- The Nifty closed at 5316.55. Nifty future (June) closed at 5320.30 i.e. at a premium of 3.75 points vs. 4.35 points
- and shredded -1460700 shares in open interest.
- The Nifty future (July) closed at 5326.95 i.e. at a premium of 10.40 points vs. 11.10 points and added 6202250
- shares in open interest.
- The cost of carry is at +12.87% vs. +9.88%.
- Interpretation: The Nifty future prices ended in the negative terrain along with overall addition of open interest
- and increase in the cost of carry, this is an indication of some longs at lower levels.
stock is in strong momentum & have seen strong open interest build up in last session. ICSA yesterday closed @144.95 with high volume on fund raising plans.
we expect stock to move further up towards 152-57-62 above 146. buy with stoploss@140 level.
Deepak Fertilisers: Buy for a target of Rs154
Valuations & Views
With the overall economic scenario improving and the industrial activity picking up momentum, we believe DFPCL would perform better in FY11E on the back of growth in its user industries – mining, cement, infrastructure and agriculture. DFPCL’s new TAN facility likely to be operational in Q3FY11E will boost revenues and profitability going ahead. Also, favorable and normal monsoons will boost revenue from agribusiness.
At the CMP of Rs. 128, DFPCL is trading at 4.5x its FY11E EPS of Rs 28.1. We value the stock at 5.5x its FY11 earnings to arrive at a target price of Rs. 154, which represents an upside of 20%. We thus recommend a BUY on the stock.
All Market tips you can get from here
