WEEKLY TRENDSETTER (FEB 3RD,2023)
| 2022 | JAN 20 | JAN 27 | Ch % |
| NIFTY | 18027 | 17604 | -2.35 |
| BANK NIFTY | 42506 | 40345 | -5.08 |
| USD/INR | 81.20 | 81.53 | 0.41 |
MARKET REVIEW–The range bound move broke out on the downside led by Adani stocks which had a bad impact on the banking stocks with the index losing 5% for the week. Going into the budget next week, the market clearly has got spooked from disturbing news which was not expected. The impact of the same is likely to remain as an independent issue and the market must now navigate the budget.
BACK TO RESULTS (Dec qtr.)
The Dec quarter results are getting announced. The small and mid-cap segments are the ones where some interesting results could be looked at. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against Dec,21 quarter.
| Company | Revenue | Net profit |
| Jindal Saw | 5158(+49) | 143.3(+999) |
| AIA Engn | 1210(+43) | 353(+155) |
| Elecon Engn | 389(+44) | 62(+98) |
| Jyoti Lab | 613(+14) | 67(+77) |
Jindal Saw (116)-The company reported a robust growth in topline as well as bottom-line which was largely aided by stable raw material prices and buoyant demand. The outlook for the global steel pipe market looks promising with opportunities in oil and gas, water and wastewater, power generation, automotive and other industrial sector
AIA Engn(2603)-The company is in a niche business and manufacturers mill internals which are used for crushing and grinding operations in the cement, steel, power utility and mining industries. It posted a strong set of numbers for the Dec quarter. It has sequentially seen a robust performance over the last few quarters. With an EPS of Rs 38 for the quarter, the company looks heading to post an EPS of 150 for FY22-23.It has seen value based buying at lower levels and looks an attractive bet.
Elecon Engn(380)-The company is Asia’s largest manufacturer of industrial gear systems and material handling systems. It has also made inroads into international markets from where 26% revenue came in FY22.It has also consciously reduced debt levels and now interest costs have come down to negligible levels. Significantly it is also a supplier to the defence industries and gaining strength from the “Make in India “initiative of the Govt of India. With an EPS of Rs 5.60 for the quarter the company looks poised to post EPS in the range of 18-20 for FY22-23.
Jyoti Lab (204) -While topline was marginally lower, the bottom-line got a boost from softer raw material prices .The company has a strong presence in the FMCG market with brands like Pril,Ujala,Exo,Henko,Margo,Maxo,etc .With a presence in fabric care, home care, personal care and dish wash, the company has come a long way since it made a beginning with Ujala, a whitener which created a brand image for the company years back. The company looks heading for a Rs 8 EPS for FY22-23 which looks attractive for a FMCG player.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index decisively broke the 17800 level on the back of severe selling in Adani stocks and banking counters. With the budget in focus for the coming week, any further panic could see levels of 17400-500 where short covering could emerge. On the higher side 18000 should act as a resistance though the volatility could see broader range during the week.
BANK NIFTY-The index saw a free fall during the latter half of the week breaching critical levels. While a near term level of 39500-40000 could see short covering, any upside should get capped at 40800-41000.Accordingly optional bets would be appropriate to trade.
PICKS FOR THE WEEK-With budget in focus strategies option trading could be considered to ride the volatility.
Nifty-Close to levels of 17400 ,17800 call could be bought.
Bank Nifty- Close to levels of 39500 ,40500 call could be bought for a possible upside.
Wishing all readers, a great week in the markets!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam