WEEKLY TRENDSETTER (FEBRUARY 6TH ,2021)
| 2021 | Jan 29th | Feb 5th | Ch % |
| NIFTY | 13634 | 14924 | 9.46 |
| BANK NIFTY | 30565 | 35655 | 16.65 |
| USD/INR | 72.88 | 72.91 | 0.04 |
The week turned out to be a bonanza for the bulls as the markets took off post budget as it turned out to be more positive than expected and apprehensions of Covid tax, etc were misplaced.
BIG PLAYERS ACTIVITIES
The FII s turned buyers again while DII s continued with their profit taking.
RESULT SEASON IS BACK!
While the heavyweights like HDFC, Bharti Airtel, SBI and Zee Ent posted decent set of numbers, some other less discussed corporate results are as follows: –
| Company | Revenue | Net profit |
| Tata Power | 7598(+7.5) | 166(+153) |
| WPIL | 257(+28) | 31.7(+327) |
| Garware Poly | 283(+40) | 42.8(+276) |
| Finolex Inds | 1067(+52) | 253(+180) |
| Asahi Songwon | 72.5(+24) | 8.5(+143) |
Rs in cr (Figures in bracket indicates change in %)
Tata Power -This company is on a comeback mode and interesting developments should keep things improving particularly at the subsidiary level. CGPL, a subsidiary of the company repaid the entire bank loan of Rs 4150 cr which comprised 50% of its debt. Besides the company also completed the acquisition of 51% of equity of a couple of distribution companies in Orissa which will enable it to manage the distribution and retail supply of electricity in 6 Odisha circles for a period of 25 years effective Jan 1,2021.
WPIL -While other income largely aided surge in bottom line, even at operating level the company has seen a 50% jump in profits. Major opportunities exist in the Jal Jeevan Mission to be executed by 2024 which aims to provide water to every household in India. Similar, opportunities exist in energy efficiency projects across the country along with an expected upturn in public and private investments in India.
Garware Polyester (GPL) -The last 2 quarters have seen a robust growth in profits. It is the largest manufacturer of Sun Control films and the only company to manufacture paint protection films (PPF) for vehicles. It is among the few companies in the world which is vertically integrated facility starting with a R&D and manufacturing facility from PET resin to finished Laminate giving it a high control over its product range. GPL exports 67% of its output to 80+ countries across the world. GPL also buys post-consumer waste (PCR) to reprocess and make effective use in the manufacturing of some of the products. For the 9-month period ending Dec 20, it has already posted Rs 41 EPS despite a dismal Covid affected first quarter.
Finolex Inds-The 50% surge in turnover hints at a strong growth trajectory for the company which is a leading integrated manufacturer of PVC Pipes & Fittings. Boost to the housing sector by extension of tax holiday, higher impetus on Jal Jeevan Mission, enhancement of agricultural credit and increased provision for rural infra development fund will go a long way in revival and sustainability of PVC pipes sector as stated by the company management. The company has already posted Rs 35 EPS for the 9-month period till Dec 20.
Asahi Songwon- Asahi’s color pigment products have applications across ink, paints, plastics, textiles and paper industries. It has its principal manufacturing facility at Padra in Vadodara. Recently it commissioned a Rs 82 cr plant for manufacture of red and yellow pigment with an installed capacity of 2400 tpa. It is a JV with Tennants Textiles Colours Ltd (UK). This is expected to widen its global presence. In Dec it had bought back 2% of its equity at Rs 330. For the 9-month period it has already posted EPS of Rs 21.
WHAT DOES THE COMING WEEK HOLD?
1.RBI allows retail participation in govt securities via its retail direct platform -This is expected to ease burden on banks and financial institutions to fund Govt borrowing. Over a period of time, it will be popular as it gives access to one more avenue of risk-free investment to the retail investors.
2.Next week will see results from several companies, notable of them being BPCL, NMDC, Tata Steel, Titan Inds, GAIL, Auro Pharma, Hindalco, Coal India, Power Grid among others. Promises to be another action-packed week!
3.On the market front,13600 was perceived to be a good support level and it proved to be so. The intensity of upside post the budget was a pleasant surprise. Some of the budget expectations were met particularly the privatization of some PSU banks which could be the beginning of the reversal of the 1969 bank nationalization and could offer great opportunities going ahead.
DID YOU KNOW
Consumable durables are still a low penetrated market in India going by global standards .A growing middle class purchasing power offers immense growth opportunity for growth .An interesting statistics as presented by Blue Star Ltd says that the market size of AC s in India (5.4 mn units)pales in comparison to China(80 mn) and global (140 mn).Penetration levels are at India(6%),China (60%),global (30%).AC industry is one of the sunrise sectors identified along with leather, shoes, and furniture. The Union government is committed to make India an export hub. Thus “high valuation “for these listed companies may be misleading and in real sense may actually indicate the high potential of growth.
Some stray thoughts –
A couple of my nephews indicated that they were interested in coding classes!! Coming from 8-10 Standard kids this increased my curiosity. After some exploration in Google, I discovered that kids are taught to build animations, websites, mobile apps guided by expert instructors. The testimonial segment revealed that kids actually enjoy doing this and are stress free .A kid showed propensity to combine knowledge of coding and Robotics to built a Smart waste disposal while another was mastering the art of underwater garbage management !!Technology empowerment at such young age is unheard of !Looking back of course our childhood had its own share of excitement of either playing cricket, flying kites ,playing chess to name a few !Life goes on ,new generations improve our lifestyles and hopefully ,make us better human beings !
Wishing all readers, a great trading week! Paper profits are ok to brag about but the real profits are in cash!
Krish Subramanyam