Markets Today

Markets Snapshot
Markets recover from day's low, however profit booking seen at higher levels
Sensex ends down 205 pts at 17230.2; recovers nearly 100 pts from day's low
Nifty ends down 53 pts at 5105; recovers nearly 30 pts from day's low
CNX Midcap Index down 0.7%, BSE Small-cap Index outperforms all indices, ends up 0.44%
Interest rate sensitive sectors like Bank & Realty witness selling pressure
BSE Bank Index down 2.4%; SBI down 3.14%, HDFC Bank down 2.6%
BSE Realty Index down 1.9%, Unitech down 2.9%, DLF down 2%
Index losers; Rel Infra down 4.8%, BHEL down 3.5%, ABB down 3.1%, Bharti down 2.7%
Index gainers; Cairn India up 8.5% ((UBS upgrades to Buy from Sell and price target to Rs374 (from Rs246))
Sterlite Ind up 4.7%, Suzlon up 3.4%, May Sell Some Stake In REpower
Buzzers; Mundra Port up 14%, Videocon Ind up 16.5%, Adlabs up 6.6%, S Kumars up 5.4%, Sasken up 8%, Graphite India up 15.2%
Buzzers; Videocon Appliance, Tamilandu Petro, Hilton Metal up 20% each
NSE Advance Decline at 5:6
Total market turnover at Rs 52860 cr Vs Rs 57402 cr on Friday
Total NSE F&O turnover at Rs 33290 cr Vs Rs 37877 cr on Friday
F&O Snapshot
F&O action muted; very stock specific
Nifty seen short buildup; trades at a 10-15 point discount; Adds 34 lakh shares in Mar series
Turnover lower than last weeks average
Nifty 5100, 5200 Call adds over 1 lakh shares each
Nifty 5000, 4800 put sees unwinding of open interest
Long positions seen in Cairn, Suzlon, R Power, JSW Steel, SRF
Fresh shorts seen in NTPC, SAIL, Unitech, JP Associates, PFC, DLF
Unwiding of long positions seen in momentum stcoks like Chambal Fert, Nag Fert, IFCI, GMR Infra, Alok, RNRL, Arvind MIlls
Long Positions
Cairn India up 7.7%; add 24 lakh shares in OI
Suzlon up 3.7%; add 17.5 lakh shares in OI
R Power up 4.3%; add 8.7 lakh shares in OI
HDIL up 4.2%; add 8.6 lakh shares in OI
Unwinding of long positions
Chambal Fert down 2.6%; shed 13.8 lakh shares in OI
GMR Infra down 1.3%; shed 9.15 lakh shares in OI
Nag fert down 2%; shed 8.7 lakh shares in OI
RNRL down 2%; shed 4.6 lakh shares in OI

Source: moneycontrol.com

Investment Pick: Voltas

A Tata group company, the market did not take too kindly to the results of Voltas. The financial performance for year ended 31-03-08 can be labeled as consistent, not trailblazing, which is probably what the market expected.
The net sales of the company rose 26.8% at Rs.3,044.50 crore. Its operating expenses rose 22%. Yet, it managed to post a 76% higher EBIDTA at Rs.293.90 crore. PBT was up 38% at Rs.307.50 crores and PAT rose 12% at Rs.208.30 crore. On an equity of Rs.33.07 crore, its EPS stands at Rs.6.30.
Higher volumes managed to offset the rising prices and this helped its translation into better profits. Its engineering and machine tools division faced some slowdown.
The company is now looking at acquisitions, mainly in organic business and is scouting around in South Africa, North Africa, Vietnam, Singapore and Middle East.
Its order book was at Rs.800 crore in domestic market and Rs.3,800 crore in international market. The company is expecting manpower shortages in current fiscal in overseas market and to retain employees, it is considering pay hikes. Rising manpower costs is something that most companies will have to now learn to grapple with.
Voltas continues to be a good investment buy at the current price.

Source: sptulsian.com

Intraday Trading Calls for 20th May

Stock Market India may open flat and see some profit booking. It may remains rangebound of +/- 1%. A Nagetive closing expected.

Today's Intraday Trading Calls:

ORCHID CHEMICAL
GMR INFRA
BANK OF BARODA
KOLTE PATIL
S KUMAR NATIONWIDE
CAIRN INDIA

For Levels and Targets Download the file by CLICK HERE.

Others: Hind Oil Exploration, Selan, RPL as crude oil trading at all time high around $127.

Good Luck

Multibagger: Control Print (India) Ltd.

Control Print (India) Ltd.: Good growth potential
BSE Code: 522295
Book Value: Rs.47.53
EPS: Rs.9.15
P/E: 5.40
Dividend: 20%
Market Cap: Rs.37.18
Performance: Market out-performer
Target: Rs.130-160 in 18 months
Introduction: Control Print (India) Ltd. (CPL) began in 1991 with a dream of bringing Indian packaging at par with the international benchmarks in terms of coding & marking and is the undisputed market leader in the coding and marking machinery with a market share of around 40%. It has a product range of contact coders, superior touch coders, specialized metal marking systems, sophisticated ink jet coders and advanced laser coders that can be used to print on any type of surface like plastic, glass bottle, paper, wood, steel etc. The company operates in a single segment, viz. Coding & Marking machines and consumables thereof.
The company has entered into a technical collaboration with KBA-Metronic AG, Germany for manufacture of Industrial Ink-Jet Printers at Nalagarh, Himachal Pradesh. The company has also entered into technical collaboration for Thermal Transfer Overprinters, Large Character Printers and ink-jet consumables. KBA-Metronic AG, Germany, is the undisputed worldwide technology leader in Coding, Marking and Printing. The venture will lead to Industrial Ink-jet Printers manufactured in India based on the know-how transferred from KBAMetronic. It is worth noting that KBA-Metronic AG is a wholly owned subsidiary of Koenig & Bauer AG (KBA), the world's third largest printing equipment manufacturer.
The company will also be manufacturing KBA-Metronic's wide range of specialized ink formulations for various applications. With this tie-up, the company will be the first Indian manufacturer of industrial inkjet printers. The company has already set up a manufacturing and assembly facility for marking and coding devices at its facility in Nalagarh, Himachal Pradesh and which has already started commercial production from FY08. It shall he expanded for production of the Industrial Ink-jet Printers.
The company plans to export printers to other emerging markets in conjunction with KBAMetronic. The company has launched its ‘Conprint’ range of consumables for ink-jet printers and has also started marketing the full range of products.

Shareholding Pattern: The promoters hold 38.2% while the investing public holds 57.25% of which United India Insurance holds 4.52%, promoters have increased their holding from 36.57% to 38.2% in FY08.
Financials: For Q3FY08, its total income was flat at Rs.9.26 cr. as against Rs.10.45 cr. in Q3FY07 while the net profit was lower at Rs.1.04 cr. as against Rs.1.81 cr. in Q3FY07. This reduction in sales and profit was due to changeover of products.
Investment Rationale:
(1) Earlier, CPL made preferential allotments of 1,25,000 equity shares of Rs.10 each at a premium of Rs.53 per share i.e. Rs.63 per share as per SEBI guidelines to the promoters.
(2) The company declared a dividend of 20% for FY07 and may reward shareholders again in FY08.

(3) CPL plans to develop its land in a prime area of Mumbai, for commercial purpose in FY09. It will first develop its property at Chandivali, Andheri East, Mumbai. In fact, the value of its land is more than its market cap of Rs.37.18 cr. This is an important trigger for re-rating the scrip.
(4) CPL has commenced the commercial production of Conprint Hot Ink Coders and its consumables Ink Rolls at Nalagarh in Himachal Pradesh. The products are at par with similar imported products and it has received repeat orders from the users.

(5) The cumulative margins of printer and consumable sales are expected to expand further in FY09 and FY10.

(6) The company’s topline and bottomline is expected to see good growth from marketing of high end digital printers. The digital printers are used to print variable information on the Aluminum foil packaging of pharmaceutical tablet strips or on the packaging labels.
(7) One of the promoters has recently increased his holding in the company.
(8) The company’s clients include Coca Cola, Pepsi, P&G, Shaw Wallace, Cipla, Dr. Reddy’s Laboratories, Novartis, Rane Brakes, Tata Steel, SAIL, Hindalco, Jindal Iron, Aksh Optifibre and the like.
(9) With organized retailing coming off age in India, packaging has assumed importance. As a result, this technology has readymade domestic and overseas markets.
Concerns:
(1) Entry of new players could increase the already strong cut throat competition existing in the industry. With the market set to expand rapidly, many new players can be expected.
(2) Any delay in employing the latest technology could reduce growth targets. While CPL is lready in talks with many large companies for digital printers, the low cost machine sales would depend on its ability to market the product efficiently.
Conclusion: CPL is in a relatively new industry with mammoth growth potential. It is also the only listed company in this segment. This makes comparing valuations difficult and complex. It is worth understanding that CPL derives majority of its revenue from FMCG, Pharmaceutical and the Auto sectors. Since CPL is dependent on these sectors, it ought to get valuations closer to sectors dependent on these sectors. But the fact that it derives revenue from multiple sectors reduces its dependence on one particular sector. As a result stability in earnings is high. Profit visibility is also expected to improve as its printer base continues to grow over the next few years resulting in high consumable sales.
Considering these factors, the CPL share may get a valuation lower than the core sectors but closer to the dependent sectors. At a P/E of only 5.4, Book Value of Rs.47.53, Dividend of 20% and EPS of Rs.9.15, the scrip is available at an attractive CMP of Rs.49.45 and could get re-rated soon. The scrip is near its 52-week low of Rs.41 and thus has a minimum downside. In the short-term if the scrip is able to cross Rs.57 with good volume then the next target could be Rs.70-75. The stock is in the oversold territory and a bounce back could be expected very soon. Please keep a strict Stop Loss of Rs.45.5 in case it starts to slide or if the market dynamics change suddenly. I place a target of Rs.130-160 in 18 months time frame.

By Suman Mukherjee (Source: Moneytimes Internet)

Stock Ideas

Although Accurate Transformers Ltd. (Code: 530513) (Rs.130) is unable to fully capitalise on the boom in the power sector and registered a normal growth it’s still a value buy at the current level. For Q4FY08, it posted 10% rise in sales as well as net profit to Rs.95 cr. and Rs.3.40 cr. respectively. Accordingly for FY08, sales improved by 15% to Rs.197 cr. and PAT grew by 25% to Rs.7.90 cr. This translates into a healthy EPS of Rs.27 on its very tiny equity of Rs.2.97 cr. Due to shortage of working capital funds, the company is running at a very low capacity utilisation. Earlier, it tried to raise capital by a preferential allotment of around 31 lakh warrants at Rs.56 to promoters but it did not get SEBI approval due to some technical reason. The company has huge manufacturing facilities spread across Ghaziabad, Sikandrabad, Greater Noida, Dehradun and Haridwar with an installed capacity to manufacture nearly 8000 MVA of transformers. At a very modest discounting by 6-7 times, the share price can move up to Rs.175 in 6-9 months.
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On an year-on-year (YoY) basis, Q4FY08 results of Tera Software Ltd. (Code: 590020) (Rs.50.50) look very disappointing as revenue declined by nearly 50% to Rs.16 cr. and PAT fell by 40% to Rs.3 cr. But if we examine quarter-on-quarter (Qo Q) basis, it posted the highest sale among all the four quarters of FY08. This implies that the company may have completed some big e-governance project in Q4FY07. Still for FY08, it posted marginal growth in revenue to Rs.59 cr. and 15% increase in PAT to Rs.12.25 cr. after making the highest tax provision of 38%. It reported an EPS of Rs.11 on its equity of Rs.12.50 cr. and may declare 25% dividend for FY08. Of late, the company has been empanelled as a vendor for the rollout of IT services in the government sector through National Informatics Centre Services Inc. for a period of one year, which can be extended by another year. Looking at its strong order book position, it may end FY09 with sales of Rs.75 cr. and profit of Rs.16 cr. i.e. an EPS of Rs.13. Also as per reliable sources, the company is planning to dispose off its 20 acres surplus land in Hyderabad, which is worth Rs.40 cr. Once the deal is finalised, its share price will shoot up.
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Amar Remedies Ltd. (Code: 532664) (Rs.29.40) is a well-known manufacturer of ayurvedic, herbal and cosmetic dental care, personal care, skin care, beauty care & healthcare products like tooth pastes, toothpowders, shampoos, creams, lotions, shaving gels, balm & pain relieving ointments. Besides, it has successfully developed 24 different ayurvedic and herbal medicines and has also obtained the FDA approval for the manufacture and sale of these medicines, which include medicines for hypertension, diabetes, and heart ailments. Recently, it came out with excellent results for the December 2007 quarter as sales jumped by 70% to Rs.73 cr. and PAT increased by 40% to Rs.5.60 cr. However, the company is yet to start commercial production at its newly set up Dehradun facility as it is awaiting the clearance certificate the from pollution control authorities. On the back of aggressive capex, it has tripled its gross block from Rs.35 cr. to almost Rs.100 cr. For FY08 ending 30th June 2008, it can register sales of Rs.300 cr. with PAT of Rs.20 cr. i.e. an EPS of Rs.8 on its equity of Rs.26.20 cr. A safe bet in the current market sentiments.
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Mazda Ltd. (Code: 523792) (Rs.73.35) is among the few engineering companies in the world manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilisers, chemicals, nuclear, sugar, paper, food, pharma etc. Broadly, its product profile is segmented into Vacuum systems, Valves, Air pollution control equipment, Crystallisers and Evaporators. It came out with satisfactory results for Q4FY08 and ended FY08 on quite a buoyant note. For FY08, its sales improved by 15% to Rs.60.50 cr. whereas profit increased by 30% to Rs.6.60 cr. Hence it registered a very healthy EPS of Rs.15.50 on its small equity of Rs.4.26 cr. Importantly, the company has technical collaboration with world renowned Croll-Reynolds Inc., USA, which holds 12% stake in the company. To cater to the increasing demand, it is setting up a third unit at an investment of approx. Rs.5.6 cr. Despite the promising future, this hi-tech engineering company is available very cheap at an enterprise value of around Rs.40 cr. and is a screaming buy.

Source: moneytimes (internet)

Stock Idea: Unichem Lab

Karvy Stock Broking has maintained its buy rating on Unichem Laboratories with a traget price of Rs 225 in its May 16, 2008 research report. "The company's net revenues for the quarter were up by 3.2 % to Rs 1383 million. The growth has been driven by a 11 % growth in domestic formulations business revenues which has been offset by degrowth in exports. Operating margins were lower by 500 bps to 14.2 % mainly on account of lower gross margins and higher excise. Profits for the quarter were higher by 13 % to Rs 153 million."
"We upgrade our FY 2009E EPS nos by 7.3% to Rs 22.1 and maintain our FY 2010E nos at Rs 31.3. We upgrade our price target by 10 % to Rs 225 based on 10.2x FY 2009E. The Company is quoting at attractive valuation of 6.6X FY09E. We maintain our BUY rating on Unichem," says Karvy's research report.

Market This Week

Market This Week
Sensex up 4%; Nifty up 3.5%
CNX Midcap Index up 2.5%; BSE Small Cap Index up 1.2%
BSE Metal Index up 9.5%, BSE IT, Bank Index up 5% each
BSE Cap Goods Index up 4.2%, BSE Healthcare Index up 4%
Nifty Gainers: Hindalco up 19%, Suzlon up 13%, SAIL, RComm up 12%, PNB up 13%
Nifty Gainers: Ranbaxy up 8.3%, Nalco up 19%, Tata Steel up 5.6%, TCS up 6.7%
Nifty Losers: ONGC down 8%, BPCL down 4.2%, ACC down 4.8%, Bajaj Holdings down 4.6%
Midcap Gainers: Chambal Fert up 21.7%, JSW Steel up 25%, Mercator Lines up 16%
Midcap Gainers: Lanco Infra up 15%, NIIT Tech up 10%, Orchid Chem up 10%, BILT up 8.5%
Source: moneycontrol.com