Market Overview
The week ended on a flat note after attaining a 23-month closing high on charts.
The most awaited FDI debate has come to an end after the UPA won the
approval of parliament for allowing FDI in retail after convincingly overcoming
the motion in against; as the BSP voted in favour of UPA government. The
buying interest was seen in Realty,
Metal and Oil & Gas on the flip side IT moved
downwards on continued worries over the sector's revenue outlook. The key
economic indicators viz. IIP and Inflation would be the key triggers to watch out
for next week.
Industry & Economy
India's manufacturing sector expanded at its fastest pace in five months in
November 2012, boosted by strong export orders and a surge in output, a
business survey showed today, 3 December 2012. The HSBC manufacturing
Purchasing Managers' Index (PMI), which gauges the business activity of India's
factories but not its utilities, rose to 53.7 in November from 52.9 in October.
Readings above 50 denote growth.
The HSBC services Purchasing Managers' Index, based on a survey of around
400 companies, fell to 52.1 in November from October's 53.8, to register a 13-
month low.
Moody's Investors Service said its outlook on the Indian banking system for the
next 12-18 months remains negative, as it has been since November 2011,
reflecting the continued challenging nature of domestic operating environment
which is characterized by slow economic growth, high inflation, high interest
rates, and a weak local currency.
Weekly Corporate News
Jaiprakash Associates (JAL) said its wholly owned subsidiary Jaypee Cement
Corporation (JCCL) is looking into various options to unlock the value for its
shareholders.
L&T said it has secured an order valued at over Rs 732 crore from Nuclear
Power Corporation of India (NPCIL) for the Rajasthan Atomic Power Plant
(RAPP). The contract underlines L&T's growing contribution in the Indian nuclear
energy sector and strengthens its long-standing relationship with NPCIL.
RIL said that the board of Ex-Im Bank has voted to extend the single largest
financing transaction of $2.1 billion to Reliance Industries. This includes a $1.06
billion direct credit loan and to guarantee a $1.06 billion JP Morgan Chase loan
to the company.
BEML Ltd has bagged orders worth Rs 500 crore from Saudi Arabia and the
Indian Railways. The company has recently bagged a Rs 73-crore order from The
Kingdom of Saudi Arabia for the supply of dumpers and excavators for its
mining segment.
Piramal Enterprises has acquired the United Kingdom-based market analytics
company Abacus International, giving it access to the European markets.
M&M total automobile sales rose 18% to 48,143 units in November 2012 over
in November 2011.
Bajaj Auto total sales fell 1% to 3.72 lakh shares in November 2012 over
November 2011. Motorcycle sales fell 2% to 3.26 lakh units in November 2012
over November 2011. The company said sales bigger and sportier Pulsar and
Discover brands contributed 68% of motorcycle sales in November 2012. Sales
of Discover brand totaled 1.5 lakh units in November 2012.
SAIL has registered a growth of 8% during November 2012 compared to the
same month last year. The company produced 9.72 lakh tonnes of saleable steel
during November.
Techno - Funda Recommendation
Investment Rationale
Dabur India Ltd is one of the leading FMCG Companies in India. Its international
business contributes 30% and domestic business contributes about 70% of the
company's total business. The company is strengthening its presence in existing
categories and markets as well entering new geographies. Dabur has strong
focus on innovation. It has rolled out new variants & products which have
contributed to around 5-6% of our growth p.a. The company plans to spin off
the retail business and also plans 50 more New U stores over the next three
years.
Technical Outlook
The stock has been in long term uptrend, shown by consistent series of rising
tops and bottoms on monthly charts. This year FMCG counters have clearly
outperformed broader indices and they continue to do so as broader markets
have too seen a smart rally in last two quarters. Stock of DABUR hit all-time
high levels in October-2012 after which it has gone into a consolidation. While
moving in a narrow range it has been able to maintain above longer term
moving averages and recent gains in last two weeks indicate there can be
continuation of the rally in near term. Accordingly, one may go long between
128-CMP (130.05) with closing below stop loss of 123 level for the target of
146 levels.
The week ended on a flat note after attaining a 23-month closing high on charts.
The most awaited FDI debate has come to an end after the UPA won the
approval of parliament for allowing FDI in retail after convincingly overcoming
the motion in against; as the BSP voted in favour of UPA government. The
buying interest was seen in Realty,
Metal and Oil & Gas on the flip side IT moved
downwards on continued worries over the sector's revenue outlook. The key
economic indicators viz. IIP and Inflation would be the key triggers to watch out
for next week.
Industry & Economy
India's manufacturing sector expanded at its fastest pace in five months in
November 2012, boosted by strong export orders and a surge in output, a
business survey showed today, 3 December 2012. The HSBC manufacturing
Purchasing Managers' Index (PMI), which gauges the business activity of India's
factories but not its utilities, rose to 53.7 in November from 52.9 in October.
Readings above 50 denote growth.
The HSBC services Purchasing Managers' Index, based on a survey of around
400 companies, fell to 52.1 in November from October's 53.8, to register a 13-
month low.
Moody's Investors Service said its outlook on the Indian banking system for the
next 12-18 months remains negative, as it has been since November 2011,
reflecting the continued challenging nature of domestic operating environment
which is characterized by slow economic growth, high inflation, high interest
rates, and a weak local currency.
Weekly Corporate News
Jaiprakash Associates (JAL) said its wholly owned subsidiary Jaypee Cement
Corporation (JCCL) is looking into various options to unlock the value for its
shareholders.
L&T said it has secured an order valued at over Rs 732 crore from Nuclear
Power Corporation of India (NPCIL) for the Rajasthan Atomic Power Plant
(RAPP). The contract underlines L&T's growing contribution in the Indian nuclear
energy sector and strengthens its long-standing relationship with NPCIL.
RIL said that the board of Ex-Im Bank has voted to extend the single largest
financing transaction of $2.1 billion to Reliance Industries. This includes a $1.06
billion direct credit loan and to guarantee a $1.06 billion JP Morgan Chase loan
to the company.
BEML Ltd has bagged orders worth Rs 500 crore from Saudi Arabia and the
Indian Railways. The company has recently bagged a Rs 73-crore order from The
Kingdom of Saudi Arabia for the supply of dumpers and excavators for its
mining segment.
Piramal Enterprises has acquired the United Kingdom-based market analytics
company Abacus International, giving it access to the European markets.
M&M total automobile sales rose 18% to 48,143 units in November 2012 over
in November 2011.
Bajaj Auto total sales fell 1% to 3.72 lakh shares in November 2012 over
November 2011. Motorcycle sales fell 2% to 3.26 lakh units in November 2012
over November 2011. The company said sales bigger and sportier Pulsar and
Discover brands contributed 68% of motorcycle sales in November 2012. Sales
of Discover brand totaled 1.5 lakh units in November 2012.
SAIL has registered a growth of 8% during November 2012 compared to the
same month last year. The company produced 9.72 lakh tonnes of saleable steel
during November.
Techno - Funda Recommendation
Investment Rationale
Dabur India Ltd is one of the leading FMCG Companies in India. Its international
business contributes 30% and domestic business contributes about 70% of the
company's total business. The company is strengthening its presence in existing
categories and markets as well entering new geographies. Dabur has strong
focus on innovation. It has rolled out new variants & products which have
contributed to around 5-6% of our growth p.a. The company plans to spin off
the retail business and also plans 50 more New U stores over the next three
years.
Technical Outlook
The stock has been in long term uptrend, shown by consistent series of rising
tops and bottoms on monthly charts. This year FMCG counters have clearly
outperformed broader indices and they continue to do so as broader markets
have too seen a smart rally in last two quarters. Stock of DABUR hit all-time
high levels in October-2012 after which it has gone into a consolidation. While
moving in a narrow range it has been able to maintain above longer term
moving averages and recent gains in last two weeks indicate there can be
continuation of the rally in near term. Accordingly, one may go long between
128-CMP (130.05) with closing below stop loss of 123 level for the target of
146 levels.
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