Nifty Technical Analysis - Judgment Day
Intraday Tips
Tata Steel (Rs. 585)
Buy only on a move above 585 with a stop loss
below 572 for an intra-day target of 605.
Nifty Technical Analysis - Judgment Day
The Nifty gained 14 points over the day to close at 4867. The
Indian markets underperformed the rest of Asia yesterday as
they could not build-up on the gap-up start. After the initial rally
the index hit the major resistance of 4930 (earlier support) and
thereafter traded with a negative bias with a lot of volatility. The
upper end of our mentioned support zone of 16000-16200 was
tested yesterday and the same is likely to hold in the near term.
The oscillators are now deeply oversold demanding a “quality”
pullback. The pattern formed is mildly positive while a new
bottoming pattern is developing on the hourly indicators. The setup
on the Elliot wave study and DM indicator continues to be our
biggest concern as negative triggers remain. However, we
believe that a retracement to the recent fall is likely and during
that upmove we would get to understand the positional trend
better. Most world markets are close to their respective supports
(Dow, FTSE, Bovespa, Hang Seng etc) and hence the downside
looks capped. Overall, the policy today should lead to volatility
but the index is likely to sustain above the 16000-16200 zone.
Re: Nifty Technical Analysis - Judgment Day
DLF
SELL
Price: Rs324 Target: Rs305 (Mar’11)
Improvement in quality of revenue booked; assets sale plan partially deferred
* Improvement in quality of revenue booked: DLF’s 3QFY10 sales, EBITDA grew
48%, 9% YoY while net profit declined 31% to Rs20.2bn, Rs8.4bn and Rs4.6bn
respectively. Profit growth impacted by EBITDA margin compression to 42% in
3QFY10 vs 56% last year (2Q: 52%) as lower-priced projects started contributing
to revenue, and higher interest and tax rate. Quality of revenue booked,
however, appears to have improved vs 1H, where substantial revenue booking
(Capital Greens) was enabled due to high-land cost component of the project.
* Operations update: (a) Fresh construction of c.3mn sq ft commenced (homes
and commercial complexes in Gurgaon, New Gurgaon) in 3Q bringing the total
area under construction to c.51mn sq ft, (b) c.3mn sq ft of fresh home sales
booked during the quarter (mix of luxury and mid-income) with average
realisation of Rs5,832 per sq ft, (c) Handed over 0.7mn sq ft of homes taking
the 9MFY10 total to 1.6mn sq ft, (d) 15mn sq ft new launch plans for FY10 kept
intact (9M launch: 7mn sq ft), implying that planned launch for 4Q stands at
c.8mn sq ft. Launch road-map as per management comprises 3-4mn sq ft of city
centre projects (Phase 3 of Capital Greens in Delhi, Chennai, Kochi) and 4mn of
mid-income projects (Chandigarh, Hyderabad, Goa, Bangalore). These plans, in
our view, appear to be on the aggressive side, (e) Value-housing launch (earlier
target: 3-4mn sq ft) likely to get deferred to 1QFY11E, (f) Fresh lease volume
subdued but a few transactions have taken place and enquiries have picked up.
* Net debt increased c.Rs23bn QoQ: Net debt surprisingly increased by Rs23bn
sequentially. DLF, however, remains confident of becoming net debt zero over
the medium-term vide improved operational cash flows, inflows from non-core
asset sale. Existing DAL receivables remain largely unchanged (Rs28-30bn).
* Non-core assets sale plan partially deferred: Against the total non-core asset
sale plan of Rs55bn, DLF achieved Rs12.3bn in 9MFY10 (3Q: Rs1.7bn).
Management hinted at visibility of Rs12bn monetization in 4Q (licence fee
refund, projects exit in Western India, land-parcels sale in Gurgaon) and has
deferred the balance Rs30bn to FY11E, citing approval delays and expectation of
better realization given an improving economic environment.
* DLF-DAL integration: Closure expected by end-FY10. Management pegs
consolidated rental income at c.Rs15bn p.a. post integration.
