WEEKLY TRENDSETTER (AUGUST 16,2024)
| 2024 | AUG 2 | AUG 9 | Ch % |
| NIFTY | 24717 | 24367 | -1.42 |
| BANK NIFTY | 51350 | 50484 | -1.69 |
| USD/INR | 83.75 | 83.95 | +0.24 |
MARKET REVIEW-The week saw a sharp gap down opening pushing the Nifty below 24000.However, it recovered but still not enough to fill the opening gap. The week was highly volatile with gap down and gap ups swaying bulls and bears all over the place.
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 |
| Cupid | 39(+14) | 8(+300) |
| Venkys | 808(-17) | 75(+294) |
| Oriental Aromat | 216(10) | 11(+999+ |
| Sandur Mangan | 602(+65) | 147(+267) |
Cupid (105) -The company is a leading manufacturer of condoms, IVD s and related products. While the male and female contraceptives and jelly accounts for 90% of the revenue, IVD has also started showing growth. The domestic share is 48% and the balance comes from international markets. EBIDTA margins have risen sharply from 5.4% to 17% which has boosted the bottom-line resulting in an EPS of Rs 0.31 for the quarter on an enhanced capital post 1:1 bonus and stock split. The company has an ambitious expansion plan which augers well for future. Levels of around 90 would be ideal for accumulation.
Venkys (2330) –the group is the largest fully integrated poultry group in Asia. It has diversified its activities to include SPF eggs, chicken and eggs processing, broiler and layer breeding, genetic research and Poultry diseases diagnostic, vaccines and feed supplements, vaccine production, bio-security products, etc. For the quarter despite a dip in revenue the margins have zoomed enabling the company to post a healthy growth. The company had headwinds in FY22-23 due to high cost of feed ingredients like maize and soya and lower realization from sale of poultry products. The stock has largely been an underperformer in the last few years. Levels closer to 1800 would be ideal for investment.
Oriental Aromatics-(505) The company is one of the world’s leading integrated companies, specializing in flavours, fragrances and aroma chemicals. The last few years were challenging as EBIDTA margins dipped from 10.65% to 5.62% in the FY21-24 period. The June quarter has begun on a promising note with margins improving to 10.3%. International sales account for 44% of the revenue. The company successfully commissioned a hydrogenation plant at Vadodara and commercial production commenced on 30th July, 2024.A capex to enhance capacity is expected to show results in the 2nd half of FY24-25. The stock has been an underperformer for several months. However, since it belongs to a niche segment investment could be considered at declines.
Sandur Manganese (544) -While the company is the 3rd largest manganese miner in India, it also has good presence in iron ore, coke, solar -wind renewable energy, ferro alloys, etc. The company has ambitions to become a steel producer which is a forward integration. A small beginning was made by acquiring a steel unit in April ‘24. With Rs 9 EPS for the quarter, the stock looks attractive. Technically levels of around 475 would be ideal for entry.
NIFTY –The index saw a gap down breaching the 24000 level briefly. While a pullback did happen, it has seen resistance at 24400.Some more consolidation could be seen in the 24200 -24400 band.
BANK NIFTY-The index had a gap down from 51350.After 4 days of high volatility the index has not filled the gap and met with resistance around 50700 levels. Upside looks capped at around 51000 and lower levels of 50200-300 could see support emerging.
PICKS FOR THE WEEK
BHEL-(302) -The stock has been losing momentum on the upside. After taking support at around 280 levels, it has settled above 300.Any rise closer to levels of 310-315 could again see selling pressure resuming. Selling can be considered for possible slide to 285 again.
Tata Motor (1067)-A gap down in the beginning of the week saw the scrip dipping below 1100.Support came at around 1000.However, after a retracement to 1083 momentum is slackening. Levels around 1080 can be utilized to sell the scrip for a possible target of 1020.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam