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Contents
Godrej Consumer Products Management Meet Update; Status Quo, Maintain Accumulate; Target: Rs 447
n We met the management of Godrej Consumer – foresee continuation of growth momentum and no change in growth assumptions and resultant earnings estimates
n Much publicized cost pressures are restricted to Soaps segment alone – also productivity and efficiency gains would keep Ebidta margins unchanged at 18% for FY11E and FY12E
n New growth drivers (recent acquisitions) are reporting some acceleration in growth momentum; erstwhile drivers like domestic business are heading for breather
n 17% price correction from Rs441/Share to Rs369/Share unwarranted - Maintain ‘ACCUMULATE’ rating with target price of Rs447/Share
n Dealer Comments
The markets started the day’s session on a negative note with almost 90 odd point’s downward gap tracking mixed cues from the global markets particularly the weak Asian counterparts. Post weak opening markets continued to trade in the negative zone till almost noon trades in the absence of flows and any major triggers on both global and domestic fronts from all categories of investors. Though the price action wasn't something to write home about but the day's gains were certainly better compared to the lackluster trend seen in the previous few sessions. Post noon trades markets left behind a lethargic morning session and both the indices staged a remarkable recovery aided by buying in metal, fmcg, healthcare and capital goods stocks. Once again good buying was seen in sugar stocks in today’s trading session and most of the stocks were up in the range of 3-5% across the space on the back reports that trading in sugar futures will resume from 27th December. Post news of government slashing import duty on rubber, tyre stocks saw good buying interest. Finally the markets closed the day and the week on a positive note above its psychological levels of 20000 and 6000 for Sensex and Nifty towards the end with Sensex gaining 91 points or 0.45% higher to settle at 20074 levels while Nifty gained 32 points or 0.53% higher to settle at 6012 levels. On a weekly basis among both Sensex and Nifty gained 1.05% each while Midcap index gained 0.4% and Smallcap index gained 1.8% respectively. On a weekly basis among the sectoral indices Metal index gained 4%, IT index gained 1.8% and Auto index gained 1.2% each respectively. The overall traded volumes were higher compared to the earlier day by almost 22% and were at Rs 1234 bn. While delivery based volumes were also marginally higher compared to the earlier day at 38.7% of the total traded turnover. Among the Fund activities FII’s were net sellers to the tune of Rs 1.01 bn 23rd December 2010. While on 24th December 2010 FII’s were net buyers to the tune of Rs 0.15 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 12.36 bn while Domestic Funds were also net sellers to the tune of Rs 2.96 bn.
n Technical Comments
Above 6000
Today Nifty started the day on a weak note. However, within the few minutes after the opening bell, Nifty managed to find support at the 200-HSMA and saw a rally of 60 odd points from the low of the day. Also, the final closing was above the psychological mark of 6000, which negated the evil effect that the Dark-cloud cover pattern (formed a day before yesterday) could have brought. Moreover, in this ongoing move, we may see an addition of 50 odd points from current level, but unless 6100 is surpassed we will maintain our bearish stance.
BSE Metal:
BSE Metal index has formed a Bullish Engulfing candlestick pattern, which negated the previous Bearish Engulfing candlestick pattern witnessed on daily chart. Hence we feel that the current up-move may continue in the near future.
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