WEEKLY TRENDSETTER (MAY 29th ,2021)
| 2021 | MAY 21 | MAY 29 | Ch % |
| NIFTY | 15175 | 15435 | 1.71 |
| BANK NIFTY | 34606 | 35141 | 1.54 |
| USD/INR | 72.80 | 72.49 | -0.42 |
MARKET REVIEW –All days of the week closed with positive gains and the Nifty also touched the all -time high mark. Sector rotation was at best as IT and banks led from the front and metals and pharma lagged behind. The PSU banks were in limelight as good March quarter results as well as some positive news developments boosted sentiments.
REVIEW OF RESULTS (MARCH QTR)
The result season is slowly coming to an end and focus this week is on some outstanding performance for the March quarter.
Rs in cr, Bracket indicates ch in %
| Company | Revenue | Net profit |
| Elgi Equipment | 610(+34) | 42.7(+999) |
| Sagar Cement | 418(+38) | 49.8(+999) |
| IG Petro | 424(+58) | 100(+999) |
| Datamatics Global | 283(-8.7) | 29(+753) |
Elgi Equipment (210)-The company caters to a whole range of industries like manufacturing, textiles, pharma, agriculture mining and defence. The last 3 quarters have seen sequential increase in profits. It also caters to international markets and has been an FII favourite with a 20>% holdings over the years. With an EPS of around Rs 3 for FY21, valuations appear expensive though long-term prospects look robust.
Sagar Cement (879)-Riding on the back of a booming cement industry the company has come out with great numbers which has been the trend for the last 4 quarters. With low interest costs, the company plans to leverage on this by adding 2.25 MTPA in the current year. Current capacity stands at 5.75 MTPA.With an EPS of Rs 80 for FY21, valuation appears attractive .
IG Petro (556)-The company has been identified with PAN (phthalic Anhydride) over the years and has been able to ride bullish trends in the product. Interestingly, the company s topline has been stagnant at around Rs 1100-1200 cr in the last 5 years, However profitability has risen by >80% over the period. With an EPS of Rs 61 for FY 21, the stock is still far from its all time high of 840 in Jan 2018.It had touched a low of 81 in March 21. Appears to be an interesting bet.
Datamatics Global (155)- The company is one of the oldest IT companies and provides consulting, information technology, data management, and business process management services. Its services use robotics, artificial intelligence and machine learning algorithms. It has a presence across America, Australia, Asia and Europe. Though the March quarter has been boosted by a one-time income, the company has still shown significant growth in profitability on the last 4 quarters. With an EPS of around 8-9 (excluding the one-time component), the scrip still trades at an attractive valuation.
MARKET OUTLOOK.
1.The PSU banking pack has seen some interest revival in the last week on the back of some encouraging performance from likes of SBI, Canbank, UCO Bank, etc and also a booster from a SC verdict which allows banks to invoke personal guarantees of defaulters.
2.Major results for next week are Bank of Baroda, Aurobindo Pharma, ITC, Gujarat Gas among others.
2.With the market scaling the previous peak of 15431, financials could again be in forefront to take it forward. Metals have seen some good profit taking. Some bounce back could be seen in the coming week. Easing of lockdown in Delhi and Mumbai could again see some boost in sentiments though the trend in the non-metros seems worrying. The most encouraging factor though is the excellent corporate results in March. Some blip could be seen in the June quarter. Lot hinges on how fast normal life comes back on track and also the expected good monsoons.
Some technical cues are as follows going by market trends
Scrips to watch out
ICICI PRU (546)-This scrip saw an all-time high a few weeks back before going into a correction mode. However, lower levels of 530-40 have seen buying interest emerging. It could head back to levels of 580 in the coming days.
Borosil Glass (273)-The stock has been an investor’s delight in the last 1 year and corrections have been bought into. After racing past 300 it has receded to levels of 270. Levels of 250-60 could again see buying emerging and the scrip could again regain levels of 300 .
MCX (1548)-After hitting a high of 1875 in Oct 20, this scrip has gone into a consolidation phase. However ,lower levels of around 1500 has seen decent accumulation and the next uptrend could see the scrip up to levels of 2000.
IDEA CELLULAR (8.75)-The scrip has seen a significant correction and slipped below 10. However, levels of around 8 have seen buying in the past few months. The scrip could surprise on the upside in the coming weeks. Levels of 14-15 could be expected in the long run.
We are all living in hope that the current Covid situation will pass. Faith in Almighty is the need of the hour to tide over this difficult phase and restore normalcy
Have a great trading week!
Krish Subramanyam