WINNING STROKES: THINK DIFFERENT:

Satyam Computer Services Ltd is up more than 18% in the morning trade after L & T hikes the stake in the company. The average acquisition price of the shares of Satyam Computer Services Ltd by L & T is around Rs.80, and hence we might see further upmove in the shares of the company going forward.

Rolta Ltd moved up by more than 9% in the opening trade after the company came out with better than expected results.

Unitech Ltd has now been recommended by a number of analysts from Gujarat and Bombay for a price target of Rs.42--Rs.45.

HANUNG TOYS AND TEXTILES LTD RECOMMENDED IN THE MONDAY REPORT (26TH JANUARY, 2009), AS PICK OF THE WEEK, IS UP MORE THAN 6% IN THE OPERNING TRADE.

The management of Selan Exploration Technologies Ltd has started buy back of the shares of the company from the open market at a price not more than Rs.230 per shares from 23rd January, 2009. The good point is that, the Crude Oil as expected has started to move up on Nymex--this will definitely push up the shares of Selan Exploration Technologies Ltd, Reliance Industries Ltd, Cairn Energy Ltd, etc, in the days to come.

My recommended Essar Shipping, Indiabulls Securities Ltd, Kolte Patil Developers Ltd, Indiabulls Securities Ltd, etc, are also doing well in the early trade.

Today, my recommended Infosys Technologies Ltd is up more than 3%, silencing many of my critics.

The markets are expected to see sharp rallies going forward due to positive erffect coming from the Obamas bail out package.

If RBI cut Repo or Reverse Repo rate, today, then we could see a rally in the Real Estate/Construction counters. RBI could go for a cut in the Reverse Repo rate by at least 25 basis points to push up the domestic demand.

L&T increases stake in Satyam from 4% to 12%

Larsen & Toubro has increased its stake in Satyam Computer Services from 4% to 12%. Bulk of the buying was done by the infrastructure giant on Friday. The Satyam stock witnessed huge volumes during the day. The company has not yet commented on the move.

As per records on the NSE website, L&T bought 3.9 crore Satyam shares at Rs 34.52 per share. Sources said L&T increased the stake to protect the company’s interest in Satyam.

Earlier, L&T had picked up a 3.95% stake in Satyam, when the IT company was already facing rough weathers for its attempt to acquire Maytas Infra and Maytas Properties. The full-blown Rs 7,000-crore corporate scandal, however, had not broken then.

L&T’s flip flops

Even as the infrastructure giant took a bold move on Friday to up its stake, in the past few weeks, the signal it was sending out with regard to Satyam was conflicting.

Soon after former Satyam chairman B Ramalinga Raju confessed his guilt in a shocking letter, AM Naik, CMD of the company, said the investment was merely financial in nature. He also went on record to say the company wouldn’t sell any of Satyam’s share but also had no intention to buy any further sake.

YM Deosthalee, L&T’s CFO, had echoed a similar sentiment after the scam broke out. He had said: “After this recent development, we won’t pick up anymore stake and we will see how the developments takes place going forward and then take a decision. The key thing is, if there is a possibility I am sure the board is going to work on that to salvage this company… we will take a decision and we will decide what to do hereafter once the picture becomes very clear.”

A week later then, after the new Satyam board was announced by the government, Naik said his investment was strategic and he was watching the developments at Satyam closely. In the past week, Naik lobbied with the corridors of power in Delhi fuelling speculation that L&T was indeed keen on Satyam. Tuesday last week, he again sent a confusing signal saying he was more concerned about his existing stake rather than hiking it — "Our 4% is stuck. I have to worry about how to save my 4%. How can I buy? [The] 4% stake itself will cost me Rs 475 crore," he said.

LIC supports

CNBC-TV18 has learnt from sources that insurance giant Life Insurance Corporate (LIC) is in full support of L&T's move to increase stake in Satyam. LIC has an 18% stake in L&T and a 4.24% stake in Satyam. It also has board members in both companies. Sources say LIC has full faith in the management of L&T and believes that L&T is best suited to handle Satyam and revive the company.

When news of L&T picking up stake in Satyam broke last time, the market reacted negatively and L&T stock was hammered down heavily. It remains to be seen how the market will react this time around when it opens on Tuesday.