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Bank of Baroda Company Update; Reinforced confidence; Buy; Target: Rs1,160
n We recently spoke to Dr Rupa Rege Nitsure, chief economist, Bank of Baroda. Here are key takeaways
n BOB quite confident about managing margins. Pre-emptive increase in lending rates and high CDR to help maintain NIMs
n The slippages to remain under check with minimal exposure to sectors recently in news for wrong reasons. Slippage rate for FY11E at 1.0-1.1%
n Valuations attractive at 1.8x FY11E/1.5x FY12E ABV. We maintain our BUY rating with price target of Rs1160. Remains our top pick in large PSU banks
Titan Industries Company Update; Aiming Higher, Maintain ACCUMULATE; Target: Rs3,762
n Titan targeting to double market share in India’s Jewellery market over next 5 years – based on robust demand and large presence of unorganized market
n EMKAY earnings forecast based on 50% increase in market share in 5 years and volume growth of 15-20% p.a.
n Higher market share would result in 6% upgrade in FY12E earnings from Rs116/Share to Rs123/Share
n Retain earnings forecasts of Rs87/Share and Rs116/Share for FY11E and FY12E – Maintain ‘ACCUMULATE’ rating with target price of Rs3762/Share
Rallis India Managememt Meet Update; Growth trajectory intact, Maintain BUY; Target: Rs 1,800
n Rallis India management maintains its encouraging outlook for rabi crop and H2FY11 growth target
n Recent floods have adversely affected crop output in few regions however on overall basis revenue growth is likely to remain intact for Rallis
n Foray into branded pulses segment by Tata Chemicals may unravel attractive growth opportunity in future for Rallis
n We expect momentum in earnings to continue – we maintain BUY with price target of Rs 1800
n Dealer Comments
The markets started the day’s session on a negative note with almost 60 odd point’s upward gap tracking mixed cues from the global markets particularly the strong China markets despite interest rate hike on weekend. Post firm opening by the bourses markets managed to stay afloat till almost noon trades but in a very range bound zone with not much of enthusiasm from the investors and any major triggers on both global and domestic fronts from all categories of investors. Fridays ADAG stocks which hogged the limelight today saw good selling pressure on the back of clarification that RIL was not anticipating to buy any stake buy in Reliance Comm. After a slump in the Chinese markets in late trades and weak opening by European markets, we also witnessed selling action and leading to a fall in the markets. Finally the markets closed the day on a marginal negative note towards the end at almost day’s lows with Sensex losing 45 points or 0.22% lower to settle at 20028 levels while Nifty lost 14 points or 0.22% lower to settle at 5998 levels. The overall market breadth indicating the strength of the market was positive as broader markets witnessed subdued action with Midcap index losing 0.17% and Smallcap index gaining almost 0.21% each and was at almost 1.1 x. The overall traded volumes were marginally lower compared to the earlier day by almost 1% and were at Rs 1201 bn. While delivery based volumes were quite lower compared to the earlier day at 35.4% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 0.40 bn while Domestic Funds were net sellers to the tune of Rs 1.25 bn respectively on 24th December 2010. While on 27th December 2010 FII’s were net buyers to the tune of Rs 2.46 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 2.25 bn while Domestic Funds were also net sellers to the tune of Rs 1.14 bn.
n Technical Comments
Buy on dips
After a healthy opening above the 6000 mark, Nifty was just hovering around that mark, led by a sell-off in the second half. Overall the trend is still bullish as the higher top higher bottom on hourly chart is still intact. Also, Nifty is seeing constant demand inching in near its 20- and 50- HSMA in recent past. So as long as the higher top higher bottom formation and the hourly moving averages are intact, the viewpoint remains bullish and one should look for buying of dips near 50% (i.e. 5993) and 61.8% (i.e. 5980) retracement level for the target of 6080.
Bank Nifty:
Bank Nifty is trading within a broad range of 300 odd points and the break above 11571 or below 11411 will be a good opportunity to initiate a fresh intraday trade for the coming session.
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