Sesa Goa has posted a net profit after tax of Rs 4069.40 million for the quarter ended June 30, 2009 where as the same was at Rs 6447.20 million for the quarter ended June 30, 2008.
Total Income is Rs 10250.60 million for the quarter ended June 30, 2009 where as the same was at Rs 13109.30 million for the quarter ended June 30, 2008.
Sesa Goa, the country’s largest private iron ore exporter, has bought Goa-based V S Dempo Mining Corporation for Rs 1750 crore.
A part of London-listed Vedanta Resources, Sesa Goa will fund the transaction through internal accruals. Sesa Goa has reserves of Rs 4,000 crore.
Dempo has 19 mining leases spread over 1800 hectares in Goa. Its total reserve is estimated to be 70 million tonne. Last year, it extracted 4 million tonne of iron ore. - ET
US markets ended negative.
Europe also ended negative.
Asia has opened in red and is also trading in red.
Expect a gap down opening in Indian Markets.
NIFTY magic levels
Current Spot - 3554.60
Support - 3505 and 3470
Resistance - 3590 and 3645
Day Trading Ideas -
Sesa Goa
Buy above 141 for targets of 145 and 148
Sell below 131 for targets of 128 and 125
HUL
Buy above 228 for targets of 230 and 232
Sell below 221 for targets of 219 and 216
Satyam Computers
Buy above 46.20 for targets of 47.90 and 49.10
Sell below 41.25 for targets of 40.05 and 39.10
RNRL
Buy above 58.10 for targets of 59.25 and 60.10
Sell below 57.25 for targets of 56.50 and 55.90
Happy Investing !
US markets ended flat.
Europe ended negative.
Asia has opended positive.
Expect Indian Markets to have a gap up opening.
The support for the Sensex is 10150 and the resistance to the up move is at 10708-11295
Nifty: (3211) the support for the Nifty is at 3150 and the resistance to the up move is at 3451
Day Trading Ideas -
IFCI
Buy above 22.10 for taregst of 23.45 and 24.05
Sell below 20.50 for taregst of 19.90 and 19.25
HDFC Bank
Buy above 1060 for targets of 1071 and 1084
Sell below 1010 for targets of 995 an 986
Sesa Goa
Buy above 106.10 for targets of 107.45 and 108.50
Sell below 103.25 for targets of 102.10 and 101.25
Happy Investing.
US markets rallied.
Europe also rallied.
Expect Asian markets to open flat to negative.
Indian markets may also follow the foot prints of Asian markets.
The support for the Sensex is 9520 and the resistance to the up move is at 10050-10201
Nifty: (3060) the support for the Nifty is at 2960 and the resistance to the up move is at 3108.
Day Trading Ideas -
Sesa Goa
Buy above 102.10 for targets of 104.25 and 106.50
Sell below 97.45 for targets of 95.20 and 93.45
HDFC
Buy above 1005 for targets of 1012 and 1019
Sell below 989 for targets of 982 and 976
TCS
Buy above 551 for targets of 558 and 563
Sell below 546 for targets of 541 and 536
Investors with a three-year horizon can consider accumulating the stock of Sesa Goa, trading at Rs 82.10. The company’s market leadership in iron ore mining and exports, signs that Chinese demand for Indian ore may resume on the back of the stimulus package and the attractive valuation for the stock make it a reasonable long-term investment in the commodities pack.
The stock of Sesa Goa trades at a price-earning multiple of 4.6 times its trailing earnings. In the domestic context, National Mineral Development Corporation (NMDC) and Minerals and Metals Trading Corporation of India (MMTC) (not strictly comparable due to a wider product basket) trade at a P/E of about 15 times.
Global iron ore miners such as BHP Billiton, Rio Tinto and Vale currently trade at 9.7, 9.4 and 6.6 P/Es respectively.
Business Overview
The company’s revenues originate from three segments — iron ore, pig iron and metallurgical coke (Met coke).
The iron ore segment is the backbone for the business and its share in revenues has steady increased in the last four years, to contribute 84 per cent to sales in 2007-08.
Sesa Goa, with its mines in Goa, Karnataka and Orissa, produces lower and medium grade ore. Sixty-six per cent of the company’s iron ore production is exported to China and 20 per cent to other Asian countries such as Japan, Pakistan and South Korea and 7 per cent to Europe. Domestic sales are a miniscule 7 per cent.
Demand Outlook
By relying substantially on the export market, particularly on China, Sesa Goa’s earnings prospects hinge to a large extent on Chinese offtake of Indian iron ore. This being the case, post-Olympic stockpiles and the sharper-than-expected deceleration in the Chinese economy led to imports recording sharp year-on-year falls from October 2008.
Iron ore spot prices also corrected from $190 in May to $ 63 in October 2008. While China’s 4 trillion Yuan ($586 billion) bail-out package is expected to revive demand for steel and, thus, iron ore, the jury is still out on whether overall Chinese import volumes will be maintained at last year’s levels of about 400 million tonnes.
But the past two months have brought signs of a drawdown in Chinese stockpiles and better export offtake of iron ore, especially for Indian exporters. Export volumes of iron ore from India staged a sharp year-on-year increase of 38 per cent and 21 per cent respectively in December and January.
Expectations of higher Chinese demand have propped up spot prices for iron ore by about 30 per cent from $63 to $ 85 a tonne in recent months.
While Sesa Goa appears well-placed to benefit from the higher volumes and higher spot sales, ongoing negotiations on contract prices for 2009-10 between the large iron ore producers and Chinese steel mills, expected to be concluded by April, may be the deciding factor on the price outlook. Current expectations are for a 10-30 per cent cut in contract prices compared to last year.
Financial Overview
Offtake has not been a key problem for Sesa Goa in recent years, with the company managing a 25-30 per cent volume growth every year since 2004-05.
In the current fiscal, Sesa Goa witnessed a volume decline in the September quarter to the tune of 30 per cent on a complete cutback in Chinese demand, but volumes recovered, increasing by 37 per cent in the December quarter. Sales for the last quarter were up by 23 per cent on a Y-o-Y basis, despite the economic slowdown.
Volume growth from the iron ore segment was at 36 per cent year on year and 37 per cent . Sales are up by 76 per cent and net profits by 69 per cent in the nine months ended December 2008.
Steadily rising iron ore realisations have helped Sesa Goa steadily improve its operating profit margins over the years to nearly 48 per cent in the first nine months of 2008-09; though margins have moderated in the December quarter.
A low cost structure and zero financing costs, endows the company with a cost advantage amongst its competitors globally. Vedanta Resources Plc (the 51 per cent holding company) had earlier announced plans for an eight-fold increase in the iron ore production capacity at Sesa Goa.
While this expansion project will certainly add scale over the long term, whether it will be implemented in its entirety, given a softer demand scenario, needs to be seen. This plan has the potential to increase the debt on the balance-sheet. Strong operational performance in recent years has left Sesa Goa with high return ratios (return on capital employed of over a 100 per cent), a strong balance-sheet, with high free reserves and near zero debt. With commodity prices set to fall further, the company has hinted at more room for downsizing costs.
Recent export duty concessions extended by the Indian Government will also translate into better realisations in the coming quarters. The easing off of inflation may see lower policy intervention on ore exports; this has been a key source of risk to earnings last year.
Valuations
The key risks to Sesa Goa’s earnings arise from a sharper-than-expected cut in iron ore prices (contract as well as spot), slippage in Chinese demand and a spike in freight rates.
Volumes and defending its market share being the foremost priority, Sesa Goa may have to work with thinner margins than in the immediate past, for the near term.
A key trigger to the stock price would be the conclusion of iron ore negotiations with China, at the expected prices.
US markets end marginally positive after a volatile session. The support for the Sensex is 9500 and the resistance to the up move is at 9824 Nifty: (2924) the support for the Nifty is at 2900 and the resistance to the up move is at 2972 Day trading Ideas - DLF Buy above 154 for targets of 158 and 161 Sell below 142 for taregts of 139 and 137 Punj Llyod. Buy above 98.90 for targets of 100.45 and 101.65 Sell below 96.20 for taregst of 95.05 and 94.15 Sesa Goa Buy above 98.40 for taregts of 99.80 and 100.95 Sell below 94.60 for taregts of 93.10 and 92.15 IFCI Buy above 22.15 for taregts of 22.80 and 23.25 Sell below 20.10 for taregst of 19.40 and 18.85
Obama is ought to give US a huge bailout package. (That is certainly a good news).
Europe ended flat . Asia is bonded to open flat to positive.
We may see a positive opening in the Indian markets.
Happy Investing !
US markets ended positive on Friday. The support for the Sensex is 9227 and the resistance to the up move is at 9400-9539 Nifty: (2843) the support for the Nifty is at 2750 and the resistance to the up move is at 2889 Day Trading Ideas - Sesa Goa - Buy above 97.80 for targets of 99.65 and 101.15 Sell below 94.10 for targets of 93.15 and 92.10 Spice tele - Buy above 74.10 for targets of 76.25 and 80.40 Sell below 69.30 for targets of 68.15 and 67.10 Buy above 29.10 for targets of 30.15 and 31.05 Sell below 27.45 for targets of 26.80 and 25.90
Europe was also flat.
Asia has opened positive but is giving up all its gain.
Expect Indian Markets to open flat to positive.
Unitech -
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Read the full post...US markets ended positive on Friday. The target for the Sensex is 9200 and the resistance to the up move is at 9528-9708 Nifty: (2828) the target for the Nifty is at 2740 and the resistance to the up move is at 2870-2922 Markets may not be able to sustain all its gains and may remain volatile. Day Trading Ideas - Unitech Subscribe for free Email Updates - Click here. Free SMS Updates subscribe - Click here
Europe also ended positive.
Asia has opened positive.
I expect Indian Markets to open flat to positive.
Buy above 31.10 for targets of 31.90 and 32.50
Sell below 29.15 for targets of 28.60 and 28.10
Suzlon
Buy Above 52.15 for targets of 53.50 and 54.90
Sell below 49.50 for targets of 48.75 and 48.10
Infosys
Buy Above 1277 for targets of 1285 and 1293
Sell below 1257 for targets of 1250 and 1245
Sesa Goa
Buy above 78.50 for targets of 79.25 and 79.90
Sell below 75.45 for targets of 74.80 and 73.90
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Happy Investing
NIFTY is technically oversold and is now in down trend for short term.
Do not initiate any fresh buys. Also don’t short much below 2700 as we can bounce back on short covering.
The support for the Sensex is 8947-8845 and the resistance to the up move is at 9575-9750
Nifty: (2773) the support for the Nifty is at 2685-2404 and the resistance to the up move is at 2812
Day trading ideas.
Unitech
Buy above 35.10 for targets of 36 and 37.10
Sell below 33.05 for targets of 32.50 and 31.70
Sesa Goa.
Buy above 77.50 for targets of 79.05 and 80.50
Sell below 74.10 for targets of 73.50 and 72.25
Rajesh Exports
Buy above 22 for targets of 22.70 and 23.25
Sell below 20.50 for targets of 20 and 19.45
HDIL
Buy above 102 for targets of 103.20 and 104.50
Sell below 98 for targets of 96.40 and 95.10
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Indian markets will have a gap up opening.
The support for the Sensex is 9495 and the resistance to the up move is at 9875-9990
Nifty: (2980) the support for the Nifty is at 2900 and the resistance to the up move is at 3035
If we open too higher we will face a stiff resistance above 10115.
If we have a huge gap up be prepared to slowly give up all its gains.
Day Trading Ideas
Satyam
Buy above 164 for targets of 169 and 174
Sell below 149 for targets of 146 and 143
Sesa Goa
Buy above 87 for targets of 88.90 and 90.15
Sell below 83 for targets of 81.50 and 80.10
RNRL
Buy above 58.50 for targets of 59.20 and 60.25
Sell below 54.25 for targets of 52.25 and 51.20
Happy Investing!
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Markets may open Positive.Indian markets witnesed another chopsy day yesterday.
US markets had a gap down opening but recovered a bit in the later hours.
Asia has opened mixed.
Europe was marginally lower.
We may see a gap down opening to flat opening.
Yesterday we saw an intense profit booking session.
If we open negative we will see a recovery in later hours if IIP data is good.
IIP data is gona release today.
Be cautious while trading.
The support for the Sensex is 9760-9260 and the resistance to the up move is at 10050
Nifty: (2939) the support for the Nifty is at 2863-2746 and the resistance to the up move is at 3000
Day Trading ideas.
LNT
Buy above 872 for targets of 874 & 902
Sell below 851 for targets of 840 & 828
Sesa Goa
Buy above 79 for targets of 80.50 & 81.90
Sell below 76 for targets of 75.10 & 73.90
Sun Pharma
Buy above 1210 for targets of 1225 & 1245
Sell below 1190 for targets of 1180 & 1169
Ranbaxy
Buy above 227 for targets of 231 & 235
Sell below 221 for targets of 218 & 215
Happy Investing.
I am sorry I was not able to post Market outlook and day trading ideas yesterday.
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