Market Close: Biggies get into action again !

Started in green then went on to trade volatile and ranged before closing really strong. The morning session was choppy with no triggers from the global markets. But Indices rallied in the later part of the day as buying in index heavyweights propelled the Sensex to traded almost 200 points up. State Bank of India continued its upward journey after changes in regulatory framework to merge its subsidiaries were made in Bank?s favor. Buying was also witnessed across Automobiles, Engineering and cement counters along with small and mid caps. Appreciating Rupee had its impact on the IT counter which was the weak spot in an otherwise strong market. Global markets had mixed session with Asian Market managing a positive close while Europe was mixed after a red start.

Sensex closed higher by 198 points at 14127.31. It was helped up by gains in SBI (1284.45,+5 percent), ICICI Bk (919.1,+4 percent), RCVL (490.75,+3 percent), BHEL (2595,+3 percent) and Tata Motors (734.9,+3 percent). Restricting the gains were Hero Honda (678.3,-3 percent), Infosys (1951.65,-1 percent), TCS (1224.4,-1 percent), Cipla (209.8,-1 percent) and TISCO (588.45,-1 percent).

United Spirits acquired Whyte & Mackay for Rs.4,900 cr (595 million pounds). The installed capacity of the latest acquisition is to manufacture 4 cr litres of alcohol per year. The sales numbers of the Scottish company in the previous year was 6.6 cr cases in the previous year. The manufacturing plants of the Scottish company is located at 4 locations across Scotland. The results of the company for the fiscal were encouraging. The top line of the company grew by 32% YoY. The EBIDTA for the year stood at Rs.491 cr up by 90% from Rs.259 cr. The growth in volume terms was by 12% at 6.15 cr cases against 5.16 cr cases previous year. The Bagpiper whisky clocked sales numbers of 1.37 cr cases while the McDowell.s No.1 brand grew by 32% at 2.28 cr cases. With this acquisition the consolidated sales of the company would stand at 7.5 cr million cases per annum in volume terms. W&M has brands liked Whyte & Mackay Scotch Whiskey, Highland Malt, Isle of Juara Malt Whiskey, Glayva Liquer and Dalmore Single Highland Malt, John Barr, Mackinlays, Cluny and Claymore. With the latest acquisition the missing link of Scotch in the product portfolio of the company is complete. United Spirits stands to gain from the internationally recognized brands of the Scottish company along with a will established international marketing network. The price however certainly is high. Only time will tell whether United Spirits will be able to milk this acquisition. Its a big one.

Hindustan Construction Company (HCC) rallied to end higher by 3% after it bagged an order worth Rs.735 cr from Andhra Pradesh Govt. The current order book of the company stands at Rs.9,500 cr. Out of the total order book 88% of the orders is contributed by Power and Transportation segment. The company had formed a joint venture with Coastal Projects Pvt Ltd to bid for the project, floated by the Andhra Pradesh Irrigation Department. The share of the company in the joint venture would be of 60%.

Cera Sanitryware Ltd ended 10% higher after it reported its results. The top line for the quarter improved by 33% YoY. The EBIDTA for the year stood at 17.7% for the year. The bottom line surged by 57% at Rs.9.3 cr. The top line for the quarter improved by 41% at Rs.37 cr. The EBIDTA for the margins for the quarter were at 17.6%. The bottom line for the quarter improved by 18% at Rs.2.5cr. Expect a research note from us on this one. We have been the few research houses which has worked on this company.

Tata Tele services ended 4% lower after the company reported a loss of Rs.46 cr. The loss of the company was reduced by 70% on yearly comparison. The loss figures for the previous year stood at Rs.152 cr. The top line of the company improved by 24% at Rs.3,804 cr against Rs.3071 cr previous year. Company continues to add 1 lakh new customers every month while the other player in the country like Reliance are increasing their subscribers by almost a million every month. Valuation gap remains high.. and expectations of a turnaround were not met and that had the stock down.

Technically Speaking: Sensex was strong between an intra day high of 14,159 and low of 13,937. The breadth was in favor of Advances as Advances beat declines in ratio of 2:1. The volume for the day was at Rs.5,151 cr. The resistance is at 14,190-14,275 levels while the support lies at 14,000-14,030 levels. As expected market moves out of the 2 day range. It is headed towards a target of 14500.