Market News & Trends

HOT FROM THE PRESS

* ECONOMY : 3Q CY09 GDP data to be released @ 11am.. consensus est @ +6.3% v/s
6.1% in 2Q CY09 and 7.7% in 3Q CY08
* BANKS : RBI has asked banks to furnish details of their direct & indirect
exposure to Dubai World.. seeks info on extent of defaults, if any, that the
banks have seen in their Dubai & UAE portfolios
* STEEL : Govt plans to to launch ultra mega steel projects to accelerate
creation of large steel capacity in the country to meet the growing demand
* AUTO : rpts carmakers are gearing up for a two-phase price hike due to
increasing input costs & need to adhere to stricter emission norms
* PHARMA : India's drug retail market grew by 29% yoy in value terms in Oct..
its more than double the avg monthly revenue growth rate of 13-14% recently
* ONGC : finds traces of a new oil reserve in Gujarat (~ 20k barrels of oil per
day) which cud increase the cos total onshore oil production by about 20%
* GAMMON INDIA : plans to make a yearly invt of Rs50bn for roads development
projects and looking to bid for 10 projects by fiscal end
* LUPIN : US FDA starts inspection of cos plant in Indore... once approved co
can start selling oral contraceptive drug produced in that facility to the US
* L&T : forming a JV with state-owned Nuclear Power Corp of India to explore
co-operation in manufacturing & setting up nuclear power plants in India
* GMR INFRA : Delhi Intnl Airport may rise Rs 13bn from sale of 45 acres which
is 42% higher than estimated in Jan09
* WOCKHARDT : reaches out of court settlement with DBS over repayment of Rs
440mn @ 19% discout for loan taken in 2007
* TATA MOTORS : Co rejects £10mn loan fm UK govt saying it can get better terms
elsewhere.. CFO says fully repaid JLR bridge loan, expects more cost cutting
measures in coming qtrs.. Co to look at fund raising options to cut debt
* TATA TEA : CFO says Co may seek overseas acquistions for expansion

Corporate News – Industry trends

* Aditya Birla Retail, the country’s second biggest supermarket
operator, is considering an initial public offer (IPO) and will time it as
soon as the company starts earning profits (BS)

* Tata Group, which owns British car maker JLR, has rejected a £10 mn
loan offered by the UK government to develop electric cars at the
group’s European Technical Centre, according to a report in the Times
today (BS)

* The Oil and Natural Gas Corporation has found traces of a new oil
reserve in Gujarat which could increase the company’s total onshore oil
production by about 20%; The new hydrocarbon structure located at
North Kadi in the Mehsana area is likely to produce at least 1 mmtpa of
oil (about 20,000 barrels of oil per day). This is a little less than half
the oil production from Mehsana, the company’s largest onshore field
with a production of 2.2 mmtpa (BS)

* Infrastructure player Gammon India plans to make a yearly
investment of up to Rs 50bn for roads development projects and is
looking to bid for 10 projects by fiscal end. “As of now we plan to
invest Rs 10-50bn every year on highways ... We would bid for about
10 projects by March 2010 (BS)

* Tokyo-based Japan Steel Works is focusing on emerging economies
like India to expand its overseas operations against the backdrop of
weakening performance in major markets like the US (BS)

* Debt-ridden pharmaceutical company Wockhardt and DBS Bank
have agreed to an out-of-court settlement of a dispute over loans the
drug manufacturer had taken from the Singapore-based lender (BS)

* Carmakers are gearing up for a two phase price hike after
almost a year, thanks to increasing input costs and the need to
switch to stricter emission norms from April; prices of popular vehicles
such as Mahindra Scorpio, Maruti Swift and Honda Civic may go up by
Rs 10,000-20,000 within a month or so as the raw material prices have
gone up by 10-15% and also the Japanese carmakers are concerned
by the rise in yen valuation (ET)

* Larsen and Toubro and state-run Nuclear Power Corporation will
announce on Monday formation of an Rs 20bn joint venture for making
forgings, a crucial component in construction of nuclear reactors, for
new plants (ET)

* INDIA’S drug retail market grew by a whopping 29.24% in
value terms in October this year over the year-ago period, more
than double the average monthly revenue growth rate of 13-14% in
the recent past, according to market research firm ORG IMS (BS)

* With the RIL operated KG-basin D6 block gas flowing in, the gasbased
power generation across the country has registered a healthy
turnaround; in October, a total of 15 gas-based stations recorded a
plant load factor of over 80% due to improved fuel availability, as
against around just 50% last year (BL)

* After the euphoria, “affordable” realty developers are faced with
the reality of excesses; consider this: In May this year, property
developer Jaypee Greens put the sold-out sign within hours of
launching its affordable project Aman on the Greater Noida
expressway. The 3,000-odd apartments were priced at Rs 2,100 per
square feet. Another Jaypee Group company, which was offering flats
along the same expressway for Rs 4,500-6,000 a sq ft, was finding the
going tough (BS)

* With just a day left for the Government-imposed ban on illegal
handsets to come into effect, the mobile operators have sought a
two-month extension of the deadline. The operators who have set up
1,600 outlets for implanting the IMEI number on handsets through an
standardised software are nowhere near reaching out to the 20 mn
consumers suspected of owning a handset without the number (BL)

* MTNL, which operates in Mumbai and Delhi, has 12.4 MHz spectrum,
the highest amount given to any operator so far (Mint)

* Jay Shree Tea & Industries, a B K Birla group company, is close to
announcing its first overseas acquisition, in Uganda; "We are in an
advanced stage of negotiations for acquisition in Uganda and we hope
to finalise it in a months time," (BS)
International trends

* The United Arab Emirates’ central bank said it “stands behind” the
country’s local and foreign banks, which face losses from Dubai World’s
possible default, and offered them access to more money under a new
facility (BS)

Hold Tata Power

Tata Power
Hold
Price: Rs1,323 Target Price (Mar 11): Rs1,270

1H FY10 Consolidated Results

* Consolidated Sales flat; PAT at Rs3.8 bn: Tata Power (TPC) reported
Sep qtr consolidated profits at Rs3.8 bn (down 29.3% YoY) on lower
exchange gains (Rs287 mn in 2Q10 vs. Rs764 mn in 2Q09) and higher tax
provisioning at 38.8% (vs. 16.4% in 2Q09). Higher taxes were on account
of higher MAT provisioning for NDPL (partly includes 1Q provisions) and
under-provisioning in coal assets last year (in 2Q09). Revenues remained
flat YoY at Rs45.6 bn despite higher volumes in coal business and
translational gains (+13.5% exchange rate movement in 2Q FY10). For
1H10, reported PAT grew 19.4% YoY on back of 6.7% YoY sales growth
and 500 bps improvement in EBITDA margins (due to lower fuel cost).

* Coal Sales volumes up 23%; ASP down 29% to US$57.9/MT: TPC
reported 6.8% de-growth in coal segment sales with 390 bps decline in
margins to 30.1%. The margins declined despite 13.5% currency gains and
record 23% YoY gain in volumes (to 15.4 MT), as sale price declined
sharply to $57.9/MT (29.4% lower YoY). Volumes were up 23% YoY as the
weather conditions were favorable. Cash cost of production was also
reduced to US$31.1/MT (-19.6% YoY). Coal SPVs reported $9 mn profits
for the quarter (post- interest repayment for acquisition debt) vs. $5 mn
loss in 2Q09. Outstanding debt as of Sep’09 is $740 mn with a cash
balance of $100 mn. Management guided for effective tax rate of 35-40%
(we have built 40%) as management fees remains tax deductable.

* Subsidiaries performance: NDPL (delhi distribution business) recorded
41% YoY growth in sales but its PAT declined 32%, primarily due to extra
provisioning of tax given higher MAT rate. Powerlinks, almost doubled its
profits to Rs206 mn as its sales grew 34.5% to Rs751.1 mn, on account of
new CERC norms as well as higher capitalization in 2Q10 (Rs63.2 mn
benefit). Tata Power Trading registered 1% sales growth and 8% PAT
growth despite 27% YoY increase in volumes (to 807 MU) traded, as the
average tariffs declined 20% YoY to Rs5.6/kWh from Rs7.1/kWh.

* Lower TP to Rs1,270; maintain Hold: While we reduce Coal ASP for
CY09 to $62/MT (inline with Bumi’s guidance) and lower merchant tariffs to
Rs5.5 (from Rs6.5/kWh earlier), we have tried to capture merchant upsides
from 450 MW (out of Reliance Infra’s 500 MW PPA expiring by Mar’10) by
giving 40% ROE to proportionate regulated equity for MLA (Rs12.5 bn).
Lower ASP for coal leads to Rs70 decrease in our valuation of coal assets to
Rs333/share. Adjusting for $300 mn FCCB dilution, our new TP at Rs1,270
(for Mar’11) offers 4% downside (see Exhibit 5) from current levels.
Maintain Hold.

Buy KEC International

KEC International
Buy
Price: Rs564 Target Price (Sep 10): Rs675

Brighter quarters ahead
We met with the management of KEC International. Key takeaways:

* Strong order pipeline both domestic and international: KEC continues
to record healthy order inflows and has received Rs7.2 bn worth of orders
since October’09, out of which Rs5.1 bn are overseas orders. It expects
strong order inflows in the coming quarters too as visibility in the
international markets is improving. Domestically, PGCIL is expected to order
out large number of projects (~Rs90-100 bn) in next 4 months 2H10 vs.
Rs30 bn in 1H10, similar to last years’ trend (Rs102 bn in 2H09 vs. Rs36 bn
in 1H09).

* US market seen as next leg for growth: KEC management expects US
market to provide next leg for growth and is on a lookout for possible
acquisition or a JV with a local partner, to enhance its presence. The
National Renewable Energy Laboratory recently published a report
concluding that inadequate transmission capacity is the primary cause of all
wind energy curtailment, followed by US Govt. announcing US$3.4 bn
grants to upgrade the country's aging electric grid. Matched by 1:1 funding
by private sector, total investments may cross US$7 bn for grid expansion
in the US.

* Introduce FY12; include RPG Cables: We increase earnings by 8.3% and
7.5% for FY10E and FY11E respectively, as ~Rs1.6 bn accumulated losses
at RPGC will be offset against taxable PBT. We cut our operating margins
estimate to 10.6% (from 10.8%) for FY10E and 10.2% (from 10.7%) for
FY11E primarily due to low margin (4-6%) RPGC business merger. We also
introduce FY12E with an EPS of Rs60 (+15.4% YoY) on the diluted capital of
Rs514 mn. While the merger is expected to be ROCE dilutive, tax benefits in
next 2 years will increase returns.

* Upgrade to Buy with Sep’10 target price of Rs675: While operational
performance has been tad below expectations so far, we see better visibility
in the order inflows both domestically and internationally in next 2 quarters.
KEC does not have any exposure to Dubai, but the Middle East region
accounts for Rs9.0 bn (~17%of total OB) and we don’t see any reason for
concern from Dubai’s debt crisis. We continue to value KEC at 12x (inline
with sector), but roll forward to Sep’11 adjusted EPS of Rs56 to get a target
price of Rs675 (Rs580). Upgrade to Buy on incremental 20% upside and
robust order visibility.

Hold Balrampur Chini

Balrampur Chini
Hold
Price: Rs 126 Target Price (Sep’10): Rs122

4QFY09 results lower than estimates

* 4Q09 profits significantly below our estimates-Balrampur Chini’s
(BCML’s) 4QFY09 net profit of Rs388mn, up 544%YoY, was significantly
lower than our estimate of Rs680mn. This was mainly due to (a) lower
sugar volumes and realisation and (b) lower co-generation and distillery
sales than estimates. However, this was partially off-set by tax write backs
of Rs130mn pertaining to FY02-05. While sales of Rs3.89bn were 14%
lower than our estimates, EBITDA came in at Rs0.75bn vs. our estimate of
Rs1.43bn. Lower EBITDA was due to ~9% lower sugar volumes and
realisation than estimates. Management acknowledged lower realisation in
sugar was on account of poor timing of sales. While we are not concerned
about lower sugar sales volume as sugar prices have moved up in 1Q10,
(thus leading to inventory gains), lower realisation still remains a concern.

* Raise our estimates by 11-2% for FY10/11E led by higher sugar
realisation– We raise our FY10 profit estimate by 11% to Rs3.65bn on the
back of higher sugar realisation, raw sugar and co-generation volumes. We
raise our blended sugar realisation assumption by 4% to Rs30.8/kg, in line
with management guidance. We believe our landed cane cost assumption
of Rs215/quintal (vs. current cost of Rs200/quintal) for FY10E seem
reasonable as strong sugar realisation and intense competition among
players would lead to higher cane prices as the season progresses. We
increase our raw sugar volume estimate to 1.2lt (lakh tonnes) from earlier
0.85lt as management guides additional imports of raw sugar in FY10E. We
raise our FY11E earnings by 2% to reflect higher sugar realisation.

* Coal based power contribution may not be significant- Based on
management guidance, we assume 100-80mn units of coal based power in
FY10/11E respectively. However, given high coal (BCML is yet to identify
sources for coal) and in-land transport costs and stable realisation, we
believe coal based co-generation may not be significantly profitable. While
we continue to believe that co-generation (coal and bagasse based
together) provides stability throughout the cycle, we think coal based
power will contribute only 2-3% to consolidated EBITDA for FY10/11E.

* Raise target price marginally, maintain Hold– We continue to value
BCML based on 1 year forward up- cycle multiple of 10x FY11EPS of
Rs12.2and arrive at our Sep’10 (rolled forward from Sep’09) target price of
Rs122 (from Rs119 earlier) and hence maintain Hold at current price
(potential downside of 3%). While stock prices may track sugar prices in
near term, we think concerns over the longevity/severity of the cycle and
higher SAP may emerge, thus impacting the valuation multiples. We
believe key risks to our call are sugar/alcohol realisation higher than our
estimates & lower cane prices than our assumptions.

Market Technical Analysis

Market Technical Analysis - Tough Times Don’t Last

The Nifty lost 111 points over the week to close at 4941. A
volatile last week for the markets as they rallied in the first half to
test our ST target of 5130/17200 only to turn overbought and
correct significantly in the second half. The knee-jerk reaction
last Friday has not done much damage to the technical set-up as
the indices continued to sustain above the mentioned support
levels of 16600/4900. We think the decline was just another
shakeout and it provided an excellent buying opportunity. Most of
the technical indicators that were overbought in the middle of last
week have now moved into the neutral zone, which is an
encouraging sign. The daily RSI is close to the oversold line
while the moving averages are almost at the price action. The
only negative trigger last week was the development on the
DM/ADX study, which we think would get reversed (from sell
mode to buy mode) in the coming week. Only on a close below
the support of 4900 do we re-analyse the ST set-up. For the day,
supply seen at 4984/5011. Overall, the indices look set to retrace
their recent losses and get back above 5000/17000.

Intraday Tips

RELIANCE

Weekly Trend Decider 2117. Down side support are 1000 and 984, higher level resistance 1047-1051-1068 -1075 to be watch out.


TISCO

Weekly Trend Decider 5547.Strong reversal from the lower level 513... now consider support are 520-510 .... If up move continue it will test 572. Likely test 611.

SUZLON ENERGY

Weekly Trend Decider 72.... Contra Stocks... Consider support 66 as remain it will test 90 mark in short term.

BANK OF INDIA

Real strength show only above 395, otherwise first target are 350.

CIPLA

Negative divergence on the chart, sell stop loss 332 above target are 298-285.

DISH TV

Sell stop loss 43 and play for .......?

RIL INFRA

Real strength + Bull favour above 1200, otherwise you will see below 1000 mark.

IDBI

We are bearish below 131, ultimate target are double digit mark in coming days.


KFA

Up move is over.... And looks bearish, bull favour only above 56.50.. otherwise you will see in coming days.......


PUNJ LLOYD

Bearish set up - Stop loss for your selling at 217

• India Infoline Dec. Future (Rs. 129)

Buy only in the region 127-129 with a stop loss
below 124 for an intra-day target of 135.

• Lanco Infra. Dec. Future (Rs. 534)

Buy only in the region 530-534 with a stop loss
below 524 for an intra-day target of 547.

• GAIL (Rs. 412)

Buy only in the region 405-412 with a closing stop
loss below 385 for a short-term target of 450 and 484.

Nifty Future + Bank Nifty + CNX IT

Nifty Future : Strong volatile last week due to financial crises in Dubai resulted big sell off in world market including our market and tested a low of 4806, but lower level valuation again emerged and smart money was come into the market and resulted on itnra day basis strong recovery and resulted closed at 4941. We may consider in coming trading session it will face resistance 5000, on reversal selling opportunity, higher level resistance are 5150-5180 likely continue. Trade with cautious approach and hedge your position by way of call/put options in either side.

Friday high was 4960 and low 4801 but finally managed to closed at 4953 in premium against the spotclosed at 4941.

FO data indicate that some short covered at lower level, but again at higher level short created due to weakness.

Weekly trend decider are 4958 and real show only above that level and it will face resistance 5116-5180, thereafter sharp recovery can not be ruled out, down side support are 4789-4800-4631.

Today support are 4902-4890, below free fall and non stop target 4841,

If hold support 4902, it will test 5000 mark easily.

Bank Nifty : Trend is mixed and last week low was 8591, and strong bounce back and closed at 8900 above. Over all trend is still bullish sign but confirmation only above 9000 if hold with volume. Down side support 8543-8146, higher level resistance 9300-9700 range and should be watch out please. 8946.

CNX IT : Over all trend is still bullish as remain hold 5000 mark, higher it will face resistance are 5471-5670, down side support are 5121-4970. Weekly Trend Decider 5320.


Market(Sensex,Nifty) Predictions on 30-Nov-2009

NIFTY

Today support are 4900 and resistance are 4967-4971, crossover and sustained above, time being positive, down side below 4900, further weakness and it will test 4848. Weekly trend decider 4963.


BSE

Today : Friday low are very crucial 16200, and further weakness only below that level, which will come up to 16000, higher level resistance are 16830-16900-17000. Weekly trend decider 16691

Dow

Dow almost touched a target of 10495 . The short term trend is positive as remain 10000 level hold in coming trading sessions.

Market New & Trends

HOT FROM THE PRESS

* RANBAXY : launches the generic version of Glaxo Smithkline's blockbuster drug
Valtrex (anti-herpes drug) in the US

* BANKS : Govt will provide Rs 50bn to public sector banks to beef up their
capital.. this will be in addition to the Rs160bn provided by World Bank

* TATA POWER : 2Q consolidated PAT Rs 3.68bn v/s 5.28bn, Rev Rs 45.8bn v/s 46.4b

* SIEMENS : Sep FY09 PAT Rs 7.05bn v/s 6bn, Rev Rs 92.86bn v/s 96.8bn.. board
meet on 30th Nov to consider merger of Siemens Healthcare

* VARUN SHIPPING : puts its fleet acquisition plans with capex of Rs 4.6bn in
FY10 on hold due to credit crisis and economic slowdown

* PRAKASH INDUSTRIES : plans RS 30bn expansion in power capacity in next 4 yrs

* IOCL : expected to invest Rs 46.50bn in new petroleum pipeline projects

* ONGC/OIL INDIA : ONGC Videsh and OINL exploring possibilities of bidding for
oil and gas fields in Iraq

* MCLEOD RUSSEL : in battle with Birla grp JayShree Tea for 4 tea gardens in
Uganda with combined productiojn capacity of 6mn kg a yr

* DLF : buyers invested in co's commercial office project in S Delhi demanding
refund alleging project delays & that co doesnt have approval for the same

* SUN PHARMA : receives tentative US FDA approval for its generic Strattera
capsules for treatment of attention deficit hyperactivity disorder


Corporate News – Industry trends

* MARKETS around the world including India found themselves
lashed on Thursday by fears of fresh financial trouble, this time with
its epicentre near home in Dubai, threatening to derail an incipient
global recovery and holding huge ramifications for India (ET)

* Bulk drug imports are set to be the next flashpoint between India
and China. The office of the Drugs Controller General of India has
roped in, for the first time in its history, the CBI to probe the alleged
import of “unregistered” bulk drugs from China (BS)

* Following reports that ITC could make a hostile bid to increase its
stake in EIH, which runs the Oberoi hotel chain, ITC Chairman Y C
Deveshwar said his company could even raise its stake to 25% in EIH
(BS)

* A move that will help Ranbaxy boost its revenues from the US in the
next six months, the company has launched the generic version of
GlaxoSmithKline’s blockbuster medicine Valtrex (valacyclovir
hydrochloride) in the US (BS)

* Telstra, the Australian communications major, is planning to re-enter
India’s telecommunications services space after several years, by
offering national (NLD) and international long distance (ILD) services.
It also plans to acquire an internet service provider (ISP) licence in
India (BS)

* Indian Oil Corporation, is planning to invest Rs 46.5bn in crude oil
and petroleum product pipelines over the next three years, Jitin
Prasada, minister of state for petroleum and natural gas, said in a
written reply to a question in Parliament (BS)

* Aiming to expand its portfolio in the executive segment motorcycles,
Bajaj Auto said it would launch Pulsar in the sub150 cc category early
next month. The company also said it expected to sell 1 mn units of
the Pulsar range of bikes in 2010, on the back of the yet-to-be
launched bike (BS)

* Tata Steel, for a consecutive quarter, has posted a consolidated net
loss, of Rs 27.1 bn for the quarter ended September, compared with a
net profit of Rs 47.0bn in the corresponding quarter last year.
Consolidated net sales during the period plunged to Rs 252.6bn from
the previous year’s Rs 440.5bn, down 42.6% (BS)

* Patni Computer Systems shares continue to be sold by members of
the promoter family; the family have sold shares accounting for a
stake of about 0.3% in the open market for a total value of Rs 17.6 bn
(BS)

* The state-owned oil exploration major ONGC is eyeing a 20-25% stake
in a giant Iranian gas field, even as it awaits Tehran’s nod for its plan
to develop a gas field it had discovered two years ago (BS)

* Citing steep rise in coal prices, the West Bengal State Electricity
Distribution Company Ltd, the largest electricity distribution
company in the state, has decided to hike its power tariff by 22%.
CESC Ltd, the other power distributor in the state, has also increased
its tariff by 12%. This is the second time this year that the tariffs have
been hiked (BS)

* Port and Dock workers’ unions call for a nationwide strike after
December 15 to protest at lack of wage revision may be averted, as
the port authorities have expressed willingness to hold talks before the
end of this month (BS)

* Indian corporate raised close to US$2 bn through FCCBs in October
— the highest since February 2007, riding on the back of an upswing in
stock prices in the local market (ET)

* Bharat Sanchar Nigam Ltd has received bids from five companies for
rolling out WiMax-based broadband services on a franchisee model
(BL)

Economic/Regulatory development

* The YoY inflation in food prices has shot up to 15.58% largely on
the back of potato prices which have more than doubled in the past
year. Prices of pulses and onions also rose by over 25% in the
wholesale market; the annual rate of inflation in the Primary Articles
group has risen to 11.04% during the week ended November 14,
higher than the previous week’s annual rise of 9.94% (BL)

* National Bank for Agriculture and Rural Development has
sanctioned loans worth Rs 2880 mn under the Rural Infrastructure
Development Fund (RIDF) (BL)

International trends

* China, the world’s biggest polluter, set its first target aimed at slowing
the growth of carbon dioxide emissions, less than two weeks before
global leaders meet to negotiate a new climate change treaty (BS)

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