Index Trends & Stocks in Action For 27th May 2013

Indian markets ended on positive side on Friday as Tata Steel surged after it March-quarter operating profit beat street estimates and other large cap stocks joined the party after taking beating in last trading session. Nifty ended at 5983 up by 16 points. The index looks oversold on extreme short term charts and a bounce back looks likely from support levels which are placed around 5930-5920 levels. 5940 level is the 38.2% retracement of the entire rally that started from 5477. On higher side nifty needs to cross hurdle of 6000-6040. A fresh breakout will come only if we sustain above 6040.

Footwear major, Bata India has said that the company will open 100 stores in India every year with an investment of Rs 100 crore. It will focus on bigger outlets and a wider product range. Company has around 1,250 stores across India after the addition of total 189 stores last year. It also has plans to have specialised footwear stores to sell its licensed brands. With the addition of the new outlets, the company will be able to increase its growth rate. The stock is likely to react positively on this news.

Oil India, a Navaratna PSU posted 28% rise in its sales to Rs 2376 crore for the March 2013 quarter. Net profit came in even better at Rs 764 crore showing a year on year growth of Rs 72%. Its EBITDA margins improved from 27% in Q4FY12 to 41% in the March 2013 quarter. For the full year, the company has reported a flat revenue growth while net profit has increased by just 4%. The strong Q4 numbers are aided by higher realizations as well as lesser subsidy. The company also has declared a dividend of Rs 7 per share. One may expect an upward movement in the shares of Oil India.

HSIL which reproted a good set of earnings post the market hours on Friday is likely to show  positive trades. The company has reported a total income of Rs 494 crore, with a growth of 28%. Its net profit stands at a handsome Rs 48 crore, showing even better growth of 47% on a year-on-year basis. The EBITDA margins have too shown a sequential improvement.

Lupin, has been on a strong growth trajectory for past few years and as per its MD Kamal Sharma, the company now aims to bring more branded drugs. The company is on its way to touch USD 2 billion revenues and is filing specialty niche products in the US market. Kamal Sharma has been a key person behind the transformation of Lupin and therefore his comments are most likely to be taken positively by the markets.