WEEKLY TRENDSETTER (OCT 27th ,2023
| 2023 | Oct 13 | Oct 20 | Ch % |
| NIFTY | 19751 | 19542 | -1.06 |
| BANK NIFTY | 44287 | 43723 | -1.27 |
| USD/INR | 83.42 | 83.12 | -0.36 |
MARKET REVIEW–The correction was broad based and even the mid-cap and small cap segments felt the heat and profit taking was seen at higher levels. With a stellar rally in these segments in the past few weeks the trend is likely to continue.
BACK TO RESULTS (Sep qtr.)
The Sept quarter results are trickling in. So far, it has been a decent show. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against Sep,22 quarter.
| Company | Revenue | Net profit |
| Cyient DLM | 292(71) | 15(+114) |
| KPI Green | 215(+34) | 35(+66) |
| Jai Balaji Inds | 1547(+13) | 202(+861) |
| Zensar Tech | 1241(+0.49) | 174(+205) |
Cyient DLM (697)-The company has presence in 2 promising sectors- aerospace and defence. It got listed recently and has attracted investor attention. It is into electronic manufacturing services with 74% comprising of PCB and rest include box build, cables, and others. The end user segments are defence (49%), aerospace (22%), industrial (20%), med tech (7%) and others. The near-term concern for the company is that it has significant presence in Israel from where it also sources raw materials. The scrip has run ahead on expectations. However, due to its niche presence it is a scrip to watch out.
KPI Green (829)- The company develops, builds, owns, operates, and maintains solar and hybrid power plants as an Independent Power Producer (IPP) and as service provider to Captive Power Producer (CPP) under the brand name of ‘Solarism’. It has seen significant growth in the last 5 years with revenue growing 20 times and PAT 12 times and EPS jumping from Rs 6 to Rs 30! The Sept quarter has seen the same trend and with the sector still in early stages outlook remains bright. Valuation has run up but levels of around 650-700 should attract attention.
Jai Balaji Inds (623)– The company has been a remarkable turnaround story in the past 5 years and with outlook for the steel industry expected to improve prospects remain bright. It has 8 integrated steel manufacturing units spread across India in the states of West Bengal, Chhattisgarh, Orissa and Jharkhand, and a diverse portfolio of value-added products including DRI (Sponge iron), Pig iron, Ferro Alloys, Alloy and Mild Steel Billets, Reinforcement Steel TMT Bars, Wire Rods, Ductile Iron Pipes, and Alloy and Mild Steel Heavy Rounds, with a combined capacity of 27.4 lac tpa, making it one of the largest steel manufacturers in the private sector in Eastern India. The company has posted an EPS of 24 for the 6 months of FY23-24 and thus valuation still appears attractive though some near term correction cannot be ruled out.
Zensar Tech (511)-While the Sept quarter saw decent numbers, the management commentary is cautious as challenges are expected in key verticals like Hi-tech, manufacturing and consumer and the 3rd quarter could be weak. The near-term weak sentiment could see profit -taking and the scrip could cool down to levels of 420-450.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index faced resistance again at around 19850 for the week and by close had breached the 19550 level which is critical as it opens possibility of the lower band of 19300-19550 being opened. The banking results over the weekend could set the tone for next week. However, breaching of 19850 on the upside looks difficult next week.
BANK NIFTY-The index has breached the critical 43850 level and now looks set to test the 43000 support. However, with monthly expiry due next week some short covering rally could be expected as it was the 5th week of fall in succession.
PICKS FOR THE WEEK-
SMS Pharma (123)-The low-profile pharma company saw a decent rally from 55 to 140 before cooling off. Buying could be considered for possible levels of 160 in the coming weeks.
Harrison Malayalam (158)-The scrip has seen a good correction from levels of 250 in 2021 and has seen decent buying around levels of 130-40. Accumulation could be considered for possible levels of 185-200.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam