SR.Stock: 06/01/2011

Wednesday 29 June 2011

Buy Maruti Suzuki; target of Rs 1594: PINC Research

PINC Research is bullish on Maruti Suzuki India and has recommended buy rating on the stock with a target of Rs 1594 in its June 29, 2011 research report.

“Maruti Suzuki India, during FY09- 11, MSIL compact segment volumes grew at 25.7% CAGR against the segment CAGR of 27.9% i.e. a marketshare loss of 200bps. In the same period Hyundai lost 160bps while Tata Motor’s lost is at a whopping 580bps. Of the recent launches, the Figo has been largely successful, helping Ford garner a marketshare of 5% in the segment. The Beat, after tasting initial success fizzled out. Polo ramp up has been slow due to capacity constraints and monthly runrate has stabilized near the 3k mark, exceeding 200bps marketshare.”

Five stocks that brokerages recommend to buy

Goldman Sachs reiterates buy on Bharti Airtel with a target of Rs 435. Both Bharti and MTN are well positioned to show double digit revenue.

UBS retains its buy rating on L&T with a target of Rs 2,100. L&T may launch the L&T Finance holdings IPO within the next six weeks, the capital raising would enable the to fund its growth.

Buy Bharat Heavy Electricals; target of Rs 2600: KRChoksey

KRChoksey is bullish on Bharat Heavy Electricals (BHEL) and has recommended buy rating on the stock with a target of Rs 2600 in its June 26, 2011 research report.

Buy GMR Infra; target of Rs 40: Aditya Birla Money

Aditya Birla Money is bullish on GMR Infra and has recommended buy rating on the stock with a target of Rs 40 in its June 28, 2011 research report.

Dabur: Strong growth ahead, buy for an upside of 24%

Investment Rationale:
- Positive FMCG Industry outlook: Growing economy favors FMCG industry. Rural`s FMCG consumption is increasing. Dabur India Ltd (Dabur) enjoys a very strong brand equity.
- Organic and inorganic growth: Dabur is looking at organic and inorganic growth in healthcare and personal care categories. It has acquired energiser brand 30 Plus and is also in other acquisitions talks.

Understanding Technicals & how to use them to track markets

CNBC-TV18’s special show ‘The Informed Investor’ tries to simplify jargons that are often thrown. Over the course of the last few weeks Informed Investors has been talking at length about fundamental analysis, both for the equity market and for other asset classes. To switch gears a little bit, the focus is now on technicals.

Technical’s is a term that you often use or hear when we talk about equity markets or crude or where even the currency maybe headed. Managing director of Louise Yamada Technical Research, Louise Yamada and Chief Technical Analyst at Miller Tabak & Co, Phillip Roth talk to CNBC-TV18’s Mitali Mukherjee, and try and breakdown what technical analysis actually means and how it works for some of these asset classes.

Three stocks that brokerages recommend to buy

CLSA has upgraded ONGC to buy from outperform and raised the target price from Rs 330 to 375. CLSA says upstream companies have usually come out longer term winners after policy interventions, they would use any near-term strength to increase exposure in ONGC.

Nomura maintains a ‘buy’ on Lanco Infra with a target of Rs 51. The damages stated to be sought by Perdaman are currently unsubstantiated as Lanco has stated that the agreement has not been terminated and supply is only slated to commence in FY15.

PN Vijay's multi-bagger ideas: Orchid Chem, IndusInd Bank

Analysts on the street feel that interest rates, inflation numbers and rising crude prices have been hindering growth of the Indian market. PN Vijay, Portfolio Manager, told CNBC-TV18 that the Indian stock market is negatively correlated to oil over the past three years; however, he thinks that a recent drop in oil rates on the back of the International Energy Agency’s (IEA) announcement to release 60 million barrels is likely to push the market up.

4 stocks with top brokerages' stamp of approval

UBS maintains a "buy" on L&T with a target of Rs 2,100. L&T's has bagged new orders worth USD 55 billion this week. The strong order inflow growth augurs well for the stock price performance, it is currently trading at lower than average of its historical range and looks like an attractive opportunity to buy.

Rakesh Jhunjhunwala : How to buy multi bagger stocks?

For any investor, buying stocks which can be multibaggers are the most attractive option. Raamdeo Agrawal, Director, Motilal Oswal Financial Services owned over 10 multibagger stocks, while Sanjoy Bhattacharyya, Partner, Fortuna Capital owned over 100 baggers. And we all know about the success story of Rakesh Jhunjhunwala, legendary investor in Indian stock market.

But how does one identify a multibagger? Valuation, a company's fundamentals, a business that promises growth over time, management's integrity, rational allocation of capital etc decide if a stock is of the multibagger variety.

Infosys a best value pick

Infosys is one of the best value picks in this market today, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "The technology pack I think represents a great buying opportunity. In fact the bear operators had the temerity to short TCS and they quickly realized their mistake and covered. I think people did a little bit of over reaction to the possible fall in the contracts from US and the European Union (EU). EU of the big nations are doing quite well, the France’s and the Germany’s of the world and even UK started doing well. So, I don’t see any great slowdown in contracts and on the other hand the technology companies have hired adequately their bench level as the percentages back, they do have a cost problem. But I think the big technology players especially Infosys is one of the best value picks in this market today."

Source : Moneycontrol

Monday 20 June 2011

Rakesh Jhunjhunwala : Golden period of Indian equities is still ahead

In an exclusive conversation with ET Now, Big Bull Rakesh Jhunjhunwala says that the next 3 months are likely to be very difficult period for the markets, but he is extremely bullish on their long-term prospects. Excerpts:

ET Now: Indian markets have been stuck in this range from last six months. Do you think we could remain in this range for an extended period of time?

Rakesh Jhunjhunwala: The next three months are going to be a very difficult period for the markets. The chances to break down to me seem to be greater than the chances to break up, at least in the next three months.

GTL tanks 60%, firm says fall 'attack on group'

Shares of the GTL group plunged on Monday, even as it is not yet clear what triggered the sell-off in them.

Flagship GTL was down nearly 60% to Rs 135, and market talk is that the slide could have been accentuated by margin calls getting triggered. Promoters hold around 52% in the company, of which a little over 24% has been pledged with lenders, according to the company's filing with the stock exchanges as on March 31.

Bull's Eye: 12 must-have stocks for your portfolio

Bull's Eye, the popular game show on CNBC-TV18, offer investors a chance to have a look at the stocks that can be added to their portfolio. In today's game, Prakash Diwan of Networth Stock Broking, Ashish Tater of Fort Share Broking and Kunal Bothra of LKP Securities place their respective bets in four stocks each. Investors can read into the detailed analysis made by these experts before agreeing to any or all the bets. Below are the stocks and their analysis:

Rakesh Jhunjhunwala : Next 3 months to be very difficult for markets

In an exclusive conversation with ET Now, Big Bull Rakesh Jhunjhunwala says that he is concerned about the impact of inflation on Indian equities and it is indeed the biggest risk for the markets. He says that the next 3 months are likely to be very difficult period for the markets. Excerpts:

What is your view on the markets?

The next three months are going to be a very difficult period for the markets. The chances to break down to me seem to be greater than the chances to break up, at least in the next three months.

BHEL: Q4 revenues up 32% at Rs17,921.4 cr

Financial highlights
- Revenues in Q4FY11 rose 32.2% to Rs17,921.4 cr y-o-y with an OPM of 23.4%, a y-o-y increase of 280 bps.

- PAT stood at Rs2,798 cr, a growth of 46.5% y-o-y.

- Change in accounting policy during FY11 related to provision for warranties resulted in an increase in revenue and PBT of Rs2,772.8 cr and Rs695.5 cr respectively which was higher than Rs2,450 cr and Rs410 cr stated during the provisional results.

- Order inflow during the quarter was down 4.1% y-o-y. Outstanding order book as of 31st March 2011 stood at Rs1,624 bn providing revenue visibility of over 3 years.

- Company declared a final dividend of Rs17.9 per share in addition to interim dividend of Rs 13.25
per share during the year.

Transport Corporation of India

Delta Corp can give 25-35% return: Tater

Aashish Tater, Head of Research, Fort Share Broking is of the view that Delta Corp can easily give 25-35% return in no time

Tater told CNBC-TV18, "Delta Corp is one trading bet we have been taking on right from Rs 45 levels to 130 levels. We have been selling and buying this particular stock. I was just reading the F&O criteria as prescribed by SEBI and at market cap of Rs 2,000 crore this is one candidate that can be listed into F&O space from next three- six months perspective. I was calculating the quarter sigma for this stock and also calculating into the range. This is a fit that will hit the F&O space. Now my prior experience suggest that whenever these are midcap listing into F&O space which has a trading momentum by its side gives 40-50% return in no time."

How to choose between growth and dividend - Times of India

Choosing between hundreds of schemes is a difficult task for most mutual fund investors. For newbie investors , another dilemma is whether to go for the growth or the dividend option. While you don't stand to gain or lose significantly with either alternative, there are some aspects that need to be considered to make the correct decision. Let us first examine how one differs from the other.

Buy ONGC; target of Rs 328: Angel Broking

Angel Broking is bullish on Oil and Natural Gas Corporation (ONGC) and has recommended buy rating on the stock with a target of Rs 328 in its June 1, 2011 research report.

ONGC an underperformer, target of Rs 303: LKP Shares

LKP Shares has recommended an underperformer rating on ONGC with a target of Rs 303 in its June 3, 2011 research report.
“ONGC, Q4 FY11 results bore the brunt of the increased subsidy burden with ONGC having to suffer a whopping subsidy discount of $ 70.1/bbl during the quarter.
• Total sales for the quarter increased 5.2% yoy but fell 16.6% qoq to Rs 155,510 mn:
- Q4 FY11 subsidy burden at Rs 121,353.4 mn ($ 70.1/bbl) was almost triple the subsidy/bbl of $ 24.3/bbl in Q3 FY11. This resulted in the net realization plunging by 40% from $ 64.8/bbl in Q3 FY11 to $ 38.7/bbl in Q4 FY11.
- Q4 FY11 domestic crude production at 6.8 MMT was down 3.3% sequentially. Production from nomination fields dropped by 0.2 MMT during the quarter whereas a 5-day repair in MPT resulted in marginal drop of 0.03 MMT in output from JVs.
• Powered by the hike in APM gas price to $ 4.2/mmBtu, natural gas sales from nomination fields jumped by 110% y-o-y to Rs 29,970 mn in Q4 FY11.
- Production from nomination fields at 5.73 bcm was up 1.6% y-o-y, but dropped 1.4% q-o-q.
- Production & sales from JVs fell 11% & 16% y-o-y to 0.58 bcm & 0.52 bcm respectively during the quarter. Gas sales from JVs fell by 14% y-o-y to Rs 4,530 mn.
Operating expenses leaped by 33.1% q-o-q & 39.9% y-o-y to Rs 42,890 mn. Also, other expenses at Rs 5,300 mn were up 223.2% q-o-q driven by a four-fold jump in provisions & write-offs. This led to OPM falling by 1390 bps q-o-q & 1060 bps y-o-y to 46.8% for Q4 FY11. As a result, net profit for Q4 FY11 plunged 60.6% q-o-q & 26.1% y-o-y at Rs 27,908.6 mn. EPS for the quarter was Rs 3.3, as against Q3 FY11 EPS of Rs 8.3.
The upstream sector’s share of the gross under recoveries, which was fixed at ~33% during FY08-10, has been increased suddenly to ~39% in FY11. Since our FY12 & FY13 estimates of gross under-recovery at Rs 911.5 bn & Rs 860.6 bn are higher than gross under recovery of ~Rs 782 bn in FY11, we don’t foresee a return to the 33% sharing mechanism in the near term. Accordingly, we assume 39% of the subsidy burden to be borne by the upstream sector in perpetuity. We estimate post-subsidy realization for ONGC India to be $ 51.9/bbl and $ 54.9/bbl respectively in FY12 & FY13. As per our estimates, ONGC’s crude realizations are capped at ~ $ 58/bbl going forward. We estimate consolidated topline growth of 7.3% and 6.4% in FY12 & FY13 respectively. We estimate net sales of Rs 1,261.8 bn & Rs 1,342.7 bn in FY12 & FY13. We estimate EPS of Rs 26.5 and Rs 29.7 in FY12 & FY13 respectively. Our SOTP valuation for ONGC yields a target price of Rs 303. Our price target translates into EV/boe of $ 5.3/boe and FY12E & FY13E P/E of 11.4x and 10.2x respectively.
We note that the adhoc increase in the subsidy burden for the upstream sector has resulted in heightened uncertainty for investors. By virtue of its size, ONGC bears the lion’s share of the subsidy burden which is leading to depressed realizations & earnings. The upcoming FPO is also expected to result in downward pressure on the stock price as there have been precedents of PSU FPOs being issued at a discount to the CMP to achieve maximum subscription. At our target price of Rs 303, the potential upside is 8.2% only. Hence, in light of the near term external pressures on the company, we revise our rating to UNDERPERFORMER,” says LKP Shares research report.

Market Voices

The markets lost significantly after the release of disappointing IIP data but recovered in the last one hour of trade to close with moderate losses. Interest rate sensitive sectors like banking and realty were the worst performers in today's trade, consumer durables being the only sector to close in the green. The Sensex closed at 18268, down 116 points from its previous close, and Nifty shut shop at 5486, down 35 points. The CNX Midcap index was down 0.3% while the BSE Smallcap index lost 0.5% in today's trade. The market breadth was negative with advances at 439 against declines of 840 on the NSE. The top Nifty gainers were Hindalco, Cairn, ONGC and Ranbaxy and the biggest losers included Grasim, DLF, Reliance Capital and L & T.

Source : Rediff