WEEKLY TRENDSETTER (May 19th,2023)
| 2023 | MAY 5 | MAY 12 | Ch % |
| NIFTY | 18069 | 18315 | +1.36 |
| BANK NIFTY | 42661 | 43793 | +2.65 |
| USD/INR | 81.70 | 82.18 | +0.56 |
MARKET REVIEW–The week began on a strong note.The Bank Nifty was the star as the recovery was swift after the previous week’s late correction. The closing looks encouraging and odds are high that the life-time high of 44151 could be touched before month end.The broader market was also supportive.
BACK TO RESULTS (March qtr.)
The March quarter results are getting announced. The small and mid-cap segments are the ones where some interesting results could be looked at. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against March,22 quarter.
| Company | Revenue | Net profit |
| CEAT | 2875(+11) | 132.4(+420) |
| Mangalore Chem | 1163(+61) | 67.87(1800) |
| Foods & Inns | 324(+69) | 14.77(+397) |
| HP Adhesives | 58.45(+15) | 3.87(+455) |
CEAT (1866)-The company posted robust numbers. EBIDTA margins jumped to 13.1% against 7.5%. The company has an interesting mix. Replacement sales accounts for 53% of sales while OEM (29%) and exports (18%) account for the balance. The company is going in for Rs 900 cr capex which will largely be funded by internal accruals. For FY23 the company has posted EPS of Rs 51 out of which the last quarter itself contributes Rs 33. Some profit taking could be expected around these levels.
Mangalore Chem (97) -The company showed a decent performance for the quarter which also has to be seen against a dismal quarter in March 22. Sequentially the performance has been slightly negative.With an EPS of Rs 12 for FY 23 the scrip appears well priced at current levels.
Foods & Inns(154) -The company posted another good set of numbers.It processes and markets various fruit pulps, concentrates and spray dried fruit and vegetable powders in India and internationally.It raised Rs 210 cr through issue of warrants to 6 investors at a price of Rs 95 on a preferential basis.The company has been on a steady growth path and with fresh raising of funds the momentum is likely to accelerate.With an EPS of nearly Rs 10 for FY23 the stock looks an interesting bet for long term.
HP Adhesives (405) -This Bagla group company got listed 2 years back and is one of the largest manufacturers of Adhesive Tapes and Polyolefin Shrink Films in the world. It is the packaging partner of some of the biggest brands like Unilever, Pepsico,Coca Cola,P&G,Cadbury ,Nestle to name a few. With an EPS of Rs 5.91 for FY23 the scrip looks steeply discounted.However,looking at the industry potential and profile of the company ,it looks an interesting bet on a correction.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index showed good recovery with banking and auto giving a good boost. However, with the index trading at near resistance levels of 18350, some profit-taking could creep in. Support should ideally emerge around 18150-200 levels.
BANK NIFTY-The index saw a sharp recovery after a sharp correction towards close of previous week which was largely triggered by the sharp fall in HDFC Bank. However,with broad based buying in other banking counters as well as a recovery in HDFC Bank, the index now looks poised to touch all-time high by end of month. In the near term it looks stretched. Any correction should see support emerging around 43200-300 levels.
PICKS FOR THE WEEK-
Lumax Auto Tech (308)-The scrip has been on a steady rise and consolidating above 300.Accumulation could be considered for long term for a possible target of 370.
Picadelly Agro (47.4)-The scrip has been consistently making all-time high on huge volumes.Its trading only on BSE and could see further upsides.Accumulation could be considered for a possible target of 65-70.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam