WEEKLY TRENDSETTER (JULY 26,2024)
| 2024 | JULY 12 | JULY 19 | Ch % | |
| NIFTY | 24502 | 24531 | +0.12 | |
| BANK NIFTY | 52278 | 52265 | -0.02 | |
| USD/INR | 83.52 | 83.65 | +0.16 | |
MARKET REVIEW-The week saw peaking of indices even as the broader market was showing signs of fatigue. With budget round the corner, all eyes will be on the FM for fresh cues for the fiscal year. The bigger concern is the possible SEBI action on the rise in F&O volumes which seems to be a cause of worry.
BACK TO RESULT SEASON
June quarter results are trickling in. Let’s explore some of them to get cues of where the stocks could be heading
Rs in cr, Bracket indicates ch in % against June,23 quarter.
| Company | Revenue | Net profit |
| Jubiliant Pharm | 1732(+9) | 482(+6785) |
| ICICI Lombard | 5601(19) | 580(+48) |
| KCP Sugar | 89(-7) | 54(+74) |
| Patanjali Foods | 7173(-7) | 263(+198) |
Jubiliant Pharma (749)-The company is into radiopharma, Allergy immunotherapy, CDMO Sterile injectibles, Contract Research & development and manufacturing, generics and proprietary novel drugs business. It has had a roller coaster ride in the past 4-5 years which has seen steady revenue but sharp dip in bottom line. The June quarter also has seen an exceptional item which has boosted the bottomline. However, on the operational front things are falling place and the company looks like getting back to better times. Ideal levels for buying into the scrip is around 650.
ICICI Lombard (1881)-The company has posted an impressive set of numbers. With presence in several non-life insurance products like medical, health, travel, SME, corporate, etc the market is still at a nascent stage and the growth is likely to accelerate in the coming years. Having an early entrant advantage the company enjoys an entry barrier in an industry which requires strong brand backing. At current levels it looks a little stretched. However, on any market correction to levels of around 1700 the scrip is likely to attract investors.
KCP Sugar (49)-The company is one of the leading sugar manufacturers in the country. Its allied business consists of manufacturing and marketing of sugar, ethanol and some allied products. It has 2 plants in Andhra Pradesh having a crushing capacity of 11500 tpa.The company’s performance has been steadily improving over the years and posted EPS of 5.8 for FY 23-24.The latest June quarter has seen operational improvement in working and further due to a substantial other income the bottomline got a further boost.With an EPS of Rs 4.7 and the expected benefits of firm sugar prices in the coming quarters ,the company is heading for EPS in double digits for FY24-25 .Some marque investors have presence in the company and the scrip is an attractive addition at dips.
Patanjali Foods (1594) -This has been the fastest growing FMCG company in the past 5 years in terms of topline even while others have seen pressure. The company has a niche clientele which has continued to patronize its products over the years. Once the sector revives ,the margins also should see improvement due to the pricing power enjoyed by the company .Besides e-commerce business has also seen a decent uptick which is likely to accelerate in the coming years .Export revenue was at Rs 53 cr for the quarter which is still less than 1% of its revenue .However with presence in 22 countries another window of opportunity is opening up .In the latest update the company is going to acquire the non – food business from Patanjali Ayurved at Rs 1100 cr.This company has some interesting segments like dental care, skin care ,hair care ,home care, etc .Thus Patanjali Foods will be transformed into a full fledged FMCG company. In the light of these developments the company has attracted investor interest and looks like heading for an exciting future.
NIFTY – The index closed flat for the week which however looks deceptive as volatility was high. Levels of 24800 and above was difficult to sustain and finally it closed above 24500 leaving hopes of 25000 dashed for the week. However, with budget round the corner, the trend could be sharp on either side atleast in the near term. Levels of 23500 should provide decent support while a breach of 25000 cannot be ruled out. However, going by the trend of the last couple of weeks upside could be losing momentum in the near term.
BANK NIFTY-The indexclosed flat for the week. However, some resilience was seen towards close of week. Thus, despite weak global cues any correction to 52000 and below could be bought into. High volatility is likely with budget round the corner and levels of 53000 can’t be ruled out during course of the week.
PICKS FOR THE WEEK
Engineers India (262)-The scrip touched an all-time high of 304 before sharp profit-taking emerged and is now back to support levels. Ideally 255-260 should be good levels to enter for a possible bounce upto 285.
EMS Inds (670)-The stock has seen some strong buying at lower levels of 400-450.A strong breakout on monthly charts suggests that on any correction accumulation could be done. Ideal levels for entry are 550-580 considering the recent sharp rise.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam