Investement Idea

Alok Industries

CMP 22/-

Alok Industries is one of the largest & fully integrated textile manufacturers in the country, with widest product portfolio [from Cotton & Polyester yarn, grey, Fabric, Home textiles, Apparel fabric, to Garments] catering to host of segments. It mainly caters to domestic markets [65%] while rest is exported. Company's main focus is on value added products and retail [it is expanding its retail H&A outlet network to 1000 in 2 years].

The order book is full for next 4 months at Rs 900crs including Home textiles order book which is full for the whole year. This offers revenue visibility for the second half of this FY.

There are many capacity additions done by the company during the year and range of products is being increased everyday. All kind of fabrics and garments are being produced. They are currently at 75% utilization level and expect to increase to 80% by next year and more going forward.

Another worry company will address is reduction in high debt levels, which will help reduce the risk and increase their bottom line. This they will do by rising cash by - listing retail UK subsidiary and by selling of property in Mumbai.

The industry outlook is good and is expected to improve further as after de-stocking of last year, most of the big global retailers are placing fresh orders in big way. Increasing utilization levels and completion of expansion plans will fetch increased revenues going forward and drive growth in earnings.

As their expansion phase is almost complete, so operations will show net cash flows from FY11.

Management is making efforts to improve the margins in domestic as well as global sales and volumes are growing, so cash generation will take care of high debt which will come down gradually. 

With cash EPS for current year, close to 10/-and EPS around Rs 4/-, we expect this highly liquid stock to reach levels of 30-35 in next 6-12 months. BUY.

First Call

ITC

Execution Price Range                        Stop Loss                  Target

Buy Between Rs 256 to 260                253                           268

ICICIBANK

Execution Price Range                       Stop Loss                  Target
Sell Between Rs 905 to 915               921                            888

RANBAXY LABS

Execution Price Range                     Stop Loss                      Target
Buy Between Rs 418 to 424              415                               434

USD/INR DAILY

Dollar moved in a 13 paisa range on Wednesday as currency traders seemed to have adopted a wait and  watch strategy. Dollar moved 46.31 and 46.18 levels with Nifty also trading in a range bound manner and closing at 5054 points which was 7 points lower than the previous close.In international currency markets, dollar rose against the Euro on speculations that U.S investors are bringing back overseas fund towards year end.EURUSD was quoting at 1.4926 against the dollar after making a high of 1.5057 during previous week. However yen gained against major currencies after indications of Japan’s largest banks facing pressure to raise funds spurred investors to bring back earnings on assets abroad. In domestic news yields for short term bonds continued to be unchanged with 91 days T‐bills being auctioned at 3.2754%, the same as that of
previous week. However yields on long term bonds fell with 365 days T‐bills being auctioned at 4.4508% from 4.5275% a fortnight ago. For today we expect range bound movement to continue with 46.10 acting as a key support and 46.30 as a crucial resistance.


                            Pivot                 Support 1    Support 2        Resistance 1          Resistance 2
Spot                     46.2308           46.1667       46.1133         46.2842                46.3483
Nov. Future         46.2442           46.1783        46.1192         46.3033               46.3692

Daily Market Tips

Wednesday, 18 November

• The market opens on a sluggish and soft note. Earlier, the US markets ended off the day's low while Asian markets have opened marginally in the green and are trading quiet. Sensex is trading at 16994, down 56 points from its previous close, and Nifty is at 5045, down 16 points. CNX Midcap index is up 0.2% and BSE Smallcap index is up 0.3%. The market breadth is positive with advances at 454 against declines of 276 on the NSE.
• Sell DLF at Rs 383 with target of Rs 361 and stop loss of Rs 389. The stock last traded at Rs 377.80, down 2% on the BSE. 
• Buy Wockhardt with intra-day target of Rs 190 and stop loss of Rs 181. The stock last traded at Rs 183.15, down 3.2% on the BSE. 
• Buy XL Tele with intra-day target of Rs 44 and stop loss of Rs 39. The stock last traded at Rs 39.35, up 4.9% on the BSE. 
• Buy HUL at Rs 276 with intra-day target of Rs 283 and stop loss of Rs 272. The stock last traded at Rs 276.35, up 0.7% on the BSE.  
• The trend in the market is upward and my next target for the Nifty is 5125 with stop loss at 4890.  
• The Nifty could be heading towards 5200 and there is good short-term support for it between 5000-5020. Buy Infosys with target of Rs 2500 plus and stop loss of Rs 2350.The stock last traded at Rs 2396.75, up 2% on the BSE.  
• The trend in the market is positive and traders should use all intra-day dips and lower levels to buy. Buy at around 5000 and booking profits at 5075-5100 levels.