WEEKLY TRENDSETTER (MARCH 4TH,2022)
| 2022 | FEB 18 | FEB 25 | Ch % |
| NIFTY | 17276 | 16658 | -3.58 |
| BANK NIFTY | 37599 | 36431 | -3.11 |
| USD/INR | 74.6 | 75.28 | 0.91 |
MARKET REVIEW–This was a week which tested the mettle of bulls and bears and though some pull back was seen, the damage was done as the broader market saw a brutal sell off.
BACK TO RESULTS (Dec qtr.)
The Dec quarter results are over. The small and mid-cap segments are the ones where some interesting results could be looked at. This week let’s explore some turnaround results:
Rs in cr, Bracket indicates ch in % against Dec,21 quarter.
| Company | Revenue | Net profit |
| NB Venture | 950(+15.4) | 191(-15.7) |
| Shree Renuka | 2014(+42) | 43.3(-97.8) |
| Ugar Sugar | 340(+15) | 51.2(-5.8) |
| Saurashtra Cem | 192.2(+8.3) | 4.1(-7.2) |
NB Venture-(120) The company is one of the leading Ferro alloy producers in India with 1.25 lac MT of Manganese and 75,000 MT of Chrome Alloy capacities. The group has total installed power generation capacity of 434MW in Telangana, Andhra Pradesh and Odisha. Improving margins have eased interest burden and boosted EPS to Rs 11.60 for the quarter. The last few quarters have seen consistent profits on the operational level. The scrip could be added at declines.
Shree Renuka (32.70)-The company is on a turnaround path with emphasis on ethanol, production capacity of which is going to be doubled from 720KL/day to 1400KL/day which should be operational from Sept /Oct-22. The company also has a sugar brand “Madhur” which is the leader in the packaged category in India and has seen a 25% jump post Covid where hygiene is a top priority. Operationally, the company still has a low interest cover which should improve in the coming quarters. Levels of 25 should be an ideal entry point given the surge it has already seen.
Ugar Sugar (43)-The company has seen a stunning growth in the Dec quarter and with the sector in limelight with ethanol blending impetus given by the Govt, the company looks poised to capitalize on the same. It has posted EPS of Rs 4.5 for the Dec quarter. Current levels look attractive for accumulation.
Saurashtra Cement (66)-The cement sector is in a sweet spot and this regional player has a well established brand “Hathi”. Recently the company merged with Gujarat Siddhe Cement . For every 100 equity shares of Gujarat Sidhee, 62 equity shares of Saurashtra Cement will be available. The company had also acquired Snowcem in the last financial year which is an exterior cement-based paint. With an EPS of around 4, the scrip looks interesting with the recent acquisitions.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index breached the 3-month low of 16410 on the back of the ongoing Ukrainian crisis. However, some recovery was seen towards close of week. The market could be expected to remain volatile and though some developments look encouraging which should ensure a bounce upto 17000, any further upmove could attract profit taking.
BANK NIFTY-The index again breached the 200-dma of 36653 and infact closed below that for the week. Any bounce could see levels of 37300-400 beyond which profit taking could resume.
SCRIPS TO WATCH OUT
The mid-cap and small-cap segments have seen a meltdown which has seen some stocks down to attractive levels.
Ugar Sugar (43.15)-The scrip has seen a strong price volume breakout from levels of 35 to 55. Subsequently it has receded to levels which could be used for accumulation. A long-term target of 65-70 is envisaged.
GATI (149)-The scrip saw a stellar run upto levels of 221 and since then has seen a sharp correction and slipping below its 200-dma. Near term weakness could continue though accumulation could be considered at declines.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam