Market Updates 30 May11
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Market Outlook »
The market will stay sideways in the near-term.
Pace of rallies is faster than the pace of declines indicating a shift
of sentiment. Accumulation pattern which are now becoming evident in
the short term.Oversold technical indicators which are now exhibiting
positive divergence.Weekly candlestick chart shows a ``Dragon Fly
Doji`` which is a bullish reversal pattern. A confirmation to this
pattern is awaited in the coming week.
Technical Calls »
Buy Amara Raja Batteries 213.45 target 225
Buy Engineers India 261.00 target 275
Buy Gitanjali Gems 277.00 target 285
Momentum Calls »
Buy CREW BOS 99.00 target 120
Buy Ramky Infra 266.00 target 275
Buy Cairn India 343.00 target 355
Investment »
JK Tyre
JKTIL is the market leader in the radial truck and bus segment (TBR).
In line with that its capacity at Vikrant has been commissioned from
May 2011. Radialdemand continues to be on the upswing with TBR
segmentradial penetration reaching 18%.. JKTIL has capex plans of Rs
11.3 billion in FY12E of which Rs 3billion has been spent till
now.With moderate growth (8-10%) in TBR segment and higher growth in
PV
Investment »
Tata Power
We value the company at a P/E multiple of 17x FY12E EPS of Rs 91.1 and
arrive at target price of Rs 1,550, which is arevision from our
earlier target price of Rs 1,630. We reiterate a Buy rating on TPC`s
share with an upside potential of 29% based on company`s strong
presence across the value chain, established fuel linkage, huge
expansion plans and good operating track record.At the current market
price
Stock Watch
Elecon Engineering
EEC`s order backlog has been declining post hitting the peak of Rs
18.12 billion in 3QFY2009. At the end of March 2011, the order backlog
stood at Rs 13.84billion. It believes EEC`s current order book of Rs
15.77 billion or 1.2x FY2011 consolidated revenue offers good revenue
visibility. It believes EEC is well placed to seize the upcoming
opportunities in the power sector due its strong order book, which
renders high revenue visibility. It has revised its earnings estimates
to factor in the impact of the acquisition. It estimates sales to
register a 23% CAGR to Rs 19.54billion over FY2011-13. The bottom line
is likely to move in tandem with a 22% CAGR over the period. At
current levels, the stock is trading at attractive valuations of 5.8x
FY2013E earnings
Stock of the Week
Arvind Ltd
Arvind is engaged in the manufacture of textiles and branded segments.
Operates in three segments, textiles which inlcude yarn,fabric and
branded garments and others which include EPABX and rural automatic
exchange systems, It services and construction business. With an
equity base of Rs 254cr supported with huge reserves of Rs 1235cr. For
FY11 it recorded net sales of Rs 2691cr with net profit of Rs 134cr.
FY11 EPS is Rs 5.64. At cmp the stock is available at a forward
multiple of just 14.
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