Online Trading On NSE - BSE

Which stock should you buy?

2011-12-28T03:50:00.001-08:00

Which stock should you buy?

In the equity market, stock tips are aplenty. Everyone believes themselves to be an expert just because they have a Trading and Demat account and have made some investment in the equity market! Therefore it is very important to have some basic knowledge about share market before you start investing in stocks according to share tips.

There are more than 6000 shares listed in India. But, broadly they can be categorized into four types:

Growth stocks: They are companies which grow faster than its industry or the market. Growth shares do not believe in paying dividends but reinvest profits for expansion and growth. They are marked by high P/E ratio and are always in demand due to potential price appreciation.

Value stocks: They are companies which have good fundamentals but are underpriced as they are temporarily out of favour. Value shares are great picks as they have a greater potential of growth. They have a low P/E ratio and low PBV ratio.

Income stocks: They are companies which regularly pay high dividends. These shares are often less volatile and may limited growth options. Profit from these stocks is in the form of regular dividends declared by the company. They are marked with higher dividend paying ratio.

Penny stocks: They are stocks with low price and low market capitalization. These shares are easy to manipulate because of low volumes. Investing in penny shares is extremely risky as these are extremely speculative in nature, illiquid and marked with volatile movements.

Share Market Update on Central Bank of India for 1QFY2012

2011-10-16T22:45:00.000-07:00

Share Market Update on Central Bank of India for 1QFY2012 with a Neutral recommendation.

For 1QFY2012, Central Bank ofIndia posted a 16.6% yoy decline in its net profit primarily due to higherprovisions. However, results were above our estimates on lower-than-estimatedoperating expenses. A sharp sequential dip in NIM and high slippages despitethe pending switchover to system-based NPA platform were the key highlights ofthe results. We maintain our Neutral view on the stock.

NIMdips on lower yield on investments; slippages remain elevated: The bank’s business momentumslowed during the usually lean quarter. Advances declined by 2.8% qoq (up 17.2%yoy) and deposits increased by 3.6% qoq (up 20.3% yoy). CASA deposits growthmoderated to 14.7% yoy, resulting in a 259bp qoq decline in CASA ratio to32.6%. Bulk deposits and CDs constituted a relatively higher ~33% of totaldeposits. The reduction in CASA ratio and the higher interest rate environmentresulted in a sharp 72bp qoq rise in cost of deposits to 6.8%. The yield onadvances went up by 77bp qoq to 11.4%. Reported NIM declined sharply by 48bpqoq to 3.0% primarily due to fall in yield on investments (fall of 73bp qoq).The sequential decline in NIM was exacerbated by the benefit of interest onincome tax refund of ~`130cr in 4QFY2011. Overall asset quality of the bankdeteriorated during the quarter, with annualised slippage ratio remainingelevated at 1.8% (1.1% in 1QFY2011) and net NPAs rising by 27.7% qoq. Slippagesremained elevated at 1.8% as compared to 1.1% in 1QFY2011. Provision coverageratio including technical write-offs declined to 65.2% from 67.6% in 4QFY2011.The bank is yet to switchover to the system-based NPA recognition platform,which could result in a substantial rise in slippages given the bank’s ruralbranches (37%) and a relatively large agri (16%) portfolio.

Outlook and valuation: At the CMP, the stock is trading at cheap valuations of 0.8xFY2013E ABV compared to its trading range of 0.5–1.5x with a median of 1.1xsince listing in 2007. However, due to near-term asset-quality concerns becauseof system-based NPA recognition, we remain Neutral on the stock.

Share Market Update on Bhushan Steel for 1QFY2012

2011-10-10T23:06:00.001-07:00

Share Market Update on Bhushan Steel for 1QFY2012 with a Neutral recommendation.

Strong top-line growth: During 1QFY2012, Bhushan Steel’s(BSL) net sales grew by 62.6% yoy to `2,232cr mainly on account of highervolumes of flat products. Flat products sales volumes grew by 80.2% yoy to388,790 tonnes, while long product sales volumes grew by 7.6% yoy to 100,664tonnes in 1QFY2012. Long product average realisation increased by 18.2% yoy to `42,915/tonne,while flat product average realisation decreased by 3.2% yoy to `49,294/tonne.

Depreciation and interest costs mute net profit growth: During 1QFY2012, EBITDAincreased by 62.1% yoy to `661cr, representing EBITDA margin of 29.6%, comparedto 29.7% in 1QFY2011. EBITDA/tonne increased to `13,505 (US$300) in 1QFY2012,compared to `13,186 (US$293) in 1QFY2011. Depreciation expense increased by182.4% yoy to `151cr due to increased capacity, while interest expenseincreased by 173.8% yoy to `216cr because of higher debt. A sharp increase indepreciation and interest costs resulted in net profit growth of only 2.0% yoy(despite 62.1% growth in EBITDA) to `210cr.

Outlook and valuation: At the CMP, the stock is trading at 8.1x FY2012E and 7.1x FY2013EEV/EBITDA, a significant premium over its peers. Although we expect salesvolume growth of 24.8% over FY2011–15E, we believe it is too early to play thevolume growth story of BSL as strong volume growth is expected only postFY2013. Further, although BSL uses a combination of BF-EAF technology toproduce steel, rising prices of iron ore and coal will affect its margins.Moreover, BSL’s debt-equity ratio remains high. Further, we believe theincrease in the stock price in the past three months fairly discounts thegrowth prospects of BSL. Hence, wemaintain our Neutral view on the stock.

Share Market Update on ACC for 2QCY2011

2011-09-28T15:00:00.000-07:00

ShareMarket Update on ACC for 2QCY2011 with a Neutral recommendation.

For 2QCY2011, ACC posted a 6.2%decline in its bottom line; however, it was ahead of our estimates. Thebottom-line decline was despite higher realisations, as the company facedmargin pressure on account of higher power and fuel costs and freight costs.During the quarter, ACC faced the full impact of the domestic coal price hikecarried out by Coal India. Realisation was higher as cement prices, whichtouched the peak in March 2011 remained strong until May.
At current levels, we maintain our Neutral view on the stock.

OPM at 24.1%, down 527bp yoy: ACC posted an 18.9% yoygrowth in net sales to `2,403cr on account of growth in dispatches and betterrealisation.
The company’s dispatches for the quarter stood at 5.9mn tonnes, up 12.5% yoy,on account of higher capacity (on a yoy basis) operational at Wadi and Chandaduring the quarter. However, on a sequential basis, dispatches declined by3.7%, indicating the lukewarm demand scenario. Realisation also improved by5.7% yoy and 4.1% qoq to `4,052/tonne.

Outlook and valuation: All-India cement dispatches, which witnessed a marginal decline in1QFY2012, are expected to pick-up post the monsoons. Demand growth is expectedto be driven by infrastructure activities with FY2012 being the last year ofthe Eleventh Plan. However, the ongoing SFIO investigation on cement pricingmight soften the extent of price recovery. We expect ACC to register a 16.0%CAGR in its top line over CY2010–12, aided by capacity addition. However, thebottom line is expected to grow at a lower CAGR of 4.6% over the mentionedperiod due to higher operating costs. At current levels, the stock is tradingat EV/EBITDA of 6.8x and EV/tonne of US$110, based on CY2012 estimates. We maintain our Neutral view on the stock, aswe believe it is fairly priced.

Share Market Result Update on Sarda Energy and Minerals for 1QFY2012

2011-09-22T02:08:00.000-07:00

ShareMarket Result Update on Sarda Energy and Minerals for 1QFY2012 with a Buy recommendation and a Target Price of `259 (12 months).

For 1QFY2012, Sarda Energy and Minerals (SEML) reported net sales growth of 17.2% yoy to `254cr. However, adjusted net profit declined by 48.3% yoy to `14cr due to higher costs. We maintain our Buy rating on the stock.

Ferro alloy segment drags SEML’s 1QFY2012 profitability: During 1QFY2012, SEML’s net sales grew by 17.2% yoy to `254cr due to higher realisation in the steel segment coupled with higher sales volume of billets, ingots and power. Blended steel realisation grew by 96.1% yoy to `33,036/tonne on account of improved product mix. EBITDA margin declined substantially by 857bp yoy to 14.4% mainly on account of higher raw-material costs. Thus, EBITDA declined by 26.6% yoy to `37cr. EBIT of the ferro alloys segment declined by 73.0% yoy to `7cr on account of lower realisation coupled with higher prices of key inputs. Interest costs for the quarter increased by 112.6% yoy to `6cr, owing to which adjusted net profit declined by 48.3% yoy to `14cr.

Outlook and valuation: We continue to believe that SEML is well poised to benefit from a) backward integration into coal and iron ore, b) commercial production of pellets and c) increased power and ferro alloy production. Moreover, firm sponge iron and billet prices should lead to higher capacity utilisation in FY2012 and FY2013, thereby leading to higher sales volumes. A key catalyst for the stock would be restarting of its iron ore operations at Rajnandgaon. We recommend Buy with a target price of `259, valuing the stock at 5.5x FY2013E EV/EBITDA.

Share Market Update on IDBI Bank for 1QFY2012

2011-09-19T23:33:00.000-07:00

Share Market Update on IDBI Bank for 1QFY2012 with a Neutral recommendation.

For 1QFY2012, IDBI Bank reported healthy 33.6% yoy growth in its net profit to `335cr, which was in-line with our estimates but lower than consensus forecasts. Sequentially stable NIM, lower fee income and higher slippages despite the already-functioning system-based NPA recognition platform were the key highlights of the result. We maintain our Neutral view on the stock.

NIM surprises positively while slippages rise: For 1QFY2012, the bank’s advances declined by 1.3% qoq (up 14.5% yoy). Deposits also declined by 2.3% qoq (up 12.1% yoy). Advances growth on a yoy basis was driven by strong 49.8% growth in retail credit, which has increased its share to 19.2% from 14.7% in 1QFY2011. CASA deposits growth continued to be healthy at 49.2% yoy, leading to a 429bp yoy improvement in CASA ratio to 17.3%. The bank was able to largely sustain (down marginally by 3bp qoq) its reported NIM at 2.1%, despite the 54bp qoq rise in cost of funds. The annualised gross slippage ratio increased to 1.6% as compared to 0.5% in 4QFY2011. Slippages were on the higher side considering the fact that the bank had already switched over to system-based NPA recognition platform. Profitability in 1QFY2012 was aided by the write-back of provisions on SRs of `92cr. However, profits were lower due to the higher effective tax rate at 44.6% (27.6% in FY2011) due to non-tax deductibility of certain provisioning expenses. Profits for the quarter included ~`18cr from the two subsidiaries, which had merged with the bank in 4QFY2011. Branch expansion was healthy with addition of 67 branches, taking the network to 883.

Outlook and valuation: We believe the bank is set to improve its credit and deposit mix going forward on the back of its strong branch expansion plans. The bank has been amongst the fastest-growing in terms of CASA deposits over the past few years even when compared to private banks and now has a market share of 2.1%. At the CMP, the stock is trading at 1.1x FY2013E P/ABV adjusting for SASF (0.8x without adjusting). However, in our view, there are near-term cyclical headwinds to margins and asset quality. Hence, we maintain our Neutral stance on the stock

Share Market Update on Federal Bank for 1QFY2012

2011-09-08T01:27:00.000-07:00

Share Market Update on Federal Bank for 1QFY2012 with a Buy recommendation and a Target Price of `478 (12 months)

For 1QFY2012, Federal Bank recorded net profit growth of 10.8% yoy (down 14.9% qoq), below our estimates, mostly due to higher provisioning expenses than built in by us. Management has attributed the rise in NPAs (slippages at `323cr) during the quarter to one-off employee-related issues, which led to a spurt in slippages in the retail book. Fee income according to management also suffered due to this one-off event. We recommend a Buy rating on the stock.

CASA ratio improves; however, asset-quality woes continue: For 1QFY2011, advances grew by 0.1% qoq to `31,972cr, while deposits declined by 0.2% qoq to `42,936cr. Although total deposits declined during the quarter, the bank was able to sequentially grow its savings and current account deposits by 3.5% and 4.2%, respectively, leading to a 96bp increase in CASA ratio to 27.2%. Including NRE deposits, total low-cost deposits constituted 32.8% of total deposits. Cost of deposits increased by 103bp qoq, leading to a 13bp qoq decline in reported NIM to 3.9%. Slippages for 1QFY2012 stood at `343cr (annualised 4.0%), driven by higher slippages on the retail (~`140cr) and SME (~`140cr) front. Management has attributed the increase in slippages on the retail side to one-off employee-related issues that cropped up during the quarter, leading to slackness on the recovery front. During 1QFY2012, non-interest income declined by 17.2% qoq (up 6.4% yoy), mainly due to sluggishness in fee-related initiatives and recoveries on the retail side (recoveries were down by 42.6% qoq), as per management.

Outlook and valuation: Post the recent correction, the stock is trading at 1.1x FY2013E ABV. While lower leverage is leading to low RoE at present, the bank’s core RoA is relatively high and should improve further as asset-quality pressures start moderating. We recommend Buy on the stock with a target price of `478.

Stock Market Update on Crompton Greaves for 1QFY2012

2011-08-02T00:00:00.000-07:00

Stock Market Update on Crompton Greaves for 1QFY2012 with a Neutral recommendation.

Crompton Greaves (CG) reported a dismal performance for 1QFY2012; well below our expectations, with a disappointing performance on the profitability front. On a consolidated basis, the company posted modest growth of 5.9% yoy to `2,438cr (`2,302cr), which was broadly in-line with our estimate of `2,486cr. However, a sharp increase in raw-material costs affected the company’s margins considerably, denting CG’s overall profitability during the quarter. We recommend Neutral on the stock

Negative surprise on margins; Unimpressive show by the power segment: Led by high raw-material costs, EBITDA margin for the quarter witnessed a steep decline of 545bp yoy to 7.5%, which was well below our estimate of 12.5%. The margin erosion can mainly be attributed to the power systems segment, which contracted sharply by around 800bp yoy to 2.6%. Weak performance delivered through overseas subsidiaries (flat growth and negative OPM) largely contributed to the dull operating performance on a consolidated front. Consequently, EBITDA declined by 38.8% yoy to `182cr (`297cr). Consequently, PAT also fell sharply by 58.4% yoy to `79cr (`191cr).

Outlook and valuation: The T&D equipment segment is witnessing challenging times, characterised by heightened competition, pricing pressures and delayed tendering from PGCIL. Industry commentary suggests that ordering is likely to pick up post 1HFY2012 on the back of increased activity at PGCIL’s, which should stabilise CG’s power segment. However, a tough macro environment and competitive pressures in the overseas T&D markets (which contribute substantially to CG’s revenue) would weigh heavily in the near-to-medium term. Though we believe CG to be an underperformer, the stock has corrected significantly and further downside seems limited. Hence, we recommend Neutral.

Open Trading Account Today!

2010-02-08T05:56:00.001-08:00

Angel Broking gives you an opportunity to avail of the following services by opening an account i.e services such as online trading software and training, portfolio management software daily-weekly-monthly research reports. To further lead you step by step we offer you services like investment advice, trading tips, stock market on mobile, Sms service, 24*7 back offices and live chat support.

Open Trading A/C Today!

NSE-BSE Live

2009-11-04T03:20:00.001-08:00

Choice of all traders

2008-10-24T03:20:00.000-07:00

With two decades of experience in the broking industry, Angel has placed itself among the top three broking houses in India. The urge to get into the depths of the stock market has always been one of the chief objectives of Angel. This has lead Angel to build an extensive in-house research team. Today Angel is the only broking house in India that successfully maintains a vast research wing that publishes daily as well as extensive research reports online.

Guided by the objective of customer satisfaction, Angel has always offered the best customer care services. Considering the needs and situations of every single client, it has created four different trading platforms. Whether an investor or an intra day trader, everyone gets a platform of their own choice to carry on their business at ease. The online trading platforms have been made keeping in mind the different web browser settings of the clients. ‘Angel Investor’ and ‘Angel Trade’ has features suited for the investors and the other two products i.e., ‘Angel Diet’ and ‘Angel Everywhere’ are exclusively for the traders. The streaming quotes in the online trading platforms gives the all the users the experience of real time trading.

The clientele of Angel is huge in size and is growing each day. The massive pool of client it holds contains people having different levels of web awareness. Angel has always considered this issue and is the driving force behind the e-broking training center. The executives of Angel provide comprehensive training sessions to the clients over phone to make them reap more returns.