WINNING STROKES:

The market looks attractive from all angles: Mindless selling in the Indian Bourses blinds the bulls:

The Sensex is down now by 217.45 points:

Buy Information Technologies counters because any cut in the IT spending in the US will act as positive trigger for the Indian IT companies, in the form of outsourcing of the work. It is to be understood that Indian IT companies specially the large ones derive a majority of their revenues from the overseas (Read North America). So the US companies in order to save on the cost on their expenditure will obviously outsource their work to the Indian companies at a fraction of the cost which is done in the US. Hence while any cut in the IT spending will act as a negative trigger to the US based companies but it will be a positive trigger for the Indian IT companies. Just ignore the Cheap story of dollar-pound given by one brokerage house. It seems some brokerage houses are running out of ideas and have started to send twisted stories with zero value.

Then, in case of IT companies there is the Rupee Depreciation trigger which will help the companies who derivative majority of their revenues from the Overseas Contracts. Hence I am bullish on IT Giants like Infosys Technologies Ltd, Wipro Ltd, TCS Ltd, and other smaller companies like Ram Informatics Ltd, ASM Technologies Ltd (mini-Infosys Technologies Ltd), Rolta Ltd etc. The US markets are going great as compared to their counterparts in India.

Reliance Ltd is going down today due to the Hocus-Pocus theory that GRM will go down as the crude falls. But what about the Graphical-take on the scrip, as the scrip has been getting sold and sold by the punters in the Bourses. It is to be understood that Reliance Industries Ltd is not only a Crude Oil Producer but is also a downstream company and hence any take on it will have to be done by using two coloured glasses. Reliance Industries Ltd is a great company (professionally managed) and the Gas from the KG Basin is expected to flow very soon.

Now coming to the Rupee Depreciation angle once again and looking from another side, let us take a look at KEC International Ltd. We all know that KEC International Ltd gets more than 60% of their revenues from the overseas and hence we could see some movement of the stock in the days to come. Besides the Power Stocks will buzz along with the Infrastructure stocks as the government is committed to the Infrastructure development of India.

Besides, it is now obvious that the Inflation has peaked out and hence I would not be surprised if the RBI goes soft interest rate structure in the days to come. I am bullish on Power, Infrastructure, Real Estate (Interest sensative), IT, and to some extent on the downstream oil companies or the companies which would benefit from the fall in the crude oil prices, like Bhagyanagar India Ltd.

Expansion buzz does not benefit GMR Infrastructure GMR Infrastructure slipped 0.36% to Rs 97.40 at 13:26 IST on BSE, on reports the company’s subsidiary GMR Energy would invest Rs 10,000 crore in setting up a 2000–3000 megawatt nuclear power plant in the country in next 5-7 years.

Meanwhile, the BSE Sensex was down 134.12 points, or 0.94%, to 14,190.17. On BSE, 5.52 lakh shares were traded in the counter. The stock had an average daily volume of 27.12 lakh shares in the past one quarter. The stock hit a high of Rs 99.75 and a low of Rs 96.10 so far during the day. The stock has a 52-week high of Rs 268.70 on 6 December 2007 and a 52-week low of Rs 76.50 on 1 July 2008. The mid-cap stock had underperformed the market over the past one month till 11 September 2008, declining 8.26% as compared to the Sensex’s decline of 7.61%. It had also underperformed the market in the past one quarter, declining 10.03% as compared to the Sensex’s decline of 5.67%. The company’s current equity is Rs 364.13. Face value per share is Rs 2. The current price of Rs 97.40 discounts Q1 June 2008 annualized EPS of Rs 0.92, by a PE multiple of 105.87. GMR Energy currently has 800-megawatt of thermal power generating capacity.

In August 2008, GMR Infrastructure signed a memorandum of understanding with Deccan Cargo & Express Logistics for developing modern express cargo hubs in Hyderabad and Delhi. On 25 June 2008, the company acquired 50% stake in Netherlands-based power generation company InterGen N.V. for $1.1 billion. On 6 June 2008, GMR Infrstructure’s 100% subsidiary GMR Energy entered into a power purchase agreement with Karnataka Power Transmission Corporation for sale of power for a period of 7 years.

GMR Infrastructure’s net profit surged 5638.4% to Rs 41.89 crore on 684.2% increase in net sales to Rs 55.44 crore in Q1 June 2008 over Q1 June 2007. GMR Infrastructure generates, transmits and distributes electrical power. It also develops, maintains and operates airports and roads.