WEEKLY TRENDSETTER (NOV 15,2024)
| 2024 | NOV 1 | NOV 8 | Ch % |
| NIFTY | 24304 | 24148 | -0.64 |
| BANK NIFTY | 51674 | 51561 | -0.22 |
| USD/INR | 84.06 | 84.38 | 0.23 |
MARKET REVIEW-The week was hugely volatile as US elections were held and the cues from there were very positive. However, after a one day rally all gains were given up and by end of week traders were left worrying about whether 24000 on Nifty would be held next week.
BACK TO RESULT SEASON
Sept 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 Sept,23 quarter.
| Company | Revenue | Net profit |
| Zen Tech | 242(+261) | 63(+350) |
| Indian Hotel | 1826(+27) | 573(+258) |
| Universal Cable | 638(+29) | 18(+200) |
| KCP | 602(-14) | 99(106) |
Zen Tech (1825) –The company has made impressive strides in the last few years and has managed to ride the defence wave which has been actively promoted by the Govt also. It has been in the forefront of producing the latest equipment required in modern warfare right from anti drones’ system to jammers, radar systems, etc. It has also been investing into R&D which enables it to keep up with the latest requirements. Both domestic and exports have shown steady growth and along with the equipment, AMC contracts also could provide a steady income stream in the coming years. The company could end up posting EPS of Rs 35-40 for the year. At current levels it looks stretched.
Indian Hotels (745)-The hotel chain with the Taj brand has been leading the charts since inception. There are currently several tailwinds which could keep the growth strong for the industry as a whole. With a growing tourist crowd, rising middle class domestically, under penetration, several new destinations still to be reached, the existing players should see strong tariffs to continue. Besides with a sharp rise in real estate prices new entrants will be kept under check. The demand has been so strong that in FY23-24 on an average one new hotel was opened every week. The company has low debt and strong cash reserves. The 2nd half of the year usually witnesses better performance due to higher tourist traffic and wedding season. At current levels the stock looks stretched. However, for the long term it is an ideal portfolio stock given the sweet space it operates in.
Universal Cables (650)-The company is a leader in the Indian cable industry with the widest product range. The cable division has a very wide range of product. It includes Low, medium and extra high voltage XLPE Power Cables up to 500 kV grade. Its Cables and Capacitors are known by the Brand Name “UNISTAR”. The company has posted a strong performance for the Sept quarter. With the power sector and real estate in robust condition, the company’s prospects look bright. At current levels valuation looks reasonable.
KCP Ltd (233)-The company derives its revenue mainly from cement and sugar. The quarter was a one division show by sugar which posted EBIDTA of Rs 106 cr which offset the dismal performance by the cement division which posted a loss of Rs 25 cr. The 2nd half of the year is historically better for cement and thus the company could be expected to do better. With an EPS of Rs 4.76 for the quarter the company could be expected to end the year with an EPS of around Rs 15 at the least. At current levels it could be an interesting bet at dips.
NIFTY –The beginning of the week was subdued. However later it did look like bulls would be under control. After a one day rally on the back of cues from US, selling resumed and by end of week the index was back in the red for the week and 24000 could again be revisited next week.
BANK NIFTY-The index saw a smart mid-week rally. However, it was short lived and by end of week, the index closed at 51561.A dip below 50800 could see a swift move towards 50000.On the upside 52200 should pose a stiff resistance.
STOCK PICKS
DLF (785)-The stock has breached 800 level and trading below that. Selling could be considered around 795-800 for a possible target of 740 in the coming days.
Aarti Inds (475)-After a promising beginning for the week, the stock broke down on volumes below the critical support levels of 500 and looks heading for levels of 440.Selling could be considered around 485-90.
Wishing all readers great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam