TECH_SPEAK: NEWSLETTER

Volume action in Gateway clearly indicates that some major `news' development in near term. Buy for short term target of Rs175 with suitable trailing stop loss.

FKONCO Fresenius Kabi (earlier Dabur Pharma)
is attracting buying interest due to its robust performance.
Buy on declines for a target price of Rs 125.

Gati has reported excellent second quarter
numbers and a preferential issue at high
premium reflects that worst is over and that
the company is back on rails.
Buy for a target price of Rs 85 in medium term.

SE Investments focuses on microfinance and works with low income families to provide financial solutions.
It also has a wind energy division. Buy on declines for a target price of Rs 300.

M&M Financial Services can be treated as a proxy for micro finance company since the company operates in the underpenetrated rural financing segment. Its plans to diversify into mutual fund business have triggered buying interest in the counter. Buy for a mediumterm target of Rs 350.

HBL Power is the pioneer in the design, development and manufacture of specialised batteries and DC systems in India for defence, aviation, telecommunication and railway sectors. Available cum split, the stock is a good bet for an exsplit target of Rs 60.

Indo Borax is synonymous with Boric Acid and has market leadership in the segment. A steady growth makes the counter a good long-term bet for a target price of Rs 90.

I have heard somebody saying Turnarounds seldom turn around. But, there are exceptions and Pennar is definitely one of them. Pennar is one of the companies that was going strong for most part of the 90's but was caught in the recession at the turn of the century. The company which had made sales of around 320 crore in FY 98 was able to report just 76 crore by the end of financial year FY 02. It then entered a Corporate debt restructuring scheme and you know what? The company has come out really strong with improved and impressive numbers, new business forays and chalking out plans for a higher and brighter future.

The turnaround started with a modest profit in the first quarter of FY 06 and the company has not turned back since then. The company has even recorded profit growths for 20 consecutive quarters. The company managed to pull them out by moving from a Cold rolled steel commodity to value added products. The company also entered new business segments like Electrostatic precipitator, Tube products, Road safety systems and railway coach profiles. Tata Motors, L&T, Indian Railways, Thermax, ACC and Ashok Leyland are some of its notable clients now.

The company started with a 30,000 tonnes per annum plant to manufacture cold rolled steel strips in 1988. It then expanded the capacity in 1997 when the capacity was increased to 50,000 tonnes per annum. It had acquired Nagarjuna steel limited and Press metal, a unit of Tube investments. Pennar has also set up a facility in Chennai to serve the railway and auto sectors. It also has another unit at Hosur in TN to service TVS group.

It currently manufactures a range of steel components which includes specialised items such as electro static precipitators for the boiler industry. It has a significant presence in road safety systems manufacturing the barriers that you see installed on the highways.

Currently, the company is well positioned to make use of the strong growth in railways, highways, pollution control and automobile sectors. The growth in railways sector and the demand for pre engineered building systems are expected to strongly driver the revenues for the company.

In the railways sector, the company has built strong relations with wagon manufacturers like Titagarh wagons and ICF. The current product profile contains high strength - light weight Chasis members, coach floors, wagon segments and stainless steel profiles. The company has also chalked out plans to launch more wagon and coach components and to move up the value chain. The company derived around 176 crore in revenues from the rail segment in FY 09 and if the internal targets are to believed the company is looking at revenues of around 300 crore from the rail segment alone in FY 10. The demand for new coaches, the replacement demand and setting up of dedicated freight corridors will act as the key drivers for the growth.

The company has also set up a subsidiary to tap the opportunities in the pre engineered building systems market. The company has made a tie up with NCI inc, one of the leading PEB companies in the US. The subsidiary is setting up a 60,000 tonnes per annum plant in Andhra pradesh at a cost of around 105 crore. The first phase of commercial production expected to be kicked off by late 2009. The company is expecting a turn over of around 250 crore from this subsidiary by FY 12. The key growth driver here is expected to be the huge demand and increase in warehousing capacities.

The company has a clear vision for its future and has been working on it. The company is primarily looking at boosting the revenues coupled with a strong expansion in the margins. This company is one to look out for.

SELL TATAPOWERBELOW BELOW 1262 TGT 1225<1204>

The Indian market opened higher note following global cues and end with marginal gains .For coming session if nifty trade above 4790 level it likely to test 4830-4863 zone .On the lower side trading below 4764 it can drift lower towards 4710-4690 zone .On the moving head there will strong resistances zone 4863-4920 as shown on chart .

Last week sensex gain by 1.65% and nifty close in green by 1.79%,As last week nifty saw sharp pullback from the lower support zone band and regain from the lower levels. On Friday nifty had test the 50ema and close below it till the nifty not able to cross and close above 4863-4920 it can say pullback from the lower levels .If coming nifty close below 4710 level it likely to test 4607-4550 zone as we had seen expansion of band currently nifty is trading 4950 -4550 band closing below 4550 band it will shift lower band towards 4350-4100 bands. So technically market bounces from oversold ground but this fall had weaken the weekly chart .