WEEKLY TRENDSETTER (NOV 1,2024)
| 2024 | OCT 18 | OCT 25 | Ch % |
| NIFTY | 24854 | 24180 | -2.71 |
| BANK NIFTY | 52094 | 50787 | -2.51 |
| USD/INR | 84.07 | 84.08 | +0.01 |
MARKET REVIEW-The week saw relentless selling pressure right from the beginning and all support expectations were blown away and by close Nifty was close to breaching the 24000 level.Poor corporate results have resulted in sharp sell off in several scrips which could continue in the coming days.Caution is advised as the broader market has also seen a similar trend.
BACK TO RESULT SEASON
Sept 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 Sept,23 quarter.
| Company | Revenue | Net profit |
| IDFC First Bank | 8957(+21) | 211(-71) |
| Shakti Pump | 635(+315) | 101(+1583) |
| INOX Wind | 732(+97) | 90( loss 27) |
| Go Digit | 2234(+17) | 89(+217) |
IDFC First Bank(65)
The company has seen a strong growth in deposits by 32% and now has a CASA ratio of 48.9%.loan growth of 21.5% also looked positive . However provisioning has seen a sharp increase by 73% which is attributed to prudent provisioning for micro finance business and an additional provision of Rs 315 cr. Infrastructure customers had to take a hit due to withdrawal of toll tax at Mumbai entry point and an additional provision of Rs 253 cr has been made. The stock has been an underperformer in the past few months and with this dismal show could see further slide.
Shakti Pump (4262)
The company is one of the pioneers in manufacture of energy efficient pumps and motors. With its latest series of new advanced solar energy operated pumps it has got very good response in domestic and international markets.
The company offers advanced water pumping solutions to a wide range of applications such as irrigation – flood and micro irrigation, horticulture, domestic water supply, commercial and industrial applications and so on. With a leading position in solar pump markets in India, Shakti exports a wide range of pumping products to over 100 countries globally.It came out with robust results for the Sept quarter and announced a bumper 5:1 bonus which saw the stock soaring past 5000 before correcting to 4200 in the recent market sell -off.The stock is trading at rich valuations and at current levels profit taking could be considered.
INOX Wind(203) -The company announced highest quarterly profits since 2017 .It also has a strong order book position of 3.3 GW .Its subsidiary INOX Green also has been a leading performer in the wind O&M services space with a portfolio of 3.5 GW .It is well positioned to capture a large market share in one of the fastest growing sector in India; India’s Wind sector is set to add ~ 80GW of capacity in the next 8 years over against 47 GW of currently .At current levels profit booking is likely.
Go Digit (320) -The company came out with an IPO in May 24 at a premium of Rs 272. It is an insurance provider offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products, which customers can customize to meet their needs.It started operations in 2016 but has grown at a fast clip .Between FY18-24 the company’s revenue has grown from Rs 2018 cr to Rs 8614 and turned positive with net profit of Rs 181 cr in FY24 .The growth has been impressive and the company boasts of a customer base of 5 cr.The Sept quarter has been another impressive show .However on the valuation front the price looks steep and a correction is already under way which could bring the price down to the issue levels.
NIFTY –The ominous signals of a crack were already visible last week when the index cracked 24750 .The closing below 25000 was not a good sign .However,the fall was sharper than expected and with monthly expiry due next week a slide below 24000 looks on cards sooner than later.
BANK NIFTY-The index gave some hope last Friday and support at 51000 was expected .However that was not to be and by close it had cracked further to 50787.A crack below 50400 could see a sharper slide to 49000.
PICKS FOR THE WEEK
IDFC Bank (65.3) -The stock has been an underperformer in the banking space and trading way below 200-dma. With the breaching of 70 levels on high volumes,it could see a further slide to levels of 55 .
L&T(3328)-The stock has slipped below 3550 which was its 200-dma on strong volumes.Any attempt to rally could face stiff resistance .Selling could be considered for a possible target of 3000 in the coming weeks.
Wishing all readers, a very Happy Diwali! May the coming year bring good health ,peace and prosperity !
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam