Meba Wo Aborokye!!!

Ashanti Funeral Fabrics

Time to seed.........!!!

 Hello Readers !

Time for passive Investor to Turn Active.

Undoubtedly the confidence crisis has hurt the market sentiment which is further deteriorated by the weak set of nos by SBI. Bears has upper hand at the moment and sell on rise is the buzz. They are even successful.

The story is getting repeated again and again. Bears are not enjoying huge sell on top of the market because of the technical calls and every time they try to take charge of the market it happens on lower end of the market.

This time too the bears have taken charge around 5550 and last 150 odd points is in their favour. They will go short till 5300 probably but buy the time they go aggressive short to break the last leg of the market their average will come down to 5400 or below and market will rise by 200 odd points giving no chance to them either to make profit in a big way.

Nifty has a strong support around 5350 levels. Market can bounce back form these level.
Level to be watched.

5482.04

5448.58

5449.42

5459.43

1. 5482

   2.5528
   3.5555

Don't judge each day by the harvest you reap but by the seeds that you plant

  

Thanks & Regards

Dev Purohit

Review of Monetary Policy (03 May 2011)

Changes in Key Interest Rates
RBI increased repo and reverse repo rates by 50 basis points each from 6.75 percent to 7.25
percent and 5.75 percent to 6.25 percent respectively. Meanwhile CRR, SLR and Bank Rate have
been retained to their existing levels.
Policy Rate Change Effective Rate
CRR Unchanged 6.0%
Repo rate +50 basis point 7.25%
Reverse Repo rate +50 basis point 6.25%
Bank rate Unchanged 6.0%
As per RBI the expected outcomes of the actions are:
􀂾 To control the demand side inflationary pressures and to minimize risk to growth.
􀂾 To sustain growth in the medium term and to maintain an interest rate regime
consistent with price, output and financial stability.
Some of the key highlights of the policy are:
􀂾 RBI Policy shifted to single rate regime. There will be only one independently varying
policy rate which will be the repo rate. The reverse repo rate will continue to be
operative but it will be pegged at a fixed 100 bps point below the repo rate. This
indicates that with every hike in repo rate reverse repo rate will be automatically
increased to the same extent. We believe that this move is expected to reduce the
volatility in the short term rates.
􀂾 RBI has increased the savings bank deposit interest rate from current 3.5% to 4.0% with
an immediate effect. The increase in savings banks rate will increase the bank’s cost of
funds which will impact the banks’ NIMs by 10‐12 bps on an average (depending on the
proportion of savings a/c in total deposits). Banks will have to pass on the increase in
cost to its customers in order to minimize the impact.
􀂾 RBI has projected FY12 GDP growth to be in the range of 7.4‐8.5%. Finance Ministry in
its economic survey had mentioned that GDP growth will be around 9% for FY12. The
current RBI projection is way below the Finance Ministry estimate.
􀂾 Banks credit growth is projected to be at 19% and deposit growth to be at 17% for FY12
as against credit growth of 21% in FY11. This indicates a slowdown in credit off take of
the banks.
􀂾 RBI has projected FY12 money supply growth at 16%.

Investment in debt mutual funds will be subject to a cap of 10% of the net worth as on
March 31 2010. However, banks which already have investments in excess to 10% will
be allowed an extension of 6 months to comply with this requirement.
􀂾 WPI inflation has been projected at 6.0% for FY12 with an upward bias. However, RBI
added that inflation will remain elevated in H1FY12 (approximately 9% factoring in fuel
price hikes) before it starts to gradually cool down in second half.
􀂾 RBI has proposed to enhance the provisioning requirements on certain NPAs and
restructured advances. Higher provisioning will impact the profitability of the bank
especially the banks with lower Provision Coverage Ratio (PCR) like SBI and Dena Bank
and higher restructured assets like IDBI Bank and ICICI Bank.
􀂾 Provisioning on banks' secured portion of loans has been increased as follows:
Existing Proposed
Substandard loan provisioning 10% 15%
Upto 1 year 20% 25%
1‐3 years 30% 40%
􀂾 Moreover, additional 10% provision has to be made on unsecured sub‐standard loans
and 2% provision on restructured loans in standard assets for first 2 years.
􀂾 RBI mentioned that it would adhere to begin BASEL‐III implementation from January
2013 and is preparing norms for internal rating under Basel‐III for banks.
􀂾 RBI further indicated that bank loans to micro finance companies from April 1 2011
onwards will be considered as priority sector only if the prescribed percentage of their
total assets are in the nature of "qualifying assets" and they adhere to the "pricing of
interest" guidelines to be issued.
􀂾 According to RBI global recovery is expected to continue in 2011. However, growth is
expected to slow down marginally from its pace in 2010. Growth is projected to
decelerate in advanced economies due to weakening of the effects of fiscal stimuli, high
oil prices and other rising commodity prices.
􀂾 Growth in Emerging Market Economies is also expected to decelerate on account of
monetary tightening and rising commodity prices.

No Confidence without Integrity

Hello Readers !!!

End of the day….


NAV exercise of funds is on. Nifty has crossed 200 DMA as well as SMA giving clear break out on upside.


All my friends are still waiting for 4700 and 4800 and Nifty has decided to close to the year at 5750 plus.


Stocks still filling gaps and ownership pattern is allowing this with thin volume.


CNI as a matter of fact has proved prudence of buying in dips in a BULL market. The pending calls have come to just 6 and there is enough scope to find new buy calls. Bears so long as remain short, the bias will be positive. Current state is dangerous for all technical guys as there is no clear signal ob buy side or sell side. For fundamentalists there is no confusion.

"There can be no friendship without confidence, and no confidence without integrity"

Thanks & Regards

Dev Purohit

ZEE LEARN - MULTIBAGGER STOCK ..BUY FOR 3/5 YEARS

BSE: 533287 NSE: ZEELEARN.......BUY .....TGT 50++++

Zee Learn Limited is the education arm of Essel Group. Essel Group is a diversified conglomerate with interests in Media, packaging, Amusement Parks, Entertainment & Education among others. It owns some of the most famous brands in India such as Zee TV, Zee News, Dish TV, Siticable, Fun Republic, Esselworld , Playwin, Kidzee, Zee Schools, ZICA & ZIMA.

The group have the following
* Mount Litera Zee Schools
* Kidzee pre-schools
* Mount Litera World Pre-school
* Mount Litera World School

School Innovations

* Zee Learn Gakken Science Academy
* School Management Services
Youth Vocational Education

* Zee Institute of Creative Arts (ZICA)
* Zee Institute of Media Arts (ZIMA)
* ZEE LEARN have a good market capitalization and good assets worth 117.00 crores. sector also good as, education is the more attractive space now.the management is the well known group,it started its businesses just now and have to go long run.Zee Learn had earmarked Rs. 500 crore for its various initiatives for five years, of which 40 per cent has already been invested in an university in Dehradun and schools . In 3-4 years you might see this stock around 100 levels. Enter around 21.00 or below and hold it for atleast 4-5 years this one would be a sureshot multibagger.

Thanks & Regards

Dev Purohit

No Sign of Break Out !!!

Hello Readers !

Indian stock market cut initial losses and recovered in mid morning trade after Japanese shares rebounded
from an early morning sell off and the yen moderated from a new record high versus the dollar. However, it
lost ground once again after the RBI hiked rates by 25 bps and raised its inflation estimate amid persistent
worries over the global uncertainties. Market ended the session in red.

Nifty closed at 5,446.65, down by 64.50 points or 1.17 percent over the previous day closing of 5,511.15, after witnessing a low of 5,435.30 and a high of 5,510.05. Sensex closed at 18,149.87, down by 208.82
points or 1.14 percent over the previous day closing of 18,358.69. It touched an intraday low of 18,104.02 and high of 18,354.27.


The markets’ breadth was negative. Out of 2,967 stocks traded, 1,203 stocks advanced, 1,638 stocks declined and 126 stocks remained unchanged. In Sensex, 8 stocks advanced and 22 stocks declined.


Indian stock market is likely to trade range bound as no triggers are visible for an upside. Instead, RBI inflation outlook that has been raised from 7% to 8% for March 2011 may dampen sentiments. However, no sharp reaction to this may be seen either. Buy Mirza International and also Fedders Lloyds, Whirlpool and
Bluestar, falling copper prices, summer demand likely to boost their prices.


                                            OPTION STRATEGY
           Scrip/Index: BHEL
           Strategy: Long Call option
           Current Price of Underlying: Rs 1964/- Lot Size: 125
           Long Mar 2000 Call option @ Rs 28/-
           Profitable when closing price is below Rs 2028/- on expiry
           Maximum Potential Profit: Unlimited Maximum Possible Loss: Rs 3,500/-
           Time to Expiry: 14 days

Thanks & Regards

Dev Purohit

NATIONAL PLASTIC INDUSTRIES LTD (BSE CODE: 526616) AT18/- TARGET OF 57/- & 75/-

STOCK  : NATIONAL PLASTIC INDUSTRIES LTD.  Trading in BSE CODE : 526616

Target : 57/- to 75/- in Short term and Medium terms

Equity  : 9 Cr

Promoters  Holding : 56% ; Body Corporate : 5%; Public Only 39%

Face Value : 10/-

EPS : 6.5/-  above (As per 20010-11 September Quarter) Estimated EPS for Full Year above 9/- ( Expansion Income will Add)

Book Value: 29/-

Dividend History : 2010 --- 10%; 

National Plastic Industries Ltd having Good Land Bank at Mumbai and Bangalore near 100 Cr above Per share 100/- above; and Valuable Assets.

National Plastic Industries Ltd Expanding plans is very Aggressive.

For 2010-11 September Quarter Posted Net Income of 12.36 Cr and Net Profit of 1.48 Cr with Equity 9 Cr. As per This EPS is 6.5/- Annualized But in coming Quarters Expanding Income will add So Expecting EPS for 2010-11 is 9/-. Stock Trading at 34/- PE just 5 Industry PE is 14. As per this Stock will zoom to 100/- levels in 6 Months time.

The Company Having Good High Value Ideal Real Estate Property at

1)Andheri (East) Mumbai

 2) Virla Mumbai

3) Kashi Mira Road in Thane District

4) Bangalore Near Satellite Bus Stand and Big Bazar

5) Gaaziabad UP;

All these Lands are very good Value; But Equity is just 9 cr and Land Value near to 100 Cr per share 100/- above Value and good Book Value and EPS 6.5/- Dividend Paying company. Just watch it Stock will go 100/- to 200/- in Near Future.

National Plastic has been marketing their products under the brand name " NATIONAL". Today ‘National Plastic Industries Ltd’ is an ISO - 9001:2008 ACCREDITED COMPANY and “NATIONAL” products are available across 36 countries including America, Australia etc.

Positive Points for this stock for Up moving:

1)  Company is in Plastic furniture and others Business;  company Circle people and Operators are accumulating at current price. Because Company Stock Good Value at 34/- Good Profit making company and Book Value at 29/- and Good dividend paying company.

2)  Equity is very small at 9 Cr promoters Holding 56%

3)  Company recently going Expansion Plans for Real Estate and and Power Buisness.

4)  Good Profit Making Company for 20010-11 EPS 6.5/- Annualised and Expecting EPS for full     year is above 9/-because Expansion income will add next Quarters.

5)  Company having Good Book Value 29/- and Good Land Bank and Good Assets.

6)  Company having lot of Land Bank in Mumbai, Bangalore and UttarPradesh; Total cost of this land is Nearly 100 Cr above per share will come 115/- above and Expansion Plans in Future .

7) FII’s Eyes in this stock. If they will start buy Stock will zoom to 150/- levels like SE Investment (Call Given at 175/- Now including Bonus and Split 1250/-) and Bihar Tubes Ltd (Call Given at 57/- Now 165/-).

8) Risk Free at Current Market Price, Its very Cheap price Trading at 34/- Compare to companies Reserves, Assets and Value and Equity and Profits and Future Plans and power Generation.

Happy Invest ……….. Good Fundamentals and will give good returns from 100% to 500% returns with short and medium terms and Long terms.

Thanks & Regrads
Dev Purohit

Nifty in Chopy Mood !!

Hello Readres

Nifty has seen major break out in downward trend from 5620 levels to 5420 levels these sharp fall is due to inflatinoary presure and bad news around the conner.

Nifty is finding it difficult to hold the levels above 5500 and if Nifty moves  below 5416/17  levels you can see major downside on chart that could take nifty to new band in downside of 5200.
Today closing is curcial on Nifty as it has closed on 5416 level so Morining session will be important to hold nifty.
There could be a relife rally in Nifty as Major stock on indexed have corrected with out any major change in Fundamental. You can go long on Nifty above 5460 levels for a tgt of 5530 for 70 points on Nifty.

The stock which lools attarctive on these Nifty are Infra Sector which is in over sold zone so bounce back is possible.




If you are investor dont miss the these time as the rally of upside is still left. we are in multi deaced bull run a correction of 10-15% on Nifty will not have any impact. investor should get in these market in value stocks.

My view on Bank Nifty still is Negative as there will not be any relife in banking stocks you can go short on bank nifty.

Stocks that i like in thses market are:-

1. J P Associative for tgt of 90+
2. Titan Industry (Short ) for tgt 3462
3. RIL for tgt of 980
4. IBR Infra & IVRCL for long term bets
5. Shree Renuka Sugars for tgt of 100
6. Jain Irrigation for Tgt of 200+

My view on Nifty is beraish but these are good investment idea where you can make money.
Important Level to watch on Nifty :- Resistances 5527/5606/5633/5668

Supports

5417/5318/5297/5275

Thanks & Regards

Dev Purohit

Bears hammer stocks once again; Sensex, Nifty at 5-month trough

Hello Readers

The key benchmark indices fell for the fifth straight day to hit five-month lows on worries corporate profit growth will slow on rising input costs and higher interest charges. Macroeconomic worries arising from higher crude oil prices and selling by foreign funds last month, also weighed on the sentiment as index heavyweight Reliance Industries (RIL), a number of Anil Dhirubhai Ambani group stocks, some realty and construction shares hit 52-week low/lifetime low. Indian stocks underperformed higher global equities. World stocks rose as worries over the unrest in Egypt receded. The BSE 30-share Sensex was down 305.54 points or 1.67%, off close to 430 points from the day's high and up close to 40 points from the day's low. The Sensex settled above the psychological 18,000 mark after falling briefly below that mark in late trade.
Index heavyweight Reliance Industries (RIL) extended initial losses. Realty, capital goods, auto and FMCG stocks declined. The market breadth was weak, in contrast with positive breadth earlier in the day. All the sectoral indices on BSE were in the red.
The market slipped into the red after a firm start triggered by higher Asian stocks. The market extended initial losses to hit fresh intraday low in morning trade. The market came off lows in mid-morning trade. Th market weakened once again after recovering from the day's lows in early afternoon trade. A bout of volatility was witnessed in afternoon trade as a recovery from lower level was cut short. The market slumped to five-month low in mid-afternoon trade. Stocks extended losses in late trade.
Concerns about high inflation, surging global commodity prices, and fears of slowing corporate earnings have spooked Indian stocks this year. The Sensex has lost 2,486.87 points or 12.12% in calendar 2011 so far. The BSE Mid-Cap index has lost 1,046.58 points or 13.41% and the BSE Small-Cap index has lost 1,314.56 points or 13.59%.
With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth faster than they have till now.
The results announced so far showed that the combined net profit of a total of 1,424 companies rose 23.4% to Rs 67,216 crore on 20.8% rise in sales to Rs 5,59,774 crore in Q3 December 2010 over Q3 December 2009.
Macroeconomic worries arising from higher crude oil prices also weighed on sentiment today, 1 February 2011. Benchmark Nymex light sweet crude-oil futures settled at the highest level in more than two years on Monday, 31 January 2011, after climbing 3.2% in the session. The Indian government on Monday, 31 January 2011, approved a Rs 8,000-crore subsidy to the three public sector oil marketing companies to compensate half the revenues they lost on selling diesel, domestic LPG and kerosene below cost for the quarter ended 31 December 2011.
A recent data had showed that the government's fiscal deficit in the April-December 2010 period of fiscal 2010-11 declined 44.75% to Rs 1.71 lakh crore, from Rs 3.09 lakh crore in the same period last fiscal. The deficit during the period is just 44.9% of the Budget Estimate of Rs 3.81 lakh crore for the whole fiscal.
Foreign institutional investors (FIIs) sold shares worth a net Rs 900.50 crore on Monday, 31 January 2011, higher than an outflow of Rs 592.40 on Friday, 28 January 2011. FII outflow in calendar year 2011 totaled Rs 5713.50 crore (till 31 January 2011). FII outflow in January 2011 totaled Rs 4813.20 crore. FIIs had bought equities worth Rs 2049.60 crore in December 2010.
Faster than expected global recovery may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India, the Reserve Bank of India (RBI) said at a quarterly policy review last week.
Indian stocks today, 1 February 2011, underperformed firm global stocks. European shares bounced back on Tuesday, with investors confidence bolstered by a bright outlook for the economy and corporate profits, with strong earnings from Infineon and ARM lifting technology firms. The key benchmark indices in France, Germany and UK rose by between 0.9% to 0.96%.
Asian stocks rose on Tuesday, led by shares of resource companies, as strong US factory data and surging commodities prices offset fears that unrest in Egypt could spread to other parts of the Middle East. The key benchmark indices in Hong Kong, Indonesia, China, Japan, Singapore and South Korea rose by between 0.11% to 0.98%.
China's official purchasing managers' index (PMI) gauge of manufacturing slipped to 52.9 in January, indicating slowing growth in the sector after December's 53.9 reading. However, HSBC said its own China PMI rose slightly in January, edging up to 54.5 from 54.4 in December, though still below November's 55.3 reading. Still, both readings agreed that inflation remained a problem.
US index futures edged higher in volatile trade. Trading in US index futures indicated that the Dow could gain 44 points at the opening bell on Tuesday, 1 February 2011.
US stocks rose on Monday on strong corporate earnings and signs of a strengthening economy, even as a surge in the price of oil highlighted the potential for increased political risk in the Middle East to upset markets.
Egyptian Vice President Omar Suleiman said on Monday that President Hosni Mubarak has asked him to start a dialogue with all political forces, while Egypt's armed forces pledged not to fire on peaceful demonstrators. The latest news calmed US markets after stocks suffered their biggest fall in nearly six months on Friday on worries turmoil in Egypt could spread to other Middle East countries.
On the economic front, the Commerce Department said US consumer spending rose in December for a sixth straight month, while a separate report showed business activity in the US Midwest grew more than expected in January.
The BSE 30-share Sensex was down 305.54 points or 1.67% to 18,022.22, its lowest closing level since 31 August 2010. The index shed 345.59 points at the day's low of 17,982.17 in late trade. The index gained 124.30 points at the day's high of 18,452.06 in early trade.
The S&P CNX Nifty was down 88.70 points or 1.61% at 5,417.20, its lowest closing level since 31 August 2010. The Nifty hit a low of 5,402 in late trade.
The BSE Mid-Cap index fell 1.63% and the BSE Small-Cap index declined 1.44%. Both these indices outperformed the Sensex.
All the thirteen sectoral indices on BSE declined. The BSE Realty index (down 4.04%), Auto index (down 2.83%), Capital Goods index (down 2.49%), Oil & Gas index (down 2.1%), and FMCG index (down 2.02%), underperformed the Sensex. The BSE Power index (down 1.53%), banking sector index Bankex (down 1.44%), Healthcare index (down 1.37%), IT index (down 1.07%), Consumer Durables index (down 0.91%), PSU index (down 0.87%), and Metal index (down 0.8%), outperformed the Sensex.
The market breadth, indicating the health of the market, was weak, compared with positive breadth earlier in the day. On BSE, 1966 shares declined while 936 shares advanced. A total of 89 shares remained unchanged.
Among the 30-member Sensex pack, 27 declined while rest rose.
BSE clocked turnover of Rs 3443 crore, lower than Rs 3559.94 crore on Monday, 31 January 2011.
Index heavyweight Reliance Industries (RIL) fell 2.57%, with the stock falling for the sixth straight day. The stock hit 52 week low of Rs 888.55 on NSE today. The Comptroller and Auditor General of India is reportedly finalising a report that questions the government's move to allow Reliance Industries to increase its expenditure in developing the D-6 field of the KG basin, significantly reducing the country's share of revenues from the biggest gas field.
The RIL stock has fallen recently on concerns about slow ramp up in gas production from the KG-D6 field. Gross natural gas production from RIL KG-D6 block, off India's east coast, declined 5.7% to 55.8 million metric standard cubic metres per day (mmscmd) in Q3 December 2010 from Q2 September 2010, as the company continues to struggle to find solution to problems related to the reservoir.
RIL's net profit rose 28.14% to Rs 5136 crore on 5.15% rise in net turnover to Rs 59789 crore in Q3 December 2010 over Q3 December 2009. Higher refining and petrochemicals margins boosted the performance. RIL's gross refining margin (GRM) improved to $9 per barrel in Q3 December 2010 from $5.9 per barrel in Q3 December 2009. The GRM was also higher compared to $7.6 per barrel in Q2 September 2010. The result was announced after trading hours on Friday, 21 January 2011.
Many Anil Dhirubhai Ambani Group stock hit 52-week/lifetime lows. Reliance Capital fell 4.48%. The stock hit 52 week low of Rs 497 today. Reliance Communications slumped 3.47%. The stock hit a record low of 117.10 today. Reliance Energy shed 2.92%. The stock hit 52 week low of Rs 680.05 today.
Capital goods stocks declined on profit taking. Larsen & Toubro, Bhel, Thermax, BEML and ABB shed by between 0.49% to 5.24%.
Auto stocks declined on worries higher interest rates and vehicle costs could dent demand. India's largest truck maker by sales Tata Motors tumbled 6.92%. Tata Motors' total vehicle sales rose 15% to 75,423 units in January 2011 over January 2009. Domestic sales rose 13% to 70,475 units. Commercial vehicle sales rose 12% to 40,263 units.
Maruti Suzuki India fell 1.02%. Total vehicle sales rose 14.7% to Rs 1.09 lakh units in January 2011 over January 2010. Domestic sales rose 23.8% to 1 lakh units in January 2011 over January 2010. The company announced the monthly sales data during market hours today.
M&M, and Bajaj Auto declined by between 0.98% and 0.19% respectively.
Hero Honda Motors, India's largest motorcycle maker fell declined 1.4%. The company said its sales in January 2011 rose almost a fifth from a year earlier to 4,66,524 units.
FMCG stocks fell on profit taking. United Spirits, Marico, Nestle India, ITC and Hindustan Unilever fell by between 1.65% to 4.15%.
Interest rate sensitive realty stocks declined for the fifth straight day on concerns higher interest and higher property prices may dent demand for residential units. Indiabulls Real Estate, Sunteck Realty and HDIL fell by between 0.27% to 4.64%.
Unitech slumped 10.59%. The stock hit 52 week low of Rs 42.35 today.
DLF declined 1.38%, reversing initial gains after consolidated net profit fell 0.47% to Rs 465.67 crore on 20.56% rise in total income to Rs 2594.23 crore in Q3 December 2010 over Q3 December 2009. The company announced the Q3 results after market hours on Monday, 31 January 2011.
The company said at the time of announcing Q3 December 2010 result that the focus on debt reduction will be visible gong forward with new launches, acceleration of execution, culmination of investments in strategic land buys and continuing non-core asset divestments. DLF also said Q4 March 2011 will witness a scale up in launches across 4-5 geographic locations.
ACC declined 1.44%. ACC's cement dispatches rose 7.32% to 2.05 million tones in January 2011 over January 2010. Production rose 9.5% to 2.06 million tonnes. The company announced the monthly sales data during trading hours today, 1 February 2011.
Banking stocks extended recent losses on worries higher cost of funds may negatively impact net interest margin. India's largest private sector bank by net profit ICICI Bank shed 2.61%. India's largest bank by net profit and branch network State Bank of India fell 1.72%.
India's second largest private sector bank by net profit HDFC Bank declined 0.13%. Net profit rose 32.91% to Rs 1087.83 crore on 28.9% rise in operating income to Rs 6357.78 crore in Q3 December 2010 over Q3 December 2009. The result was announced after trading hours on Thursday, 27 January 2011.
IT stocks fell for the second day in a row. India's second largest software services exporter Infosys shed 0.97%. Consolidated net profit rose 2.5% to Rs 1,780 crore on 2.3% rise in revenues to Rs 7106 crore in Q3 December 2010 over Q2 September 2010 as per International Financial Reporting Standards. The result was announced before market hours on 13 January 2011.
India's largest software services exporter TCS declined 0.59%. On a consolidated basis, net profit rose 9.25% to Rs 2369.83 crore on 5.35% increase in total income to Rs 9857.56 crore in Q3 December 2010 over Q2 September 2010. The result was announced after trading hours on 17 January 2011.
India's third largest IT exporter by sales Wipro shed 2.17% extending recent losses triggered by resignations of joint-CEOs of its information technology business. The resignations were announced at the time of announcing third quarter results before market hours on Friday, 21 January 2011.
Wipro's net profit as per International Financial Reporting Standards rose 10% to Rs 1319 crore on 12% increase in total revenue to Rs 7829 crore in Q3 December 2010 over Q3 December 2009.
Diversified firm Jaiprakash Associates shed 4.32%, extending Monday's 4.69% losses. The stock hit 52 week low of Rs 79.05 today. Net profit rose 125.84% to Rs 232.66 crore on 0.52% rise in net sales to Rs 2893.71 crore in the quarter ended December 2010 over the quarter ended December 2009. The result was announced after market hours on Friday, 28 January 2011.
PSU OMCs fell as crude oil prices surged. BPCL, Indian Oil Corporation and HPCL declined by between 3.48% to 6.28%. Crude oil prices rose on Monday as the financial markets continued to keep an eye on the situation in Egypt. The price rose $2.85, or 3.19% to settle at $92.19 a barrel on New York Mercantile Exchange on Monday. Higher crude oil prices will increase under-recoveries of state-run oil firms on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
The Finance Ministry on Monday, 31 January 2011, approved Rs 8000-crore cash subsidy to state-owned oil marketing companies to make up for their under recoveries on selling fuel at a subsidised rate for the quarter ended December 2010. Meanwhile, stat-owned oil firms on Monday hiked jet fuel prices by a massive 4.5%, the biggest hike in almost a year, on the back of spiralling international oil prices.
NTPC declined 1.96%. Net profit rose 0.27% to Rs 2371.48 crore on 18.43% rise in total income to Rs 14165.90 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 results after market hours on Monday, 31 January 2011.
