WEEKLY TRENDSETTER (NOV 8,2024)
| 2024 | OCT 25 | NOV 1 | Ch % |
| NIFTY | 24180 | 24304 | +0.51 |
| BANK NIFTY | 50787 | 51674 | +1.75 |
| USD/INR | 84.08 | 84.06 | +0.13 |
MARKET REVIEW-The week began on a positive note. However, selling pressure resumed at higher levels. Finally, the indices closed in the positive for the week. Bulls will be relieved after a testing month of Oct. The FIIs were on a selling spree during the month and that was countered well by DIIs.Some near-term uptrend can be expected though levels of 24000 will be critical.
BACK TO RESULT SEASON
Sept quarter results are trickling in. Let’s explore some of them to get cues of where the stocks could be heading.
Rs in cr, Bracket indicates ch in % against Sept,23 quarter.
| Company | Revenue | Net profit |
| Servotech Power | 200(+132) | 11(+266) |
| Allied Blenders | 868(+2) | 48(+300) |
| Iris Business | 31(+29) | 4(+300) |
| Ami Organics | (244(48) | 38(loss 21) |
Servotech (188)-The company has had a remarkable growth riding the solar power demand. Its products include EV Charger, solar invertor, solar batteries, power backup, UPS among other similar products. The company has had 20 years presence in manufacturing power electronic products. It has 2 manufacturing facilities in Sonipet, Haryana. It has capacity to produce 30000 AC EV chargers and 12000 DC EV chargers. The EBIDTA margins have seen a smart jump from 7% to 10% with the EPS at 0.51 for the quarter. The stock has been one of the remarkable multibaggers in the last 2 years. It was trading below 10 in 2021 and has soared since then with its power packed performance. At current levels it looks stretched.
Allied Blenders (324)- A recently listed company,it is the 3rd largest spirits company in terms of annual sales volumes in India since FY2014. First flagship brand, Officer’s Choice Whisky, launched in 1988 Is amongst the top selling whisky brands globally.97% of the revenue comes from whisky. The company has also made a presence in exports which is close to crossing Rs 200 cr for FY25.However the last 5 years has seen minimal growth in sales which is hovering around Rs 3000 cr. Due to slender margins net profit has been dismal with negligible profits of Rs 6 cr for FY24.The Sept quarter has posted a decent show. It remains to be seen how effectively profitability can be increased in the coming quarters as the IPO proceeds were largely towards reducing debt. At current levels the stock looks well priced.
IRIS Business (385) -The company offers a comprehensive suite of solutions tailored to meet the needs of modern enterprises, including cutting-edge offerings for XBRL/iXBRL Reporting, ESG Reporting, Disclosure Management, GST Filings, and Tax Compliance. XBRL offers major benefits at all stages of business reporting and analysis. The benefits are seen in automation, cost saving, faster, more reliable, and more accurate handling of data, improved analysis, and better quality of information and decision-making. The company has been in existence for over a decade. However recently, it has seen growth accelerating along with profitability. The Sept quarter saw a smart jump in topline and net profit zooming. The company could head for an EPS of Rs 7-8 for the current year. There has been interested buying at lower levels. Looking at growth prospects accumulation could be considered though ideally levels of 300 would be ideal for entry.
Ami Organics (1977) -A recently listed company it manufactures different types of APIs for new chemical entities, and material for agrochemicals and fine chemicals. It has built a robust pipeline of CDMO projects, working with multiple originator clients across regions like Europe, the USA, and Japan. Some of the CDMO projects are in the sampling stage, while others are expected to begin scaling up in the coming quarters. The company also reported progress in the advanced stages of finalizing CDMO contracts, which should add significant revenue from FY26E onward. The Sept quarter has seen robust growth in topline and profits. The company could end up with EPS in excess of Rs 30 for FY 25. Levels of around 1500 would be ideal for entry.
NIFTY –The beginning of the week held out some promise. However, it was unable to sustain at higher levels. Towards close there was some recovery and 24000 held out which now will act as a support. In the near term a rally up to 24800 looks likely.
BANK NIFTY-The index was a relative outperformer. It has good support at around 51000.Levels of 52500 could be revisited in the coming days as some short covering in large cap banking stocks could be seen.
DIWALI PICKS
BCL Inds – (57) –The stock has been regularly recommended in these columns. The recent market meltdown has also seen the stock correcting to near 50 levels. The stock had touched a high of 86 early this year. Since then, it has seen selling pressure pushing it below 60. Accumulation at dips could be done and the stock could see levels of 85-90 in the coming weeks.
Just Dial – (1141)-The stock has been in an uptrend in the past few weeks. After touching a high of 1394 a correction has set it and recently it also touched its 200-dma of 981 before bouncing back. Near term sluggishness could be utilized to accumulate the stock. Strong support exists at 800-900 for long term. The stock could see levels of 2000 in the long term.
Veedol (1972) –The stock (previously known as Tide Water) has been on an uptrend. However, a sharp correction has been seen from levels of 2800 in Aug. Some more correction up to levels of 1600-700 cannot be ruled out. Gradual accumulation could be considered for possible levels of 3000 in the coming months.
Wishing all readers, a very Happy Diwali! May the coming year bring good health, peace and prosperity!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam