CMP Rs 96 BSE 16167
TECHNICALS:
The 2 year price charts show that ordinarily the 365 SMA has been a good support for this Stock; however, 26/09/2011 onwards the Scrip has consistently traded below it, showing definite signs of weakness. This weakness is seen to be particularly accentuated 30/9/2011 onwards with the predominant theme now being one of side ways movement or consolidation, if one were to be charitable. On the downside there is good support at 94 levels and on the upside the SMA 250 as well as SMA 365 are a major resistance area. Said SMA 365 is currently at 103. Thus purely on Technicals, the Scrip seems to be in a tight 95-102 range.
FUNDAMENTALS:
The Company has a fair amount going for it with a strong Brand presence as well as pricing power in certain segments. Corporate Results have been reasonably good with some squeeze on Margins due to rising input costs which is understandable. However even though Topline growth has been good but one would ideally have liked a greater contribution from increased volumes than on account of price hikes. The Stock at CMP 96 is trading at about 34x FY12E (EPS FY12 E around 2.8 or 3 max.) which is not cheap, particularly with a view to the possible PE contraction that the entire Consumption space is likely to witness once the Interest Rate cycle softens and rate sensitives start finding greater favour with the Market. However, if one would like to add the Scrip to one's Portfolio it would be best to buy it as close to the 85-90 range (which would put the entry PE at about 30x FY12E at the lower end) as possible. One could also look to make initial entry at 95 levels and then add on declines thereafter.
Having said this, I would also say that Scrips like ITC and NESTLE would be better choices for the long term Portfolios of interested Investors.
Thus, to sum-up, the 85-95 zone seems to be a good entry range for the long term , with the lower levels of the range obvoiusly being more favourable entry points.
-DABUR Q2 FY12 RESULTS SEE HERE
- MORE INFO ON ITC BEST ENTRY SEE HERE
- MORE INFO ON NESTLE BEST ENTRY SEE HERE
The 2 year price charts show that ordinarily the 365 SMA has been a good support for this Stock; however, 26/09/2011 onwards the Scrip has consistently traded below it, showing definite signs of weakness. This weakness is seen to be particularly accentuated 30/9/2011 onwards with the predominant theme now being one of side ways movement or consolidation, if one were to be charitable. On the downside there is good support at 94 levels and on the upside the SMA 250 as well as SMA 365 are a major resistance area. Said SMA 365 is currently at 103. Thus purely on Technicals, the Scrip seems to be in a tight 95-102 range.
FUNDAMENTALS:
The Company has a fair amount going for it with a strong Brand presence as well as pricing power in certain segments. Corporate Results have been reasonably good with some squeeze on Margins due to rising input costs which is understandable. However even though Topline growth has been good but one would ideally have liked a greater contribution from increased volumes than on account of price hikes. The Stock at CMP 96 is trading at about 34x FY12E (EPS FY12 E around 2.8 or 3 max.) which is not cheap, particularly with a view to the possible PE contraction that the entire Consumption space is likely to witness once the Interest Rate cycle softens and rate sensitives start finding greater favour with the Market. However, if one would like to add the Scrip to one's Portfolio it would be best to buy it as close to the 85-90 range (which would put the entry PE at about 30x FY12E at the lower end) as possible. One could also look to make initial entry at 95 levels and then add on declines thereafter.
Having said this, I would also say that Scrips like ITC and NESTLE would be better choices for the long term Portfolios of interested Investors.
Thus, to sum-up, the 85-95 zone seems to be a good entry range for the long term , with the lower levels of the range obvoiusly being more favourable entry points.
-DABUR Q2 FY12 RESULTS SEE HERE
- MORE INFO ON ITC BEST ENTRY SEE HERE
- MORE INFO ON NESTLE BEST ENTRY SEE HERE
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