ABB

Macquarie Research initiates 'underperformer' rating on ABB
10 Sep, 2008

ABB India
cmp: Rs 893.40
target price: Rs 728

Macquarie Research has initiated coverage on ABB India with an ‘underperformer’ rating saying ABB has traded at a significant premium to peers in the power sector equipment space.

“We expect growth to moderate and multiples to come off,” said Macquarie in a note to its clients. Macquarie expects the company’s growth to mod-erate to 26% CAGR over CY08-10.

“We expect ABB’s growth to come in line with BHEL’s (proxy to generation sector investment) projected growth. Our projected topline growth over CY08-10 is 26%, against 42% over CY05-07,” the note said. According to Macquarie, ABB has built-in price escalation clauses in its contracts and has also hedged key raw materials such as copper.

“We expect margins to remain stable on pass through clauses, earnings growth around 27%,” the note added.


Wait for more signals before turning positive
28 Jul, 2008,

At the recent low of 12514 points, the Sensex has tested the 12800-12000-pts support zone and has since then attempted a corrective rally. During the past trend phases in the Sensex, a monthly moving average convergence/divergence (MACD) cross-down below its trigger line, have, typically, led to a significant value erosion, with the corrective phase lasting, at least, for a year.

Therefore, immediate rallies would be interpreted as corrective in nature until the medium-term technical parameters turn positive. The recent upmove in the Sensex since the low of 12514 pts has been very sharp. The upside gap of July 23, 2008 had created a bullish ‘Island Reversal Gap’ on the daily charts between 14510 pts and 14519 pts.

Normally, the implications of this on the medium-term outlook would be very positive, especially since the “Island” comprised of 22 trading sessions. When a stock indicates an uptrend, trades above the gap which occurs, then gaps back down and trades below the initial price, an island reversal has occurred.

However, the Sensex has since run into a strong resistance zone between 15026 pts and 15390 pts. The monthly mid-point of June 2008 is at 15026 pts. The 50% retracement level of the fall from the May 2008 peak (17735 pts) is at 15124 pts. The positive implications of the bullish “Island Reversal Gap” would thus get negated if the Sensex has a daily close below 14104 pts (the close on July 22, 2008). The Sensex is then expected to have an initial downside of 13513 pts, the 61.8% Fibonacci retracement level of the recent rise from 12514 pts to 15130 pts.

If the bearish “Island reversal gap” of 14484-14568 pts is immediately filled and the Sensex manages to decisively overhaul the resistances between 15130 pts and 15390 pts, the ongoing upmove would continue. The Sensex may then test higher levels between 16618 pts and 16860 pts.

The 78.6% Fibonacci retracement level of the fall from the May 2008 peak is at 16618 pts while 16860 pts is the 50% retracement level of the entire fall from the January 2008 peak. Hence, one would await further confirmation before turning positive on the medium-term outlook.

Dish TV

Dish TV shines bright on debut in NSE F&O
August 14, 2008

Dish TV India on Wednesday surged 10.26 per cent to close at Rs 39.75 after being included in NSE’s futures and options segment with effect from August 21. NSE announced this yesterday after the market hours. The stock opened 7.07 per cent higher at Rs 38.60 and touched an intraday high of Rs 40.45.

The counter witnessed volumes of 76,78,034 shares vis-à-vis a two-week average of 34,47,892 shares. The stock hit a 52-week high of Rs 106.4 on January 1 and a 52-week low of Rs 26.3 on July 2. The scrip has gained 18.1 per cent in the last one week.

Tata Motors

Anand Rathi puts 'buy' on Tata Motors
7 Aug, 2008

Anand Rathi Securities has initiated a medium term technical 'buy' call on Tata Motors. The brokerage suggests buying this stock between Rs 430-440 with a stoploss of Rs 399 for a target of Rs 520. The current market price is Rs 440.

The stock has sustained above its strong resistance levels at Rs 435-440. The 14-day Relative Strength Index indicates the stock is in an oversold zone and the candle stick chart has formed a bullish engulfing pattern.

“We strongly believe that the stock has entered into medium term bullishness with substantial upside,” Anand Rathi says in its report

HDFC Bank

Indiabulls maintains 'buy' on HDFC Bank
6 Aug, 2008

CMP: Rs 1,184.35
Target price: Rs 1,400

Indiabulls has maintained a ‘buy’ rating on HDFC Bank as it feels that the bank would revert to its more profitable numbers once Centurion Bank of Punjab (CBoP) is integrated in its existing network.

“Sound fundamentals make HDFC Bank a strong performer,” says the report, adding that “despite taking a nominal hit on its net interest margin (NIM) post the merger with CBoP, net interest income (NII) grew by 74.9% YoY and fee income by 37.3% YoY.” This pulled up net profit by 44.6% and on a proforma basis, by 31.1%.

While the bank recorded a 111.60% YoY increase in its non-performing assets, the brokerage feels it is more on account of the merger than due to a deterioration in asset quality, since HDFC Bank’s net NPA ratio stood at 0.5% of net advances this quarter.

MTNL

MTNL shares up 6% on 3G spectrum allocation
1 Aug, 2008,

MUMBAI: Shares of MTNL picked up steam after the telecommunications ministry announced that BSNL and MTNL will be allotted high-speed third-generation spectrum right away.

A global auction for 3G mobile services will be held and have five operators initially. The new guidelines for 3G spectrum, released today, provides for a reserve price for availing of radio frequency.

The department of telecommunications has also fixed the base price at Rs 160 crore for metros and category A circles, Rs 80 crore for category B, and Rs 30 crore for C circles, respectively for 3G spectrum auctions.

The guidelines for 'mobile number portability', also released by the government, MTNL shares up 6% on 3G spectrum allocation
1 Aug, 2008,

proposes dividing the country into two zones for implementing the scheme that is prevalent in most mature telecom markets.

India has 60 MHz of 3G spectrum available, and will allow both GSM and CDMA 3G services.

At 12:45 pm, MTNL shares soared 6.45 per cent to Rs 110.50. Among other telcom players, Bharti Airtel was marginally higher, Tata Communications rose 2.03 per cent while Idea Cellular lost 0.79 per cent.