WEEKLY TRENDSETTER (August 18th,2023)
| 2023 | Aug 4 | Aug 11 | Ch % |
| NIFTY | 19517 | 19428 | -0.46 |
| BANK NIFTY | 44879 | 44199 | -1.52 |
| USD/INR | 82.83 | 82.84 | 0.01 |
MARKET REVIEW–The week saw more correction which comes on the back of 2 weeks selling pressure and though the broader market saw some pockets of gains, banking was the drag particularly towards the end of week.June quarter results of many companies announced last week also were below expectations which saw scrips correcting from elevated levels.
BACK TO RESULTS (June qtr.)
The June quarter results are trickling in. So far, it has been a mixed bag. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against June,22 quarter.
| Company | Revenue | Net profit |
| Patanjali Foods | 7767(+7) | 88(-263) |
| Uttam Sugar | 460(-23) | 31(-18) |
| Lemon Tree | 222(+15) | 27(+103) |
| Sun TV | 1349(+9.6) | 592(+16.43) |
Patanjali Foods (1293)-The edible oil segment posted revenue of Rs 5890 cr which was a 35% growth y-o-y despite a challenging environment where prices saw a sudden correction and the company was saddled with high cost of inventory. The FMCG and FMHG segments have made steady progress where the company sells products under the Patanjali, Ruchi Gold and Nutrela brands. Exports surged 128% y-o-y to Rs 162 cr. This company has been the fastest growing FMCG in the last 5 years with a niche clientele which is steadily growing. Some correction to levels of around 1150-1200 could see the scrip back into accumulation radar.
Uttam Sugar (336)-The company posted muted results in line with other sugar companies. The company plans to produce more ethanol which is being encouraged by the Central Govt to use it to blend with petrol. The distilled capacity will go up from 150 KLPD to 250 KLPD and capex of Rs 56 cr is planned with the capacity addition scheduled to be completed by Dec 23. The scrip has seen a major surge in the past few months. However, a correction would be ideal to use for accumulation. Levels of around 300 would be attractive.
Lemon Tree (95)-The quarter saw a muted performance from the company which is in line with seasonality in the industry. However, the coming 3 quarters are expected to be exciting with the beginning of festival season followed by World Cup cricket and year end tourism. The management has indicated a 10-15% price hike with average occupancy of 75%. While a Rs 1000 cr revenue is expected, another Rs 300 cr is expected in the next 2 years. At current levels the scrip appears well prices.
Sun TV (545)-The company operates satellite television channels across Tamil Nadu, Telengana, Karnataka, Kerala, Bengal, and Maharashtra, and airs FM radio stations across India. It also owns SunRisers Hyderabad Cricket franchise of the Indian Premier League (IPL) and SunRisers Eastern Cape of Cricket South Africa’s T20 League. The consolidated revenue of the company includes income from the IPL franchise, which more than doubled annually to Rs 513 cr in Q1FY24 as opposed to Rs 243 cr in the corresponding period of the previous fiscal. Total cost on these franchises went up over 50 % to Rs 228 % (Rs153 cr) in the latest quarter. With an EPS of Rs 15 for the quarter, the scrip looks attractive.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index continued to shed ground finally closed at the low point for the week just above 19400.With a truncated week ahead, the index will try to take support around 19200.On the upside 19600 will be a resistance area.
BANK NIFTY-The index was largely under pressure and now looks set to breach 44000.Any bounce will find resistance at around 44600-700.
PICKS FOR THE WEEK-
GMDC (178)-The stock went on to a profit-taking mode and now looks set to resume its uptrend. Levels of 165-70 should act as a good support level. In the immediate short term 188 should be a resistance. However, the scrip is likely to advance to levels of 200.
MRPL – (86.50)-The scrip was oscillating between 80-90 for the past few weeks. It now looks set to break past 90 on the upside. Buying could be considered for a possible target of 95.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam