WEEKLY TRENDSETTER (July 21ST,2023)
| 2023 | July 7 | July 14 | Ch % |
| NIFTY | 19332 | 19564 | 1.20 |
| BANK NIFTY | 44925 | 44819 | -0.24 |
| USD/INR | 82.73 | 82.17 | -0.68 |
MARKET REVIEW–The week turned out to be volatile and higher levels attracted profit-taking. With result season beginning, the trend could now shift towards the overall profitability trend. This was evident last week as IT turned out to be the preferred sector post results of heavyweights. This has been an underperforming sector. However, risk-reward perception tilted the preference to this sector.
Interesting cues
TATA STEEL PLANS EAF route to expand capacity
Steel from scrap is being looked at as a viable method to expand steel capacity. Since this involves melting of scrap, no coal is required. Besides the carbon emission is at 0.5-0.6 ton per ton of steel which is far lesser than 2 -2.1 tons in a coal-based steel plant. While this is still in an experimental stage with a small 0.75 mn tons capacity in Ludhiana, the company wants to replicate this in north, west and south of India while east continues to produce steel from iron ore and coal. Using scrap for steel manufacture is still predominant in the unorganized sector and thus potential is huge.
Aster DM Hospitals acquires 57.5 % stake in Ramesh Hospitals for Rs 200 cr
This has added 710 beds bringing the total count to 4317.The scrip has been attracting steady buying at lower levels as the healthcare sector holds huge promise in the coming years with domestic demand and medical tourism expected to drive growth.
M&M tie -up for semiconductors
The group tied up with NXP Semiconductors, a leading player in secure connectivity solutions for embedded applications. This is expected to cover a wide range of vehicles including utility vehicles, LCV, farm equipment and tractors in which the Mahindra group reigns.
Patanjali Foods OFS oversubscribed by 3 times
The issue was done to comply to the minimum public holding norms of 25%.The issue was at a floor price of Rs 1000 as against the ruling market price of Rs 1220.The company has had a scorching growth over the last 5 years with turnover increasing by 2.3 times to Rs 31524 cr in FY23 and profits growing more than 10 fold from Rs 76 cr to Rs 886 cr.EPS for FY23 stands at Rs 25.With its niche market having a royal clientele the company has bucked the sluggish trend in the FMCG sector which has seen competition hotting up in the last 3-4 years.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index closed for the week very much at the top and now 19500 could act as an intermediate support. Ideally caution should be exercised as the market looks stretched and any sharp gains could attract selling.
BANK NIFTY-The index had a major test of strength as the HDFC Bank -HDFC merger attracted selling pressure.However,ICICI Bank lent decent support and recovery was swift. The coming week could see support at around 44500 and resistance at around 45300.
PICKS FOR THE WEEK-
GIPCL-112)-The scrip has seen a strong 2 -year breakout and levels of 105-110 could be used to accumulate the stock. The scrip could touch 140-50 in the coming weeks.
GMDC (171)-The scrip has been trading in a band of 155-175 for the past few weeks. Steady buying at lower levels now increases odds of it going past 175 towards 200 in the coming weeks. Buying can be considered at declines.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam