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Contents
Inflation marginally up to 8.6%, core inflation remains unchanged at 4.9%
n Headline inflation for September inched up marginally to 8.6% from 8.5% last month.
n Primary articles inflation has seen an increase to 17.5% from 15.8% last month, driven mainly by an increase in both food (15.7%) and non-food inflation (18.2%).
n The major contributors to the rise in primary articles inflation are vegetables (5% mom), potatoes (5% mom), onions (16% mom) and fibres (10% mom)
n Fuel inflation saw a drop to 11% from 12.6% last month.
n Manufactured products saw a sustained drop in inflation by ~20bps from last month to 4.6% for the month of September.
n Core inflation that has been steadily moving downwards has remained stagnant this month at 4.9%.
n Despite downward rigidity in food and non-food inflation, the month of October is likely to see a marginal drop in primary articles inflation, owing to a favourable base effect scenario; some of which would trickle down to ease headline inflation.
CRISIL Q3CY10 result estimates
We expect CRISIL’s revenues to grow by moderate 14.3%yoy to Rs1.6bn. The OPMs are likely to decline by 312bps over last year, as a result the operating profit will grow by a lower 4.7%yoy to Rs519mn during the quarter. Traction in IREVNA and advisory will be key things to watch out.
Larsen & Toubro Q2FY11E Result Estimates (Standalone)
We expect L&T to report healthy performance in Q2FY11E.
n We expect revenue growth at 15% YoY to 91.3 bn led by strong revenue booking in E&C (+12% YoY) and growth in E&E and M&I (+8% YoY each).
n Expect EBITDA growth at 34% YoY to Rs11.2 bn with 170bps YoY expansion in EBITDA margins to 12.3%
n We expect lower APAT growth at 13% YoY to Rs6.2 bn due to 77% YoY decline in other income.
n Order traction is likely to continue in the current quarter
Infosys Q2FY11Result Update; Solid show marred by muted earnings outlook; ACCUMULATE; Target Price: Rs 3,300
n Revenues at US$ 1,496 mn (+10.2% QoQ) beat high expectations. Op mgns expanded by ~170 bps QoQ to 33.3% (V/s exp of ~190 bps increase)
n Co wide vol growth at 7.1% QoQ (onsite vols up by ~15% QoQ) Broad based growth across verticals/service lines with Europe joining the party with a ~16% QoQ growth
n FY11 Revenue guidance raised to ~24-25% YoY growth now, however EPS raise muted and a tad disappointing at Rs 115-117 ( V/s Rs 112-117 earlier)
n Marginal change in FY11/12E EPS despite higher currency reset helped by ~2.4%/6% increase in revenues. Retain ACCUMULATE with a March’12 TP of Rs 3,300
Rallis India Q2FY11 Result Update; Price target revised to Rs 1,800; BUY
n Q2FY11 results were broadly in line with estimates with EBITDA margins of 24% and PAT growth of 23% to Rs 587 mn
n Revenues, +15% yoy, were below estimates due to floods in northern region - expected to catch up in the coming quarters
n Outlook for H2FY11 remains encouraging with estimated APAT growth of 44% based on strong domestic outlook
n With strong visibility, we rollover our price target to FY13E and revise price target to Rs 1,800 (from Rs 1,440) and maintain BUY
n Dealer Comments
The markets started the day’s session on a subdued note with almost 40 odd point’s upward gap mirroring mixed trend from the global markets led by sudden surge in jobless claims in the US. After a very quiet start markets started to loose its steam and kept on dragging down with every passing hour. Finally markets closed the day on huge negative note towards the end at almost day’s lows with Sensex losing 373 points or 1.82% lower to settle at 20125 levels while Nifty lost 115 points or 1.86% lower to settle at 6063 levels. On a weekly basis Sensex and Nifty both closed 0.6% lower while Midcap index was down 0.5% and Smallcap index gained 1.5% each respectively. The overall traded volumes were marginally lower compared to the earlier day by almost 3% and were at Rs 1600 bn. While delivery based volumes were marginally higher compared to the earlier day at 38.5% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 10.96 bn while Domestic Funds were net sellers to the tune of Rs 3.99 bn respectively on 14th October 2010. While on 15th October 2010, FII’s sold shares worth Rs. 1.13 bn in cash segment (provisional) while in the F&O segment they were net sellers to the tune of Rs 1.79 bn whereas Domestic Funds sold shares worth Rs. 10.53 bn (provisional).
n Technical Comments
Shooting Star – a sign of caution
The sell-off across all sectors brought the index down to settle below 6100 after hitting a weekly high of 6284.10. Moreover, on weekly degree Nifty has formed a Shooting Star candlestick pattern with a small real body at the lower end of the range and a long upper shadow. Such Shooting Stars sends a warning signal as bulls fail to gain control and an impending correction may be near. However, unless the trend of 21-daily exponential moving average changes or market gives a lower top lower bottom signal one should not jump the guns and start going short.
BSE Metal
BSE Metal seems to be in a short term correction mode, due to which it has a high probability to correct upto 17050 level. Moreover, today’s sell signal in daily MACD is also a sign of caution for the short term buyers.
n Results Today
Bajaj Fin. | Bajaj Finserv | CRISIL | Essar Oil | H D F C | Indiabulls Sec. |
ING Vysya Bank | Larsen & Toubro | NIIT Tech. | Sesa Goa | Zydus Wellness |
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