WEEKLY TRENDSETTER (June 3rd,2022)
| 2022 | May 20 | May 27 | Ch % |
| NIFTY | 16266 | 16352 | 0.53 |
| BANK NIFTY | 34276 | 35613 | 3.90 |
| USD/INR | 77.71 | 77.59 | -0.15 |
MARKET REVIEW–The Nifty managed to hold on to previous week s low and with some spirited short covering from the banking pack, buying at lower levels was evident.
BACK TO RESULTS (March qtr.)
The March quarter results are getting announced. The small and mid-cap segments are the ones where some interesting results could be looked at. This week let’s explore some of them:
Rs in cr, Bracket indicates ch in % against Mar,21 quarter.
| Company | Revenue | Net profit |
| Container Corp | 2057(+5.2) | 252.5(+999) |
| JSW Energy | 2441(+55) | 877(+784) |
| Pokarna | 204(+122) | 20.1(+430) |
| Hind Organic | 196.3(+78) | 32.3(+331) |
Container Corp (658)-The PSU is well placed to capitalize on infrastructure related growth and has been the favourite of FIIs (23.54%) and DII (16.89%). Besides providing inland transport by rail for containers, the PSU is also into management of ports, air cargo complexes and establishing cold chains. With Rewari to Palanpur being connected to DFC, the company is witnessing strong improvement in terms of faster turnaround time and improved efficiency. Further benefits are expected once the DFC is connected to Dadri and JNPT. The company is planning for a capex of Rs 80 bn over the next 3-4 years to be executed through internal accruals. This investment would largely be towards infrastructure, rolling stock, containers and equipment. With an EPS of Rs 17 for FY22, the stock looks a decent portfolio candidate.
JSW Energy (284)-The sharp rise in net profit has been largely on the back of a one-time reversal towards tariff adjustment order for a hydro plant. The quarter also saw increase in long term electricity sales which was up 19%. Operating margins rose by 605 basis points to 46.36% on better realization of electricity sold. The quarter also saw a significant drop in interest costs. On the whole the EBIDTA/interest cover has seen a sharp increase as well which augers well for the future. With an EPS of Rs 10.5 for the year the stock could see buying at lower levels.
Pokarna (503) The company has made a mark in mining quality granites which is then processed and polished. With an EPS of Rs 25 for FY21-22 earnings have seen a sharp growth during the year. The scrip has been one of the star performers in the post Covid boom. At current levels it looks fairly priced.
Hind Organic (32)-The PSU has kept hopes alive thanks to the chemical boom in the last couple of years. However, performance in the previous quarters were much below expectations. The company is the 2nd largest manufacturer of phenol and acetone in India which goes into vital industries like resins, laminates. It also has capacity to produce hydrogen peroxide. The PSU has been struggling in the last few years. The March quarter saw a sharp operational improvement and also aided by a bumper other income. High interest costs have been a huge drag on the financials. However, the quarter offers a glimmer of hope for the future. Given the high growth envisaged in the chemical sector, the company certainly has the potential to translate the same into performance.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index has again managed to hold the previous support of 15700 and could see some gains upto 16650 where a fresh review could be taken.
BANK NIFTY– The index has seen a sharp short covering rally which has seen it outperforming Nifty. With the index approaching the 50dma of 35750, some profit taking could creep in in the early part of next week. Levels of 34700 should provide decent support.
SCRIPS TO WATCH OUT
Goodyear (946)-The low volume stock offers a decent bet in the long run as levels of 850-900 acts as a good support. Accumulation could be considered for possible target of 1200 in the medium term.
HBL Power (82) -The stock has been in the limelight even in the meltdown in the market and has seen steady accumulation. Given its underlying strength it could be accumulated at declines for a possible target of 120.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam