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Sensex, Nifty end higher ahead of March F&O expiry; Banks soar

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Indian Indices: Indian equity benchmarks continue to maintain the upbeat trend in late afternoon session as positive global cues along with strong rupee against dollar, buoyed investors’ sentiments. Traders remained optimistic with the Care ratings’ report that it expects GDP growth to accelerate to 8 percent next financial year as against 7.1 percent in this year as per the latest CSO estimate and added that the monsoon will be the only domestic risk factor which may scupper this. Sentiments also got some lift with the report that Finance Minister ArunJaitley moved the Central Goods and Services Tax (CGST) Bill, 2017, along with three other GST Bills for consideration and passage in the LokSabha. However, up-side remained capped ahead of the near month March 2017 derivatives contract expiry on Thursday.

The BSE Sensex is currently closed at 29,531.43 up by 121.91 points or 0.41% after trading in a range of 29439.42 and 29535.04. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index was up by 0.47%.

The CNX Nifty is currently shut up at 9143.80 up by 43.00 points or 0.47% after trading in a range of 9109.10 and 9140.10. There were 35 stocks advancing against 16 stocks declining on the index.

MARKET INDICATORS

·           

 

Top Movers (Group A)

 

 

Company

Cmp

% chg

Gainers

 

 

Dishman

301.50

8.38

GRUH

408.00

9.99

Edelweiss

157.25

7.71

Muthootfin

377.40

7.52

Losers

 

 

Bharatfin

804.154

-3.63

NLCIndia

104.55

-3.55

Unitech

5.43

-3.21

SREINFRA

82.95

-3.04

INDEX PERFORMANCE

 

 

Index

Close

% Chg

Sensex

29,531.43

0.41

Nifty

9,143.80

0.47

Crporate Front: Foreign investors are set for their biggest monthly purchases of Indian equities in four years in March, but analysts expect inflows to moderate after a major overhaul of tax rules kicks in on April 1.Market participants estimate about one-third of the inflows of $3.6 billion seen this month - the biggest since February 2013 - were linked to buying ahead of the implementation of the General Anti-Avoidance Rules (GAAR).

 

Macroeconomic front:

Finance Minister ArunJaitley said that the tax rates will be kept at the current levels so as not to have any inflationary impact, reported PTI. Introducing four bills to give effect to the Goods and Services Tax (GST), Jaitley said the legislations will have to be passed by Parliament and one by each of the state assemblies to turn India into one market with a single tax rate.

 

On the global front:

On the global front, European markets were trading in green, on Wednesday, as investors looked to London and Brussels and the start of Britain's much-anticipated Brexit proceedings. Back home, in scrip specific development, Kalpataru Power Transmission (KPTL) edged higher after the company secured new orders exceeding Rs 1200 crore and Talwalkars Better Value Fitness (TBVF) surged after the company inaugurated its 10 Zorba - renaissance studios.

Commodity Updates:

Commodity Prices (MCX):

Commodity

Rs

% Chang

Gold

28674.00

-0.6

Silver

422118.00

-0.64

Crude oil

3165.00

-0.06

Natural Gas

208.80

0.88

Alluminium

125.40

-0.52

Copper

382.65

-0.65

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Telecom up by 1.46%, Bankex up by 0.77%, Capital Goods up by 0.77%, PSU up by 0.75% and Metal up by 0.74%, while Realty down by 0.36%, Healthcare down by 0.24%, Oil & Gas down by 0.16% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were BhartiInfratel up by 4.90%, SBI up by 2.46%, Eicher Motors up by 1.88%, Hindalco up by 1.74% and HCL Tech up by 1.64%. On the flip side, Grasim Industries down by 0.91%, Sun Pharma down by 0.90%, Mahindra & Mahindra down by 0.83%, Kotak Mahindra Bank down by 0.62% and AurobindoPharma down by 0.59% were the top losers.

 

Global Signals:

Asian markets were trading mostly in green; KOSPI Index increased 3.67 points or 0.17% to 2,166.98, Nikkei 225 increased 14.61 points or 0.08% to 19,217.48, Jakarta Composite increased 34.72 points or 0.63% to 5,575.92 and Hang Seng increased 46.18 points or 0.19% to 24,392.05. On the flip side, Taiwan Weighted decreased 20.2 points or 0.2% to 9,856.25, Shanghai Composite decreased 11.63 points or 0.36% to 3,241.31 and FTSE Bursa Malaysia KLCI decreased 5.41 points or 0.31% to 1,749.01.

All European markets were trading in green; UK’s FTSE 100 increased 12.37 points or 0.17% to 7,355.79, France’s CAC increased 18.58 points or 0.37% to 5,064.78 and Germany’s DAX increased 71.94 points or 0.59% to 12,221.36.

 

US indices bounce back with Dow Jones having best rally in over 3 weeks as Oil trades over US $ 48. Bond yields rise as US March confidence data jumps sharply.

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Indian Indices: Asian indices are set for another good day after Dow Jones clocked a 150 point rally overnight. The indices were in oversold zone and a bounce was on the cards, which got the necessary fillip from the US confidence data, which showed the highest reading since 2000.


Nifty saw strong foreign buying, the best in the last 6 months that lifted the index to 9100. With expiry of derivative contracts tomorrow expect bulls to strive higher in the opening session as short covering sees Nifty test 9150. For today expect buying in Metals, Banks and Infra to continue even as Pharma and IT will witness profit booking.  


The BSE Sensex is currently trading at 29474.05, up by 64.53 points or 0.22% after trading in a range of 29439.42 and 29494.44. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index was up by 0.40%.

The CNX Nifty is currently trading at 9119.60, up by 18.80 points or 0.21% after trading in a range of 9109.10 and 9134.05. There were 33 stocks advancing against 18 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Dishman

306.00

9.99

Cox&Kings

220.60

5.60

SCI

72.90

5.27

CentralBk

103.20

4.77

Group ATopLosers

 

 

Hindzinc

291.50

-2.35

Sadhav

300.00

-2.26

KEC

189.30

-2.25

Fincables

504.00

-1.44

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

29326

29525

Nifty

9090

9130

 

Technical view: Nifty will find strong support around 9080, which was yesterday's low and face resistance around 9170 on the upside. Bank Nifty finds support around 21145, which was yesterday's low and faces resistance @ 21350, which was the swing top of last week.


 

Zee Entertainment (Buy above 531, for Target of 550, Stop Loss at 521.5): The stock has witnessed a swift move and has smoothly broken out from a Symmetrical Triangle pattern indicating a typical continuation of its previous uptrend. The price outburst has also been accompanied with smart volume uptick. Other momentum oscillators also indicate strength in the current up move.


Derivative Snippets: In the last trading session, markets ended the trading session on a positive note, as PSU banks continued to surge higher. Long Build up was seen in Bank Nifty future along with the short covering of ITM/ATM call options, indicating of a continuation of this rally up to the resistance zone of 21500 levels.

FIIs were net buyers in cash market segment to the tune of Rs 6415 crore.

FII’s index future long/short ratio at 2.7x vs3.2x, with a significant creation of fresh long and shorts positions to the tune of ~34k and ~12K contracts.

Nifty Movers: The top gainers on Nifty were BhartiInfratel up by 3.44%, Tata Power up by 2.14%, Asian Paints up by 1.51%, SBI up by 1.24% and Larsen & Toubro up by 1.21%.
On the flip side, Adani Ports & Special Economic Zone down by 1.06%, AurobindoPharma down by 0.62%, Kotak Mahindra Bank down by 0.58%, Mahindra & Mahindra down by 0.57% and Reliance Industries down by 0.49% were the top losers.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Telecom up by 1.08%, Capital Goods up by 0.73%, Industrials up by 0.47%, Consumer Durables up by 0.47% and Basic Materials up by 0.42%, while Oil & Gas down by 0.29%, Energy down by 0.22% and Healthcare down by 0.04% were the few losers on BSE.

 

 

 

 

On the global front: On the global front, Asian shares were trading mostly in green, taking a cue from Wall Street overnight. Bank of Japan board member Takehiro Sato said labor market reform and other measures to boost Japan’s growth potential must accompany monetary easing to raise the country’s low long-term inflation expectations. Japanese retail sales were effectively flat in February as consumers cut back on food and durable goods after employers offered the lowest spring wage increases in four years.

 

Global Signals:The Asian markets were trading mostly in green; KOSPI Index increased 2.85 points or 0.13% to 2,166.16, Shanghai Composite increased 4.6 points or 0.14% to 3,257.55, Nikkei 225 increased 8.51 points or 0.04% to 19,211.38, Hang Seng increased 34.51 points or 0.14% to 24,380.38 and Jakarta Composite increased 41.32 points or 0.75% to 5,582.52.

On the other hand, Taiwan Weighted decreased 32.22 points or 0.33% to 9,844.23 and FTSE Bursa Malaysia KLCI decreased 3.79 points or 0.22% to 1,750.63.

 

Investor brefing Hindustan unilever ltd.-Research report-Sharetipsinfo

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Text Box: Company Overview:

 

Hindustan Unilever Limited is engaged in fast-moving consumer goods business comprising home and personal care, foods and refreshments. The Company's segments are Soaps and Detergents, which includes soaps, detergent bars, detergent powders, detergent liquids and scourers; Personal Products, which includes products in categories of oral care, skin care (excluding soaps), hair care, deodorants, talcum powder, color cosmetics and salon services; Beverages, which includes tea and coffee; Packaged Foods, which includes branded staples (atta, salt and bread), culinary products (tomato-based products, fruit-based products and soups) and frozen desserts, and Others that includes exports, chemicals, water business and infant care products. The Others segment also includes export sale of marine and leather products. Its brands include Lux, Surf excel, Rin, Wheel, Fair & Lovely, Pond's, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall's and Pureit.

 

Business Growth :

 

Input inflation to improve the sales growth;

HUL is seeing gradual recovery in demand with wholesale channel is yet to normalize. However, the company is expecting improvement in growth driven by revival in rural demand. GST will not have any impact on volumes as inventory levels already low

* Company continues to focus on new products/categories like Ayush (Ayurveda) & Baby products and is also investing towards market development (~25% of sales) where the penetration levels. No down-trading was witnessed in the DeMon period

* Sustained premiumisation trend across categories is encouraging with a focus on sustained improvement in margins. We believe input inflation will improve the value/volume mix which was impacted in the recent past with growth mainly driven by volumes. We retain our estimates and maintain ACCUMULATE with target of Rs 950.

 

INVESTMENT ARGUMENT:

Recovery is gradual; expects to gain momentum

HUL is seeing gradual recovery in demand with wholesale channel is yet to normalize and green shoots which were visible pre-DeMon has taken a pause. However, the company is expecting improvement in growth driven by revival in rural demand and indicated that GST will not have any impact on volumes as company has been focusing on keeping inventory levels low at the wholesale channel since last one year. Focus has been on improving the direct reach (3mn outlets) through technology (data analytics) and better assortment at the retail outlets. Revival in rural will be driven by good monsoons and increase spend on rural by the government.


Premiumisation continues; Focus on new products & innovation

No down-trading by the consumer witnessed during the DeMon period although shift towards lower unit packs (LUP) was visible across categories. Company continues to focus on new products/categories like Ayush (Ayurveda) & Baby products and is also investing towards market development (~25% of sales) where the penetration levels are significantly low like fabric conditioner, fabric liquid, liquid dish wash, body wash, green tea etc. Categories with low penetration are witnessing strong double digit growth. 

Financial Result:

 

Income Statement

Particulars

Dec-16

Sep-16

June-16

Revenue

8317.94

8480.26

8128.18

Other Income

82.44

252.83

107.59

Total Income

8400.38

8733.09

8235.77

Expenditure

-6809.45

-7057.40

-6421.52

Interest

-4.56

-4.94

-5.95

PBDT

1586.37

1670.75

1808.30

Depreciation

-100.0

-94.50

-93.29

PBT

1486.17

1576.25

1715.01

Tax

-448.24

-480.65

-541.11

Net Profit

1037.93

1095.60

1173.90

Equity

216.43

216.43

216.43

 

Highlights the fact:

 

1)HUL is seeing gradual recovery in demand with wholesale channel is yet to normalize and green shoots .

2)Company continues to focus on new products/categories like Ayush (Ayurveda) & Baby products.

3)GST will not have any impact on volumes as inventory levels already low.

4)Reduction in promotion and calibrated price hikes covers up the increase in input cost.

5) Categories with low penetration are witnessing strong double digit growth. 

 

Technically View:

The stock is currently trading above 50 days and 100 days, moving average that is all about good bullish& uptrend signal on daily base. RSI &MFI is present at 57 and 75respectivally, which is side ways& showing the uptrend formation for the short term period. The stock is currently in uptrend and now somemore upside is expecting with major support is found 870level. MACD line is greaterthen signal line 10 day Avg Volume is very high.

 

 

VALUATION & OUTLOOK:

 

Sustained premiumisation trend across categories is encouraging with a focus on sustained improvement in margins. We believe input inflation will improve the value/volume mix which was impacted in the recent past with growth mainly driven by volumes. Reduction in promotion and calibrated price hikes covers up the increase in input cost. We retain our estimates and maintain ACCUMULATE with a target price of Rs 950.

 

CONCLUSION:

 

Hindunilever accumulate with the stop loss would be below Rs 870and  would buy on any dip, it could be Rs 890. If it were to cross Rs 905, then also buy, that is going to be upward formation and the  target would be Rs 950 but the short-term target remains around Rs 950.

 

 

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