Wednesday 29 October 2008

Mkts near bottom; no major bounce seen: Brics Sec

Anand Tandon of Brics Securities does not expect markets to fall further from these levels. "Markets are near their bottom, but we do not see too much bounce from these levels."

According to Tandon, the Sensex might touch 12,000 in the next couple of quarters. "But that would make the markets get into expensive mode."

He is bearish on the capital goods and construction space.

Ashwani Gujral, Technical Analyst sees Nifty trading volatile between 2,200 to about 3,050 in November. He said markets will not get out of this bearish phase unless it closes above 3,800, which is a long way off.

Source: Moneycontrol

Unitech Telenor deal: An analysis

Unitech said it will sell 60% in its telecom arm, Unitech Wireless, to Telenor for Rs 6,120 crore via a fresh issue. Unitech Wireless will invest USD 3 billion over the next three years.

When contacted, Telenor said Unitech telecom arm deal will be completed in four tranches by September-end. The initial equity injection in the Unitech arm will be done by Telenor Asia.

Here is a verbatim transcript of Nayantara Rai’s comments on CNBC-TV18.

The deal is a little below than what market analysts were expecting. At one time, analysts as well as Unitech were expecting that the deal would value Unitech Wireless at around USD 3-4 billion. But, finally the enterprise value has come to USD 2.3 billion. The company has a debt of about Rs 1,200 crore, which is raised from a consortium of six banks. Unitech has also given a debt of around Rs 750 crore to Unitech Wireless. So with this equity infusion that debt will be reduced.

Sanjay Chandra, MD, Unitech, told CNBC-TV18 earlier this week that there was a little strain in the balance sheet because of this high debt. "But that is expected to now come down because of the deal. They are going to start operations in June. The deal has been done with Norwegian entity, Telenor and the enterprise value is about USD 2.3 billion."

Source: Moneycontrol

Jhunjhunwala sees 3 phases of mkts

Investor and Trader Rakesh Jhunjhunwala sees a three-phased way out of the current bear market. “First is going to be a phase of stabilisation and it will be linked in a large part not to local but international factors. Then we will go through a phase of consolidation. Then, we will go through a new market,” Jhunjhunwala said.

Jhunjhunwala also said the strengthening dollar was beyond comprehension. He said, “I don’t understand how the dollar is defying gravity. The only way for housing to ease in America is to consumption to ease up. The only way the American economy can stabilise is by growing exports and with this value of the dollar, what will happen to American exports?”

On the possible reasons for things to improve, Jhunjhunwala, said there were two positives that could result in markets moving up from here. “There are two factors that should dramatically improve the atmosphere for Indian equity. One, interest rates are headed nowhere but down. In my calculation — and I have studied the WPI index — one is going to have between 5.5-6% inflation by March and interest is one of the biggest factor in valuing assets,” Jhunjhunwala said. “So when interest is going to go down, that will give a kick to equities.”

“Secondly, one year ago, nobody was bothered about India’s monetary and fiscal position and the only joker in the pack was oil. With oil being down — and I am not seeing any recovery for oil — India’s monetary and fiscal position and foreign-exchange position next year will dramatically improve,” Jhunjhunwala added. These are two factors which could drive up valuations in India, he said.

Source: Moneycontrol

Fed cuts rate by 50 bps to 1.0%

The Federal Reserve has slashed a key interest rate by half a percentage point as it seeks to revive an economy hit by a long list of maladies stemming from the most severe financial crisis in decades.

The central bank on Wednesday reduced its target for the federal funds rate, the interest banks charge on overnight loans, to 1 percent, a low last seen in 2003-2004. The funds rate has not been lower since 1958, when Dwight Eisenhower was president.

The cut marked the second half-point reduction in the funds rate this month. The Fed slashed the rate by that amount in a coordinated move with foreign central banks on Oct. 8.

Further rate cuts would make it very inexpensive for banks to borrow from one another. The Fed is hoping that low rates, along with efforts to increase liquidity, will spur greater lending and borrowing, unfreezing credit markets.

Many consumer and business lending rates have remained high. The average mortgage rate last week was at 6.3 percent, according to Bankrate.com, above the level of earlier this year.

Source: EconomicTimes

Dhanteras delivers this year too, over 15,000 cars sold

When all else fails, Motown can fall back on the goddess of wealth to bail it out. Meltdown or no meltdown, Dhanteras sales have sparked a sparkling Diwali for car companies.

Dhanteras – the most auspicious day for buying metal in North India – saw the industry clock three times its usual daily sales. Initial reports suggest that more than 15,000 vehicles (cars and SUVs) were sold on Sunday across the country. That’s a big leap from what the industry usually clocks, around 3,000-3 ,500 cars per day.

But this Dhanteras still couldn’t match the sparkle of the same day last year when around 17,000 vehicles were sold. The liquidity crisis and prevailing high interest rates as well as strict lending norms played spoil sport this time round, dampening demand.

Source: EconomicTimes

Hungary to get $25.1 billion in IMF-led aid deal

Hungary's currency and stock market rose Wednesday after the country agreed to get an aid package of up to $25.1 billion (20 billion euros) from the International Monetary Fund, the European Union and the World Bank.

The IMF will provide a 17-month standby loan of $15.7 billion (12.5 billion euros), the European Union is ready to lend Hungary $8.1 billion (6.5 billion euros), and the World Bank will give $1.3 billion (1 billion euros) to keep Hungary's economy from collapsing under the weight of the global financial crisis.

The news drove the benchmark BUX stock index to close up by a massive 14 percent and pushed the Hungarian currency the forint higher against the euro and dollar.

Source: EconomicTimes

Time Inc plans about 600 job cuts : NYT

Time Inc, a unit of Time Warner, plans to announce a revamp that will lead to job cuts of 6 per cent, or more than 600 positions, the New
York Times reported on its website on Tuesday.

A memorandum on Tuesday evening from Chief Executive Ann Moore will outline the plan and the cuts will begin in about two weeks, the newspaper reported. Time officials were not available for comment.

Source: EconomicTimes

Firms seen cutting jobs by 25% in next 10 days: Assocham

Indian firms are likely to lay off a quarter of their employees in the next 10 days, as part of steps to contain costs in the face of shrinking margins amidst the economic turmoil, an industry body said on Wednesday.

Trade body Associated Chambers of Commerce and Industry of India (ASSOCHAM) said the job cuts would be across the steel, cement, construction, real estate, aviation, IT-enabled services and financial services sectors.

Expansion has slowed in Asia's third-largest economy in the last two quarters, from the 8 percent or more annual growth in the past four years, with high interest rates crimping demand and on the global financial crisis.

The Reserve Bank of India last week cut its forecast for growth in 2008/09 to 7.5-8 percent from its earlier view of 8 percent. This compares with the economy's 9 percent growth in 2007/08.

Source: EconomicTimes

Volvo lays off 600 employees in Sweden, Belgium

Swedish truck maker Volvo AB says it will lay off 600 more workers at plants in Sweden and Belgium due to declining demand in Europe.


Volvo spokesman Stafan Karlsson says the job cuts will affect 200 staff at its plant in Ghent, Belgium, 250 in Goteborg, western Sweden, and 150 in Umea, northern Sweden.

He said Wednesday that the financial crisis has meant customers in Europe are holding back their truck orders.

The company previously gave notice to 1,400 truck workers in September, and has also cut 1,300 staff at its construction equipment unit.

Source: EconomicTimes

German airline Lufthansa to take control of British BMI

The leading German airline, Lufthansa, said on Wednesday that it would take a stake of 80 percent in British carrier BMI.

The increase from Lufthansa's previous 30-percent stake in BMI, formerly known as British Midland, is the result of an option held by investor Michael Bishop to sell his stake of 50 percent plus one share to the German carrier.

Source: EconomicTimes

London stock market soar more than 5 per cent

London stocks rallied more than five per cent in morning trade on Wednesday, accelerating initial gains as investors took their cue from a sharp overnight rally in New York, dealers said.

Source: EconomicTimes

US stocks waffle ahead of Fed rate decision

Wall Street drifted in quiet trading on Wednesday after its huge rally a day earlier, as investors awaited an afternoon decision on interest rates from the Federal Reserve. The major indexes alternated between gains and losses.

The market expects policymakers to lower the fed funds rate by a half point to 1 percent, though there has been speculation that smaller or wider cuts are possible.

The only certainty is that Wall Street will pore over the Fed's statement on its decision and its reading of the economy. That assessment, along with any move on rates themselves, could lead the market to retreat, rally or simply shrug off a move that it writes off as expected.

Stocks' fluctuations were not surprising given the light trading volumes and the 889-point advance logged by the Dow Jones industrials Tuesday. The Dow and the Standard & Poor's 500 index posted gains of nearly 11 percent, while the Nasdaq composite index rose 9.5 percent as investors, confident about the prospects for a rate cut, piled into the market to pick up stocks that have become bargains.

The Dow's gain was its second-largest daily point gain; the biggest was its 936-point surge on Oct. 13 that later evaporated as fears about the economy grew. The stock market has been extremely volatile lately _ beyond a simple case of investor indecision, the market's back-and-forth moves may also be part of its attempt to establish a bottom.

The Dow rose 13.86, or 0.15 percent, to 9,078.98 after falling in midmorning trading.

Broader stock indicators were narrowly lower. The S&P 500 index fell 3.58, or 0.38 percent, to 936.93, and the Nasdaq composite index fell 4.14, or 0.25 percent, to 1,645.33.

The Russell 2000 index of smaller companies rose 5.06, or 1.05 percent, to 487.61.

Advancers outnumbered decliners by about 2 to 1 on low volume of 256 million shares on the New York Stock Exchange.

Source: EconomicTimes

Where McCain scores over Obama

Barack Obama looks certain to beat John McCain and become the next US president. Most Indians will be delighted. An Obama victory will symbolise the vanquishing of racism and the dismal Bush legacy.

Besides, McCain is a military hawk, especially on Iraq. Obama is not exactly a dove, but is far less a military adventurer than McCain, and is preferred by Indians on this score too.

Yet, a look at the voting record and campaign content of the two candidates suggests that McCain might in many ways be better for India than Obama, especially on economic issues.

A nasty global recession has begun. Nouriel Roubini of New York University predicts we will suffer the worst economic downswing since the Great Depression. So, pressures will mount for protectionist measures and beggar-thy-neighbour policies in the US, hurting countries like India. Apart from erecting import barriers and subsidising dumped exports, US politicians will seek to curb the outsourcing of services to India. Visa curbs will slow the movement of skilled workers and their dollar remittances back to India.

McCain is one of the few American politicians in either party with the courage and conviction to stand up to protectionist populism. By contrast, Obama embodies protectionism.

Look at the accompanying chart. It shows that McCain has voted 88% of the time against bills creating trade barriers, and 90% of the time against export subsidies for US producers. Few other senators have such a splendid record.

Obama has served a much shorter time in the Senate, and avoided voting on many key issues. He has voted against trade barriers only 36% of the time. He supported export subsidies on the two occasions on which he voted, a 100% protectionist record in this regard.

In 2007, he voted to reduce visas issued to foreign workers (such as Indian software engineers), and to ban Mexican trucks on US roads. He sometimes voted for free trade - he supported the Oman Free Trade Act and a bill on miscellaneous tariff reductions and trade preference extensions. More often he voted for protectionist measures including 100% scanning of imported containers (which would make imports slower and costlier), and emergency farm spending.

Source: EconomicTimes

Morgan Stanley gathering deposits, eyes bank deals

Morgan Stanley, eager to secure more stable sources of funding in volatile times, said on Wednesday its brokerage division sold $3 billion in certificates of deposit during the past week as part of its broader plan to build up deposits.

In addition to offering services more common at neighborhood bank branches, Morgan Stanley said it would "explore both organic and acquisition opportunities" to accelerate deposit growth.

Following the bankruptcy of Lehman Brothers last month, Morgan Stanley converted from an investment bank to a Federal Reserve-regulated bank holding company and said it would deploy its 8,500 advisers and brokerage offices to amass deposits.

The firm reported $36 billion in deposits as of August 31, but that is not nearly enough to support a company with nearly $1 trillion in assets.

Morgan Stanley said it will introduce new savings accounts and global currency accounts, increase international banking through a Swiss bank unit, and expand banking services for smaller businesses. It already offers checking accounts, ATMs and credit cards for broker clients.

Morgan shares have been punished by investors who worried it did not have enough capital and cash to survive a worsening financial crisis. Converting to a bank, selling a 21 percent stake to Mitsubishi UFJ Financial Group and scooping up deposits were supposed to allay those fears.

The shares continue to come under pressure -- down 71 percent for the year -- and the price of its default insurance remains lofty at $415,000 for every $10 million of debt.

Source: EconomicTimes

Sun Pharmaceutical an outperformer: Karvy

Karvy Stock Broking has maintained its outperformer rating on Sun Pharmaceutical Industries with a target of Rs 1387 in its October 29, 2008 research report. "The company's net revenues for the quarter were up by 76 % to Rs 11778 million. Profits for the quarter have moved up by 135 % to Rs 5127 million with the help of higher other income."

"We have marginally decreased our FY 2009 estimates by 3.4 % to Rs 87.9 mainly on account of lower gross margins, higher staff and other expenses despite higher revenue traction. We have marginally increased our FY 2010 estimates by 3.1 % to Rs 99.1 mainly on back of higher other income. We however downgrade our price target on account of compression in valuations. We value the core business of the company at 18x FY 2009E and value it at 1272 while we value the FTF opportunity of Rs 28.4 at 4x and value it at Rs 114. We arrive at a value of Rs 1,387 for the company. We however continue to rate the stock as Outperformer," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Dishman Pharma, target of Rs 250: Karvy

Karvy Stock Broking has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target of Rs 250 in its October 29, 2008 research report. "The net revenues for the quarter reported at Rs 2.52 billion with 35.1% y-o-y and 6.8% q-o-q growth rate, against our estimates at Rs 2.43 billion. The net profits for the quarter before exceptional items stood at Rs 339.87 million. The company maintains its guidance of reporting Rs 10500 million revenues in FY09 with 23% to 24% margins at EBITDA level and operational PAT to the tune of Rs.1500mn."

"We maintain our revenue and earnings estimates for FY09E & FY10E. We expect revenues and earnings to grow at a CAGR of 31.4% and 27% from FY08 to FY10E driven primarily from the high margin CRAMS segment. The stock is currently available at P/E of 6.9x on FY10E basis. On account of compressed valuations, we downgrade our PE multiple from 13.1x to 10.5x on FY10E diluted EPS at Rs 23.6 and revise our price target downwards by 24% to Rs 250. We continue to rate the stock as a "BUY," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Everest Kanto, target of Rs 210: PINC

PINC Research has maintained its buy rating on Everest Kanto Cylinder with a target of Rs 210 in its October 24, 2008 research report. "Everest Kanto Cylinder Ltd’s (EKC) Q2FY09 results were in line with expectations as it reported a 73% YoY growth in net sales to Rs 2.2 billion on back of volume growth and full quarter contribution from CP Industries. OPM expanded by 72bps to 31.8% while net profits rose by 52% to Rs 432 million."

"The CMP of Rs 159 discounts FY10E EPS of Rs 23.8 by 6.7x. The stock trades at an EV/Sales of 1.4x and EV/EBIDTA of 5.2x FY10 estimates. Robust demand for CNG cylinders coupled with growing contribution from lucrative jumbo cylinders business is expected to provide sustained revenue growth and higher margins in the coming quarters. Thus, we maintain our ‘BUY’ recommendation with an 18-month price target of Rs 210," says PINC's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy SBI, target of Rs 2057: Motilal Oswal

Motilal Oswal has maintained its buy rating on State Bank of India with a target of Rs 2057 in its October 27, 2008 research report. "SBI’s 2QFY09 PAT of Rs 22.6 billion, driven by strong core business performance. Key highlights: 1) loans up 37% and deposits up 28%; CASA ratio marginally up YoY, decline QoQ; CASA deposits grew by 27% YoY, 2) 45% NII growth v/s our estimate of 30%; margins improve 15bp YoY to 3.16% in 1HFY09, 3) fee growth (ex forex) of 40%, and 4) gross NPA at 2.5% and net NPA at 1.3%; some stress visible."

"We have increased SBI’s earnings by 8% for FY09 to factor in higher fees, higher margins growth. However, for FY10, we have reduced our estimate by 2%, due to higher provisions. Adjusted for value of SBI Life at Rs117 in FY09 and Rs133 in FY10, SBI trades at 0.8x FY09E Cons BV and 0.7x FY10E Cons BV. Maintain Buy, target Rs 2,057," says Motilal Oswal's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy ICICI Bank, target of Rs 581: Motilal Oswal

Motilal Oswal has maintained its buy rating on ICICI Bank with a target of Rs 581 in its October 27, 2008 research report. "ICICI Bank's NII grew 20% YoY in 2QFY09 (in line with exp) driven by stable margins on the back of slower loan growth (7%), lower term deposits (8% decline), and higher CASA growth at 16%. CASA ratio improved to 30%. PAT was flat in 2QFY09 to Rs 10.1 billion."

"We are reducing our target multiple of ICICI Bank to 1x FY10E ABV given its subdued core RoE (<12%) for the next couple of years. We are reducing our target valuations for all its subsidiaries due to lower expected growth. Adjusted for value of subs at Rs 175 per share, the stock trades at 0.4x FY09E BV. Maintain Buy with a revised target price of Rs 581, an 84% upside," says Motilal Oswal's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Union Bank, target of Rs 225: Motilal Oswal

Motilal Oswal has maintained its buy rating on Union Bank of India with a target of Rs 225 in its October 27, 2008 research report. "NII grew 49% YoY to Rs 9.8 billion on the back of the strong improvement in margins and 26% YoY growth in loans. We are impressed by the core operating performance in 2QFY09 and expect the strong trend to continue. NII growth, cost of funds and margin movements are encouraging. Asset quality has improved significantly and would enable lower provisions ahead."

"We are upgrading our estimates by 5% for FY09 and FY10. We expect the bank to report EPS of Rs 31 and Rs 36 in FY09 and FY10. We expect BV to be Rs135 in FY09 and Rs164 in FY10. The stock is trading at 4x FY09E EPS and 0.9x FY09E BV. RoE would remain strong at 24%+ over next two years. Maintain Buy, target of Rs 225," says Motilal Oswal's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy TIL, target of Rs 300: SKP Securities

SKP Securities has recommended a buy rating on TIL with a target price of Rs 300 in its October 29, 2008 research report. "Net sales were up by 49.69% for Q2FY09 at Rs 264.12 crores. PAT was up by 49.02% y-o-y at Rs 9.12 crores. At the current level of Rs 156.60, TIL is trading at 3.14 x FY10E earnings of Rs 49.91. We are revising our price target and recommend a BUY to the stock with a target price of Rs 300 at 6 x FY10E earnings, giving it an upside potential of 92%," says SKP Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Sun Pharma, target of Rs 1600: Angel

Angel Broking has upgraded its rating on Sun Pharmaceutical Industries from neutral to buy with a target of Rs 1600 in its October 24, 2008 research report. "The company posted Net Sales of Rs 1,177.8 crore registering yoy growth of 82.2%. Robust Sales growth along with expansion in Operating Margins aided Net Profits to end the period at Rs 512.8 crore yoy surging by 134.4%. In FY2008, Sun Pharmaceuticals clocked robust growth following launch of FTF products."

"Going into FY2009, the company would see potential upsides from Pantaprazole and Amifostine. Sun has maintained its guidance of 25% rise in its US business, while ex-USA regions are expected to deliver 18-20% growth. On the back of robust 1HFY2009, we have upgraded our Net Profit numbers for FY2009 and FY2010 by 34% and 23%, respectively. On the valuation front, at the CMP, the stock is trading at 13.9x FY2009E and 15.2x FY2010E Earnings. We upgrade the stock to Buy from Neutral, with a Target Price of Rs 1,600," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Godawari Power, target of Rs 115: Angel

Angel Broking has maintained its buy rating on Godawari Power & Ispat with a target of Rs 115 in its October 24, 2008 research report. "Godawari Power & Ispat’s (GPIL) Top-line grew 86% yoy to Rs 331 crore (Rs 178.2 crore) in 2QFY2009. The company’s Bottom-Line surged 48.3% to Rs 31.8 crore (Rs 21.4 crore). We have revised our FY2009 and FY2010 estimates including our realisation assumption as we believe that prices across its products have peaked out. Growth in Bottom-line is expected to be slower owing to 494bp Margin contraction factored in by us. At the CMP, the stock is trading at 2.0x FY2009E and 1.8x FY2010E EPS and 0.4x FY2010E P/BV. We maintain a Buy on the stock, with a revised Target Price of Rs 115 (Rs 280)," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Jyothy Labs, target of Rs 300: LKP Shares

LKP Shares has recommended a buy rating on Jyothy Laboratories with a one-year price target of Rs 300 in its October 29, 2008 research report. "With the Sensex itself trading at 10x we believe that there is a compelling reason to buy JLL which is trading at 6x with a dividend yield of 4% and above all it is a debt free company (cash per share of Rs 65) which came out with its IPO a year back in November 2007 at Rs 690 (Rs 5 paid up) purely to provide an exit to private equity investors and did not collect any funds for itself. JLL has corrected to Rs 215 now from its peak of Rs 965 in early January 2008 and at CMP of Rs 215 we believe that it is an attractive investment bet for investors with a one-year price target of Rs 300, which is a 40% upside from current levels," says LKP Shares' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Garware Offshore, tgt Rs 144: India Capital Markets

India Capital Markets has recommended a buy rating on Garware Offshore Services with a target price of Rs 144 in its October 29, 2008 research report. "Garware Offshore Services (GOSL) has reported excellent numbers in Q2FY09 with strong revenue growth in revenues 79% yoy at Rs 446 million. GOSL is currently trading at a discount of 30-40% to its peer group. Our target price of Rs 255 was based on DCF valuation on a long term perspective. However, contraction in multiples will lower our target price to Rs 144, which works at 4x FY2010 earnings. Hence we recommend a BUY on the stock," says India Capital Markets' research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Alembic, target of Rs 44: Angel

Angel Broking has maintained its buy rating on Alembic with a target of Rs 44 in its October 24, 2008 research report. "For 2QFY2009, Alembic posted Net Sales of Rs 344.7 crore registering a growth of 13.1%. During 2QFY2009, the company posted Net Profits of Rs 15.0 crore, substantial part of which came on the back of Rs 22.5 crore forex losses booked by the company. Alembic has re-aligned its business model to leverage the opportunities available in the Pharmaceutical sector."

"Over the years, the company has also invested in R&D and built infrastructure to cater to the Regulated markets. The company is now through with its investment phase. The company’s 1HFY2009 performance has been impacted by forex losses on account of which we have pruned our FY2009 and FY2010 estimates by 54% and 23%, respectively. At Rs 27, stock is trading at 8.0x FY2009E and 4.2x FY2010E Earnings. We maintain a Buy on the stock, with a Target Price of Rs 44," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Biocon, target of Rs 167: Reliance Money

Reliance Money has maintained its buy rating on Biocon with a revised target price of Rs 167 in its October 24, 2008 research report. "Biocon reported 58% growth in its consolidated revenues to Rs 4422.9 million in Q2FY09, coupled with OPM of 16.6% (a sharp fall from 28.8%) and resulted in a flat PBT at Rs 557.1 million. Though we have revised down our target price to Rs 167 mainly to capture overall market valuations, we maintain our positive stance on the future earnings backed by strong pipeline of biosimilars and progress in its discovery pipeline. Hence, we maintain our buy recommendation on Biocon with the revised target price of Rs 167," says Reliance Money's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Avoid Suzlon Energy: Vijay

Portfolio Manager, PN Vijay is of the view that one should ignore Suzlon Energy.

Vijay told CNBC-TV18, "When there is so much available at bargain bottom, Suzlon’s model is a risky model. When an Indian company puts major portion of its assets abroad where so many environmental, so many technical issues are involved and it is not a Birla or a Tata with deep pockets who is doing it; it is the first generation entrepreneur, you are having a very high risk level on that stock. I think that novelty of seeing all these windmills and all that is gone now, it is just one more stock. So I think one would better ignore Suzlon.

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Punj Lloyd a good pick: Vijay

Portfolio Manager, PN Vijay is of the view that Punj Lloyd is a good pick with one year perspective.

Vijay told CNBC-TV18, "The stock I will be very comfortable with is Larsen & Toubro. I often say L&T and State Bank of India represent the Indian nation. If you saw L&T Q2’s result and I was looking at it with great apprehension to see what that bellwether would do. Showed a remarkable increase in the order book and a small blip in EBITDA, I think less than a percent, which is because of high commodity prices. I think they are well positioned; they have fallen like a pack of cards like everybody else and so in infrastructure I would choose L&T as a good pick."

He further added, "Punj Lloyd is in a hi-tech construction business and they have grown very well. They have some balance sheet related problem, I think they have got over them and again that share has fallen about 60-70% from its January highs. So Punj Lloyd would be an excellent pick with one-year perspective."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Stay away from IFCI: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that Stay away from IFCI.

Sukhani told CNBC-TV18, "Stay away from IFCI. Financials are not the flavour of the season and IFCI is not the flavour of the financials anyway. Retail investors should never try to get into such stocks. I hope they have learnt their lesson this time."

Disclosure: Analyst has delta neutral positions in Nifty and investments in shares.

Source: Moneycontrol

Hold Reliance Industries, says Madan

Ashu Madan, National Head of Religare is of the view that one can hold Reliance Industries.

Madan told CNBC-TV18, "It’s a very daunting task for Reliance to go back to the original level and at the same time, I cannot advice at these levels to average it out, so probably I can only say that hold it for sometime, wait for some bounce back because probably even if we feel that there is some bounce back would be there it would be led by these blue chips only. So somewhere once the selling stops and you see some bounce back, I don’t know what level that could be."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Expect more upside in RIL, ICICI Bank: Gujral

Technical Analyst, Ashwani Gujral is of the view that Reliance, ICICI Bank could have some more upside but it’s really a pullback rally before we start the downtrend.

Gujral told CNBC-TV18, "On Individual stocks, something like Reliance capital and everything will bounce back if the market comes back so probably some of the beaten down sectors, the metals the real estate, from the financials if something gets announced after this meeting, so broadly this is just a pullback rally and heavyweights like Reliance, ICICI Bank could have some more upside but its really a pullback rally before we start the downtrend."

Source: Moneycontrol

Book profits in Unitech at Rs 55-60: Gujral

Technical Analyst, Ashwani Gujral is of the view that one should book profits in Unitech at Rs 55-60.

Gujral told CNBC-TV18, "If one bought Unitech anywhere around Rs 30, I think Rs 55 or Rs 60 is a good level to book your profits. So if it goes upto Rs 60, people should book out and get out of the stock."

Source: Moneycontrol

Tata steel can touch Rs 210: Bose

Technical Analyst, Rajat K Bose is of the view that Tata steel can bounce back and touch Rs 210.

Bose told CNBC-TV18, "I would say that Sterlite Industries, looks pretty much attractive, but I would be more confident if it were to trade above Rs 253 decisively."

He further added, "Tata Steel, I would say that there can be a bounce if it were to stay above Rs 191-193, then we can expect it to move up to something like Rs 204-210. But if you ask me that if there is any major upswing likely in these counters, then I would say I am quite skeptical even now although they have rallied considerably from the lower levels that were reached on Monday."

Disclosure: it is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Above Rs 74, Moser Baer can go upto Rs 85: Bose

Technical Analyst, Rajat K Bose is of the view that above Rs 74, Moser Baer can go upto Rs 85.

Bose told CNBC-TV18, "Moser-Baer was holding out in the carnage for quite sometime, finally it cracked so it is actually trying to recover lost ground and if it were to trade above say something like Rs 74 then on Friday, you will see a good rally happening at least up to Rs 83-85 range. Once it is above Rs 85, then one can expect it to move to something like triple-digits, but there would be a tall order as of now."

Disclosure: it is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Cairn India can head upto Rs 136-138: Bose

Technical Analyst, Rajat K Bose is of the view that Cairn India can head upto Rs 136-138. Unless it falls below Rs 105, its current bullishness might actually remain, he added.

Bose told CNBC-TV18, "Cairn India looks pretty good at these levels. If it were to actually stay above this Rs 115-117 kind of levels, then chances are we would see it going up to something like Rs 136-138 range. Once it goes above that then we would have new projections for that. Unless Cairn India falls below Rs 105, its current bullishness might actually remain."

Disclosure: it is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Buy now, make money on long side: Sukhani

Sudarshan Sukhani of Technical Trends said this is a bear market, where every rally will eventually fizzle out. Whenever there is a dip, a trader should go for long side, rather than looking at short selling opportunities, as a bear market rally can be sudden and can go to a larger extent. So there is no sense fighting momentum.

One should take profits at the current levels, and do not expect earlier levels of 21,000 on the Sensex, Sukhani added.

According to Sukhani, one can make money on long side at these levels.

Source: Moneycontrol

4 reasons why you should buy while FIIs sell

LET’S assume that you have invested in both, the US and the Indian stock markets. Now, it turns out, while your Indian investments are doing exceedingly well, the US portfolio suffers acute losses.


What is the most obvious thing you would do?

You would book profits in India, in order to make up for the US loss. Right?

This, in a nutshell, is the current scene today. The only difference is that the investors are foreign institutional investors (FIIs). These are institutions that operate mutual funds, hedge fund and portfolio management services abroad and invest the fund money in other countries. FIIs by definition, have world wide investments. So, not only India but other Asian markets are also facing a sell off.

What happens when FIIs sell?
FIIs have a huge exposure to the Indian market. Due to this, their buy and sell actions have a considerable impact on the market.


Recently, FIIs have been on a selling spree. This is one of the reasons for the markets to register steep falls.

If FIIs are selling, should you buy?

The US is in turmoil but there is nothing wrong with us. The following factors just reaffirm this:


1. Toxic securities (such as MBS and CDOs) are conspicuously absent in our market, thereby preventing us from catching the infection.

Mortgage Backed Security (MBS) and Collateralized Debt Obligations (CDOs) are securities which are backed by a pool of mortgages that are paid by home loan takers in the US. So, if a home owner defaults on his repayment, the MBS holder suffers. Read all about these instruments and how they caused the big collapse .


2. As far as domestic operations of banks are concerned, RBI has been extremely strict by continually increasing the risk weights to real estate and housing loans, thereby discouraging banks to get ahead of themselves, in a bid to increase business.

See: Why Indian banks are safe

3. Unlike the West which has a negative savings rate, our domestic savings rate is more than 35 per cent, that means, on an average, Indians save 35 per cent of their income. So, even if there is a protracted slowdown, we would still have considerable demand for products and services, which in turn will help the economy to achieve good growth.

4. Amongst all emerging economies, our export to GDP ratio is the lowest. This means that even if our exports went down, our growth won't be significantly impacted. Therefore, even a full blown US recession will shave only around 40 to 60 basis points off our GDP growth rate. So, we will still have the capacity to chug along at an 8 per cent plus rate.


India - a safe haven
The fundamentals of our economy make our market nothing short of a safe haven during such turmoil. So, I don’t care if the market falls to 9,000 or even lower. Once this storm blows over, things will be back to normal.

In the meanwhile, your fortune as an investor would depend on how you react or, rather, don’t react to the situation.


The great fall of the market isn’t going to suddenly reverse the quality of the companies listed. If anything, I am looking forward to picking up some cheap but quality stuff.

Source: Moneycontrol

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.