Today Morning http://www.indiabulls.com/securities/mailermis/morning-brief/morning-brief-28Apr2010.htm
Derivatives EOD report on http://www.indiabulls.com/securities/mailermis/derivative-strategy/derivative-EOD-27-Apr-2010.htm
 Corporate News Headline | |||||||||||||||||||||||||||||||||||||||||||||
| • | Patni Computer Systems Ltd said it secured a multi-million dollar five-year IT and back office services deal from Universal American Corp, a US-based senior health insurance firm. (BS) | ||||||||||||||||||||||||||||||||||||||||||||
| • | ONGC may be asked to set up a 4.5-6 million tons refinery in Rajasthan if the state government agrees to pick up 26% stake in the Rs. 92.30 bn project, besides giving a slew of fiscal incentives. (BS) | ||||||||||||||||||||||||||||||||||||||||||||
| • | JSW Energy posted a consolidated net profit of Rs. 2.73 bn for the quarter ended March 31, 2010. The company had a net profit of Rs. 238 mn during the corresponding period of the previous fiscal. (BS) | ||||||||||||||||||||||||||||||||||||||||||||
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| Economic and Political Headline | |||||||||||||||||||||||||||||||||||||||||||||
| • | Six core infrastructure industries grew by a healthy 7.2% in March against 3.3% in the year-ago period, reflecting firm industrial recovery. The key sectors- crude, petroleum refinery products, coal, electricity, cement and finished steel - also showed marked improvement in March when compared to the 4.7% in February. (BS) | ||||||||||||||||||||||||||||||||||||||||||||
| • | Confidence among US consumers increased in April to the highest level since September 2008 as Americans became more upbeat about the labor market. The Conference Board's confidence index rose more than forecast, to 57.9 from 52.3 in March, according to the New York- based private research group. (Bloomberg) | ||||||||||||||||||||||||||||||||||||||||||||
| • | Greece had its credit rating cut to junk by Standard and Poor's and forecast investors would be paid no more than half their initial outlay in the event of any restructuring of debt. S&P lowered its long- and short-term sovereign credit ratings on Greece to BB+ and B, respectively, from BBB+ and A-2. The outlook is negative. (Bloomberg) SPOT / CASH INDEX LEVELS TODAY
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Strong & Weak Stocks
This is list of 10 strong stocks
DCB, Indian Bank, Uco Bank, LITL, Pir Health, GMR Infra, GT Offshore, Tata Chem, Sintex & Andhra Bank.
And this is list of 10 Weak Stocks
Renuka, Triveni, Balrampur Chini, Bajaj Hind, Sun Pharma, Maruti, McDowell, Tech Mahindra, BEL & HDIL.
The daily trend of nifty is in downtrend
NIFTY FUTURES (F & O):
Below 5298 level, selling may continue up to 5291-5293 zone and thereafter slide may continue up to 5278-5280 zone by non-stop.
Hurdles at 5319 & 5326 levels. Above these levels, expect short covering up to 5331-5333 zone and thereafter expect a jump up to 5344-5346 zone by non-stop.
Sell if touches 5348-5350 zone. Stop Loss at 5361-5363 zone.
On Negative Side, break below 5274-5276 zone can create panic up to 5261-5263 zone by non-stop. If breaks & sustains this zone then downtrend may continue and have caution.
Short-Term Investors:
Bullish Trend.
Up Side Target at 5476.55.
Stop Loss at 5217.05.
STOCK FUTURES (NSE):
IDFC FUTURES
Infrastructure Development Finance Company Ltd (IDFC) has informed the BSE that the Board of Directors of the company at its meeting held on April 27, 2010, approved, in principle, a plan to raise Tier 1 and / or Tier 2 capital up to Rs 3500 crore for meeting future growth needs. This is expected to be raised through issue of appropriate equity or quasi-equity instruments in one or more tranches over the next 12 months.
Technicals:
Fall expected on yesterday. But Speculative Selling taken place on yesterday.
Assuming that if this downtrend continues, then fall may continue up to 153.25 level and have caution.
On Positive Side, if Short Covering Starts then expect a jump up to 173.45 level. Risk is slightly on higher side.
GMRINFRA FUTURES (2 Day's Holding)
The company recently raised Rs 1399.50 crore from a qualified institutional placement at Rs 62.20 per share.
Technicals:
Real Buying taken place in last 2 days.
Assuming that if this uptrend continues, then rally may continue up to 73.70 level by non-stop. It will be great rally too.
On Negative Side, if Profit Booking Starts then expect a fall up to 62.40 level and have caution. Slightly risk is too high.
OPTIONS (NSE):
NIFTY 5300 PUT OPTION
Fall expected on yesterday. But Speculative Selling taken place on yesterday.
Assuming that if this downtrend continues, then fall may continue up to 19.40 level and
have caution. It looks that downtrend may be limited.
On Positive Side, if Short Covering Starts then expect a jump up to 32.00 level.
SBIN 2200 PUT OPTION
Yesterday's Rally was surprising. But Speculative too.
Assuming that if this uptrend continues, then rally may continue up to 15.70 level by non-stop.
On Negative Side, if Profit Booking Starts then expect a fall up to 4.05 level and have caution.
Equity:
TATAMOTORS (NSE Cash)
Tata Motors will start production of Nano, the world's cheapest car, from its Sanand plant in Gujarat from April 30.
The plant had been moved to Gujarat after Mamata Banerjee and Trinamool Congress forced Tata Motors to withdraw from West Bengal and abandon the plant built at Singur to manufacture Tata Nano.
As of now, the Nano is being made at the company's Pantnagar plant in small volume.
The Sanand plant will have installed capacity of 250,000 cars annually. Tata Motors has so far delivered about 30,000 Nanos...
Technicals:
Yesterday's Selling was a surprise. But Speculative too.
Assuming that if this downtrend continues, then fall may continue up to 829.30 level and have caution.
On Positive Side, if Short Covering Starts then expect a jump up to 863.05 level. Risk is Slightly on higher side.
MARUTI (NSE Cash)
Europe's largest carmaker, Volkswagen, has asked its Indian operations to send proposals on Maruti Suzuki's models which could be sold under the VW brand.
This is facilitated by the fact that VW owns a 20 percent stake in Suzuki Motor, which in-turn owns a majority stake in Maruti.
VW are looking at Ritz to be sold under the Skoda brand and the newest fugly dudly to hit the shores, WagonR, to be inducted under the VW wing.
The cars would be assembled at the VW plant at Chakan and that the cars would cost 5-7 percent more than the similar siblings by Maruti. VW also plans to use the superior K-series and DDIS engines in some of its cars for India.
Under the proposal, Skoda, which is owned by Volkswagen, may use Maruti's new Wagon platform for its budget car model.
The going may not be so easy for VW this time because – Maruti supplies the A-star to Nissan in Europe as the Pixo and their famous diesel mills are from Fiat and the Ritz is sold as the Opel Agila in Europe.
Technicals:
Fall expected on yesterday. But Speculative Selling taken place on yesterday.
Assuming that if this downtrend continues, then fall may continue up to 1222.85 level and have caution.
On Positive Side, if Short Covering Starts then expect a jump up to 1335.15 level. Risk is too high.
INVESTMENT VIEW
Dewan Housing: Growth With Value
Capitalizing on domain experience and niche presence: Given its rich domain experience of over 25 years, large presence, strong customer relationships, and quick turnaround time, we believe that Dewan Housing Finance is sweetly poised to capture the opportunity presented by the growing demand for housing in rural and semi-urban regions.
Being a niche player in the housing finance business, with a focus on middle and low income customers in tier-II and tier-III cities, it enjoys higher yields and margins than peers. Its average incremental ticket size was Rs 840,000 as on December 2009 compared with ~Rs1.4m for LIC Housing Finance.
Efficient utilization of capital; strong growth to continue: DHFL has been one of the fastest growing housing finance companies in the last six years. Its loan book and disbursements registered a CAGR of 39% and 37%, respectively (well above peers) over FY04-09. In 1QFY10, DHFL raised Rs3b through equity dilution, taking its tier-I ratio to 20%.
Post capital raising, growth rates have remained very strong and significantly higher than industry. In 9MFY10, loans and disbursements grew 55% and 78% YoY, respectively. On a lower base and higher ticket size, we expect loan growth of 40% CAGR and disbursement growth of 37% CAGR over FY10-12.
Superior margins, high asset quality: Though its cost of funds is higher and it has low exposure to the non-retail segment, DHFL's niche presence enables it to earn superior margins. Also, despite exposure to high-risk low-income customers, DHFL's asset quality is relatively high. Its gross NPA ratio was <1.6% over FY03-09 and net NPA ratio was 96bp as of 9MFY10. Its domain expertise and its cardinal principle of lending only to "end users" enables it to sustain asset quality.
Fee income initiatives gaining traction: DHFL is focusing on growing fee income through insurance distribution, project marketing and by providing technical services to developers. In 9MFY10, DHFL's third-party distribution income was Rs175m as compared to just Rs30m in FY09. Fee income (including processing fees) was Rs450m in 9MFY10 as compared to Rs170m in FY09. We factor in fee income of Rs1b in FY11.
Offers strong growth-value combination: DHFL offers a strong combination of growth and value, with superior asset quality. The stock trades at 1.3x FY12E BV and 5.9x FY12E EPS.
(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) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 27-Apr-2010 | 2701.19 | 2865.48 | -164.29 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 27-Apr-2010 | 993.73 | 992.64 | 1.09 |
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
