WEEKLY TRENDSETTER (APRIL 24th ,2021)
| 2021 | APRIL 16 | APRIL 23 | Ch % |
| NIFTY | 14618 | 14341 | -1.89 |
| BANK NIFTY | 31977 | 31722 | -0.79 |
| USD/INR | 74.43 | 75.04 | 0.82 |
MARKET REVIEW –The week started on a sell -off mode for the 3rd week running on worsening Covid situation. However, some recovery ensured that the Nifty closed above 14250 giving some hope going into expiry next week. The Bank Nifty however managed to perform better and managed to close above 31500.
REVIEW OF RESULTS (DEC QTR)
With the result season getting into high gear, focus this week is on some outstanding performance for the March quarter.
Rs in cr, Bracket indicates ch in %
| Company | Revenue | Net profit |
| Bhansali Engn | 474(+88) | 163.2(+999) |
| Tata Steel BSL | 6774(+66) | 1913(+999) |
| Indus Tower | 6492(+286) | 1363(+405) |
| Philips Carbon | 867(+24) | 128(+75) |
Bhansali Engn – the company is a vertically integrated petrochemical company that manufactures ABS, which acts as a raw material for companies dealing in automobiles, home appliances, telecommunications, luggage, bus body and various other multi-faceted applications. While the user industries were in a buoyant state, the June quarter could mirror the Covid effect. Despite a washout performance for June ,20 the company has managed to post EPS of Rs 20 for FY20-21.
Tata Steel BSL – Rechristened after coming into Tata fold, the company is on a major turnaround mode. The company repaid debt of Rs 6140 cr. At the end of FY21, it stood at Rs 10000 cr. With an EPS of Rs 6.8 for the year, the stock could see value buying going ahead.
Indus Tower-The company is now a merged entity of Bharti and Indus Tower and ownership has shifted to Bharti Infratel (36.7%), Vodafone group (28%) and the rest includes KKR &Co and Canada Pension Plan Investment Board. The highlight was the addition of 3700 towers during the quarter. With the sector outlook looking strong led by data consumption, the stock looks reasonably valued.
Philips Carbon -Another strong set of numbers from the company. In Feb 21, the company commissioned two speciality black lines for capacity of 32000 MTPA. Thus, the full effect of this will be seen in FY 21-22. The June quarter may again be impacted by Covid which could see some correction.
POINT OF VIEW
Reliance Retail has some products like Snac tac noodles and colas which could be potential game changers in times to come. The group has its eyes set on dominating a grocery market that’s already worth a cool $608 bn and set to grow more than 20% by 2024, according to Forrester Research. This “private labels “experiment was initiated by the Future group which need deep pockets. However, the cash strapped Future group failed to pull it off and now that Reliance has entered the fray, odds become better thanks to the deep cash reserves of the Reliance group which could ensure staying power. The Future Retail deal, if it happens could triple Reliance outlets to 2100. That could be an icing on the cake!
MARKET OUTLOOK
1.The last week results were well received by the markets. Some of them like Tata Elxsi were clearly the highlights. The weekend provided some cheer from ICICI Bank which posted a decent set of numbers.
2.Major results for next week are HDFC Life, Tech Mahindra, Maruti, Axis Bank, Tata COMM, Bajaj Finserve, Biocon, Laurus Lab, HUL, Indus Ind Bank.
2.Technically, the market is witnessing a huge struggle with Nifty failing to sustain above 14500. While the bounce from 14250 levels have been seen several times, odds are high that the pre-budget level of 14000 will be tested in which case 13600-700 could be seen in the next few weeks. Sentiments are fragile and largely driven by daily Covid numbers. If the derivative expiry goes smoothly and Nifty stabilize above 14400, odds will become better for an uptrend.
Some technical cues are as follows going by market trends
BIOCON (397) -In a pharma frenzy market, this scrip has been an underperformer. Critical levels have got breached and going into expiry and also results, levels of 380 could be seen. Long term trend remains intact and closer to levels of 360-70 could see buying emerging
Alembic (110)-After a fairly long consolidation, the scrip looks poised to gain ground in the coming weeks. Levels of 140-50 could be expected.
Gufic Bio(132)-After a 3 month consolidation the stock looks heading higher .Levels of 150-60 could be seen in the coming weeks.
Some caution is advised on market front. Going into expiry, the first month of serious correction in the last 6 months looks on cards. With hefty gains in the past few months the temptation to book profits more aggressively could be there. Lot of cheer is provided by small and mid cap counters where good results have kept spirits high. Try some of these bargains and take advantage of corrections.
Health is wealth in these trying times. While this too shall pass, till then take care as the future is ours, if we ride through this present turmoil!
Have a great trading week!
Krish Subramanyam