US Markets ended lower.
Europe ended positive.
Asia has opened positive.
Expect the Indian markets to have a flat to positive opening.

NIFTY Technicals :

S 2 4835.5
S 1 4876.45
Pivot *4900.95*
R 1 4941.9
R 2 4966.4

Day Trading Ideas :

Hindalco :
Buy above 148 for targets of 150 & 153. SL of 145
Sell below 144 for targets of 142 & 139. SL of 148

IDFC :
Buy above 152 for targets of 155 & 158. SL of 149
Sell below 147 for targets of 145 & 142. SL of 150

GMR Infra :
Buy above 58 for targets of 60 & 62. SL of 56
Sell below 55 for targets of 53 & 51. SL of 57

Happy Investing!

State of Markets abroad :
US Markets ended lower.
Europe ended mixed.
Asia has opened lower.
Expect the Indian markets to have a flat to negative opening.

NIFTY Technicals :

S 2 4859.5
S 1 4901.7
Pivot *4965.65*
R 1 5007.8
R 2 5071.75

Day Trading Ideas :

Hindalco :
Buy above 145 for targets of 147 & 151. Sl of 143
Sell below 140 for targets of 138 & 135. SL of 143

RNRL has had a good time! (What do you think about it?)

US Markets ended flat.
Europe ended mixed.
Asia has opened mixed too.
Expect the Indian markets to have a flat to positive opening.
The crucial support on the downside for the Nifty is 5100-5030 and resistance at 5175-5250
BSE Sensex: (17167) the crucial support on the Sensex on the downside is 17000 and resistance at 17272

Day Trading Ideas :

Cairn India : Buy above 276 for targets of 280 & 284. SL of 272

Hindalco Ind : Buy above 165 for targets of 168 & 171. SL of 162

Happy Investing!

US Markets ended flat.
Europe ended flat too.
Asia has opened flat.
Expect the Indian markets to have a flat to negative opening.
The crucial support on the downside for the Nifty is 4800 and resistance at 4918-4975-4993
BSE Sensex: (16237) the crucial support on the Sensex on the downside is 16000 and resistance at 16575

Day Trading Ideas :

Hindalco : Buy above 152 for targets of 156 and 159. SL of 149

Cairn India : Buy above 267 for targets of 272 and 275. SL of 263

Happy Investing!

US markets ended higher.
Europe ended higher too.
Asia is ought to open positive.
Expect the Indian Markets to open positive. With a Gap up opening of 200 to 250 points.
The support for the Sensex is 14150 and the resistance to the up move is at 14381-14548
Nifty: (4234) the support for the Nifty is at 4200 and the resistance to the up move is at 4255-4315

Day trading Ideas :

RNRL : Buy above 79.90 for targets of 81.45 and 83.20. SL of 77.90

Rajesh Export : Buy above 38.10 for targets of 39.45. SL of 36.85

LNT : Buy above 1450 for targets of 1471 and 1484. Sl of 1435

Hindalco : Buy above 80.25 for targets of 81.85 and 82.90. SL of 78.10

Sterlite Ind. : Buy above 632 for targets of 640 and 649.50. SL of 626

Nirmal Bang has advised traders to buy and hold Hindalco for target of
Rs 83-88.

“Buy and hold Hindalco as the scrip has corrected almost 36% from the top of Rs 106 to the low of Rs 68. Support exit in the region of Rs 71-68 and resistance at Rs 75. If maintains above Rs 75 then look for a target of Rs 83-88 shortly,” the note said.

Source : Economic Times

Investors with a long-term perspective can continue to hold the Hindalco (Rs 59) stock even if the company’s near-term earnings performance is lacklustre. Hindalco’s operations have delivered reasonable growth on a standalone basis, but muted profitability and high debt of the Novelis acquisition have brought down valuations in recent times. As a low cost and integrated producer of aluminium, Hindalco could capitalise on Novelis’ value-addition capability and diversified user base in the event of an economic recovery. The tilt towards user sectors such as beverages and infrastructure makes it less vulnerable to demand slowdown than many of its global peers.

At a PE multiple of 7 times its estimated 2008-09 earnings, the stock trades at a discount vis-a-vis its Indian and global competitors.

Aluminium: Main revenue generator

Aluminium and copper are Hindalco’s main business streams. On a standalone basis, aluminium contributes 37 per cent to Hindalco’s revenues, but its share in net profits is as high as 80 per cent. Extensive brownfield expansions and low-cost acquisitions implemented over the last five years have put Hindalco on the list of global low-cost aluminium manufacturers. The company concentrates on producing rolled aluminium, ingots, bars and foils. These finished goods are sought after by infrastructure companies, capital goods manufacturers and power transmission and distribution companies.

While the automobiles industry accounts for about one-fourth of Hindalco’s demand (on a consolidated basis), the improvement in domestic passenger vehicle sales offers some comfort. For the nine months ended December 2008, Hindalco’s net profits (on a standalone basis) from the aluminium segment rose by about 6 per cent and revenues by 10 per cent.

Hindalco acquired Novelis, maker of value-added products such as beverage cans and alloy wheels in May 2007 for $6 billion. Though this changed Hindalco’s business and geographic profile, the deal weakened its balance-sheet as Hindalco was forced to take on Novelis’ debt burden of $2.9 billion.

Novelis Acquisition

Born in early 2005 as a result of spin-off from its parent company Alcan, Novelis has a diversified clientele — Coke, Ford, General Motors, Audi, Lotte, Kodak and Tetra Pak. But in a bid to pump up its business, Novelis entered into fixed price supply contracts with some of its major customers.

Trouble began in 2005 when raw material prices spiralled sharply. Since Novelis was compelled to sell below cost due to contractual obligations it reported losses of $102 million from operations for the nine months ended December 2008. This swelled to $1.82 billion, after the company charged goodwill impairment and losses on derivative contracts.

Despite this, Novelis’ business does offer long-term benefits to Hindalco. Facility to produce value-added products may aid Hindalco’s margins over the long term. The fixed price contractual obligations of Novelis end by January 1, 2010. Moreover, Novelis has embarked on cost savings and had undertaken a production cut. In addition, it is accounting for goodwill impairment which may help Hindalco benefit from the deal

Copper: Yet to shine

Hindalco’s copper business (where demand is mainly from the domestic market) has been facing margin pressures from declining realisations. While the segment’s contribution to revenues is 67 per cent, its high cost structure has limited its share in profits to as low as 20 per cent.

Copper cathodes and rods find use in high end industries such as electrification, housing and construction and infrastructure projects. Apart from US and Europe, Hindalco exports copper to the BRIC nations, which offset decline in demand from US and Europe in 2007-08. But with even the BRICs witnessing a slowdown in 2008, Hindalco’s revenues from copper slipped by 5 per cent for the nine months ended December 2008.

LME prices

Copper prices in the London Metal Exchange corrected sharply, by 62 per cent, between July and December 2008. They have since recovered 44 per cent. Easing warehouse stocks and signs of higher Chinese demand have raised hopes about an early recovery in the copper price cycle.

On the other hand, aluminium prices remain subdued, though they have risen 19 per cent from the February 2009 lows. LME inventories show some improvement in aluminium demand but the recovery is more tentative than for copper.

Financial overview

A strong commodity cycle saw Hindalco deliver sales growth of 24 per cent and operating profit growth of 25 per cent between 2003 and 2007.

In 2007-08, the company saw a manifold growth in consolidated sales from Rs 193 crore to Rs 600 crore (attributable to the acquisition of Novelis), while operating profits rose 50 per cent. But high interest costs from the Novelis acquisition led to a dip in net profits. From a consolidated debt service coverage ratio of 15 times in until 2006-07, it fell to three in 2007-08.

The bridge loan taken for the buyout (due in November 2008) has been fully repaid by the company, through rights issue proceeds amounting to $920 million. For the remaining debt, the company has again borrowed $982 million (at a rate of LIBOR + 80 bps) after liquidating its investments.

The financial year 2007-08 saw a sharp surge in crude oil prices, which had cascading effect on transportation costs and cost of alternative energy sources such as coal. Going forward, Hindalco’s margins are likely to benefit from the substantial correction in crude oil and coal prices.

Other concerns

The major constraint for the aluminium division is the threat of import substitution. With the government recently hiking import duties on the metal, this problem has been addressed adequately. The copper division continues to face raw material supply constraints, resulting in production capacities remaining unutilised.

Moreover, Hindalco faces margin pressures because of depressed treatment and refining charges, which determine conversion margins on copper and this is expected to persist in the near future also.

US markets ended flat after a volatile section.
Europe also ended in red.
Asia has opened flat.
Expect Indian Markets to have a flat to gap down opening.

The support for the Sensex is 8400-8168 and the resistance to the up move is at 8700

Nifty: (2675) the support for the Nifty is at 2600-2484 and the resistance to the up move is at 2725

Day Trading Ideas –

India Infoline
Buy above 45.10 for targets of 45.90 and 46.85
Sell below 43.05 for targets of 42.45 and 42.05

Hindalco
Buy above 38.10 for targets of 39.05 and 39.80
Sell below 36.25 for taregst of 35.85 and 35.20

IFCI
Buy above 17.90 for targets of 18.40 and 18.85
Sell below 16.25 for targets of 15.90 and 15.50

Happy Investing.

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US markets crack down.
Europe ended flat.
Asia has opened flat. Expect Indian Markets to open flat to negative.

The support for the Sensex is 8865 and the resistance to the up move is at 9445

Nifty: (2789) the support for the Nifty is at 2727-2685 and the resistance to the up move is at 2890

Day Trading Ideas –

Hindalco
Buy above 41.25 for targets of 41.90 and 42.85
Sell below 38.95 for targets of 38.40 and 37.90

Tata Motors
Buy above 135.85 for targets of 136.50 and 137.85
Sell below 133.25 for targets of 132.40 and 131.90

Spice Communications
Buy above 84.10 for targets of 85.25 and 86.90
Sell below 79.95 for targets of 78.10 and 77.45

Happy Investing !

US markets ended mixed.
Europe was trading in red. Asia has opened mixed.
I expect Indian markets to open flat to negative.
Markets may remain volatile throught the day.

The support for the Sensex is 9034-8940-8868 and the resistance to the up move is at 9232

Nifty: (2767) the support for the Nifty is at 2705 and the resistance to the up move is at 2820

Day Trading Ideas

DLF

Buy above 156 for targets of 160 and 163

Sell below 149 for targets of 144 and 141

Hindalco

Buy above 47.90 for targets of 49.10 and 50.50

Sell below 44.10 for targets of 43.25 and 42.50

Ranbaxy Labs

Buy above 214 for targets of 218 and 221

Sell below 209 for targets of 207 and 203

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Happy Investing !