Technicals: Bank of India, Carborundum, Hindustan Copper, Hindustan Zinc, Reliance Industrial Infrastructure, Deepak Fertilizers :: Business Line

Technicals-Hindustan Copper, Greaves Cotton, Praj Industries, JB Chemicals, Sobha Developers, Bharat Electronics :: Business Line

Hindustan Copper Ltd.:: Q3FY12 – Net sales growth driven by strong volume from copper CC rod • GEPL

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Q3FY12 – Net sales growth driven by strong volume from copper CC rod
• Net sales for the Q3FY12 stood at `3,465 mn, showing a growth of 12.6% Y-o-Y and 28.4%
sequentially. This was mainly on account of strong increase in sales volume of Copper CC rods.
• Total expenditure rose by 73.2% Y-o-Y; which was partly on account of increase in production
volume and rise in other expenditure. The other expenditure which accounted for 51% of the
overall expense rose by 47.7% on Y-o-Y. The power & fuel cost which accounted for 16.7% of
the overall cost rose by 25.7% on Y-o-Y basis.
• As a result of increase in production costs coupled with decrease in realisation of copper CC
rods; EBIDTA margins for Q3FY12 declined by 1,064bps to 26.8% Y-o-Y.
Result Highlights
Significant growth in volume for copper CC rod contributed to the growth
Copper CC rod accounted for 96% of total revenue in Q3FY12. The volume for Copper CC rods in
Q3FY12 grew by 34.6% Y-o-Y and 98.3% Q-o-Q. However; realisation for the products were lower by
4.7% Y-o-Y and 9.9% Q-o-Q. Similarly, Copper cathode which accounted for 3.6% of total revenues
in Q3FY12; saw sales volume decline by 82.7% Y-o-Y and 83.5% Q-o-Q. However; the realisation for
copper cathode rose by 2.3% Y-o-Y.
Valuation & Viewpoint
At current market price the stock is trading at 100.3x its EV/EBIDTA and 111.3x its P/E (trailing 12
months). The average P/E for the sector stands at 47.9x making us believe the current valuation
are stretched and could result in the stock correcting in the future.

Sizzling Stocks: Hindustan Copper; RCF :: Business Line

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Hindustan Copper (Rs 291.7)

Hindustan Copper skyrocketed 56 per cent accompanied by extraordinary volume in the previous week. While trending higher, the stock emphatically broke through its key resistance at Rs 250 and also its 200-day moving average. Moreover, in the last week, the stock has conclusively penetrated its long-term down trend-line that was in place since its January 2010 peak of Rs 656. Strong move above Rs 300 will take the stock higher to Rs 350 or to Rs 400 in the medium-term.

Nevertheless, it currently faces resistance at Rs 300. The stock's daily indicators and oscillator have reached over brought levels, signalling that the stock can witness a corrective decline to Rs 270 or Rs 250 the near-term. Next support for the stock is at Rs 200.

RCF (Rs 65.5)

Rashtriya Chemicals and Fertilizers zoomed almost 42 per cent in the previous week, backed with heavy volume. The stock has been trending higher from its 52-week low of Rs 42 registered on December 20. However, it is facing significant long-term resistance in the band between Rs 70 and Rs 73. An emphatic jump above this resistance will alter the trend upwards and pave the way for the stock to rally to Rs 80 and to Rs 88 levels in the medium-term.

Inability to exceed the above mentioned resistance band will drag the stock down to Rs 61 and then to Rs 55. Next key support below Rs 55 is at Rs 50.

Sizzling Stocks: Hindustan Copper ,United Spirits : Bussiness Line

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Hindustan Copper did a volte-face last week and skyrocketed 37 per cent for the week. It breached its medium-term key resistance as well as 50-day moving average around Rs 300 on Friday, by gaining more than 11 per cent with extra-ordinary volumes. The stock now faces its next important resistance at Rs 350. Inability to surpass this resistance will result in the stock moving sideways in the range between Rs 350 and Rs 300 before it trends upward.

Strong weekly close above Rs 350 will push the stock higher to its long-term resistance level of Rs 400 in 

the upcoming months. Key supports are pegged at Rs 300 and Rs 250.

United Spirits (Rs 1,190.9)

The stock bounced up 19 per cent taking support from a psychological support level of Rs 1,000 last week. Nevertheless, it encountered a long-term significant resistance at Rs 1,200 and is currently testing it. Strong close above this level would lift the stock higher to Rs 1,300 and then to Rs 1,400. Reversal from the current resistance will drag the stock down to Rs 1,100 or even to Rs 1,000 in the weeks ahead.

Medium-term trend is down for the stock since its October 2010 peak of Rs 1,683.

Decisive weekly close above Rs 1,400 will mitigate this downtrend and push the stock higher to its Rs 1,500 resistance level.