Markets Today

It was a eventful day for Indian markets as opened with bang but slipped in red taking the Sensex sub 17,300 levels but bounced back inching towards the 18,000 levels. Sensex graph was typically V shaped, closing near the high point of the day.
It was a historic day in rems of volume also with over Rs 130,000 crore. The cues from Asia were mixed and even Europe opened flat.
Asia ended mixed, Hang Seng is down over 1600 points from the day's high. Hang Seng was down over 2% as there have been talks of FIIs reducing their holdings in Hong Kong-listed Chinese firms.
Realty, IT, power, capital goods and oil & gas were among the top gainers. Selling pressure was seen in select pharma consumer durables and cement stocks. Broader markets underperformed the benchmark indices.
Top gainers on the Sensex were DLF, Infosys, HDFC, ICICI, Tata Power, Sterlite Ind, Suzlon Eergy, NTPC, Reliance Comm, Reliance Energy and Reliance.
Cipla, Ranbaxy, Ambuja Cements, SBI, Tata Steel, GAIL, MTNL were among the top losers.
Suzlon has bagged 150 MW order from DLF and the stock is up over 3%.
Sensex was up 518.42 points or 2.99% at 17847.04, and the Nifty up 141.85 points or 2.80% at 5210.80.
About 1221 shares have advanced, 1762 shares declined, and 52 shares are unchanged.
The BSE Small Cap Index closed at 9,108.70 down 0.8%.
The BSE Midcap Index ended at 7,540.54 up 0.2%.
The BSE FMCG Index closed at 2,157.31 up 0.3%. Marico, Tata Tea, Dabur India, Colgate closed in green.
The BSE Metal Index closed at 14,180.50 up 2%. Hindalco, Hind Zinc, Sesa Goa, Sterlite Ind, Jindal Steel were among the gainers.
The BSE Health Care Index was down 0.5% at 3,817.82. Orchid Chemical, Glenmark, Cipla, Sun Pharma closed higher.
The BSE Capital Goods Index was up 2.6% at 15,064.27. Greaves Cotton, BEML, Jyoti Structure, Reliance Infra, BHEL ended higher.
The BSE Auto Index closed at 5,399.60 up 1.6%. Tata Motors, Maruti Udyog, Bajaj Auto, Mah and Mah, Bharat Forge were among the gainers
The BSE IT Index closed at 4,790.90 up 4%. Infosys, TCS, I-Flex Solution, Tech Mahindra, Mphasis, HCL Tech ended higher.
The BSE Bankex was up 2% at 9,575.59. Karnataka Bank, Kotak Mahindra, ICICI Bank, Federal Bank Axis Bank, SBI, HDFC Bank closed higher.
The BSE Oil and Gas Index closed at 10,008.53 up 3.4%. Reliance, BPCL, IOC, ONGC closed in green
The NSE cash turnover was at Rs 24819.65 crore and the NSE F&O turnover was at Rs 105619 crore. The BSE cash turnover was Rs 10023.92 crore. Total market wide turnover was at Rs 140462.57 crore.

Intraday Calls for 3rd October

Market can open with a gap up but remain very volatile whole day. A strong rally expected.

Sensex Support 17200, 17040 and Resistance 17500
Nifty Support 5040, 5000 and Resistance 5090, 5120

Buys for Intraday:

RCOM (612) Target 630 SL 608
Tata Power (910) Target 925-935 SL 905
GMR Infra (179) Target 185
Renuka Sugar (730) Target 740-745 SL 725
NTPC (206) Target 212-215 SL 203
Aptech (407) Target 415-420 SL 404
Sel Manufacturing (118) Target 125 SL 115
GTL Infra (40.50) Target 43-45 SL 39
Divis Lab (1340) Target 1375 SL 1330
Binani Zinc (270) Target 285 SL 265
REL (1350) Target 1375-1390 SL 1340

Others: Agro Dutch, Surya Pharam, Usha Martin, Spentex Ltd., Mount Shivalik,

Good Luck

KPIT Cummins Target Rs. 178

KPIT Cummins Infosystems Ltd.
(Rs 120, FY09E - EPS Rs 10.9, P/E 11x, Target price: Rs. 178)

KPIT Cummins is the first Indian Company to receive Jaspar membership
KPIT Cummins Infosystems Ltd (KPIT), one of the premium members of AUTOSAR (Automotive Open System Architecture), has joined Jaspar (Japan Automotive Software Platform Architecture). Jaspar is a consortium of automotive manufacturers and suppliers working together to develop and establish a standard Japan Automotive Platform Architecture where as AUTOSAR is a partnership between these manufacturers and suppliers to develop and establish a de-facto open industry standard for automotive electrical/electronic architectures. KPIT is the first and the only Indian company which has become part of the Japan-based consortium. KPIT had recently began its partnership with Renesas for one of the largest outsourcing deals in Japan, in the area of semiconductors.
Jaspar:
Jaspar’s objective is to promote automotive software technology and to cut development costs by encouraging Japanese companies to collaboratively develop non-competitive technologies such as automotive LAN (Local Area Network) enabling technology, middleware and software platforms. Jaspar addresses the escalating need for efficient cars and the increasingly stringent legislations for car safety in Japan. As the density of in-vehicle electrical integration and networked systems increases, there is a growing need to develop non-competitive technology on a common platform, at a reduced cost. Car safety requires complex electronic components, which need to collaborate in harmony for safer and more reliable ride. Jaspar connects auto OEMs and suppliers to understand common problems faced by the industry and provide solution by combined efforts. The
consortium carries out activities concerning software and networks for electronic vehicle control systems including survey, research, technological development, specification development and activities related to intellectual properties.
Jaspar is responsible for defining uniform, interchangeable high-speed bus architecture for the Japanese car industry and aims to contribute technical support to international standardization of communication in the areas of auto & electronic software and contribute to the development of global standards, on the whole.
Advantages to KPIT through Jaspar membership:
Having received the membership, KPIT Cummins is able to use Jaspar specifications to develop tools in compliance with Jaspar standards for the Japanese automotive market. AUTOSAR standards would be modified by Jaspar to meet Japan car makers needs/domestic needs.
Jaspar membership enables access to technology development requirements of participating OEMs as well as preferential access to the outcome of the joint development and most importantly reduces the software development cost. KPIT is going to be benifitted getting access to these requirements.
KPIT’s position will further strengthen in Japan as it can enhance its contribution to the world of automotive electronics in Japan by deeper understanding of local market and existing customers. Over the years, KPIT Cummins has established a leadership position and domain expertise in automotive & semiconductor solutions, partnering with some of the major European, North American & Japanese OEMs and Tier-1s.
Business Outlook and Valuation:
KPIT Cummins has been able to build its presence both organically and inorganically in last few quarters. Growth visibility of the company continues to be strong with recent partnerships and inorganic initiatives coupled with strong ramp up in both Star and Non Star customers.
KPIT has demonstrated its ability to grow on the back of its strong focus on the automotive and semiconductor verticals. The Japanese market is strong in both these verticals. KPIT currently gets about 12% of its revenues from rest of the world (primarily Japan) and expects this to touch to about 20% till 2010. We believe that KPIT’s membership with Jaspar is an excellent platform where the company can both gain and contribute knowledge and expertise in the focused area of Automotive Electronics in the Japanese market. At the same time, KPIT has been able to reduce its dependence on Cummins, from 44% a year ago to 39% today.
However, on the margin front, concern still remains on account of appreciating rupee scenario. About 60% of the company’s revenues come from US making it susceptible to unfavorable rupee movements. KPIT has tried to create geographical diversification, and Europe now accounts for almost 30 per cent of its turnover, which has doubtless helped manage financial results in the face of dollar depreciation.
We expect KPIT’s revenue and net profit to grow at a CAGR of 28% and 25% respectively over FY07A-09E.
Year Ended FY07A FY08E FY09E
Net Sales (Rs Mn) 4637.0 5943.0 7689.5
EBITDA (Rs Mn) 707.8 965.1 1280.4
OPM% 15.3 16.2 16.7
Net Profit (Rs Mn) 504.8 654.1 829.9
EPS (Rs) 6.6 8.6 10.9
P/E (x) @ Rs 120 18.2 14.0 11.0

KPIT stock trades at a P/E of 14x FY08E and 11x FY09E. We continue to maintain a BUY on KPIT with our previous target price of Rs 178. At our target price the stock trades 20.7x and 16.3x EPS for FY08E & FY09E respectively (based on fully diluted equity of Rs 152.5 mn). We continue to maintain a BUY on KPIT with our previous target price of Rs 178.

Source:emkayshare.com

Markets Today

The markets ended in green with moderate gains on account of buying support from the host of energy stocks. Oil & gas, power were among the performers of the day.
The breadth was also positive as the midcap and smallcap indices have outperformed the benchmark indices. Oil & gas sstocks like ONGC, GAIL were up and power stocks like NTPC, Tata Power have surged. Pharma stocks were also trading smart on the bourses. ADAG group stocks like Reliance Capital surged yet another day.
IT stocks were under pressure due to ongoing appreciation in the rupee. Banking stocks were down on the speculation that RBI may hike CRR in near future. Select metal stocks were also down.
NTPC, ONGC, Reliance Communication, Tata Power and GAIL were among the major gainers on the indices.
SBI, BHEL, HCL Tech and ITC were among the top losers on the indices.
Select auto stocks recovered from its lows today on the back of good auto sales numbers in the month of September. Hero Honda's September sales was at 3.14 lakh units versus 2.4 lakh (MoM). Bajaj Auto sep sales was at 2.32 lk units vs 1.96 lk (MoM). Maruti and TVS has also announced good numbers today.
Sensex was up 37.52 points or 0.22% at 17328.62, and the Nifty up 47.60 points or 0.95% at 5068.95.
About 1740 shares have advanced, 1213 shares declined, and 80 shares are unchanged.
The BSE Small Cap Index closed at 9,184.52 up 1%.
The BSE Midcap Index ended at 7,528.64 up 1.4%.
The BSE FMCG Index closed at 2,151.10 down 0.5%. Nestle, Godrej Consumer, GlaxoSmith Con, United Brewerie, ITC closed in red.
The BSE Metal Index closed at 13,899.77 down 0.3%. Sterlite Ind, Sesa Goa, Tata Steel, SAIL, Hindalco, Shree Precoated were among the gainers.
The BSE Health Care Index was up 1.4% at 3,837.15. Divis Labs, Novartis India, Cipla, Biocon, Lupin closed higher.
The BSE Capital Goods Index flat at 14,688.96. Reliance Infra, Gammon India, Crompton Greave, BEML, Lakshmi Machine ended higher.
The BSE Auto Index closed at 5,316.33 down 0.3%. Hero Honda, Bajaj Auto, Tata Motors, Punj Tractors were among the losers.
The BSE IT Index closed at 4,598.11 down 0.6%. Tech Mahindra, TCS, Mphasis, HCL Tech ended lower.
The BSE Bankex was down 1% at 9,395.78. Axis Bank, SBI, HDFC Bank, Bank of India, Andhra Bank closed lower.
The BSE Oil and Gas Index closed at 9,682.59 up 1.3%. BPCL, GAIL, IOC, Essar Oil, ONGC closed in green
The NSE cash turnover was at Rs 17331.97 crore and the NSE F&O turnover was at Rs 61451.29 crore. The BSE cash turnover was Rs 7201.34 crore. Total market wide turnover was at Rs 85984.6 crore.

source:moneycontrol.com

Intraday Calls for 01st October

Market can take some rest here and may open positive but remain flat to positive.

Buys for intraday:

Bharati Shipyard (590)
Allied Digital (378)
Hindustan Zinc (812)
Balaji Telefilms (260)
Pioner Embro (148)
RPL (153)
GMR Infra (173)
Zee Entertainment (342)
REL (1205)
Visu International (17.50)
TTML (43)
Fert. & Chem (FACT) (28.85)

Good Luck

Monthly Technical Picks

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Investment Idea

Kirloskar Electric Company Ltd
CMP 271
Target 361
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