Blog carnival on Saturday !

Aban Offshore Technical Analysis :
Stock is still in uptrend with immediate resistance near 1180-1200 zone.Immediate Breakout could target 1800 in medium term. However failure will once again could take back to 728 zone once again.21 day Twiggs money flow indicator above zero shows a buying pressure in this stock. Read Full Story on Market Calls

Power Companies leading the Renewed IPO Buzz :
Yes, the buzz is back and testing markets and testing mettle of individual investors. Three power sector companies, viz. Adani Power, Indianbulls Power, and NHPC, are in fray to get investors money. I had expressed my thoughts about Reliance Power IPO. Let us revisit some of the few tidbits in the context of this latest buzz. Read Full story on TIPBlog

How Builders are Not keeping their Promises in Real Estate :
Deepak Shenoy came up with a very nice article on How Builders are not keeping there promises while delivering the Residential Properties . He shares his views on Why it does not make sense to buy Residential Properties currently at idiotic prices level currently . He also links to another article of this where he compares Renting Vs Buying a Flat . Read Full post on JagoInvestor.


NHPC IPO Analysis and Review :
NHPC IPO will hit Indian Markets on 7th of August. Just like Adani Power issue I think this issue will also be in high demand. Read Full story on SQUAMBLE

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Investing in Infrastructure sector now makes sense.

Real estate sector has tumbled in the same way in which Jill fell down in the well. But as inflation has now cooled it makes sense to buy some blue chip real-estate scrip’s. Home loan have sweetened leading to higher demand of new homes. This sector has a potential to turn the markets upside down as every new investment needs infrastructure and now low rate home loans will give a boost to many things directly and indirectly. The main sectors to benefit are firstly Infrastructure and later Banking.

Looking for a long term point of view one should pick up few beaten up stocks. I would go for Larsen & Tubro (LNT), Unitech , HDIL , SBI , ICICI Bank and Indiabulls Real estate.

Cooling home loans rate is the only reason why I am bullish on this sector for long term.
Happy Investing.

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ICICI Securities puts a buy on Indiabulls Real Estate.

Target price: Rs 170 

ICICI Securities has initiated coverage on Indiabulls Real Estate with a ‘buy’ rating, with a price target of Rs 170 on grounds the company is well capitalised to ride the current downturn in the realty sector. “IBREL has sold stake in its company and in properties to raise Rs 5,300 crore in the past two years. 

Its balance sheet is robust (debt Rs 205 crore, cash Rs 3,400 crore) to tied through the current downturn and capitalise on opportunities,” the broking company said in a recent report. “We estimate FY09E NAV (net asset value) to be Rs 8,800 crore, or Rs 341/share (target price Rs 170/share assuming 50% dis-count to NAV). Given the execution risks, we expect the stock to trade on its balance sheet strength (cash per share Rs 122, FY08 BV/share Rs 171) rather than the potential of the project pipeline,” it added. - ET

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Realty stocks under pressure on liquidity concerns.

Despite the broadbased rally, realty stocks failed to pick up steam on Friday as investors resorted to heavy selling on sustained concers about availability of funds. Industry leaders Unitech and DLF continued to crumble. 

Market analysts said selling pressure went up after reports that DLF has postponed residential, commercial and hotel projects due to low demand. The real estate developer said it would terminate services of some of company's employees and stop working on some of its projects. Unitech and Parsvnath Developers also retrenched their staff last month in line as part of the cost cutting drive due to global meltdown. 

"Real estate is likely to underperform for the next 3-4 quarters. The interest rate for the realty firms as well as consumers has to come down to boost volumes. We estimate that the volumes won't go higher unless the prices correct by 30-40 per cent. But the builders are adament on the prices. However, according to the economic cycle, the prices have to go down because there is no affordability in the market," said Shailesh Kanani of Angel Broking. 

"Also, some builders expanded largely expecting the bull run to continue and bought land at exhorbitant rates and now are stuck in the change of economic cycle. We expect almost a 50 percent degrowth in the sector over the next 2-3 quarter," he added.

Rising borrowing costs, surging real estate prices and liquidity crunch ended the rally in the country's property market on the deepening global financial crisis. 

At noon, the BSE Realty Index fell 5.09 per cent with Unitech falling 10.53 per cent and DLF losing 4.24 per cent. Among other players, HDIL shed 5.88 per cent, Omaxe fell 4.44 per cent, Ansal Infrastructure was down 4.82 per cent. 

Meanwhile, Bombay Stock Exchange's Sensex rose 3.41 per cent or 288 points to 8,739.42 and National Stock Exchange's Nifty climbed 3.45 per cent or 88.1 points to 2641.25. - ET

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ICICI Securities maintains 'buy' on Sobha Developers.

Stock Recommendation from ICICI
CMP - 105.80
ICICI Securities has maintained a “buy” on Sobha Developers after the company’s second quarter results were in line with expectations with revenues and PAT dipping 10% Y-o-Y and 13% Y-o-Y to Rs 2.9 billion and Rs 490 million, respectively. The brokerage, however, has downgraded the company’s NAV owing to sluggish sales and stretched balance sheet.

According to the brokerage, the company is facing headwinds in the form of downturn in realty and strained balance sheet. “The debt level has increased three times to Rs 19 billion in one year, and new sales and project launches have slowed down. We lower FY09(estimated) NAV estimate to Rs 282/share (target price at Rs 169/share), assuming 25% drop in selling prices and increased timelines by 8-10 years (reducing development pipeline 55-65%).

ICICI Securities has also lowered FY09E & FY10E earnings estimates by 51% and 71%, respectively. Sobha’s balance sheet is stretched and any respite through the proposed rights issue of Rs 3.5 billion will be temporary unless housing demand picks up, it adds.

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