Weekly Wrap up
Ashish Kapur - CEO at Invest Shoppe
Prasad Kushe - tech analyst, www.equitytrendz.com
Ashish Kapur - CEO at Invest Shoppe
Ashish Kapur - CEO at Invest Shoppe
Shrikant Shetty - head equity advisory, Unicon Securities
Shrikant Shetty - head equity advisory, Unicon Securities
Shrikant Shetty - head equity advisory, Unicon Securities
Nalin V Shah - Director, NVS Brokerage Pvt Ltd
Sanjeev Bhasin - Independent Investment Advisor
Sanjeev Bhasin - Independent Investment Advisor
VVLN Sastry - country head, Firstcall India Equity Advisors
Sanjeev Bhasin - Independent Investment Advisor
Hemant Kale - Director, Maia Financial
Pankaj Jain - Director, Satguru Capital & Finance Pvt Ltd
Kunal Saraogi - Technical Analyst, www.equityrush.com
There certainly was a festive mood on Dalal Street this week. Positive triggers, both local and global, ensured that Nifty broke the psychological 5250 mark to close at 5360, a gain of 300 points over last week. The Sensex gained over 1000 points to close at 17,804. It was a truncated trading week, as the market was closed for Diwali on Thursday, and there was less than two hours of trading in the Muhurat session on Wednesday.
Market movers:
The Reserve Bank of India set the tone for the rally on Tuesday when it raised benchmark rates by 25 basis points as was widely expected, but surprised the market with an indication that it may not raise rates at the next review meet in December. However, in a move that could hurt banks’ profit margins and eventually push up the cost of funds, RBI freed up savings account rates . This means that banks now have the freedom to decide the rates they want to pay on saving accounts, currently fixed at 4%.
But the big boost came from the Eurozone after European leaders reached a consensus over the bailout package to resolve the ongoing debt crisis . However, many analysts are skeptical about the package and say that the debt crisis is far from being resolved. Mark Mathews of Julius Baer believes that this deal is only atemporary solution to a long term problem . “I don’t think the European solution has the power to lead the market higher out of the woods because it is a stimulatory kind of band-aid solution and not hard medicine,” he said in an interview to CNBC-TV18.
Former Goldman Sachs and P&G director Rajat Gupta has been charged by the US Magistrate Court in New York with one count of conspiracy to commit securities fraud and five counts of securities fraud. However, he is pleading not guilty on all counts .
Losers & Gainers:
Sterlite Industries (Rs 132.90; +15.8%): The rally in global commodities helped the stock overcome its disappointing results earlier this week.
SBI (Rs 1,907; -2.25%): The RBI’s move to free up savings account rate dampened sentiment for the stock, on fears that the bank’s cost of funds could shoot up. SBI has the highest share of saving banks accounts in the industry.
JP Associates (Rs 78.55; +13.5%): All the hype and excitement in the week leading up to the first ever grand prix in India boosted sentiment for the stock.
Stock Recommendations (by NDTV Profit)
Aban Offshore Ltd(Hold)
Rs. 425.85 23.25 (5.77%)
Date: October 20, 2011
The firm is a part of cyclical industry. Its debt levels have decreased. Once new rigs are deployed in Q3 which is likely soon, it will add to revenues of the firm. It is a high-beta stock and available at very low valuations. Hold for at least an year.
Apollo Tyres Ltd(Sell)
Rs. 57.05 1.30 (2.33%)
Date: October 20, 2011
The stock has formed lower tops on the charts. Sell the stock on with a stop loss of Rs. 50 .
Apollo Tyres Ltd(Hold )
Rs. 57.05 1.30 (2.33%)
Date: October 20, 2011
The company is a major player among tyre firms with good volume growth. Even if there is a slowdown in the OEM segment, the firm will not be impacted because it gets significant revenue from the replacement market. Hold the stock.
Bajaj Hindusthan Ltd(Hold)
Rs. 37.05 1.50 (4.22%)
Date: October 20, 2011
The company is among the largest players in the sugar industry. Its distribution network is good. The firm is expected to give good returns whenever sugar cycle turns around. Hold the stock.
Rs. 304.55 16.55 (5.75%)
Date: October 18, 2011
The bank is attractively valued in the PSU bank space. Concerns remain on the credit growth front. Also NPAs have affected valuations. Stock of the bank is trading at 0.8 times its book value. The stock has scope for good gains in the medium term. Buy with a target of Rs. 380.
Tecpro Systems Ltd(Buy)
Rs. 219.25 0.15 (0.07%)
Date: October 18, 2011
The company has a strong order book. It is likely to see growth of 25-30 per cent on increase in its target business segment. It plans significant additions in power sector, which will augur well for the company. Return of order flows should improve sentiments and valuation. The firm is attractively valued at 6 times its FY13 earnings. Buy with a target of Rs. 300.
Rs. 132.05 4.25 (3.33%)
Date: October 18, 2011
The firm is a strong player in the infrastructure finance business. It is well capitalised and positioned for strong growth. Valuations are now reasonable after sharp correction. The stock is trading at 13 times its FY 12 earnings and 1.2 times its FY12 book value. Buy with a target of Rs. 180.
Bajaj Hindusthan Ltd(Buy)
Rs. 37.05 1.50 (4.22%)
Date: October 17, 2011
Bajaj Hindustan is the largest sugar producer in India. The firm has raised Rs. 1,650 crore via rights issue and will use Rs. 1,530 crore to recover firms debt. Buy with a target of Rs. 57 per share.
Provogue (India) Ltd(Buy)
Rs. 29.00 -0.80 (-2.68%)
Date: October 17, 2011
It is a good long-term play on consumption, retail theme. The stock will do well in the festive season and also once interest rates peak out, they will impact the bottom line. Buy with a target of Rs. 45.
JSW Steel Ltd(Sell)
Rs. 664.00 60.05 (9.94%)
Date: October 17, 2011
It is a long-term stock and will take time to play out. It has corrected in line with metals selloff globally. The stock is expected to give returns over next 2 to 3 years. Sell on rallies & buy into Tisco.
ICICI Bank Ltd(Hold)
Rs. 932.95 61.15 (7.01%)
Date: October 28, 2011
The savings rate deregulation will not affect the bank much. Once external banking environment becomes alright, the stock is expected to see good upmove. The bank is placed quite well in this segment. Hold the stock.
The stock has formed lower top to bottom pattern on charts in the recent past . It offers support at Rs.60 levels. There is a possibility that stock may show some upward momentum in the near future. Hold the stock.
IDBI Bank Ltd(Hold)
Rs. 113.75 6.70 (6.26%)
Date: October 24, 2011
Valuations have been attractive for the stock. After a pause in the interest rate hike cycle, the stock is expected to rise 30- 40 per cent in the next three-four months. Hold with a target of Rs. 140 in one year.
Vijaya Bank(Sell)
Rs. 55.85 1.65 (3.04%)
Date: October 24, 2011
The chart structure for Vijaya Bank is weak. There have been no signs of upmove in the stock. The stock has been a gross underperformer in the recent past. Sell the stock.
NTPC Ltd(Hold)
Rs. 178.60 4.35 (2.50%)
Date: October 21, 2011
The power company is expected to double its capacity additions .The company has declared decent dividend in the past. The stock can go up to 180-190 in long term. Hold the stock.
Tata Chemicals Ltd(Hold)
Rs. 337.10 13.50 (4.17%)
Date: October 21, 2011
The stock offers support at 300 levels. Hold with a stop loss of 285-290 levels for a target of Rs. 400 over a period of time .
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