WEEKLY TRENDSETTER (FEB 9,2024)
| 2024 | JAN 25 | FEB 2 | Ch % |
| NIFTY | 21352 | 21854 | 2.35 |
| BANK NIFTY | 44866 | 45971 | 2.46 |
| USD/INR | 83.11 | 82.92 | -0.23 |
MARKET REVIEW-The week started on a strong footing on the back of positive global cues and the beginning of a fresh series. The momentum led by heavyweights like Reliance, Tata Motors and Maruti saw the Nifty touch life time high before slipping towards close.
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 |
| IOC | 199906(-2) | 8577(1071) |
| Jubiliant Pharma | 1667(7) | 53(478) |
| Swan Energy | 1592(+1476) | 220(+414) |
| CG Power | 1979(+11) | 748(+228) |
IOC (162)-The OMC has released a very strong set of numbers which is largely due to softening of crude prices from around $90 to $77 per barrel in the last 3-4 months. The rupee was also relatively strong. The icing on the cake was that there was no price cut announced for petrol and diesel which normally follows on the eve of Assembly and LS elections. With a volatile crude to tackle, the view seems pragmatic as geo political tensions continue. While if the low prices continue, there may be a cut soon. However, the OMC s is well placed to absorb any such cuts as the margins will still be strong. Even at current levels the scrip looks attractive and the market’s re-rating of all the OMC s continues.
Jubilant Pharma (593)-Formerly known as Jubilant Life Sciences the company has seen a fall in fortunes since 2020 and even slipped into red in FY23 though marginally. However, the 3 quarters of FY23-24 have seen sequentially better numbers. The company is involved in Radiopharma, Allergy Immunotherapy, CDMO Injectables, CDMA, generics and Proprietory Novel drugs business. The Radiopharma segment involves developing radioactive medications used to diagnose or treat cancer. This accounts for 40% of the revenue. The company could end up posting around Rs 15-20 EPS for FY23-24 going by the current momentum. It had posted EPS of Rs 56 and Rs 52 respectively in FY19-20 and FY 20-21. Thus, the potential remains and consistency is the key.
Swan Energy (686)- The company has 4 business verticals -oil & gas, petrochemical, textiles, and real estate. The company has developed LNG port facilities for LNG receipt, storage, regasification, and despatch with a capacity of 10MTPA.With presence in textiles with a capacity of 3 million metres per month the company also has presence in realty segment and has successfully completed residential and commercial projects. With a well-diversified business, the company was in losses in the last 3-4 years till FY23.However, it has posted 3 consecutive profitable quarters and could end FY23-24 with an EPS more than Rs 30. The stock has taken wings after the improved performance. It could see better valuations if the consistency is maintained.
CG Power (448)-Ever since the company came under the wings of the Murugappa group, it has seen a remarkable resurgence and the last quarter has seen another strong set of numbers. The company is a major player in the domestic industrial motor, rail product and transmission equipment space with a robust M&A record. The management’s three-pillar strategy prioritizes exports, capacity expansion, and technology. The company also plans to set up a semiconductor assembly and testing facilities in India. The quarter also saw an extraordinary income of Rs 551 cr which substantially boosted the bottomline. This is towards dissolution of the erstwhile CG Power Solutions on the order of NCLT where CG Power was the main creditor. The stock could see some cooling down soon but will remain an investment candidate on any sharp correction.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index recovered to again close above 21500 and even touched an all-time high. The momentum looks strong as large cap heavyweights like RIL, Tata Motors, SBI, Power Grid look to carry on the momentum. If HDFC Bank shows even some stability, the index could race ahead to levels of 22500 soon.
BANK NIFTY-The index must do some catching up. However, levels of 46500 could be the immediate resistance. Above that it could see levels of 47300 in the coming week.
PICKS FOR THE WEEK
Exide Inds (344)-The stock has beenhitting new highs. All corrections have been bought into and with a sharp breakout it looks poised to seek higher levels. Accumulation can be considered for a possible target of 370 in the coming weeks.
Jindal Steel & Power
(776)- The stock has been an outperformer in the metal segment and after a consolidation phase looks set to conquer higher levels. Accumulation can be considered for a possible level of 825 in the coming weeks.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam