WEEKLY TRENDSETTER (FEB 2,2024)
| 2024 | JAN 20 | JAN 25 | Ch % |
| NIFTY | 21571 | 21352 | -1.02 |
| BANK NIFTY | 46058 | 44866 | -2.59 |
| USD/INR | 83.11 | 83.11 | 0.00 |
MARKET REVIEW-It was another week of profit taking and the Bank Nifty on the way down touched the 200-dma which now becomes a critical support. HDFC Bank again played spoilsport in sinking both indices and traders need to be wary of sharp movement in the Nifty Bank which can be dictated by HDFC Bank alone considering its heavy weightage.
BACK TO RESULTS (Dec qtr.)
The Dec 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 Dec,22 quarter.
| Company | Revenue | Net profit |
| Adani Power | 12991(+67) | 2738(+30322) |
| Cyient DLM | 321(+50) | 18(+200) |
| PCBL | 1657(+21) | 148(+52) |
| Rail Tel | 668(+48) | 62(+93) |
Adani Power (542)-Though sequentially the profits dropped, the growth in revenue was due to higher operating capacity after commissioning of the Godda thermal power plant and improved power offtake. The company is having an ongoing capacity expansion of 1600 MW at Mahan. The company looks heading for an EPS of Rs 25-30 in FY23-24. With debt levels becoming more comfortable and with additional capacities the scrip looks attractive.
Cyient DLM (679)-The quarter saw a strong growth in the aerospace and defence segments and a strong order book position. A new precision machine facility has been set up in Bangalore with 36000 square ft manufacturing area. Besides new facility has been identified for growth in medical and industrial sectors. In terms of revenue mix the company has presence in defence (48%), aerospace (27%), industrial (12%) and medical tech (10%). While the defence grew 100%, aerospace saw a 75% growth during the quarter. In terms of product category PCBA (67%), Box build (27%), cables (3%) and others (3%) are the respective revenue share. Exports constitutes 54% of the revenue. The business model appears to be revenue driven with normal EBIDTA margins of 10%. The company could end up with an EPS of 7-8 for FY23-24. The high valuation reflects the growth potential and investor expectation from the company. At any sharp correction it could be an interesting bet.
PCBL -The company is the largest carbon black manufacturer in India and a strong global player with a significant customer base in 50+ countries. It has a capacity of 7.7 lac MTPA and generating 110 MW per hour of green power. It has come out with another strong set of numbers with an EPS of Rs 3.9 for the quarter. With an expected EPS of around 15-16 for FY23-24, the stock appears well priced. C
RailTel (438)-One of the stars of 2023, the company again delivered another stellar set of numbers. It is an ICT (Information and communication technologies) owning a PAN India optic fibre network along the rail network. It provides mission critical connectivity services like IP based video-based surveillance systems at stations, short haul connectivity between stations and long-haul connectivity to support various organizations within the Indian Railways. It also provides Wi-fi services across major railway stations. With a possible Rs 5-6 EPS for the quarter the scrip has raced ahead on high expectations. At current levels it appears well priced.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index closed below 21500 and though expiry adjustment also played its part, the coming week could be critical with Budget announcements on cards. Levels of 21000 could act as immediate support while on the upside the index could attempt to break past 21800 where selling could emerge.
BANK NIFTY-The index has been on slippery ground for the past few weeks and results announcements have also not helped in improving sentiments. With 200-dma also been touched on the downside, the index now looks oversold. A bounce back up to 46000 is possible.
PICKS FOR THE WEEK
BCL Inds (72)-This has been a regular recommendation in these columns for the past few months since levels of 55. It has been consolidating in the 68-70 band for the past few weeks and now looks poised to resume its uptrend. Accumulation could be considered for a possible target of 85-90 in the coming weeks.
Power Grid (245)-After a range bound performance in the Jan series the stock now looks poised to break out on the upside. Accumulation could be considered for a possible target of 270 in the coming weeks.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam