WEEKLY TRENDSETTER (NOV 5TH,2021)
| 2021 | OCT 29 | NOV 5 | Ch % |
| NIFTY | 17671 | 17916 | 1.39 |
| BANK NIFTY | 39115 | 39573 | 1.17 |
| USD/INR | 74.92 | 74.54 | -0.51 |
MARKET REVIEW–The start of the week saw a spirited run followed by some volatility and finally a positive close in a truncated week. The broader market continues to be strong as investors nibble into unperforming scrips where potential is seen.
BACK TO RESULTS (Sept qtr)
The Sept quarter results season has begun and several large cap results have been widely discussed. The small and mid-cap segments are the ones where some interesting results could be looked at. June 21 is taken for comparison as the previous corresponding quarter was largely Covid affected.
Rs in cr, Bracket indicates ch in % against June,21 quarter
| Company | Revenue | Net profit |
| Cera Sanitary | 403(+76) | 44(+281) |
| CG Power | 1453(+38) | 188(+292) |
| Shakti Pump | 356(+141) | 19.1(+337) |
| United Spirits | 2507(+46) | 286(+469) |
Cera Sanitaryware (5500)-A leading manufacturer of ceramic sanitaryware and faucets, the company has seen huge demand as a result of home upgradation and improvement, pandemic induced preference for larger spaces and Govt incentives for the real estate sector. Raw material costs have spiraled but strong demand has ensured passing off the cost to customers. Levels of around 5000-5100 would be attractive for entry.
C.G. Power (165)-Ever since it came under the Murugappa fold, the company has seen a turnaround in operations with rising topline, falling interest costs and cost control measures. The improving prospects of the power sector also contributed to its turnaround as the company is engaged in the business of power transformers and reactors, low tension motors and switchgears. After a steep run up some cooling off could be expected but levels of 135-140 would be ideal for entry.
Shakti Pumps (664)-The topline has seen an impressive growth on the back of the emphasis on solar pumps which is being encouraged by the Central and State Govts.The company has already installed 20000 out of the 50000 solar pumps ordered by the central government and 6,500 by the states. The KUSUM scheme in its second phase is targeting 4 lac pumps, out of which the company plans to install about I lac pumps. The scrip is trading just around its 200-day moving average. Levels of around 575-600 would be ideal for entry.
United Spirits (977)-The company’s performance is impressive on all parameters. While top line has sharply improved, margins have also improved and further boosted by a sharp fall in interest costs. Management commentary remains optimistic as the relaxation of lockdown could further boost sales. The stock has seen good investor appetite and trading at an all time high. Lower levels of around 850 would be attractive for an entry.
MARKET OUTLOOK.
The market is going through a reality check post announcement of results. With a steep run up till mid -Oct, results have by and large been greeted with profit -taking which has seen the Nifty cooling of to levels of 17800-18000.This is notwithstanding the banking counters which have had a relatively better run with PSU banks in particular attracting buying as valuations look compelling. The week will see the launch of PayTM IPO which would indicate the investment appetite for new age scrips as valuation looks steep. Besides the listing of Nyka, Policy Bazaar will also be keenly watched if there is sufficient demand post listing.
Some technical cues are as follows going by market trends: –
NIFTY-Near term resistance could be at 18100-18200 on the Nifty and support should be around 17700-17800.The lower band has seen short covering rally in the previous week. The coming week is another truncated week. The market could broadly remain in a trading range for the week.
BANK NIFTY -Levels of 39500-600 could be near term support and levels of 40100-40300 could see some profit-booking.
SCRIPS ON RADAR
BSE Limited-(1382)-The stock has been in a range of 1200-1400 for the past few months. However, with higher bottoms during the period, it looks poised to breach past 1400 in the coming weeks. Accumulation could be considered for possible target of 1500
Federal Bank (101)-The scrip has broadly been an underperformer in the last few months. However, with a strong break out past 100 it looks heading for higher levels. Buying in the 95-100 band could be considered for a target of 125 in the coming weeks.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam