WEEKLY TRENDSETTER (APRIL 26,2024)
| 2024 | APR 12 | APR 19 | Ch % |
| NIFTY | 22519 | 22147 | -1.65 |
| BANK NIFTY | 48564 | 47574 | -2.04 |
| USD/INR | 83.47 | 83.48 | 0.01 |
MARKET REVIEW-The week was hugely volatile with a negative bias. While US markets sold off for most part of the week, geopolitical tension again resurfaced. However, the market managed to claw back and some of the losses were pared. The coming week will see monthly expiry and cues will be keenly awaited for May when large part of the country will have general elections. Quarterly results will also be flowing in and thus an action-packed week is awaited.
BACK TO RESULT SEASON
March quarter results are trickling in. Lets 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 |
| Elecon Eng | 564(+32) | 101(+53) |
| GM Brew | 623(+299) | 87(+148) |
| Oriental Hotel | 107(-3) | 17(-5) |
| Cupid | 63(+53) | 24(+200) |
Elecon Engn (1166)-The engineering major posted another stellar quarter which was largely due to the strong demand in power segment, material handling and foundry business. The company has posted Rs 32 EPS for FY24 and the Board has decided to split the face value from existing 2 to Re 1 which should improve liquidity. The stock has seen good demand from institutions and retail alike. Valuation looks high. A gradual buying could be considered for the long term.
GM Brew (753)-The company is engaged in manufacturing and marketing of Alcoholic Beverages; such as Country Liquor (CL) and Indian made Foreign Liquor (IMFL). It is the largest manufacturer of country liquor in the state of Maharashtra with a sizeable market share. The company’s performance for the March quarter is however mixed. Margins were under pressure on a sharp rise in revenue. Other income ensured a decent surge in bottom-line declared dividend of Rs 7 per share and also declared bonus in the ratio of 1:4. With an EPS in excess of Rs 80, valuations look compelling as even a marginal improvement in margins could boost the earnings even further. Investment could be considered at declines.
Oriental Hotel-(135)-The hospitality business of OHL was established under the technical and operational support of Indian Hotels Company Ltd (IHCL), the hospitality wing of the Tata Group. IHCL owns and operates hotels under “Taj” brand in India and abroad. OHL’s hotels are marketed as part of the Taj Group of Hotels. Over a period of time, OHL has established itself as a very reliable and steadily growing hotel company and has expanded its operations significantly. Presently it has seven hotels mostly in southern states and predominantly in Tamil Nadu.
Operationally the performance has been steady after a strong recovery post Covid. However, the last 2 years has also seen the bottomline buoyed by other income. With an EPS of 3.1 for FY23-24. the stock looks well priced. A sharp tariff hike or even a corporate restructure could provide trigger for a strong upside.
Cupid (114) -The company is a leading exporter of male and female condoms, personal lubricant and IVD kits. It has a production capacity of up to 480 mn male condoms, 52 mn female condoms, 210 mn sachets of personal lubricant and 20 mn IVD Test Kits annually. In December 2023, the company announced strategic land acquisition that will enable it to amplify its production capacity by 1.5 times the existing output. As a result, the annual production capacity will be augmented by approximately 770 mn male condoms and 75 mn female condoms. This expansion is in addition to the current production capacity. The company has a prominent presence in the international markets and holds the distinction of being the first company in the world to attain WHO/UNFPA pre-qualification for male and female condoms. CUPID currently exports its products to over 105 countries, with over 90% of its revenue generated from international markets.
The company split its shares to Re 1 paid-up. It had also announced a 1:1 bonus. With an expected Rs 4-5 EPS for FY24-25 on the enhanced capital, the stock looks interesting though the near term could see some sluggishness due to increase in floating stock as a result of the spilt and bonus. Technically levels of around 90 would be ideal for entry.
NIFTY – The index continued to slide for most part of the week. Closer to the previous month’s low of 21710, short covering emerged and a smart recovery ensured a close above 22000.The coming week could see resistance around 22350-400.A closing above that would be a welcome sign for resumption of the uptrend. The weekly low of 21777 will be critical as a slip below that will make the market vulnerable to a fall below 21300.
BANK NIFTY-The index saw a sharp cut last week. The coming week will begin with cues from the HDFC Bank results. A swing past 48100 and consolidation above that could be very positive for the index to go past 48700. A slip below 46580 could see the index slipping to the 200-dma of 45650.
PICKS FOR THE WEEK
Ramkrishna Forging (773)-The stock has given a strong bullish weekly engulfing pattern on good volumes. With strong momentum in place the scrip could advance past its previous all time high of 815. A target of 840-50 could be expected in the coming weeks.
Sanghvi Movers (1327) -The stock with low floating stock saw good support emerging around 1200 and now looks steadily breaking past its previous high of 1400 which is a modest target. The stock could be an interesting bet for a target of 1500 also.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam