WEEKLY TRENDSETTER (NOV 19th,2021)
| 2021 | NOV 12 | NOV 19 | Ch % |
| NIFTY | 18103 | 17765 | -1.95 |
| BANK NIFTY | 38733 | 37976 | -1.87 |
| USD/INR | 74.42 | 74.24 | -0.40 |
MARKET REVIEW–The market was in no mood to take forward the bullish closing of the previous week and there was relentless selling pressure which not only wiped out the previous week’s gains but also closed below 17800 which was largely a support area.
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 |
| Chempla Sanmar | 1673(+74) | 151.3(+425) |
| Pokarna | 148(+41) | 20.4(+404) |
| Sequent Scientific | 350(+9.4) | 13.8(+422) |
| Sandhar Tech | 618(+51) | 21.2(+300) |
Chemplast Sanmar (609)- It is a leading manufacturer of speciality chemicals such as specialty Paste PVC resin and Custom Manufactured Chemicals for agro-chemical, pharmaceutical and fine chemicals sector. It also produces other chemicals such as Caustic Soda, Chlorochemicals, Hydrogen Peroxide, Refrigerant gas and Industrial Salt. The impressive growth in topline and bottomline is despite a high interest cost which has been a drag in the previous quarters. With an EPS of Rs 10.5 for the quarter the scrip is clearly one to keep on the radar.
Pokarna (620)-The company processes granite which is sourced from its own quarries as well as a few outsourced ones. Its subsidiary PESL Ltd, is India’s largest manufacturer and exporter of quartz surfaces. It also has an apparel business which is still in a nascent stage. With a Rs 6.6 EPS for the quarter momentum is in favour of the company. The scrip has seen a steep rise. At current levels some profit-taking could emerge.
Sequent Scientific (178)- The company has become one of the world’s leading producers of APIs & amongst few dedicated integrated veterinary companies in the world. The quarter witnessed some pressure in margins and only a tax write back boosted the bottomline. The stock has almost halved in the last 6 months and given the entry into the Carlyle group long term potential is good. Accumulation at declines can be considered .
Sandhar Technologies (277)-The company is one of the leading automotive components and systems supplier engaged in the manufacture of a diverse range of products with primary focus on safety and security systems for automobiles across segments. While 2-wheelers accounts for 55% of the offtake,4-wheelers accounts for 24% and tractors around 16%. The company’s strong topline in the quarter is in the background of a de growth seen in the industry as a whole. The company is also a supplier to EV players and was even rumoured to be talks with Tesla .Given its strong presence and also reasonable valuation, low debt ,etc. ,it could be a scrip to watch out.
MARKET OUTLOOK.
The week gone by was clearly in favour of bears and the breach of 17800 on the Nifty and closing below that has resulted in an engulfing bearish pattern on weekly charts which could prove decisive in the coming weeks. Banking and metals saw the brunt of selling pressure and going into expiry ideally some short covering should emerge at lower levels. The negative listing of PayTm also saw some sentimental impact and it will be a critical factor in the coming week as well.
Some technical cues are as follows going by market trends: –
NIFTY-The indices could witness some volatility going into expiry and any bounce could see selling emerging around levels of 17900-18000.Lower levels of 17500-600 could be touching going into expiry. The index saw a massive jump from 16000 to 18600 in the Aug -Oct period. Even a 50% correction could see the index down to 17000 which could be seen as profit-taking.
BANK NIFTY -Levels of 38500-600 could now see as near-term resistance and support could emerge around 37000 levels. Thus, selling bias could be seen in the coming week
SCRIPS ON RADAR
SAIL-(111)-In line with the metal sector the scrip also has seen a steep decline and has closed just above its 200-dma of around 110.However going into expiry the weakness could continue. Selling could be considered for a possible target of 98-100 in the coming weeks.
PFC (130)-The scrip has seen short built up in the last couple of weeks and approaching its 200-dma of 126.Ideal levels for selling is 132-35. The scrip could slide to levels of 120-22.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam