WEEKLY TRENDSETTER (June 14,2024)
| 2024 | MAY 31 | JUNE 7 | Ch % |
| NIFTY | 22530 | 23290 | 3.37 |
| BANK NIFTY | 48984 | 49803 | 1.67 |
| USD/INR | 83.48 | 83.42 | 0.37 |
MARKET REVIEW-The week saw a roller coaster ride on the back of hype in opinion polls and subsequent fall in expections in the Lok Sabha elections.However once it was clear that NDA was coming back to power for a 3rd term, markets quickly recovered all the losses and ended with solid gains and was just shy of the all-time high mark.
BACK TO RESULT SEASON
March quarter results are in full steam. Let’s explore some of them to get cues of where the stocks could be heading
Rs in cr, Bracket indicates ch in % against March,23 quarter.
| Company | Revenue | Net profit |
| Oriental Aromatic | 216(+10) | 10(+900) |
| Lux Inds | 708(-0.98) | 55(+83) |
| Alkem Lab | 2936(+1) | 304(+347) |
| IFB Inds | 1090(+7) | 16(+300) |
Oriental Aromatics(354)-The company has 3 divisions – camphor and terpene chemicals,speciality chemicals and fragrance & flavour .The first two divisions have been plagued with excess supply conditions which has kept realizations low and margins under pressure.However ,the trend seems to suggest that the worst might me over .The fragrance and flavour divisions have however been the beneficiary of suppressed prices and thus helped to increase profitability in FY 23-24.The last quarter of the year has thrown in some optimism and the coming quarters should see better results.At current levels the worst is discounted and gradual buying could be considered.
Lux Inds (1446)-The company’s products are a household name as the Lux brand for men and women has seen a steady market share .The manufacturing locations are well spread out to cater to address the growing markets.The revenue pie has also seen a 6% contribution from overseas markets.The promoters hold 74% stake and FII s hold 20% and thus floating stock is negligible.The stock performance has however been disappointing as besides sluggish performance it was also plagued by corporate governance issues which marred sentiments.However ,with a 18 Rs EPS for the quarter and presence in a buoyant market with marquee brands ,the stock has the potential to recoup lost ground .Current levels look attractive and could be considered for buying at declines.
Alkem Laboratories (4953)-The company The company has had an impressive track record with 19 manufacturing units,over 800 brands and footprint in over 40 countries. 35% revenue coming from overseas market and has shown an increasing trend over the years .FY 24 saw a 380 bps jump in margins .At current levels the stock looks well priced .
IFB Inds (1457)-The company began its journey manufacturing fine blanks components and subsequently diversified into white goods segment as well as automotive applications .While revenue has seen an impressive growth over the years margins have not kept pace and infact declined to 5.4% which has also resulted in an unimpressive bottomline growth.However,management commentary is suggesting measures to reduce costs and is targeting a double digit margin by the end of FY25.Even if the attempt results in a 50% improvement the bottomline could see a significant rise.At current levels the stock is a decent buying bet.
NIFTY – The index saw a wild swing and breached even 22000 mid week.However a short covering rally ensured recouping of all losses and the index looks heading to surpass the previous all time high.Any decline to 23000 levels offers a buying opportunity .
BANK NIFTY-The index was a relative underperformer during the week.However the trend seems to suggest that levels of 49000 should ideally hold and the index could march towards 51200 .
PICKS FOR THE WEEK
GIPCL (208)-The stock has been trading in a band for the past few weeks with levels of 190 providing decent support.Buying around 195-200 could be considered for a possible target of 240.
Uttam Sugar (326)-The stock has seen a significant correction from levels of 525.While long term trend still is up ,levels of around 310-320 provides entry point.Short term upside of 350 could be seen while long term buying for more upside past 400 could be considered.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam