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Emkay
Morning Meeting Notes
Private Client Research 12 th June, 2008
Corporate Snippets
Contents
v From Our Research Desk
n
- PSL Ltd.
v v v v v v
From Our Commodity Desk From Our Technical Desk From Our Derivatives Desk From Our Dealing Desk Trade Details of Bulk Deals Forthcoming Events
n
n
Market Statistics Index Closing Sensex 15185 Nifty 4524 Sectoral Indices Mid-Cap 6191 Small-Cap 7467 Auto 4152 Health 4447 FMCG 2269 IT 4357 PSU 6503 Bankex 7018 Oil & Gas 9832 Metal 15401 Capital Goods 11901 World Indices Closing NASDAQ 2394 DOW 12084 Nikkei 13847 Hang Sang 22755 Indian ADR’s (USD) VSNL N/A Infosys 44.89 Wipro 12.69 Satyam 25.32 Dr Reddy’s Lab 16.14 Value Traded (Rs Cr) Cash BSE Cash NSE Derivatives Net Inflows (Rs Cr) FII Mutual Fund Advances/Declines (BSE) 11Jun08 A Advance 153 Decline 51 Unchanged 0 Commodity 11Jun08 Crude (USD/Bbl) 134.6 Gold (USD/OZ) 876.1 Silver (USD/OZ) 16.8 Debt/Forex Market Closing Re/USD 42.87 10 yr Gsec Yield 8.26 Source : Bloomberg
1 Day (%) 3 M (%) 2.0 (5.8) 1.7 (7.0)
6 M (%) (25.2) (25.8)
1.4 (11.5) 1.7 (12.8) 0.8 (11.1) 0.8 16.0 (0.4) 2.9 1.7 22.8 1.8 (17.3) 2.3 (17.3) 1.5 (6.9) 0.9 (4.2) 2.4 (15.4) 1 Day (%) 3 M (%) (2.2) 6.7 (1.7) (0.2) (2.4) 7.7 (2.5) (2.9) 1 Day (%) 3 M (%) N/A N/A (1.8) 27.1 (3.3) 19.3 (3.0) 17.4 0.9 17.5 11Jun08 (%) 5317.7 (0.1) 13191.2 (4.4) 45776.0 (15.1) 10Jun08 MTD (844.0) (5424.6) NA 1219.9
(32.6) (36.0) (27.9) 9.5 4.6 (1.7) (35.5) (40.4) (24.2) (19.2) (41.4) 6 M (%) (10.4) (10.3) (13.1) (20.2) 6 M (%) N/A 2.1 (15.2) (4.7) (6.5)
YTD (9118.0) 332.0
B B2 1155 483 51 1 Day (%) 3 M (%) 2.7 27.1 (0.5) (10.9) (0.6) (16.8) 1 Day (%) 3 M (%) 0.5 (5.9) (0.3) 7.1
Total 1308 534 51 6 M (%) 51.3 7.7 14.3 6 M (%) (9.0) 4.7
n
n
n
n n
n
Japanese pharmaceutical major Daiichi Sankyo will acquire a majority stake in Ranbaxy Laboratories Ltd (RLL), with the promoters of the company selling their entire stake. Daiichi would acquire 34.82 per cent stake of the promoters and make an open offer as per regulatory requirements at a price of Rs 737 per share. BL NIIT Technologies on Wednesday posted a net profit of Rs 31 crore in the fourth quarter ended March 31, 2008, an 11 per cent fall from the corresponding period last year. It had reported a net profit of Rs 45.9 crore during the same quarter la st year. BL Unichem Laboratories Ltd has received final approval from US Food & Drug Administration (FDA) for Zaleplon Capsules in the strengths of 5 mg and 10 mg. BS After the aborted attempt to induct strategic investor six months back, non-banking finance company IFCI board will again meet tomorrow to consider inviting bids for selling 26 per cent stake. BS PSL Ltd has bagged a contract worth Rs 1,928 crore from public sector undertaking Gail to supply steel pipes for the latter's Vijaipur-Dadri-Bawana pipeline project. BS 3i Infotech Ltd has acquired a majority stake of 51 per cent in Fineng Solutions Pvt Ltd (FinEng) with a commitment to acquire remaining stake in two tranches over a period.BS Construction firm Gammon India Ltd said on Wednesday its overseas units have acquired stakes in two Italian firms. ET Bharat Petroleum Corp, India's second-biggest state-run refiner, may buy crude oil from Iran under a one-year contract to diversify its sources of supply, company officials said today. ET Lupin Ltd today informed the Bombay Stock Exchange that the company has received US Food and Drug Administration (USFDA) approval for the company's abbreviated new drug application for Ramipril capsules, 1.25 mg, 2.5 mg, 5 mg and 10 mg. BS
Macro Economic & Geo-Political News n
n
China's trade surplus touched $20.2 billion during May, a 10 per cent drop over the same month a year earlier, the General Administration of Customs said. BS The Prime Minister, Dr Manmohan Singh, on Wednesday made a strong pitch for Indo-US nuclear deal, saying it is crucial for ending nuclear apartheid against India and hoped progress will be made in the months ahead on the agreement which has "r un into some difficulties''. BL
Top Five Gainers (NSE) Ambuja Cements BHEL DLF Hero Honda HDFC Bank Top Five Losers (NSE) BPCL Siemens India Idea Cellular Sun Pharma Cairn India
Price
Chg (%)
Vol (Mn)
88 1482 512 810 1196
7.2 7.1 6.7 5.9 5.7
5.9 2.5 10.0 0.2 1.3
Price
Chg (%)
Vol (Mn)
273 480 97 1444 290
(4.0) (2.5) (2.5) (1.7) (1.7)
0.8 0.6 4.7 0.3 5.4
Source: ET = Economic Times, BS = Business Standard, FE = Financial Express, BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange
C-6, Ground Floor, Paragon Center Pandurang Budhkar Marg, Worli, Mumbai – 400 013. India
Emkay - Private Client Research
12 th June, 2008
FROM OUR RESEARCH DESK Event Update Pankaj Kumar [email protected] +91 22 66121243
PSL Ltd. (CMP Rs 381, FY09E EPS Rs 36.8, BUY, Target Price Rs 668) PSL has bagged orders worth Rs 19280 mn from GAIL. This is the fifth consecutive order from GAIL and second consecutive large size order bagged by the company in the month of June. With this the total order book of the company stands at over Rs 60000 mn which is 3x FY08E net sales. These orders are expected to be executed by December 2009. Under mentioned are the details of the same.
Fifth consecutive order from GAIL worth Rs 19280 mn PSL has been awarded its fifth consecutive order from GAIL India for supplying large diameter coated line pipes valued at Rs. 19,280 million.
PSL has been awarded its fifth consecutive order from GAIL India for supplying large diameter coated line pipes valued at Rs. 19,280 million. The order has been awarded for the supply of large diameter HSAW pipes, varying in size from 20 inches to 48 inches, and totalling 470 kms in length for GAIL’s Vijaipur-Dadri-Bawana Pipeline. The production against this order is expected to commence in July 2008. The company expects to execute the order within the coming financial year. PSL’s Varsana facilities will be fulfilling the entire requirement of the order.
Timely execution resulting into repeat orders from GAIL The contract is the fifth successive order secured by PSL from GAIL cumulatively totalling over Rs. 27,000 million. The company has successfully completed the first 4 orders in a timely manner, resulting in a total of 675 km of pipeline already laid. Orders received from GAIL Vijaipur-Dadri-Bawana Pipeline*
Length (Kms) 470
Value (Rs.million) 19,280
124 190
1,350 2,180
Dahej - Uran Pipeline Project (Phase II)
164.5
1,810
Dahej - Uran Pipeline Project (Phase I) Total
197 1,145.00
2,410 27,030
Dhabol - Panvel Pipeline (Phase II) Dhabol - Panvel Pipeline (Phase I)
* Current Order, Source: Company
Bagged US$ 418 mn of order in US Recently PSL’s US subsidiary, PSL North America LLC bagged US$ 418 mn of pipes and associated coating from Florida Gas Transmission Company.
Recently PSL’s US subsidiary, PSL North America LLC bagged US$ 418 mn of pipes and associated coating from Florida Gas Transmission Company. The order is for the supply of X70 grade HSAW pipes with diameters ranging from 30-42 inches and 543 miles of length. The order is to be executed by December 2009 and carries price escalation clause. The company is expected to deliver most of the portion of this order from its greenfield plant in US which is expected to be operational by Q2FY09.
Total order backlog stands at Rs 60000 mn With all these orders bagged by PSL, the consolidated unexecuted order book now stands in excess of Rs. 60,000 million
With all these orders bagged by PSL, the consolidated unexecuted order book now stands in excess of Rs. 60,000 million, with a substantial portion secured over the course of the past one month.
Domestic order visibility appears to be strong Going forward the domestic order visibility appears to be strong as GAIL, GSPL and other domestic gas pipeline players have announced their detailed plans worth over Rs 200,000 million in investment for building gas pipeline transmission networks. PSL expects a large share of orders from these proposed gas pipeline network. Contd...
Morning Meeting Notes
2
Emkay - Private Client Research
12 th June, 2008
Negligible impact of export duty on future financials Since exports from India comprises merely 2.5% of the total current orderbook of PSL, the company is least likely to be impacted from the recently imposed duty on exports orders executed from India.
Since exports from India comprises merely 2.5% of the total current orderbook of PSL, the company is least likely to be impacted from the recently imposed duty on exports orders executed from India. Large focus on domestic pipeline demand and execution of overseas orders from its units based in UAE and USA gives PSL an edge over other line pipe manufacturing players.
Background PSL Ltd is going to become one of the largest HSAW players in the world with fully expanded installed capacity of 15.5 lakh tonne per annum.
PSL Ltd deals in design, manufacture, supply, erection and commissioning of plants, machinery and equipments catering to the pipeline industry. Its business segments include HSAW pipes manufacturing and coating, turnkey projects for HSAW mills, etc. It is the largest HSAW pipe manufacturer in India with total annual installed capacity of 11.75 lakh tonne. It manufactures HSAW pipes with diameter ranging from 18 inches to 125 inches, thickness 5 mm to 25 mm and length 6 meter to 24 meter. It has 12 HSAW mills spread across India and Middle East. It is expanding its operations in US by setting up pipe mill with installed capacity of 3 lakh tonne per annum which is expected to be operational in Q2FY09. With this it is going to become one of the largest HSAW players in the world with fully expanded installed capacity of 15.5 lakh tonne per annum.
Financial Estimates : Net Sales
FY07 14,433
FY08E 20,220
FY09E 30,251
FY10E 35,747
EBITDA EBITDA %
1,642 11.4%
2,293 11.3%
3,416 11.3%
4,226 11.8%
PAT Equity
683 340.6
1,021 430.0
1,716 466.4
2,257 502.7
20.0 19
23.7 16
36.8 10.3
44.9 8.5
EPS (Rs) PER (x) Source: Emkay PCG Research
We maintain our previous financial estimates and may review the same when the company declares FY08 audited financial result which is expected by the end of this month. On the basis of FY09E and FY10E EPS of Rs 36.8 and Rs 44.9, PSL is trading at a P/E of 10.3x and 8.5x respectively. We maintain BUY recommendation and our previous target price of Rs 668.
Home Morning Meeting Notes
3
Emkay - Private Client Research
12 th June, 2008
FROM OUR COMMODITY RESEARCH DESK Commodities View Commodity Research Team
US ECONOMIC DATA RELEASES AS ON 11th June 2008 Data NO RELEVANT DATA RELEASE
Actual
Expected
Previous
-
-
-
Bullion: Gold and Silver recovered from their lows made on Tuesday supported by a weak dollar and record-high crude prices. Both gold and silver rallied from supports at $863 and $16.40 in spot to close higher at $880 and $16.91. Crude also recovered from support at $130 to close above $136 on Nymex which supported bullion prices. Among Thursday's data, Core retail sales, retail sales and Import price Index data are expected to be negative while Jobless Claims data is expected to be positive for bullion. Gold and Silver are likely to correct till $873 and $16.65 in spot but one could initiate a buy from these levels for higher targets of $890 and $17.10 in spot respectively.
Crude: Crude Oil rallied higher taking good support at $130 on Nymex, a possibility which was mentioned in Tuesday's report. Crude rallied to $138.30 on Nymex before closing slightly lower at $137. The US inventory data showed an unexpectedly huge drawdown in crude inventories as against an expected build-up in gasoline and distillate inventories. Crude now has support at $134.5 on Nymex and we could see a run-up till $138 and $142 in the near term.
Home Morning Meeting Notes
4
Emkay - Private Client Research
12 th June, 2008
FROM OUR TECHNICAL DESK Indices Sensex Nifty S&P CNX 500 BSE 500 BSE Mid-Cap BSE Small-Cap BSE Auto BSE Health BSE FMCG BSE IT BSE PSU BSE Bankex BSE Oil & Gas BSE Metals BSE Cons Dur BSE Cap Good BSE Realty BSE Power Levels to Watch Day’s High Day’s Low 13 DMA 34 DMA
Previous close 14,889 4449 3570 5,864 6,103 7,341 4,119 4,411 2,276 4,283 6,390 6,862 9,691 15,265 3,840 11,617 5,630 2,606 Sensex 15,225 15,009 15856 16322
Today’s close 15,185 4523 3632 5,957 6,190 7,467 4,152 4,447 2,268 4,357 6,503 7,018 9,832 15,400 3,846 11,901 5,803 2,652
% chg 1.99 1.66 1.73 1.59 1.42 1.72 0.79 0.80 -0.35 1.72 1.77 2.27 1.46 0.88 0.15 2.44 3.07 1.76 Nifty 4541 4468 4686 4837
Yesterday Nifty opened on a positive note and made a high of 4541, thereafter it was moving very range bound through out the day. Finally Nifty closed 4523 with a gain of 1.66%.The BSE Sensex closed at 15185 with a gain of 1.99%. On the sectoral indices front, BSE Realty index (+3.07%) followed by BSE Cap Good index (+2.44%) were the top-gainers, rest all other indices closed positive except BSE FMCG index (-0.35%) closed negative. The Advance decline ratio was almost 3:1.
Market Perspective After three days of continuous downtrend yesterday Nifty opened on a positive note. It made a high of 4541and thereafter was moving very range bound, but however through out the day bulls were not giving any chance to bears to take over them. Finally Nifty closed above the psychological level of 4500 with a gain of 1.66% at 4523. Yesterday Nifty had already retraced 38.20% of the recent fall from 4746 to 4369, now for an immediate term can come upto to 4558 which is 50% of the above mentioned fall and if it sustain above this level then it can come upto 4602 levels which is 61.80% retracement level of the above mentioned fall. We strongly believe that on higher level selling pressure will be witnessed therefore one should use this bounce back as an exit opportunity. However for short-term we maintain our bearish view with the target of 4053. Today’s Strategy: For Intra-day Nifty has resistance at 4558 and it has support at 4482 and below that 4369.
Sectoral Speak: After the major fall from 8148, yesterday the BSE Realty index took support at 5513, and outperformed the broader markets. It made a high of 5852 and finally closed at 5803 with a gain of 3.07%. Now this index can fill last week Friday’s Gap and can test 6188 levels.
Contd...
Morning Meeting Notes
5
Emkay - Private Client Research
12 th June, 2008
Recommendations Futures Trading Calls Date
Futures
Action Reco. Price
03-06-08
Nifty June
Sell
4487.00
50
4520.60 4220.00
4515.00 Stop-Loss triggered
09-06-08
Reliance June
Sell
2136.00
75
2230.60 1950.00
2264.80 Stop-Loss triggered
10-06-08
ONGC June
Sell
813.00
225
700.00
828.50
10-06-08
Mc Dowell June
Sell
1392.00
125
1462.60 1250.00
1383.40
10-06-08
LT June
Sell
2535.00
50
2655.30 2300.00
2670.00 Stop-Loss triggered
Manas Jaiswal Technical Analyst [email protected] +91 22 66121274
Lot Size
Stop-loss
864.60
Target
Current price
Comment
Suruchi Kapoor Junior Technical Analyst [email protected] +91 22 66121275
Home Morning Meeting Notes
6
Emkay - Private Client Research
12 th June, 2008
FROM OUR DERIVATIVES DESK Nifty Snapshot Open Interest (No. of Shares)
Nifty: 4523.60 (1.66%) LTP
10.06.08
11.06.08
Basis
Nifty Spot
4461.00
4534.85
-
Jun Future
4453.00
July Future
4445.00
10.06.08
Change in OI
11.06.08
Nifty
-
-
4515.00
-19.85 39423750 40129000
705250
4506.00
-28.85
1261700
106800
40605500 41419650
814150
Total (Jun+ July +Aug)
1154900
PUT CALL RATIO (PCR-OI) 10.06.08
11.06.08 Chg in OI
Call OI 25140650 23705000 -1435650 Put OI 37211450 39116300 PCR
1.48
1.65
1904850 0.17
FII's Derivative Statistics for 10.06.08 Buy
No. of
Sell
Amt in
No. of
Crs.
Contr.
Open Interest as on 10.06.08
Amt in
No. of
Amt in
Contr.
Open Interest as on 09.06.08 No. of
Change in FIIs Open Interest
Amt in
No. of
Amt in
Contr.
Crs.
Crs.
Contr.
Crs.
Contr.
Crs.
Index Futures 116631
2571.57 164507
3628.72
950930 21098.33
926682
20679.37
24248
418.96
Index Options
66348
1452.40
48294
1073.49
871150 19382.22
842584
18962.14
28566
420.08
Stock Futures
49666
970.63
44702
871.25
927638 18065.08
906134
17738.2
21504
326.88
1886
53.42
509
11.92
1064.21
56220
1028.09
1802
36.12
234531 5048.023 258012 5585.377 2807740 59609.83
2731620
58407.8
76120
1202.03
Stock Options TOTAL
58022
Source: NSE
Today Nifty opened Positive, and later on it traded mostly sideways with a positive bias throughout the day to finally close at 4523.60 with a gain of 1.66 %. The major Gainers were Orchid Chemicals, NIIT Tech, Bombay Dyeing, Air Deccan and Hero Honda. However, the major losers were Patni, BPCL, Yes Bank, Siemens and IRB. n
Nifty June futures cost of carry is at 10.65 % Negative against a 4.09 % Negative for the previous session.
n
Nifty June futures traded at nearly 20 - 25 points Discount at the end of trading sessions.
n
Total Turnover for NSE F&O Segment was Rs.45775 Crores.
Open Interest Analysis: Long OI was seen in Cipla (12%), Crompton Greaves (11%), Hero Honda (9%), Orchid Chemicals (32%) and Ranbaxy (24%). Hence we may see further upside move in these stocks. Short OI build up was seen in IDEA (8%). Hence we would advise clients to avoid going long on the Stock. The Implied Volatility of Nifty decreased from 33 - 34 % to 32 - 33 %.Nifty Futures added 8.14 Lac shares (2%).Now on the downside Nifty has strong support at 4200 levels and immediate support at 4400 on an end of day basis.
Put Call Ratio Analysis: PCR (OI) of Nifty increased from 1.48 to 1.65. Nifty Call options shed 14.35 lac shares (5.71%) and Put options added 19.04 lac shares (5.12%) in OI.
Cost of Carry (June): Turned Positive: BPCL, Essar Oil, MTNL and Praj Industries. Turned Negative: Amtek Auto, Axis Bank, Ballarpur Ind , Bharti Airtel, BHEL, Dr Reddy, ICICI Bank, ITC, Orchid Chemicals, Punj Llyod, SAIL and Tech M.
Contd...
Morning Meeting Notes
7
Emkay - Private Client Research
12 th June, 2008
Bank Nifty: 5971.25 (2.7%) LTP
CNX IT: 4303.60 (1.26%)
Open interest (No. of shares)
Chg in Ol
LTP
10.06.08 11.06.08 Basis 10.06.08 11.06.08 Spot
5821.40 5985.05
10.06.08
-
- Spot
4309.00 4270.50
130875
113150 -17725 June Future 4231.00
Total (Jun+ July +Aug)
132850
114650 -18200 Total (Jun+ July +Aug)
LTP
Open interest (No. of shares)
2285.20 2326.15
June Future 2285.65
-
2311.20 -14.95
Total (Jun+ July +Aug)
Chg in Ol
LTP 10.06.08
-
- Spot
7392.95 7392.00
2325
2325
0 June Future 7231.35
2325
0 Total (Jun+ July +Aug)
31650
31150
-500
31650
31150
-500
Open interest (No. of shares)
Chg in Ol
-0.95
-
-
14425
14425
0
14425
14425
0
Most active stock options
No. of
Scrip
Expiry
Strike Price
JUN JUN JUN JUN JUN JUN JUN JUN JUN JUN
580 2310 65 160 2250 60 2220 70 3000 2400
Contracts RELIANCE RANBAXY DLF IFCI RELCAPITAL LT SBIN BHEL ICICIBANK RPL
-
11.06.08 Basis 10.06.08 11.06.08
7242.10
2325
Top traded stock futures Scrip
-38.5
-
Nifty Junior: 7376.95 (2.09%)
10.06.08 11.06.08 Basis 10.06.08 11.06.08 Spot
Chg in Ol
11.06.08 Basis 10.06.08 11.06.08
4262.65
June Future 5830.00 5949.00 -36.05
Nifty Midcap 50: 2320.25 (1.76%)
Open interest (No. of shares)
Option Type
87546 62214 36067 30427 26903 23255 20674 19593 18744 18360
RANBAXY RELIANCE IFCI SAIL RELIANCE IFCI RELIANCE IFCI LT RELIANCE
No of Contracts
CA CA CA CA CA CA CA CA CA CA
1678 1659 1550 1349 1244 1127 1114 1101 979 922
Derivative Strategy Recommendations Date
Scrip
View
Strategy Action
Maximum Maximum Profit Risk
Current Price
Profit/ Remarks Loss (Rs.)
02.06.08
RNRL
Bearish
Sell Call Option
Sell June 100 CA @ 6.75
Rs.12069
-
Rs.9208.2
Booked Profit @ 1.6
05.06.08
Nifty
Bearish
Bear Put Spread
Buy June 4600 PE @ 154 Sell June 4400 PE @ 82
Rs.6400
Rs.3600
June 4600 PE @ 162 June 4400 PE @ 79
Rs.550
Hold
05.06.08
RPL
Bearish
Sell Call Option
Sell June 170 CA @ 6.05
Rs.10133.75
Breakeven @ 176.05
June 170 CA @ 8.65
(Rs.4355)
Hold
05.06.08
JP Bearish Associates
Sell Call Option
Sell June 200 CA @ 11.1
Rs.8325
Breakeven @ 211.10
June 200 CA @ 7.1
Rs.3000
Hold
09.06.08
Reliance
Bearish
Buy Put Option
June 2190 PA @ 44.5
(Rs.5662.5)
Hold
10.06.08
RNRL
Bearish
Sell Call Option
June 90 CA @ 3.85
Rs.625.8
Hold
Buy June 2190 PA @ 120 Sell June 90 CA @ 4.20
Rs.7509.60
Breakeven @ 106.75
Rs.9000 Breakeven @ 94.20
Sameer Shetye Associate Derivative Analyst [email protected] Tel: +91 22 6612 1276
Morning Meeting Notes
Home 8
Emkay - Private Client Research
12 th June, 2008
FROM OUR DEALING DESK Dealing News
Market News & Gossip Market Outlook: Advance decline ratio was at 2.26:1 which is positive. Accumulate stocks like Hero Honda, L&T, Infosys and Tata motors as investment idea.
Events Updates: Ranbaxy has entered into a big deal with Japanese pharmaceutical company, Daiichi Sankyo has agreed to buy entire 35% stake from the promoters in Ranbaxy. Daiichi is aiming to increase its stake to 50.1%. This deal will close by March 2009. After this deal, Daiichi will make an open offer at Rs 737/share.
Derivatives: On Wednesday Net OI Up by Rs.1493 cr. (Disc. to cash avg.18-20 pts.) NF = Net OI Up by Rs.610 cr. (added 8 lc NF ) SF = Net OI Up Rs.883 cr. Overall OI is @ Rs 44809 cr. (NF 18830 cr + SF 25980 cr) Fii's OI (only Futures) as on 10th June stood at Rs.39163 cr. (ie 44%)
Market Gossip*: It was a strong pullback rally for the markets through out the day after last few sluggish sessions. Buying was seen in reality, banking, capital goods, technology and pharma. Important resistance level is 4746 which needs to be breached on closing basis for the trend to be clear and positive. Our view is still cautious as a single day bounce back after a fall of 10% in the markets cannot suggest bullish trend. We continue with our negative bias in Nifty, DLF and JP Associates. Mid term trading ideas which we like are Reliance Capital target 1260. Traders are advised to maintain a stop loss of 5-7% on all trading calls. Important parameters to watch are Crude prices, inflation and FII flows. Disclaimer * : Short term view is expressed with time horizon of 8 to 10 trading sessions while mid term view is for a time period of one to two months. This Market Gossip information contained herein is from the public domain or sources believed to be reliable. This market gossip information may not be suitable for all clients. Clients are requested to make their own decision based on their own investment objectives, Stop losses, goals & financial position. Stop loss for short term and mid term views should be kept at 5%-7% from the recommended price
Home Morning Meeting Notes
9
Emkay - Private Client Research
12 th June, 2008
TRADE DETAILS OF BULK DEALS Bulk Deals
Deal Date 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008
Scrip Name ACCURATE TR ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS AZTECSOFT L AZTECSOFT L BANG CHOIC INTERN CHOIC INTERN JUMBO BAG LT JUMBO BAG LT KARUTURI GLO KARUTURI GLO RAI SH REK M REFEX REFRIG RIT PRO IND SPICE MOBIL TUTIS TECH USHER AGRO
Client Name
Deal Quantity Price ** Type * SECUROCROP SECURITIES INDIA P S 19655 121.69 SUMMIT COMMUNICATIONS PVT LTD B 100000 318.00 MUKUL R. TIBREWALA B 78949 311.81 S. M. NISSAR B 155837 312.10 PRABHUDAS LILLADHER PVT. LTD. B 112238 309.98 PINKEY POPATLAL JAIN B 78276 310.49 MUKUL R. TIBREWALA S 78949 310.83 GOPAL TRADERS S 99363 304.10 S. M. NISSAR S 156072 312.30 PRABHUDAS LILLADHER PVT. LTD. S 112238 310.00 PINKEY POPATLAL JAIN S 78276 309.35 MINDTREE LIMITED B 242472 72.00 V R GOVINDARAJAN S 242472 72.00 CHANDRA FIN. SERV.PVT. LTD B 96522 264.39 EXPLICIT FINANCE LTD B 21000 13.10 DHANNALAL ARVINDKUMAR JAIN S 20900 13.10 SANDEEP MOHAN BONGANE S 54138 37.60 NILESH JOSEPH GONSALVES S 45544 37.60 CITIGROUP GLOBAL MRKT MAURITIUS P L B 7200000 21.25 BSMA LIMITED S 7200000 21.25 NILU SANJAY PODDAR B 70963 113.91 HIMAT PARSHOTTAMBHAI JATANIA B 87000 229.50 SANJEEV ARORA B 81000 120.86 MODI RUBBER LTD S 389797 21.52 MILLENNIUM ENTERPRISE S 125010 13.88 MAVI INVESTMENT FUND LTD S 128060 139.63
Source: BSE ** = Weighted Average Trade Price / Trade Price
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Emkay - Private Client Research
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COMPANY / MARKET Forthcoming Events
Effective Date
Summary
Action Type
12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08
Acrysil Ltd Ador Fontech Ltd Advanta India Ltd Aries Agro Ltd Asian Paints Ltd Bharat Bijlee Ltd Century Enka Ltd DIC India Ltd Electrotherm India Ltd Indbank Merchant Banking SVC Madras Aluminium Co Ltd/The MRO-Tek Ltd Navin Fluorine International Ltd Reliance Industries Ltd Solitaire Machine Tools Swasti Vinayaka Synthetics Ltd Vijaya Bank
Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Corporate Meeting Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Corporate Meeting Cash Dividend Cash Dividend Cash Dividend
Source: Bloomberg
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Emkay’s Network
Home
N
Map not to scale
Total Regional Offices Total Branches Total Franchisees
03 77 207
Regional Offices NEW DELHI MR. ARUN BANSAL 401, NEW DELHI HOUSE, 27, BARAKHAMBA ROAD, NEW DELHI - 110001 PH: 9350496088 / 9350192101; Email: [email protected] CHENNAI MR. RAJESH RENGARAJAN 1ST FLOOR ROOP EMERALD. NEW NO 45 OLD NO28, NORTH USMAN ROAD. T-NAGAR, CHENNAI 600-017 TEL NOS: 044-45502496/7/ , Email: [email protected] KOLKATA MR. VIKRAM MEHROTRA / MR. VISHAL PRABHAKAR 4, R.N.MUKHERJEE ROAD, 1 ST FLOOR, KOLKATA -700001. WEST BANGAL. Mob: 9830999412(Vikram) / 9831554477(Vishal) Email: [email protected] / [email protected] / [email protected] Mr. Mr. Mr. Mr.
Chirayush Bakshi – Vice President - Marketing and Business Development, Mob.: 9322934529; Email: [email protected] V. H. Bhaskaran – Vice President - Business Development (South), Mob.: 9323811847; Email: [email protected] Vijay Saraf – Vice President - Private Client Group, Tel.: +91-022-66121265; Email: [email protected] Hemang Mamtora – Vice President - Branch & Franchise Sevicing, Tel.: +91-022-66121245; Email: [email protected]
Morning Meeting Notes
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12 th June, 2008
Home
Name
Sector
Tel No
E-mail id
Daljeet S. Kohli
Head of Research
+91 22 6612 1205
[email protected]
Urmil Negandhi
Auto, Auto Ancillary and Pharmaceutical
+91 22 6612 1280
[email protected]
Pankaj Kumar
Engineering, Capital Goods & Mid-caps
+91 22 6612 1243
[email protected]
Sweta Sinha
Hotels & IT
+91 22 6612 1282
[email protected]
Manas Jaiswal
Technical Analyst
+91 22 6612 1274
[email protected]
Suruchi Kapoor
Junior Technical Analyst
+91 22 6612 1275
[email protected]
Sameer Shetye
Associate Derivative Analyst
+91 22 6612 1276
[email protected]
DISCLAIMER Emkay Share & Stock Brokers Limited (Emkay) has two separate independent equity research groups: Institutional Equities and Private Client Group. This document has been prepared by Emkay – Private Client Group (Emkay -PCG). Affiliates of Emkay Institutional Group may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating and target price of the Institutional Equities Research Group of Emkay Share & Stock Brokers Limited. This document is not for public distribution and has been furnished to you solely for your information and any review, re-transmission, circulation or any other use is strictly prohibited. Persons into whose possession this document may come are required to observe these restrictions. This document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential information and/or privileged material. We are not soliciting any action based upon this material. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of Emkay -PCG. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Emkay-PCG will not treat recipients as customers by virtue of their receiving this report. We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable. It should be noted that the information contained herein is from publicly available data or other sources believed to be reliable. Neither Emkay, nor any person connected with it, accepts any liability arising from the use of this document. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The recipients of this material should rely on their own investigations and take their own professional advice. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. Opinions expressed are our current opinions as of the date appearing on this material only. We do not undertake to advise you as to any change of our views expressed in this document. While we would endeavor to update the information herein on a reasonable basis, Emkay, its subsidiaries and associated companies, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasons that may prevent Emkay and its affiliates from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Emkay and its affiliates, officers, directors, and employees may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company (ies) discussed herein or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Analyst’s holding in the stocks mentioned in the report: NIL
Emkay Share and Stock Brokers Ltd. Member: Bombay Stock Exchange Limited (BSE) and The National Stock Exchange (NSE). C-6, Ground Floor, Paragon Center, Pandurang Budhkar Marg, Worli, Mumbai – 400 013. Tel No. 66121212. Fax: 66121299; e-mail: [email protected]; Regn.Nos.PMS-INP 000000779; BSE (Cash) INB 010901838; BSE (Derivative) INF 010901838; NSE (Cash) INB 230901838; NSE (Derivative) INF 230901838; DP CDSL IN-DP-CDSL-58-2000 Call (Tollfree) 1-600-223-434 / 1-800-223-434 Morning Meeting Notes
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Morning Meeting Notes
Private Client Research 12 th June, 2008
Corporate Snippets
Contents
v From Our Research Desk
n
- PSL Ltd.
v v v v v v
From Our Commodity Desk From Our Technical Desk From Our Derivatives Desk From Our Dealing Desk Trade Details of Bulk Deals Forthcoming Events
n
n
Market Statistics Index Closing Sensex 15185 Nifty 4524 Sectoral Indices Mid-Cap 6191 Small-Cap 7467 Auto 4152 Health 4447 FMCG 2269 IT 4357 PSU 6503 Bankex 7018 Oil & Gas 9832 Metal 15401 Capital Goods 11901 World Indices Closing NASDAQ 2394 DOW 12084 Nikkei 13847 Hang Sang 22755 Indian ADR’s (USD) VSNL N/A Infosys 44.89 Wipro 12.69 Satyam 25.32 Dr Reddy’s Lab 16.14 Value Traded (Rs Cr) Cash BSE Cash NSE Derivatives Net Inflows (Rs Cr) FII Mutual Fund Advances/Declines (BSE) 11Jun08 A Advance 153 Decline 51 Unchanged 0 Commodity 11Jun08 Crude (USD/Bbl) 134.6 Gold (USD/OZ) 876.1 Silver (USD/OZ) 16.8 Debt/Forex Market Closing Re/USD 42.87 10 yr Gsec Yield 8.26 Source : Bloomberg
1 Day (%) 3 M (%) 2.0 (5.8) 1.7 (7.0)
6 M (%) (25.2) (25.8)
1.4 (11.5) 1.7 (12.8) 0.8 (11.1) 0.8 16.0 (0.4) 2.9 1.7 22.8 1.8 (17.3) 2.3 (17.3) 1.5 (6.9) 0.9 (4.2) 2.4 (15.4) 1 Day (%) 3 M (%) (2.2) 6.7 (1.7) (0.2) (2.4) 7.7 (2.5) (2.9) 1 Day (%) 3 M (%) N/A N/A (1.8) 27.1 (3.3) 19.3 (3.0) 17.4 0.9 17.5 11Jun08 (%) 5317.7 (0.1) 13191.2 (4.4) 45776.0 (15.1) 10Jun08 MTD (844.0) (5424.6) NA 1219.9
(32.6) (36.0) (27.9) 9.5 4.6 (1.7) (35.5) (40.4) (24.2) (19.2) (41.4) 6 M (%) (10.4) (10.3) (13.1) (20.2) 6 M (%) N/A 2.1 (15.2) (4.7) (6.5)
YTD (9118.0) 332.0
B B2 1155 483 51 1 Day (%) 3 M (%) 2.7 27.1 (0.5) (10.9) (0.6) (16.8) 1 Day (%) 3 M (%) 0.5 (5.9) (0.3) 7.1
Total 1308 534 51 6 M (%) 51.3 7.7 14.3 6 M (%) (9.0) 4.7
n
n
n
n n
n
Japanese pharmaceutical major Daiichi Sankyo will acquire a majority stake in Ranbaxy Laboratories Ltd (RLL), with the promoters of the company selling their entire stake. Daiichi would acquire 34.82 per cent stake of the promoters and make an open offer as per regulatory requirements at a price of Rs 737 per share. BL NIIT Technologies on Wednesday posted a net profit of Rs 31 crore in the fourth quarter ended March 31, 2008, an 11 per cent fall from the corresponding period last year. It had reported a net profit of Rs 45.9 crore during the same quarter la st year. BL Unichem Laboratories Ltd has received final approval from US Food & Drug Administration (FDA) for Zaleplon Capsules in the strengths of 5 mg and 10 mg. BS After the aborted attempt to induct strategic investor six months back, non-banking finance company IFCI board will again meet tomorrow to consider inviting bids for selling 26 per cent stake. BS PSL Ltd has bagged a contract worth Rs 1,928 crore from public sector undertaking Gail to supply steel pipes for the latter's Vijaipur-Dadri-Bawana pipeline project. BS 3i Infotech Ltd has acquired a majority stake of 51 per cent in Fineng Solutions Pvt Ltd (FinEng) with a commitment to acquire remaining stake in two tranches over a period.BS Construction firm Gammon India Ltd said on Wednesday its overseas units have acquired stakes in two Italian firms. ET Bharat Petroleum Corp, India's second-biggest state-run refiner, may buy crude oil from Iran under a one-year contract to diversify its sources of supply, company officials said today. ET Lupin Ltd today informed the Bombay Stock Exchange that the company has received US Food and Drug Administration (USFDA) approval for the company's abbreviated new drug application for Ramipril capsules, 1.25 mg, 2.5 mg, 5 mg and 10 mg. BS
Macro Economic & Geo-Political News n
n
China's trade surplus touched $20.2 billion during May, a 10 per cent drop over the same month a year earlier, the General Administration of Customs said. BS The Prime Minister, Dr Manmohan Singh, on Wednesday made a strong pitch for Indo-US nuclear deal, saying it is crucial for ending nuclear apartheid against India and hoped progress will be made in the months ahead on the agreement which has "r un into some difficulties''. BL
Top Five Gainers (NSE) Ambuja Cements BHEL DLF Hero Honda HDFC Bank Top Five Losers (NSE) BPCL Siemens India Idea Cellular Sun Pharma Cairn India
Price
Chg (%)
Vol (Mn)
88 1482 512 810 1196
7.2 7.1 6.7 5.9 5.7
5.9 2.5 10.0 0.2 1.3
Price
Chg (%)
Vol (Mn)
273 480 97 1444 290
(4.0) (2.5) (2.5) (1.7) (1.7)
0.8 0.6 4.7 0.3 5.4
Source: ET = Economic Times, BS = Business Standard, FE = Financial Express, BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange
C-6, Ground Floor, Paragon Center Pandurang Budhkar Marg, Worli, Mumbai – 400 013. India
Emkay - Private Client Research
12 th June, 2008
FROM OUR RESEARCH DESK Event Update Pankaj Kumar [email protected] +91 22 66121243
PSL Ltd. (CMP Rs 381, FY09E EPS Rs 36.8, BUY, Target Price Rs 668) PSL has bagged orders worth Rs 19280 mn from GAIL. This is the fifth consecutive order from GAIL and second consecutive large size order bagged by the company in the month of June. With this the total order book of the company stands at over Rs 60000 mn which is 3x FY08E net sales. These orders are expected to be executed by December 2009. Under mentioned are the details of the same.
Fifth consecutive order from GAIL worth Rs 19280 mn PSL has been awarded its fifth consecutive order from GAIL India for supplying large diameter coated line pipes valued at Rs. 19,280 million.
PSL has been awarded its fifth consecutive order from GAIL India for supplying large diameter coated line pipes valued at Rs. 19,280 million. The order has been awarded for the supply of large diameter HSAW pipes, varying in size from 20 inches to 48 inches, and totalling 470 kms in length for GAIL’s Vijaipur-Dadri-Bawana Pipeline. The production against this order is expected to commence in July 2008. The company expects to execute the order within the coming financial year. PSL’s Varsana facilities will be fulfilling the entire requirement of the order.
Timely execution resulting into repeat orders from GAIL The contract is the fifth successive order secured by PSL from GAIL cumulatively totalling over Rs. 27,000 million. The company has successfully completed the first 4 orders in a timely manner, resulting in a total of 675 km of pipeline already laid. Orders received from GAIL Vijaipur-Dadri-Bawana Pipeline*
Length (Kms) 470
Value (Rs.million) 19,280
124 190
1,350 2,180
Dahej - Uran Pipeline Project (Phase II)
164.5
1,810
Dahej - Uran Pipeline Project (Phase I) Total
197 1,145.00
2,410 27,030
Dhabol - Panvel Pipeline (Phase II) Dhabol - Panvel Pipeline (Phase I)
* Current Order, Source: Company
Bagged US$ 418 mn of order in US Recently PSL’s US subsidiary, PSL North America LLC bagged US$ 418 mn of pipes and associated coating from Florida Gas Transmission Company.
Recently PSL’s US subsidiary, PSL North America LLC bagged US$ 418 mn of pipes and associated coating from Florida Gas Transmission Company. The order is for the supply of X70 grade HSAW pipes with diameters ranging from 30-42 inches and 543 miles of length. The order is to be executed by December 2009 and carries price escalation clause. The company is expected to deliver most of the portion of this order from its greenfield plant in US which is expected to be operational by Q2FY09.
Total order backlog stands at Rs 60000 mn With all these orders bagged by PSL, the consolidated unexecuted order book now stands in excess of Rs. 60,000 million
With all these orders bagged by PSL, the consolidated unexecuted order book now stands in excess of Rs. 60,000 million, with a substantial portion secured over the course of the past one month.
Domestic order visibility appears to be strong Going forward the domestic order visibility appears to be strong as GAIL, GSPL and other domestic gas pipeline players have announced their detailed plans worth over Rs 200,000 million in investment for building gas pipeline transmission networks. PSL expects a large share of orders from these proposed gas pipeline network. Contd...
Morning Meeting Notes
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Emkay - Private Client Research
12 th June, 2008
Negligible impact of export duty on future financials Since exports from India comprises merely 2.5% of the total current orderbook of PSL, the company is least likely to be impacted from the recently imposed duty on exports orders executed from India.
Since exports from India comprises merely 2.5% of the total current orderbook of PSL, the company is least likely to be impacted from the recently imposed duty on exports orders executed from India. Large focus on domestic pipeline demand and execution of overseas orders from its units based in UAE and USA gives PSL an edge over other line pipe manufacturing players.
Background PSL Ltd is going to become one of the largest HSAW players in the world with fully expanded installed capacity of 15.5 lakh tonne per annum.
PSL Ltd deals in design, manufacture, supply, erection and commissioning of plants, machinery and equipments catering to the pipeline industry. Its business segments include HSAW pipes manufacturing and coating, turnkey projects for HSAW mills, etc. It is the largest HSAW pipe manufacturer in India with total annual installed capacity of 11.75 lakh tonne. It manufactures HSAW pipes with diameter ranging from 18 inches to 125 inches, thickness 5 mm to 25 mm and length 6 meter to 24 meter. It has 12 HSAW mills spread across India and Middle East. It is expanding its operations in US by setting up pipe mill with installed capacity of 3 lakh tonne per annum which is expected to be operational in Q2FY09. With this it is going to become one of the largest HSAW players in the world with fully expanded installed capacity of 15.5 lakh tonne per annum.
Financial Estimates : Net Sales
FY07 14,433
FY08E 20,220
FY09E 30,251
FY10E 35,747
EBITDA EBITDA %
1,642 11.4%
2,293 11.3%
3,416 11.3%
4,226 11.8%
PAT Equity
683 340.6
1,021 430.0
1,716 466.4
2,257 502.7
20.0 19
23.7 16
36.8 10.3
44.9 8.5
EPS (Rs) PER (x) Source: Emkay PCG Research
We maintain our previous financial estimates and may review the same when the company declares FY08 audited financial result which is expected by the end of this month. On the basis of FY09E and FY10E EPS of Rs 36.8 and Rs 44.9, PSL is trading at a P/E of 10.3x and 8.5x respectively. We maintain BUY recommendation and our previous target price of Rs 668.
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FROM OUR COMMODITY RESEARCH DESK Commodities View Commodity Research Team
US ECONOMIC DATA RELEASES AS ON 11th June 2008 Data NO RELEVANT DATA RELEASE
Actual
Expected
Previous
-
-
-
Bullion: Gold and Silver recovered from their lows made on Tuesday supported by a weak dollar and record-high crude prices. Both gold and silver rallied from supports at $863 and $16.40 in spot to close higher at $880 and $16.91. Crude also recovered from support at $130 to close above $136 on Nymex which supported bullion prices. Among Thursday's data, Core retail sales, retail sales and Import price Index data are expected to be negative while Jobless Claims data is expected to be positive for bullion. Gold and Silver are likely to correct till $873 and $16.65 in spot but one could initiate a buy from these levels for higher targets of $890 and $17.10 in spot respectively.
Crude: Crude Oil rallied higher taking good support at $130 on Nymex, a possibility which was mentioned in Tuesday's report. Crude rallied to $138.30 on Nymex before closing slightly lower at $137. The US inventory data showed an unexpectedly huge drawdown in crude inventories as against an expected build-up in gasoline and distillate inventories. Crude now has support at $134.5 on Nymex and we could see a run-up till $138 and $142 in the near term.
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FROM OUR TECHNICAL DESK Indices Sensex Nifty S&P CNX 500 BSE 500 BSE Mid-Cap BSE Small-Cap BSE Auto BSE Health BSE FMCG BSE IT BSE PSU BSE Bankex BSE Oil & Gas BSE Metals BSE Cons Dur BSE Cap Good BSE Realty BSE Power Levels to Watch Day’s High Day’s Low 13 DMA 34 DMA
Previous close 14,889 4449 3570 5,864 6,103 7,341 4,119 4,411 2,276 4,283 6,390 6,862 9,691 15,265 3,840 11,617 5,630 2,606 Sensex 15,225 15,009 15856 16322
Today’s close 15,185 4523 3632 5,957 6,190 7,467 4,152 4,447 2,268 4,357 6,503 7,018 9,832 15,400 3,846 11,901 5,803 2,652
% chg 1.99 1.66 1.73 1.59 1.42 1.72 0.79 0.80 -0.35 1.72 1.77 2.27 1.46 0.88 0.15 2.44 3.07 1.76 Nifty 4541 4468 4686 4837
Yesterday Nifty opened on a positive note and made a high of 4541, thereafter it was moving very range bound through out the day. Finally Nifty closed 4523 with a gain of 1.66%.The BSE Sensex closed at 15185 with a gain of 1.99%. On the sectoral indices front, BSE Realty index (+3.07%) followed by BSE Cap Good index (+2.44%) were the top-gainers, rest all other indices closed positive except BSE FMCG index (-0.35%) closed negative. The Advance decline ratio was almost 3:1.
Market Perspective After three days of continuous downtrend yesterday Nifty opened on a positive note. It made a high of 4541and thereafter was moving very range bound, but however through out the day bulls were not giving any chance to bears to take over them. Finally Nifty closed above the psychological level of 4500 with a gain of 1.66% at 4523. Yesterday Nifty had already retraced 38.20% of the recent fall from 4746 to 4369, now for an immediate term can come upto to 4558 which is 50% of the above mentioned fall and if it sustain above this level then it can come upto 4602 levels which is 61.80% retracement level of the above mentioned fall. We strongly believe that on higher level selling pressure will be witnessed therefore one should use this bounce back as an exit opportunity. However for short-term we maintain our bearish view with the target of 4053. Today’s Strategy: For Intra-day Nifty has resistance at 4558 and it has support at 4482 and below that 4369.
Sectoral Speak: After the major fall from 8148, yesterday the BSE Realty index took support at 5513, and outperformed the broader markets. It made a high of 5852 and finally closed at 5803 with a gain of 3.07%. Now this index can fill last week Friday’s Gap and can test 6188 levels.
Contd...
Morning Meeting Notes
5
Emkay - Private Client Research
12 th June, 2008
Recommendations Futures Trading Calls Date
Futures
Action Reco. Price
03-06-08
Nifty June
Sell
4487.00
50
4520.60 4220.00
4515.00 Stop-Loss triggered
09-06-08
Reliance June
Sell
2136.00
75
2230.60 1950.00
2264.80 Stop-Loss triggered
10-06-08
ONGC June
Sell
813.00
225
700.00
828.50
10-06-08
Mc Dowell June
Sell
1392.00
125
1462.60 1250.00
1383.40
10-06-08
LT June
Sell
2535.00
50
2655.30 2300.00
2670.00 Stop-Loss triggered
Manas Jaiswal Technical Analyst [email protected] +91 22 66121274
Lot Size
Stop-loss
864.60
Target
Current price
Comment
Suruchi Kapoor Junior Technical Analyst [email protected] +91 22 66121275
Home Morning Meeting Notes
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12 th June, 2008
FROM OUR DERIVATIVES DESK Nifty Snapshot Open Interest (No. of Shares)
Nifty: 4523.60 (1.66%) LTP
10.06.08
11.06.08
Basis
Nifty Spot
4461.00
4534.85
-
Jun Future
4453.00
July Future
4445.00
10.06.08
Change in OI
11.06.08
Nifty
-
-
4515.00
-19.85 39423750 40129000
705250
4506.00
-28.85
1261700
106800
40605500 41419650
814150
Total (Jun+ July +Aug)
1154900
PUT CALL RATIO (PCR-OI) 10.06.08
11.06.08 Chg in OI
Call OI 25140650 23705000 -1435650 Put OI 37211450 39116300 PCR
1.48
1.65
1904850 0.17
FII's Derivative Statistics for 10.06.08 Buy
No. of
Sell
Amt in
No. of
Crs.
Contr.
Open Interest as on 10.06.08
Amt in
No. of
Amt in
Contr.
Open Interest as on 09.06.08 No. of
Change in FIIs Open Interest
Amt in
No. of
Amt in
Contr.
Crs.
Crs.
Contr.
Crs.
Contr.
Crs.
Index Futures 116631
2571.57 164507
3628.72
950930 21098.33
926682
20679.37
24248
418.96
Index Options
66348
1452.40
48294
1073.49
871150 19382.22
842584
18962.14
28566
420.08
Stock Futures
49666
970.63
44702
871.25
927638 18065.08
906134
17738.2
21504
326.88
1886
53.42
509
11.92
1064.21
56220
1028.09
1802
36.12
234531 5048.023 258012 5585.377 2807740 59609.83
2731620
58407.8
76120
1202.03
Stock Options TOTAL
58022
Source: NSE
Today Nifty opened Positive, and later on it traded mostly sideways with a positive bias throughout the day to finally close at 4523.60 with a gain of 1.66 %. The major Gainers were Orchid Chemicals, NIIT Tech, Bombay Dyeing, Air Deccan and Hero Honda. However, the major losers were Patni, BPCL, Yes Bank, Siemens and IRB. n
Nifty June futures cost of carry is at 10.65 % Negative against a 4.09 % Negative for the previous session.
n
Nifty June futures traded at nearly 20 - 25 points Discount at the end of trading sessions.
n
Total Turnover for NSE F&O Segment was Rs.45775 Crores.
Open Interest Analysis: Long OI was seen in Cipla (12%), Crompton Greaves (11%), Hero Honda (9%), Orchid Chemicals (32%) and Ranbaxy (24%). Hence we may see further upside move in these stocks. Short OI build up was seen in IDEA (8%). Hence we would advise clients to avoid going long on the Stock. The Implied Volatility of Nifty decreased from 33 - 34 % to 32 - 33 %.Nifty Futures added 8.14 Lac shares (2%).Now on the downside Nifty has strong support at 4200 levels and immediate support at 4400 on an end of day basis.
Put Call Ratio Analysis: PCR (OI) of Nifty increased from 1.48 to 1.65. Nifty Call options shed 14.35 lac shares (5.71%) and Put options added 19.04 lac shares (5.12%) in OI.
Cost of Carry (June): Turned Positive: BPCL, Essar Oil, MTNL and Praj Industries. Turned Negative: Amtek Auto, Axis Bank, Ballarpur Ind , Bharti Airtel, BHEL, Dr Reddy, ICICI Bank, ITC, Orchid Chemicals, Punj Llyod, SAIL and Tech M.
Contd...
Morning Meeting Notes
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Emkay - Private Client Research
12 th June, 2008
Bank Nifty: 5971.25 (2.7%) LTP
CNX IT: 4303.60 (1.26%)
Open interest (No. of shares)
Chg in Ol
LTP
10.06.08 11.06.08 Basis 10.06.08 11.06.08 Spot
5821.40 5985.05
10.06.08
-
- Spot
4309.00 4270.50
130875
113150 -17725 June Future 4231.00
Total (Jun+ July +Aug)
132850
114650 -18200 Total (Jun+ July +Aug)
LTP
Open interest (No. of shares)
2285.20 2326.15
June Future 2285.65
-
2311.20 -14.95
Total (Jun+ July +Aug)
Chg in Ol
LTP 10.06.08
-
- Spot
7392.95 7392.00
2325
2325
0 June Future 7231.35
2325
0 Total (Jun+ July +Aug)
31650
31150
-500
31650
31150
-500
Open interest (No. of shares)
Chg in Ol
-0.95
-
-
14425
14425
0
14425
14425
0
Most active stock options
No. of
Scrip
Expiry
Strike Price
JUN JUN JUN JUN JUN JUN JUN JUN JUN JUN
580 2310 65 160 2250 60 2220 70 3000 2400
Contracts RELIANCE RANBAXY DLF IFCI RELCAPITAL LT SBIN BHEL ICICIBANK RPL
-
11.06.08 Basis 10.06.08 11.06.08
7242.10
2325
Top traded stock futures Scrip
-38.5
-
Nifty Junior: 7376.95 (2.09%)
10.06.08 11.06.08 Basis 10.06.08 11.06.08 Spot
Chg in Ol
11.06.08 Basis 10.06.08 11.06.08
4262.65
June Future 5830.00 5949.00 -36.05
Nifty Midcap 50: 2320.25 (1.76%)
Open interest (No. of shares)
Option Type
87546 62214 36067 30427 26903 23255 20674 19593 18744 18360
RANBAXY RELIANCE IFCI SAIL RELIANCE IFCI RELIANCE IFCI LT RELIANCE
No of Contracts
CA CA CA CA CA CA CA CA CA CA
1678 1659 1550 1349 1244 1127 1114 1101 979 922
Derivative Strategy Recommendations Date
Scrip
View
Strategy Action
Maximum Maximum Profit Risk
Current Price
Profit/ Remarks Loss (Rs.)
02.06.08
RNRL
Bearish
Sell Call Option
Sell June 100 CA @ 6.75
Rs.12069
-
Rs.9208.2
Booked Profit @ 1.6
05.06.08
Nifty
Bearish
Bear Put Spread
Buy June 4600 PE @ 154 Sell June 4400 PE @ 82
Rs.6400
Rs.3600
June 4600 PE @ 162 June 4400 PE @ 79
Rs.550
Hold
05.06.08
RPL
Bearish
Sell Call Option
Sell June 170 CA @ 6.05
Rs.10133.75
Breakeven @ 176.05
June 170 CA @ 8.65
(Rs.4355)
Hold
05.06.08
JP Bearish Associates
Sell Call Option
Sell June 200 CA @ 11.1
Rs.8325
Breakeven @ 211.10
June 200 CA @ 7.1
Rs.3000
Hold
09.06.08
Reliance
Bearish
Buy Put Option
June 2190 PA @ 44.5
(Rs.5662.5)
Hold
10.06.08
RNRL
Bearish
Sell Call Option
June 90 CA @ 3.85
Rs.625.8
Hold
Buy June 2190 PA @ 120 Sell June 90 CA @ 4.20
Rs.7509.60
Breakeven @ 106.75
Rs.9000 Breakeven @ 94.20
Sameer Shetye Associate Derivative Analyst [email protected] Tel: +91 22 6612 1276
Morning Meeting Notes
Home 8
Emkay - Private Client Research
12 th June, 2008
FROM OUR DEALING DESK Dealing News
Market News & Gossip Market Outlook: Advance decline ratio was at 2.26:1 which is positive. Accumulate stocks like Hero Honda, L&T, Infosys and Tata motors as investment idea.
Events Updates: Ranbaxy has entered into a big deal with Japanese pharmaceutical company, Daiichi Sankyo has agreed to buy entire 35% stake from the promoters in Ranbaxy. Daiichi is aiming to increase its stake to 50.1%. This deal will close by March 2009. After this deal, Daiichi will make an open offer at Rs 737/share.
Derivatives: On Wednesday Net OI Up by Rs.1493 cr. (Disc. to cash avg.18-20 pts.) NF = Net OI Up by Rs.610 cr. (added 8 lc NF ) SF = Net OI Up Rs.883 cr. Overall OI is @ Rs 44809 cr. (NF 18830 cr + SF 25980 cr) Fii's OI (only Futures) as on 10th June stood at Rs.39163 cr. (ie 44%)
Market Gossip*: It was a strong pullback rally for the markets through out the day after last few sluggish sessions. Buying was seen in reality, banking, capital goods, technology and pharma. Important resistance level is 4746 which needs to be breached on closing basis for the trend to be clear and positive. Our view is still cautious as a single day bounce back after a fall of 10% in the markets cannot suggest bullish trend. We continue with our negative bias in Nifty, DLF and JP Associates. Mid term trading ideas which we like are Reliance Capital target 1260. Traders are advised to maintain a stop loss of 5-7% on all trading calls. Important parameters to watch are Crude prices, inflation and FII flows. Disclaimer * : Short term view is expressed with time horizon of 8 to 10 trading sessions while mid term view is for a time period of one to two months. This Market Gossip information contained herein is from the public domain or sources believed to be reliable. This market gossip information may not be suitable for all clients. Clients are requested to make their own decision based on their own investment objectives, Stop losses, goals & financial position. Stop loss for short term and mid term views should be kept at 5%-7% from the recommended price
Home Morning Meeting Notes
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Emkay - Private Client Research
12 th June, 2008
TRADE DETAILS OF BULK DEALS Bulk Deals
Deal Date 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008
Scrip Name ACCURATE TR ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS ANU LABS AZTECSOFT L AZTECSOFT L BANG CHOIC INTERN CHOIC INTERN JUMBO BAG LT JUMBO BAG LT KARUTURI GLO KARUTURI GLO RAI SH REK M REFEX REFRIG RIT PRO IND SPICE MOBIL TUTIS TECH USHER AGRO
Client Name
Deal Quantity Price ** Type * SECUROCROP SECURITIES INDIA P S 19655 121.69 SUMMIT COMMUNICATIONS PVT LTD B 100000 318.00 MUKUL R. TIBREWALA B 78949 311.81 S. M. NISSAR B 155837 312.10 PRABHUDAS LILLADHER PVT. LTD. B 112238 309.98 PINKEY POPATLAL JAIN B 78276 310.49 MUKUL R. TIBREWALA S 78949 310.83 GOPAL TRADERS S 99363 304.10 S. M. NISSAR S 156072 312.30 PRABHUDAS LILLADHER PVT. LTD. S 112238 310.00 PINKEY POPATLAL JAIN S 78276 309.35 MINDTREE LIMITED B 242472 72.00 V R GOVINDARAJAN S 242472 72.00 CHANDRA FIN. SERV.PVT. LTD B 96522 264.39 EXPLICIT FINANCE LTD B 21000 13.10 DHANNALAL ARVINDKUMAR JAIN S 20900 13.10 SANDEEP MOHAN BONGANE S 54138 37.60 NILESH JOSEPH GONSALVES S 45544 37.60 CITIGROUP GLOBAL MRKT MAURITIUS P L B 7200000 21.25 BSMA LIMITED S 7200000 21.25 NILU SANJAY PODDAR B 70963 113.91 HIMAT PARSHOTTAMBHAI JATANIA B 87000 229.50 SANJEEV ARORA B 81000 120.86 MODI RUBBER LTD S 389797 21.52 MILLENNIUM ENTERPRISE S 125010 13.88 MAVI INVESTMENT FUND LTD S 128060 139.63
Source: BSE ** = Weighted Average Trade Price / Trade Price
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Emkay - Private Client Research
12 th June, 2008
COMPANY / MARKET Forthcoming Events
Effective Date
Summary
Action Type
12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08 12-Jun-08
Acrysil Ltd Ador Fontech Ltd Advanta India Ltd Aries Agro Ltd Asian Paints Ltd Bharat Bijlee Ltd Century Enka Ltd DIC India Ltd Electrotherm India Ltd Indbank Merchant Banking SVC Madras Aluminium Co Ltd/The MRO-Tek Ltd Navin Fluorine International Ltd Reliance Industries Ltd Solitaire Machine Tools Swasti Vinayaka Synthetics Ltd Vijaya Bank
Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Corporate Meeting Cash Dividend Cash Dividend Cash Dividend Cash Dividend Cash Dividend Corporate Meeting Cash Dividend Cash Dividend Cash Dividend
Source: Bloomberg
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Emkay - Private Client Research
12 th June, 2008
Emkay’s Network
Home
N
Map not to scale
Total Regional Offices Total Branches Total Franchisees
03 77 207
Regional Offices NEW DELHI MR. ARUN BANSAL 401, NEW DELHI HOUSE, 27, BARAKHAMBA ROAD, NEW DELHI - 110001 PH: 9350496088 / 9350192101; Email: [email protected] CHENNAI MR. RAJESH RENGARAJAN 1ST FLOOR ROOP EMERALD. NEW NO 45 OLD NO28, NORTH USMAN ROAD. T-NAGAR, CHENNAI 600-017 TEL NOS: 044-45502496/7/ , Email: [email protected] KOLKATA MR. VIKRAM MEHROTRA / MR. VISHAL PRABHAKAR 4, R.N.MUKHERJEE ROAD, 1 ST FLOOR, KOLKATA -700001. WEST BANGAL. Mob: 9830999412(Vikram) / 9831554477(Vishal) Email: [email protected] / [email protected] / [email protected] Mr. Mr. Mr. Mr.
Chirayush Bakshi – Vice President - Marketing and Business Development, Mob.: 9322934529; Email: [email protected] V. H. Bhaskaran – Vice President - Business Development (South), Mob.: 9323811847; Email: [email protected] Vijay Saraf – Vice President - Private Client Group, Tel.: +91-022-66121265; Email: [email protected] Hemang Mamtora – Vice President - Branch & Franchise Sevicing, Tel.: +91-022-66121245; Email: [email protected]
Morning Meeting Notes
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Emkay - Private Client Research
12 th June, 2008
Home
Name
Sector
Tel No
E-mail id
Daljeet S. Kohli
Head of Research
+91 22 6612 1205
[email protected]
Urmil Negandhi
Auto, Auto Ancillary and Pharmaceutical
+91 22 6612 1280
[email protected]
Pankaj Kumar
Engineering, Capital Goods & Mid-caps
+91 22 6612 1243
[email protected]
Sweta Sinha
Hotels & IT
+91 22 6612 1282
[email protected]
Manas Jaiswal
Technical Analyst
+91 22 6612 1274
[email protected]
Suruchi Kapoor
Junior Technical Analyst
+91 22 6612 1275
[email protected]
Sameer Shetye
Associate Derivative Analyst
+91 22 6612 1276
[email protected]
DISCLAIMER Emkay Share & Stock Brokers Limited (Emkay) has two separate independent equity research groups: Institutional Equities and Private Client Group. This document has been prepared by Emkay – Private Client Group (Emkay -PCG). Affiliates of Emkay Institutional Group may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report. The views and opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating and target price of the Institutional Equities Research Group of Emkay Share & Stock Brokers Limited. This document is not for public distribution and has been furnished to you solely for your information and any review, re-transmission, circulation or any other use is strictly prohibited. Persons into whose possession this document may come are required to observe these restrictions. This document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential information and/or privileged material. We are not soliciting any action based upon this material. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of Emkay -PCG. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Emkay-PCG will not treat recipients as customers by virtue of their receiving this report. We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable. It should be noted that the information contained herein is from publicly available data or other sources believed to be reliable. Neither Emkay, nor any person connected with it, accepts any liability arising from the use of this document. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The recipients of this material should rely on their own investigations and take their own professional advice. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. Opinions expressed are our current opinions as of the date appearing on this material only. We do not undertake to advise you as to any change of our views expressed in this document. While we would endeavor to update the information herein on a reasonable basis, Emkay, its subsidiaries and associated companies, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasons that may prevent Emkay and its affiliates from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Emkay and its affiliates, officers, directors, and employees may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company (ies) discussed herein or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. Analyst’s holding in the stocks mentioned in the report: NIL
Emkay Share and Stock Brokers Ltd. Member: Bombay Stock Exchange Limited (BSE) and The National Stock Exchange (NSE). C-6, Ground Floor, Paragon Center, Pandurang Budhkar Marg, Worli, Mumbai – 400 013. Tel No. 66121212. Fax: 66121299; e-mail: [email protected]; Regn.Nos.PMS-INP 000000779; BSE (Cash) INB 010901838; BSE (Derivative) INF 010901838; NSE (Cash) INB 230901838; NSE (Derivative) INF 230901838; DP CDSL IN-DP-CDSL-58-2000 Call (Tollfree) 1-600-223-434 / 1-800-223-434 Morning Meeting Notes
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