Market Outlook
Technically, the domestic markets are precariously poised as the Nifty is perched on the threshold of a medium term ascending trendline support (5300 level) , below which the bears are likely to emerge with daggers drawn. The coming week is likely to witness a range of 5625 on the upside as long as the Nifty stays above the bullish pivot at the 5450 mark. In case of declines, the Nifty is likely to test a level of 5200 as long as the bears keep the Nifty below the 5400 levels. The possibility of a draw down is higher than the probability of a rally, therefore, fresh long positions in the leveraged segment should be avoided. Focus on capital protection. Our view is cautiously bullish and it will be better not to focus on the Nifty to trade (positional) but buy the stock specific which are attractive at the lower level will give the handsome return if market gets the reversal and 5,252 level should be watched very carefully
Technical Calls
Buy Coal
Buy Jyothy Lab 216.65 Target 225
More
Momentum Calls
Buy GVK Power 21.00 Target 26
Buy Max India 177.50 Target 185
More
Investment
Carborundum Universal SMC Global
Investment rationale:
> On a consolidated basis, the company has announced a capex of Rs 1.50 billion for the current fiscal. The company is going ahead as scheduled in executing them. The company is seeing strong growth coming back in
> The company is in the process of finalizing three joint ventures (JVs) for its proposed renewable energy material manufacturing plants. The company would announce two of the three joint ventures in a couple of months. The JVs would be established in its own 25-acre central government-approved renewable energy SEZ (special economic zone) in
> The order intake continues to be strong. The company isexpecting this year to be as good as last year in terms of growth. The management is very confident of more than 15-17% top line growth going forward with margins at least being protected.
> The Company continued to pursue a `grow our market` strategy by addressing all tiers of the market at their respective price points by an appropriate combination of brand and product. Long term market power was enhanced by strengthening the core segments and near adjacencies.
> In the consolidated results, the company reported net profit after minority interest of Rs 494.3 million in the quarter ended March 2011 as against Rs 324.3 million during the previousquarter ended March 2010. Sales reported to Rs 4.33 billion in the quarter ended March 2011 as against 3.51 billion during the previous quarter ended March 2010.
Investment
JBF Industries SMC Global
Investment rationale:
> JBF Industries has decided to set up a new polyethylene terephthalate (PET) facility in
> The company is also planning for PTA capacity of 1.12 million MT at Mangalore SEZ and is waiting for the environmental clearance. Capex for this facility is to the tune of USD 700 million. This facility is expected to start commercial operations from 2014.
> The company expects expansion of chips capacity at RAK to 0.43 million MT and film capacity enhancement of 36000 MT, which would be completed by December 2011. By the end of June 2011 chips capacity in
> The chips realization per kilo gram has increased by 36.4% to Rs 82.13 for the quarter ended March 2011 and 20% to Rs 66.36 for year ended March 2011. The realization of POY and specialty yarn has inched up by 32.5% and 15.3% to Rs 99.63 a kg and 81.74 a kg in quarter and year ended March 11 respectively. Film realizations surged by 97% to Rs 182.15 inquarter and 67% to Rs 150.14 for year ended March 11.
> For the year ended March 11, the consolidated total income from operations inched up by 31% to Rs 64.87 billion and net profit zoomed up by 2.86 times to Rs 5.46 billion. OPM improved by 530 bps to 14.8% in period under review.
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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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