WEEKLY TRENDSETTER (August 11th,2023)
| 2023 | July 28 | Aug 4 | Ch % |
| NIFTY | 19646 | 19517 | -0.66 |
| BANK NIFTY | 45468 | 44879 | -1.30 |
| USD/INR | 82.21 | 82.83 | 0.75 |
MARKET REVIEW–The week continued with the profit-taking mode of the previous week. The results season was in full focus and while good results were largely greeted with profit-taking, any missing of expectations bore the brunt of selling.
BACK TO RESULTS (June qtr.)
The June quarter results are trickling in. So far, it has been a mixed bag. This week let us explore some of them:
Rs in cr, Bracket indicates ch in % against June,22 quarter.
| Company | Revenue | Net profit |
| BHEL | 5003(+7) | -360(-79) |
| Alembic Pharma | 1486(+17) | 121(+305) |
| IG Petro | 550(-15) | 36)-55) |
| Nitta Gelatine | 131.3(-2) | 29(+200) |
BHEL– (99)-The company posted dismal set of numbers which belied the expectations on the back of decent numbers in the last quarter. There have been some encouraging developments in the past few quarters which raised hopes. The company in consortium with Titagarh Rail Systems Ltd (TRSL) has signed a contract with Indian Railways for engineering, manufacturing, testing, commissioning, supply as well as 35 yrs annual maintenance contract of 80 Vande Bharat train sets which is the highest ever industry sector order. Besides it has also signed MoU with Volvo Eicher Commercial Vehicles Ltd for development and deployment of Hydrogen/CNG cylinders in the CV segment. Besides this the power sector where the company has a large presence is on a high growth phase. All this is expected to drive growth for the PSU.The scrip could see profit-taking in the immediate short-term on the back of disappointing results. In the near term 85-90 could see some support emerging.
Alembic Pharma (780)-The API business saw a 41% growth in topline which boosted bottom-line which was also aided by cost rationalisation. The company has seen commercialisation of products from the injectable and oncology facilities. Other growth drivers were speciality segments that grew 13%, including gynecology, anti-diabetic, ophthalmology & ortho. The company’s animal health business grew 15 % over previous year. The beginning for FY23-24 has been on a good note and market will be keenly hoping that the trend continues. Levels of around 725-750 the scrip could see buying support.
IG Petro (467) -The performance has been disappointing largely due to sluggish prices of Phthalic Anhydride of which the company is an established player. The product has a wide application covering industries like PVC products, cables, pipes, films for packaging, paints, building materials, plastic products, textile industries and printing ink. The user industries are on a strong growth phase though the cyclical downtrend of these critical raw material still appears to be down, going by recent price movements. However, sequentially some bottoming out of margins is visible though it is still not confirmed. Despite such sluggish trends the company has posted an EPS of Rs 11.60 for the quarter. At current price the scrip deserves accumulation as any reversal of trend could see improved prospects.
Nitta Gelatine (840)-The company is a manufacturer of gelatine which goes into pharma and food applications, di-Calcium phosphate as poultry feed, ossein and Chitosan for agri and industrial applications. More than 60% of the company’s products are exported to over 35 countries including Japan, US, Canada, and Europe. The June quarter results have shown a sharp jump in profitability resulting in an EPS of Rs 27 for the quarter against Rs 15 in the previous quarter and Rs 9.30 for June 22. In a market hungry for value, the scrip is ripe for re-rating and a decent portfolio bet.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY – The index continued to shed ground and bounced from a critical support of 19300.Levels of 19700 and above could be a challenge in the coming week while on the downside 19100-200 should provide support.
BANK NIFTY-The index was largely under pressure and any recovery will see pressure around 45400.On the downside 44150-200 should act as a decent support.
PICKS FOR THE WEEK-
Philips Carbon (155)-The stock has been consolidating above a major long term support level of 140-150.While in the near term some correction could be seen, levels closer to 140-45 would be ideal for a long-term target of 200-210.
Lemon Tree-(97) The scrip has been on a consolidation mode in the past 2-3 months and moving in a band of 90-95. Accumulation on declines could be considered for a possible target of 110 in the short to medium term.
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam