Vivek Patil: Weekly Technical Analysis.. Week of 12th Nov 2012:: ICICI Sec

http://content.icicidirect.com/ULFiles/UploadFile_20121112101059.asp

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Next IPO :Tara Jewels -21st Nov to 23rd Nov

Next IPO :Tara Jewels  -

The issue date is from 21st Nov to 23rd Nov


Price Band Rs 225-230,
Bid Lot: 50 shares and multiples of 50

IPO Size:  around Rs 179.5 Cr

Anchor investor at Rs 225

FII DERIVATIVES STATISTICS FOR 15-Nov-2012

FII DERIVATIVES STATISTICS FOR 15-Nov-2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	39271	1067.70	87888	2329.03	368768	9166.01	-1261.33
INDEX OPTIONS	452365	12744.19	452716	12797.48	1861747	52458.34	-53.29
STOCK FUTURES	46834	1357.25	61412	1679.14	1095626	29877.65	-321.89
STOCK OPTIONS	50530	1377.84	49462	1359.45	93347	2566.04	18.39
						Total	-1618.12

 

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FII & DII trading activity on NSE and BSE 15-11-2012

Category		Buy	Sell	Net
		Value	Value	Value
FII		3742.91	3696.46	46.45
DII		784.95	1166.62	-381.67

 

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Reliance Industries (RIL IN) Downgrade to UW: HSBC Research

Reliance Industries (RIL IN)
Downgrade to UW: Fully valued
 2QFY13 results in line with our and consensus estimates;
refining business contributed 60% of operational profit
 We believe the recent run in refining margin is unlikely to
sustain given weak macro outlook and impending return of
several refineries from unplanned shutdown
 We retain TP of INR800 but downgrade RIL to UW (from N)
due to recent run up in the share price

Emami:: Outlook remains buoyant – Maintain BUY:: Religare

Outlook remains buoyant – Maintain BUY
HMN’s net sales/EBITDA/adj. PAT grew 17.9%/14.3%/7.6% YoY in Q2FY13, led by a strong 22% YoY growth in the domestic business and recovery in the international business. The onset of early winter has been good for the company with H2FY13 looking strong. We maintain BUY with a Sep’13 TP of Rs 635 on: (a) double-digit volume growth in the domestic business, (b) flattening out of input costs and (c) reasonable valuations at 25.9x/21.2x FY13E/FY14E P/E.

Gujarat Gas -Margins expand; outlook improves :: Centrum

Margins expand; outlook improves
Price hikes across segments during the beginning of Q3 led to Gujarat Gas’s
stupendous performance with 16.2% YoY and 79.6% QoQ jump in adjusted
PAT (adjusted for other income) at Rs935mn (reported PAT at Rs1,001mn).
Although LNG prices softened on a sequential basis, ~2% QoQ rupee
depreciation led to flattish gas sourcing cost. Going ahead the company is
likely benefit from both rupee appreciation and lower LNG prices. We thus
expect an improvement in operational performance in Q4 and in CY13E.
However, the near term stock performance is likely to follow the open offer
price (at Rs314.2/share). Based on our revised estimates we upgrade the stock
to ‘Neutral’ from Sell.
Price hike at the beginning of Q3 leads to higher average realisations:
GujGas’s average distribution realisations grew by 42.6% YoY and 6.2% QoQ
to Rs28.1/scm owing to the price hikes across segments at the beginning of
the quarter. Distribution volumes that were marginally up QoQ at
3.2mmscmd, were however down 9.5% YoY primarily due to YoY increase in
retail prices by a whopping 30-40%.
Gross margins, EBITDA/scm expands: Price hikes across segments without
any increase in sourcing cost led to expansion in gross margin from Rs4.6/scm
in Q2 to Rs6.1/scm in Q3 and EBITDA/scm from Rs2.7/scm to Rs4.4/scm in Q3.
Spot LNG prices have been softening and hence the sourcing cost was
contained despite ~2% average rupee depreciation sequentially. Thus
average natural gas sourcing cost remained flattish at Rs22.0/scm while
jumping by over 46.7% YoY from Rs15.0/scm.

Higher energy costs lead to lower op. margins India Cements :: Centrum

Higher energy costs lead to lower op. margins
India Cements’ Q2FY13 result was below estimates with EBITDA at Rs2.1bn (vs. est.
Rs2.2bn) and op. margin at 18.3% (vs. est. 20.1%). Lower EBITDA was primarily
due to higher energy cost as the Andhra Pradesh grid declared a power holiday for
12days/month. High power cost due to power cut led to ~Rs160/tonne YoY (and
Rs65/tonne QoQ) increase in energy cost. Lower EBITDA and higher interest cost
(9.9% QoQ increase) led to adj. profit of Rs420mn (vs. est. Rs621mn). The
management expects the power cut from Andhra Pradesh grid to continue in
2HFY13E which will result in higher energy cost. Considering this, we have revised
our EPS downwards by 10.8% to Rs9.1 for FY13E. Going forward with the
commissioning of the power plant in Andhra Pradesh and stabilization of Tamil
Nadu plant the company will get some respite from higher energy costs in FY14E.
Going forward, we expect EPS to grow at a CAGR of 19.2% between FY12-FY15E.
RoE of the company is expected to improve to 10.1% by FY15E against 6.9% in
FY12 (RoE was 1.9% in FY11). We maintain Buy on the stock with a target price of
Rs122, upside of 25% from CMP.
Higher realization and sales volume lead to higher revenues: Revenue of the
company increased 3.1% YoY to Rs11.2bn (est. Rs10.9bn) driven by a) 4.4% YoY
increase in cement realization to Rs4,408/tonne (est. Rs4,377/tonne) and b) 2.3%
YoY increase in cement sales volume to 2.48mt (est. 2.38mt). Revenue from IPL was
at Rs52mn against Rs515mn in Q2FY12 as last year the company received IPL
revenues in two tranches.
Higher costs lead to decline in op. profit and margin: Operating cost for the
Cement division increased 7.5% YoY to Rs3,588/tonne due to an increase in energy
and freight costs. Energy cost increased Rs205/tonne YoY (and Rs113/tonne QoQ)
led by a) increase in power cost in Tamil Nadu and Andhra Pradesh SEBs, b)12
day/month power cut by Andhra Pradesh grid and c) increase in domestic coal
price. Freight cost increased 14% YoY to Rs901/tonne led by increase in diesel price
and railway freight rates. EBITDA loss from IPL was at Rs55mn against profit of
Rs328mn in Q2FY12. EBITDA declined 18.6% YoY to Rs2.1mn and EBITDA margin
declined 4.9pp YoY to 18.3%.
Lower EBITDA and increase in interest and depreciation costs lead to lower
adjusted profit: Interest cost (adjusted for foreign exchange items) of the
company increased 17.9% YoY (and 9.9% QoQ) to Rs769mn due to a rise in loans as
the company acquired a ship during the quarter. Depreciation was up 11.6% YoY
to Rs699mn. Decline in EBITDA coupled with higher depreciation and interest cost
led to 51.2% YoY decline in adj. profit to Rs420mn. Foreign exchange gain was at
Rs101.7mn against loss of Rs243.5mn in Q2FY12 (and Rs250.2mn in Q1FY13).

Asset quality improves KVB: :: Centrum

Asset quality improves
KVB’s Q2FY13 bottomline performance came in slightly below expectation
(PAT at Rs1.3bn, up 17% YoY) though net total income was in line. A healthy
25bps NIM expansion QoQ and ~30bps improvement in %GNPA surprised us
positively. Overall asset quality remains robust with slippages at ~1.0% and
PCR healthy at ~75%. The restructured portfolio increased by 9% QoQ though
it remains comfortable at 2.8%. We maintain our positive stance on the stock
and our Buy recommendation with a revised target price of Rs550 (1.75x
FY14E).
NIM expands 25bps QoQ: NII grew by a strong 32% YoY to Rs2.9bn led by a
smart 25bps expansion in NIM coupled with healthy credit growth (27% YoY).
The NIM expansion can be traced to 25bps improvement in cost of deposits.
We expect the NIM to stabilise at current levels for H2FY13.
GNPA improves sequentially: Asset quality matrices continued to remain
healthy with 1) GNPA improving by ~30 bps QoQ 2) PCR stable at 75% 3) and
slippage rate contained at ~1.0%. Meanwhile, the restructured portfolio was
up 9% sequentially though remaining comfortable at 2.8% of loans. KVB
upgraded a textile exposure (Rs500mn exposure, had slipped in previous
quarter) after restructuring it under CDR. This helped the bank write back the
provisions created on the account. The management has stepped up
monitoring and recovery efforts lately given the challenging economic
environment.

DSPBR Small and Midcap Fund: Invest:: Business Line

Stellar performance, maintain Buy JK Cement :: Centrum

Stellar performance, maintain Buy
JK Cement’s Q2FY13 result was above estimates with EBITDA at Rs1.3bn (vs.
est. Rs1.2bn), EBITDA margin at 18.2% (vs. est. 17.2%) and profit at Rs541mn
(vs. est. Rs410mn). Higher profit was largely due to a) higher sales of white
cement at 0.10mt (vs. est. 0.09mt), b) grey cement realization at
Rs3,973/tonne (vs. est. Rs3,939/tonne) and c) 22.5% QoQ decline in interest
cost to Rs290mn. Going forward, with higher sales from South plants in the
current year, the management believes that grey cement sales volume could
increase by 8-10% in FY13E. Last year, sales volume from this plant was ~44%
which is expected to improve to ~70% in FY13E. The expansion plan of 3mt
(split grinding units of 1.5mt each in Haryana and Rajasthan) is on track and
the management expects these plants to get commissioned by end-FY14E.
We believe that higher grey and white cement sales volume will lead to
improved earnings for the company and expect EPS to grow by 53.1% YoY to
Rs39.4 in FY13E. EPS of the company is expected to grow at a CAGR of 24.7%
between FY12-FY15E. Higher earnings will lead to improvement in RoE to
16.9% in FY13E against 12.3% in FY12. JK Cement is our top-pick among midcaps
and we maintain Buy on the stock with a price target of Rs354, upside of
30.5% from the CMP.
Better performance from both segments helps to post better results:
Revenue of the company increased 39.3% YoY to Rs7.1bn led by 40.9% YoY
growth in grey cement revenue and 34.6% YoY growth in revenue of white
cement. EBITDA increased 114.9% YoY to Rs1.3bn and EBITDA margin
expended 6.4pp YoY to 18.2%. EBITDA margin expansion was primarily due to
7.9pp YoY improvement in op. margin of grey cement. Adj profit of the
company increased 15.2x YoY to Rs541mn.
Higher realization and sales volume lead to stellar performance from grey
cement: Led by 17.8% YoY sales volume growth and 19.6% YoY realization
growth, revenue from grey segment increased 40.9% YoY to Rs5.4bn. Higher
realization and sales volume led to 189.2% YoY growth in operating profit of this
segment to Rs839mn and EBITDA margin expanded 7.9pp YoY to 15.4%.
Operating cost of grey cement increased 9.3% YoY to Rs3,360/tonne primarily
due to an increase in raw material, energy and freight costs. EBITDA/tonne of
grey cement increased 145.4% YoY to Rs614/tonne.

Volume disappointment mars performance NMDC :: Centrum

Volume disappointment mars performance
NMDC’s operational performance was well below expectations with EBITDA at
Rs19.3bn (margin of 74.1%) as sales volume dropped by ~15% QoQ to ~5.9MT.
Volumes suffered due to heavy monsoons and exports unexpectedly rose to 3.75
lakh tonne resulting in increased expenses on freight and margin compression.
NMDC had hiked iron ore prices for the quarter and blended realizations stood at
~Rs4465/tonne (up by 7.8% QoQ) but pricing has started to taper down from
October onwards to reflect global iron ore price fall. NMDC recently guided for flat
volumes for FY13E as evacuation bottlenecks continued to adversely affect
operations and has announced price cuts of ~12% in both fines and lumps in
Q3FY12E through monthly cuts announced for Oct and Nov. We reduce our
volumes and PAT estimates by 8-10% for FY13E/14E to account for the same.
Maintain buy with a reduced target price of Rs205.
Volumes drop sharply; export volumes increase unexpectedly: Sales volumes stood
at ~5.9MT, down by ~23% YoY and ~15% QoQ as production and evacuation from
Chhattisgarh mines was adversely affected by heavy monsoons. Exports increased
unexpectedly to 3.75 lakh tonne amidst global iron ore price fall that led to higher
freight costs. Realizations remained strong at ~Rs4465/tonne as NMDC announced
price hikes during the quarter. The prices have since been reduced in October and
November by ~12% for both fines and lumps after shift to monthly pricing.
EBITDA margin falls sharply as export volumes increase expenses: EBITDA
margin went down sharply during the quarter to 74.1% (down by 690bps QoQ)
and EBITDA stood at ~Rs19.3bn (EBITDA/tonne of ~Rs3300, down by ~1.5% QoQ).
Margin drop was mainly on account of lower overall volumes and exports
accounting for 6.4% of overall volumes in the sales mix.

Volumes decline but take-or-pay income aids bottom-line -GSPL :: Centrum

Volumes decline but take-or-pay income aids
bottom-line
Although, GSPL’s transmission volumes declined by 8.1% QoQ at
28.6mmscmd, the company reported PAT of Rs1.3bn backed by takeor-
pay income and additional other income. Sequential volume
decline is attributed to the decline in KG D6 volumes which is likely to
continue at least for the next few quarters. Average transmission
tariffs soared 10.0% QoQ at Rs993/’000scm which can be attributed to
the income from take-or-pay contracts. The company is yet to
implement new tariffs based on the PNGRB tariff order. We believe
the incremental volume growth is likely to be muted due to declining
KG D6 volumes and the notified tariffs have been factored in the
current valuations which do not provide meaningful upside from
current levels. Maintain ‘Neutral’.
Transmission volumes decline, average tariffs move up: Decline in KG
D6 volumes impacted GSPL’s transmission volumes which were down
8.1% QoQ at 28.6mmscmd. However, average transmission tariffs surged
10.0% QoQ at Rs993/’000scm which can be attributed to income from
take-or-pay contracts and short distance transmission.
Other income offers further support to bottom-line: Depreciation
went up by 5.4% YoY and 5.6% QoQ at Rs464mn due to capex on new
pipelines. The interest cost remained flat at Rs316mn during Q2. Higher
cash balance on the books led to higher other income which went up by
35.4% YoY and 22.6% QoQ at Rs185mn. Overall, despite lower
transmission volumes, higher average tariffs and higher other income led
to 2.7% YoY and 6.4% QoQ jump in bottom-line at Rs1.3bn.

SGX Nifty: 5,653.00 -52.00: Market to open DOWN

SGX Nifty: 5,653.00 -52.00: Singapore Stock exchange
8:40 AM India time
15 Nov
Market to open DOWN

Healthy core performance CUB :: Centrum

Healthy core performance
CUB’s Q2FY13 core performance (Rs1283mn, 26.4% YoY) came in line with our
estimates driven by a healthy NII and fee income performance. Higher
provisioning during the quarter contained the bottomline at Rs804mn (vs
estimate of Rs853mn) as GNPA was up 21% QoQ. However, asset quality
matrix still remains robust with %GNPA at 1.24% and restructured assets at
4.5% of loans. We continue to remain positive on the stock driven by its ability
to deliver consistently robust return ratios. Maintain Buy with a revised target
of Rs65.
NIM expands 15bps QoQ: The reported NIM expanded by 15 bps QoQ to
3.3%, driven primarily by easing in cost of funds as blended yields were flat
QoQ at 10.7%. The NIM expansion was in line with our expectations. The NIM
expansion along with continued healthy credit growth (27% YoY) led to a
robust 24% YoY growth in NII. The management has guided for stable NIMs
for H2FY13, which we believe is achievable considering gradual easing in
funding costs and pricing power enjoyed by the bank in key segments.
Asset quality slips but remains comfortable: CUB’s asset quality matrices
deteriorated during Q2FY13 with GNPA jumping 21% QoQ though %GNPA
still remains comfortable at 1.24%. Slippage rate inched up higher to 1.9%
(from 1.5% in previous quarter). It should be noted that the slippages of
Rs610mn includes a pharma company exposure of Rs320mn, which slipped
due to temporary cashflow mismatch. The management expects recoveries
from this account during H2FY13. Conservatively, we have factored in a 2%
slippage rate and credit cost of 70bps for FY13.