BUY Marg Ltd. Target of Rs. 250

Marg Ltd (530543)

When the market is in a confused state with a negative bias and fund managers are expecting correction in the range of 5-10%, stocks like MARG Ltd (530543) are offering more than 20% upside potential. at  CMP of 205. MARG Ltd is one of the India’s fastest growing EPC and Infrastructure development companies established in 1994 and headquartered in Chennai. MARG has interests in Infrastructure Development with presence in diverse sectors such as ports, ship repair yards, dredging, marine logistics, special economic zones (SEZs), airports, power and multi-level car parks. MARG's real estate business constitutes commercial spaces like malls, serviced apartments, hotels and residential spaces including villas, row houses and affordable homes. Counter has witnessed an increase in volume activity in last couple of sessions and after consolidation for 8-9 months has come out of the trading range of 150-215.  Stock has bounced back from its 50 DMA and on MACD chart stock is trading in positive space. Buy stock with a target price of Rs 250.

Indian Hospitality - Future Trends

We have been tracking the performance of the Indian hospitality sector since 1995/96 and have been witness to the various trends and cycles the industry has experienced since then. 

Indian Hospitality Sector - Trends

As presented in the adjacent chart, the nationwide occupancy equated to 66.5% in 1995/96, but exhibited a downward trend over the next few years to 53.9% in 1999/00. The Indian hospitality sector benefited from the economic boom in the United States in 2000, attaining increases in both occupancy and average rate in that year. The US recession in 2001 soon spread to other parts of the world, including India, and had a significant impact on hotels in the country, resulting in decline in occupancy to its lowest level in the 15 years. The decline in occupancy was accompanied by a decline in average rate as hotels reduced rates in an attempt to remain competitive in a price-sensitive market and chose to focus on maximizing occupancies. These simultaneous declines in both occupancy and rate resulted in a steep decline in RevPAR in that year. The Indian hospitality sector, however, proved to be very resilient with occupancy rebounding by roundly 11.0% in 2002/03, and by over 13.0% the next year. Such a recovery was even more significant given the fact that international travel was affected by the global recession, the SARS outbreak, and the Iraq war. This downturn saw the domestic traveler step in to save Indian travel and hospitality and serve as the more stable, albeit lower rated, alternative to the international traveler. We note that while the nationwide occupancy increased in 2002/03, nationwide average rate continued to decline in that year as hotels continued to focus on improving occupancy levels at the cost of rates, especially as they modified strategies to target the rate-sensitive domestic market.

BUY Bombay Dyeing Target of Rs. 740/880

This Textile counter had been forming an accumul- ation pattern for the last 7-8 months. During that period valuation level of 601 had proved to be a strong resistance. Last week saw prices stage an excellent breakout from Saucer pattern as well from resistance and closed near new swing highs. Momentum has got a fresh boost with this up move and shifted in to bullish zone. Volume is also expanding aggressively showing optimism here. So we recommend here to buy this counter for a short term target of 740 with a stop-loss of 605. If the stock sustains above the level of 740 on a good level, then in the next leg of upmove it may test the level of 880.

BUY B F Utilities Ltd. Target of Rs. 1350

Prices of this Electric Utility counter B F Utilities has rebounded smartly from the support of 30day EMA. Previous session they also overcame the hurdle of 970 (23.6% retracement) and closed above it. Aggressive participation with higher volume and MACD chart placed in bullish zone further reaffirms, strength prevailing here. Look to buy stock at CMP with a target price of 1350, which scrip is likely to achieve in a month's timeframe.

Indian Cement Sector - A Contrarian Buying Opportunity

Shares of cement companies started rallying higher after reports that the Maharashtra based cement companies have hiked price by Rs 10-20 per 50 kg bag from today. Leading domestic brokerage house Religare has upgraded outlook on the Cement sector from Neutral to Positive and reset recommendation to BUY on UltraTech, ACC and Ambuja Cement among large caps. Religare believe the cement sector downcycle is close to bottoming out, and investors should accumulate stocks in order to ride the upcycle that will follow over the next 3–4 years. FY11 was the trough year for cement as prices likely to bottom out in Q2, following which the sector would turn a corner, as – a) the demand environment improves, backed by higher infrastructure and real estate offtake, b) capacity utilisation rises as incremental additions ease off, and c) cement prices firm up. We find current valuations appealing – stocks have corrected 8–28% over the past four months – and the downside limited. M&A activity in the sector could also fuel a re-rating. 

 

Indian Film Industry Back In The Spotlight

The Indian Film industry eclipses Hollywood both in terms of number of films produced and theatrical admissions. Overall, 2009 was a difficult year for the film industry. While the multiplex – producer stalemate left the industry with significant losses, the general elections and the swine flu scare also kept audiences away in early 2009. The total annual theatrical admissions in Indian cinemas are around 3 bn, as compared to 1.5 bn tickets sold annually in the US.