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Research Report-Voltas-Sharetipsinfo

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Text Box: Company Overview:

 

 

 

Voltas is India's largest air conditioning company, and one of the world's premier engineering solutions providers and project specialists.

Founded in India in 1954, Voltas Limited offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality.

 

Green Mission:

 

It's in the very nature of Voltas' core businesses to be actively engaged in today's Green movement. Every day, the need to conserve energy, preserve the ecology and minimise man's carbon footprint become more and more imperative. That's a call which Voltas answers through its products, its services, and its operating principles.

 

Devlopment Growth: VOLT’s Q3 revenues (-7% YoY to Rs 11.8bn) were hit by demonetisation and slower execution in the projects business, even as EBITDA margins expanded 309bps YoY (9M: +241bps) off a low base. Management remains cautious on the pace of execution in the Middle East but expects closure of legacy projects by FY17-end. While VOLT maintains leadership in the room AC business, we think competition can depress the business metrics. BUY &HOLD with (Sep’17 TP: Rs 450) set at 20x FY19E PE.

 

 

Performance highlights:.

Execution disappoints in Middle East:

VOLT attributed the 3% YoY decline in the electromechanical projects & services (EMPS) business to slower-than-expected progress on some new orders in the Middle East. However, positive closure of some old projects and better margins in new orders led to segment EBIT margins of 3.88%. VOLT expects to close legacy projects in the Middle East by FY17-end, which should normalise segment EBIT margins to ~4-5%. Overall, VOLT booked Rs 4.5bn of new orders in Q3 and its order book stood at Rs 42bn (incl. Rs 18bn of overseas orders). PAT came in at Rs 803mn (+42% YoY).

Currency ban hits AC business: The unitary cooling products (UCP) segment declined 5% YoY to Rs 4.1bn as demonetisation negated the strong YoY growth in Oct’16. VOLT stated secondary sales of ACs across the industry dropped 11% YoY by volume, and that it maintained leadership in room ACs with YTD market share of 21.7%. Segment EBIT margins slid 116bps YoY to 10.8% but increased 150bps YoY to 13.4% in 9MFY17. Management had earlier guided to ~13% margins for FY17. VOLT thinks it can get scale benefits even if it sources ACs via imports as it will have a higher import share when rivals opt for installing manufacturing capacity locally.

Financials (Quarterly) :

 

Particulars

Dec 16

Sep 16

June 16

Revenue

1037.16

850.33

1654.88

Other Income

57.93

118.07

35.74

Total Income

1095.09

968.40

1690.62

Expenditure

-943.37

-787.72

-1537.77

Interest

-1.29

-1.31

-2.40

PBDT

150.43

179.37

150.45

Depreciation

-4.54

-4.49

-4.68

PBT

145.89

174.88

145.77

Tax

-42.48

-48.97

-40.81

Net Profit

103.41

125.91

104.96

 

Highlights the fact:

1)Voltas has a history of strong price swings, which started with a steep fall in 2008, followed by equally sharp reversal in 2009. In short, it rewards handsomely to the swing trades and investors, provided they follow its trend.

2)The unitary cooling products (UCP) segment declined 5% YoY to Rs 4.1bn as demonetisation negated the strong YoY growth in Oct’16.

3)The company is selective in booking fresh orders. VOLT booked Rs 4.5bn of new orders in Q3 and its order book stood at Rs 42bn (incl. Rs 18bn of overseas orders).

4)It has been consolidating in a broader range 320-350 for last couple of months and currently trading closer to the upper band of the same.

5) It recovered almost vertically from that mark and formed a new record high 406 in at its recent  moves.

Technically View:

VOLTAS

Synopsis

Technicals View

50 Day EMA

Close is Above EMA 50 (Short Term)

Bullish

100 Day EMA

Close is Above EMA 100 (Mid Term)

Bullish

200 Day EMA

Close is Above EMA 200 (Long Term)

Bullish

MACD (12 26 9)

MACD Line is GreaterThen SIGNAL Line

Bullish

RSI (14)

RSI is 54.56

Sideways

MFI (14)

MFI is 72.08

Sideways

CCI (20)

CCI is above 100

Over Bought

10 Day Avg Volume

Traded -42.89 % Less then 10 Day Average Volume

 

VALUATION & OUTLOOK:

 

The stock trades at a PE of 25x/22x FY18E/FY19E; we think valuations are full given “slow recovery” in the Middle East and the near-term impact of demonetisation. Maintain BUY &HOLD with a Mar’18 TP of 550 (Sep’17 TP: Rs 450).

 

 

Text Box: CONCLUSION:

Given sustained Short-term earnings growth potential,–

We retain our Buy recommend in this script with the target of Rs 450-550 in the short term outlook. So Entry would be around 365-375and stoploss maintain 330 asrecomanded in this counter.

US indices consolidate as rate hike certainty sees caution on stocks with bond yields rising as US Dollar gains.

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Indian Indices: Asian markets are also seeing consolidation as US indices close with minor losses with caution being the buzzword. With almost 85% probability of a rate hike by the US Federal Reserve on the March 15 markets have turned cautious and will see some more profit booking before the event to price in the same.


Nifty closed with minor losses as 8950 and above saw profit booking before the election results due this weekend. With next week being holiday, expect more volatility in the coming few days as investors book profit before the event with markets being closed on Monday. Metals, Banks and Pharma stocks could be under pressure with Energy, IT seeing buying for today.


The BSE Sensex is currently trading at 28920.60, down by 78.96 points or 0.27% after trading in a range of 28908.89 and 29022.32. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index was down by 0.06%.

The CNX Nifty is currently trading at 8942.00, down by 4.90 points or 0.05% after trading in a range of 8939.85 and 8957.05. There were 22 stocks advancing against 29 stocks declining on the index.


MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Hathway

37.95

5.12

APLLTD

617.00

4.84

GET&D

287.70

3.16

Divislab

773.90

2.50

Group ATopLosers

 

 

NMDC

140.75

-4.45

Adanipower

38.75

-4.08

Jindalstel

120.25

-3.72

Adanient

94.55

-3.42

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

28938

29079

Nifty

8929

8975

 


Technical view: Nifty finds strong support @ 8880-8900 while resistance comes around 9000. Bank Nifty sees support around 20400, which was the swing low last week while 20800 will act as resistance on the upside.


 

Trading ideas :IndusInd Bank (Buy above 1332 for Target of 1370 and SL 1315): After consolidating for the past five trading sessions, our analysis of the hourly time frame indicates that the stock has broken out from an inverse head and shoulder pattern, which is bullish in nature. The neckline breach has also been accompanied with credible volumes. IndusInd Bank has also closed above its short term 10-EMA, further accentuating our bullish stance on the stock.


Derivative Snippets: Markets ended yesterday’s trading session on a lackluster note. Nifty call and put options witnessed some buying interest, as the implied volatility of ATM/OTM options started to move up ahead of state election results.   

FIIs were net buyers in cash market segment to the tune of Rs 920 crore.

FII’s index future long/short ratio stands at 3.5x vs4.1x. Significant long and short positions to the tune of ~14k and ~13k contracts were added in index future.


Nifty Movers: The top gainers on Nifty were Kotak Mahindra Bank up by 1.71%, Yes Bank up by 1.70%, Power Grid up by 1.49%, ACC up by 1.34% and AurobindoPharma up by 0.87%.

On the flip side, BPCL down by 1.57%, Idea Cellular down by 1.52%, Hindalco down by 1.22%, HCL Technologies down by 1.05% and Infosys down by 0.89% were the top losers.

Top Sectoral& Stock Screening:  The only gainers on the BSE were Healthcare up by 0.15% and Bankex up by 0.09%, while Metal down by 1.27%, Oil & Gas down by 1.08%, Energy down by 0.88%, IT down by 0.71% and Realty down by 0.71% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.16%, HDFC up by 0.69%, NTPC up by 0.41%, Larsen & Toubro up by 0.36% and Cipla up by 0.28%.

 

 

On the global front: On the global front, Asian shares were trading mostly in green, as strong China trade data bolstered bets of a recovering global economy, though gains were capped by caution ahead of a widely expected US interest rate hike next week. Japan’s economy grew more than earlier estimated in the fourth quarter as capital expenditure grew at its fastest in almost three years, welcome news for policymakers as they begin to discuss how to wind down years of massive stimulus.

 

Global Signals:The Asian markets were trading mostly in green; KOSPI Index increased 0.86 points or 0.04% to 2,094.91, Shanghai Composite increased 1.05 points or 0.03% to 3,243.45, Taiwan Weighted increased 23.15 points or 0.24% to 9,761.22 and Hang Seng increased 95.21 points or 0.4% to 23,776.28.

On the other hand, Nikkei 225 decreased 111.9 points or 0.58% to 19,232.25, Jakarta Composite decreased 2.38 points or 0.04% to 5,400.23 and FTSE Bursa Malaysia KLCI decreased 1.96 points or 0.11% to 1,726.70.

 

US indices opened the week on a quiet note as North Korea missile test leads to profit booking with all eyes on Federal Reserve for next week

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Indian Indices: Asian markets opened a mixed note with most indices trading in green as overnight US indices regained most losses to close marginally below 21000. North Korea missile test, profit booking and Fed meet on March 14-15 will be key in deciding future direction of the US and the global markets next week.


Nifty rallied from opening bell to close near the highs for the day as foreign buying saw bears scramble for cover. The Nifty closed @ the highest point in the last 2 years with 9000 being the target for today. Reliance, Metals and private banks led the way as mid-caps also joined the party.


The BSE Sensex is currently trading at 29043.51, down by 4.68 points or 0.02% after trading in a range of 29033.83 and 29098.17. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were holding the ground and trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.17%.

The CNX Nifty is currently trading at 8959.40, down by 4.05 points or 0.05% after trading in a range of 8952.40 and 8977.85. There were 25 stocks advancing against 26 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Adanipower

40.35

4.67

Coromande

328.95

3.43

Bajajelec

274.00

3.14

DEN

83.80

3.14

Group ATopLosers

 

 

Hindalco

193.60

-2.91

JKTYRE

121.25

-2.18

Wabag

568.95

-2.14

Hindzinc

303.20

-1.97

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

28912

29205

Nifty

8929

9005

 

Technical view: Nifty finds strong support @ 8900 with 9000 being the resistance on the upside, while Bank Nifty also finds strong support @ 20400 with 20800 acting as resistance on the upside.


 

Trading ideas: ASHOKLEY (Buy above Rs 91, for Target of Rs 95.5, SL at Rs 88.5): Stock has formed a bullish morning star pattern on the daily charts after successfully taking support at the 50% Fibonacci retracement of the recent up move. Ashok Leyland also closed above its 200-DMA in yesterday's trade with credible volumes. RSI crossover on the daily chart adds to the bullish stance in the stock.  We advise to Buy AshokLey above Rs 91, Stop Loss at Rs 88.5 and Target of Rs 95.5.


Derivative Snippets: Markets traded with a positive bias as Auto and Banking index surged higher. With the heavy short selling of Nifty 9000PE and short covering of Nifty 9000CE, a breach of the psychological resistance of 9000 is on the cards for the first time since March 2015.

FIIs were net buyers in cash market segment to the tune of Rs 564 crore.

FII’s index future long/short ratio continues to stand above 4x since the start of this F&O series, leading to a positive bias in the markets.


Nifty Movers: The top gainers on Nifty were Tata Power up by 1.33%, BPCL up by 0.98%, Reliance Industries up by 0.85%, Zee Entertainment up by 0.77% and Tech Mahindra up by 0.65%. On the flip side, Hindalco down by 1.70%, Infosys down by 1.44%, Tata Motors - DVR down by 0.96%, Tata Motors down by 0.85% and Yes Bank down by 0.80% were the top losers.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Power up by 0.84%, Utilities up by 0.76%, Energy up by 0.52%, Oil & Gas up by 0.43% and Consumer Durables up by 0.37%, while Metal down by 0.50%, Realty down by 0.47%, IT down by 0.29%, TECK down by 0.21% and Healthcare down by 0.10% were the losing indices on BSE.

 

 

On the global front: On sectoral front, power utility and energy stocks were restricting any fall in the market. The oil & gas stocks were trading higher after International Energy Agency (IEA) stated that India is moving to the centre stage of global energy market and by the early 2020s it will replace Russia as the world's third largest refiner. In scrip specific action Bharat Financial Inclusion declined after it said that 4.5 percent of its loan portfolio was at a risk of turning bad in Q4 and that 60 percent of the overdue portfolio pertained to Uttar Pradesh and Maharashtra.

 

Global Signals:The Asian markets were trading mostly higher; FTSE Bursa Malaysia KLCI was up by 1.29 points or 0.07% to 1,728.65, KOSPI Index gained 13.4 points or 0.64% to 2,094.76, Taiwan Weighted was higher by 38.3 points or 0.4% to 9,720.93 and Hang Seng increased 92.36 points or 0.39% to 23,688.64.On the other hand, Nikkei 225 declined by 26.15 points or 0.13% to 19,352.99, Jakarta Composite was down by 6.41 points or 0.12% to 5,403.41 and Shanghai Composite was tad lower by 2.24 points or 0.07% to 3,231.63.

 

Global rally consolidates as rate hike seems certain as yields and US Dollar strengthen with global equities seeing profit booking.

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Indian Indices: Asian markets opened mixed as North Korea tested some missiles, which saw a cautious start to the week. The undertone remains strong with all falls being bought, as the rate hike by the US Federal Reserve anticipated in March, gets priced in.


Nifty saw a sharp pullback on Friday in the last hour of trade as foreign investors bought aggressively. Reliance Industries led the rally as renewed buying by foreign institutions saw the heavyweight lead from the front. For today, expect bets on the election results due in the state elections on Saturday March 11th to fuel rumours as Nifty will oscillate sharply this week.


The BSE Sensex is currently trading at 29050.54, up by 218.09 points or 0.76% after trading in a range of 28856.12 and 29054.72. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.64%.

The CNX Nifty is currently trading at 8959.95, up by 62.40 points or 0.70% after trading in a range of 8914.00 and 8962.10. There were 38 stocks advancing against 13 stocks declining on the index.


MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Welcorp

87.25

4.37

JPAssociat

15.80

3.61

Relaince

1303.5

3.55

GPPL

158.05

3.47

Group ATopLosers

 

 

Apl Ltd

592.00

-1.76

Persistant

630.65

-1.45

Grasim

1006.25

-1.44

Hexaware

219.20

-1.28

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

28745

28945

Nifty

8855

8950

 

Technical view: Nifty has held the support @ 8860 with 8840 acting as strong support while 8980 will act as resistance on the upside. Bank Nifty also finds strong support @ 20350 while 20800 will act as resistance.


 

Trading ideas :Bharat Forge (Buy above Rs 1045 for Target of Rs 1075, SL at Rs 1028): After correcting for past seven consecutive trading sessions, the stock has finally shown some signs of reversal by forming a hammer candle stick pattern on daily charts. The stock has also retested the neckline of the long drawn consolidation breakout, which occurred two weeks back. Momentum oscillators are also indicating a shift in momentum. 


Derivative Snippets: In the last trading session, markets traded in a narrow range as the option writers took a center stage. Across the board, Option writing of the OTM strikes was witnessed in the Bank Nifty weekly contracts.

FIIs were net buyers in cash market segment to the tune of Rs ~1529 crore.

FII’s index future long/short ratio fell to 4.4x vs5.4x, as long unwinding of 12.7k contracts was witnessed.


Nifty Movers: The top gainers on Nifty were Reliance Industries up by 3.58%, IndusInd Bank up by 1.99%, Power Grid up by 1.68%, Asian Paints up by 1.41% and NTPC up by 1.38%.

On the flip side, Grasim Industries down by 1.69%, Idea Cellular down by 1.31%, AurobindoPharma down by 0.93%, Zee Entertainment down by 0.87% and Sun Pharma down by 0.76% were the top losers.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Energy up by 2.06%, Oil & Gas up by 1.27%, Power up by 1.09%, Auto up by 1.08% and PSU up by 1.03%, while Consumer Durables down by 0.08% and IT down by 0.01% were the only losers on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.66%, Power Grid up by 1.70%, NTPC up by 1.57%, Asian Paints up by 1.31% and Bajaj Auto up by 1.20%.

 

 

WEEKLY NIFTY TRADING VIEW FOR THE WEEK MAR 06, 2017–MAR12, 2017

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Events to watch this week

  • Hike anticipated at March FOMC meeting
  • Global growth uptick continues
  • Major indices set records
  • House of Lords seeks Brexit bill amendments

The Week ahead:

  • The People’s Bank of China meets to set interest rates on Monday, 6 March
  • Q4 eurozone gross domestic product is released on Tuesday, 7 March
  • Japan releases Q4 GDP figures on Wednesday, 8 March
  • China reports its trade balance on Wednesday, 8 March
  • The European Central Bank holds a rate-setting meeting on Thursday, 9 March
  • The US February employment report is released on Friday, 10 March

For the week,Global equities extended gains this week, and strong global manufacturing data suggested that economic momentum continues to improve. Yields on the 10-year US Treasury note rose strongly — to 2.49% from 2.32% — as investors moved to price in an interest rate increase from the US Federal Reserve. Despite growing economic optimism, oil prices fell this week on increased US inventories. West Texas Intermediate crude fell $1 per barrel to $53.00 this week while global Brent fell to $55.50 from $56.50. Volatility remains subdued, with the Chicago Board Options Exchange Volatility Index at 11.50.

NIFTY- 8,897.55
CRUDE OIL-Rs 3,557barrel
GOLD-Rs 29,020 gram
Rs/$-Rs 66.81

MARKET ROUND UP

After logging gains in prior five weeks, key benchmark indices took a breather in the week ended Friday, 3 March 2017 as investors resorted to profit booking. Key indices edged lower in four out of five trading sessions during the week.

In the week ended Friday, 3 March 2017, the Sensex fell 60.52 or 0.21% to settle at 28,832.45. The Nifty 50 index fell 41.95 points or 0.47% to settle at 8,897.55. The BSE Mid-Cap index fell 123.07 points or 0.91% to settle at 13,409.04. The BSE Small-Cap index gained 32.39 points or 0.24% to settle at 13,620.17.

Trading for first day of the week began on a subdued note as the key benchmark indices dropped on Monday, 27 February 2017 due to selling pressure in bank stocks. The barometer index, the S&P BSE Sensex, fell 80.09 points or 0.28% to settle 28,812.88, its lowest closing level since 21 February 2017.

Macro Economic Front:

On the Economic Front,India's dominant services industry returned to growth in February for the first time in four months, a private business survey showed on Friday, 3 March 2017. The Nikkei Services Purchasing Managers' Index, or PMI, in India came in at 50.3 in February of 2017, up from 48.7 in January. It was the first expansion after three months contraction but the weakest since October 2016 as output increased while employment has shown only one noteworthy monthly increase in the past one-and-a-half years. A reading above 50 indicates that the services sector is generally expanding; below 50 indicates that it is generally declining.

The GDP growth is estimated to be 7% in Q3 December 2016, as per the second advance estimates of national income from Central Statistics Office (CSO) under Ministry of Statistics and Programme Implementation. The growth in GDP during 2016-2017 is estimated at 7.1% as compared to the growth rate of 7.9% in 2015-2016.

Major Action &Announcement:

Maruti Suzuki India fell 2.37% to Rs 5,891.80. The company said its total sales rose 10.9% to 1.30 lakh units in February 2017 over February 2016. The announcement was made during market hours on Wednesday, 1 March 2017. The company's total domestic sales rose 11.7% to 1.20 lakh units in February 2017 over February 2016. Exports grew by 2.2% to 9,545 units in February 2017 over February 2016.

Tata Motors fell 0.41% to Rs 460.10. The company's total sales rose 2% to 47,573 vehicles in February 2017 over February 2016. The company's domestic sales of Tata commercial and passenger vehicles rose 3% at 42,679 units in February 2017 over February 2016. The announcement was made after market hours on Wednesday, 1 March 2017.

Mahindra & Mahindra (M&M) rose 0.84%. The company reported a 11% growth in its total tractor sales to 15,007 units in February 2017 over February 2016. The company's domestic tractor sales grew by 9% to 13,834 units in February 2017 over February 2016. Exports surged 35% to 1,173 units in February 2017 over February 2016. M&M's total auto sales declined 3% to 42,714 units in February 2017 over February 2016. Total domestic sales fell 2% to 40,414 units in February 2017 over February 2016. Exports dropped 13% to 2,300 units in February 2017 over February 2016. The company announced the monthly sales volume data during market hours on Wednesday, 1 March 2017.

Lupin rose 1.23%. The company announced during trading hours on Thursday, 2 March 2017, the launch of generic Prstiq (Desvenlafaxine Succinate) Extended-Release Tablets, 50 mg and 100 mg having received an approval from the United States Food and Drug Administration (FDA) earlier. Lupin'sDesvenlafaxine Succinate Extended-Release Tablets, 50 mg and 100 mg is the AB rated generic equivalent of Wyeth Pharmaceuticals' Pristiq Tablets. It is indicated for the treatment of major depressive disorder (MDD). Pristiq Tablets had annual US sales of approximately $859.9 million (IMS MAT December 2016).

State-run Coal India lost 2.09%. The company said that production of the company and its subsidiary companies was 96% of targeted production at 54.30 million tonnes in February 2017. Offtake was 94% of target at 47.73 million tonnes in February 2017. The announcement was made after market hours on Wednesday, 1 March 2017.

Wipro rose 1.41%. The company announced that it has completed the sale of its EcoEnergy division on 1 March 2017. Wipro said that the impact of sale of EcoEnergy division is expected to reflect in the financials of Wipro for the Q4 March 2017 and year ending 31 March 2017 (FY 2017). The announcement was made before market hours on Thursday, 2 March 2017.

Global Front:

In Overseas Markets,the Labor Department said on Thursday, 2 February 2017 that initial jobless claims fell to their lowest level in over 40 years in the week ended 25 February 2017, potentially adding to rate hike expectations.

US President Donald Trump promised to provide tax cuts for companies and middle-class citizens, invest $1 trillion in infrastructure, and increase defence spending in his maiden speech to Congress on Wednesday, 1 March 2017. Trump made no suggestions on how he would pay for his plans.

Global Economic News:

Market prices in March Fed move
The week began with markets pricing in about a 50% chance of a hike in the federal funds rate at the Federal Open Market Committee meeting this month but ended with markets almost fully pricing in a quarter-percent hike. Hawkish comments from the troika of Fed chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed president William Dudley helped seal expectations of a March hike.

Fresh records for major indices
More records were broken this week as the reflation rally extended further. The Dow Jones Industrial Average closed above 21,000 for the first time on Wednesday, while the S&P 500 Index brushed 2,400. London’s FTSE 100 also closed at a record high on Wednesday, boosted in part by a weak pound.

Brexit process hits speed bump
Despite suffering a defeat in the House of Lords over the Brexit bill, UK prime minister Theresa May insists her timetable for triggering Article 50 will not be delayed. The Lords voted to amend the Brexit bill in order to force the government to guarantee the rights of citizens of the European Union living in the UK. The bill will now be referred back to the House of Commons, where May is expected push to reject the amendment.

Earnings season draws to a close
With 98% of companies reporting for the fourth quarter of 2016, the earnings growth rate for the S&P 500 is 4.9%. According to FactSet Research, the fourth quarter will mark the first time the index has seen year-over-year growth in earnings for two consecutive quarters since Q4 2014 and Q1 2015. Sales growth for Q4 is running at a 4.9% rate, according to FactSet. The 12-month forward P/E ratio is now 17.9%, which is above the 5- and 10-year average.

GLOBAL CORPORATE NEWS

Economic optimism continues to build
A sizable uptick in the closely watched ISM manufacturing purchasing managers’ index and a jump to a 15-year high in the Conference Board’s consumer confidence measure were two standout data points in the United States this week, keeping the reflation trade firmly on track. China’s PMI showed strength as well, though the eurozone’s and United Kingdom’s PMIs were less robust. However, economic sentiment in the eurozone reached a six-year high. Also notable in the eurozone this week was an energy-driven rise in inflation to near the European Central Bank’s 2% target. This is the first time consumer price inflation has reached the target in four years.

NEW 52-WEEK HIGH BSE (A):

 

ESCORTS

491.65

FINOLEXID

555.00

RELIANCE

1287.80

 

NEW 52-WEEK LOWS BSE (ALL):

ANIL LTD

70.30

ACME

11.41

 

MAJOR WEEKLY GAINERS IN BSE A CATEGORY:

national alumini

18.54

ESCORTS LTD

16.07

DELTA CORP

12.36

MAJOR WEEKLY LOSERS IN BSE A CATEGORY:

BPCL

-11.58

HIND PETROL

-8.66

JAMMU & kASHMIR

-8.12


Eyes will be set on the certain US economic data releases are:

Monday (06 Mar)
Factory Orders

Tuesday (07 Mar)
Consumer Credit

Wednesday (08 Mar)
Wholesale Trade

Thursday (09 Mar)
Jobless Claims & Natural Gas Report

Friday (10 Mar)
Employment Situation

Fundamental Pick of the week:

Buy GlaxoSmithKline Consumer Healthcare Ltd For Target Rs.5,910.

Strategy:

GlaxoSmithKline Consumer Healthcare closed 0.6% up in trade today at Rs5,108 vs. 0.5% fall in benchmark Nifty.

GSK Consumer is the market leader in health food drinks industry with market share of 70%. With its flagship brands Horlicks and Boost, it has successfully fend off competition from likes of Heinz and Mondelez.

The company would substantially benefit from lower tax rates in the GST regime as its current tax structure is quite high compared to other players.

Based on expected EPS of Rs181, the stock trades at attractive valuation of 28.2x FY18E earnings. We have a BUY rating on the stock with price target of Rs5,910.

Indian Market Outlook:

NIFTY OUTLOOK:

Supported by the firm global cues and better than expected GDP numbers, Nifty made a new 52-week high but finally settled with cut of nearly half a percent.

Markets are still overbought and we might see further consolidation in index ahead. However, the overall trend is bullish and hence we sug-gest traders to use any decline during this phase to accumulate quality stocks from the preferred list of sectors.

NIFTY FMCG OUTLOOK

* Nifty FMCG Index witnessed marginal profit taking in the passing week and closed slightly lower in line with the benchmark.

* Technically, it is wisely placed above its important moving averages (50,100 & 200 EMA) on daily chart and looks upbeat for an up move .

* Traders can consider fresh buying in select counters like   JUBLFOOD, HINDUNILVR, BRITANNIA from this space.

NIFTY MEDIA OUTLOOK

* Nifty Media Index also settled marginally lower after consolidating in a narrow range.

* It tested its important support zone placed around 2945 level and bounced back thereafter.

* Considering its overall chart formation, we expect strong surge in the near fu-ture.

* ZEEL, SUNTV are some of the better placed stocks in this space.

TECHNICAL VIEW:

S3

S2

S1

NIFTY

R1

R2

R3

8,760

8,820

8,865

8,897.55

8,935

9,020

9,100

Nifty Spot View

Nifty traded with volatile sentiments in last session due to profit booking at higher levels from traders. Next important support seen at 8800 level.Nifty likely to trade with sideways sentiments in thatsessio on profit booking at higher levels from traders. Nifty likely to trade with sideways sentiments and 8850 at lower side will be the trend deciding level. Higher side resistance seen at 8970 levels. However, some buying support at lower levels may limit the downside in NIFTY. Applying momentum Indicator RSI for 14-day period trading at level of 63.97 indicates that it is trading near over bought zone and may face resistance at higher levels.

 

Conclusion:

Now Bulls need a close above 9000 for a move towards 9050/9120/9200, Bears will get active below 8850 for a move towards 8800/8720.

Nifty did high of 8892 and low of 8850 so traded in the range, but in process broke the channel on downside. Break of 8850 shorts can be taken as fall can be seen till 8773 and bullish above 8900 for a move towards 8960/9000. Breakout above 8995 for a move towards 9083/9150.

 

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Forex trading is the undoubtedly the most prospective investment medium. With more than USD 5 trillion turnover every day, it is the largest financial market in the world. Though the currency market is more stable than any other financial market like the stock market, the movement of the currencies for a few points can end up giving you huge returns. This is simply because of high leverage of Forex trading and nil transaction cost. Moreover, Forex trading offers you highest form of liquidity that is not possible in any other investment in the World. So while converting your profit to cash, you do not loose any money as transaction cost.


 


All said and done, but you can not miss the fact that the Forex market is the most risky investment as well. In fact according to the analysis of the Forex brokers large number of investors experience loss at the Forex market for so many different reasons. So if you want to ensure that you make good and consistent profit at the stock market, you have to learn the tricks of the trade. You must have a comprehensive knowledge of Forex trading. Here we are presenting an overview of the Forex trading that will help you to learn the methods of Forex market trading.

 

One of the striking features of the Forex market is its geographic disparity. As the Forex trading is operated from almost all the significant financial capitals of the world, the Global Forex market is open round the clock and day and night except the weekends. So it is the time zone difference that lets you trade at any time of the day and night. You must be wondering then how to keep watch on the Forex trading through all these long trading hours. The most effective solution for this is the automated Forex trading systems. These are computer software also known as the Forex robots that can keep watch on the global Forex market and also execute the trades on your behalf as per the pre conditions that are set by you. In fact these systems are capable of the saving your investment by selling and closing the position when the market trend is on the reverse. The first thing that you need to learn for Forex trading is to use the automated system and take maximum advantage of these specifically designed software for Forex trading.

 

The next thing that you need to learn in Forex trading is how to read the Forex quotes. In Forex trading the trades are done by buying or selling one currency with another currency. That means Forex trading is done on a pair of currency. One of the currency is the pair is said to be the base currency and the other is the trade currency. For trading the trade currency is used for buying or selling the base currency on which the profit and loss is determined. In the Forex quote the base currency is always considered as one unit and the price of that one unit of base currency is mentioned in respect of the trade currency. For example if you are trading for Euro and USD where Euro is the base currency. The quote will be presented like EURUSD = 1.0538, where you will get 1 Euro for 1.0538 USD. (All Figures are just an example)

 

Like any other financial market the key for success at the Forex market is to buy one currency at a lower rate and selling the currency at a higher rate. You can also do short selling of the currency. That means you can sell a currency at a higher rate and then buy the currency to close the position at lower rate. But this is a simple equation of Forex trading and the trickiest part of the trading is to identify the trend of the market and to rightly speculate when a certain currency will go up in the market. For that you have to learn the methods of fundamental and technical analysis that are used to speculate the trend of the Forex market and movement of individual currencies.

 

These are some of the vital aspects of Forex trading and once you have an in depth understanding of the Forex trading, surely you can expect to get rich from Forex trading.

US stocks see profit booking as indices reach overbought levels with Dow Jones seeing 21000 as proverbial high.

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Indian Indices: Asian markets were trading in the red as profit booking overnight in the US. While, other emerging markets also saw indices succumb to stronger US Dollar and rising bond yields. The rally in the US may have reached the proverbial peak with 21000 on the Dow Jones being a huge tipping point in the near term. US Dollar strength will weigh on emerging markets as institutional investors book profit against currency weakness in these markets.


Nifty also saw huge reversal as nervous nineties played out perfectly with the mid-cap stocks leading the fall. Profit booking close to 9000 was on the cards as local mutual funds sold to take advantage of the superb near term rally in indices and stocks. For today expect initial profit booking to continue, however, second half index buying by foreign investors will arrest any further fall as foreign flows continue to be strong buyers. 


The BSE Sensex is currently trading at 28792.65, down by 47.14 points or 0.16% after trading in a range of 28736.10 and 28847.97. There were 16 stocks advancing against 14 stocks declining on the index. The broader indices were trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index was up by 0.13%. The CNX Nifty is currently trading at 8882.40, down by 17.35 points or 0.19% after trading in a range of 8862.45 and 8898.50. There were 25 stocks advancing against 26 stocks declining on the index.

 

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

Hathway

37.80

5.15

Infratel

301.75

4.09

Escorts

476.00

3.84

GSPL

162.60

3.80

Group ATopLosers

 

 

Apollohosp

1248.00

-5.16

Amtekauto

36.50

-3.05

Raymond

589.00

-3.05

NCC

78.95

-2.53

INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

28700

29060

Nifty

8855

8960

 

 

Technical view: Nifty will see 8830-8850 act as support while 8930 will act as first resistance. Bank Nifty has been the weaker of the 2 and sees support closer to 20450, which should hold while 20750 will act as resistance on the upside.


 

 

Trading ideas :TVS Motors (Buy above Rs 427, for Target of Rs 440, SL at Rs 420.5): The stock is trading in a constant higher top higher bottom cycle. The momentum indicator RSI has formed positive reversal at 60, which indicates bullish bias to the up move. It is also sustaining above the rising trend line support zone.


Derivative Snippets: In the last trading session, markets witnessed a wild swing in the final hour of trade. Bank Nifty was among the biggest loser as short selling of OTM March 02, 2017 weekly expiry call options and long unwinding of future contracts weighed in.

Nifty managed to hold the 8900 mark as 8900 put strike added fresh long position with the rise in open interest to the tune of ~1.82 lakh contracts. Substantial trading below 8900 may lead to a further downfall up to the support zone of 8800.

FIIs were net buyers in cash market segment to the tune of Rs ~123 crore. FII’s index future long/short ratio at 5.4x vs 4.5x.


 

Nifty Movers:  The top gainers on Nifty were BhartiInfratel up by 4.16%, Reliance Industries up by 2.32%, Hindalco up by 2.01%, Tata Power up by 1.79% and Grasim Industries up by 1.76%. On the flip side, Bosch down by 2.15%, HDFC down by 1.53%, ITC down by 1.53%, Asian Paints down by 1.38% and IndusInd Bank down by 1.16% were the top losers.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Telecom up by 1.28%, Energy up by 1.09%, Realty up by 0.73%, Utilities up by 0.70% and Oil & Gas up by 0.54%, while FMCG down by 0.76%, IT down by 0.40%, Bankex down by 0.31%, Capital Goods down by 0.22% and Auto down by 0.20% were the losing indices on BSE.

 

 

 

On the global front:On the global front, Asian shares were trading in red, as traders become increasingly confident the Federal Reserve will hike interest rates this month. Japan’s core consumer prices rose for the first time in over a year in January due to a pickup in energy costs and private consumption, offering some hope for the central bank's efforts in accelerating inflation to its 2 percent target.

Global Signals: Asian Paints down by 1.38% and IndusInd Bank down by 1.16% were the top losers.The Asian markets were trading in red; Hang Seng decreased 164.98 points or 0.7% to 23,563.09, Nikkei 225 decreased 130.53 points or 0.67% to 19,434.27, Taiwan Weighted decreased 40.28 points or 0.42% to 9,651.52, KOSPI Index decreased 25.46 points or 1.21% to 2,077.19, Shanghai Composite decreased 13.87 points or 0.43% to 3,216.15, Jakarta Composite decreased 11.87 points or 0.22% to 5,396.38 and FTSE Bursa Malaysia KLCI decreased 7.08 points or 0.41% to 1,708.59.

 



Market extends losses, Nifty below 8900, Sensex down 180 pts

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Indian Indices: Amid firm global cues, Indian equity benchmarks maintained their early gains in late afternoon session on account of better-than-expected GDP data for the third quarter of current fiscal. Domestic sentiments were buoyed as Nikkei India Manufacturing Purchasing Managers’ Index rose to 50.7 in February from 50.4 in January. Sentiments also got some support with Economic Affairs Secretary ShaktikantaDas’ statement that the positive effects of demonetisation will be visible from April and the completion of remonetisation process will drive consumption going forward. 

However, upper side remained capped with a report that the Centre’s fiscal and revenue deficits between April and January exceeded the Budget target for 2016-17. The fiscal deficit shot up to 5,64,192crore, amounting to 105.7 per cent of the Budget estimate, between April 2016 and January 2017.

The BSE Sensex is currently closed at 28,839.79, down by -144.70 points or -0.50% after trading in a range of 28984.07 and 29145.62. There were 15 stocks advancing against 14 stocks declining on the index, while 1 stock remained unchanged.The broader indices were trading in red; the BSE Mid cap index was down by 0.70%, while Small cap index was down by 0.72%.

The CNX Nifty is currently shutdown at 8899.75, down by 46.05 points or 0.51% after trading in a range of 8898.60 and 8950.25. There were 29 stocks advancing against 22 stocks declining on the index.

MARKET INDICATORS

·           

 

Top Movers (Group A)

 

 

Company

Cmp

% chg

Gainers

 

 

Nationalum

75.70

5.87

Aplltd

606.00

5.74

Jublfood

1036.00

3.27

Havells

420.30

2.56

Losers

 

 

DLF

141.10

-8.11

Biocon

1033.85

-7.35

JPAssociat

14.95

-6.56

Network18

37.15

-5.83

INDEX PERFORMANCE

 

 

Index

Close

% Chg

Sensex

28,839.79

-0.50

Nifty

8,899.75

-0.51

 

Crporate Front: Global credit rating agency Moody's Investors Service on Thursday said the performance of Indian auto-backed securities (ABS) is not expected to deteriorate post March 2017.In a statement, Moody's said after worsening immediately after demonetisation last November the performance of rated Indian ABS levelled off in January 2017.


 

Macroeconomic front: Moody's Investors Service, the world’s leading rating agency, has said the performance of rated Indian auto asset backed securities (ABS) leveled off in January 2017 after worsening immediately after demonetization. The agency expects auto ABS performance to not deteriorate beyond March 2017, as the economy recovers, and oil prices remain range-bound and budget policy initiatives provide support. Signs of stabilization appeared in January 2017, with collection efficiency rising half a percentage point to 93 per cent from December 2016.

 

On the global front:

On global front, European markets were trading mixed as investors took a breather after a strong rally on Wall Street and focused on earnings and political instability. Asian markets were trading in green tracking the strong gains overnight on Wall Street after U.S. President Donald Trump's address to a joint session of Congress. Back home, in scrip specific development, BL Kashyap& Sons traded higher after the company secured new orders worth approximately Rs 431 crore.


Commodity Updates:

Commodity Prices (MCX):

Commodity

Rs

% Chang

Gold

29358.00

-0.24

Silver

43350.00

-0.13

Crude oil

3573.00

-0.86

Natural Gas

187.10

0.54

Alluminium

129.50

-0.27

Copper

403.30

-0.16

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Auto up by 0.82%, Industrials up by 0.45%, Capital Goods up by 0.40%, Metal up by 0.18% and IT up by 0.11%, while Realty down by 2.88%, Telecom down by 1.41%, Healthcare down by 0.93%, Utilities down by 0.89% and Power down by 0.88% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Tata Motors up by 3.22%, Tata Motors - DVR up by 3.19%, Ultratech Cement up by 2.81%, Bajaj Auto up by 2.13% and Hero MotoCorp up by 1.97%. On the flip side, Idea Cellular down by 2.74%, BPCL down by 2.36%, Sun Pharma down by 2.34%, BhartiAirtel down by 1.96% and Yes Bank down by 1.51% were the top losers.

 

Global Signals:

Asian markets were trading mostly in green; KOSPI Index increased 11.01 points or 0.53% to 2,102.65, Taiwan Weighted increased 17.02 points or 0.18% to 9,691.80, FTSE Bursa Malaysia KLCI increased 18.47 points or 1.09% to 1,716.16, Jakarta Composite increased 57.03 points or 1.06% to 5,420.09 and Nikkei 225 increased 171.26 points or 0.88% to 19,564.80. On the flip side, Hang Seng decreased 48.42 points or 0.2% to 23,728.07 and Shanghai Composite decreased 16.9 points or 0.52% to 3,230.03.

European Markets were trading mixed; France’s CAC increased 1.71 points or 0.03% to 4,962.54 and UK’s FTSE 100 increased 6.7 points or 0.09% to 7,389.60. On the flip side, Germany’s DAX decreased 17.85 points or 0.15% to 12,049.34.

 

Margin-to-equity Ratio in Stock Market

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Margin-to-equity ratio in stock market;  Now the fact also should be brought into contemplation that you try to find specialized assessment about hours of daylight trade; you will get your hands on negative observations more readily than consoling psychiatric therapy. All the same the high-quality inference does make understandable perfect in case of spontaneous purchasing conclusions. To get ahead of through the verge into sensible day buy and sell in the market of any place in the world, it is to a great extent obligatory that you are outfitted with the full familiarity of the turf above and not here from in proof of payment of rationalized with the up to date market shifts so that you prefer at least probable stocks. Basically then can day businesses verify sensible. Given the simple and straightforward pre condition that you are in a profession in a place that is poles apart and are not capable to scrutinize the trading area significantly improved, it is meaningful that you should not decide on day businesses. There are new businesses opportunities as well in the share market everywhere, which do not call for necessitating you around the clock scrutiny.

 

 

What is the Margin-to-equity Ratio in Stock Market?

You will have the same opinion that the stock market will prove to be immensely encouraging for a wee number of investors in spite of the actuality that for others it maybe will not be the acceptable course of action. There are cases in point of a lot of investors who have become penniless. 'A little knowledge is a dangerous thing' is a very common and vastly true wise saying. Putting on next to nothing information and gambling into the stock market perceiving others producing immense wealth in all earthly probability will provide evidence of being hazardous for you. You could bring to an end bringing up the rear to your richly deserved wealth and habitual failures will very soon persuade you to make your way out from the online stock market panorama. Engineering and acquiring awareness by putting money in will certainly spin the bazaar in your support - a currency making podium.

 

Design your ambitions

You must also come on familiar terms with the basic necessity that you have got to design your ambitions and audition the diverse spending options in the bazaar. At first straighten out on petite investments with the intention that even though you put on or incur fatalities, you will in next to no time gain knowledge of the ins and outs of the deal. Just the once you are contented, you can settle on volume funds. You in all probability will decide on each and every one of the three dealing preferences, namely day business, interim trading and enduring investment. At one fell swoop proviso your foundation of source of revenue is exclusively the stock market; you will be able to broaden the horizons of your venture ambitions to a larger extent, for instance speculation in mutual funds, money futures, and accompanying venture goods. You can accordingly keep up equilibrium of your ventures and failures given the simple and straight forward pre condition that a few will by a nose cause inconvenience to you. Seeking singular venture alternatives will further more accede to you knowing which one goes well with you the most excellent and you can in that case put in money in volume in the understood opportunity.

 

Acts as our primary source of income

We see that the stock market provides us with a good opportunity to make a lot of money and use the stock market as our primary source of income. There are in addition the Margin-to-equity Ratios yet the fact also should be brought into consideration that Margin-to-equity Ratios are everywhere, in every trade. So what you need to do before you decide to use the stock market as your solitary or primary source of income is to gain sufficient first hand experience of the market. Put in money in small amounts – never go high-volume at the first shot. People on the odd occasion succeed that way. Just the once you have earned a suitable level of experience, you can take the jump – Yet the fact also should be brought into thoughtfulness that still with watchfulness. So now we have understood the ways of the stock market. We can therefore safely state that with all its pros and cons, we have assisted you in margin-to-equity ratio in stock market.

Dow Jones crosses 21000 as rate hike chances brighten with US Dollar gaining strength.

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Indian Indices: Asian markets were trading in the green taking cues from the overnight 300 plus point rally on the Dow Jones. The consensus now has built in the chances of a rate hike by the Fed in March, which saw yields harden and the US Dollar strengthen. Globally, the outperformance of equities continues with ETF funds seeing huge inflows.


Nifty bounced back in style to capture 8900 with ease and close near 8950. The stronger than expected GDP data and return of foreign flows will see Nifty touch 9000 today as global cues join the bull market chorus. For today, expect mid-cap gains to continue with the mid-cap index hitting all time highs. Metals, Pharma and Consumption could continue to lead the gainers while Energy and Telecoms see profit booking @ higher levels.


The BSE Sensex is currently trading at 29107.29, up by 122.80 points or 0.42% after trading in a range of 29062.07 and 29133.44. There were 24 stocks advancing against 6 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.42%, while Small cap index was up by 0.46%.

The CNX Nifty is currently trading at 8981.60, up by 35.80 points or 0.40% after trading in a range of 8969.80 and 8992.50. There were 39 stocks advancing against 12 stocks declining on the index.

MARKET INDICATORS

·           

 

Group ATopGainers

 

 

Company

Price (Rs)

% chg

GMR Infra

16.90

7.30

Jublfood

1074.60

7.12

Nationalum

75.30

5.31

Balkrisind

1377.80

5.23

Group ATopLosers

 

 

Sobha

323.25

-4.04

DLF

148.80

-3.09

Raymond

620.15

-3.01

Hexaware

221.95

-1.99

Market Statistics

 

 

 

BSE

NSE

Advances

1357

930

Declines

1054

542

 

 

Technical view: Nifty finds strong support @ 8920 while 9000 will be the first resistance on the upside while Bank Nifty also finds strong support around 20500 where it will face resistance around 21000.


INDEX PERFORMANCE

 

 

Indices

Support

Resistanes

Sensex

28860

29270

Nifty

8999

9030

 

Trading ideas :McleodRussel (Buy above Rs 176, for Target of Rs 183, SL at Rs 172.5): The stock was stuck in a narrow trading band for the past 3 weeks oscillating between Rs 173-166. Finally, Mcleod has broken out from a Flag pattern accompanied with increase in volumes. Projections indicate potential target for stock up to Rs 183 in the near term. Other momentum oscillators indicate that the current momentum is here to stay.

Derivative Snippets: Nifty Metal and Realty index shimmered as the markets restarted its upward trend after 2 days of minor correction. Nifty ATM/ITM put strikes witnessed short selling as the highest open interest put base shifted from 8500 to 8800 strike.

FIIs were net sellers in cash market segment to the tune of Rs 198 crore.


FII’s index future long/short ratio at 4.5x in contrast to 0.46x for the Retail clients.

Nifty Movers:  The top gainers on Nifty were Tata Motors up by 3.50%, Tata Motors - DVR up by 2.88%, Ultratech Cement up by 2.84%, Ambuja Cement up by 1.59% and Hindalco up by 1.53%.

On the flip side, Sun Pharma down by 1.29%, BPCL down by 1.21%, Dr. Reddy’s Lab down by 1.00%, Idea Cellular down by 0.93% and NTPC down by 0.78% were the top losers.

Top Sectoral& Stock Screening:  The top gaining sectoral indices on the BSE were Auto up by 1.24%, Industrials up by 1.18%, Metal up by 0.95%, Basic Materials up by 0.91% and Consumer Durables up by 0.81%, while Realty down by 0.71% and Healthcare down by 0.14% were the losers on BSE.

 

 

On the global front:On the global front, Asian shares were trading mostly in green, as investors were encouraged by President Donald Trump’s measured tone in his first speech to Congress, which sent Wall Street stocks sharply higher. China’s newly appointed banking regulator vowed to strengthen supervision of the lending sector, underscoring Beijing’s determination to fend off financial risks and push forward with reforms this year.

Global Signals: The Asian markets were trading mostly in green; KOSPI Index increased 12.49 points or 0.6% to 2,104.13, FTSE Bursa Malaysia KLCI increased 14.53 points or 0.86% to 1,712.22, Jakarta Composite increased 52.77 points or 0.98% to 5,415.83, Hang Seng increased 96.15 points or 0.4% to 23,872.64 and Nikkei 225 increased 191.63 points or 0.99% to 19,585.17.

On the other hand, Taiwan Weighted decreased 4.05 points or 0.04% to 9,670.73 and Shanghai Composite decreased 0.28 points or 0.01% to 3,246.65.

 

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