WEEKLY TRENDSETTER (JUNE 24th ,2021)
| 2021 | JUNE 18 | JUNE 25 | Ch % |
| NIFTY | 15683 | 15860 | 1.13 |
| BANK NIFTY | 34558 | 35364 | 2.33 |
| USD/INR | 73.94 | 74.20 | 0.35 |
MARKET REVIEW –The recovery post the previous week ‘s profit -taking was swift and the Nifty managed to regain most of the losses and began the July expiry series on a positive note. Metals, auto saw some good revival and the banking counters participated as well.
REVIEW OF RESULTS (MARCH QTR)
The result season is slowly coming to an end and focus this week is on some outstanding performance for the March quarter.
Rs in cr, Bracket indicates ch in %
| Company | Revenue | Net profit |
| MSTC Ltd | 311(60.4) | 75.44(+1471) |
| ITD Cementation | 984(+33) | 46.2(-15.3) |
| Saurashtra Cem | 243.3(+37) | 31.6(+378) |
| Suprajit Eng | 513(+32) | 57(+999) |
MSTC (260)-This is a PSU having an interesting profile. While the primary business is mainly sourcing, purchasing and selling iron scrap, coking coal, petroleum products, etc. on behalf of its clients, it has been increasing its presence in the E-commerce segment where it sells the above products on behalf of its customers based on auction model. This activity has seen impressive growth in the last 2-3 years. With an EPS of Rs 16-17, prospects look interesting.
ITD Cementation (83)-The company has a leading presence in engineering projects like highways, bridges, flyovers, airport, mass rapid transportation systems, etc. It is well known as a contractor for maritime projects for construction of jetties, berths, wharfs, etc. It has been under pressure in the last few years with mounting interest burden and contracting margins. With strong order book position, healthy bid pipeline (Rs880bn) and improved liquidity position on one hand and headwinds due to second wave of Covid on the other, management guided for conservative 15-20% revenue growth in FY22.The worst could be behind.
Saurashtra Cement (94)-Well known for its “Hathi’ brand of cement the company is largely present in Western India. In line with its peers, it posted robust set of numbers for the March quarter. With an EPS of 11-12 for the full year, the scrip looks attractively priced.
Suprajit Eng (281)-Besides producing motion control equipment for automobiles, the company also produces vehicle lighting. In non-automotive cables, the company is planning to enter into new segments such as medical device equipment, consumer durables, agriculture and construction equipment, which would drive growth and also provide a hedge against the cyclical auto industry. The company has a history of acquiring companies for its expansion of customer base, new geographies, and increasing dominancy in its core business. Interesting possibilities are there going ahead.
MARKET OUTLOOK.
1.The rupee weakening continued during the week which saw buying in pharma and IT. Price rise in crude remains a worry with Brent crossing $75.While in the long run the price could be unsustainable as seen in the past, for the immediate short term, this could have inflationary pressure in the coming months.
2.The Nifty is again on the brink of touching 16000.Global cues appear good as US mkts also showed recovery improving sentiments. Domestically, any dip in indices has seen buying emerging as seen last week as well. With banking and metals on a revival mode, levels of 16200 could be on cards in the coming week. Periodic profit-taking is advised on any steep rise in small and mid -caps.
Some technical cues are as follows going by market trends
Scrips to watch out
BPCL (471)-The scrip has seen a correction from levels of 494 and taking support above levels of 465-70. The scrip could retest levels of 500 in the coming days. Gradual accumulation could be considered.
HSIL (251) The scrip saw a strong break out rally last week past levels of 245-50. Buying could again emerge at around these levels. The scrip looks heading for 275-80 in the coming days.
Rallis (324)-The scrip was recommended last week at 344 expecting a break out. However, the scrip has slipped to 324. Levels of 315-20 could be used to accumulate and levels of 375-80 could be expected in the coming weeks.
Some optimism is returning on gradual re-opening of the economy. While the scars of Covid will take long to heal, life goes on as the human race continues on a progressive path!
Have a great trading week!
Krish Subramanyam