WEEKLY TRENDSETTER (MAY 3,2024)
| 2024 | APR 19 | APR 26 | Ch % |
| NIFTY | 22147 | 22420 | 1.23 |
| BANK NIFTY | 47574 | 48201 | 1.32 |
| USD/INR | 83.48 | 83.35 | -0.16 |
MARKET REVIEW-The week saw a flying start continuing with previous week’s closing momentum. Expiry pressure saw bears on the backfoot as short covering fueled the bulls’ buying spree. The Bank Nifty also saw a strong recovery. The coming week could see further upside and Nifty could attempt to cross its previous high of 22775.
BACK TO RESULT SEASON
March 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 March,23 quarter.
| Company | Revenue | Net profit |
| Mahindra Holiday | 800(+12) | 84(+50) |
| Eveready Inds | 281(-1) | 8(+157) |
| Tech Mah | 12871(-6) | 658(-41) |
| Himadri Spec | 1177(+14) | 115(+51) |
Mahindra Holiday (434)-The premier holiday resort company has posted another strong set of numbers for the March quarter. It has 110 resorts in India and overseas. It has 33 properties across Finland, Sweden and Spain. While occupancy increased to 87.5% from 85 %, the surge in profits is largely due to improved margins. Membership sales also rose 18% y-o-y.EPS for the quarter was Rs 4. This is seasonally a strong quarter. However, with international presence, in the long run other quarters also should see steady increase in profitability. Valuation looks expensive. However, considering the niche segment to which it belongs and a strong appetite for such stocks, corrections can be utilized to add as it is a good long-term bet.
Eveready Inds (357) –The company has seen a degrowth of revenue in the last few quarters which is a cause of concern. This was primarily due to weak rural demand impacting batteries and flashlights, and industry‐wide price deflation affecting the lighting segment. As for the coming times, the company sees each of its business categories, batteries, flashlights and lighting to provide it with a strong growth momentum aided by the strong consumer franchise built up over the years offering quality products and services addressing consumer needs. The better performance in the quarter is attributed to favourable raw material prices.Thestock price has been in a band of Rs 300-400 in the last 24 months. The stock looks well priced for now though potential remains.
Tech Mahindra (1277)-The quarter results were boosted by an other income component which was largely negated by a provision. While the IT sector has been undergoing a transformation with AI slowly disrupting products and services, the company has an interesting range of verticals -communication, media and entertainment (36%), manufacturing (18%), BFSI (16%), technology (10%), retail transport & logistic (8%) in terms of revenue contribution. Margins are a matter of concern as it has steadily slipped over the years from 18% in FY20 to 10.4% in FY24.With the industry facing challenges, the stock looks well priced.
Himadri Speciality (372)-The company had a steady quarter and now looks to consolidate further. While its core business is coal tar pitch and carbon black, the company has been early to identify opportunities like manufacture of critical material for Lithium-ion-batteries (LIB) and with backward integration in place it has a distinct advantage.LIB has an exponential growth potential (33% annually) and is expected to grow from 1700 GWh to 4700 GWh in the next 6 years. With an EPS of 8-10 for FY24, low debt and bright business prospects the stock has enjoyed good investor appetite which should ensure steady appreciation over the years.
NIFTY – The index saw a steady uptrend though the last day saw some profit -taking with global cues not supportive. Levels of 22600 could see some resistance. Consolidation beyond this should see 22775 within striking distance. Support lies at around 22300.
BANK NIFTY-The index saw a decent recovery though towards close of week selling pressure emerged. Levels of 47700 should see support emerging. Levels of 48500-900 has seen selling pressure on several occasions since the beginning of the year. The private sector banks like HDFC Bank and ICICI Bank have been steady and the PSU banks have been in good momentum.
PICKS FOR THE WEEK
Bajaj Hind (33)-After touching 40 the scrip has been on a correction mode. A low of 27 was made and the scrip again looks poised to gain. Buying at dips could be considered for a possible target of 40 in the coming weeks.
Engineers India (236)-The scrip has been on a steady ascendancy since 2023.Last week the momentum indicators suggest that the scrip is poised to go past its recent high of 273.Buying could be considered for a possible target of 280.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam