WEEKLY TRENDSETTER (June 28,2024)
| 2024 | JUNE 14 | JUNE 21 | Ch % | |
| NIFTY | 23465 | 23501 | +0.15 | |
| BANK NIFTY | 50002 | 51661 | +3.32 | |
| USD/INR | 83.56 | 83.58 | +0.02 | |
MARKET REVIEW-It was a mixed week where bouts of profit-taking emerged at higher levels. However, the bounce back was also swift as buyers at lower levels emerged. The private banking counters were largely responsible for a hefty gain in the Bank Nifty and also kept the Nifty in the green.
INTERESTING CUES
Sundaram Fastners EV parts business book swells
The company is witnessing a significant growth in the order book largely due to EV auto components order worth Rs 4000 cr with more in the pipeline. While a capex of Rs 343 cr was funded from internal accruals in FY23, another round of capex of around Rs 350-400 cr is planned. The company management believes in gradual transition to EVs starting with internal combustion engines (ICE) to plug in hybrids. While currently 6% of the revenue comes from EV this could go up to 10-15% in the coming years. The company also has a significant presence in wind energy components and expects revenue to double from current levels of Rs 250 cr non-automotive share is expected to rise from 30% to 50% in the coming years. Copper heatsinks is another product entry which has use in EV, aerospace & defence, IT and healthcare. With Rs 25 EPS for FY23-24 valuations are rich though offer promise at lower levels.
Gruner Renewables topline to swell from Rs 100 cr to Rs 4000 cr
The company built compressed bio gas (CBG)plants for other corporates and maintain them. Thanks to an order for 11 such plants from Reliance Industries, the company is poised to see a steep jump in turnover. It is expecting another round of orders in the 2nd round of bidding for the same. Interestingly bio gas produced from this plant is planned to be blended with CNG to be consumed by automobiles. The company is also planning a JV with a PSU for manufacturing CBG plants.
Vedanta plans $10bn EBIDTA
The company is planning the above powered by timely execution of over 50 projects including those in zinc, aluminium, oil&gas and power businesses. In all these projects the company is betting on low production costs. In aluminum it is betting on cost of production of $1711 per ton. Zinc production costs are placed at $1000 per ton. The company also looks to demerge all these businesses as stand alone entities and the process is on and by FY 25 end a clear picture is expected to emerge.
NIFTY – The index barely managed to close in the green for the week just above 23500.The monthly expiry is due next week. With budget due next month, rollover will be interesting as they will be based on expectation. Any downside to 23200-300 should ideally act as a support before the market resumes the uptrend.
BANK NIFTY-The indexwas largely propelled by private banks and short covering ensured a high of 51950 before some profit taking crept in. Levels of 50700-51000 should provide strong support and the uptrend should resume.
PICKS FOR THE WEEK
TD Power (374)-The stock touched an all time high of 398 before some profit taking emerged. Levels of 360-70 should provide decent support from where the scrip should surpass the previous peak.
Usha Martin-(405)-The scrip recently touched an all time high of 424 before slipping below 400.However 385-390 levels saw buying interest. Levels of 440-50 could be expected in the coming days.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam