WEEKLY TRENDSETTER (August 4th,2023)
| 2023 | July 21 | July 28 | Ch % |
| NIFTY | 19745 | 19646 | -0.50 |
| BANK NIFTY | 46075 | 45468 | -1.32 |
| USD/INR | 81.97 | 82.21 | 0.29 |
MARKET REVIEW–The August series did not exactly begin as expected by the bulls. However, some profit-taking could provide some consolidation at lower levels. While Nifty was propped up well by pharma last week, Bank Nifty was more tentative and large cap banks saw profit-taking though the PSU pack was a steadying influence on the index.
BACK TO RESULTS (June qtr.)
The June quarter results are trickling in. So far, it has been a mixed bag. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against June,22 quarter.
| Company | Revenue | Net profit |
| Jindal Stainless | 10184(+86) | 705(+303) |
| Jyoti Labs | 687(+15) | 96(+100) |
| CEAT | 2935(+4) | 146(+4766) |
| Kalyani Steel | 497(+0.8) | 61(+154) |
Jindal Stainless (394)–The company is No 1 producer of stainless steel in India with 3 mtpa. With ever growing demand the company caters to architecture business construction, auto, railway transportation, consumer durables and process engineering. For the quarter EBIDTA margin increased to 11.7% from 10.9 %. With EPS of 9 for the quarter, capex in place for expansion and merger with Jindal Hisar, the company looks poised for further growth. The stock has been on a run-away rally and with a decent performance and reasonable valuation, it looks poised to further appreciate.
Jyoti Labs (304) -The company has a strong product profile which includes Ujala, Exo, Margo, Pril, Mr White, etc which cater to fabric care, dish wash and personal care. It has been on a steady growth path and the June quarter has seen a 7% improvement in margins which has boosted profits. With a good investor appetite, the scrip has been scaling new highs. At current levels it appears well priced. Lower levels of around 275-80 could be ideal levels for entry.
CEAT (2433) –The company managed to post another stellar set of numbers mainly aided by a sharp increase in EBIDTA margins which rose sharply from 6% to 13% on y-o-y basis. However, the rise is almost nil on a q-o-q basis. Thus, the margins may soften in the coming quarters as raw material costs harden. With reduction in debt to Rs 1989 cr from 2139 cr on y-o-y basic, capex of Rs 220 cr, operationally the company looks poised to do steadily well. With an EPS of Rs 35.7 for the quarter, the stock looks well priced.
Kalyani Steel (400)-The company manufactures forging and engineering quality carbon and alloy steels which goes into automobile, energy, railways, defence, material handling. The soft raw material costs have come to the aid of the company and boosted margins and enabled it to post EPS of Rs 14 for the quarter. With the user industries in a strong growth phase, the company looks poised to sustain this steady growth phase. Current valuations look attractive and accumulation could be considered
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index shed some ground after 4 weeks of winning streak. For the coming week 19800 and above could again attract selling. At lower levels 19450-500 should act as decent support levels.
BANK NIFTY-The index will need heavyweights like HDFC Bank, Axis Bank to lend support which can propel it past 46369 which is the all-time high. At lower levels Friday’s low of 45238 will be critical.
PICKS FOR THE WEEK-
Just Dial (780)-The stock has been on a high in the past few months and touched a high of 878 in mid-July. However, it has slipped to below 800 and approaching strong support levels. Buying could be considered at declines for a possible price target of 850 in the short term.
HSCL (Himadri Speciality-136)-The stock has been a strong performer in the past few months. After touching a high of 149 it has gone into a correction mode. However, levels of 130-35 should be ideal entry levels where accumulation could be considered. Levels of 155-60 could be expected in a few weeks.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam