The Week Ahead

As the markets gain high levels, volatility will be the order of the day. Moreover higher crude oil prices of $77 and marginal rise in inflation since the last two data are key things to look at.

Besides, there are major result announcements by companies like Reliance Energy, DLF, Larsen & Toubro, Ambuja Cement and UltraTech Cement.

Markets at a glance
Strong industrial production data for May 2007 (a double digit growth of 11 per cent), positive sentiments in the global markets and healthy inflows from FIIs and mutual funds in anticipation of robust Q1FY08 results helped the market absorb the disappointing results by Infosys.

Overall the sentiments were buoyant which led to Nifty crossing 4500 levels for the first time in its history and Sensex touching its all time high levels of 15330. For the week ended July 13, Sensex ended with a gain of 308.60 points to settle at a record closing high of 15,272 while S&P Nifty added 119.70 points to record closing high of 4,504.



Stock to watch

Finolex Industries
Last week's close (Rs) 87.30 Prev. week's close (Rs 83.78 Week's high (Rs) 89.30 Week's low (Rs) 82.05 Last week's ave. daily turnover (Rs cr) 4.62 Prev. week's ave. daily turnover (Rs cr) 2.80 Number of up/down move 3/2

PVC pipe manufacturer, Finolex Industries, is worth looking at as it has announced phenomenal performance in Q1FY08. While net sales rose 33 per cent to Rs 314.8 crore, its net profits more than doubled to Rs 24.49 crore Moreover operating margins has also expanded by 219 basis points at 17.8 per cent.

Last month, there was an announcement that the company is close to inking a pact with Tishman Speyer India Ventures, a company engaged in real estate development for sale of its 78 acre land near Pune, where it houses one of its PVC pipe manufacturing facility and shift its production facility to its another facility of 1000 acre in Ratnagiri.

The value of the deal is worth Rs 300 crore. FIL is also adding 20,000 tonne of pipe capacity by setting up another greenfield facility to manufacture pipes at Urse, which will commence production by December.

The stock trades at P/E of 15.3 times its FY07 earnings and has underperformed the Sensex since December 2006.