Intraday Trading Calls for 16th December

Indian Stock Market may open flat to positive and remains positive with very high volatility today.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
CIPLA	Buy Above	347.25	353.50	360.00
	Sell Below	343.05	337.50	332.00
VIDEOCON INDUSTRIES	Buy Above	217.50	222.45	228.00
	Sell Below	214.70	209.30	203.00
SUNPHARMA ADVANCE	Buy Above	85.25	88.50	92.00
	Sell Below	83.50	80.35	76.00
RENUKA SUGAR	Buy Above	216.55	221.30	226.00
	Sell Below	213.40	208.65	203.00
BALRAMPUR CHINI	Buy Above	136.25	140.10	145.00
	Sell Below	134.05	131.20	128.00
APTECH LTD.	Buy Above	180.60	185.35	191.00
	Sell Below	178.45	175.10	170.00
CAIRN INDIA	Buy Above	270.10	275.40	280.00
	Sell Below	267.20	262.55	258.00

GOOD LUCK

Q3 Advance Tax Numbers

The deadline for payment of the third instalment of the advance tax was today, December 15, 2009 and looks like, it has been a set of mixed bag. Advance tax payments are made by companies based on their internal estimate of the year’s profit. And looks like, many companies are expecting to celebrate this fiscal on healthier numbers.
As expected, the auto companies, currently speeding in third gear, have paid robust Q3 advance taxes. Tata Motors, which, last year this time was staring at a uphill road, and had paid no advance tax at all in Q3FY09, this third quarter, has paid Rs.100 crore. Bajaj Auto paid Rs.320 cr v/s Rs 105 cr (YoY) while M&M paid Rs 195 cr v/s Rs 4.5 cr (YoY).
The oil companies are clearly hurting a lot and the pain will be felt by the Treasury too! Indian Oil and BPCL have paid zero advance tax for Q3FY10.
The numbers from banks have been mixed, which is probably why the banking stocks faced some battering. ICICI Bank was the big disappointment; its outgo YoY dropped 52%. On the other hand, SBI did not disappoint and it remained the highest advance tax payer as always, at Rs.1800 crore v/s Rs.1700 crore (YoY). PNB, IDBI Bank and IndusInd Bank paid a very high Q3 advance tax. But this was more or less lost on the market which fixated only on ICICI Bank. Expected lower credit disbursals could be one big reason why some banks have kept the advance numbers for Q3 a bit subdued.
The collection from the cement sector has been good, indicating things have are on a sound ground. Grasim and Ultratech paid more but ACC showed a 12% drop on a YoY. Ambuja Cement kept the payment status quo at Rs.140 crore, same as what it had paid in Q3FY09.
India’s largest private sector company, Reliance Inds did not disappoint and it paid 89% more at Rs.850 crore v/s Rs.450 crore paid in Q3FY09.
The big FMCG company, HUL paid very well – it paid Rs.200 crore v/s Rs.155 crore on YoY. Till Q3, rural spending has held out and now with just one quarter to go, irrespective of how the rural spending pans out, HUL’s advance tax payment in current fiscal would surely be on a higher note.
The most robust number, in terms of YoY improvement has been from M&M, a 4233% rise and Century Textiles, showing a whopping 1533% rise. L&T posting a subdued tax outgo, though disappointing, is in line with the financial performance it has posted till now.
Irrespective of the subdued payments made by the banks, the overall picture does look good. The robust numbers clearly reiterates what the IIP numbers have indicated – the economy is doing well.
If we look at the total advance tax paid by companies for FY10, till Q3, the number far exceeds that paid in FY09. And that in itself is a huge positive. Probably that is what the markets need to concentrate on, rather than just the smaller picture of one quarter.
COMPANY Q3FY10 Q3FY09 %
Reliance Inds 850 450 89
ICICI Bank 301 625 (52)
Tata Motors 100 -
Tata Steel 650 260 150
Tata Chemicals 40 83 (52)
TCS 177 129 37
L&T 270 312 (13)
HDFC 320 280 14
Hindalco 100 40 150
Bank of India 102 370 (72)
Bank of Baroda 330 220 50
Dena Bank 65 60 8

SBI 1800 1700 6
Central Bank 138 163 (15)
IndusInd Bank 65 22 195
IDBI Bank 74 19 295
PNB 618 505 22
Asian Paints 120 45 167
Glaxosmithkline 85 67 27
Century Textiles 49 3 1533
Crompton Greaves 72 50 44
ACC 110 125 (12)
Grasim 150 75 100
Ultratech 90 65 38
Ambuja Cement 140 140 -
HUL 200 155 29
Bajaj Auto 320 105 205
M&M 195 4.5 4233
(Rs in crores)

Intraday Trading Calls for 15th December

Indian Stock Market may open flat to positive and remains positive with very high volatility today.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
INDIA CEMENT	Buy Above	121.05	125.10	130.00
	Sell Below	119.75	115.60	112.00
MANGALAM CEMENT	Buy Above	138.25	143.15	148.00
	Sell Below	136.45	132.55	128.00
CEAT LTD	Buy Above	142.10	146.65	152.00
	Sell Below	139.40	135.70	132.00
RENUKA SUGAR	Buy Above	210.05	215.70	222.00
	Sell Below	207.35	203.10	198.00
APTECH LTD.	Buy Above	193.25	198.55	205.00
	Sell Below	191.20	187.35	182.00
NAGARJUNA CONSTRUCT	Buy Above	156.70	160.30	164.00
	Sell Below	155.35	152.10	148.00
CAIRN INDIA	Buy Above	271.50	276.35	282.00
	Sell Below	269.40	265.70	261.00

GOOD LUCK

Stock Idea: Dr. Reddy’s Laboratories Ltd

Dr. Reddy’s Laboratories Ltd— BUY—1100—INR
Sector — Pharmaceuticals (Bulk Drugs & Formulations)
Regd.Off.— 7-1-27, Ameerpeth, Hyderabad – 500016
Listed — NSE, BSE.
Company overview—
Company was incorporated on 2nd November 1985. Dr. K. Anji Reddy and his associates promoted company. Company established a subsidiary named “Dr. Reddy's Diagnostics Ltd.” for the manufacture of diagnostics kits. Company also formed a joint venture “Reddy Biomed Ltd.” with a Russian company for manufacturing and marketing formulation in Russia. Its diagnostics division has a technical collaboration with Board of Radiation and Isotope, technology for manufacture & marketing of radio immunoassay kits for the production of diagnostic and therapeutic recombinant protections. The Bio-technology has a technical collaboration agreement with Viral Therapeutics Inc. U.S.A. Company has a Critical care division to commercialize products from the research foundation and the first product to be marketed by the division was Miitotax an anti-cancer product used in the treatment of breast and ovarian cancer. Company has launched its first anti-cancer drug Mitotax (Paclitaxel) in 1998. The product is produced in-house at Dr. Reddy's Research Foundation (DRF) from the extracts of the yew tree and formulated in Hyderabad. Company has effluent treatment plant at its bulk pharmaceuticals manufacturing facility located at Bollaram Industrial Development Area. Company also started a new trend in the Indian pharmaceutical sector by installing a “satellite” discovery research laboratory in the United States. In April 2001 Company got listing in the New York Stock Exchange (NYSE). Company merged “Zenovus Biotech Ltd.”, a wholly owned subsidiary to enhance its strength into biotech. Company has over 950 scientists working across the globe, around the clock. Company continues its relentless march forward to discover and deliver a breakthrough medicine to address an unmet medical need and make a difference to people’s lives worldwide.
Products & services—
Company manufactures and markets Active Pharmaceutical Ingredients, Finished Dosages and Biologics in over 100 countries worldwide, in addition to having a very promising Drug Discovery Pipeline. When Dr. Reddy’s started its first big move in 1986 from manufacturing and marketing bulk actives to the domestic (Indian) market to manufacturing and exporting difficult-to-manufacture bulk actives such as Methyldopa to highly regulated overseas markets. Dr. Reddy in stark contrast is known globally for its proven high quality-low cost manufacturer in delivering safe and effective pharmaceuticals.
Company’s product portfolio spans an impressive mix of Active Pharmaceutical Ingredients, Generics and Branded Formulations as well as Biologics. In the API Segment Company manufactures Anti viral, Anti Hypertensive, muscle relaxant, Anti bacterial, Gastroprokinetic, Anti Thrombotic, Anti Fungal, Anti Histaminic, Anti Tussives, Anti inflammatory, Cardiovasculars, Anti Emetic, Nootopric, Anti ulcerant, Anti Histaminic, Anti Psychotic, Anti Convulsant, Quinolone, Anti Diarrheal, Gastroprokinetic, Anti Asthmatic, Anti Migraine, Anti Diabetic, Anti Depressant, Bronchodilator, etc. Company Markets Citalopram, Enalapril, Famotidine, Fluoxetine, Flucanozole, Ibuprofen, Oxaprozin, Ranitidine, Tizanidine and Ciprofloxacin in the USA market. Company supplies generics to the European and UK markets like Amlodipine Maleate, Bendroflumethiazide, Benzhexol (Trihexyphenidyl), Bisacodyl 5mg Tablets, Cetirizine Hydrochloride, Chlordiazeproxide, Chlorpromazine, Ciprofloxacin, Co-amilozide, Diazepam, Dipyridamole, Erythromycin, Fluconazole, Fluoxetine, Indometacin, Ketoconozole, Lamotrigine, Loratadine, Nitrofurantoin, Nizatidine, Omeprazole, Oxytetracycline, Pergolide, Piroxicam, Pravastatin, Prochlorperazine, Spironolactone, Sulfasalazine, Sumatriptan, Terbinafine, Trifluoperazine. Except the above company supplies Cetrine 10mg, Histalor 10, Ciprolet 250mg, Ciprolet 500mg, Sparflo, Stamlo 10mg, Stamlo 5mg, Enam 10mg, Resilo 25mg, Resilo 50mg, Reclide, Diavista 30, Zoran 150, Omez, Lostatin, Nise 100, Rafree 7.5, Ibuclin, Finast Tab to rest of the world. In the Biologics, company manufactures “GRAFEEL”. GRAFEEL regulates the production, maturation, and function of cells of the neutrophil lineage. GRAFEEL is used to treat cancer patients suffering from chemotherapy-induced neutropenia.
Recent Developments—
GlaxoSmithKline is in talks to pick up a 5% stake in Dr Reddy`s Laboratories (DRL) in order to strengthen its association with the Dr Reddy’s. The lines of the discussion suggest that the foreign company (GSK) may acquire fresh shares of DRL, which will impact the promoters shareholding marginally, and it may reserve the right of first refusal should the promoters decide to sell their stake in future.
Dr Reddy’s has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Fexofenadine Hydrochloride; Pseudoephedrine Hydrochloride , in strengths of 60 mg and 120 mg. The said drug is an antihistamine and a decongestant. This medicine is used to treat or prevent symptoms of allergies.
Valuation—
Company is one of the leading players into Indian pharmaceuticals market. It derives more than 25% of its revenue from US markets. At current market price, stock is trading at 20.67 P/E multiple of its FY2010 estimated EPS. We recommend investors to buy “Dr. Reddy’s Laboratories” with Medium to long-term investment prospective.
Source: Internet (Valuenotes by Abhishek Jain)

Intraday Trading Calls for 14th December

Indian Stock Market may open negative and remains negative for the day today.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
INDIA CEMENT	Buy Above	116.75	120.20	124.00
	Sell Below	115.35	112.40	108.00
TANLA SOLUTIONS	Buy Above	59.70	62.35	65.00
	Sell Below	58.40	56.25	54.00
ROLTA INDIA	Buy Above	185.25	190.25	195.00
	Sell Below	183.50	179.20	175.00
RENUKA SUGAR	Buy Above	213.60	217.55	224.00
	Sell Below	211.35	207.60	202.00
BRFL	Buy Above	192.10	197.45	202.00
	Sell Below	189.80	185.25	181.00
IRB INFRA	Buy Above	246.50	252.15	258.00
	Sell Below	244.15	239.45	234.00
GSS AMERICA	Buy Above	282.40	288.75	295.00
	Sell Below	278.50	272.70	265.00

Buy Vishal Information Technologies Ltd. (533011) CMP Rs. 15/- Short to Medium Term Target Rs. 25/-, Rs. 30/-.
GOOD LUCK

Stock Idea: ABB Limited

ABB Limited— BUY—735—INR
Sector — Engineering (others)
Regd.Off.— Khanija Bhavan, 49, Race Course Road, Bangalore – 560001
Listed — NSE, BSE.
Company overview—
Company was incorporated on 24th December 1949, at Mumbai. Company was involved mainly into manufacturing of transformers, electric motors, all-aluminium conductors, furnaces, extra H.T. air blast circuit breakers, panels and switchboards. Company’s parent ABB group, have more than 1000 companies, has operations in more than 100 countries and is involved in power generation, transmission and distribution (T&D), industrial equipments and systems, and factory automation. Company started Project for the manufacturing of industrial steam turbines with Gujarat Industrial Investment Corporation Ltd. with Government approving the collaboration agreement with AG Kunhle, Kopp & Kausch, West Germany. Company set up "Integra Hindustan Control Ltd." for the manufacture of relay and signalling equipment for the Railways using technology of Integra Ltd., Zurich, Switzerland. This project was set up at Halol in Panchmahan district of Gujarat State. Company also established National switchgears Limited, jointly with Pradeshiya Industrial and Investment Corporation of U.P. Ltd. Company formed a JV with Danish Windpower A/s, Denmark for the manufacture of wind energy conversion systems. Company also set up a factory at Mysore in Karnataka State for the manufacture of various electronics products including EPABX exchanges. Company introduced broad range of transformers, wiring accessories including switches, regulators and sockets for Indian market.
Products & Services—
Company is a leader in power and automation technologies in India that enable utility and industry customers to improve performance while lowering environmental impact. Company has 8 manufacturing units, 4 service centers, 25 marketing offices and 3 training centers in its list. Company also employs more than 3200 employees in India. ABB India serves utility and industry customers with the complete range of power, automation and industrial solutions. Company has a vast installed base, extensive local manufacturing at 8 units and a countrywide marketing and service presence. ABB has a national channel partner network, for the purpose of geographical reach and penetration of its products and services. In order to leverage India’s intrinsic technology strengths and the vast pool of highly qualified software professionals, ABB has set up a global R&D Centre in Bangalore, which focuses on Industrial IT development and deployment. It also helps maintain and support a range of software intensive products and acts as a partner for the ABB R&D centers as well as business areas within the group. Company is involved into manufacturing of control systems, Medium Voltage products, Force measurements, High voltage products (>50 KV), industry solutions, instrumentation and analytical, Low voltage Products (<1KV), Medium voltage products (1-50KV), motors, drives and power electronics, Power semiconductors, Robotics, Services, Transformers, Turbo-charging and industry Specific products.
The main areas for which company provides its services are —
Power Products: Power Products division incorporates ABB's manufacturing network for transformers, switchgear, circuit breakers, cables and associated equipment. It also offers all the services needed to ensure products' performance and extend their lifespan. The division is subdivided into three business units.
Power Systems: Power Systems offers turnkey systems and services for power transmission and distribution grids, and for power plants. Substations and substation automation systems are key areas. Additional highlights include flexible alternating current transmission systems (FACTS), high-voltage direct current (HVDC) systems and network management systems. In power generation, Power Systems offers the instrumentation, control and electrification of power plants. The division is subdivided into four business units.
Automation Products: This business serves customers with energy efficient and reliable products to improve customers' productivity, including drives, motors and generators, low voltage products, instrumentation and analytical, and power electronics. More than one million products are shipped daily to end customers and channel partners, spanning a wide range of industry and utility operations, plus commercial and residential buildings.
Process Automation: The main focus of this business is to provide customers with integrated solutions for control, plant optimization, and industry-specific application knowledge. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and turbo charging.
Robotics: Company has the world's largest installed base of industrial robots. Company also provides robot software, peripheral equipment and modular manufacturing cells for tasks such as assembly, painting and finishing, and machine tending. Key markets include automotive, foundry, packaging, material handling and consumer industries.
Recent developments—
In July, ABB has won orders worth Rs 14.10 billion from Maharashtra State Electricity Transmission Company (MSETCL) for substations to help improve the efficiency and reliability of the state’s network. The 220kv and 132kV substations will be located in the Nashik, Amravati and Nagpur zones of the western Indian state of Maharashtra, and are an integral part of MSETCL’s efforts to reduce transmission and distribution losses. The project is scheduled for completion in 2010.
In august, ABB has won Rs 1,283 million order from Power Grid corporation of India (PGCIL), for a 400-kV gas insulated switchgear (GIS) substation to strengthen the power transmission network in the country’s western grid. The substation will be located in Navsari, in the western Indian state of Gujarat. ABB will be responsible for the system design and engineering, civil works, supply, installation and commissioning. Major products included in the order are 400-kV and 220-kV gas insulated switchgear, transformers as well as control and relay panels. The project is scheduled for completion in 2011.
In December, ABB has won Rs 5.06 billion order from Bangalore Metro Rail Corporation (BMRCL) to provide power solutions for a planned metro network in Bangalore, India’s leading technology hub. It is a turnkey project for the first phase of the Bangalore mass rapid transport system (MRTS), which comprises two main lines covering 42 km of distance, about one-fifth of it underground, and serving 41 stations. ABB will design, supply, install and commission four substations that receive and distribute electricity, each rated at 66/33 kilovolts, as well as the auxiliary and traction substations.
Valuation—
At current market price, stock is trading at 26.5 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “ABB Limited” with medium to long-term investment horizon.

Source: Internet (Valuenotes by Abhishek Jain)

Stock Idea: Allied Digital Services Ltd (ADSL)

Allied Digital Services Ltd (Rs 226)
(BSE Code- 532875, NSE Code- ADSL)
(P/E - 8, Equity - Rs18.18 cr, Market Cap - Rs822 cr)
As businesses around the world grow, so do their IT spend and the complexity in managing IT infrastructures. With companies having their offices at multiple locations, it has become very important that their IT infrastructure is secure and running all the time. For this, outsourcing IT infrastructure to experts is the viable solution for any organisation, so that it can spend resources on its core activities and thereby save time and money. This trend favours IT infrastructure management company - Allied Digital Services (ADS), which has to its credit, the first Security Operation Center (SOC) that provides proactive protection and risk management for enterprise security round the clock. ADS is riding on high-growth domestic markets of system integration (SI); IT infrastructure management services (IMS) and remote infrastructure management (RIM). RIM is expected to be $13-15bn opportunity for the Indian IT industry by 2013 from the current $3.6 bn, as per the latest Nasscom and McKinsey report. Recent acquisition of EnPointe Global Services (EGS), the US-based IMS provider, marks ADS’s foray into international markets
ADS is into IT infrastructure management, security management and technical support services. The company, which has long been present in the domestic market, is now also looking at global markets. The company has started venturing into overseas territory, mainly the US and Australia. It acquired a US company called EnPointe Global Services, a carved-out subsidiary of Nasdaq-listed EnPointe Technologies in July this year. Since the deal is a mix of cash and stocks, Allied Digital will leverage the sales and marketing expertise of the parent company (EnPointe Technologies), which holds stocks of Allied Digital. This will drive its overseas earnings in future.
On the domestic front, the company sees IT-enabled services, pharma outsourcing, knowledge process outsourcing and contract manufacturing as some of the demand growth areas for its Network and security operations.
System integration, which involves designing and setting up of IT infrastructure for enterprises, accounts for 70% of ADS’s revenue and enjoys EBIDTA margins of about 18%. The balance 30% of the revenue is generated from ‘services’ comprising of Infrastructure Management Services (IMS), annual maintenance contracts and technical support. The company is working towards increasing the contribution from services to about 50% by FY10 as it enjoys a much higher EBIDTA margin of 50-60%. The company enjoys 13% market share in the domestic IMS segment and caters to a diverse customer base across the banking, manufacturing, retail, telecom and BPO industries. As per McKinsey, the global IMS industry size is estimated at $524 billion in 2008. Out of this, the addressable market for remote IT infrastructure management services (RMS) is estimated at $104 billion. RMS is a major thrust area for ADS. Through a global development centre, which comprises Network Operation Center (NOC) and Security Operation Center (SOC), ADS provides remote management services
ADS delivers services through its own facilities and centres, spread across 92 cities and follows a ‘direct’ model rather than a franchisee model, as adopted by its peers. This gives the company a direct control on the quality of service and helps it maintain the desired level of efficiency due to uniformity in training. Also worth noting is the fact that, ADSL has a vendor neutral approach and does integration based on the customer’s requirement. This has led ADSL to be a solution partner for some of the big names in the industry and develop technical expertise over a vast range of products. Since security compliance would be a subject of meeting regulatory requirement, US economic slowdown will pose minimal risk to ADSL’s prospects, while the currency risk is limited as more than 90% of ADSL’s revenue come from domestic operations.
ADS’s revenues and profits have grown at a CAGR of 45% and 70%, respectively in the last three years. The company is expected to deliver a phenomenal CAGR of 90% in revenue and 92% in profit during FY08-FY10E on the back of exponential growth expected in the RMS segment and recent acquisitions. For the half year ended September 2009, ADS posted a growth of 24% y-o-y in total sales to Rs 325.24 cr. whereas net profit grew 20% to Rs 47.82 cr. on consolidated basis. For the year ended March 2009, ADS had posted net profit of Rs 79.6 cr.(up 86%) on net sales of Rs 530 cr. (up 78%). On a equity of 18.18 cr.(Promoters’stake- 55.59% FII / MF stake-18.16%), the EPS on a Rs 10 paid up share stood at Rs 44. ADS is expected to post a growth 30%-40% CAGR in EPS over next 3 years. Recently ADS split its shares from Rs 10 to Rs 5. At the current market price of Rs 226, the stock trades at 8.3x and 6.6x of FY10E (Rs 27) and FY11E earnings(Rs 34), respectively. Strong revenue visibility, changing business mix, improving margins and higher return ratio make it a good investment bet. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months.

Source: Internet (Valuenotes by Sanjay Chhabria)