WEEKLY TRENDSETTER (NOV 12TH,2021)
| 2021 | NOV 5 | NOV 12 | Ch % |
| NIFTY | 17916 | 18103 | +1.04 |
| BANK NIFTY | 39573 | 38733 | -2.12 |
| USD/INR | 74.54 | 74.42 | -0.16 |
MARKET REVIEW–The market moves mirrored the previous week’s moves and despite some strong profit-taking mid-week,the Nifty managed to close in the positive for the week despite lack of support from the banking counters.IT was the preferred sector which propped up the index.
BACK TO RESULTS (Sept qtr)
The Sept quarter results season has begun and several large cap results have been widely discussed. The small and mid-cap segments are the ones where some interesting results could be looked at. June 21 is taken for comparison as the previous corresponding quarter was largely Covid affected.
Rs in cr, Bracket indicates ch in % against June,21 quarter
| Company | Revenue | Net profit |
| Somany Ceramic | 560(+70) | 35.4(+917) |
| Polycab | 3129(+66) | 200.8(+160) |
| NCC | 2581(+25) | 121.3(+128.2) |
| Sheela Foam | 785(+42) | 76.9(+206) |
Somany Ceramic (840)-The sector is clearly on a high and the performance of the company also bears it out. The 2nd quarter saw the company operating at 40-50% in the beginning and by close they were at 100%. The 3rd and 4th quarters are expected to be at full steam. Gas price rises have put pressure on margins and to offset the same the company took a price hike of 8% and by end of Nov another 4% price hike is expected. Since the demand has been buoyant, the company enjoys good pricing power.
Polycab (2516)- The company is a leading electricals brand and the largest manufacturer of wires and cables in India and one of the fastest growing players in the FMEG space.It manufactures and sells various types of cables, wires, electric fans, LED lighting and luminaires, switches and switchgears, solar products, pumps and conduits and accessories. The company has shown a strong performance for the quarter. The post lockdown initiatives of aggressively pushing market reach in Tier-11 and Tier-111 cities has helped a surge in revenue. The company has an aggressive target of touching a turnover of Rs 20000 cr by FY2026.The company currently commands a P/E in excess of 40 discounting the strong growth potential.
NCC (80)-is one of India’s biggest construction businesses, with a presence in a variety of infrastructure verticals including buildings, roads, water, mining, and electrical. The quarter was challenging as interest costs went up. However improved topline and some aid from an exceptional income of Rs 31cr boosted the net profit.The order book position at Rs 39112 cr augers well. Current level has seen accumulation.
Sheela Foam (3117)-The company is well known for its Sleepwell mattress. With a strong domestic presence, the company now has global ambitions with the opening of 100 %EOU in Gujarat. With an expected EPS in excess of Rs 75 for FY22 the company is on a strong growth phase. Low debt, surging demand and a strong brand recall value are likely to aid the company in the long run.
MARKET OUTLOOK.
The market is going through a reality check post announcement of results. With a steep run up till mid -Oct, results have by and large been greeted with profit -taking which has seen the Nifty cooling off to levels of 17800-18000.The bounce back in Nifty is despite the banking counters witnessing profit-taking.
Some technical cues are as follows going by market trends: –
NIFTY-The market remained in a range and took support at around 17700-17800.The closing above 18000 should encourage bulls as the consolidation is setting ground for further gains. Near term resistance could come at 18300-350.
BANK NIFTY -Levels of 38500-600 could be near term support and levels of 39500-600 could see some profit-booking.
SCRIPS ON RADAR
Venky-(2778)-The stock saw a sharp breakout past 1700 and raced to nearly 4000.The last few months has seen some cooling off and the stock seems to be settling in the 2600-2800 range. Accumulation could be considered for possible target of 4000
Muthoot Finance (1690)-The scrip saw a long consolidation phase between 1400-1600.Last week it saw a good break out past 1600 and this upward leg could see it touching 2000 in the coming months. Accumulation could be considered.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam