WEEKLY TRENDSETTER (July 8th,2022)
| 2022 | June 24 | July 1 | Ch % |
| NIFTY | 15699 | 15752 | 0.33 |
| BANK NIFTY | 33627 | 33539 | -0.26 |
| USD/INR | 78.32 | 78.9 | 0.74 |
MARKET REVIEW–The week was another tug of war between bulls and bears and it closed with honours shared though the closing was with some advantage for the bulls.
INTERESTING MUSINGS
Continuing with the review of high-profile IPOs of 2020-2021 where most of us were active applicants and rued the fact that we received no allotment and watched the listing at insane premiums and cursed our luck. The last 3 months market meltdown has taken a toll of all these IPO s and its time to take a review of these companies and their performances.3 such high-profile listings are reviewed this week: –
| NAME | Issue price (FV) | Listing price | EPS- FY22 FY21 | PRICE (July 1) |
| Rossari Bitech | 425(2) | 670 | 14.49 15.34 | 871 |
| Latent View | 197(1) | 530 | 4.15 3.98 | 335 |
| Data Patterns | 585(2) | 864 | 19.5 11.64 | 637 |
Rossari Biotech-The company manufactures a whole range of products that find application in home & personal care formulations especially in the laundry and cleaning space.
The company also has a strong presence in poultry and animal (pets) business – two of the fastest growing segments in Animal Health Care and Nutrition. It is into enzyme formulation in the poultry industry and also the leading B2B manufacturer of veterinary products in animal health feed supplements and additives segment and serves several leading multinational and Indian companies.
On the performance front the last 4 quarters have seen a decent growth in topline.However,raw material cost is clearly putting pressure on margins as profits have plateaued and the coming quarters will be keenly watched. With an EPS of around Rs 15 the scrip looks stretched and leaves no room for disappointment on the performance front.
Latent View – The company provides analytics services such as data and analytics consulting, business analytics & insights, advanced predictive analytics, data engineering, and digital solutions. Its clients are blue-chip companies in Technology, BFSI, CPG & Retail, Industrials, and other industry domains.
On the performance front the company has been on a scorching growth over the years. Margins have also been steadily rising. Currently with margins of 30% + maintaining the same could be a challenge in the coming years. With an EPS of Rs 4 for 2 years in succession the stock at Rs 334 clearly looks high despite the fact that it has steadily lost ground from 800 + since listing.
Data Patterns –Data Patterns is a defense and aerospace electronics solutions provider catering to the indigenously developed defense products industry. It has been in existence since mid-eighties and offers products to the entire spectrum of defense and aerospace platforms – space, air, land, and sea. The company’s core competencies include electronic hardware design and development, software design and development, firmware design and development, mechanical design and development, product prototype design and development, functional testing and validation, environment testing and verification, and engineering services opportunities.
On the performance front the company has seen 30 % margin over the years.With defense on the high priority list of the Govt ,the robust growth could continue.The stock has seen a steady decline post listing and is just 10% shy of its issue price.It can be kept on the radar and the coming 2-3 quarters results could set the trend which clearly looks promising.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index failed to live up to the promise early in the week.Global cues again look supportive to begin with and an attempt towards 16000 is possible on the back of short covering .
BANK NIFTY– The index has been showing a mixed trend and though 33000 appears to be a good near term support,upside of 34000-34500 could see selling pressure emerging.
SCRIPS TO WATCH OUT
Kennametal India (1841) –This is a low volume counter which has exhibited good strength even in the overall market correction. After touching an all-time high of 2300 it has corrected in the last few months. Gradual accumulation could be considered by investors with a price target of 2500 in the coming months.
WPIL (1135) -The stock has seen good buying interest at lower levels which could see it scaling past the recent all time high of 1215.Gradual buying could be considered at declines. Levels of 1400-1500 could be seen in the coming months.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam