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Thursday, January 04, 2007

[Click the star to watch this topic] Sharekhan Investor's Eye dated January 04, 2007


ORG Informatics
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs190
Current market price: Rs174

Acquisition of DGIT Solutions
ORG Informatics (ORG) has acquired 100% stake in Singapore-based DGIT Solutions Pte Ltd. Earlier, ORG had successfully raised $10 million through a global depository receipt (GDR) issue in the overseas markets. The issue had been priced at around Rs155 per share and resulted in a dilution of the equity base by 28.6 lakh shares. The company had also considered a preferential issue of 6 lakh warrants to its investors; the same has now been put on the backburner. Instead the company is considering dilution of equity through a fresh issue of shares for its future acquisitions. The additional dilution will be in line with the preferential issue of warrants considered earlier.



Higher base effect subdues dispatch growth
Cumulatively the cement majors have reported a negative growth of 1% year on year (yoy) in the cement dispatches during December to 55.3 lakh tonne. We believe this negative growth can be attributed to the higher base effect as well as the operations of the companies at near capacity levels

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Emkay Monthly

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B&K - Anant Raj Industries

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Close: profit taking to the fore yet again !

Market today started firm but could not sustain above 14000 as profit booking set in. Market reached a new high in the morning but selling and profit taking was intense with good volumes. Markets remained ranged as the trading session progressed to finally end in Red as the selling pressure intensified in final trading hour. There was not much support from the global markets as well as the major Asian Indices ended in red. European indices seem to follow the Asian trend and are trading in red. The reason / excuse was the selloff in the US post not so good economic news on Housing which seems to be dampening growth and worried statements by the Fed about inflationary pressures. Crude was down and so were the metals which had this selloff across board.

Selling Pressure remained dominant in Auto, Banking, Cement and Software stocks while Buying was seen in Textile, Media, fertilizer and Energy stocks.

Sensex closed down by 143 points at 13871.71. Weighing on the Sensex were losses in ITC (168.9,-4 percent), Hero Honda (755,-3 percent), Hindalco (174.9,-3 percent), Satyam (501.95,-3 percent) and Wipro (605.8,-2 percent). Losses were restricted by gains in Dr Reddys (826.3,+2 percent), L & T (1493.2,+1 percent), Rel Energy (530,+1 percent), Tata Motors (947.1,+1 percent) and Ranbaxy (413.45,+0 percent).

The Hero Group is planning to launch electric three-wheelers and expanding its core portfolio of bicycles and two-wheelers. The group is expected to partner UK-based Ultra Motor, its technical collaborator for electric bicycles and scooters, for its three-wheeler venture. It is likely to launch the new vehicles either by the end of the year or early next year. The group, which has so far invested about Rs 50 crore on the new facilty for electric vehicles in Ludhiana, could expand it further for the three-wheeler venture. There has been a sudden interest in electric bikes post the launch of the yo bikes by Electrosteel casting. The Hero group is intending to use its synergies of distribution and brand for making its presence felt here. Its a big market in China. However the 3 wheeler entry is a threat for Bajaj Auto. Bajaj Auto however had its demerger value unlocking lined up. We are positive on Bajaj auto but we believe that better opportunities would be available as competitive scenario becomes tougher.

Auto major Mahindra and Mahindra (M&M) clocked a 38% rise in total sales volumes in December, 2006 at 15,132 vehicles compared to 10,935 in the same month last fiscal. In the farm equipment sector, it registered a 21% growth in tractor sales at 6,759 in December as against 5,597 vehicles in the same month last year. In the auto sector, while domestic sales volumes were up 39% at 14,557, exports sales witnessed 11% growth at 575 vehicles for the December month. The utility vehicle sales, which registered a 34% growth in the month at 11,274 as against 8,414 vehicles in December 2005-06 fiscal, was one of the major contributors to the sales volumes. Its flagship utility vehicle Scorpio witnessed a 22% growth in volumes at 3,152 in December, 2006 as against 2,576 in the same month last year. The three-wheeler sales also witnessed a robust growth of 64% at 2,559 as against 1,559 in December of last fiscal. The December domestic tractor sales volumes were up 22% at 6,104, while exports were up at 11% at 655. The numbers were good but selling across board had the stock down. The Stock closed down by 1.05%.

Even in a market like this there was action in many mid cap and small cap stocks. There were stocks like Antifrcition bearings, Carborundum Universal, Eveready, Zenith, Aftek etc. So really the action was there and running. However the run down is more global in nature. Markets tend to be choppy when they are turning and certainly Markets are not trending now. We are ahead of 3 Q results and of course the budget in another 7 weeks so really markets are unlikely to give up big way.

Technically Speaking: Market traded in a ranged manner. Sensex rallied between the channels of 13748 - 13641 level. However, the breadth had been in the favor of Advances as they were 1525 advances against 1085 declines. Volumes were decent at 4508 cr. Sensex sees resistance between 14011-14167 level and support is seen at 13780 levels. Even 13500 is possible as per our Elliotist. But we will take it as it comes.

Sensex sheds 143 points

After registering gains of 228 points in the last two sessions, the market slipped on profit taking in early trades and lingered in negative territory throughout the trading session. The Sensex faltered after touching a new intra-day high of 14060 in early trades. Hectic selling in heavyweight, FMCG, metal, information technology and banking stocks in noon trades dragged the index below the 13900 mark to the day's low of 13850. The Sensex ended the session with losses of 143 points at 13872, while the Nifty shed 35 points to close at 3989.

Dragging down the market, ITC dropped 3.68% at Rs169, Hero Honda tumbled 2.98% at Rs755, Hindalco shed 2.64% at Rs175, Satyam Computers slipped 2.56% at Rs502, Wipro shed 2.34% at Rs606, Reliance Communication lost 1.70% at Rs465 and SBI declined 1.69% at Rs1,244. However, select blue chip counters managed to clock some gains. Dr Reddy’s gained 2.20% at Rs826 on impressive third quarter numbers. L&T was up 1.15% at Rs1,493, Reliance Energy gained 0.91% at Rs530, Tata Motors added 0.84% at Rs947, Ranbaxy advanced 0.29% at Rs413 and ONGC was marginally up 0.28% at Rs875.

Except the BSE CD index, the BSE CG index, the BSE HC index and the BSE Oil & Gas index, the remaining sectoral indices ended in the red. The BSE FMCG index dropped 2.08% at 1887 while the other indices were down around 1% each. However, the BSE CD index advanced 0.34% at 3679. The breadth of the market was firm. Of the 2,654 stocks traded on the BSE, 1,538 stocks advanced, 1,062 stocks declined and 54 stocks ended unchanged.

Among the non-Sensex stocks Sterlite Biotech lost 4.16% at Rs191, Maharashtra Seamless dropped 3.24% at Rs476, Canara Bank lost 3.24% at Rs278, Corporation Bank dipped 2.97% at Rs348, Jindal Stainless was down 2.96% at Rs120, Hindustan Zinc shed 2.95% at Rs785, MTNL tumbled 2.76% at Rs146, Parsvnath slumped 2.61% at Rs456 and Birla Corporation was down 2.54% at Rs330.

Over 26.87 lakh ITC shares changed hands on the BSE followed by Polaris (22.09 lakh shares), Satyam Computers (20.59 lakh shares), IndusInd Bank (20.22 lakh shares) and SAIL (13.28 lakh shares).

Value-wise Reliance Industries registered a turnover of Rs107.71 crore on the BSE followed by Satyam Computers (Rs105.44 crore), HDFC (Rs99.29 crore), Reliance Capital (Rs70.25 crore) and Glaxo (Rs64.28 crore).

Sensex sheds 143 points on weakness in metal, IT shares

The market ended with sharp losses, on the back of selling pressure in MCG, metal and IT stocks. It opened on a firm note, but soon came under severe selling pressure as the day progressed. It saw sharp swings either ways in early trade.

The 30-share BSE Sensex shed 143.21 points or 1.02% to settle at 13,871.71. It had opened firm, at 14,029.04, on reports that the centre and states had agreed to phase out central sales tax (CST) over the next four years. It had surged to hit an all-time high of 14,060.35 at the onset of the trading session.

Sensex hit a low of 13850.38 in late trading. It swung around 210 points for the day.

The S&P CNX Nifty was down 35.25 points or 0.88% to 3,988.80.

The market breadth, however stayed strong, as buying continued for small-cap and mid-cap stocks. There were close to 1.5 gainers for every loser on BSE. Against 1,525 shares advancing, 1085 declined on BSE. A total of 65 scrips remained unchanged. The BSE Mid-Cap index rose 0.16% while the BSE Small-Cap advanced 0.98%.

The BSE clocked a turnover of Rs 4,508 crore as compared to Rs 4,312 crore on Wednesday.

Among the 30- Sensex pack, 24 declined while the rest advanced

ITC was the top loser, down 3.76% to Rs 168.75, on a high volume of 26.73 lakh shares. It had touched a high of Rs 176.85 in opening trade. Market men attribute the sharp fall to the 10% plunge in wheat prices on MCX. Also there are reports that tobacco products are likely be brought under the ambit of state-level value added tax (VAT). The centre has agreed to allow states to levy VAT on tobacco and tobacco products which is under additional excise duty.

Hero Honda (down 3% to Rs 755), Reliance Communications (down 1.96% to Rs 463.55) and Bhel (down 1.15% to Rs 2275) were the other losers.

Frontline IT shares came under selling pressure after their recent rally, with the BSE IT Index declining 1.50%. Satyam Computer lost 2.53% to Rs 502.10, on a total volume of 20.57 lakh shares. A block deal of 14.2 lakh shares was executed in the stock on BSE at Rs 514.50.

TCS (down 0.92% to Rs 1269.50), Wipro (down 2.43% to Rs 605.25) and Infosys (down 1.28% to Rs 2283) also edged lower.

Pharma major Dr Reddy’s was the top gainer, up 1.81% to Rs 823.15, on 2.89 lakh shares. It had struck a high of Rs 835.

L&T gained 0.93% to Rs 1490, for the second day in a row, after the company said on Wednesday it had bagged an overseas order worth over Rs 400 crore. The stock had hit a high of Rs 1503.70, which is a lifetime high for the scrip.

Tata Motors gained 0.90% to Rs 947.50, after its ADR jumped 6.1% on Wednesday to $21.69.

Index heavyweight Reliance Industries (RIL) was down 0.34% to Rs 1280.40 on 11.47 lakh shares. The stock touched a high of Rs 1300, while its low was Rs 1277.

Shares of oil marketing firms edged higher after crude oil futures fell below $59 a barrel due to mild weather in US, the world's largest heating oil market. US crude oil for February delivery fell $2.73, or 4.5 percent, to settle at $58.32 a barrel on Wednesday (3 January 2007). Besides the sharp fall in crude oil price, increase in aviation turbine fuel price hike carried out by oil firms also aided upmove in their share prices today. HPCL surged 4.08% to Rs 288, Indian Oil Corporation (IOC) rose 4.46% to Rs 469.80 and BPCL gained 1.95% to Rs 345. As per reports, IOC has sold oil bonds worth Rs 806 crore in the secondary market.

Info Edge was the top traded counter on BSE with total turnover of Rs 120.53 crore followed by Unitech (Rs 107.66 crore) and Reliance Industries (Rs 107.63 crore).

Metal stocks witnessed severe selling pressure, with the BSE Metal index declining 2% to 8,939.47. Metal shares were sold, on the back of weakening metal prices globally. Copper and zinc hit the lower circuit by over 4% each on the MCX after a fairly long bullish spell, on the back of copper price falling below $6,000 per tonne for the first time in eight months on the LME. Copper's fall was triggered by worries of surplus stock. The prices started falling in mid-December with rising inventories in the warehouses, and the slowing of the US economy, which could reduce the demand for copper as construction will be slower.

Sterlite Industries (down 1.67% to Rs 538), Hindalco (down 3.12% to Rs 174), Jindal Stainless (down 3.56% to Rs 119), SAIL (down 3.10% to Rs 89.40), and Hindustan Copper (down 0.60% to Rs 91) declined.

JSW Steel declined 3.05% to Rs 391.95 after it said it will hike galvanised steel prices by Rs 1,500 per tonne from 8 January due to an increase in zinc price.

Tata Steel dropped 1.66% to Rs 463.75. The company said on Wednesday, its saleable steel production in the first nine months of the 2006/07 fiscal year rose 11% from a year earlier to 3.66 million tonnes.

Top zinc producer Hindustan Zinc lost 3.37% to Rs 782, after it cut zinc prices by Rs 9,300 a tonne on Thursday, or 4.2%, to Rs 212,200 per tonne.

Among the side counters, Petronet LNG rose 5.40% to Rs 52.70 following reports on Wednesday that it will soon sign a deal to import 2.5 million tonnes of LNG from Chevron-operated Gorgon gas field in Australia, at a terminal that it is constructing at Kochi.

BSEL Infrastructure Realty gained 4% to Rs 68.50 after after its equal joint-venture with Unity Infraprojects was awarded a hotel project in the western city of Pune. Its net profit for December quarter surged to Rs 30.22 crore from Rs 4.37 crore rupees a year ago.

Iron ore exporter Sesa Goa rose 3.03% to Rs 1543 on reports that Arcelor Mittal had submitted a non-binding bid for a controlling stake in the iron ore exporter.

Outsourcing firm Hinduja TMT gained 2.24% to Rs 772.55 after reports that Hinduja Group is interested in buying a controlling stake in mobile phone operator Hutchison Essar

Budget airline Deccan Aviation advanced 2.14% to Rs 143.35 following reports that the company may post a modest profit for the October-December 2006 quarter. Much of the turnaround is on account of control on costs and surge in traffic in the month of December 2006, reports suggest.

i-flex solutions rose 0.62% to Rs 1974 after the company said on Wednesday that it was acquiring the Singapore consulting business of Capco. The acquisition of Capco Capital Markets Co. Pte. through i-flex's Singapore unit, would strengthen i-flex Consulting, which provides services to banks in the Asia-Pacific region, i-flex said in a statement.

Global Vectra Helicorp rose 0.97% to Rs 250.80 after the helicopter operator said it had signed a deal worth Rs 43 crore to provide helicopter services to Transocean Offshore International Ventures and its affiliates for three years.

Mold Tek Technologies jumped 10% to Rs 79.95 after it said on Wednesday its board would meet on 10 January to consider buying plastic packaging products maker Tech-Man Tools. The board would also consider spinning off the company's engineering knowledge process outsourcing division. It also said it would review a proposal for the possible acquisition of a US-based engineering company.

The Nikkei average rose 0.74% to close at an eight-month closing high on Thursday, the first trading day of 2007, with Toyota Motor Corp rising on news that it had become one of the 'Big Three' automakers in 2006, while other exporters advanced on a softer yen. The Nikkei finished up 127.84 points, at 17,353.67, the highest close since 21 April 2006. Tokyo markets were open for a half day of business on Thursday. They were closed Monday through Wednesday for the New Year holiday.

Hang Seng index was down 1.92%, while Straits Times (down 0.46%) and Seoul Composite (down 0.86%) also edged lower.

The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored into share prices, market players will closely watch what the company managements have to say about the outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts the Q3 earnings season on 11 January.

After Q3 results, the market will be eyeing the Union Budget 2007-08. A build up of long positions is likely on expectations of favourable policy announcements in the budget, according to dealers.

As per provisional data, FIIs were net buyers to the tune of Rs 168 crore on Wednesday (3 January), the day when the Sensex had gained 73 points and settled above 14,000 level for the first time. They were net buyers to the tune of Rs 128 crore in index-based futures, as they bought Rs 43 crore of individual stock futures that day.

US stocks ended little changed in their 2007 debut session on Wednesday, as minutes from the Federal Reserve's latest meeting renewed concerns about the strength of the economy and corporate profits and halted an early rally. The Dow Jones industrial average rose 11.37 points, or 0.09%, to end at 12,474.52. The Standard & Poor's 500 Index slipped 1.67 points, or 0.12 %, to finish at 1,416.63. The Nasdaq Composite Index advanced 7.87 points, or 0.33%, to close at 2,423.16.

Kotak - Strategy 2007

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Sharekhan Highnoon dated January 04, 2007

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Motilal Oswal - IDFC, ONGC, NIIT Tech

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Karvy - Bajaj Hindustan

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PowerYourTrade Trading Calls

Ashwani Gujral

Buy Reliance Capital with a stop loss of Rs 600 for a target of Rs 730.

Buy NDTV with a stop loss of Rs 244 for a target of Rs 320.

Deepak Mohoni

Buy Mphasis BFL below Rs 316. Stop Loss at Rs 312. This is a day-trading recommendation.

Short Sell ITC above Rs 260.5. Stop Loss at Rs 264.5. This is a day-trading recommendation

Rajat K Bose

Buy L&T with stop loss below Rs 1460 for a target of Rs 1515

Buy IPCL with stop loss below Rs 291.80 for a target of Rs 302

Motilal Oswal - Value & Momentum

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5 Intra-day Stock Ideas

NIFTY (4024) SUP 4046 RES 4000

Buy BALAJITELE (132.25)
SL 129 T 141, 143

Buy UTIBANK (474.65)
SL 471 T 484, 486

Buy CIPLA (257.85)
SL 254 T 265, 267

@ 636 SL 640 T 626, 624

@ 720 SL 724 T 709, 707


Enjoy the ride…safely

Nothing is worse than active ignorance.

A joyride is good as long as you land safely. But for the markets there is no end to gains and pains. The results are yet to come in, and the bulls seem already excited. The first two days of the new year have been pretty good for the market. The Sensex is above 14k and the Nifty is quoting above 4k. The undertone remains upbeat owing to the strong momentum in the economy and corporate earnings. FII inflows continue, albeit at a slower pace.

Globally too, things appear fine from our market’s point of view. Everyone's waiting for the Fed to take a call on the US economy and interest rates. Other factor to keep an eye will be fund flows, especially into the emerging markets and particularly India within that pack. It will take some time before we get a clear picture on all these.

Locally too, some questions remain. How much more can the main indices rise from here? Will we see a correction? If yes, how long and how sharp will it be? And, most importantly when it will come? The timing of a fall is quite unpredictable. All one can do is be a little cautious when the trend is bullish. After nearly 47% returns last year from the Sensex, it may not be all that easy to make money this year. But it is definitely possible.

For today, we expect another positive start, but the current momentum may just taper off after a two-day rally. In the US, the Dow and the Nasdaq rose marginally. One good news is that oil fell sharply yesterday in New York trading to settle at $58.32 a barrel. Asian markets were mixed this morning. The Nikkei 225 Stock Average climbed 0.7% to an eight-month high while the Hang Seng dropped 50 points to 20,363.

FIIs were net buyers of Rs1.68bn in the cash segment yesterday on a provisional basis. In the F&O segment, they pumped in Rs1.57bn. Mutual Funds were net sellers of Rs79.8mn on Tuesday.

US stocks erased an initial rally in 2007's first trading day after minutes from the Dec. 12 meeting of Federal Reserve policy makers suggested that the central bank was still concerned about slowing economic growth and accelerating inflation.

Copper plunged 7.7% in New York to a seven-month low after US construction spending dropped in November. A measure of six metals traded on the London Metal Exchange (LME) dropped 1.9% following a 2.4% slide a day earlier. Copper slid 4.2% in London.

Among the Indian ADRs, VSNL surged 5.5%, Infy was up 2.3%, Wipro gained 1.4%, Satyam rose 2.3%, Tata Motors shot up 6.2%, MTNL climbed 4.4% and ICICI Bank added 1.2%.

In the emerging markets, the Bovespa slumped over 2% to 44,445 while the RTS index rose 0.6% to 1921 and the IPC index in Mexico fell 0.2% to 26,619.

Global Vectra Helicorp is likely to rise after signing an agreement to provide helicopter services to Transocean Offshore International Ventures and its affiliate for three years. The total value of contract works out to Rs430mn.

Air Deccan is expected to gain amid reports that the low-cost carrier may fly into the profit zone in the October to December quarter. Videocon Industries could be under pressure as reports say its proposed takeover of Daewoo Electronics has hit a roadblock.

NTPC is another stock to keep an eye on. The state-run power generation major is reportedly planning to sign an agreement with Nigerian Government to set up a gas-based power plant there in lieu of 3mn tons of LNG per year.

GNFC might attract some attention amid reports that it will pump in Rs11bn on setting up a TDI plant in Gujarat.

Major Bulk Deals:
Lehman Bros has picked up Asian Electronics and IOL Broadband and sold Pioneer Embroideries; ABN AMRO Bank has bought DCB; Reliance Capital has purchased EIH Associates; Lotus Global has sold GV Films; Kotak Mahindra Bank has sold NK Industries; Franklin Templeton MF has picked up Polaris.

Insider Trades:
Hexaware Technologies Limited: Goldman Sachs Investments (Mauritius) I Limited ("GSIMI") has purchased from open market 250000 equity shares of Hexaware Technologies Limited on 29th December, 2006.

Market Volumes:
The turnover on NSE was up by 37% to Rs81.54bn. The BSE Consumer Durable index was the major gainer and gained 1.61%. BSE Pharma index (up 1.42%), BSE Technology index (up 1.30%) and BSE Auto index (up 0.46%) were among the other major gainers. However, BSE FMCG index lost 0.71%.

Volume Toppers:
IFCI, DCB, Polaris, SAIL, Unitech, Hindalco, GTL, R Com, HCC, Indiabulls, IVRCL Infrastructure, Satyam Computer, Parsvnath, NTPC, GTL Infrastructure, Ashok Leyland, Triveni Engineering and Tata Motors.

Upper Circuit Filters:
Shaw Wallace, Flex Industries, Ganesh Housing, IOL Broadband and McNally Bharat.

Brokers Recommendations:
Maruti – Buy from Citigroup with price target of Rs1107

Long Term Investment:

Major News Headlines:
i-flex to buy Singapore consulting unit of Capco
Reliance Comm Board meet on Jan 10 to mull fund raising plans
RPG Transmission gets orders worth Rs1.93bn
AV Birla Group Cement sales fall 3.2% in December
Diamond Cable gets orders totaling Rs216.7mn
Tata Steel Apr-Dec sales up 11.7% yoy
IOL Broadband ties up with BSNL
ITD Cementation to sell Rs2.5bn shares to big investors
L&T secures $94mn order from Abu Dhabi
ACC Dec cement shipments up 3% yoy
Bharat Electronics Board to consider interim dividend on Jan 23
BHEL is set to bag a Rs4bn contract from Bangladesh: reports

From Research Desk- Indraprastha Gas Ltd. (IGL)

Indraprastha Gas Ltd (IGL) was setup in 1998 to supply CNG and PNG in the city of Delhi. Since then all DTC buses, taxis and auto rickshaws running on the street of Delhi have been converted to CNG and around 40,000 households have been connected with PNG. Going ahead with increased conversions of private vehicles and disallowance of registration of new diesel run LGVs (only CNG run LGVs to be registered) will drive growth for CNG. In the PNG segment the penetration is only at 4% and with real estate growth in Delhi PNG revenues are expected to clock a CAGR of 51.9%. Operating margins are expected to sustain over the current levels of above 40%. The company is also in initial stages of setting up city gas distribution infrastructure in the NCR region which are expected to contribute to revenue in FY09. These factors will drive CAGR of 17.3% and 21.4% in revenues and PAT respectively. We believe that low business risk and growth prospects of the company will drive valuations for the stock and hence we recommend a BUY on the stock with a target price of Rs162.

Momentum likely to continue

The bulls recorded second straight day of gains in first week of New Year. After piercing 14k mark at open the key indices lost ground as the heavy weights like ABB, M&M, Tisco, ONGC and ICICI Bank witnessed selling pressure, further disappointing set of dispatch numbers by heavy weight ACC aided the down fall. However, after hitting an intra-day low of 13897.42 the benchmark index recovered from lower levels in the later half of the session as buying momentum in the Technology, Auto and Pharma stocks lifted benchmark BSE Sensex to close over the 14k mark for the first time. The Pharma index rose 1.42% followed by Technology index, which added 1.30%. The Auto and Bank index followed suit. Finally, the BSE benchmark Sensex surged 72 points to close at 14014. NSE Nifty was up 16 points to close at 4024.

Tata steel slipped 1.5% to Rs471. The company registered its April-December sales at 3.53mn tons, up 11.7% from year ago. The scrip touched an intra-day high of Rs481 and a low of Rs470 and recorded volumes of over 14,00,000 shares on NSE.

L&T advanced 0.8% to Rs1471 after the company secured $94mn order from the Abu Dhabi Water & Electricity Authority for the construction of six major electrical substations. The scrip touched an intra-day high of Rs1486 and a low of Rs1420 and recorded volumes of over 6,00,000 shares on NSE.

IOL Broadband surged 3.8% to Rs277 after the company announced that they have tied up with BSNL for IPTV. The scrip touched an intra-day high of Rs277 and a low of Rs265 and recorded volumes of over 7,00,000 shares on NSE.

The Technology stocks were in the limelight. Mid-Cap technology stocks led from front Polaris, Moser Baer and Mphasis BFL were among the major gainers. Index heavy weights Infosys rose 1.9% to Rs2314, Satyam Computer was up 1.5% to Rs516 and Wipro added 1% to Rs617.

Pharma stocks recorded healthy gains. Ranbaxy, Sun Pharma, Glaxo and Cipla were among the major gainers.

Cement stocks were a mixed bag. Index heavy weights ACC lost 1.7% to Rs1073 on back of disappointing set of numbers. The company sold 1.65mn tons cement in December against 1.6mn. However, Grasim was up 0.2% to Rs2838, Gujarat Ambuja gained 0.3% to Rs145 and Mangalam Cement rose 1.4% to Rs212.

Metal stocks pared their intra-day gains. Tisco lost 1.55 to Rs471, Sterlite industries dropped 1.4% to Rs546, Hindustan Zinc fell 2.7% to Rs810 and National Aluminum was down 0.2% to Rs214.

WOW - Polaris Software - JP Morgan

Significant organizational changes & robust business pipeline will fuel growth ahead
In its report dated 2nd Januaryr, 2007 J.P. Morgan India Private Limited (JP Morgan) upgrades Polaris Software Lab Ltd. (Polaris) to Overweight with CMP of Rs 174 and a target price of Rs 225.

J.P. Morgan India Private Limited (JP Morgan) mentions that Polaris Software Lab Ltd. (Polaris) has streamlined its sales function increasing accountability for client revenues and offering geography focused services. On the delivery front, Polaris has eliminated overlaps in the solutions delivery process and integrated all existing MIS systems to improve monitoring of projects. JP Morgan also enlightens that the Quality systems have been updated inline with industry and several key personnel have been changed and new performance management systems have been implemented.

JP Morgan points out that the changes in organization structure and people are beginning to show results and Management is seeing a healthy pipeline in both products and services with positive outlook on existing clients which would lead to good revenue traction in our view with 5-7% Q/Q growth over the coming 4-6 quarters. Further, JP Morgan expects margins to increase due to scale leverage, productivity improvements and better price realization. Overall, JP Morgan expects 27% revenue and 41% EPS CAGR over FY07-09E.

JP Morgan states that Polaris is trading at P/E of 11x FY08E which is cheap compared to peers. JP Morgan expects the current strong financial performance to be sustained over the coming 12-15 months and upgrades Polaris to Overweight from Neutral with a Dec-07 Target Price of Rs 225/share with potential upside of 29% from current levels.

Thanks HK

Market may score further gains

The market may open on a firm note following reports that the centre and states have agreed to phase out central sales tax (CST) over the next four years. According to the agreement, CST, currently levied at 4% will be cut by one percentage point every year over the next four years.

According to derivatives dealers, the derivative segment gives bullish signals and the uptrend on the bourses may continue in the near term.

The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored in share prices, market players will be closely watching what the company managements have to say about outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts Q3 earnings season on 11 January.

After Q3 results, the market will be eyeing the Union Budget 2007-08. A build up of long positions is likely on expectations of favourable policy announcements in the budget, according to dealers.

As per provisional data, FIIs were net buyers to the tune of Rs 168 crore on Wednesday 3 January, the day when Sensex had gained 73 points and settled above 14,000 level for the first time. They were net buyers to the tune of Rs 128 crore in index-based futures and they net bought Rs 43 crore of individual stock futures on that day.

Asian markets were mixed on Thursday (4 January 2007). Key benchmark indices in Japan, and Taiwan were up by between 0.4% to 0.7%. Key benchmark indices in Hong Kong, South Korea and Singapore were down by between 0.08% to 1.2%.

US stocks ended little changed in their 2007 debut session on Wednesday, as minutes from the Federal Reserve's latest meeting renewed concerns about the strength of the economy and corporate profits and halted an early rally. The Dow Jones industrial average rose 11.37 points, or 0.09 percent, to end at 12,474.52. The Standard & Poor's 500 Index slipped 1.67 points, or 0.12 percent, to finish at 1,416.63. The Nasdaq Composite Index advanced 7.87 points, or 0.33 percent, to close at 2,423.16.

Oil price declined sharply on Wednesday. US crude oil for February delivery fell $2.73, or 4.5 percent, to settle at $58.32 a barrel.

Emkay Morning Notes - Four Wheeler Update

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Upmove may continue

The market crossed the psychological 14000 level in yesterday's trades and is likely to take further lead as buying interest continues in large-caps and several other sectoral counters. Gains in overnight US markets and in the Asian indices there was mix trend in current trades may augur well for the markets. Among the key local indices, the Nifty could test higher levels around 4050 and has supports at 3985 and 3960. The Sensex has a likely support at 13900 and may face resistance at 14035.

US indices post the marginal gains on Wednesday. While the Dow Jones scaled above the 12470 levels to close at 12475, 11 points up, the Nasdaq ended 8 points higher at 2423.

Indian floats, too, were upbeat on strong domestic and US markets. Except Dr Reddys, HDFC Bank, Rediff and Patni Computers, other Indian ADRs ended at higher levels. Tata Motors led the upmove and surged 6.17% while VSNL gained 5.47%, MTNL advanced 4.4% and Infosys, Satyam, Wipro and ICICI Bank gained over 1-2% each.

The Nymex light crude oil for February series declined by $2.73 cents at $58.32 per barrel. In the commodity space, the Comex gold for February delivery tumbled up $8.20 to settle at $629.80 a troy ounce

Brokers bullish on Bharti, SpiceJet, Aventis Pharma

Angel Broking has maintained buy rating on Bharti; with a target of Rs 790.

Edelweiss has maintained buy rating on SpiceJet.

Kotak PCR has kept buy rating on Aventis Pharma; with a target of Rs 1643.

Citigroup has maintained buy rating on Aban Offshore; with a target of Rs 1700.

Citigroup has kept buy rating on Maruti; with a target of Rs 1107.

ICICI Securities has reiterated buy rating on Spicejet.

ICICI Securities has maintained buy rating on MphasiS.

IDBI Capital - Ankur Drugs & Pharma

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Thanks Ashis