WEEKLY TRENDSETTER (FEBRUARY 12TH ,2021)
| 2021 | Feb 5th | Feb 12th | Ch % |
| NIFTY | 14924 | 15163 | 1.60 |
| BANK NIFTY | 35655 | 36108 | 1.27 |
| USD/INR | 72.91 | 72.62 | 0.39 |
The week was robust with healthy gains in the indices though the mid-cap and small-cap segments caught attention with several counters posting handsome gains.
BIG PLAYERS ACTIVITIES
The FII s were largely buyers while DII s continued with their profit taking.
RESULT SEASON IS BACK!
While the heavyweights like Grasim,BPCL,GAIL,Hindalco,ITC posted decent numbers ,Eicher Motor and Ashok Leyland disappointed.Some other lesser discussed results are featured :-
| Company | Revenue | Net profit |
| Thirumalai Chem | 244.9(+33.8) | 31.4(+999) |
| IFB Inds | 915(+32.2) | 71(+380) |
| Aarti Surfuctants | 106.7(+29.7) | 4.8(+505) |
| Bajaj Electricals | 1484(+16.5) | 100.8(+552) |
| Polyplex Corp | 1237(+13.3) | 224.7(+81) |
Rs in cr (Figures in bracket indicates change in %)
Thirumalai Chem -The company has posted robust growth in topline as well as bottomline .It is one of the largest producers of phthalic Anhydride which goes into the production of paints, inks, unsaturated polyster resins, pigments, etc. With the user industries doing well ,the company ‘s outlook looks healthy.
IFB Inds– The company ‘s operations consist of three divisions — fine blanking, appliances and motor. The company continues being a market leader in the domestic front load washing machines as well as the dishwasher market, with a share of 40% each.The demand for dishwashers, microwaves and dryers was strong during the Covid-19 led lockdown.This is reflected in the Dec quarter results.
Aarti Surfuctants – The recently listed company of the high profile Aarti group has been on a steady uptrend post listing .This has been followed up with decent earnings.Besides it is also to be a beneficiary of the Govt’s PLI(production linked incentive) scheme which aims to boost chemicals and petrochemicals industries.Clearly a company to watch out which could emulate its other group companies Aarti Inds and Aarti Drugs.
Bajaj Electricals – Strong growth in consumer products (up 34% yoy), a healthy EBITDA margin (9.9%, higher in consumer products division) and continued debt reduction were key factors of Bajaj Electricals all-round Q3 performance. 5-9% price hikes in Q4 is expected to protect margins. Management expects the strong momentum to continue.
Polyplex Corp-Has been posting consistently good results in the last few quarters .With this for the 9-month period ending Dec 20 ,it has posted EPS of Rs 122 .It also declared a Rs 100 dividend .At 918 cum dividend ,its trading at a trailing P/E of 7.
WHAT DOES THE COMING WEEK HOLD?
1.IIP showed a 1% growth in Dec as against a contraction of 1.9% in Nov .Consumer durables was the highlight registering 4.6% growth in Dec.CPI inflation also showed a deflationary trend at 4.06%,down from 4.59% in Dec.RBI however has hinted that the slowing of inflation could be short-lived .In any case rate cut hopes are receding with interest rates at near bottom levels .Meanwhile in the US 30 year Treasury note rose above 2% while 10-yr treasury yield was at 1.2%.
2. Trading in Asia could be subdued due to Chinese New Year holidays till Feb 17.
3.The market showed a mixed trend towards end of week.Banks regained some lost ground which arrested the downtrend in the Nifty.The IT ,pharma sectors were flat while metals lost some of the sheen towards close of week.A range bound week (14800-15250)is likely before monthly derivative expiry in the following week when volatility could increase.
DID YOU KNOW
The U.S. electric vehicle maker Tesla has bought $1.5 billion worth of bitcoins and said it would accept it as a form of payment for its cars in the near future — adding to the buzz around both carmaker and cryptocurrency.
The announcement pushed bitcoin to an all-time high of above $48,000 last week .The company had $19.38 billion in cash and cash equivalents on hand as of the end of 2020.
Tesla is not the first company to add bitcoin to its balance sheet. MicroStrategy, a U.S. software company, bought $250 million worth of bitcoins in August, which are now valued at about $3.1 billion. The bet has helped to push the share price of the Nasdaq-listed company more than 800% higher.
Some stray thoughts –
Two recent acquisitions of NBFC s has set the market abuzz that more such could follow .Firstly the Piramals acquired the beleaguered DHFL and last week Adar Poonawala acquired Magma Fincorp.One of the reasons cited is that RBI is largely in favour of converting large NBFC s into banks as recenty recommended by a RBI Working Committee .This comes as a boost to the sector as a whole after the IL&FS debacle followed by DHFL in 2018 .A consolidation with cash rich promoters will go a long way to capturing an underpenetrated market as potential was never in doubt .
Wishing all readers, a great trading week! Great opportunities are emerging outside the large cap space !
Krish Subramanyam