WEEKLY TRENDSETTER (DEC 3RD,2021)
| 2021 | NOV 26 | DEC 3 | Ch % |
| NIFTY | 17026 | 17197 | +1.00 |
| BANK NIFTY | 36025 | 36197 | +0.48 |
| USD/INR | 74.89 | 75.12 | +0.31 |
MARKET REVIEW–The week was hugely volatile and finally closed with gains.FII s relentless selling pressure continued and though there were pockets of strength,the large caps were selling off at any bounce.
BACK TO RESULTS (Sept qtr)
The Sept quarter results season has begun and several large cap results have been widely discussed. The small and mid-cap segments are the ones where some interesting results could be looked at. June 21 is taken for comparison as the previous corresponding quarter was largely Covid affected.This week lets explore some turnaround cases :-
Rs in cr, Bracket indicates ch in % against June,21 quarter.
| Company | Revenue | Net profit |
| Sundaram Clayton | 6800(+37) | 269(-8.7 cr) |
| Kalyan Jewellers | 2888(+76) | 68.8(-51.3 cr) |
| Devyani Intl | 516(+46.3) | 46.6(-33 cr) |
| Sintex Plastic | 246(+40) | 31.1(-39.9) |
Sundaram Clayton(SCL)-(4267)The company supplies aluminium castings for commercial vehicles, passenger cars and two wheeler segments of the automotive industry.The management commentary suggests that it is well placed to leverage emerging market opportunities in the wake of developments which will lead to higher content of aluminium in all vehicle types.This is due to stringent emission norms, fuel economy regulations and adoption of alternate drivetrain technologies.The revenue of SCL is derived from medium & heavy commercial vehicles (61%), followed by two wheeler industry (23%) and the car industry (16%).
High interest costs have been a drag on the bottomlne .However,with an expected EPS of around Rs 300 ,the valuation looks attractive.
Kalyan Jewellers (69) –One of the high profile jewellery companies ,post its IPO it has been subdued.However,some spark is seen in the Sept quarter results over the previous quarter and with the next 2 quarters likely to witness a barrage of weddings,the company’s performance will be closely tracked.With the organized sector being led by Titan ,there is scope for some credible names in the business.At current levels the scrip looks like an accumulation candidate.
Devyani Intl(153)-A recent high profile IPO ,the company is the largest franchisee of Yum! Brands Inc. (which operates brands such as KFC, Pizza Hut and Taco Bell) in India and are among the largest operators of chain quick service restaurants (QSR) in India, on a non-exclusive basis, and operate 803 stores across more than 175 cities in India, Nigeria, and Nepal, as of September 30, 2021. In addition, DIL is a franchisee for the Costa Coffee brand and stores in India.
The Sept quarter has seen an impressive growth in topline and bottomline.The scrip has already caught attention and if the company is able to see couple of more decent quarters ,investor appetite could increase.At current levels valuations are stretched but could be an investment candidate at dips.
Sintex Plastics(11.40)-The company has shown an impressive turnaround in performance which has been largely on an sharp rise in topline and improved profit margin.The company is facing insolvency proceedings but besides water storage tanks the company also has a subsidiary Sintex-BAPL which was once the cash cow of the group with overseas presence as well.The company could emerge as a dark horse with a couple of decent quarters .
MARKET OUTLOOK.
Some technical cues are as follows going by market trends: –
NIFTY– Mid week recovery to levels of 17400 was erased with some sharp losses towards close of the week.For the coming week 16800 levels will be critical and in the event of it getting breached levels of 16500 could be seen .On the upside 17300 should act as a stiff resistance.
BANK NIFTY -The close of the week with a slender gain leaves little room for comfort and levels of 35000 will become critical breaching of which could see the index loosing ground to 33000 levels.On the upside 37000 will act as a stiff resistance.
SCRIPS ON RADAR
Vodafone Idea (14.45)-The scrip was recommended earlier at around levels of 10 .Going by price action of the last week the scrip saw a massive breakout past 13.50 which was its last 1-year high.The near term target is around 18 .Considering its long consolidation ,the scrip looks poised to strengthen further and thus long term investment also could be considered at declines.
Cipla(914)-The scrip had a failed breakout attempt in the beginning of last week when it saw selling pressure emerging around 980.However ,it is back to its 200-dma from where it has bounced several times .Accumulation could be considered for a possible target of 985 in the coming days.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam