market outlook 5th january 2012

8/3/2019 Market Outlook 5th January 2012

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Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539 1

Market OutlookIndia Research

January 5, 2012

Dealer’s Diary

Indian markets are expected to open lower following negative cues from the

European markets and the Asian markets. Asian stocks are trading in the redafter Italy’s biggest bank said it needs to raise more capital, spurring concern

that the European debt crisis is worsening.

Indian shares ended a choppy session modestly lower on Wednesday, with key

benchmarks indices losing less than half a percent each, as investors took some

profits after a two-day rally.

European shares snapped a four-day streak of gains on Wednesday as UniCredit

SpA’s plan to sell shares fueled concern that banks need to raise capital to

weather the debt crisis. US market traded lower in the first half due to profit

taking, with some traders cashing in on Tuesday's strong gains amid lingering

concerns about the European debt crisis and the outlook for the global economy.The downward momentum was partly offset by the release of a report from the

Commerce Department showing a rebound in new orders for U.S. manufactured

goods, leading to US markets ending marginally in the green.

Markets Today

The trend deciding level for the day is 15,903/4,754 levels. If NIFTY trades

above this level during the first half-an-hour of trade then we may witness a

further rally up to 15,984 - 16,086/4,779 - 4,808 levels. However, if NIFTY

trades below 15,903/4,754 levels for the first half-an-hour of trade then it may

correct up to 15,802 - 15,721/4,725 - 4,700 levels.

Indices S2 S1 Pivot R1 R2

SENSEX 15,721 15,802 15,903 15,984 16,086

NIFTY 4,700 4,725 4,754 4,779 4,808

News Analysis

Cement Dispatches – December 2011

KEC International secures orders worth ` 1,253crRefer detailed news analysis on the following page

Net Inflows (January 03, 2011)

` cr Purchases Sales Net MTD YTD

FII 1,357 1,031 326 287 287

MFs 538 223 315 260 260

FII Derivatives (January 04, 2012)

` cr Purchases Sales Net Open Interest

Index Futures 1,210 1,359 (149) 10,517

Stock Futures 1,294 1,241 52 23,310

Gainers / Losers

Gainers Losers

Company Price (`) chg (%) Company Price (`) chg (%)

MMTC 730 17.8 Bajaj Holdings 649 (5.6)

Hindustan Copp 253 15.3 Bajaj Auto 1,426 (4.7)United Spirits 561 9.4 M&M 638 (4.3)

Gujarat NRE Coke 17 5.1 Bajaj Finserve 420 (3.6)

Neyveli Lignite 79 4.7 ACC 1,104(3.4)

Domestic Indices Chg (%) (Pts) (Close)

BSE Sensex (0.4) (56.7) 15,883

Nifty (0.3) (15.7) 4,750MID CAP 0.2 8.8 5,265

SMALL CAP 0.1 5.6 5,691

BSE HC 0.5 27.1 5,974

BSE PSU 1.7 114.4 6,731

BANKEX 0.7 66.5 9,643

AUTO (1.2) (98.9) 8,102

METAL 0.6 61.8 9,887

OIL & GAS (0.5) (37.6) 7,738

BSE IT (0.5) (29.2) 5,925

Global Indices Chg (%) (Pts) (Close)

Dow Jones 0.2 21.0 12,418

NASDAQ (0.0) (0.4) 2,648

FTSE (0.6) (31.5) 5,668

Nikkei 1.2 104.8 8,560

Hang Seng (0.8) (150.1) 18,727

Straits Times 0.8 22.7 2,711

Shanghai Com (1.4) (30.0) 2,169

Indian ADRs Chg (%) (Pts) (Close)

Infosys (0.5) (0.3) $53.2

Wipro (1.7) (0.2) $10.3

ICICI Bank (0.1) (0.0) $28.1

HDFC Bank 0.5 0.1 $27.3

Advances / Declines BSE NSE

Advances 1,499

Declines 1,200 655

Unchanged 135 72

Volumes (` cr)

BSE 2,184

NSE 9,716



Market Outlook | India Research

January 5, 2012 2

Cement Dispatches – December 2011

UltraTech reported cement dispatches for December 2011, which were up by

strong 10.6% yoy to 3.62mn tonnes. However, for 3QFY2012, growth in

dispatches has been modest at 5.9%. In December 2011, the company managed

to post better growth in dispatches compared to Ambuja Cements' growth, which

reported modest growth of 5.7% yoy. We continue to remain Neutral on UltraTech.

KEC International secures orders worth `1,253cr

KEC International (KEC) has bagged orders totaling ` 1,253cr across various

business verticals. In the transmission and distribution space (T&D), the company

secured orders worth ` 976cr. Order intake in MENA region stood at ` 414cr

( ` 310cr and ` 104cr worth of orders from Saudi Arabia and Afghanistan,

respectively). SAE Towers secured orders worth ` 154cr. In addition, ` 350cr worth

of orders came from the U.S., Kenya and Philippines. Notably, only one order

came from the domestic T&D space ( ` 59cr), thus demonstrating the company’s

globally diversified strength. The completion time of all these orders ranges from

12-27 months. In addition to the above, the company bagged orders in the

business verticals of water ( ` 123cr), cables ( ` 105cr) and telecom ( ` 49cr). The

current order book of the company stands at ` 9,000cr.

KEC’s globally diversified model has enabled it to gain an edge over its domestic

peers in the T&D space. While domestic players have struggled to secure orders

amid the slowdown, KEC has consistently maintained its average quarterly run rate

of ~ ` 1,200 since the past several quarters. In addition, new businesses of water,

railway and telecom are faring well (pace of new orders is gradually increasing).

Hence, given the latent potential of the company and healthy return ratios (~25%),

the valuations of 4.3x FY2013E EPS (well below its historic PE multiple average of

14.0x) are compelling. We recommend Buy with a target price of `45.

Economic and Political News

Government defers decision on PSU disinvestment via buyback

Finance Ministry rules out floating rates in postal savings

Global food prices expected to remain high: FAO

Corporate News

ONGC finds four more potential reserves

Bosch to invest ` 3,000cr in India on expanding capacity

Hero MotoCorp unveils three new products at Auto Expo, New Delhi

TCS adds 200 clients on its SME platform iON

Dhanlaxmi Bank raises NRE term deposit rates

Economic Times, Business Standard, Business Line, Financial Express, Mint,



Market Outlook | India Research

January 5, 2012 3

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market outlook 5th january 2012

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