WEEKLY TRENDSETTER (NOV 10th ,2023
| 2023 | Oct 27 | Nov 3 | Ch % |
| NIFTY | 19047 | 19230 | 0.96 |
| BANK NIFTY | 42782 | 43318 | 1.25 |
| USD/INR | 83.12 | 83.28 | 0.06 |
MARKET REVIEW–The market faltered again in the beginning but managed to recover towards mid -week to close in the positive. The recovery was largely on the back of reversal in US markets which improved sentiments. The trend remains tentative and the recent lows will be critical.
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 |
| Clean Science | 181(-27) | 52(-23) |
| Archean Chem | 290(-1) | 66(-5) |
| GMDC | 383(-34) | 76(-50) |
| Suzlon | 1417(-2) | 102(86) |
Clean Science (1341)-The company came out with an IPO IN 2021 at a price of Rs 900. After listing at Rs 2000 it has been on a downslide as performance has not been able to match the expectations. It is into manufacture of FMCG and pharma chemicals (67%) and agro intermediates (19%). The last few quarters have seen lower realization. However, EBIDTA margin has been steady around 40-45% for the past few quarters. The exports constitute 64% of the revenue. With an EPS of Rs 20-25 the stock is still feeling the pressure of high valuation and hitting 52-week low on a consistent basis. While the high-profile company should be on the radar, one could wait for levels of around 1100.
Archean Chem (518)-The company is a recent high-profile IPO which is into manufacture of bromine with 48% exports with end users being pharma, agrochem, water treatment, oil & gas, etc. Besides this it is also into industrial salt which is 100% exported. SOP (Sulphate of potash) is another speciality fertilizer manufactured by the company which is used for chlorine sensitive crops and 70% is exported. The company has been a steady performer though sluggish realization of its products has affected profits. The IPO proceeds are being used to set up new bromine derivatives which is expected to be commercialized by FY24.The company has posted EPS of Rs 5.3 for the Sept quarter. The scrip has been slipping and now just Rs 100 away from its IPO price of 407.However prospects appear bright and gradual accumulation could be considered.
GMDC (320) -The stock has been a star performer in the past 3-4 months with the price doubling. However, the Sept quarter showed dismal numbers which has seen a sharp correction. The company has seen revenue jumping from Rs 1343 cr to Rs 3501 in the FY21-23 period primarly coming out of lignite mining. Lignite has become a critical source of raw material for power generation and with coal imports increasing the Govt is focussing on promoting lignite. The company also is looking to coal mining in Odisha which will increase the total mining capacity from 9mtpa to 21 mtpa. The recent spurt in the stock price has been on the back of the Govt clearing the policy for lithium mining which could see the company in action as well with it having deep cash reserves. While the Sept quarter was largely affected by heavy rains in Gujarat, the coming quarters should see mining normalising. The stock could see some more cooling off. Levels of 275-300 could see investor interest reviving.
Suzlon Energy (34.4)-The company has been on a strong turnaround path with profit margins improving and debt levels coming down sharply resulting in the company posting net profit in the past few quarters. The company also has a foundry and forging division which has a revenue of Rs 450 cr annually and operating at 23% capacity. The division is already EBIDTA positive at 12% and the management is optimistic about the business. The stock has already been on a high for the past few months. It looks stretched in the short term and levels of 25-30 could be ideal for entry.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index managed to claw back above 19200 giving some hopes for the coming week. However, levels of 19350-400 could see some profit-taking.19000 should be the near-term support.
BANK NIFTY-The pullback could see halting at around 43800 which was a major support area.42700 should act as a decent support.
PICKS FOR THE WEEK-
Engineers India (129) -The scrip has been on a strong uptrend in the past few months. After touching a high of 167 it has seen a decent correction. Accumulation could be considered for a possible target of 175.
Marksons Pharma (112)-The scrip looks on a verge of a breakout past 125 on high volumes. Accumulation could be considered for a possible target of 140.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam