consecutive month today and said it doesn't rule out market intervention if the forint continues to strengthen. The Magyar Nemzeti Bank reduced the two-week deposit rate to 5.25% from 5.5%. (Bloomberg)
German Chancellor Angela Merkel said she won't release Greek rescue funds until the country shows it's got a "sustainable, credible" plan to cut its budget deficit. "I've said for weeks that Greece must do its homework first," Merkel said. "We're not doing this because we believe Greece needs help. We're doing it because we're interested in the euro's stability." (Bloomberg)

Strong & Weak stocks
This is list of 10 strong stocks
Indian Bank, DCB, Uco Bank, Pir Health, Andhra Bank, Sintex, Yes Bank, Allahabad Bank, Axis Bank & Corp Bank.  
And this is list of 10 Weak Stocks
Renuka, Triveni, Balrampur Chini, HDIL, Bajaj Hind, Sun Pharma, McDowell, BEL, Punj Lloyd & Maruti.
The daily trend of nifty is in downtrend 

SPOT/CASH INDEX LEVELS TODAY
NSE Nifty Index   5322.45 ( 0.35 %) 18.35       
 1 23
Resistance 5343.425364.38   5386.42  
Support 5300.425278.38 5257.42

BSE Sensex 17745.28 ( 0.29 %) 51.08      
 1 23
Resistance 17817.0917888.89 17951.31
Support 17682.8717620.45 17548.65

NIFTY FUTURES (F & O): 
Above 5334-5336 zone, rally may continue up to 5338 level and thereafter expect a jump up to 5348-5350 zone by non-stop. 
Multiple Support at 5312-5314 zone & at 5320 level. Below these levels, expect profit booking up to 5309 level and thereafter slide may continue up to 5298-5300 zone by non-stop. 
Buy if touches 5275-5277 zone. Stop Loss at 5261-5263 zone. 
On Positive Side, cross above 5380-5382 zone can take it up to 5394-5396 zone by non-stop. If crosses & sustains this zone then uptrend may continue.

Short-Term Investors:
 Bullish Trend. 
Up Side Target at 5476.55. 
Stop Loss at 5217.05.

STOCK FUTURES (NSE):
INDIANB FUTURES 
Shares of Indian Bank rose as much as 10% after saying that its fourth-quarter profit rose to Rs4.1bn from Rs3.94bn in the same quarter last year. Total income increased to Rs23.18bn for the quarter ended March 31, 2010 from Rs21.48bn in the year-ago quarter. 

For the Year ended March 31, 2010, the bank posted a net profit of Rs15.55bn compared to Rs12.45bn for the year ended March 31, 2009. Total income increased to Rs90.31bn for the year from Rs78.66bn for the year ended March 31, 2009 

Technicals: INDIANB FUTURES 
Rally expected on yesterday & spectacular rally. Real Buying too. 
Assuming that, if rally continues then it can zoom up to 245.75 level by non-stop and that should be considered as a huge rally too. 
On Negative Side, if Profit Booking Starts then it can tumble up to 195.05 level by non-stop and have caution. Will you take this much of risk?

STER FUTURES (3 Day's Holding) 
Sterlite said on Monday its board had approved a 1-for-1 bonus share issue and a 2-for-1 stock split. 

Sterlite, which produces aluminium, copper, zinc and lead, reported March quarter net profit jumped to 13.81 billion rupees from 5.98 billion a year ago. Net sales rose to 71.11 billion, from 43.4 billion a year ago. 
Technicals: STERLITE
Real Buying taken place in last 3 trading days. 
Assuming that, if rally continues then it can zoom up to 912.05 level by non-stop

and that should be considered as a huge rally too. 
On Negative Side, if Profit Booking Starts then it can tumble up to 786.95 level by non-stop and have caution. Will you take this much of risk?

OPTIONS (NSE):
NIFTY 5300 CALL OPTION 
Do not get excited about yesterday's rally. Speculative Buying too. 
Assuming that, if rally continues then it can zoom up to 75.45 level by non-stop

and that should be good news for the Bulls. 

On Negative Side, if Profit Booking Starts then it can tumble up to 12.75 level by non-stop and have caution.

HINDALCO 180 CALL OPTION 
Yesterday's rally was surprising & Real Buying too. 
Assuming that, if rally continues then it can zoom up to 6.10 level by non-stop

and that should be surprising. So gains may be limited from current levels. 
On Negative Side, if Profit Booking Starts then it can tumble up to 2.45 level by non-stop and have caution.

Equity:
ICICIBANK (NSE Cash) 
ICICI Bank, the country's largest private bank, posted a 35.20% year-on-year growth in its net profit for the quarter ending March 2010, to Rs 1,005.57 crore. Profitability was mainly helped by 7.8% decline in operating expenses, 8% decline in provisions and slower rate of growth in tax outgo (up 23.3%).  
Technicals: ICICIBANK
Yesterday's fall was a surprise. But Speculative Selling too. 
Assuming that, if fall continues then it can tumble up to 916.65 level by non-stop and have caution. 
On Positive Side, if Short Covering Starts then it can zoom up to 998.15 level by non-stop.

RELIANCE (NSE Cash) 
Stung by lower-than-expected fourth quarter profits from Reliance Industries (RIL), analysts have cut their future earnings estimates for the company. On Friday, RIL had reported a net profit of Rs 4,710 crore, lower than consensus expectations by around Rs 300 crore, even as revenues doubled thanks to the merger of its former refining subsidiary. 
Technicals: RELIANCE
Yesterday's fall was a surprise. But Speculative Selling too. 
Assuming that, if fall continues then it can tumble up to 1027.20 level by non-stop and have caution. 
On Positive Side, if Short Covering Starts then it can zoom up to 1116.30 level by non-stop.

INVESTMENT VIEW
Granules India 
Granules India Ltd (BSE: 532482, NSE: GRANULES) has begun supplies of finished dosages to a large multinational pharmaceutical company. The multi-year agreement targets the purchase of in excess of 1.5 billion doses on an annualized basis. This annualized demand represents upwards of 25% of the Company's finished dosage capacity.  
Commenting on the deal, Mr.C.Krishna Prasad, Managing Director stated, "We are excited to take this next step forward as it validates our vertically-integrated model. We take satisfaction in the fact that our partners can rely on Granules to provide products throughout the pharmaceutical value chain in both a cost-effective and efficient manner. This commitment will enable our finished dosage plant to ramp up production and should substantially add to our top and bottom-line figures. Going forward, we expect the finished dosage plant to drive future growth and profitability at Granules." 
Strong on Financials, Low PE leaves upside for Re-rating the stock 
Granules India Ltd., a fully backward integrated formulation manufacturer, announced financial results for its fiscal year 2010 third quarter ended December 31, 2009. On a consolidated basis, Granules posted revenue of Rs. 122.40 Cr., an increase of 24.7% over the same period last year and a net profit of Rs. 6.56 Cr. 
Quarter ended December 31, 2009 

Net Sales: Rs. 122.40 Cr, as compared to the same period last year at Rs. 98.14 Cr. The increase is attributed to higher production at the Company's facilities and an increase in sales within the formulation division. 
Net Profit: Rs. 6.56 Cr, as compared to the same period last year at Rs. 0.49 Cr. 
EPS: Basic EPS was Rs. 3.27 as compared to the same period last year at Rs. 0.25. 
On a standalone basis, the Company achieved sales of Rs. 101.34 Cr. and a net profit of Rs. 5.87 Cr. This is the first time the standalone unit has crossed Rs. 100 Cr. in sales. 

"This was a record setting quarter due to strong performance from all our divisions. I am particularly excited about our formulation division, which continues to grow rapidly and now comprises over 9% of our sales. This division will ramp up significantly over the next few quarters as we commence work on several key contracts" said C. Krishna Prasad, Managing Director of Granules.  

About Granules India Ltd., 
Granules India Ltd. is a fully integrated pharmaceutical manufacturer. The Company manufactures several strategic Active Pharmaceutical Ingredients (APIs) and multiple Pharmaceutical Formulation Intermediates (PFIs), which are distributed in over 50 countries. The Company has recently forayed into the manufacturing of finished dosages with a plant that has a capacity of 6 billion tablets per annum, scalable to 12 billion tablets. This facility will allow Granules to offer products across the value chain. 
 

(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.)

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDate Buy ValueSell Value Net Value
FII 26-Apr-20102121.55 1887.32234.23
DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category DateBuy Value Sell ValueNet Value
DII26-Apr-2010 821.96895.65 -73.69
Disclosure: I don't have any positions in the above said scrips & NIFTY FUTURES.
Disclaimer:
"I do not make any warranties, express or implied, as to results to be obtained from using the information in this e-letter.  Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report."
--
Arvind Parekh
+ 91 98432 32381