WEEKLY TRENDSETTER (July 1st,2022)
| 2022 | June 17 | June 24 | Ch % |
| NIFTY | 15293 | 15699 | 2.65 |
| BANK NIFTY | 32743 | 33627 | 2.70 |
| USD/INR | 78.07 | 78.32 | 0.32 |
MARKET REVIEW–The week was high in volatility with gap down and gap up on every alternate day.However,the closing was on an optimistic note as the market closed at the high point of the week which should cheer up bulls for next week.
INTERESTING MUSINGS
Continuing with the review of high-profile IPOs of 2020-2021 where most of us were active applicants and rued the fact that we received no allotment and watched the listing at insane premiums and cursed our luck. The last 3 months market meltdown has taken a toll of all these IPO s and its time to take a review of these companies and their performances.3 such high-profile listings are reviewed this week: –
| NAME | Issue price (FV) | Listing price | EPS- FY22 FY21 | PRICE (June 24) |
| MTAR Tech | 575(10) | 1082 | 19.8 17 | 1379 |
| Paras Defence | 175(10) | 560 | 7.78 5.55 | 558 |
| Laxmi Organic | 130 (2) | 296 | 9.72 5.59 | 295 |
MTAR Tech– is a leading national player in the precision engineering industry. The company is primarily engaged in the manufacturing of mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes. A wide range of complex product portfolios meets the varied requirements of the Indian nuclear, defence, space and clean energy sectors. ISRO, NPCIL, DRDO, Bloom Energy, Rafael, Elbit, etc. are some of the high-profile clients.
On the performance front while growth has been good margins are gradually reducing from 30% to 25% over the past few years.With an EPS of Rs 20 for FY 22 stock still commands rich valuation discounting the high profile sector it caters to.Current levels still look stretched for long term investment.
Paras Defence- The company is engaged in designing, developing, manufacturing and testing a wide range of defence and space engineering products and solutions. It is one of the leading ‘Indigenously Designed Developed and Manufactured’ (“IDDM”) category private sector companies in India, which caters to four major segments of the Indian defence sector i.e. defence and space optics, defence electronics, electro-magnetic pulse (“EMP”) protection solution and heavy engineering. (Source F&S Report).
Again its exposure to the defence and space sectors sparked high enthusiasm and high valuation.However,with an EPS of around Rs 8 for FY22 the scrip looks well priced .
Laxmi Organic-is a leading manufacturer of Acetyl Intermediates (AI) and Specialty Intermediates (SI) with almost three decades of experience in the large-scale manufacturing of chemicals.It is the only manufacturer of diketene derivatives in India with a market share of approximately 55 %. It has a market share of 30% of the Indian ethyl acetate market which largely caters to export market.
The company has an impressive growth record in the last 5 years with the topline more than doubling and profits growing nearly 4 times.The company posted an EPS of 9.72 for FY22.The March quarter result was however subdued with pressure on margins.The next couple of quarters will be keenly watched .The stock has seen a decent correction since listing and looks an interesting prospect.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index saw good short covering from the 15200 levels.The closing was near the high of the week.Global cues look supportive to begin with and a dash towards 16000 is possible on the back of short covering .
BANK NIFTY– The index was relatively better placed and closed for the week above 33500 and could regain levels of 34400 in the coming week.
SCRIPS TO WATCH OUT
Ashok Leyland-(140)-The stock has buying at lower levels in a declining market and going into expiry,it could see levels of 155-160 in the coming days.
Tata Chem-(918)-The scrip has seen a very steep decline in the past few weeks and now is at an extreme oversold zone.A short term bounce cannot be ruled out which could take the scrip to levels of 970-80.
Tata Consumer (729)-The scrip has seen good support at around 700-710.Delivery based buying has also been improving. It could recover to levels of 770 and above in the coming days.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam