WEEKLY TRENDSETTER (MAY 31,2024)
| 2024 | MAY 17 | MAY 24 | Ch % |
| NIFTY | 22502 | 22957 | 2.02 |
| BANK NIFTY | 48199 | 48971 | 1.60 |
| USD/INR | 83.30 | 83.11 | -0.23 |
MARKET REVIEW-The week began on a steady note before a powerful short covering rally pushed Nifty into all-time high and Bank Nifty also trudged along though was shy of the all-time high by more than 1000 points.
BACK TO RESULT SEASON
March quarter results are in full steam. Let’s explore some of them to get cues of where the stocks could be heading
Rs in cr, Bracket indicates ch in % against March,23 quarter.
| Company | Revenue | Net profit |
| Godrej Agrovet | 2134(+1) | 55(+323) |
| Morepen Lab | 423(+16) | 29(+262) |
| Thomas Cook | 1664(+26) | 56 (+609) |
| GE T&D | 914(+30) | 66(+540) |
Godrej Agrovet (548)-The company has an interesting mix of business comprising of animal feed (50%), dairy (15.5%), crop protection (12.2%), poultry and processed food (9.7), vegetable oil (+12%) in terms of revenue. In terms of profitability crop protection contributes 30% of the PBIT .Overall margins are still at single digit (7.8%) though the revenue has being seeing a steady growth. Having presence in niche segments the company has the potential to boost profitability. With an EPS of nearly Rs 20 for FY24, the stock could see a sharp rerating if margins improve. The stock has largely been an underperformer over the years but could be a dark horse in the long run.
Morepen Lab (49) -The company had another stellar quarter and has posted EPS of Rs 2 for FY24.It has presence in medical devices and the API segments. It is betting big on the medical devices segment and has been focusing on glucometers and BP monitors. Both saw revenue growth of 35% respectively and enthused by the growing demand it is planning expansion of capacity and also backward integration which should boost margins. The API business has also clocked 25% growth in revenue and has presence in 80 countries. The company is debt free and thus can leverage its expansion programme. At current levels valuation appears reasonable and accumulation could be considered.
Thomas Cook (212) -The company has a strong presence in forex, travel & tourism, leisure hospitality and resorts and digital imaging solutions. The travel & tourism segment has seen a significant growth during the year (+54%). The company has made a strong comeback in the past 3-4 years after a crisis situation and now is part of the Fairfax group. It is spread across 28 countries across 5 continents. The leisure hospitality still has scope to expand as it is operating at 58% occupancy and with tourism in full bloom, the possibility looks high. With an EPS of Rs 5.57 for FY 24 the stock has already raced ahead on improving prospects. In the very near term, it looks stretched but with strong investor appetite lower levels of around 180-190 should attract investors.
GE T&D (1375) –The company has presence in conventional power like gas, steam, hydro and nuclear followed by wind power and electrification solutions. It has had a tough period in the last 5 years and now has staged a comeback. While the top line was at Rs 3158 cr in FY20 it was almost the same in FY24(Rs 3167 cr). However, from a loss of Rs 302 cr it swung to profit of Rs 181 cr during the same period. Order book position is strong at Rs 13.3 bn in FY24, up by 53% over the previous year. With improving prospects, the company has managed to reduce debt substantially which has boosted profitability and has posted EPS of Rs 7.3 for FY 24. The stock has risen 7 times in the last one year and looks stretched. However, with the power sector providing immense opportunities and with the company well positioned to ride the same, growth prospects remain bright.
NIFTY – The index broke past 23000 though closed shy of the same. The coming week promises to be exciting as its monthly expiry and also approaching June when the election results will be announced on June 4. Rollover will be interesting and VIX could see some spike.
BANK NIFTY-The index could see follow up buying as the private banks appear to have bottomed out. Levels closer to 50000 is likely for the week.
PICKS FOR THE WEEK
Can Bank (117)-The stock has been consolidating post its split and levels of 110-115 should act as a decent support. Buying could be considered for a possible target of 130-35 in the short to medium term.
Morepen Lab (49) -The stock has been on a consolidation phase for the last 6 months. Levels of 45-47 is a decent support level. Levels of 60 is likely in the next few weeks.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam