10th Feb 2015 – Tuesday ShareKhan Pre - Market Action Trading Ideas: Long/Short Ideas identified on basis of Fundamental Trigger/News/Events Watch List: List of stocks identified for trading with positive and negative bias for the day News/ Updates: Important News & Events (Both Domestic & Global) to keep you updated on all the happenings in markets. Index Ideas: Nifty and Bank Nifty view for the day. Currency: View on Currencies/ Important News and Updates Commodity: View on Gold/ Silver/Metals Trading Ideas Cipla – (CMP 630 ) Cipla has inked a joint venture agreement with Morocco-based Cooper Pharma and PHI to enhance its position in the African country Action to be taken: Long Cipla Stop loss : 619 Target : 645-653 Rcom– (CMP 67.60 ) Reliance Communications talks to sell undersea cable assets to China's Citic Telecom International Holdings Ltd. for more than $500 million have stalled Action to be taken: Short Rcom Stop loss : 69 Target : 64.5 -63 News Update • Delhi Poll 2015 : Results today • India a $2.1 trillion economy under new GDP measure. Q3FY15 GDP Growth At 7.5% As Per Market Prices •PSUs like Canara Bank, GAIL India, Power Finance Corporation and other government-owned companies are lining up their bond issuances in the range of Rs7501,500 crore each •Billionaire Gautam Adani has clinched a reworked deal to acquire Lanco Infratech's 1200 MW coal fired Udupi power plant News Update • Srei Equipment Finance is planning to raise up to Rs 5,000 crore during the first six months of the next financial year through issue of private placement of secured and/or unsecured redeemable non-convertible debentures • Adani Enterprises Ltd signed a pact with the Rajasthan government to develop the country's largest solar park in the state with 10,000 MW capacity over the next 10 years at an estimated investment of about Rs 40,000 crore. The company will set up solar power project of 5,000 MW on its own in the next five years News Update •Force Motors plans to set up a manufacturing facility at Chakan near Pune to produce a range of parts including engines, gearboxes and axles with annual capacity of 50,000 sets • Food Min to float cabinet note seeking extension of raw sugar subsidy for current sugar season. As per the proposal, a total quantity of 14 lakh metric tonnne (MT) of raw sugar export has been sought for the current season. A subsidy to the tune of RS 4,000 per MT will be given for facilitating this export, as per the proposal News Update • Mangalore Refinery and Petrochemicals Ltd (MRPL) has raised its stake in ONGC Mangalore Petrochemicals Limited (OMPL) - a JV between Oil and Natural Gas Corp (ONGC) & its subsidiary MRPL – from 3 % to 46 % • CCI has ordered a fresh probe against DLF Ltd with regard to alleged abuse of its dominant market position, after it found the realty major prima facie in violation of fair trade norms in a new case. The case relates to development and sale of residential units in Gurgaon. • Novelis Q3 profit up 250% at $46 million Results Result to be declared today : Expected Profit After Tax Company ABB Cadila Hexaware Jp Associates Motherson sumi Capital first Nalco Speciality Restaurant Triveni Turbine PAT (crs) 78 288 108 -310.30 265 33 334 7.2 26.2 Watch List Stocks With +ve Bias CMP Stocks With -ve Bias CMP Fedral Bank 141 Gail 397 Drreddy 3108 Cesc 661 Divis Lab 1623 Stock for Investment Stocks for Investment Stocks CMP Maruti 3411 AB Nuvo 1741 Axis Bank 554 INFY 2254 Grasim 3725 Actionable Ideas Actionable Stock Idea – Buy Zydus Wellness(CMP 847) In Q3FY2015 Zydus Wellness’ net sales (adjusting for an excise credit of Rs6.72 crore) grew by 10% YoY to Rs106.8 crore, which is better than the 5% growth in Q2FY2015. All the key categories grew equally during the quarter (also aided by a low base of Q3FY2015). The OPM declined by 624BPS on account of a higher advertisement spending (which increased by almost 50% YoY). The adjusted PAT stood flat at Rs27.5 crore while the reported PAT after exceptional items grew by about 70%. We have revised upwards our estimates for FY2016 and FY2017 by 3 and 4% respectively to factor in the higher than estimated sales and GPM. Zydus Wellness’ revenue performance has been improving for the past two quarters and the sustenance of the same would act as a key trigger for the stock. Also, the company has adequate cash of about Rs250 crore, which can be utilised to improve the future prospects. In view of better growth prospects in the coming years, we have upgraded the stock from Hold to Buy with a revised price target of Rs940 (valuing 25x its FY2017E EPS). Actionable Stock Idea – Buy Kalpatru Power Transmission (CMP 229) For Q3FY2015, Kalpataru Power & Transmission Ltd (KPTL) reported a healthy earnings growth of 13% YoY to Rs41 crore. The highlights of this quarter’s performance: (1) an improvement of 80BPS in the margin contributed by the T&D segment; and (2) a reduction in the losses of the infrastructure-EPS business as the revenues from the legacy projects are reducing gradually. Currently the order backlog stands at Rs5,000 crore and KPTL has a very healthy pipeline of L1 orders of Rs2,100 crore. KPTL’s management sounded optimistic about the order inflow pipeline in view of an expected recovery in the T&D space. Thus, the management retained the revenue growth guidance of 12-15% for FY2015 and that of 15% for FY2016. The infrastructure-EPC business (mainly railways and pipeline) that is currently operating at a loss is likely to turn profitable by H2 of FY2016, with the completion of the legacy orders pertaining to the railways. We have fine-tuned our estimates and revised our price target to Rs260 (SOTP based); we retain our Buy rating on the stock in view of the earnings traction and potential value unlocking from some of its subsidiaries ahead. Global Update Global Indices and news •US stocks fell on Monday as investors worried about Greek debt negotiations and disappointing Chinese economic data on top of uncertainty about US interest rates. •Asian stock markets were mixed early Tuesday, following a weak lead from Wall Street and after data showed China's consumer inflation slowed further in January. •Key data to watch in US today is JOLTS(Jobs Opening and Labor Turnover). Index Close Prev Close Change % Change Dow Jones 17729 17824 -95 -0.53% S&P 500 2047 2056 -9 -0.42% FTSE 6837 6853 -16 -0.24% Index View Technical view – Nifty – 8526 For today’s trading sessions we expect nifty to trade with Negative bias Short Term Target for Nifty is 8230 Crucial Resistance area for Nifty is 8950 Intraday levels: Support 8452 - 8380 All levels are spot levels Resistance 8605 - 8645 Technical view Bank Nifty- 18403 For today’s trading sessions we expect Bank Nifty to trade with Negative bias Crucial Resistance for Bank Nifty is at 19444 Intraday levels: Support 18211 – 18000 All levels are spot levels Resistance 18667 –19027 Derivative Update Future’s Activity Nifty Nifty CoC OI PCR(OI) INDIA VIX Current Previous % change 8562.9 8711.9 -1.71% 9.20% 10.71% -14.10% 25716875 25780925 -0.25% 0.89 0.87 2.30% 6.43% 22.02 20.69 Around 0.65 lakh shares were reduced in OI. Option’s Activity Strike 8800 C 8700 C Most active index call option Curr. IV Curr. OI % Chg. OI % Chg. IV 18.58% 3200150 3.91% 4.40% 18.83% 2093850 52.73% 0.00% Strike 8500 P 8400 P 8300 P Most active index Put option Curr. IV Curr. OI % Chg. OI % Chg. IV 19.82% 3641200 18.66% 3.66% 20.50% 3070025 20.59% 4.40% 21.02% 4041175 33.86% 4.46% 8800-8700 CE has added huge no of shares in OI whereas PE 8500-84008300 strike has added shares in OI in yesterday’s trade. Securities in Ban For Trade Date 10-Feb-2015 1. IBREALEST FII : INDEX FUTURES INDEX OPTIONS STOCK FUTURES STOCK OPTIONS -1792.86 +594.12 -197.63 -96.26 5-DAY VWAP Lower Range 8760 8500 SGX Nifty -55.00 points at 8500.00 (FEB Fut) Higher Range 8760 Currency Update Technical Overview Product Prvs Close Trend Action USDINR 61.39 Bullish Buy 61.00 62.48 EURINR 70.51 Bullish Buy 69.92 70.78 GBPINR 94.88 Bullish Buy 94.20 95.14 JPYINR 52.63 Bullish Buy 52 52.80 Support Resistance Commodity Update Commodity Technical Overview Previous Product Close Trend Action Support Resistance GOLD 26944 Bullish Buy 26854 27012 SILVER 37798 Bullish Buy 37259 38151 CRUDE 3308 Bullish Buy 3239 3358 COPPER 355.35 Bearish Sell 353 357.20 Thank You ! Disclaimer The views expressed herein are solely of the analyst, Any review, retransmission, or any other use is prohibited. The information contained herein is from publicly available data or other sources believed to be reliable. Each recipient of this information should make such investigations as it deems necessary to arrive at an independent evaluation of an investment avenue referred to in this web cast and determine the merits and risks of such an investment. Further each recipient of this information may take their own decisions based on their specific investment objectives and financial position and using such independent advisors, as they believe necessary. This information is given in good faith and Sharekhan Ltd makes no representations or warranties, express or implied as to the accuracy or completeness of the information and shall have no liability to you or your representative(s) resulting from use of this information. The investment ideas discussed or views expressed may not be suitable for all investors Analysts and other employees of Sharekhan and Sharekhan may have holdings in the companies mentioned in the webcast. Sharekhan neither makes any representation as to the quality, liquidity or market perception on the securities/market, not does it provide any guarantee whatsoever. The risk arising out of the /participation in any financial instrument will rest fully with you without any form of recourse to Sharekhan. The views are for assistance only and are not intended to be and must not alone be taken as the basis for an investment decision.