WEEKLY TRENDSETTER (MARCH 8,2024)
| 2024 | FEB 23 | MAR 2 | Ch % |
| NIFTY | 22212 | 22378 | 0.75 |
| BANK NIFTY | 46811 | 47297 | 1.04 |
| USD/INR | 82.93 | 82.83 | -0.12 |
MARKET REVIEW-The week was highly volatile and it looked like closing below 21500 was possible. However, buying in heavyweights like HDFC Bank, ICICI Bank and Reliance ensured that the index rallied past even 22200.The mid and small caps witnessed a subdued trend
BACK TO RESULTS (Dec qtr.)
The Dec quarter results are almost over. 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 |
| Zaggle Prepaid | 200(+35) | 15(+1400) |
| Zomato | 3288(+68) | 138( -346 loss) |
| Sudarshan Cem | 566(+7) | 15(+1400) |
| Parag Milk | 801(+8) | 34(+277) |
Zaggle Prepaid (354) –A recent listing, the company has diversified offering of fintech products and services, having one of the largest number of issued prepaid cards in India in partnership with certain banks (which constituted approximately 16.0% of India’s total prepaid transaction volume, as of March 31, 2023), a diversified portfolio of SaaS, including tax and payroll software, and a wide touchpoint reach. It is a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023.
The company has shown a steady growth over the last few quarters. The Dec quarter has also been boosted with an other income. With an EPS of Rs 1.4 for the quarter, the stock looks well priced. However, considering the space it caters to buying has been seen at lower levels.
Zomato (166)-The company has been growing at a fast clip in terms of revenue. From Rs 1312 cr in 2019 it has zoomed to Rs 7079 cr in 2023.However after posting losses till FY23, the 3 quarters of FY24 has seen the company turning positive which has enthused investors. The management commentary looks very positive and a revenue growth of >40% is expected in the next one year. With negligible debt, profitability should further improve. Currently EBIDTA margin is around 8% and the company has posted EPS of 0.16. Valuations look steep but perception has changed and being a new age company with an early entry advantage, lower levels will attract buying interest. Technically levels of 110-125 should provide an ideal entry point.
Sudarshan Chem (589) -One of the earliest chemical companies, the company is on the path to recovery after some sluggish performance in the past few quarters. It is the 3rd largest pigment producer in the world. Exports constitutes almost 50% of the revenue. EBIDTA margins have jumped by 300 basis pts to 11 % in the Dec quarter. The stock has seen good support at around 500. With the sector on a revival path the company looks poised for better times.
Parag Milk (245) – The company is known for its “Govardhan “brand and though the topline has shown a steady uptrend, profitability has been erratic and broadly showing a negative trend. However, the 3 quarters of FY23-24 have shown a steady uptrend. The stock looks heading to post EPS of around Rs 9-10 for the year. At current levels the stock looks reasonably priced and with growing perception of brands and a variety of milk products available, the stock could be a re-rating candidate.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index held on to 22000 despite breaching it for couple of days. A strong recovery ensured it closed above 22200 and now looks poised to break past 22500.
BANK NIFTY-The index is bounced back sharply on short covering to close above 47000.With HDFC Bank also showing strong signs of revival, a dash to 48000 is possible next week.
PICKS FOR THE WEEK
Suven Life (111)-The stock has been consolidating above 95 and ow looks poised to cross its previous high of 128. Buying can be considered at dips for a possible target of 130.
BEL-(206) The stock has shown good resilience and now looks poised to go past 210. Buying at dips can be considered for a possible target of 225
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam