WEEKLY TRENDSETTER (MAY 8TH ,2021)
| 2021 | APRIL 30 | MAY 7 | Ch % |
| NIFTY | 14631 | 14823 | 1.31 |
| BANK NIFTY | 32782 | 32904 | 0.37 |
| USD/INR | 74.06 | 73.45 | -0.82 |
MARKET REVIEW –The week started on a negative note but saw some good recovery and managed to close at the higher end of the band. While the Nifty has been in a range, broader market has been vibrant and several sectors are witnessing good buying interest. Another interesting feature is the weakening of the dollar over the past 2 weeks. From a level of Rs 75.6 it has weakened to Rs 73.45, a near 3% correction which is unusual. Surprisingly the FII s have been largely sellers during the period.
REVIEW OF RESULTS (MARCH QTR)
With the result season getting into high gear, focus this week is on some outstanding performance for the March quarter.
Rs in cr, Bracket indicates ch in %
| Company | Revenue | Net profit |
| Craftsmans Auto | 537(+60) | 47(+999) |
| KSB Pumps | 382(+48) | 42(+307) |
| Solara Activa | 444(+50) | 56(+218) |
| HIKAL | 532(42) | 51(+108) |
CRAFTSMAN AUTO –The company has come out with a decent set of numbers and since it listed recently, it should catch the eyes of discerning investors. The company is primarily engaged in manufacture of precision components for auto, power, storage and material handling industries. EBIDTA is at a healthy 20% and EPS for the Oct-March 21 period stands at Rs 45. Since it caters to a wide range of industries, it is insulated well. Clearly the coming quarters will be keenly watched as it has a niche presence.
KSB PUMPS -The company has posted 3 quarters of good growth in topline and bottom line. Going ahead prospects appear to be good due to emerging opportunities in water treatment, nuclear power, oil& gas and exports. Besides 20% of revenue is generated from after market services. This MNC should see good investor appetite at lower levels.
SOLARA ACTIVA –Another solid set of numbers from the company. The Board has approved the amalgamation of Aurore Life Sciences, Empyrean Life Sciences, and Hydra Active Pharma Sciences with Solara which will open up substantial growth opportunities for the company going ahead. The combined entity would be a pure play API company of scale, with a strong presence in regulated markets and emerging markets, having a broad product portfolio, robust operations infrastructure and excellent R&D capabilities; and it would strengthen the CRAMS business of the company. With an EPS of Rs 80 for FY20-21, the stock has seen very good investor appetite. The company was carved out of Strides Shasun and listed in June 18.
HIKAL -The company has seen a very sharp jump in topline (53%) in the last 4 quarters .Net profit has tripled during the same period. Meanwhile the company has signed a multiyear contract with an MNC which will entail supply of API s over a period of 10 years. The commercialization of the same is expected to be in FY 24. With an EPS of Rs 11 for FY20-21, prospects look bright. Clearly a stock to watch out despite the recent sharp run up.
MARKET OUTLOOK.
1.The immediate concern for the markets is the reducing level of economic activity across India as restrictions and lockdowns are being witnessed in many States and despite expected vaccination drive, the Covid cases have continued to rise. This uncertainty could dampen the 1st quarter performance of companies similar to the last corresponding quarter.
2.Major results for next week are Tata Power, Jindal Steel &Power, Lupin, Apollo Tyres, L&T, Dr Reddy and CIPLA among others.
2.Technically, Nifty is back to the resistance levels of 14850.Profit taking could again emerge around 14900 levels. The broader market has been fairly strong and several counters are making decent gains.
Some technical cues are as follows going by market trends
Scrips to watch out
AUROBINDO PHARMA (1013)– The scrip entered the 4-figure mark last week and hit a life time high of 1039. After a small consolidation in the 990-1010 levels the scrip should see further uptrend for a possible target of 1100.
GATI (107) –The scrip has been on a strong comeback mode since last year on increasing volumes. A break out past 120 could see the scrip go to levels of 150.
DCM NOUVELLE (92)-The scrip has been on a tearaway rally since Nov 20 when it was quoting at 29-30. After touching 98, it has seen a modest correction. Now it is readying for the next leg of run up which could take the scrip to 120.
Health is wealth in these trying times. While this too shall pass, till then take care as the future is ours, if we ride through this present turmoil!
Have a great trading week!
Krish Subramanyam