Buy DB Realty; target of Rs 564: Anand Rathi Securities

Anand Rathi Securities is bullish on DB Realty and has recommended buy rating on the stock with a target of Rs 564 in its October 4, 2010 research report.

“DB Realty (DBRL) has total projects, 64% are for residential purpose. With 65m sqft residential properties – of which 33m sqft is in Mumbai City and 17.9m sqft in MMR (ex Mumbai), – DBRL has the largest value offering in the high-conversion (higher margin) Mumbai City. Around 70% of DBRL’s land is from slum rehab schemes (SRS), urban renewal schemes (URS) and public private partnership (PPP) projects that not only entail lower cost but also deferred payment vis-à-vis typical land acquisitions. One-third of the remaining 30% is in the form of virgin/millland projects which are in JDAs/JVs with land-owners and developers. This has resulted in high-value saleable area cost of only Rs 623 per sqft on purchase of land, and Rs 1310 per sqft, after PPP handover cost.”

“We have assumed a development schedule for most of DBRL’s properties, given SRS, PPP, URS and redevelopment projects and as land only accrues when the rehabilitation is undertaken/complete. Most new developments under construction/planned by DBRL are highrise buildings (+65 floors); such development is new to Mumbai. We have assumed development schedule of 5-6 years, 40% higher than company estimates (as the company follows a construction-linked payment plan). Given low base and new launches, we have expanded the construction expenditure, from Rs 10.4 billion in FY11e to a peak Rs 37.5 billion in FY13e, on account of more projects coming under execution than in the current portfolio.”

“DBRL’s cost of equity at 16.6% and cost of debt at 14.5% translates into WACC of 13.8%. Our Sep ’11 target price of `564 is the same as our Sep’11 NAV. We believe DBRL is attractively valued at FY12e P/BV of 2.2x, as regards strong earnings growth and high RoE (>40%). Downside risks are slowdown in property market and looming oversupply,” says Anand Rathi Securities research report.

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Tata Elxsi (Rs 273.3): Buy

We recommend a buy in the stock of Tata Elxsi from a short-term perspective. It is evident from the charts of the stock that following a medium-term downtrend from its March 2010 peak of Rs 347, it found support at a low of Rs 226 in August and started to trend higher. Since then, the stock has been on a short-term uptrend.

On October 1, the stock jumped more than 8 per cent, breaching its 21 and 50-day moving averages conclusively. Subsequently on Tuesday, the stock penetrated its medium-term down trendline that was in place from March by surging 7 per cent.

This up move has reinforced the stock's short-term uptrend. Moreover, we notice increase in volume over the past three trading sessions. The long-term trend is also up for the stock since March 2009.

The daily relative strength index has entered into the bullish zone from the neutral region and the weekly RSI is rising towards the bullish zone. Daily moving average convergence divergence oscillator has signalled a buy and is on the verge of entering into positive territory.

We are bullish on the stock from a short-term perspective. We anticipate the stock to move up further until it hits our price target of Rs 282 or Rs 290 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 265.



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BUY HERO HONDA MOTORS - MOTILAL OSWAL

Motilal Oswal is bullish on Hero Honda Motors and has recommended buy rating on the stock in its October 4, 2010 research report.

“Hero Honda Motors posted September 2010 volumes of 433,461 units (versus estimate of 470,000), up 8% YoY (2.1% MoM). Volumes were impacted by floods in North India (including at its plant in Uttarakhand), disrupting the movement of goods. As a result the company is carrying inventory of ~35,000 units across its plants. Although short-term headwinds exist, the outlook seems buoyant. Anil Dua, Sr VP (Mktg) said: "The record sale in H1 of FY11 is extremely encouraging. We introduced two new bikes this month. Leading into the festive season, we have lined up a couple more launches. With this slew of launches, high-decibel communication and activation, we are confident of doubling our pace of growth during the festive season."

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VIDEO - IIFL-Post Market Summary 04.10.2010

IIFL-Post Market Summary 04.10.2010



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DERIVATIVE TIPS AND TRICKS FOR THIS MONTH (OCTOBER 2010)

IF THE PREMIUM ON NIFTY ;FUTURES IN OCTOBER AND NOVEMBER SERIES IS ANY INDICATION, MOST OF THE SHORT COVERING HAS ALREADY TAKEN PLACE AND THE UPWARD MOVE TRIGGERED BY THE ;SHORT SQUEEZE IS OVER.
THE OPEN INTEREST IN THE MARKET INDICATES CREATION OF MORE LONG POSTIONS THAN ANYTHING ESLE.

THE SEPTEMBER SERIES, WHICH SAW A SHARP UPWARD MOVEMENT IN NIFTY, DID SEE SOME PROFIT BOOKING ON THE DAY OF EXPIRY. BUT THE DECLINE WAS NOT SHARP, WHICH INDICATES THAT THE MAKKET IS STILL IN STRONG
HANDS.

THE OCTOBER SERIES HAS STARTED ON A STRONG NOTE WITH MORE THAN 2 PERCENT GAINS IN A SINGLE SESSION. ONE REASON FOR THE SRONG UPOWARD MOVEMENT WAS FRESH BUYING BY INVESTORS, WHO HAD BEEN SITTING ON
THE SIDELINES AND WAITING TO SEE IF THE AYODHYA VERDICT HAS ANY MAJOR NEGATIVE REACTION, THESE ARE NOT ONLY DOMESTIC INVESTORS. EVEN A SECTION OF FII'S WERE WATCHING THESE DEVELOPMENTS KEENLY.

AS FAR AS THE DERIVATIVE MARKET IS CONCERED, THE COST OF PUT OTPIONS IS SHOWING THAT WITH EVERY PASSING DAY, MORE AND MORE PEOPLE ARE GETTING CONVINCED THAT THE MARKET....

SEE THE IFRAME AND READ THE FULL ARTICLE ABOUT DERIVATIVE TIPS :

TATA STEEL LTD

Tata Steel Ltd
Current: Rs. 671.70 0.59%
Open: Rs. 675.00
High: Rs. 680.40
Low: Rs. 668.75
Stop Loss: Rs. 665.00
Buy: Rs. 667.80
Target: Rs. 678.00

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Mahindra and Mahindra can test Rs 775-800: Kedia - CNBC-TV18 -

Mahindra and Mahindra can test Rs 775-800, says Gaurav Kedia, Antique Stock Broking.

Kedia told CNBC-TV18, "I was looking to back M&M in the early morning trade with a 2% stoploss. I think M&M could go upto Rs 775-800 levels. The auto numbers were definitely being good on Friday. In anticipation of the heavy buying season coming ahead of Diwali, I think one could definitely see 5 to 10% upside in all these auto stocks."

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From: http://www.moneycontrol.com/news/stocks-views/mahindramahindra-can-test-rs-775-800-kedia_488554.html

Avoid CEBBCO IPO: Angel Broking

The initial public offering (IPO) of Commercial Engineers and Body Builders (CEBBCO) - a designer and manufacturer of vehicle bodies - has opened for subscription. Angel Broking has recommended avoiding the IPO, in its research report dated October 1, 2010.

The issue consists of a fresh issue of Rs 153 crore and an offer for sale of 15,28,587 shares by New York Life Investment Management India Fund (FVCI) II LLC and Commercial Automobiles Private Limited, which is more than Rs 19 crore. The issue will close on October 5, 2010. A price band is at Rs 125-127 a share.


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From: http://www.moneycontrol.com/news/ipo-issues-open/avoid-cebbco-ipo-angel-broking_488567.html

Talbros Auto Components – Buy

Investors with medium-term horizon can consider buying the stock of Talbros Automotive Components (Rs 87.7). The company manufactures gaskets, steering and suspension components, stampings, rubber products and forgings.

After recording multi-year low of Rs 15 in March 2009, the stock reversed higher. Since then it has bee on a long-term uptrend shaping rising peaks and troughs. While trending higher, the stock strongly broke through key long-term resistances at Rs 45 and Rs 60. Further, it penetrated another long-term resistance at Rs 80 on October 1, by jumping 15 per cent with heavy volume.

In bullish zone

The stock is trading well above its 21 and 50-day moving averages. Both daily and weekly relative strength indices are featuring in the bullish zone and also monthly RSI hovering in this zone. The daily moving average convergence divergence oscillator has re-entered in to the positive territory and has given a buy signal. The weekly MACD is featuring in the positive territory, implying upward momentum.

Medium horizon

Taking into consideration that the stock's long-term uptrend line is in tact, we are bullish on it from a medium-term horizon. We believe that Talbros Automotive has the potential to continue its current uptrend until it hits our price target of Rs 105, following a small pause around Rs 97. Medium-term horizon investors can buy the stock while maintaining stop-loss at Rs 79.

Follow up- PBA Infrastructure (Rs 84.9)

Following initial gain to Rs 94.6, the stock slipped 6 per cent last week and is trading above our stop-loss. We reiterate our medium-term positive outlook on the stock with revised target of Rs 100. Medium-term investors can buy the stock with modified stop-loss at Rs 76.

(This recommendation is based on technical analysis. There is a risk of loss in trading.)

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From: http://www.thehindubusinessline.com/2010/10/04/stories/2010100451780100.htm

BUY Syndicate Bank >> Buy

Buy Syndicate Bank, says Technical Analyst, Ashwani Gujral.
Gujral told CNBC-TV18, "Smaller banks moved sideways, while the Bank Index was doing well. Now on Friday they started moving higher, so we can buy Syndicate Bank with a stoploss of about Rs 113, target here could be about Rs 138."

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From: http://mmb.moneycontrol.com/india/messageboardblog/message_thread/2930481/4726826#m4726826?utm_source=Price_MMB10