STOCK TIPS 4 U FROM ADITYA BIRLA MONEY- Sell Welspun Corp; target of Rs 195-192

Aditya Birla Money is bearish on Welspun Corp and has recommended sell rating on the stock with a target of Rs 195-192 in its April 19, 2011 research report.

“Welspun Corp, prices lost ground sharply and closed below the 200-day EMA in yesterday’s session. The 14-day RSI is turning down towards the equilibrium after showing negative divergence while the Stochastic (14, 3, 3) has made a bearish crossover and is easing out of the overbought territory. As the prices also closed comfortably below the rising trend line sentiment is likely to remain mixed to weak towards support near Rs 192/189 in the short-run.”

“On the higher side, 200-day EMA near Rs 208 and yesterday’s high of Rs 214 will act as immediate resistance levels. Only an early close above the latter could negate the expected weakness and extend the prevailing positive tone above Rs 220 subsequently. Sell Welcorp initially below Rs 203 and then on any rise to Rs 207, with a closing stop of Rs 212 and for a possible target of Rs 195/192,” says Aditya Birla Money research report. (Source: moneycontrol.com)

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LONG TERM TRADING TIPS FROM ANGEL BROKING - IDBI Bank has target of Rs 195-200

IDBI Bank has target of Rs 195-200, says Phani Sekhar, Fund Manager, Angel Broking.

Sekhar told CNBC-TV18, "IDBI Bank is one of those few midcap public sector banks that I like because it happens to be a turnaround case and we have been seeing that the bank has met with remarkable success in its strategy albeit the growth has been moderated below the industry averages but having said that I think next year is going to be crucial as far as the growth is concerned, business quality issues have more or less been sorted out and I think that is discounted in the price."

He further added, "Although at the same time, I must mention here that the street is also factoring in a smart recovery in next year. The only risk here is that if the growth doesn’t come back beyond Q2, I think that there might be some disappointment. But having said that, I think it is worthwhile to hold this bank because the valuations are inexpensive when you compare it with some of its peers. So I would say that maybe over one year timeframe one can expect a target of around Rs 195-200."
SOURCE: MONEYCONTROL

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SHORT-TERM TRADING TIPS - Buy Ambuja Cements; target of Rs 163: Aditya Birla Money

Aditya Birla Money is bullish on Ambuja Cements and has recommended buy rating on the stock with a target of Rs 163-165 in its April 18, 2011 research report.

“Ambuja Cement, prices have pulled back slightly after breaking above the higher end of the prior consolidation last week. The 14-day RSI is staying mixed near the overbought territory while the MACD (12/26/9) is moving flat above its signal line. Hence a break above immediate resistance near Rs 153.5/154 levels could signal the resumption of prevailing up trend and keep the sentiment positive towards Rs 165 levels subsequently.”

“On the downside, prices find support near Rs 147 (formed by the previous minor swing low and the 13-day EMA). Only an early close below it would invite a downside correction in prices towards 140 levels and lower negating the expected gains. Outlook remains positive as long the stock stays above Rs 147. However, one may consider buying only a break above Rs 153.50, with a stop loss of Rs 149 and target of Rs 163/165,” says Aditya Birla Money research report. (source: moneycontrol.com)

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STOCK TIPS 4 U - Buy Infosys Tech; target of Rs 3400: Motilal Oswal

Motilal Oswal is bullish on Infosys Technologies and has recommended buy rating on the stock with a target of Rs 3400 in its April 15, 2011 research report.

“Infosys Technologies, 4QFY11 revenue well below expectations (US$1,602m v/s est. of US$1,653m), driven by volume decline of 1.4% v/s est. of 4% increase. Volume decline primarily driven by continued weakness in Telecom (revenue down 4.8% QoQ in CC) and surprising weakness in the Insurance sub-segment within BFSI. Decline in North America revenues was also a surprise (0.5% QoQ) in the context of recent management commentary. Volume decline of 1.4% represented a rare but material miss relative to Infosys' guidance which had called for volume growth of 1-2% in 4QFY11. A 5% point sequential decline in utilization (including trainees) primarily drove 120bp sequential decline in EBIT margin (an aggregate drag of 260bp). This was despite a 2.1% sequential increase in realization (should have helped margin by only ~100bp as part of the increase was driven by business mix) and tailwinds from Rupee depreciation v/s the US dollar (margin benefit of ~40bp).”

“Though US$ revenue guidance for FY12 of between 18-20% and INR revenue guide of 15.4-17.3% is in-line with our expectations, EPS estimates fall well short. INR EPS guidance implies a growth of just 5.7-7.37% as operating margins are expected to decline 300bp YoY. Full year FY12 implied net margin of 22.7% at the midpoint represents a decline of ~230bp even from 4QFY11 level of ~25% and FY11 net margin of 24.8%. Also, though US$ revenue guidance of 18-20% is in-line with expectations, volume growth guidance at the mid-point is just 16%.”

“Full year margin decline to be driven primarily by currency (~100bp) and utilization staying near current low levels (impact of ~125bp). Wage inflation impact (10-12% offshore, 2-3% onsite) is expected to be 100bp (300bp inflation impact offset by 200bp improvement on employee pyramid management). S&M expenses may also go up as a % of revenues on significant local and front-end hiring. The magnitude of offset from 3% blended realization improvement should be moderate as most of the improvement is on account of cross currency and business mix. US$ revenue growth guidance for 1QFY12 of just 3% (traditionally strong quarter) at mid point v/s our estimate of 4.2%. Implied CQGR for next three quarters would be 5.5%+, implying a sharply backended revenue growth profile to meet guidance. Rupee revenue growth guidance is just 1.3% at the midpoint for 1QFY12 whereas EPS is expected to decline 12.6% QoQ (v/s our prior est. for growth of 2.3% for revenue and EPS decline of 5.3%). Margins and EPS will get impacted in the quarter because of wage hikes and assumption of Re/US$ of Rs44.5 v/s Rs45.26 in 4QFY11.”

“The absence of one-offs or timing delays in 4QFY11 and the already sharply backended nature of guidance means that it is hard for the consensus to justify any upside to its current US$ revenue growth estimate of 25%. Though one can presumably believe that the margin guidance is conservative, the base case to assume will still be a decent decline, if not a decline as high as 300bp. Consensus prior to today's results was projecting flat to a slight decline in margins for FY12, which implies an inevitable downgrade to earnings. We are revising our top line estimate slightly higher to 24% driven primarily on account of expectation of higher blended realization increase of 2.6% v/s our prior estimate of 1.5%. We are assuming a lower margin decline of 150bp v/s management guidance of a decline of 300bp, though that still represents a downside relative to our prior assumption of flat margins (ex-currency). It may however be noted that the 150bp decline is on a lower base for FY11 driven by the 4QFY11 miss on margins.”

“This results in an EPS downgrade of 7.6% from Rs152 to Rs 140.6 (implying YoY growth of 17.7%). Assuming similar margin profile for FY13, we have downgraded our FY13 EPS estimate by 7.3% to Rs 169.5 v/s prior estimate of Rs 183. Keeping FY13 target P/E at 20x, our revised price target is Rs 3400, implying an upside of 14% from the CMP of Rs 2989. Maintain Buy,” says Motilal Oswal research report.
SOURCE: MONEYCONTROL.COM