WEEKLY TRENDSETTER (JAN 26,2024)
| 2024 | JAN 12 | JAN 20 | Ch % |
| NIFTY | 21894 | 21571 | -1.48 |
| BANK NIFTY | 47709 | 46058 | -3.46 |
| USD/INR | 82.92 | 83.11 | 0.23 |
MARKET REVIEW-The week saw a decent correction after a gap down opening mid-week post HDFC Bank results, which dragged the indices down. The Bank Nifty was a bigger casuality with a 3.46% loss.
BACK TO RESULTS (Dec qtr.)
The Dec quarter results are trickling in. So far, it has been a mixed bag. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against Dec,22 quarter.
| Company | Revenue | Net profit |
| Aarti Surfuctant | 139(+3) | 7(+75) |
| J.K.Cement | 2935(+20) | 284(+667) |
| Union Bank | 25521(+21) | 3610(+60) |
| Stl Strips &Wheels | 1110(+18) | 60(+36) |
Aarti Surfuctant (755)-The company is one of the leading producers of ionic and non-ionic surfuctants and speciality products catering to personal care, Industrial applications, agro and oil industries. Its reach is overseas as well. It has shown good resilience in the past few quarters which have been testing for the chemical industry. While topline has been stagnant, the bottom line has infact shown a healthy growth q-o-q and for the Dec quarter it has posted EPS of Rs 8.4. At current levels the scrip still offers reasonable valuation.
J.K. Cement (3984)-This has been one of the steadiest performers in the industry which has been going through a volatile phase in the past few quarters. EBIDTA margins stood at a whopping 21.3% against 10% in the corresponding previous quarter. It has posted EPS of Rs 36.7 for the quarter and the stock is trading at an all-time high and has been a top performer in the industry. At current levels the stock looks well priced.
Union Bank (141)-While on a y-o-y basis the bank has reported a 60% jump, on sequential basis the growth has been flat. The management has also raised concerns about rising stress in its retail book, particularly home loans. Thus, the challenge ahead will be how it tackles these issues and keep recoveries on a steady track.
Steel Strips & Wheels (272)- SSWL is into designing and manufacturing automotive wheels, both under the steel & alloy categories. Recently it was in the news for acquisition of AMW Auto components and will infuse Rs 138 cr through a mix of debt and equity. It currently has four plants in India with total production capacity of around 23 million wheels per annum (including 3 million wheels per annum for alloy wheels). It is looking to expand its presence in alloy wheel with global passenger car segment customer. In view of that, the company is expanding the capacities to cater the global demand. Globally Alloy wheel is very popular with more than 80 %-wheel penetration. It gives huge export opportunity to SSWL to imitate the steel wheel exports story. The scrip trades at reasonable valuation.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index dipped below 21500 in mid-week before a recovery ensured a closing well above that. With monthly expiry in the coming week the index looks oversold in the immediate short term and a bounce upto 21750 is possible. With a truncated week ahead aggressive positions could be postponed till next week.
BANK NIFTY-The index saw a sharp cut post HDFC Bank results. However, it is showing signs of regaining lost ground and could be expected to be largely positive. Short covering could emerge and the index could head closer to 47000 and recover some lost ground.
PICKS FOR THE WEEK
PFC (419) -The stock has been an outperformer in 2023 and has seen repeated support emerging at 380-85 levels. It has now given an weekly bullish engulfing pattern and could head higher. Accumulation could be considered for a possible target of 440-50 in the coming weeks.
Coal India (399) – The stock saw a strong comeback towards close of week after consolidating around 375-85 levels. Levels of 385-90 should act as a decent support and buying could be considered for a possible target of 425 in the coming weeks.
Wishing all readers a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam