WEEKLY TRENDSETTER (SEPT 1st ,2023
| 2023 | Aug 18 | Aug 25 | Ch % |
| NIFTY | 19310 | 19266 | -0.23 |
| BANK NIFTY | 43851 | 44231 | 0.87 |
| USD/INR | 83.14 | 82.66 | -0.58 |
MARKET REVIEW–The week was another testing period for the bulls as any recovery attempted was promptly sold into. However, there was nothing to complain as far as the mid-cap and small -cap scrips were concerned as the party continued with smart sectoral rotation.
BACK TO RESULTS (June qtr.)
The June quarter results are almost at the fag end. So far, it has been a mixed bag. This week let us explore some turnaround results:
Rs in cr, Bracket indicates ch in % against June,22 quarter.
| Company | Revenue | Net profit |
| Thomas Cook | 1899(+94) | 73(+1316) |
| Rajshree Sugar | 228(+1) | 9(+181) |
| Orchid Pharma | 183(+39) | 14(+255) |
| Hikal | 388(+2) | 7(+177) |
Thomas Cook (113)-The travel and tourism major has had a torrid time in the past few years. However, hopes are again raised with a decent quarter and with the sector expected to do well in the coming quarters the stock has raced past 100.The company is part of the Fairfax group which owns 72.34% stake.It has a strong foothold on corporate travel where it also acquired 13 new accounts across sectors. While domestic tourism was robust, it also managed large groups for Europe where visa restrictions were proving to be a challenge. The company also manages delegates for conferences across continents and this also showed a robust growth. The Sterling resorts operations also saw a modest growth and the coming quarters could see this division contributing more with several domestic events lined up and a surge expected in tourism. The scrip looks fully priced but levels of around 85-90 could see investor attention.
Rajshree Sugar (53)-The company has presence across integrated fields as sugar, distillery, power, and bio-technology. While sugar continues to be the chief revenue contributor (75%), it underperformed in the quarter and posted a loss. However, power and distillery divisions rallied to deliver positive bottom-line overall. The entire sector is getting re-rated due to allied divisions like distillery, power, etc. gaining prominence and will aid in more sustainable profits in the future. The scrip would be an attractive bet at around 45.
Orchid Pharma (566)-The company has posted a remarkable turnaround in the past few quarters. Sequentially however profits have shown a degrowth. It recently raised Rs 400 cr at a price of Rs 405 per share.While Rs 140 cr will be utilized to retire debts ,90 cr will be utilized to set up a manufacturing facility in Jammu and a further Rs 100 cr towards setting up a new block for API facilities in Tamil Nadu. The Jammu facility is a subsidiary where the company proposes to manufacture of 7ACA which is a critical raw material for manufacturing cephasloporins which is also a backward integration. The scrip has seen great investor interest and though at current market price it looks stretched lower levels of around 500 could see active buying again.
Hikal (284) -The company was on a steady growth path till 2022 before a setback arrested the same. However, it is again showing signs of revival. It is also setting up an animal health plant in Gujarat which is expected to be completed in the next few months. The other divisions namely speciality chemical and crop protection have made steady progress. While prospects remain bright the scrip still looks sluggish. It is trading at critical support area of 270-80. It could be a dark horse for the coming quarters.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index continued to shed ground and closed at the low point for the week below 19300.With the monthly expiry due next week, bulls will be looking to defend 19150 on the downside while levels above 19500 could see selling pressure.
BANK NIFTY-The index was a relative outperformer during the week. While many large caps banks showed signs of revival, HDFC Bank remains a big drag. Post the merger with HDFC Ltd the weightage on the index has increased and thus along with the index, the scrip will have to be keenly watched. Levels of 43500-800 should act as a decent support while 44600 -900 could act as a resistance zone.
PICKS FOR THE WEEK-
Lloyd Steel (42)-The stock has been an outperformer in the sluggish steel sector. After touching a high of 60 it has corrected sharply and approaching critical support levels. Buying could be considered with possible target of 55 and above in the coming weeks.
Kopran – (217)-The scrip has seen a sharp breakout on weekly charts on huge volumes. While the near term could see some profit taking levels closer to 205-210 should see support resuming. Buying can be considered accordingly for a price target of 250.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam