Intraday Trading Calls for 31st August

Indian Stock Market may open negative and negative with very high volatility.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
PSL LTD.	Buy Above	158.70	164.20	170.00
	Sell Below	156.35	151.10	146.00
ICSA	Buy Above	198.60	205.05	211.00
	Sell Below	196.10	191.35	186.00
IDFC	Buy Above	132.75	136.15	140.00
	Sell Below	130.45	127.15	124.00
STC INDIA	Buy Above	377.25	384.45	392.00
	Sell Below	372.35	364.10	356.00
REL POWER	Buy Above	162.25	166.50	171.00
	Sell Below	159.70	155.75	151.00
GMR INFRA	Buy Above	143.25	147.25	152.00
	Sell Below	141.05	137.10	134.00
ASTRA MICROWAVE	Buy Above	84.25	87.65	92.00
	Sell Below	82.40	79.35	75.00

GOOD LUCK

Stock Idea: Redington India Ltd

Redington India Ltd (Rs 226)
(BSE Code- 532805 NSE Code- REDINGTON)
(P/E- 10, FY09 Revenues - Rs 12,668 cr, Market Cap - Rs 1,760 cr)
Redington is the distributor for a range of IT products such as personal computers, laptops, servers, networking products and packaged software. It has vendor relationships with all the major names in this segment such as HP, HCL Infosystems, Acer, IBM, Intel and Cisco. This segment contributes over 85 per cent of its revenues. The company has also started distributing products such as mobile handsets of Nokia, Microsoft X-Box, Apple iPods, Mac and consumer electronic products. Redington's revenues have grown at a compounded annual rate of 39% over the three years to Rs 10,883 cr. in 2007-08, while net profits grew at a CAGR of 47.5% to Rs 136 cr.. For the year ended March 2009, net sales grew 16.4% to Rs 12,668 cr., whereas net profit grew 17% to Rs 159.6 cr. The EPS on a equity of Rs 77.87 cr.(Promoters'stake-44%) stood at Rs 20.5 and the dividend declared was 40%. The business is reliant on volumes and offers wafer-thin margins. Though they remain narrow, Redington's net profit margins have improved (from 0.69% to 1.25% in the last five years) due to the reselling of better margin products such as networking products, lifestyle gadgets and contributions from improved after-sales and post-warranty service. Redington generates 53% of its revenues domestically, and the rest from South East Asia, West Asia and Africa. The company's customer base is now at 14,458 corporate clients, spread across as many as 44 brands and caters to a wide range of sectors. Players such as HP and HCL Infosystems, and Wipro that dominate the domestic PC market, have continued to have strong relationship with Redington, thus assuring it of sustained volume growth.
According to a recent IDC report, the domestic IT hardware market is set to grow at an annual rate of 14.6% to Rs 96,558 cr. by 2012, while the packaged software segment is set to grow at a rate of 20.9% to Rs 21,129 cr., representing a huge opportunity for players such as Redington. Increased Governmental spending on IT-enablement across the country is another important growth driver for the company. The prospects are especially good for the better margin laptops, which have outpaced desktops in terms of sales growth in India and West Asia. The growth prospects for West Asia and the African region are equally impressive for IT hardware and software. Redington, with its relationship with all the big names in the IT business, would be well placed to tap this opportunity.
In addition to hardware, the company has begun to resell packaged software as well and has tied up with players such as Adobe to distribute their products in India. This could usher in better margins, as does the expansion into networking and data storage products. The company has also diversified into distribution of non-IT products such as mobile handsets of Nokia in Africa and other digital and consumer electronic products across India and West Asia. This segment contributes less than 10% of the current revenues and may serve as a good diversification strategy over the long run. Redington has also added to its offerings, high-end repair, warranty and post-warranty services. These are aimed at capturing annuity-based revenues, in addition to hardware sales. This apart, Redington has leveraged on its existing distribution network to venture into third-party logistics and has acquired spaces in Chennai, Delhi and Kolkata and Dubai.
For the Q1 ended June Dec. 2009, Redington has reported net profit of Rs 37.35 cr.(up 10%) on net sales of Rs 2,922 cr (flat) on consolidated basis. At current valuations, the stock trades at 11 times its FY 2009 earnings (Rs 20.5) and 9.4 times its estimated FY 2010 earnings (Rs 24). Redington's strong positioning in the domestic IT market and the absence of listed peers make the stock attractive. Accumulate on declines for decent returns in the medium-long term.

Source: Internet (Valuenotes By Sanjay Chhabria)

Stock Idea: Cosmo Films Ltd.

Cosmo Films Ltd(Rs 103)
(BSE Code- 508814 NSE Code- COSMOFILMS)
(P/E- 4, Market Cap- 200 cr, FY09 Sales- Rs 655 cr)
Cosmo Films(CFL) is one of the leading players in production of biaxially oriented polypropylene (BOPP) films. The product is used mainly by FMCG players like Parle, Britannia, Hindustan Unilever, Nestle and Dabur, which use tetrapacks and BOPP films for packing their products. Cosmo currently has an aggregate capacity to manufacture up to 96,000 tpa of BOPP films, which will be enhanced to 105,000 tpa by the first quarter of '10. The company not only supplies to FMCG multinationals operating in India and local players, but has also established its presence in overseas markets like the US and Europe. At present, close to 55% of the company's net sales are accounted for by exports. In India, the company faces competition from Uflex and Jindal Polyfilms. Apart from BOPP films, the company manufactures thermal films with annual production capacity of 21,000 tpa. This is a value-added product, made out of BOPP films, which carries a higher realisation.
The Indian BOPP market is estimated at 1.70 lakh tonnes and growing at 20% a year, with Jindals being the biggest producer of this product. Cosmo, promoted by Mr Ashok Jaipuria, operates two plants with six lines of production in Aurangabad and Vadodara. The demand for BOPP packaging material is increasing in India due to the retail boom. The major end-users of this product are food, confectionery, cosmetic, toiletries, label films, and cigarettes makers. CFL is now also looking at new geographies, with focus on parts of Africa and Eastern Europe. The global demand for BOPP products is estimated at 4.7 million tonnes and growing at 4-5% annually.
For the Q1 ended June 2009, Cosmo's domestic sales volume increased by 39% whereas export volume declined by 9% resulting in 5% drop in net sales to Rs 176.06 cr.. Higher interest/Depreciation due to commissioning of new BOPP line in March 2009 lead to 14% lower PAT at Rs 12.41 cr.. The EPS for Q1 stood at Rs 6.4. During FY09, Cosmo's net sales grew to Rs 655 cr from Rs 585 cr. in FY08. The slow growth was on account of the company's conscious decision to go slow on production in anticipation of a possible downturn in the BOPP cycle. The PAT was marginally down to Rs 42.74 cr. from Rs 44.5 cr. in FY08. PAT after extraordinary item (due to change in method of depreciation, there was surplus of Rs 44.72 cr.) was Rs 87.46 cr. On a equity of 19.44 cr.(Promoter's stake- 44%), the EPS before extraordinary item stood at Rs 22 and dividend of 50% was declared. CFL also completed the acquisition of GBC Commercial Print Finishing with global revenues of approx. $100 mn. Post this acquisition, CFL is expected to successfully establish itself as the global leader in thermal lamination segment. At the current market price of Rs 103, the scrip trades at 4.7 times its FY 2009 earnings (Rs 22) and 4 times its estimated FY 2010 earnings (Rs 26). Cosmo has one of the highest dividend yields among its peers at 4.85%. The stock holds good potential for appreciation in the next six months. Accumulate.

Source: Internet (Valuenotes By Sanjay Chhabria)

Stock Idea: Power Finance Corporation (PFC)

A Navaratna PSU, Power Finance Corporation (PFC) reported a steady growth in its standalone net profit for first quarter ended 30th June 2009. Total income rose 31% on a YoY at Rs.1893 crore. Net Interest Income increased by 36% to Rs. 700 crore. Net profit increased by a very healthy 87% to Rs. 555 crore.

What was gratifying to note was that Net NPA was at a low level of 0.01% of net loan assets; meaning loan quality has remained good with a miniscule portion of bad loans.

Its sanctions also increased by 24% to Rs. 18,782 crore. Disbursements were lower by 8% at Rs.4345 crore. Sanctions continue to be dominated by state sector, which was up 47%, central sector was up 20%, joint sector was at 8% and that to the private sector was at its highest, up 26%. What this means is that one would see higher disbursements coming in Q2. PFC’s targets for the current fiscal is Rs.60,000 crore in sanctions and Rs.23,000 crore in disbursements.

Its debt equity at the end of current Q1 stands at 4.85 and capital adequacy is at 17.51% as against 16.75% in Q1FY09. Book value is very healthy at Rs.98.57.

PFC had tapped the primary market in 2007 with a Rs.997.19 crore issue. It was priced at Rs85 per share and got listed at Rs.113. Today it is quoted at around Rs.215 levels, which continues to remain a very good deal for the original shareholders even now, even in this market.

PFC is the dominant investor in the country's power sector, funding about 20% of the projects. PFC has been designated as a nodal agency by the union government for facilitating the development of UMPPs and with six more UMPPs to go, PFC seems to have its work all chalked out! Power is one of the sectors, which is expected to get the maximum impetus, and irrespective of any slowdown or inflation, the growth of this sector will continue relentlessly. PFC remains a good stock in the portfolio.

Source: www.premiuminvestments.in (By S P Tulsian)

Intraday Trading Calls for 28th August

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

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
PSL LTD.	Buy Above	158.50	164.20	170.00
	Sell Below	155.35	151.10	146.00
GMDC	Buy Above	113.60	118.20	124.00
	Sell Below	111.10	107.15	102.00
IRB INFRA	Buy Above	218.60	224.35	230.00
	Sell Below	214.70	208.65	202.00
STC INDIA	Buy Above	367.20	374.15	382.00
	Sell Below	361.35	354.35	346.00
BRFL	Buy Above	207.25	212.35	218.00
	Sell Below	203.40	196.75	191.00
GMR INFRA	Buy Above	143.25	147.25	152.00
	Sell Below	140.35	136.45	132.00
ASTRA MICROWAVE	Buy Above	80.10	84.25	89.00
	Sell Below	78.15	75.20	71.00

Buy Astra Microvave Products Ltd. (532493) CMP Rs. 79/- Short to Med Term Target Rs. 125/-.

GOOD LUCK

Stock Idea: Colgate Palmolive Ltd.

This MNC whose brand name is almost the generic name for toothpaste in India, has done pretty well for itself for the first quarter ended 30th June 2009. YoY, net sales were up 19% at Rs.485.40 crore. Its business continues to be driven by toothpaste and it achieved a volume growth of 12% in this category. It now has a market share of 52.3%, which makes it the market leader in this segment. In the toothbrush category, volume market share has increased to 38.2% and in the toothpowder category to 48.8% in Q1FY10.

Net profit for the quarter was at Rs.102.8 crore, an increase of 43% on a YoY. The company has been working on reducing costs and this to a large extent has helped shore up the margins. Operating cost for current Q1 was at Rs.362.83 crore which was 75% of the net sales. As against this, in Q1FY09, operating cost was at Rs.341.50 crore, which was 84% of the net sales, clearly YoY there has been a reduction vis-à-vis the sales. Even sequentially, costs have been reduced, which in Q4FY09 was 80% of the net sales. This reduction is cost has been reflected in the margins – OPM was at 27.02% v/s 23.86% in Q1FY09 and NPM improved from 17.64% to 21.17%.

And the major cost reduction has come by way of reduction in advertising and sales promotion costs, which YOY was down 16% and has remained more or les flat on a QoQ at Rs.69.31 crore.

This is one of the best MNC stocks on the BSE. Apart from having a negligible interest outgo, reserves of over Rs.200 crore (as on 31st March 2009), this is one MNC, which is not dependent on the monsoon for rural India’s demand. Irrespective of the rains, the demand for toothpaste and tooth powder does not go down. Stay invested and one can accumulate for long term on declines.

Source: www.premiuminvestments.in (By S P Tulsian)

Stock Idea: Infotech Enterprises Ltd.

Company Overview—
Infotech Enterprises Ltd , promoted by B V R Mohan Reddy was incorporated as Infotech Enterprises Pvt Ltd in August 1991 for creating facilities for software development and its export. Commercial operations began in September 1992. Company went public in March 1997. Company’s first project on creation of facilities for Computer Aided Design and Drafting and Geographical Information Systems (GIS) was successfully completed in September 1992, with aid from IDBI under its Venture Capital Scheme. Main areas of the company are Computer Aided Design (CAD) and GIS. It provides technical software services and has diversified into Business Software Services and Net Services (Internet and Intranet-related services). It also has Engineering Services and Geo-Engineering divisions. Company has strategic alliances and business partners in USA, Europe, Australia and Japan.
Products & services—
Infotech Enterprises is a global software services company specializing in geospatial, engineering design and IT solutions. Company provides its services to improve companies’ speed to market, optimize resources and reduce costs, thereby creating measurable business impact. Key areas of its services are as follows—
Geographic information system—
Infotech has carved a niche for itself in the GIS market space and is recognized as a leading global GIS service provider. Infotech possesses strong domain knowledge and complete solution capability and is focused on the creation of enhanced value for its customers. Infotech has over 1000 GIS professionals working round-the-clock providing over two million person hours of experience in GIS services. Infotech is one of the largest offshore providers of digital Photogrammetry services. Based on extensive technical resources, infrastructure and global delivery capability, it manage, execute and deliver large projects to customers worldwide, providing them the benefits of high-quality, cost-effectiveness and reliable delivery. It offers complete end-to-end GIS solutions to help organizations scope, design, build and manage their GIS. Infotech provides the Managed Application Service to all clients who have had a bespoke application built for them. The MAS is an all-encompassing agreement that covers every aspect of support and maintenance specifically within the GIS field. Infotech provides a wide range of training courses in the latest GIS software. Courses are interesting and relevant to provide users with the confidence and skills to make desktop mapping work for the organization.
Engineering Design—
Infotech offers integrated engineering design solutions in focused domain areas. Infotech has developed robust cross-border collaborative processes that enable a seamless integration with customer design team. Company is able to undertake complex engineering tasks and effectively deliver high quality results that are critical to its customers.
IT services—
Infotech provides services in the areas of ERP, EAI, Business Intelligence, e-biz, Web enabling of business processes as well as maintenance/enhancement of legacy systems, Corporate Portals and Knowledge Management. It is enhancing the customers Business Processes using technology as an enabler to create competitive advantage. Its platform expertise includes IBM, Microsoft, Plum Tree, Seebeyond, SAP, Oracle, SUN and BEA, Documentum.
Electronic Design services—
Infotech has executed projects for global customers enabling them to reduce time to market, optimize resources and reduce costs. Its EDS team is well experienced in design of Analog, Digital and Real time embedded systems and is capable of developing products using a variety of 8, 16 and 32 bit Micro-controllers and DSPs from Analog Devices, Motorola, Microchip, Intel, Atmel, NEC, Hitachi, Texas Instruments etc. It offer services in the following areas: Product Development, Re-Engineering, Firmware Development, Software Development, PCB Design, Verification and Validation.
Offshore outsourcing—
Offshore outsourcing is emerging as a flexible and powerful approach that companies can use to achieve a wide range of tactical and strategic aims. Many organizations are outsourcing their software development, testing, support, technical design, application and data management, thereby enabling them to focus more on understanding customer needs, achieve better product positioning and enhance customer satisfaction.
Recent Developments—
Infotech Enterprises announced that it has signed a Memorandum of Understanding (MoU) with Eurocopter a Germany-based helicopter manufacturing Company, for the attack helicopter program of the ministry of defence, Government of India.
Infotech Enterprises has announced that its subsidiary, Infotech Enterprises Benelux BV, has signed an agreement with the Dutch telecommunications engineering and technology company Volker Wessels Telecom to provide a new service offering in Telecommunications engineering to telecommunications industry world wide. The company specializes in engineering design services (EDS) like mechanical and electronic design, technical publications and engineering software development.
Infotech Enterprises, a global technology solutions provider with headquarters in Hydrabad, India announced that it has inked a 5 year contract with inCONTROL Tech (iTEC) of Malaysia to implement an Enterprise GIS information System for Tenaga National Berhad (TNB) which is the largest Electric Utility in Malaysia. The implementation is a part of TNB’s long term GIS roll out plan for all their circles nationwide. Under this project, Infotech and iTEC would be offering a service oriented architecture (SOA) based solution for enterprise GIS information management to TNB. This implementation would help integrate and streamline business processes across various functions within TNB.
Valuation—
At current market price, Stock trades at attractive valuation of 8.67 multiple of its FY2010 Estimated earnings par share. We recommend investors to buy “Infotech enterprises” with medium to long-term investment horizon.

Source: Internet (By Abhishek Jain)