Market Updates03 Jun11
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Market Outlook »
A breakout below 5350 can trigger a fall to 5200 levels
Nifty has a strong resistance at 5640 (50-day SMA) and 5750 (200-day SMA).he futures added nearly 12% in Nifty open interest (OI), while there is a gradual increase in puts OI from 5400 to 5200 levels, while calls OI has been in line with the market. In the Nifty June series, the highest call OI is at 5800 strike with 6.5 million shares and the highest put OI is at 5400 strike with 6.9.million shares. We recommend a long put of 5400 strike price to hedge your portfolio.
Buy Adani Enterprise 634.70 target 645
Buy HCL Techno 514.30 target 525
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Buy Mundra Port 164.00 target 170
Buy Nalco 92.05 target 100
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Investment »
Banco Products
The outlook on the auto sector for FY12 remains very cautious and hence the outlook for the players catering to auto segment will be the same. However NRF`s healthy performance in future will act as a catalyst for Banco`s consolidated performance during FY12 and in future. Also with the commodity prices likely to cool off in the H2FY12, the margins are likely to improve in future. The management has also indicated to improve
Investment »
Harrisome Malayalam
At the CMP, the stock is trading at 21.5x and 14x its FY12 and FY13 estimated EPS of Rs 3 and Rs 4.5, respectively. We expect tea prices to remain firm at ~Rs 80/kg in the coming quarters led by increasing demand in international markets and a consequent fall in production in Kenya. However, rubber prices could soften to ~Rs 190/kg, thereby keeping revenue growth at moderate levels. Hence, we maintain our target
Stock Watch
On account of cheaper valuations post the correction in construction stocks and taking into account the FY2013E earnings growth outlook, we remain positive on companies having 1) less dependence on capital markets for raising equity for funding projects (L&T and Sadbhav); 2) strong order book position (IVRCL and Sadbhav); 3) superior return ratios (L&T and Sadbhav); 4) comfortable leverage position (L&T, NCC and Sadbhav); and 5) inexpensive valuations (IVRCL and NCC). We maintain L&T, IVRCL and Sadbhav as our top picks in the sectorstock.
Stock of the Week
Arvind is engaged in the manufacture of textiles and branded segments. Operates in three segments, textiles which inlcude yarn,fabric and branded garments and others which include EPABX and rural automatic exchange systems, It services and construction business. With an equity base of Rs 254cr supported with huge reserves of Rs 1235cr. For FY11 it recorded net sales of Rs 2691cr with net profit of Rs 134cr. FY11 EPS is Rs 5.64. At cmp the stock is available at a forward multiple of just 14.
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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report
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