13th August 2010 Intraday Calls

13th August 2010 Intraday Recommendation 08:53
Note : Follow Buy Calls in Positive Market Bias and v.v.

Buy Axisbank sl 1308 T 1336

Buy Gail sl 444 T 453
Buy Biocon sl 326 T 352 P
Buy Cumminsind sl 652 T 680 P
Buy Drreddy sl 1337 T 1368
Buy Glenmark Abv 272 sl 268 T 278
Buy MRPL sl 78.5 T 81
Buy Patni sl 471 T 490 P

Sell Aban sl 840 T 819
Sell TCS sl 860 T 844
Sell Adanient Bel 598 sl 607 T 588/577
Sell McDowell-n sl 1418 T 1401
Sell Zeel sl 303 T 295

Tata Steel :(Results Update)
India’s biggest producer, turned to first-quarter group profit after demand from automobile and engineering companies gained.

Net income, including that of U.K. unit Corus, was 18.3 billion rupees ($391 million) in the three months ended June 30, compared with a 22.1 billion rupee loss a year earlier, the Mumbai-based company said today in a statement. The median profit estimate of 10 analysts in a Bloomberg survey was 19.1 billion rupees. Sales rose 16 percent to 270.1 billion rupees.
Rising income levels lifted India’s car sales by more than 30 percent each month in the April-to-June period. The price of hot-rolled coils in India rose 29 percent in the quarter, Bloomberg data showed, while average three-month Mediterranean steel futures on the London Metal Exchange rose 42 percent.
Rising Prices
Tata Steel Europe’s average selling price in the quarter was $1,000 a ton, the highest in almost two years, Chief Executive Officer Kirby Adams said today at a media conference in Mumbai. Steel consumption in Europe increased 33 percent in the quarter, he said.
Corus, which provides more than two-thirds of Tata Steel’s output, increased production after orders picked up from automobile and engineering companies in Europe. While automotive demand was better than expected, demand from construction companies in Europe remained weak, said Karl-Ulrich Kohler, who will replace Adams on Oct. 1.
Capacity use in the current quarter in Europe is 80 percent to 90 percent and may continue at 90 percent in the third quarter, he said, without giving first-quarter figures.
Raw material contract prices have continued to rise in the current quarter and while the spot prices are below contract prices, the future remains “uncertain,” Kohler said.
Iron ore and coking coal prices in April surged after Vale SA, the world’s largest iron ore producer, and BHP Billiton Ltd. ended a 40-year system of setting annual prices by signing short-term contracts with Asian steelmakers. The Brazilian company won a 90 percent increase for iron ore.
Debt Risk
Tepid demand in the summer months, coupled with European sovereign debt risks and fiscal cuts, pose additional threats to demand revival, Adams said.
First-quarter profit fell 25 percent from the previous quarter because of lower prices following a surge in imports. India imported 2.76 million metric tons of steel in the three months ended June 30, compared with 1.52 million tons a year earlier, A. Sai Prathap, junior steel minister said on Aug. 6.
Tata Steel sold 1.4 million tons in the first quarter, unchanged from a year earlier, while production gained 8.25 percent to 1.63 million tons, the company said on July 6.
Tata Steel’s net debt as on June 30 was 457.1 billion rupees, Chief Financial Officer Koushik Chatterjee said at the conference. The company plans to refinance as much as $6.5 billion of long-term debt, he said, without giving a timeframe.
The company began talks with lenders including Citigroup Inc. to refinance as much as 3.5 billion pounds ($5.4 billion) in loans for its U.K. unit, six people with knowledge of the matter said on July 19.
Corus, which has plants in the U.K., the Netherlands, Germany, France and Belgium, is still in talks with potential buyers for its mothballed Teesside operations, Adams said. The company hired Citigroup to assist the sale of the plant in northern England, it said in May.