WEEKLY TRENDSETTER (JAN 27th,2023)
| 2022 | JAN 13 | JAN 20 | Ch % |
| NIFTY | 17956 | 18027 | 0.40 |
| BANK NIFTY | 42371 | 42506 | 0.32 |
| USD/INR | 81.28 | 81.20 | -0.10 |
MARKET REVIEW–It was another week of volatility and the market moved in a band. While 17800-18200 was the Nifty band, the Bank Nifty’s band was 42000-42500.The latter showed a slight positive bias towards close of week which augers well for the coming week.
BACK TO RESULTS (Dec qtr.)
The Dec quarter results are getting announced. The small and mid-cap segments are the ones where some interesting results could be looked at. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against Dec,21 quarter.
| Company | Revenue | Net profit |
| Surya Roshni | 2021(-0.4) | 89.7(+121.4) |
| Wendt | 50.8(+25.2) | 10.1(+81) |
| India Mart | 252(+34) | 122(+67) |
| Stylam | 234(+39) | 24(+54) |
Surya Roshni (612)-The company has presence in 2 booming sectors -GI steel pipe and lighting products. The pipe division contributes more than 75% of revenue and profits. The company has been focussing on reduction of debt-equity ratio during the quarter which was also aided by better cash conversion cycle. The company ramped up operations at the new DFT technology manufacturing at Malanpur.Export market also looks healthy in terms of revenue and order inflow stood at Rs 700 cr.
The lighting segment offers huge potential with the company making inroads into the smart city segment like Indore Airport lighting, Karimnagar smart city, Bharuch Bridge Façade,etc.Other range of products include fans,water heaters,irons,grinders among several others which offers huge potential in semi-urban and rural areas.
The company looks heading to report Rs 50 EPS for FY 22-23 and looks heading for all -time high in the coming months.
Wendt (8342)- A high flying blue chip of the abrasives industry reported robust set of numbers. The company primarily caters to automotive, auto-ancilliaries, steel ,bearing and aerospace industries.While over the last 5 years revenue growth has been modust,profitability has been robust and infact doubled during the period.With 2 successive quarters of Rs 50 EPS the company looks heading for Rs 200 EPS for the year.At 40 P/E the stock enjoys premium valuation which is also boosted by low floating stock.
India Mart Intermesh (4543)-The company is India’s largest online B2B marketplace, connecting buyers and sellers. The range comprise textiles, electronic goods, pharma, medical equipment, food agricultural produce to name a few. Clearly the business model knows the pulse of the market and the company has been growing from strength to strength. There has been a boost in other income in the Dec quarter as well but with high margins, negligible interest costs, the company looks to consolidate on its first mover advantage. For FY23 EPS could cross the 100-mark going by the trend. The stock has seen a huge correction of 50% in the last one year. Valuation still looks stretched though the company prospects look bright.
Stylam Inds (1088)-The company has been a leading name in laminates. It has reached about 80% capacity utilization level in the laminates division and have now started modular expansion at the existing facilities that will increase the capacity by up to 40%. This will entail a total Investment of Rs 40 cr. The company has already made inroads into the export market with 60% of the revenue coming from exports. Low debt coupled with expanding topline and margins the company looks poised to consolidate on its strength. FY23 EPS could be Rs 60. The stock has seen good buying at lower levels and looks good to add on dips.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index has managed to hold the 17800 level for the past few weeks and 18200 has seen selling emerging. The coming week could possibly see the index again oscillating in this range though with a positive bias.
BANK NIFTY-The index made a strong comeback towards close of week and managed to close above 42500.The coming week will see reaction of the market to the results of heavyweights ICICI Bank and Kotak Bank and odds are high that levels of 42800-43000 will be crossed.
PICKS FOR THE WEEK
Tata Steel (125)-The Jan series has seen good accumulation in the scrip and now looks poised to cross 125-130 in the coming days. Buying could be considered at dips for a possible target of 140-45 in the coming weeks.
Finolex Inds (175)-The scrip saw some cooling off in the past few weeks from levels of 195.Good support has emerged at 165-70. Buying could be considered for a possible target of 200 in the coming days.
Wishing all readers, a great week in the markets!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam