Friday, December 31, 2010

Today's Bse Nse Stock picks

Nifty, Hind Unilever & Wipro
Devangshu Datta / New Delhi December 31, 2010, 0:30 IST

Current: 6,101.85 (Jan futures 6127),
Target: 6,170

The index has moved above resistance at 6,070 creating a pattern of higher intermediate highs. It could rise till between 6,150 and 6,175 today and it should have a target of 6,250 in the next three-five sessions. Keep a stop at 6,075 and go long if you take a long futures positions. An option bullspread of long Jan 6,200c (69) and short Jan 6,300c (35) also looks attractive with a five-session perspective. It has a potential maximum payoff of 66 versus a net cost of 34.

Current Price: Rs 309,
Target Price: Rs 318

A price breakout is backed by volume expansion. The stock could test its 52-week high of 320 over the next three sessions. Keep a stop at 305 and go long. Increase the position between Rs 311 and Rs 313. Start booking profits above the Rs 317 level.

Current Price: Rs 490,
Target Price: Rs 497

The stock is testing resistance in the Rs 490-500 zone. It’s likely to reach at least Rs 497 intra-day today and it may move further. Keep a stop at Rs 485 and go long. Add to the position between Rs 493 and Rs 495. Start booking profits above Rs 497.          

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Analysts' corner Bse Nse Stock

SI Team / Mumbai December 31, 2010, 0:51 IST

Reco price: Rs 399,
Target price: Rs 444

Shiv-Vani Oil & Gas Exploration Services (SVOG) could witness value unlocking, owing to significant capex demand, driven by estimated minimum work programme (MWP) requirements of $3.5-billion for onshore Nelp blocks along with sizeable coal bed methane (CBM) blocks potential. SVOG is best placed to milk the domestic onshore E&P capex drive in the long term. The stock trades at 4.6 times FY12E EV/Ebitda, which is at significant discount to global onshore services peers despite their weaker profitability matrices. The company is expected to report free cashflow worth Rs 360 crore in 2010-11. Maintain buy.

— Reliance Securities

Reco price: Rs 430,
Target price: Rs 513

Blue Star’s demand outlook remains firm from sectors such as hotels, hospitals, educational institutions, etc. The demand of the Information Technology (IT) sector is yet to recover, but the level of enquiries have improved. Large IT companies have resumed spending, reinforcing management’s belief of a broadbased recovery in the near-to-medium term. Management has reiterated focus on non-commercial sectors such as infrastructure, power and industries. It expects contribution to increase from 20 to 40 per cent over the next three to four years. Pressure on operating margins to id to remain until 2011-12 attributed to high raw material costs and low margin orders in current order book. Room air-conditioners market is set to grow at a robust 30 per cent compound annual growth rate over the next three to four years.Company to increase presence in high growth residential market, but will continue to be a small player (about 5 per cent market share). Maintain Accumulate.

 — Emkay Global Financial Services

Reco price: Rs 136,
Target price: Rs 164

KPIT Cummins Infosystems is riding on the recovery of its anchor vertical — manufacturing. Brokerages expect the company to post a revenue compound annual growth rate (CAGR) of 21.7 terms (rupee terms) over 2009-10 to 2012-13, with Ebitda and net profit expected to grow at a CAGR of 14.4 per cent and 20.2 per cent, respectively. Analysts believe KPIT will witness revenue growth once the global automobile sector returns to higher growth, manufacturing vertical increasingly starts spending on discretionary IT services to go-to-market and drive cost efficiencies and the top-client, Cummins, returns to secular robust growth. Initiate Coverage with Buy.

— Angel Broking

Fair Value: Rs 126,
Current Price: Rs 115

Crisil Equities has assigned fundamental grade of 1/5 to Punjab Chemicals and Crop Protection (Punjab Chemicals), indicating poor fundamentals. Punjab Chemicals, borrowed heavily to fund its overseas acquisitions, which increased its debt-equity ratio from 1.5x in 2004-05 to 5.3x in 2008-09 and further to 13.0x in 2009-10. The latter was also due to a loss of profit resulting from the fire at the company’s Chandigarh plant in 2009-10. While the company’s performance is likely to improve and return to profitability by 2012-13, given the high leverage analysts expect, financial and liquidity position will continue to remain under stress. Crisil Equities expects Punjab Chemicals’ revenues to grow at a three-year compound annual growth rate of 17 per cent to Rs 920 crore in 2011-12, while EPS is expected to improve to Rs 12.7 in 2012-13 from negative Rs 77.9 in 2009-10.

— Crisil Equities       

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Investing in the Top Sectors for Dividend Bse Nse Stocks

Several industrial sectors are filled with dividend-paying companies, and some sectors provide better bets than others for your dividend stock investment portfolio. The following sectors offer the top options for dividend stock investing; when you’re fishing for good dividend stocks, you can improve your chances of hooking some keepers by dropping your line in these holes:
  • Utilities: Electricity, water, and natural gas (suppliers, not producers)
  • Energy: Oil, natural gas (producers, not suppliers), and master limited partnerships (MLPs)
  • Telecommunications: Carriers and wireless services
  • Consumer staples: Food/beverages, prescription drugs, household products, tobacco, and alcohol
  • Real estate: Commercial, residential, or office buildings inside real estate investment trusts (REITS)

       Related Articles
  1. Six Signs of a Promising Dividend Nse Bse Stock Company
  2. Researching Your Dividend Bse Nse Stock Picks with Important Formulas
  3. How to Understand the Types of Dividend Bse Nse Stocks
  4. Important-numbers-to-review-before Investing

    Thursday, December 30, 2010

    Today's Bse Nse Stock picks

     Bse Nse Stock News

    Airtel, Axis Bank & Hindalco
    Devangshu Datta / New Delhi December 30, 2010, 0:36 IST

    Current Price: Rs 354,
    Target Price: Rs 360

    The stock has made a “mini breakout” on high volumes. It could have a target in the range of Rs 360 but it could also fall back to test support at Rs 350. Keep a stop at Rs 351 and go long. Increase the position between Rs 356 and Rs 357. Book profits above Rs 360. If it drops to below Rs 350, go short with a stop at Rs 352 and a target of Rs 344.

    Current Price: Rs 1,312,
    Target Price: Rs 1,285

    The stock is likely to hit resistance at Rs 1,318-1,320 and fall back to retest support at Rs 1,285. Keep a stop at Rs 1,320 and go short. Increase the position between Rs 1,300 and Rs 1,305. Start booking profits below Rs 1,287. If Rs 1,320 is broken, a bounce till Rs 1,332 is possible.

    Current Price: Rs 241.5,
    Target Price: Rs 248

    The stock has made a breakout backed by volume expansion and it will probably test resistance at Rs 243. If it crosses Rs 243, it could climb till Rs 248. However, on the downside, it could slide till Rs 239. Keep a stop at Rs 240 and go long. Add to the position between Rs 243 and Rs 244. Start booking profits above Rs 247.

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    Analysts' corner Bse Nse Stock

     Bse Nse Stock News
    MindTree, Bajaj Finance, Hindustan Dorr-Oliver & Sagar Cements
    SI Team / Mumbai December 30, 2010, 0:37 IST

    Reco Price: Rs 508,
    Target Price: Rs 660

    MindTree expects the quantum of losses for restructuring the product business will be $3.6–3.9 million against an earlier indication of $12-14 million. These entire losses will be accounted in the December quarter and there will be no further impact. The costs are mainly in the nature of people separation, legal fees, asset write-offs and payments to vendors for cancellation of contracts. The actual amount of losses is 70 per cent lower than the indicated range. Further, there will be no impact on the financials from 4QFY11 onwards and that should address investor concerns. MindTree had announced launch of product business in April with an estimated investment/loss of $10-11 mn between April-September 2011. Subsequently in October 2010, company announced its decision to shut the product business and indicated restructuring cost of $12-14 mn. Maintain BUY.

    — JM Financial Research

    Reco price: Rs 700,
    Target price: Rs 918

    Bajaj Finance Limited (BFL) is a play on rising consumer spending in India, which is expected to grow multi-fold on rising disposable income. It has metamorphosed itself from Bajaj Auto’s finance arm to a diversified NBFC, where its loan book from Bajaj Auto is expected to reduce from current levels of 30 per cent to 23 per cent by 2011-12. The company has plans to foray into infrastructure financing. Diversification into other secured assets business will likely enhance quality of loan book. High yield consumer durable financing business and secured loans business is expected to show compound annual growth rate (CAGR) of 42 per cent and 100 per cent respectively, during FY10-FY12. Total disbursal and loan book will exhibit CAGR of 50 per cent during the same period. Balance sheet of BFL is well capitalised and tenure for the majority of borrowings is more than two years, which will help contain cost of funding in case of rising short term rates. Initiate coverage with buy.

    — Motilal Oswal

    Reco price: Rs 116,
    Target price: Rs 138

    Hindustan Dorr Oliver (HDOR) has an order-book of Rs 1500 crore and is strategically placed to benefit from the robust industrial production and increasing capex in the core industries in India. HDOR has undertaken various cost controls and quality control initiatives since it became a part of IVRCL, resulting in improving operational efficiency. HDOR has tapped new clients backed by strong brand equity, track record and presence across infrastructure segments of IVRCL. The sound and large balance sheet of the parent also helps HDOR to bid for bigger projects. The Davy Markham acquisition will provide technological expertise and equipment to strengthen its presence in domestic and overseas mining sector. The tie-up with SPIG will provide HDOR the exclusivity to participate and jointly bid for cooling tower projects. Maintain buy.

    — Reliance Securities

    Fair Value: Rs 202,
    Current Price: Rs 138

    Sagar Cements (Sagar) has grown from a mini cement plant to a mid-sized cement manufacturer with 2.35 mtpa grinding capacity in Andhra Pradesh, a cement manufacturing hub in India. It has JV with Vicat (France) for setting-up a fully integrated cement plant of 5.5 mtpa (2.75 mtpa to be operational in 2011-12). Sagar is entitled to 47 per cent stake in the JV with 19.7 per cent cash contribution – significant shareholder value accretion at low cost. However, over the next two years, Sagar’s profitability is expected to be impacted by the overcapacity in the southern region, with improvement post 2011-12, when the industry overcapacity is likely to ease. Crisil Equities expects two-year revenues CAGR of 4 per cent to Rs 460 crore in 2011-12, with EPS of Rs1, lower than Rs 13 in 2009-10.

    — Crisil Equities

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    Six Signs of a Promising Dividend Bse Nse Stock Company

    Dividend stock companies often give you signs that their outlooks are promising. Although you shouldn’t bank entirely on a stock’s promise, these signs can help you weed out bad-news dividend stocks that don’t belong in your investment portfolio.

    • Rising dividend payments: A long history of rising dividend payments, in good times and bad, generally indicates a stable company. Look for at least a three-year history; five years is better.
    • Fiscal strength: You want to see debt ratios showing that the company has sufficient financial resources to cover liabilities, as well as continued dividend payments at or near levels of past payments. Look for the following:
      • Quick Ratio higher than 1 percent.
      • Debt Ratio higher than 2 percent.
      • Debt-to-equity ratio at or below 1 percent.
    • Good value: Shares trading below absolute or fair value. Go to Yahoo! Finance and compare the company’s P/E with the P/E for its sector. A below-average P/E may be a bargain. Also compare growth rates and look for companies growing faster than the industry.
    • Predictable, sustainable cash flow: Banks, consumer staples, and utilities have a solid reputation for maintaining positive cash flow. Avoid industries and individual companies that have a track record of erratic cash flow streams.
    • Confident company insiders: If company insiders are buying rather than selling shares, that means they believe in the stock’s strength.
    • Sector survival: Consider companies that seem to be holding their own or even thriving in a sector that’s bruised and battered.
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    1. Investing in the Top Sectors for Dividend Bse Nse Stocks
    2. Researching Your Dividend Bse Nse Stock Picks with Important Formulas
    3. How to Understand the Types of Dividend Bse Nse Stocks
    4. Important-numbers-to-review-before Investing

    Wednesday, December 29, 2010

    Today's picks

    Coal India, ICICI Bank & Tata Motors

    Devangshu Datta / New Delhi December 29, 2010, 0:27 IST

    Current Price: Rs 304,
    Target Price: Rs 296
    The stock made a breakout when it dropped below support at Rs 309 on higher volumes on Monday and confirmed it yesterday with a further fall on volume expansion. A fall till Rs 295 is possible. Keep a stop at Rs 307 and go short. Add to the position between Rs 299 and Rs 301. Start booking profits at Rs 296

    Current Price: Rs 1,112,
    Target Price: Rs 1,090
    The stock is in a gradual downtrend and likely to test support between Rs 1,090 and Rs 1,105 today. If that breaks, Rs 1,075 is a likely target. Keep a stop at Rs 1,125 and go short. Increase the position between Rs 1,100 and Rs 1,106. Start booking profits below Rs 1,091. If you can hold till settlement (December 30), look for a target of Rs 1,075.

    Current Price: Rs 1,269,
    Target Price: Rs 1,230
    The stock is seeing selling on heavy volume and likely to test support at Rs 1,250 on the downside. If Rs 1,250 breaks, it could slide till Rs 1,225-1230. Keep a stop at Rs 1,278 and go short. Increase the position between Rs 1,256 and Rs 1,263. At Rs 1,250, book partial profits and reset the stop till Rs 1,255. If the price drops below Rs 1,250, look for a target of Rs 1,230. 

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    Analysts' corner
    Infosys Technologies, eClerx, JK Lakshmi Cement & Kandagiri Spinning Mills
    SI Team / Mumbai December 29, 2010, 0:27 IST

    Reco Price: Rs 3,369,
    Target Price: Rs 3,667
    Infosys plans to move into next orbit by ramping up its Consulting/PI and transformational offerings. Focus on new engagement models (NEMs) is bearing fruit and is expected to contribute one-third to the topline. CY11 budgets are expected to be flat-to-marginally positive and robust traction from BFSI and retail is expected to drive growth in the near-term. While the company continues to capture demand through aggressive hiring, a strategic acquisition cannot be ruled out. Infosys revenue growth is estimated at 25-30 per cent in 2011-12. While retail is focusing more on driving revenues, manufacturing is focused on cost-efficiency measures. Smart pick-up in telecom sector is expected following the current cycle of capex done by telco clients. Drive towards 40:40:20 revenues from US, Europe and RoW will de-risk the revenue profile materially. Maintain market performer.

    — India Infoline

    Reco price: Rs 730,
    Target Price: Rs 670
    eClerx is on track to achieve brokerages’ 2010-11 revenue estimates of $75 million (up 35 per cent y-o-y). Company expects sales and marketing support business to grow faster than the capital market business driven by new client wins in the recent past and pick-up in prospects after a relatively sedate 2009-10 for the digital media segment. In terms of demand from the capital market segment, company does see regulatory resolutions impacting volumes. However, it sees this as a future opportunity in the form of transformational/consulting projects. Brokerages currently model in 8 per cent sequential growth in revenues for Dec’10 quarter at $19.4 million with margins flat margins at 36.2 per cent. Current valuations appear reasonable after a 70 per cent plus upmove in the past six months. Maintain accumulate.

    — Emkay Research

    Reco price: Rs 55,
    Target Price: Rs 81
    JK Lakshmi Cement has annual cement capacity of around 4.75 million tonnes. The Northern region accounts for 52 per cent of total sales of the company, while the West accounts for the rest. The extended monsoon adversely affected demand for cement in northern and western regions whereas heavy fog and cold weather is expected to delay cement consumption further. As a result, since April, prices in the North fell by 8-10 per cent. However, analysts believe from next quarter, demand is expected to pick-up in northern and western regions as it is a busy period for construction. Historically, the March quarter has seen higher-than-average cement consumption, boosting cement prices. Prices in the West have risen by 5-7 per cent since October. This increase in prices will lead to better realisations, and, hence, better margins for the company.

    — Reliance Securities

    Fair Value: Rs 124,
    Current Price: Rs 107
    Crisil Equities has assigned a fundamental grade of 2/5 to Kandagiri Spinning Mills Ltd. (Kandagiri) indicating ‘moderate’ fundamentals. Kandagiri is well placed to cater to increased demand following the execution of a modernisation plan, which is expected to improve its utilisation rates. Kandagiri is present only in the cotton yarn segment, exposing it to any downturn in the cotton yarn industry. Additionally, the company’s margins are susceptible to volatile cotton prices. Crisil Equities expects Kandagiri’s revenues to grow at a three-year compound annual growth rate of 15 per cent to Rs 170 crore in 2012-13, while EPS is expected to increase from Rs 8.4 in 2009-10 to Rs 22.0 in 2012-13.

    — Crisil Equities    

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    Researching Your Dividend Bse Nse Stock Picks with Important Formulas

    As with all stocks, you should research the dividend stocks you’re considering before you buy them to ensure they’re good investments. These formulas help you determine whether a stock’s dividend and other markers are sufficient to meet your needs. Check out the company’s balance sheet, income statement, and cash flow statements for the figures you need to crunch the numbers using the following formulas.

    Dividend Per Share (DPS)
    Total Dividends ÷ Total Shares = Dividend Per Share (for the quarter)
    $_______________ ÷ _______________ shares = $_______________ DPS
    Indicated Dividend Per Share (IDS)
    Dividend Per Share (DPS) x 4 = Indicated Dividend Per Share
    $_______________ x 4 = $_______________ IDS
    Indicated Dividend Per Share ÷ Share Price = Yield
    $_______________ ÷ $_______________ = _______________ % Yield
    Earnings Per Share (EPS)
    Net Profit ÷ Total Shares Outstanding = Earnings Per Share
    $_______________ ÷ _______________ shares = $_______________ EPS
    Price-to-Earnings (P/E) Ratio
    Share price ÷ Annual Earnings Per Share = P/E
    $_______________ ÷ $_______________ = _______________ P/E
    Payout ratio
    Dividends Per Share ÷ Earnings Per Share = Payout Ratio
    $_______________ ÷ $_______________ = _______________% Payout Ratio
    Net Margin
    Net Profit ÷ Total Revenues = Net Margin
    $_______________ ÷ $_______________ = _______________% Net Margin
    Return On Equity (ROE)
    Net Annual Profit ÷ Average Annual Shareholder Equity = Return On Equity
    $_______________ ÷ $_______________ = _______________% ROE
    Quick Ratio
    (Current Assets - Inventories) ÷ Current Liabilities = Quick Ratio
    ($______________- $______________ ) ÷ $______________ = ______________ Quick Ratio
    Debt Covering Ratio
    Operating Income ÷ Current Liabilities = Debt Covering Ratio
    $_______________ ÷ $_______________ = _______________ Debt Covering Ratio
    Debt-to-Equity Ratio
    Total Liabilities ÷ Shareholders’ Equity = Debt-to-Equity Ratio
    $_______________ ÷ $_______________ = _______________% Debt-to-Equity Ratio
    Free Cash Flow
    Net Cash from Operating Activities - Capital Expenditures = Free Cash Flow
    $_______________ - $_______________ = $_______________ Free Cash Flow
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    Tuesday, December 28, 2010

    Bse Nse Stock Picks By Brokers

    Date Company   Broker  Reco  Price
     on  Report
    CMP Return
    (in %)
    Return Relative to Sensex (in %) Target Achieved
    28-DEC-10 Allahabad Bk Emkay Buy 216.00 300.00 216.00 0.00 0.03 No
    28-DEC-10 Kec Intern Angel Buy 483.60 648.00 489.15 1.15 1.18 No
    28-DEC-10 Ntpc Angel Buy 196.75 230.00 197.40 0.33 0.36 No
    28-DEC-10 Kpit Cummi Info Angel Buy 136.05 164.00 140.25 3.09 3.12 No
    Post From Myris Broker Reaserch         

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    How to Choose Analyse Growth Bse Nse Stocks

    A stock is considered a growth stock when it’s growing faster and higher than stocks of other companies with similar sales and earnings figures. Usually, you compare the growth of a company with growth from other companies in the same industry or compare it with the stock market in general.

    If a company has earnings growth of 15 percent per year over three years or more and the industry’s average growth rate over the same time frame is 10 percent, then this stock qualifies as a growth stock. A growth stock is called that not only because the company is growing but also because the company is performing well with some consistency.

    Here are some other important things to look at when considering growth stocks:

    *Fundamentals. This refers to the company’s financial condition and related data. When investors do fundamental analysis, they look at the company’s fundamentals: its balance sheet, income statement, cash flow, and other operational data, along with external factors, such as the company’s market position, industry, and economic prospects. The company should have consistently solid earnings, low debt, and a commanding position in the marketplace.

    *Value. Value stocks are stocks that are priced lower than the value of the company and its assets. You can identify a value stock by analyzing the company’s fundamentals and looking at some key financial ratios, such as the price-to-earnings ratio. If the stock’s price is lower than the company’s fundamentals indicate it should be (in other words, it’s undervalued), then it’s a good buy — a bargain — and the stock is considered a great value.

    *Leaders and megatrends. A megatrend is a major development that has huge implications for most (if not all) of society and for a long time to come. A good example of a megatrend is the aging of America. Federal government studies tell us that senior citizens will be the fastest-growing segment of our population during the next 20 years. How does the stock investor take advantage of a megatrend? By identifying a company that’s poised to address the opportunities that such trends reveal. A strong company in a growing industry is a common recipe for success.

    *Strong niche. Companies that have established a strong niche are consistently profitable. Look for a company with one or more of the following characteristics:

    oA strong brand: Companies that have a positive, familiar identity — such as Coca-Cola and Microsoft — occupy a niche that keeps customers loyal.

    oHigh barriers to entry: United Parcel Service and Federal Express have set up tremendous distribution and delivery networks that competitors can’t easily duplicate.

    oResearch & development (R&D): Companies such as Pfizer and Merck spend a lot of money researching and developing new pharmaceutical products. This investment becomes a new product with millions of consumers who become loyal purchasers, so the company’s going to grow.

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    Monday, December 27, 2010

    How to Understand the Types of Dividend Bse Nse Stocks

    By Lawrence Carrel

    When you start shopping for dividend stocks and evaluating candidates, consider targeting a specific dividend category to narrow the field. After identifying a few prospects that meet your minimum dividend requirements, you can then dig deeper into each company by using valuation, growth, liquidity, and solvency ratios.
    Low-yielding stocks

    In general, low-yielding stocks are those with a yield less than the average yield of the S&P 500 Index — currently 2 percent or lower. These yields are unlikely to keep pace with inflation.

    You can find the yield on the S&P 500 on the Standard & Poor’s Web site. Under the heading Latest Standard & Poor’s 500 Market Attributes, click S&P 500 Earnings and Estimates. An Excel spreadsheet will appear; the yield is in the middle of the spreadsheet.

    Don’t ignore low-yielding stocks and low payout ratios as a starting point for your research. A low payout ratio from a company just starting to pay dividends may show that the company is still reinvesting a considerable portion of its profits. Taking share price appreciation into account, a low-yielding stock may eventually outperform a high-yielding stock.

    Steer clear of low-yielding stocks accompanied by high payout ratios. If the company is distributing 50 to 75 percent of its profits to investors and the yield is still below two percent, that’s not a good sign.
    Medium-yielding stocks

    Stocks posting yields between the average yield of the S&P 500 and up to 3 percentage points greater than the index’s yield are medium-yielding stocks, typically keeping pace with inflation and paying out between 30 and 50 percent of their earnings in dividends.

    Investors usually buy medium-yielding stocks only if they expect to see share price appreciation as well as income.

    The key issue when buying a dividend stock with a low or medium yield is income growth. You want to see a steady stream of dividend increases.
    High-yielding stocks

    High-yielding stocks are those with yields at least 3 percentage points higher than the average yield of the S&P 500 Index, which typically means higher than the inflation rate and returns from safer investment vehicles, including CDs and Treasury bonds. Companies that fall into the high-yield category are usually mature and have a limited growth potential. You can find them in a variety of industries, including utilities, energy, and real estate investment trusts. If you’re primarily an income investor, high-yielding stocks are the stocks for you.

    Look for the sweet spots: high-yielding, undervalued companies where growth, income, and value all meet. Yield can increase as a result of an increase in dividend payment or a decrease in share price or both. A high-yielding stock can mean the shares are selling for less than they’re worth, signaling a potential buying opportunity. When management increases the dividend as the share price drops, they’re sending a message that they believe the share price will rise to a point at which the dividend is at an appropriate level. Buying the stock at this point may help you reap the benefits of both share price appreciation and high yield.

              Other How To's

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    Myiris news - From the News Room - Weekly technical calls from brokers Nse Bse

    Myiris news - From the News Room - Weekly technical calls from brokers

    Other How To's

    Analyst's corner

    TCS, Ashiana Housing, IDFC & Orient Paper & Industries
    SI Team / Mumbai December 23, 2010, 0:07 IST

    Reco Price: Rs 1,167,
    Target Price: NA
    Unlike CY10, TCS has witnessed significant discretionary spent commitment at the earlier stage of discussion with its key accounts during customer meets in different geographies. TCS is quite confident of its growth going into 2011-12 as its book to bill ratio continues to improve. With December quarter categorised with lower working days (3 per cent lower than September), volume growth is likely to be impacted for the quarter by similar magnitude. Moreover, the current quarter is likely to bear the impact of stronger rupee as well. Analysts expect margins to decline by 100-120 bps in December quarter, with 7-8 per cent effort-based volume growth. Operating margins are likely to sustain for 2011-12 at 27 per cent as pricing and employee pyramid changes will absorb the salary hikes into next year. Further, declining attrition could impact margins positively.
    Maintain buy.

    — Edelweiss Securities Limited

    Fair value: Rs 220,
    Current price: Rs 160.9
    Crisil Equities has assigned fundamental grade of 3/5 to Ashiana Housing (Ashiana), indicating good fundamentals. Ashiana has strong track record of developing 9 mn sq ft of residential projects and has a healthy project pipeline of 7 mn sq ft. to be developed over the next four-five years. Ashiana does not accumulate huge land banks, which could result in comparatively lower capital requirements. This along with very low leverage provides Ashiana the strength to withstand cyclical risks. Crisil Equities expects Ashiana’s revenues to grow at a two-year Compound Annual Growth Rate (CAGR) of 40 per cent to Rs 220 crore in 2011-12, while EPS is expected to register growth of 30.7 per cent to Rs 34.3 during the same period.

    — Crisil Equities

    Reco Price: Rs 171,
    Target Price: Rs 210
    Natixis Global Asset Management (NGAM), a Paris and Boston based asset manager, will acquire 25 per cent stake in IDFC AMC for Rs 275-crore, valuing IDFC’s mutual fund business at Rs 1,100 crore. This translates into 5.5 per cent of average assets under management of Rs 20,000 crore (September 30). This partnership will enable IDFC AMC to significantly enhance its international distribution. NGAM will be able to expand its global footprint. The valuation ascribed by NGAM is higher than the valuations for the past few deals—T. Rowe-UTI MF (3.3 per cent of AUMs in November 2009), Nomura-LIC MF (2.6 per cent in July 2008) but is in line with analysts’ expectations.
    Maintain hold.

    — Edelweiss Securities Limited

    Reco Price: Rs 55,
    Target Price: Rs 80
    Orient Paper & Industries’ (OPIL) cement division has recently commissioned 1.6 mn tonne cement capacity expansion (March) and would drive volume growth and 50-Mw CPP would add to energy cost savings. Besides, the worst seems to be over for its paper division with resolution of production-related issues and improved paper price outlook in a rising international pulp price environment. Also, the company’s electrical division is posting robust growth with over 15 per cent volume increase in electrical fan segment and a new stream of revenue from the recently launched CFL. With two of its earnings streams (paper and electricals) on a robust growth phase and its cement business relatively better placed(OPIL) than peers, the company is well placed to tide over the currently challenging phase in the cement space.
    Initiate coverage with outperform.

    — Indiabulls Researc

       Other How To's

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    Myiris news - From the News Room - Stock of the week: Sesa Goa

    Myiris news - From the News Room - Stock of the week: Sesa Goa

    Today's picks Nse bse Stock

    IBREL, Axis Bank & Sun Pharma
    Devangshu Datta / New Delhi December 24, 2010, 0:31 IST

    Current: Rs 128.5,
    Target: Rs 119
    Indiabulls Real Estate’s stock seems to have made a downside break out though there’s support at Rs 127-128. If it drops below Rs 127, it could slide all the way till Rs 118. Keep a stop at Rs 131 and go short. Increase the position between Rs 124 and Rs 126 and reset the stop to Rs 127. Book profits below Rs 120.

    Current Price: Rs 1,314,
    Target Price: Rs 1,275
    Volumes have dropped alarmingly suggesting a breakdown. If the stock falls below Rs 1,305, it could drop till the Rs 1,270-1,280 mark. Keep a stop at Rs 1,325 and go short. Increase the position between Rs 1,295 and Rs 1,305 and reset the stop to Rs 1,310. Below Rs 1,280, book profits.

    Current: Rs 453,
    Target: Rs 463
    The stock bottomed out at Rs 423 and has since risen on high volumes. It has a minimum target near Rs 460 and a good trending session could push it to Rs 465. Keep a stop at Rs 447 and go long. Add to the position between Rs 455 and Rs 458 and reset the stop to Rs 454. Book profits above Rs 462.

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    Sunday, December 26, 2010

    How Much Should You Invest in Stocks and Stock Mutual Funds?

    Asset allocation involves spreading your investments across diverse asset classes in an attempt to reduce the overall portfolio risk, while maintaining or increasing expected portfolio return. In other words, everything doesn’t go up and down at the same time. Some investments zig, while some zag, and the net result is smoother investment portfolio performance.
    Two significant academic studies performed within the last 20 years overwhelmingly concluded that more than 90 percent of a portfolio’s long-term variation in return was explained by its weighting between stocks, bonds, and cash; in other words, it's more important that you have investments in stocks than which individual stocks you own or when you bought them. Only a small portion of the returns were explained by the investment manager’s individual investment selections. Asset allocation decisions are the fundamental building blocks on which all good portfolios are designed.
    Figuring out the appropriate asset allocation for your portfolio depends on your unique circumstances. To get started, check out the following tables, which focus on your time horizon, tolerance for investment risk, and, of course, your personal goals. In order to determine the appropriate asset allocation for your needs, you must take into account all three of these components.
    Use the Time Horizon and Equity Exposure table as a guideline that tells you how much of your total investments should be in stocks or stock mutual funds based on when you’ll need this money. Think of time horizon as the date that you need to withdraw those dollars from your investment portfolio to support your standard of living in retirement. For example, if you’re 60 years old right now and plan to retire in five years, your time horizon isn’t five years. Your time horizon begins five years from now and may go for two to four decades — for the rest of your life. So, the first withdrawal you make does have a time horizon of five years. The next annual withdrawal you make has a time horizon of six years, and so on.
    Time Horizon and Equity Exposure
    Time Horizon* Maximum Equity Exposure
    0–3 years 0%
    4–5 years 20%
    6 years 30%
    7 years 40%
    8 years 50%
    9 years 60%
    10 years 70%
    11+ years 80%
    * When you need to spend this money.
    The Risk Tolerance and Equity Exposure table gives you the lowdown on how much of your total investment portfolio should be invested in stocks or stock mutual funds based on the maximum amount of money you can handle losing — both financially and emotionally.
    Risk Tolerance and Equity Exposure
    Maximum Tolerable Loss (Annual) Maximum Equity Exposure
    5% 20%
    10% 30%
    15% 40%
    20% 50%
    25% 60%
    30% 70%
    35% 80%
    40% 90%
    50% 100%

    After looking at these tables, you may discover that the maximum equity exposure will be different depending on your time horizon and your maximum tolerable loss in a given year. If you discover a discrepancy between the maximum equity exposures for your time horizon and your maximum tolerable loss in a given year, select the lower of the two equity exposures.

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