Nifty Outlook Global Markets - JRG Securities Limited

DECEMBER 11 2012
Nifty Outlook
tr The Indian markets are expected to open soft on Tuesday, tracking mixed
Asian markets. The NSE Nifty may move in a range-bound manner between
the first resistance at 5936 and around 5900 levels. The market
participants will closely watch the Parliament proceedings today, whether
the left parties will be able to prevent a discussion again on Banking
amendments bill .From midsession if the benchmark is able to sustain
above 5936, then it can target 5956.The overall mood will remain strong as
long as the index holds above the Critical support level of 5880 and a fall
below can trigger profit taking. The first support for the day is at 5862 and
lowers to this can slip towards the major support at 5846
Global Markets
US: The US indices ended the day in positive territory led by shares of tech
companies, but well off their highs for the session. Positive sentiment
generated by upbeat data from China was partly offset by political
uncertainty in Italy. However, uncertainty about the political situation in
Italy following news that Prime Minister intends to resign helped to limit
the upside for the markets. Investors have been reluctant to place big
positions before lawmakers reach a compromise on tax increases and
spending cuts set to kick in automatically on Jan. 1.
EUROPE: The major European markets ended with modest gains The
markets took a hit in early trade, following the weekend announcement
that Mario Monti will resign. Industrial production in France declined more
than expected in October. Greece extended the deadline for the buyback of
debt by one day, after initial offers fell short of target last week.
ASIA: The most of the markets in Asia are firm tracking US equities but
Japan stocks are trading down today
TOP EVENTS TODAY:
US ISM semi annual report on business& economic forecast; 2030 IST
US monthly wholesale trade for October; 2030 IST
Nifty R2 5956
Nifty R1 5936
NIFTY Critical Level 5880
Nifty S1 5862
Nifty S2 5846
FII Net Trade Cash Market (Cr) 698
FII Net Trade Stock Futures (Cr) -398
FII Net Trade Index Futures (Cr) 103
DII Net Trade Cash Market (Cr) -586
200 DMA 5350
7 DMA 5898
200 EMA 5426 7 EMA 5877
100 DMA 5519 NIFTY 14 DMA 5779
100 EMA 5558 14 EMA 5817
50 DMA 5709 21 EMA 5780
Singapore 3127.95 13.61 0.44%
Hangseng 22346.25 69.53 0.31%
Nikkei225 9506.29 -27.46 -0.29%
China 2075.09 -8.68 -0.42%
Malaysia 1640.65 8.5 0.52%
Thailand 1341.54 6.59 0.49%
FTSE100 5921.63 7.23 0.12%
DAX 7530.92 13.12 0.17%
CAC 3612.1 6.49 0.18%
Dow 13169.88 14.75 0.11%
NASDAQ 2986.96 8.92 0.30%
S&P500 1418.55 0.48 0.03%
Gold $ 1710
Brent Crude $ 107.30
Dollar Index $ 80.34
Indian Rupee 54.47

BSE Code 509148
52 Week range 38.75 - 7.75
Face Value(Rs) 10
200 DMA 19
Key Data
Equity Cap (Cr)
Market Cap (Cr) 79
21.84
Book Value 13.9
P/E 7.3
Key Ratios(FY12)
OPM(%) 5.31
NPM(%) 3.10
ROCE(%) 12.5
DEBT/EQUITY 3.25
Share Holding (%)
Promoter 53.84
Institutions 1.55
Public 44.61
(Rs cr) FY-12 FY-11
Income 340.82 340.92
Expenses 315.01 306.01
Oper Prof 25.81 34.91
PBT 4.4 10.98
Net Profit 9.39 5.07
Q2
comparison(Rs
cr)
Operating
Income
Sep
2012
Sep
2011 YOY
107.88 85.06 26.83
Total Expenses 94.37 79.82 18.23
Operating Profit 13.51 5.24 157.82
Other Income 0.32 0.06 433.33
PBDIT 13.83 5.30 160.94
PBT 9.01 1.26 615.08
Adjusted Net
Profit
7.13 1.26 465.87
Performance
1 Week : Rs 33.95 (7.66%)
1 Month : Rs 36.00 (1.53%)
1 Year : Rs 9.81 (272.58%)
Govind Rubber Limited Recommended price 36{Moderate exposure} Target:Rs 40.50-44.50
Govind Rubber Limited (GRL) engaged in auto tyres, tubes and high-end bicycle tyres
manufacturing. GRL is one of the largest manufacturer of Bicycle & Rickshaw Tyres -Tubes in
India, has grown manifold with an installed capacity to produce 36 Million Bicycle Tyres and
Tubes per annum in 4 modern manufacturing units at Ludhiana in Punjab. GRL produce the
widest Range of Tyres from 12 to 28 inch sizes with suitable tread patterns and constructions for
all type of bicycles including the new generation MTB, ATB and City Cross Bicycles etc. GRL has
now engaged itself in development of a range of Children Bicycles, BMX, Suspension Bikes, MTB
Bicycles and many more. The company has ventured into the bicycle industry with the brand
name - "TRAX" range of bicycles.GRL International Ltd, a subsidiary of Govind Rubber, has
launched Trax Monarch, an high-end bicycle, for Rs 12,000 and also introduced Trax 360 degree
BMX Freestyle Stunt Bike for teenagers and youngsters for Rs 6,500.GRL International has been
importing bicycles from China since 2010 and including the imported stuff, the company sells 28
models of bicycles.
The company has a sales network of 49 Branch Offices spread across the country for catering to
6400 worthy dealers .Globally, the company have presence in 40 Countries including European
Original Equipment Manufacturers. GRL is also a preferred supplier of Tyres - Tubes to all major
Domestic as well as European OEMs . GRL's wholly-owned subsidiary in the Netherlands, GRL
BV, has also set up an office and warehousing. GRL will market its full range of tyres and tubes in
Europe through this network. GRL has entered into a joint venture for manufacturing highly
specialized rubber by setting up a plant at Busan, South Korea.The company plans to set up a
new tyre and bicycle manufacturing facility at Dahej in Gujarat at an investment of Rs 750 crore.
GRL is preferred Supplier to renowned Indian bicycle manufacturing Companies –T I ,Avon, Hero,
Atlas, Milton Cycles.GRL is a part of– the Siyaram Poddar group and the much awaited
settlement of assets between family members have begun which is likely to be completed in the
second quarter of next year.
The company reported a gross turnover of Rs 355 crore in FY 12. Net profit rose 117 per cent at
Rs 11.09 crore in FY 12 as against Rs 5.08 crore in the previous year .The company expects
better profitability in the quarters to come due to softening of rubber prices.
Risk factors: For the last two years, prices of rubber have shown undue turbulence. The rubber price upside movement can affect the
profitability of the company. The promoters have pledged 76.5% of holding (which works out to 41% of total equity).The debt equity ratio of
3.25 and interest coverage ratio of 1.14 in Mar 2012 indicates that if the income from sales come down, the company’s ability to meet
interest expenses may be questionable. The basic fundamental ratios are not very strong. There is high competition in the segment from
organized and unorganized segment.
In the last couple of years the company has been struggling in its performance. If we look in to the Q1 and Q2 of this FY it seems that the
company seems to be a turnaround. GRL has got a strong foothold now in the overseas market and getting very good realizations for their
products. The debt amount can be brought down in the coming quarters. The stock is showing a technical break out in the charts. One can
take a moderate exposure to GRL at CMP and on a decline to 33 for a short term target of 40.50 and a medium term target of 44.50.But
considering the risk factors mentioned above, do not hold the stock below Rs 29.75.

PSU banking stocks will be in focus on hopes that legislation on
banking sector reforms would be passed during the current session
of Parliament. The Parliament is expected to amend the banking laws
that includes raising the limit on shareholders' voting rights in public
and private sector banks
BHARAT ELECTRONICS: Has signed a pact with Israel Aerospace
Industries for cooperation on future long range surface to air missile
ship-defence systems.
NMDC: Merchant banks have suggested a floor price of 145-150
rupees for the offer for sale of shares in the state-owned company.
Punj Lloyd :it has bagged a contract worth Rs 528 crore in Singapore
to construct a new prison headquarter.
Reliance Industries Ltd :DGH has rejected RIL's proposal to do a
single test to confirm three natural gas discoveries in the flagging KG-
D6 block, saying separate tests are required as the three finds are
distant and unconnected
RICO AUTO INDUSTRIES: One section of the company's Ferrous
Foundry (Unit-I) located at Gurgaon Plant has been damaged in a fire
on Dec 7.
WIPRO: Cargill India, the Indian arm of US-based food company
Cargill Inc,has acquired the company's Sunflower Vanaspati brand of
vegetable Oil.
BankNifty DEC Fut:12462
BankNifty DEC Fut:12462: The market participants will closely
watch the Parliament proceedings today, whether the left parties
will be able to prevent a discussion again on Banking amendments
bill.We can expect huge volatility during the day. The Critical level
on the upside is at 12505 and if it sustain above this, the index can
target 12548 followed by 12612,The major resistance on the upside
is at 12675.The first minor support for the day is at 12415 and the
sentiment can turn bearish below 12392 for which the lower
support comes at 12333.The major support is at 12284.

Scrip R2 R1 PP S1 S2 20SMA
200
SMA
50
SMA
100
SMA
ACC 1442 1428 1415 1398 1385 1402 1311 1422 1381
Ambuja Cement 209 208 207 205 205 205 179 208 198
Axis Bank 1343 1333 1324 1312 1302 1275 1103 1216 1130
Bajaj Auto 2007 1984 1955 1937 1916 1875 1672 1825 1754
BPCL 367 362 356 351 347 336 351 342 346
Bharati Airtel 328 323 319 312 308 313 297 287 278
BHEL 247 245 244 241 240 231 233 238 230
Cairn India 335 331 328 321 318 331 333 332 334
Cipla 427 422 416 411 407 396 341 381 370
Coal India 369 366 364 359 357 358 347 356 357
DLF 228 225 222 218 216 208 203 211 211
Dr.Reddy's 1956 1920 1876 1847 1812 1781 1690 1744 1705
GAIL 361 357 355 350 348 348 354 361 363
Grasim 3281 3241 3211 3161 3122 3252 2845 3330 3156
HCL Tech 635 628 620 613 607 629 534 609 579
HDFC Bank 700 696 693 689 686 672 577 647 623
Hero Honda 1864 1853 1839 1830 1821 1829 1940 1845 1878
Hindustan
Unilever
540 538 534 531 529 531 474 546 526
Hindalco 126 124 123 121 120 113 119 115 115
HDFC 902 884 859 847 830 803 706 778 751
ICICI Bank 1144 1133 1125 1109 1099 1066 938 1065 1014
IDFC 178 176 173 169 167 165 140 160 149
Infosys Tech 2359 2336 2318 2290 2269 2379 2458 2403 2396
ITC 307 304 301 299 297 290 255 287 274
JP Associates 107 106 104 102 102 94 78 92 83
Jindal Steel &
Power
419 415 409 405 401 385 439 396 393
Kotak MahBank 688 681 671 665 659 641 586 632 606
L&T 1687 1676 1668 1652 1642 1620 1407 1636 1530
Lupin 617 611 604 597 592 579 557 575 580
M&M 948 938 931 919 911 930 754 893 824
Maruti Udyog 1527 1510 1500 1476 1460 1483 1272 1431 1309
NTPC 161 159 157 154 153 163 162 166 166
ONGC 272 269 267 263 261 257 271 268 275
Power Grid 120 119 119 117 117 120 114 119 119
PNB 867 854 834 825 812 766 799 782 758
Ranbaxy 515 511 508 504 501 513 503 528 526
Rel Ind 845 837 829 819 812 793 763 806 797
Reliance Infra 528 523 517 513 509 475 516 494 494
SBIN 2346 2333 2317 2306 2295 2160 2109 2197 2088
Sesagoa 197 192 187 183 180 175 183 173 176
Seimens 689 683 679 670 665 672 709 689 682
Sun Pharma 720 712 704 696 689 697 635 699 682
TCS 1273 1255 1243 1218 1202 1294 1253 1303 1301
Tata Motors 288 284 281 275 272 271 261 269 255
Tata Power 112 111 109 106 106 104 100 104 101
Tata Steel 407 403 399 396 394 379 414 395 393
Ultratech 1972 1960 1950 1935 1924 1936 1653 1988 1852

Prepared By:
Binu Joseph
Product Team
Equity Research
Disclaimer:
This document has been prepared by JRG Securities Ltd.
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trading.
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to its accuracy, completeness or correctness.
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