WEEKLY TRENDSETTER (MAY 17,2024)
| 2024 | MAY 3 | MAY 10 | Ch % |
| NIFTY | 22475 | 22055 | -3.07 |
| BANK NIFTY | 48923 | 47421 | -1.87 |
| USD/INR | 83.45 | 83.50 | 0.06 |
MARKET REVIEW-The week saw some serious selling and despite a minor pull back ended with sharp losses. This was despite a buoyant US market. Election jitters may be causing bulls to take profits off the table. The broader market was mixed and even decent results saw profit booking at higher levels. The next week could be critical as both indices look to defend previous month’s lows.
BACK TO RESULT SEASON
March 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 March,23 quarter.
| Company | Revenue | Net profit |
| JP Power | 1515(+9) | 589(+1438) |
| Dalmia Bharat | 4307(+10) | 320(+300) |
| Inox Wind | 528(+180) | 38(+133) |
| Birla Corp | 2656(+7) | 193(+127) |
JP Power (18.2) -The company has shown marked improvement in operational performance and though there was an exceptional write off it was more than buffered by other income. Interest costs are now covered 5-6 times which is a great progress in the the last one year. The stock is on a long-term uptrend and levels of 16-17 should be ideal for investment.
Dalmia Bharat (1714)-The company had another strong quarter. It has proactive with strict emission norms, water conservation, alternative energy for self-consumption, prominent producer of super cement used in air strips, nuclear installations, diversified presence in all regions, etc. The quarter followed an equally good previous quarter and with an EPS of Rs 16 for the March quarter it posted an EPS of Rs 44 for FY23-24. On the valuation front it looks stretched. Levels of 1400-1500 should be ideal entry levels.
INOX Wind (543)-The company is riding a strong uptrend in the industry and being one of the early entrants has been making good headway. In Feb 24 the company bagged the single largest contract from CESC for 1500 MW which is supposed to be the single largest contract awarded to an Indian Wind OEM till date. The company turned cash positive during the quarter. The company has a robust order book of 2.7 GW. With a strong promoter background, the company has also been able to attract marque investors. The stock has seen a 400% surge in stock price in the last one year. The company also declared 3:1 bonus which probably hints at a strong management confidence about future prospects. However, with an already bloated equity, this bonus could swell the equity further. At current levels the stock looks well priced.
Birla Corp (1466)-The company had another stellar quarter resulting in an EPS of Rs 55 for the full year. In the last six years, the company has doubled capacity to 20m tonnes and targets 30m tonnes by FY30. Its plants (each) have limestone reserves for 20 years. With coal mines going operational it should take care of 35-40% of requirement. Renewable energy requirement is expected to be covered upto 30% with commissioning of capacities. At current levels the stock looks well priced. Outlook looks bright and levels of around 1200 should be ideal for entry.
NIFTY – The index saw a sharp correction and even cracked 22000 before a pullback enabled it to close above 22000.Levels of 21700 which was the previous month’s low is the critical support. Levels of 22350-400 should be levels of resistance.
BANK NIFTY-The index saw a sharper correction as both private and PSU banks tumbled. Levels of 47000 should ideally hold while a recovery to 48400 should be levels of resistance.
PICKS FOR THE WEEK
Mahindra Holidays (410) -The stock is on a consolidation phase between 350-430 and now looks ideal for accumulation near the lower band. A long-term target of 480 could be expected.
MCX-(3817) -After touching a life time high of 4270 the stock has corrected to 3817.Long term looks strong and with expected volatility in the next 3 weeks, the stock could be accumulated. Levels of 3500 should act as a decent support and the stock could be expected to cross 4500 in the coming weeks.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam