[T.S.R:14573] 9am with Emkay

 

9am with Emkay

Contents

n Research Update Included

Petron Engineering Construction Management Meet Update; Right Mix; NOT RATED

n Petron Engineering Construction (PEL) change in ownership to Kazakhstan based KazStroyService is a positive development

n With 60% exposure to the oil & gas sector and another 20% exposure to the power sector, PEL is in a sweet-spot for next 3 years

n Sitting on an all-time high order book of Rs10.5 bn - equivalent to 1.9X revenues. Boasts of an equally robust order bid pipeline at Rs18.0 bn

n Expect earnings CAGR of 43% in FY10-12E period with earnings of Rs48.8/Share in FY11E. Valuations are attractive at 7.8X FY11E earnings

n Dealer Comments

The markets started the day's session on a minor positive note with 30 odd point's upward gap mirroring subdued to flattish overseas markets. Almost till late noon trades alternate bouts of buying and selling was seen in the frontline stocks as a result the indices kept gyrating zones. Post good opening by the European markets on the back of successful Spanish bond auction easing worries about the Euro zone crisis markets staged a solid bounce. The late rally was mainly led by buying in capital goods, auto, power and oil & gas stocks. Finally after a subdued opening the markets closed the day on a positive note towards the end at almost day's highs with Sensex gaining 154 points or 0.88% higher to settle at 17617 levels while Nifty gained 42 points or 0.79% higher to settle at 5275 levels. The overall traded volumes were higher compared to the earlier by almost 12% and were at Rs 1252 bn. While delivery based volumes were also higher compared to the earlier day at 36.7% of the total traded turnover. Among the Fund activities FII's were net buyers to the tune of Rs 8.76 bn on 16th June 2010. While on 17th June 2010, FII's bought shares worth Rs. 4.63 bn in cash segment (provisional) while in the F&O segment they were net buyers to the tune of Rs 5.88 bn whereas Domestic Funds sold shares worth Rs. 3.64 bn (provisional).

n Technical Comments

Above 5250

Nifty broke out above 5250, after witnessing two days of consolidation and consistently maintained positive trend for the seventh consecutive day. On hourly, chart Nifty has bounced back after taking support at 20-HSMA and thus gave a bullish breakout from the Flag pattern. Hence we believe that our short term target of 5339 will be achieved in the coming future.

BSE Cap Good:

BSE Cap Good index outperformed the broader markets and had already retraced 61.80% of the recent fall from 14516 to 12998, thus now going forward this index has resistance at 14516 and trend reversal will take place only if in the coming days this index closed above 14516 levels.

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