Metal stocks fell on profit taking. Tata Steel, Jindal Steel & Power, Hindustan Zinc and Steel Authority of India shed by between 0.16% to 4.34%.
National Aluminium Company (Nalco) rose 2.09% after the board approved 2-for-1 stock split and 1:1 bonus issue of at the time of announcing Q3 December 2010 results after trading hours on Monday, 31 January 2011. Net profit rose 64.94% to Rs 255.95 crore on 2.78% rise in net sales to Rs 1425.02 crore in the quarter ended December 2010 over the quarter ended December 2009.
Airline stocks declined after oil marketing firms hiked jet fuel prices by a massive 4.5% with effect from Tuesday, 1 February 2011, the biggest hike in almost a year, on the back of spiralling international oil prices. SpiceJet (down 11.41%), Jet Airways (down 8.99%) and Kingfisher Airlines (down 8.7%), edged lower. Jet fuel prices are linked to the global crude oil prices. Jet fuel constitutes more than 50% of operating cost for airliners.
Unitech clocked highest volume of 1.75 crore shares on BSE. C Mahendra Exports (1.13 crore shares), Cals Refineries (99.66 lakh shares), Delta Corp (99.16 lakh shares) and Shree Ashtavinayak Cine Vision (94.31 lakh shares) were the other volume toppers in that order.
State Bank of India clocked highest turnover of Rs 226.96 crore on BSE. Reliance Industries (Rs 208.99 crore), C Mahendra Exports (Rs 183.72 crore), Tata Steel (Rs 131.34 crore) and Tata Motors (Rs 127.75 crore) were the other turnover toppers in that order.
Exports in December rose an annual 36.4% to $22.5 billion, while imports for the month fell 11.1% on the year to $25.1 billion, the latest government data showed. The trade deficit in December narrowed to $2.6 billion compared with $8.9 billion in November. Exports rose an annual 29.5% to $164.7 billion in April-December 2010.
The manufacturing sector expanded at a slightly faster pace in January 2011 on the back of output and new order growth but inflationary pressures persisted, a business survey showed. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, edged up to 56.8 in January from 56.7 in December. That was the 22nd consecutive month the key index of manufacturing has been above the reading of 50 that divides growth from contraction.
The GDP growth for the 2009/10 fiscal year has been provisionally revised upwards to 8% from 7.4%, a government statement said on Monday. The estimates of GDP and other aggregates for the previous years have been revised on account of using the new series of wholesale price index (WPI) with base 2004-05 and also subsequent revision in index of industrial production (IIP), the Central Statistical Organisation said in a statement on Monday.
The food price index rose 15.57% and the fuel price index climbed 10.87% in the year to 15 January 2011, government data, last week, showed. In the prior week, annual food and fuel inflation stood at 15.52% and 11.53%, respectively. The primary articles index was up 17.26% in the latest week, compared with an annual rise of 17.03% a week earlier.
To control surging inflation, the Reserve Bank of India (RBI) at its quarterly policy review on 25 January 2011 raised repo rate by 25 basis points to 6.5% and the reverse repo rate by 25 basis points to 5.5%. Repo rate is the rate at which the RBI lends money to banks. Reverse repo is the rate at which RBI borrows funds from banks. The central bank held the cash reserve ratio steady at 6%.
As high food inflation persists, the prospect of it spilling over to the general inflation process is rapidly becoming a reality, Reserve Bank of India (RBI) Governor Subbarao said in the policy document released on Tuesday, 25 January 2011. The RBI lifted its headline inflation projection for March 2011 to 7% from 5.5% previously. The RBI stuck with its 8.5% GDP growth forecast for the current fiscal year, but with an upside bias.
The combined risks from inflation, the high current account deficit (CAD) and fiscal situation contribute to an increase in uncertainty about economic stability that consumers and investors will have to deal with, RBI said. To the extent that this deters consumption and investment decisions, growth may be impacted. While slower growth may contribute to some dampening of inflation and a narrowing of the CAD, it can also have significant impact on capital inflows, asset prices and fiscal consolidation, thereby aggravating some of the risks that have already been identified, it said.
Capital flows, which so far have been broadly sufficient to finance the CAD, may be adversely affected, the RBI said. Faster than expected global recovery may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of India's external sector. Hence, the composition of capital inflows needs to shift towards longer-term commitments such as foreign direct investment (FDI), the RBI said.

Thanks & Regards

Dev Purohit

SUZLON ENERGY LTD

SUZLON ENERGY LTD

Asia’s largest and the world’s third largest wind turbine manufacturer in terms of market share, Suzlon provides end-to-end wind energy solutions. In 2006, Suzlon acquired Hansen Transmission (a global gear box player) for 465 million euros. Currently, it holds around 26.06% stake in it. In May ’07, Suzlon acquired Re-Power, a leading manufacturer of onshore and offshore wind turbines for 1.3 billion euros. The total capacity of the Group is around 5,000 MW.

Problem

Global meltdown:

Due to the global economic crisis, new installations declined between 25-50%, mainly in

the US and the European market (the US and Europe accounted for more than 50% in sales). In FY09, the combined order book from EU and USA was more than 60% of Suzlon’s total order book, which declined to 27% of the total order book in Q2FY11.

High debt burden due to acquisition of RE-Power:

In May ’07, Suzlon acquired RE-Power system AG (90%) for total consideration of 1.3 billion euros. Although the acquisition gave footprints to Suzlon to enter into the highly lucrative European market, the acquisition weighed heavily on the balance sheet. The total debt increased from r5,167 crore in FY07 to r12,667 crore in FY10, resulting into higher interest burden in a downturn environment.

Cracking of blades:

In 2008, the media reported the appearance of a common crack in the in-service S88 V2 turbines at c.5m from the hub fairing. These faults were observed in 172 blades. Suzlon announced a retrofit for 1,251 blades, a majority of which were sold in the US. Suzlon was forced to provide 450 crore towards the retrofit programme. The cracking of blades dented the image of Suzlon, which resulted in a decline in sales and volume of the company.

Signs Of A Turnaround

Increase in order book:

The order book fell by more than 50% at the end of FY10, both in domestic and international markets from 3357 MW to 1126 MW due to lack of orders and subdued demand from USA, Europe and other major wind markets. But in FY11 (YTD), Suzlon witnessed huge order inflows of 1043 MW, mainly from India (90%) and China (10%). After a

decline for the past 8-10 quarters, Suzlon is witnessing an uptick in its order book. The current order book of Suzlon stands at 1550 MW.

The company management expects the domestic market to reach 2,000 MW and 3,000 MW in 2010-11 and 2011-12, respectively and is quite confident of maintaining its leadership

Improving global scenario and focus on emerging markets:

The global wind industry, which saw a growth of 29% CAGR in new installations up to CY09, witnessed a decline in CY10 due to lower installations in US and Europe. But despite weakness in the developed  markets, key emerging markets like China, India Brazil, South Africa and Chile among others are showing promising growth, aided by favourable government policies.

 

Restructuring of debt:

Suzlon’s debt increased from  r5,167 crore in FY07 to r12,667 crore in FY10 due to the acquisition of RE-Power and higher working capital. Suzlon has taken significant steps to lower its debt. It has refinanced its debt with rupee loan of  r10,694 crore with a holiday of two years in principal repayment. Recently, the company successfully raised r1,188 crore through a rights issue. Suzlon’s net debt/equity declined from 1.9 to 1.48 as on 30th Sept ’10.

The increase in order inflow will help Suzlon to improve its capacity utilization and margins, going forward. Suzlon is available at EV/Capacity of 3.16 r/MW as compared to its international peers, Gamesa 4.35 r/MW and Vestas 2.77 r/ MW. 

With a discerning eye for finer details, an investor can actually spot companies that have the potential to outperform themselves in the long run and thus stay ahead of the race, despite a slack in business due to several factors, affecting the fundamentals.

Thanks & Regards 

Dev Purohit