9am with Emkay

9am with Emkay

Contents

n        Research Views

Auto – September 2010 volume update

Maruti Suzuki India Ltd (MSIL)

n    Domestic sales grew by 32.9% YoY to 95,148 units

n    Export volumes grew by 9.8% YoY to 12,858 units.

n    Total sales increased by 29.6% YoY to 108.006 units

Mahindra & Mahindra (M&M)

n    Total sales increased by 15.2% YoY to 50,589units

n    Total automotive sales increase by 23.0%  YoY to 33,108 units

n    Passenger UV sales increased 8.1% YoY to 16,537 units

n    4-Wheelers Pick Ups (Incl Gio and Maximmo) sales increased by 38.9% YoY to 9,255 units

n    3-Wheelers sales increased 40.9% YoY to 6,005 units

n    Total tractors sales increased by 2.9%  YoY to 17,481 units

Tata Motors Ltd (TML)

n    Total sales increased by 23.1% YoY to 64,668 units

n    M&HCVs sales increased by 27.8% YoY to 16,637 units

n    LCVs sales increased by 3.5% YoY to 19,097 units

n    Total  passenger vehicles sales increased by 31.4% YoY to 23,877 units (including 5,520 units of Nano)

n    Total domestic sales increased by 20.1% YoY to 59,611 units

n    Export sales increased by  76.6% YoY to 5,057 units

TVS Motors Ltd. (TVS)

n    Total sales increased by 30.8% YoY to 188,005 units

n    Motorcycle sales  increased by 34.0% YoY 81,381 units

n    Scooters/ Mopeds sales increased by 26.4%% YoY to 103,402 units

n    Three wheelers sales grew by 168.5% YoY to 3,222 units

n    Export sales increased by 88.5% YoY to 19,365 units.

n        Research Update Included

Monsoon Economy Update; September 29, 2010; Ending on a positive note

Ending on a positive note

The southwest monsoon that started with a lag, turning sluggish immediately after, picked up quickly with increased momentum, ends on a positive note. The monsoon has covered 102% of its full season. The rainfall for the week ended September 29, 2010 was, ~37% below its long period average (LPA). The cumulative rainfall for the week ended September 29, 2010 stood at ~2% above its LPA.

The number of divisions experiencing excess/normal rainfall remained unchanged at 31 from last week. The number of regions experiencing scanty rainfall stood at 5 and has not changed since the previous week.

Cumulative rainfall ends at ~2% above LPA

The season ending September 29, 2010, saw the cumulative rainfall deficit ending in the green at 2.5% above LPA. Rain dependent areas stood at ~4% above their LPA and rain-fed areas at 2.1% below theirs. Rainfall deficits in all regions have ended in positive territory with normal rainfall, except for the five regions that have been consistently hit by deficit. The regions with significant deficits in increasing intensities are Bihar, East Uttar Pradesh, Assam & Meghalaya, Gangetic West Bengal and Jharkhand.

Monsoon at 102% of its full season

The monsoon as a % of its full season stands at 102. Improvement in rain dependant areas has significantly contributed to this betterment with rainfall at ~103% of its full season. Well irrigated and rain-fed areas closed at ~90% and ~99% of their full season respectively.

Reservoir levels at 75% of their FRL’s

The reservoir levels stand at 75% of their full reservoir level (FRL) and at 114% of their LPA. Prospects of a good rabi crop seem promising with the robust pick up in reservoir levels.

Forecast rainfall for parts of south peninsula and east India

As the season comes to an end, so does the incidence of rainfall. The weekly rainfall for the previous week saw reduced momentum, indicating a gradual end to season. However, good showers are expected in the regions of Kerela, south Karnataka and west Tamil Nadu.

Acreage for kharif crops at ~1006 lakh hectares

Kharif crop acreage has touched 1006.24 lakh hectares (lh) as of 24th September 2010. This is a ~7% increase over the acreage of last year. Of the major crops, acreage for rice has seen an increase of ~7% over last year, pulses by ~22% and sugarcane by ~17%. Oilseed acreage has seen a meagre 0.5% increase over the same period last year and coarse cereals have seen a modest increase of 2.3%.Deficient rainfall in rice producing regions of West Bengal, Bihar and Jharkhand would affect the final production of rice. 

n        Technical Comments

Bullish momentum still alive

Nifty rallied for fifth consecutive week to conclude with a gain of 250 odd points on weekly basis. Nifty closed above another psychologically important level of 6100 on buying across the sectors; even it touched 6150 in an intraday trade. Moreover, by the end of today’s session the momentum oscillator MACD also started diverging from its signal, which indicates that the bullish momentum is still alive and upsides are still not capped. Also there was a positive crossover of 20- and 50- hourly moving averages during the course of the day, which again indicates that the current trend is gaining strength. Hence ride the trend upto 6250.

BSE IT

Today’s price action of IT index indicates that a fresh leg of impulse have just begun, whose target is coming in the region of 6400. Moreover, the daily Stochastic Oscillator has also given a buy signal, which confirms our bullish viewpoint.

BSE Metal

Since the BSE Metal Index has touched our mentioned target of 17500 and has started ‘‘walking the upper Bollinger band’’, we are now revising our target further upto 17900 level.