Saturday, February 28, 2009

>Sunil Hitech Engineers (ANGEL BROKING)

Sunil Hitech Engineers
Initial Coverage..........

Price Rs63
Target Price Rs111
Investment Period 12 months

* Substantial Power capacity addition to throw up immense opportunities: India's Eleventh Five-Year Plan Target for Power generation capacity addition stands at 78,577MW. Even after providing for slippages, actual capacity addition is expected to be in excess of 50,000MW. The power capacity addition is expected to throw up opportunities in excess of Rs1,00,000cr for players in the BOP space over FY2007-12E.

* Robust Order Book Position: During 9MFY2009, the company received orders worth Rs887cr. As of December 31, 2008, SHEL had a strong Order Book position of Rs1,298cr or 4x its FY2008 Revenue. This strong Order Book position provides high Revenue visibility for the company over the next two years.

* Proven execution capabilities: In its two-decade long presence in the BOP space, the company has established a strong track record of timely and successful execution of projects. The company has personnel from reputed companies like BHEL on its Board, which gives a fair idea of its excellent execution capabilities. Its clients include NTPC, BHEL and various state electricity boards (SEBs).

To see full report: Sunil Hitech

>F&O Indicators (ANAGRAM)

To see report: F&O 27-02-2009

>Derivative Strategy (MICROSEC)



* Nifty opened flat to weak but fell to test a low of 2735 in early trade. It recovered from there and a late surge helped it close higher by 0.84%. However, the breadth of the market was negative.

* Inflation for the week ended 14th Feb came at 3.36%

* Nifty Call options of strike 2800 added 22254 lots to open interest while Put options of strike 2700 had a build up of 31790 lots. Put options of strike 2500 also added 25290 lots to open interest.

* Nifty Put Call ratio (OI) stands at 1.17 with the total open interest in Call options at 1,038,639 lots and that in Put options at 1,215,329 lots

* Ultratech Cement, Mphasis BFL, Chambal Fertilizers, Hero Honda Motors, Infosys
Technologies, NTPC and Cipla Ltd look good

* Volatility Index fell by 4.94% from 41.94 to 39.87.

To see full report: Derivative Strategy

>Rollover Analysis (ANAGRAM)



Rollover for the February series stood as 76%, the same as that of January series. This rollover of 76% os also in line with the last three months's average rollover of 77%. Range bound movement was seen in Nifty throughout the series where it moved within 5% range from the closing of January series and finally settled with a loss of 1.4%. This came on the back of a 3.2% cut witnessed in the January series.


We are starting March series with the total OI of 96 Cr shares as against 91 Cr shares with which we started February series. If we consider only stock futures, OI at the beginning of March series is at 83 Cr shares as against 84 Cr last month. Although in number of shares, rollover is same as that of last month, it is sharply lower in terms of number of contracts. We are starting March series with OI of 4.5 lakh contracts as against 11.9 lakh contracts last months. Higher Margin requirement due to the rise in lot sizes (Average rise of 3 times) and low risk appetite is the major reason for the lower rollover by the Retail players. This lower participation, we believe, would reduce the volume in terms of number of contracts. However, overall volume would not be affected as even if only 1 trader out of three traders trades, the overall volume in value terms remains same. The segment which will be hit hardest on the back of this rise in lot sizes is the stock option segment where liquidity is already a major issue as lower number of contracts would increase the bid-ask spread and thereby the impact cost of trade.

To see full report: Rollover Analysis 27-02-2009

>Weekly Review (INDIA INFOLINE)


* In a highly eventful week, the bulls managed to hold their own, thanks largely to the latest tax cuts announced by the government to spur demand. The Government also announced fresh measures for recession-hit export sectors. Expectations of interest rate cuts escalated after inflation hit a 14-month low of 3.36%. This helped the BSE-30 Sensex to post marginal gain of 0.5% to 8.892. The NSE Nifty added 1% to shut shop at 2,764. The bulls shrugged off weak Q3 GDP data, which missed market expectations.

* Auto stocks rallied this week, after the Government announced a 2% cut in excise duty and service tax. IT stocks also managed to notch up some gains after the Indian Rupee fell to a new record low below Rs 51 against the US Dollar. At the same time, banking and realty stocks ended up on the losing side for the week.

* Economic reports from across the globe continued to haunt the major equity markets. Top companies like GM and RBS announced massive losses, Japan's trade deficit reached a record level and its industrial production dropped 10%. Sales of existing US homes fell 5.3% to 12 year low. The Chinese stock market tumbled 7.9% snapping its rally.

To see full report: Weekly Review 27-02-2009