The markets are clearly in the grip of bulls and as we enter into 2021 there are more questions unanswered as bulls, bears, experts, optimists, doomsayers present their point of view in their “perceived “logic which can be convincing even to their detractors .Such is the power of markets as swings add wings to thoughts of marketmen.
One strong point of view is however the fact that this market is likely to stage a more broad based pull back which could see a grand revival of many stocks which got beaten down since the hallowed days of 2017-18 .While many have already recharged their batteries ,there are several still waiting in the queue as they battle the after effects of a virus which has had telling impact on most businesses.
BIG PLAYERS ACTIVITIES
The FII s continue to be on a buying spree over the week and the usual Christmas lull was not seen as the bulls clearly have got high on rising indices opting over more exotic potions. DII’s were more focused on profit taking .
Can there be smoke without fire ?
Attention is once again on select midcap and small caps which have seen sudden spurt in volumes in the last few weeks :-
Borosil Renewable aka Glass -Last week we discussed a spurt in volumes of Asahi India !However ,in the background the real action was in this not so discussed counter .The stock has risen 4 times in the last quarter.In a new awatar the company is a leading producer of solar glass .Solar PV installations are showing exponential growth across the globe and the management is confidant of the prospects.
Sterlite Tech-The current year could see 5G launch gathering steam and the company is a beneficiary of the same .The company plans to ramp up capacity from 18 mn to 33 mn fibre km .Demand from China is expected to boost revenue of the company in the coming quarters .Watch out for another peer company Vindhya Telelink as well !!
Rain Industries-Debt reduction seems to be on agenda of the company as it has divested stakes in 2 non strategic subsidiaries for Rs 637 cr which is expected to be used to repay debt which was at Rs 7350 cr as of Dec 19. So….still a long way to go before debt comes down to more comfortable levels.
Sumitomo Chem-The company has a significant presence in the agrochem segment .While the topline and profits have seen a sustained growth over the years ,fancy for the stock is steady which have kept valuations also rich. However ,the sector still offers high promise and the company’s prospects look healthy.
WHAT DOES THE COMING WEEK HOLD ?
1.The Dec quarter earnings season will kick off with TCS expected to announce results next week .Other IT majors are also in queue .Interestingly the buyback prices announced by TCS and Wipro are now close to the current market price and would be interesting to see how much offer of shares will come .
2.The IPO market has been at centrestage and companies like Rail Tel, Kalyan Jewellers ,Indigo Paints, IRCON are all expected to tap the primary market .LIC’s listing is also keenly awaited.
3.The New Year began on a promising note as for the first time GST collections touched Rs 1.15 lac cr .This augers well for the forthcoming budget as the collection could give the Govt a welcome option of reducing personal income tax which could be the right fillip for a Covid ravaged economy which has seen employment casualities .
4.Auto numbers for the Dec month has also seen an encouraging trend though challenges still remain .
5.As far as markets are concerned ,the FII stance will be keenly watched.Indices have run up 25% in the last quarter .A 1000+run month on month has been seen .Some healthy correction could possibly be the right recipe before budget expectations add to the momentum.
Once again wishing all readers a very Happy New Year ! May the New year bring good health ,peace and prosperity
Krish Subramanyam
Did you know ?
Couple of weeks back Majesco was a widely discussed company as it declared a whopping Rs 974 dividend as an outcome of its sale of business to Thoma Bravo ,a PE firm focused on software and technology enabled sectors .While the debate was whether the share was worth buying cum dividend ,a more intriguing question is what remains of the company .The management says the company has a prime real estate land in Navi Mumbai which will be sold and then the same will be distributed to shareholders.The cash value of this is around Rs 36 as per analyst’s estimate .There could be more to this company than what appears though no immediate evidence is available.Only time will tell !!
Some stray thoughts –
Google to charge from Jan 1,2021 -There was lot of talk that GPay was going to be charging its customers using it for transactions.However ,it appears these are specific to US and do not apply to Google Pay in India .Phew !! Some New Year rumour quashed !