WEEKLY TRENDSETTER (MAY 20th,2022)
| 2022 | May 13 | May 20 | Ch % |
| NIFTY | 16411 | 15782 | -3.83 |
| BANK NIFTY | 34591 | 33121 | -4.25 |
| USD/INR | 76.88 | 77.14 | 0.34 |
MARKET REVIEW–The weak trend continued for the whole week and any recovery attempt was sold into relentlessly. The broader market has also showed sharp losses and the only hope in the short term is that the market seems oversold and some bounce could be expected.
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’s explore some of them:
Rs in cr, Bracket indicates ch in % against Mar,21 quarter.
| Company | Revenue | Net profit |
| Nitta Gelatine | 141.6(+35) | 13.1(+470) |
| BSE Limited | 204(+34.4) | 55.5(+170) |
| Godrej Agrovet | 2075(+42) | 124(+149) |
| Chemplast Sanmar | 1804(+34) | 231(+117) |
Nitta Gelatine (331)-Gelatine is a protein product of natural origin consisting of protein (85%), water and mineral substances. It has widespread uses in the food industry like dairy, beverage, bakery, desserts, etc. Its performance over the years has been remarkable. While topline has grown by just 30% in the past 5 years, the profits have zoomed in excess of 200%. The FY22 full year EPS stands at Rs 29. The current market price appears reasonable.
BSE Ltd- (707)- The exchange continued with its profit expansion which has been seen in the last couple of years with the surge in retail participation. Recently it declared bonus in the ratio of 2:1. On an expanded base of 27 cr the company has reported an EPS of 4. Being a pioneer exchange the future looks buoyant with the participation from retail investors still to increase in the years to come. Near time upside could be capped due to expanded capital and rich valuation.
Godrej Agrovet (500)-Another steady quarter from the company which saw EBIDTA margins move up 230 bps to 10.7% on 42% jump in revenue. The key to future profitability is the margin which could have a significant impact on an already surging revenue. The revenue share from animal feed stands at nearly 50%. The stock has largely been an underperformer and though EPS stands at Rs 19 for FY22, lower levels of around 425-450 could be seen in the short to medium term.
Chemplast Sanmar (518)-It is a major manufacturer of speciality chemicals such as specialty paste PVC resin and custom manufactured chemicals for agro-chemical, pharmaceutical and fine chemicals sector. The company also produces other chemicals such as caustic soda, chlorochemicals, hydrogen peroxide, refrigerant gas and industrial salt. One significant feature of its performance has been the reduction in interest costs in the last one year which has boosted its bottomline. However, despite a strong revenue surge profitability has been under pressure. However, with Rs 25 EPS, the stock looks interesting.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index is at the brink of breaching the March low of 15671.Levels of 15500 could provide some support and some short covering could be expected near those levels. Upside could be capped around 16100.
BANK NIFTY– The index is still 1000 points away from the March low of 32155 but this index was the weakest towards close of week and looks vulnerable and chances are high the low will be revisited soon. On the higher side levels of 33000 could again attract selling.
SCRIPS TO WATCH OUT
L&T Info-(4108)-After touching a dizzy level of 7600 in Oct 21, the scrip has breached some critical levels. Levels of 4300-400 could be good levels to sell for a possible target of 3800 in the coming weeks.
SRF (2228) –After a modest uptrend the scrip could resume its downtrend. Levels of 2275-300 could be used to sell for a possible target.
Nitta Gelatine (331.60)-The scrip has posted a fresh breakout on the upside. However, in the overall market context it could also see profit -booking which could see the scrip retracing to 275-300.Gradual accumulation can be considered for long term investment.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam