MOSt Wealth November issue
From the Desk of Manish Shah – Associate Director, Head Equities
Dear Investor,
After the sharp rise of 2,098 points in September 2010, the Sensex consolidated in October, moving in a 5% band, to end marginally lower. This was in spite of a surge in FII inflows of nearly US$7bn, taking the cumulative inflow in calendar 2010 to over US$22bn with one quarter yet to go. This translates into a whopping Rs.100, 000 Cr the highest in history.
Wishing all investors a Happy Diwali and a prosperous new year.
Pg 2 – MOSt Value
Ø Research report- Mahindra & Mahindra
Robust volumes drive revenues…
2QFY11 revenues grew by 19% YoY (~3.7% QoQ) to Rs 53.1bn, driven by 20.1% YoY (~3.1% QoQ) volume growth to 131,285 units. Volume growth was driven by 61.3% growth in three wheelers, 17% growth in UVs and 12.6% growth in tractors. Volumes in tractors and UVs were impacted by supply side constraints. Supply side constraints, due to shortage of tyres, fuel injection equipment and castings impacted production by 4,000-5,000 units in 2QFY11. But with the easing of supply constraints, volumes are expected to improve in 2HFY11. Realizations declined by 0.5% YoY (up 0.8% QoQ), due to a 0.2% YoY (up ~1.1%QoQ) decline in automobile segment realizations, driven by an increasing share of three wheelers (14.4% in 2QFY11 v/s 10.7%in 2QFY10) and a 0.2% YoY (up ~1.2% QoQ) decline in farm segment realizations. This was driven by an increasing share of Yuvraaj tractors and a significant fall in engine sales (down ~57%YoY and 67% QoQ).
Pg 3 – MOSt Value
Ø Research report- Cummins
2QFY11 standalone performance far better than estimates.
In 2QFY11 Cummins posted standalone revenue of Rs.10.9bn (up74% YoY), significantly better than our estimates of Rs.9.2bn. EBITDA margin of 20% was up 180bp YoY, marginally lower than our estimate of 21%. Adjusted PAT was Rs.1.68bn, up 91% YoY, beating our estimates of Rs.1.4bn. Strong all-round growth, in domestic markets and exports boosted growth.
Pg 4 – MOSt Value
Ø Mid cap Research
Nesco Limited, Page Industries Ltd., Time Technoplast Ltd. . . .
Pg 6 – MOSt Value
Ø MOSt 3X3
Bharti Airtel, BHEL, Cummins India, ING Vysya & SBI . . .
Pg 7 – MOSt Momentum
Ø Market Outlook
The strong momentum in the Nifty in September 2010 spilled into the first half of October with the Nifty reaching a high of 6,284points on 14th October. We were expecting a retest of the historic 2008 high of 6,357 points. But the Nifty fell short by a whisker. After the middle of October the Nifty declined as the momentum began to fizzle out. However the declines were well supported around 5,950 points, and rallies were running into overhead resistance at 6,150 points. The Nifty closed October at 6,018 points, a loss of 12 points for the month. The outperforming sectors were health care; oil & gas and automobiles, and the underperforming sectors were power, FMCG and realty.
Going forward…
Pg 13 – MOSt Mutual
Ø Fund Of the Month
ICICI Prudential Focused Blue Chip Equity Fund
Pg 14 – MOSt Insurance
Ø Highest NAV ULIPs
With the Sensex at over 20,000 points the equity markets have completed a cycle. Investors have been moving cautiously as they don't want to repeat their pre-meltdown mistakes. In such an environment, it makes sense for investors to invest in products that provide guaranteed returns. The highest NAV guaranteed products made a comeback with regulations in line with IRDA specifications. These schemes look attractive since. . .
Pg 16 – MOSt PMS
Ø Strategy Overview
Value Strategy: During the month we exited Tata Steel,
Bulls Eye Strategy: During the month we reduced the weightage of the auto sector by selling some of our Bajaj Auto, CEAT, Eicher Motors & Tata Motors stocks. We also booked profits in...
NTDOP Strategy: During the month we didn’t introduce any new stock but realigned the weightage of existing stocks. The strategy is fully invested as of October 2010.
Optima Strategy: During the month we introduced BHEL. The strategy is fully invested as of October 2010.
Focused series III: During the month we booked profits in RIL and Bharti Airtel. The strategy introduced JP Associates, Tata Steel and Suzlon Energy . . .
Focused Series IV - Flexi Cap Strategy: During the month we booked profits in SBI and Bharti Airtel. The strategy introduced Tata Steel and Central Bank of
Invest
Pg 19 – MOSt Commodities
Ø Technical Snapshot
Gold - Gold futures on the MCX for December delivery are trading in the higher highs and higher lows pattern, which is a positive indicator. An hourly chart of gold shows a five-wave decline from Rs.20, 000 to recent lows of Rs.19, 200. As per the Elliott Wave Principle, the current pullback should cap at highs of Rs.20, 000 and the price will fall to make a new low below Rs.19, 200. Only a break above Rs.20, 000 highs would allow possibility of an alternative view and prices could inch higher. Support for gold is at. .
Copper - Copper futures on the MCX for November delivery have been trading in positive territory over the past couple of months. Good support comes at about Rs.367 and resistance is at. . .
Crude Oil - On the MCX crude prices have been trading at Rs.3, 600-3,690. There is support at Rs.3, 620 and Rs.3, 600. Resistance is at Rs.3, 830.Crude has not participated in the entire rally as. .
Pepper - The pepper market rallied this week, as we expected. Resistance now lies at Rs.21, 405 followed by Rs.21, 500. If prices are capped at these levels pepper prices can pull back substantially towards the support of rising trend line at Rs.19, 000. On the other hand, a break at Rs.21, 500 can push pepper price . . .
To read the complete articles click on the below link:
http://www.motilaloswal.com/mosl/uploadedFiles/MOSt_Wealth_November10.pdf
You can also visit http://www.motilaloswal.com/Research to read the research reports.
Wishing you all a Happy Diwali and prosperous New Year
Regards,
Retail Product Team
Motilal Oswal Securities Limited
Johnson Dye Compound
Plot: 6&7,Ramchandra Lane,
Kanchpada, Malad
Mumbai-400064
Tel:- 22 30896600
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