WEEKLY TRENDSETTER (NOV 26th,2021)
| 2021 | NOV 19 | NOV 26 | Ch % |
| NIFTY | 17765 | 17026 | -5.14 |
| BANK NIFTY | 37976 | 36025 | -4.16 |
| USD/INR | 74.24 | 74.89 | 0.88 |
MARKET REVIEW–The week was clearly in bear territory as relentless selling pressure from FIIs followed by a Covid scare outside India created total panic and the Nifty barely managed to close above 17000.With the market going into year end mode, profit -taking could continue as fund managers capitalize on what has been a profitable year.
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 |
| Jain Irrigation | 1644(-7.5) | 108.2(+704) |
| Dixon Tech | 2803(+50.7) | 62.6(+245) |
| Finolex Cables | 933(+38) | 144.8(+235) |
| Blue Star | 1239(+18) | 31.2(+142) |
Jain Irrigation(40)-The Sept quarter was operationally weak and only an exceptional income of Rs 240 cr ensured that the bottomline showed a healthy growth.High debt is clearly hurting the company and though it is operating in a promising sector,the company has not been able to capitalize on the same.The company also forayed into agri processing mainly mangoes and tissue production of banana and pomegranate globally.It is shortly launching spice processing,citrus processing and new B2C products such as fruit. 63% of the revenue is derived from outside India.Long term prospects look good though high debt is a matter of concern.
Dixon Tech(5102)-Apart from its presence in consumer electronics,the company is entering into areas like medical devices,set-top boxes and recently into laptops which is in collaboration with Acer with a manufacturing capacity of 5 lacs.With an EPS of Rs 11 for the quarter and a surging revenue model ,the prospects look bright though valuation looks stretched .
Finolex Cable(553)-The company is a leading manufacturer of electrical and telecommunication cable.Besides it is also manufacturing lighting products,electrical accessories,switchgear,fans and water heaters.With a pick up in real estate,auto sector and FMEG products the coming quarters could see growth accelerating.The Govt’s push for optical fibre cable also should improve offtake of cables.With a debt-free balance sheet the company could leverage to propel growth.With a Rs 35-40 EPS expected for FY22 and decent prospects ,the stock looks attractive.
Blue Star(930)-After a sluggish first quarter ,there was improvement in topline and working capital was aided by faster collections.Escalation in commodity costs and logistics costs was partly offset by passing on to to customers.The momentum is expected to continue into the 3rd and 4th quarters.At current market price the stock looks well priced
MARKET OUTLOOK.
Some technical cues are as follows going by market trends: –
NIFTY– The much awaited correction finally came which was signalled in the previous week with a bearish weekly candle.With 17000 on the Nifty touched,possibility of the downtrend till 16700 cannot be ruled out which was the break out point in August.
BANK NIFTY -The expected support at around 37000 was brief and eventually another 1000 points correction took the index down to 36000 by close of week.This is fast approaching the 200-DMA of 35700.Considering the weakness in banking counters ,another 10% correction to 32000 is a possibility which again is a break out point.
SCRIPS ON RADAR
Kotak Bank (1963)-The scrip made a high of 2252 in late Oct and since then has been on a corrective mode which could possibly extend upto 1875-1900.Accordingly buying could be considered for a pullback upto 2010 levels.
JSW Steel (629)-The scrip began the Dec series with a sharp correction which could extend upto 600-610 .While long term uptrend is intact ,near term volatility could be seen .However ,accumulation could be considered with a long term view for a possible target of 680 and beyond.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam