WEEKLY TRENDSETTER (May 5th,2023)
| 2023 | APRIL 21 | APRIL 28 | Ch % |
| NIFTY | 17624 | 18065 | 2.50 |
| BANK NIFTY | 42118 | 43234 | 2.65 |
| USD/INR | 82.10 | 81.82 | -0.34 |
MARKET REVIEW–The week turned out to be a merry outing for bulls. Levels of resistance were pierced effortlessly and both indices closed at the week’s high despite a long weekend ahead. The first week of May promises to begin with a flying start and with global indices also supportive, all-round participation could continue.
BACK TO RESULTS (March qtr.)
The March 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 March,22 quarter.
| Company | Revenue | Net profit |
| Mahindra Holidays | 712(+31) | 56.2(+255) |
| Lloyd Metals | 877(+163) | 269(+118) |
| Surya Roshni | 2151(-6.5) | 155.6(+88) |
| Aarti Surfuctants | 157.8(+4.3) | 4.7(+98) |
Mahindra Holidays (302)-The company operates in a niche segment of vacation ownership with properties in exotic locations all over India and also having presence in Europe. With a membership base of Rs 2.81 lacs, room inventory of 4940, occupancy at 84%, the company has still a long way to go as membership momentum increases with improving lifestyles. Besides 82 properties in India,it also has 20 properties in S.E.Asia and Middle-East and 33 destinations in Europe across Finland, Sweden and Spain. With improving cash flows and better servicing of debt, the company is poised to leverage on leisure travel in India and abroad. Valuations have been historically high for the scrip. Current earnings are discounted at 40 times.
Lloyd Metals (323)-The company has come out with a strong set of numbers which is more noteworthy in the background of the sluggish environment in the industry. It is well integrated with 10 MMTPA capacity of iron ore production. It has forward integration into manufacture of DRI and further into steel manufacturing. Interest costs have been well under control which has enabled the company to ride over downtrends and also keep up capex investments. There has been a tax write back of 109 cr. Still, looking at prospects around levels of 275-300 the scrip offers good value.
Surya Roshni (798)-The company has 2 segments -steel pipes and lighting & consumer durables. It is the largest GI pipe manufacturer in India and the 2nd largest player in lighting. Margins are low at around 7-8% and despite this, interest costs have been managed well and for FY23 the company has reported an EPS of 62.7. Lifetime high price is 868 but with high momentum, the scrip is attracting buying at lower levels.
Aarti Surfuctants (686)-The company is one of the leading producers of ionic and non- ionic surfactants and speciality products serving Home & personal care, industrial applications, agro and oil industries in India and overseas. The last few quarters have shown a sharp increase in profitability. While top line has been stagnant around Rs 150-160 cr. EBIDTA margins have jumped from 2-3% to 9% which has resulted in an increase in EPS to Rs 6.15 for the quarter from around 3 just a few quarters ago. The group has an impressive presence in the domestic and global markets. With an EPS of around Rs 20,the scrip looks fairly priced currently. Long term prospects appear bright and thus any correction is likely to attract investor attention.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index not only cleared 17800 effortlessly, it managed to march past 18000 and closed for the week above that. The coming week is likely to see the momentum continuing and the next possible target is 18350.
BANK NIFTY-The index was a strong out-performer and with large caps and PSU banks witnessing buying, the closing at 43234 promises better levels next week. Momentum could see 44000 in the coming week though profit-taking is likely around those levels after a strong run.
PICKS FOR THE WEEK-
REC (131)-The scrip has broken out of a multi-month resistance which could see it advancing to levels of 145-50 in the month of March. Support can be expected at around 120-25 on any correction.
BHEL (78.30)-The scrip has been gradually witnessing buying at lower levels. With a closing above 77, it now looks poised to touch 88-90 in the coming days. Support should ideally emerge around 75 on any correction.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam