Market is likely to see some bounce today
Today the markets are likely to open positive. The other major Asian markets have also opened in green and the US markets closed mixed. The markets are likely to bounce back a little today after consecutive negative closing for so many days. In a major bailout the government has announced a package of Rs2,000 crore for Satyam’s revival. This could bring some charm in the market sentiments as well. The over all atmosphere across Asia looks good and therefore in today’s trade we expect the markets to be trading northward with a pinch of volatility
Key Results Today: HDFC Bank, GTL Infra, NIIT Tech and PSI Data Systems
Nifty (2745) Sup 2700 Res 2795
Bharati , tata steel on radar
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Wednesday, January 14, 2009
Tuesday, January 13, 2009
Sell IT Stocks
WiproWe recommend a sell in Wipro stock from a short-term trading horizon. It is apparent from the charts of Wipro that it has been on a long-term downtrend from its February 2007 peak of Rs 690. Since then the stock has been forming lower peaks and lower troughs. In September, this downtrend accelerated and the stock witnessed a steep decline.
However, the stock found support at Rs 181 in late October and bounced back. We notice the formation of a descending triangle pattern spanning over the past two months, with the lower horizontal line at Rs 220. This pattern is a bearish continuation pattern.
On January 12, the stock plummeted by 9 per cent, accompanied with heavy volume. The stock is currently testing the lower horizontal line. The weekly relative strength index (RSI) features in the bearish zone.
We are bearish on the stock from a short-term perspective. We anticipate the stock to penetrate its lower horizontal line and decline until it hits our price target of Rs 204. Traders with short-term perspective can sell the stock, while maintaining a stop-loss at Rs 238.
Infosys Technologies Q3 consolidated net profit rose 33.3% to Rs 1,641 crore for the quarter ended December 31, 2008 as against Rs 1,231 crore in the corresponding quarter a year ago
No positive surprises were expected from Infosys and it was expected to miss its reported dollar guidance
The outlook on the industry remains weak.
However, the stock found support at Rs 181 in late October and bounced back. We notice the formation of a descending triangle pattern spanning over the past two months, with the lower horizontal line at Rs 220. This pattern is a bearish continuation pattern.
On January 12, the stock plummeted by 9 per cent, accompanied with heavy volume. The stock is currently testing the lower horizontal line. The weekly relative strength index (RSI) features in the bearish zone.
We are bearish on the stock from a short-term perspective. We anticipate the stock to penetrate its lower horizontal line and decline until it hits our price target of Rs 204. Traders with short-term perspective can sell the stock, while maintaining a stop-loss at Rs 238.
Infosys Technologies Q3 consolidated net profit rose 33.3% to Rs 1,641 crore for the quarter ended December 31, 2008 as against Rs 1,231 crore in the corresponding quarter a year ago
No positive surprises were expected from Infosys and it was expected to miss its reported dollar guidance
The outlook on the industry remains weak.
Monday, January 12, 2009
Companies that may cook books!
After the Satyam debacle it would be better idea to stay away from markets for few days.
DLF:
DLFs non-DAL revenues declined 44% QoQ to Rs22.5bn and around 40% of sales have been to DAL, a group entity. 44% of debtors are DAL and of total debtors, the share of DAL has increased during the quarter with DAL receivables increasing by Rs14.5bn QoQ.
During 1QFY09, sales to DAL were Rs15.6bn, which is marginally higher than the increase in receivables from DAL. We would like to add that DLFs high level of transactions with group company DAL and high level of receivables has been a point of debate since it went public.
Dr Reddys Labs:Dr. Reddy's has adjusted mark to market losses on outstanding US$250m of hedges in balance sheet, while P&L reflects forex gains realised. The company also reclassified its contract manufacturing business (CPS) revenues into API and Formulations, which makes it difficult to analyse its segmental performance.
HCL Tech:
HCL Tech has normally had a very large hedge position compared to its revenue base. While the rupee was appreciating, the company reaped benefits of this and reported US$79.2m in Forex gains in FY07. The company has always maintained that it would prefer to lock-in a constant INR/US$ rate through hedging rather than suffer from the currency volatility.
However, the company unwound US$540m of hedges in Jun-08 and booked large Forex losses. We find this change in Forex policy surprising and the company has likely brought forward its potential FY09 FX losses to 4QFY08 through this change in policy.
JP Associates:
Jaiprakash Associates did not provide for FX losses on outstanding FCCBs of US$400m through its P&L and plans to provide for the FX losses/ gains at the end of the year.
Jet Airways:
Jet Airways changed its depreciation policy from WDV to SLM, and thereby wrote back Rs9.2bn into its P&L, which helped the company to report profits during the quarter. It also helped Jet to report higher net worth, which will help in keeping reported gearing low. This is a one-time exercise. Jet also capitalised Forex loss of Rs6.2bn on Forex debt and adjusted it against carrying value of fixed assets.
Prajay Engineers Syndicate:
Hyderabad based developer, reported a loss in its fourth quarter results against expectations of a profit. The company "lost" records for a project worth 40% of its annual revenues at the site office.
The company in its press release said - "After the year end, basic records relating to sale agreements / revenue and construction expenses of one of the Projects of property development were lost at the site office, Vishakhapatnam. The auditors in their report have stated that they were not able to verify the books and records relating to income of Rs1437.71m and relevant construction cost of Rs752.654m. Management is making all efforts to locate/ retrieve the lost records."
Ranbaxy:
Pharma major has mark to market losses of Rs9.09bn on forex derivative contracts, which have not been provided for because the company believes "the gain on fair valuation of underlying transactions against which the derivative transactions were undertaken amount to Rs10.3bn." This argument is against the principles of conservative accounting wherein mark to market losses are being offset against assumed future profit.
Reliance Communications:
Telecom Company has adjusted short term quarterly fluctuations in foreign exchange rates related to liabilities and borrowings to the carrying cost of fixed assets. The company adjusted Rs1.09bn of realized and Rs9.55bn of unrealized Forex losses in the above manner.
In addition, the company has not recognised Rs3.99bn of translation losses on FCCBs, since the FCCBs can potentially get converted, although the FCCBs are out of money. Adjusted for all the above, the company would have virtually no profits in 1QFY09.
Reliance Industries:
In continuance of its policy, adjusted "foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets…which is at variance to the treatment prescribed in AS11." Had AS11 been followed, profits for 1QFY09 would have been lower by Rs9.4bn (23% of reported net profits).
Sobha Developers:
South Indian developer changed its accounting norms in 1QFY09 for revenue recognition which facilitates revenue being recognized earlier in a project cycle. According to its press release, if the accounting policy had not been changed, the company's 1QFY09 PBT would have been lower by 20%.
Excerpts from the company's press release: "With effect from April 01, 2008 the Company has changed its accounting policy for revenue recognition for sale of undivided share of land (group housing) on the basis of certain minimum level of collection of dues from the customer and / or agreement for sale being executed rather than criteria relating to the project reaching a significant level of completion to align it with revenue recognition policy for sale of villa plots.
This has been resulted in additional revenue recognition and higher profit before taxes of Rs321m and Rs150m respectively during the quarter ended June 30, 2008.
Tata Motors:
Company has transferred 24% stake in Tata Automotive Components (TACO), a company with revenue of US$675 in FY07, to Tata Capital, a group company, and booked profit of Rs1.1bn in 1QFY09. Management has declined to disclose the valuation methodology.
Senior management of Tata Motors, in a conference call with analysts, said, "I would not be able to share with you the specific valuation methodology, except to say that the things are done by an independent reputed firm and based on the company's track record and the future business opportunity."
Tata Motors has also changed its methodology for calculating provisions for doubtful receivables, which resulted in higher reported EBITDA to the extent of Rs507m (10% of EBITDA).
TCS:
The software major increased its depreciation policy on computers from 2 years to 4 years. As a result, 1QFY09 PBT was higher by an estimated Rs500m (c.4% of net profit in 1QFY09). TCS follows cash-flow hedge accounting and till FY08, it used to recognise hedging gains on effective hedges in its revenue line, thus boosting the reported revenue growth and EBIT margin.
In FY08, TCS had Rs4.21bn from hedging gains, of which, Rs1.37bn was included in the revenue line. However, from 1QFY09, TCS will report all Forex losses/gains below the EBIT line in other income. Thus the losses it had on its hedge position will no longer be booked in the operating line.
Zee Entertainment:
Media company withdrew its buyback offer "for the time being" without assigning any other reason. This happened after SEBI made it mandatory that companies will have to complete the entire buy back within the stipulated time, if the stock is trading below the maximum buy back price at the end of the buyback period and the buyback amount has not been completed.
DP DISCLAIMER: This is a individual opinion - please do your own research. This was a forwarded message with a intention to spread panic :-)
DLF:
DLFs non-DAL revenues declined 44% QoQ to Rs22.5bn and around 40% of sales have been to DAL, a group entity. 44% of debtors are DAL and of total debtors, the share of DAL has increased during the quarter with DAL receivables increasing by Rs14.5bn QoQ.
During 1QFY09, sales to DAL were Rs15.6bn, which is marginally higher than the increase in receivables from DAL. We would like to add that DLFs high level of transactions with group company DAL and high level of receivables has been a point of debate since it went public.
Dr Reddys Labs:Dr. Reddy's has adjusted mark to market losses on outstanding US$250m of hedges in balance sheet, while P&L reflects forex gains realised. The company also reclassified its contract manufacturing business (CPS) revenues into API and Formulations, which makes it difficult to analyse its segmental performance.
HCL Tech:
HCL Tech has normally had a very large hedge position compared to its revenue base. While the rupee was appreciating, the company reaped benefits of this and reported US$79.2m in Forex gains in FY07. The company has always maintained that it would prefer to lock-in a constant INR/US$ rate through hedging rather than suffer from the currency volatility.
However, the company unwound US$540m of hedges in Jun-08 and booked large Forex losses. We find this change in Forex policy surprising and the company has likely brought forward its potential FY09 FX losses to 4QFY08 through this change in policy.
JP Associates:
Jaiprakash Associates did not provide for FX losses on outstanding FCCBs of US$400m through its P&L and plans to provide for the FX losses/ gains at the end of the year.
Jet Airways:
Jet Airways changed its depreciation policy from WDV to SLM, and thereby wrote back Rs9.2bn into its P&L, which helped the company to report profits during the quarter. It also helped Jet to report higher net worth, which will help in keeping reported gearing low. This is a one-time exercise. Jet also capitalised Forex loss of Rs6.2bn on Forex debt and adjusted it against carrying value of fixed assets.
Prajay Engineers Syndicate:
Hyderabad based developer, reported a loss in its fourth quarter results against expectations of a profit. The company "lost" records for a project worth 40% of its annual revenues at the site office.
The company in its press release said - "After the year end, basic records relating to sale agreements / revenue and construction expenses of one of the Projects of property development were lost at the site office, Vishakhapatnam. The auditors in their report have stated that they were not able to verify the books and records relating to income of Rs1437.71m and relevant construction cost of Rs752.654m. Management is making all efforts to locate/ retrieve the lost records."
Ranbaxy:
Pharma major has mark to market losses of Rs9.09bn on forex derivative contracts, which have not been provided for because the company believes "the gain on fair valuation of underlying transactions against which the derivative transactions were undertaken amount to Rs10.3bn." This argument is against the principles of conservative accounting wherein mark to market losses are being offset against assumed future profit.
Reliance Communications:
Telecom Company has adjusted short term quarterly fluctuations in foreign exchange rates related to liabilities and borrowings to the carrying cost of fixed assets. The company adjusted Rs1.09bn of realized and Rs9.55bn of unrealized Forex losses in the above manner.
In addition, the company has not recognised Rs3.99bn of translation losses on FCCBs, since the FCCBs can potentially get converted, although the FCCBs are out of money. Adjusted for all the above, the company would have virtually no profits in 1QFY09.
Reliance Industries:
In continuance of its policy, adjusted "foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets…which is at variance to the treatment prescribed in AS11." Had AS11 been followed, profits for 1QFY09 would have been lower by Rs9.4bn (23% of reported net profits).
Sobha Developers:
South Indian developer changed its accounting norms in 1QFY09 for revenue recognition which facilitates revenue being recognized earlier in a project cycle. According to its press release, if the accounting policy had not been changed, the company's 1QFY09 PBT would have been lower by 20%.
Excerpts from the company's press release: "With effect from April 01, 2008 the Company has changed its accounting policy for revenue recognition for sale of undivided share of land (group housing) on the basis of certain minimum level of collection of dues from the customer and / or agreement for sale being executed rather than criteria relating to the project reaching a significant level of completion to align it with revenue recognition policy for sale of villa plots.
This has been resulted in additional revenue recognition and higher profit before taxes of Rs321m and Rs150m respectively during the quarter ended June 30, 2008.
Tata Motors:
Company has transferred 24% stake in Tata Automotive Components (TACO), a company with revenue of US$675 in FY07, to Tata Capital, a group company, and booked profit of Rs1.1bn in 1QFY09. Management has declined to disclose the valuation methodology.
Senior management of Tata Motors, in a conference call with analysts, said, "I would not be able to share with you the specific valuation methodology, except to say that the things are done by an independent reputed firm and based on the company's track record and the future business opportunity."
Tata Motors has also changed its methodology for calculating provisions for doubtful receivables, which resulted in higher reported EBITDA to the extent of Rs507m (10% of EBITDA).
TCS:
The software major increased its depreciation policy on computers from 2 years to 4 years. As a result, 1QFY09 PBT was higher by an estimated Rs500m (c.4% of net profit in 1QFY09). TCS follows cash-flow hedge accounting and till FY08, it used to recognise hedging gains on effective hedges in its revenue line, thus boosting the reported revenue growth and EBIT margin.
In FY08, TCS had Rs4.21bn from hedging gains, of which, Rs1.37bn was included in the revenue line. However, from 1QFY09, TCS will report all Forex losses/gains below the EBIT line in other income. Thus the losses it had on its hedge position will no longer be booked in the operating line.
Zee Entertainment:
Media company withdrew its buyback offer "for the time being" without assigning any other reason. This happened after SEBI made it mandatory that companies will have to complete the entire buy back within the stipulated time, if the stock is trading below the maximum buy back price at the end of the buyback period and the buyback amount has not been completed.
DP DISCLAIMER: This is a individual opinion - please do your own research. This was a forwarded message with a intention to spread panic :-)
IIP no Today slight better than October
On, Friday's It Was Clearly Written, that REALTY CO. May Face Severe Cash Crunch, Just See, All REALTY STOCKS, Melt Down Heavily , 101% Looking Weak, But some of them, Can Caught the fire in Today's Trade
Sms, Was Sent to Satyam Computer @ 19 , Yes, Our Target Was 25 , It's Hit 25 Level, and Still Holding in Today's Trade
In an interesting development ADAG is considering selling stake in its UK unit, igniting some rumors that Anil might be in trouble. Stay away ADAG stocks like Reliance Capital, Reliance Power and Reliance Communications. Also stay away from realty stocks for the time being
Tata Motors might get a bail out of nearly 500 million pounds from the Uk government in the next 2 weeks. Investors are advised to pare their holdings and observe a 'wait and watch' approach for now, as things need to settle down a bit before 'taking stock'
Buying is advised in Unitech at Rs.36 with stoploss at Rs.34. Book profit at Rs.39
Sms, Was Sent to Satyam Computer @ 19 , Yes, Our Target Was 25 , It's Hit 25 Level, and Still Holding in Today's Trade
In an interesting development ADAG is considering selling stake in its UK unit, igniting some rumors that Anil might be in trouble. Stay away ADAG stocks like Reliance Capital, Reliance Power and Reliance Communications. Also stay away from realty stocks for the time being
Tata Motors might get a bail out of nearly 500 million pounds from the Uk government in the next 2 weeks. Investors are advised to pare their holdings and observe a 'wait and watch' approach for now, as things need to settle down a bit before 'taking stock'
Buying is advised in Unitech at Rs.36 with stoploss at Rs.34. Book profit at Rs.39
Friday, January 9, 2009
Subscribe , CAlls for Clients only
One stock that looks great even in this pessimistic environment is BEL. We recommend a 'Buy' on Bharat Electronics Ltd at Rs 770 might offer a health 10 to 15 percent return in the next few months. We believe that this stocks is a great defensive play in the volatile markets and there might be a run ahaead of the budget due next month.
We might see some selling from the foreign funds as they might decide against having huge positions in Indian equities. In short, we advice short and mediium term investors to liquidate their holdings, atleast in the ones they have some profits.
We might see some selling from the foreign funds as they might decide against having huge positions in Indian equities. In short, we advice short and mediium term investors to liquidate their holdings, atleast in the ones they have some profits.
Wednesday, January 7, 2009
Renuka buy
Now, If Closed Above 3150 Mark, Will Hit 3190 - 3220 Mark, in Next Week Trading Session.
Today, Below 3070 , Bears Will Have Upper-Hand
Support 3070 - 3020
Resistance 3160 - 3200
Today, we expect the market to open firm in line with the global trend. Thereafter, the key indices’ move will hinge on how the institutions behave. Indian markets will be shut on Thursday for Moharam. So, we do not rule out some softening later in the day
Realty stocks might see a good bounce after a 4 percent decline in the sectoral index yesterday
Midcap IT is one space that looks interesting and Rolta, Mind Tree and Vakrangee could give handsome returns from these levels. Bartronics and MIC electronics have shown a break out yesterday and we might see further upside in these stocks today.
BGR Energy Systems
We recommend a buy in BGR Energy Systems from a short-term trading perspective.
It is clearly visible from the charts of the stock that after recording an all-time low of Rs 115 on December 2, it began to trend upward. This trend reversal was triggered by the stock’s prolonged positive divergence displayed in the weekly relative strength index (RSI). Since then, the stock has been on a medium-term uptrend. While trending up, it breached its 21- and 50-day moving averages recently.
Furthermore, the stock is trading well above these averages. Reinforcing the bullish momentum, the stock jumped by 10 per cent on January 6. We notice that there is an increase in volume over the past three trading sessions. The daily RSI has entered the bullish zone and the weekly RSI is on the verge of entering the neutral region from the bearish zone. Our short-term forecast for the stock is positive. We expect the stock’s uptrend to prolong until it hits our price target of Rs 202 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 172.
Today, Below 3070 , Bears Will Have Upper-Hand
Support 3070 - 3020
Resistance 3160 - 3200
Today, we expect the market to open firm in line with the global trend. Thereafter, the key indices’ move will hinge on how the institutions behave. Indian markets will be shut on Thursday for Moharam. So, we do not rule out some softening later in the day
Realty stocks might see a good bounce after a 4 percent decline in the sectoral index yesterday
Midcap IT is one space that looks interesting and Rolta, Mind Tree and Vakrangee could give handsome returns from these levels. Bartronics and MIC electronics have shown a break out yesterday and we might see further upside in these stocks today.
BGR Energy Systems
We recommend a buy in BGR Energy Systems from a short-term trading perspective.
It is clearly visible from the charts of the stock that after recording an all-time low of Rs 115 on December 2, it began to trend upward. This trend reversal was triggered by the stock’s prolonged positive divergence displayed in the weekly relative strength index (RSI). Since then, the stock has been on a medium-term uptrend. While trending up, it breached its 21- and 50-day moving averages recently.
Furthermore, the stock is trading well above these averages. Reinforcing the bullish momentum, the stock jumped by 10 per cent on January 6. We notice that there is an increase in volume over the past three trading sessions. The daily RSI has entered the bullish zone and the weekly RSI is on the verge of entering the neutral region from the bearish zone. Our short-term forecast for the stock is positive. We expect the stock’s uptrend to prolong until it hits our price target of Rs 202 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 172.
Tuesday, January 6, 2009
Ranbaxy weak
Today, we see the market opening flat to slightly positive. There may be some cooling at higher levels. On the whole, we expect some choppiness after the recent spurt
Rolta and Suzlon are two stocks that are worth taking a look at these valuations. Radico Khaitan might be a stock worth watching and keeping on the radar for the day traders as a positive announcement on the FCCB buy back front might attract some buying.
Investors might look to book some profits in metals and banking space after a bull run yesterday. The commodity story might be intact atleast for the next few weeks and there is no need to panic.
We have advised investors to book profits in Satyam around Rs 185 levels and the stock looks ripe to accumulate around Rs 135 - Rs 145 levels,if available. Hindalco is one stock that is looking to break out, and a 10 to 15 percent move from here is not ruled out.
ICSA India
We recommend a buy in ICSA India from a short-term trading perspective. It is evident from the chats of ICSA India that it was on an intermediate-term downtrend from August peak to late December 2008 low (from Rs 400 to Rs 127). However, the stock found support at this December low and reversed direction. This trend reversal has been backed by positive divergence displaying in the weekly relative strength index (RSI). A positive divergence is also noticed in daily moving average and convergence and divergence. On January 2, the stock penetrated its intermediate-term down trendline by jumping 6 per cent, accompanied with good volume. Subsequently, it breached 21-day moving average, reinforcing the bullishness. The daily RSI is rising in the neutral region towards the bullish zone and weekly RSI is on the brink of entering the neutral region from the bearish zone. We are bullish on the stock from a short-term perspective. We expect it to move up until it hits our price target of Rs 166. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 142.
Rolta and Suzlon are two stocks that are worth taking a look at these valuations. Radico Khaitan might be a stock worth watching and keeping on the radar for the day traders as a positive announcement on the FCCB buy back front might attract some buying.
Investors might look to book some profits in metals and banking space after a bull run yesterday. The commodity story might be intact atleast for the next few weeks and there is no need to panic.
We have advised investors to book profits in Satyam around Rs 185 levels and the stock looks ripe to accumulate around Rs 135 - Rs 145 levels,if available. Hindalco is one stock that is looking to break out, and a 10 to 15 percent move from here is not ruled out.
ICSA India
We recommend a buy in ICSA India from a short-term trading perspective. It is evident from the chats of ICSA India that it was on an intermediate-term downtrend from August peak to late December 2008 low (from Rs 400 to Rs 127). However, the stock found support at this December low and reversed direction. This trend reversal has been backed by positive divergence displaying in the weekly relative strength index (RSI). A positive divergence is also noticed in daily moving average and convergence and divergence. On January 2, the stock penetrated its intermediate-term down trendline by jumping 6 per cent, accompanied with good volume. Subsequently, it breached 21-day moving average, reinforcing the bullishness. The daily RSI is rising in the neutral region towards the bullish zone and weekly RSI is on the brink of entering the neutral region from the bearish zone. We are bullish on the stock from a short-term perspective. We expect it to move up until it hits our price target of Rs 166. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 142.
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