WEEKLY TRENDSETTER (JAN 31,2025)
| 2025 | JAN 17 | JAN 24 | Ch % |
| NIFTY | 23203 | 23092 | -0.48 |
| BANK NIFTY | 48540 | 48367 | -0.36 |
| USD/INR | 86.61 | 86.16 | -0.52 |
MARKET REVIEW-The market failed to sustain any rally and selling was sharp from higher levels around 23400 and by the end of week the index managed to sustain above 23000 after breaching it twice during the week. The weekend will see another major result from ICICI Bank which could result in some volatility early next week. Broader market also looks weak and sharp gains over the past 2 years is eroding fast.
BACK TO RESULT SEASON
Dec 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 Dec,23 quarter.
| Company | Revenue | Net profit |
| Aeroflex Inds | 97(+32) | 15(+66) |
| Vidhi Specialities | 99(+57) | 13(+44) |
| Just Dial | 287(+8) | 131(+42) |
| KFin Tech | 282(+33) | 91(+37) |
Aeroflex Inds (244)-The company is a leading manufacturer of metallic flexible flow solutions. Its product segments consist of SS Flexible Hoses and assemblies and fittings both contributing 50% each to revenues. Exports are 77% of the revenue with 60% going to US. The user industry mix is steel& metal, oil and natural gas, refinery, mining and drilling to name the major ones. The company has steadily added capacities of hoses from 11 mn mtrs to 20 mn mtrs and another 3,5 mn mtrs are planned by March 26.In assembly and fittings it has added 6 new stations in March 25.The company intends to gradually implement automated and robotic assembly lines as part of its future plans planned addition of 30 assembly stations by Mar-26.On the performance front it has seen a steady performance over the last few quarters and has the potential to leverage for funding its expansion programmes.It could end the year with an EPS of around 4-5 .At current levels it looks stretched .
Vidhi Specialities (506)-The company is in the business of food colours which has a very wide user industry like confectionary and bakery, pharma, beverages, personal care, cosmetics, home care products and even daily servings for consumption. It has a high pedigree clientele list like HUL, P&G, Britannia, Nestle, Coca Cola, Cipla, Mondelez to name a few.80% of the production goes towards exports. With growing demand, the company plans to triple production capacity from current levels of 325TPM to 1000 TPM.It has already added installed capacity of 350 TPM and the balance is expected to be completed in the next few months. The company has been posting steady performance for the past 2 years and the stock price has also been on a consolidation phase for the past 3 years. With the sharp rise in capacities, revenues and profits could see a jump in the coming quarters. With the rupee also depreciating, realizations will get a further boost. Accumulation could be considered. Good support exists at 400.
Just Dial (903)-This Reliance subsidiary is a prominent search engine with multiple advertisers and over 6 lac active paid campaigns. Visitor engagement has been steadily rising every quarter and due to the early mover advantage and also backed by a strong promoter, profits and revenue has seen a steady rise. Margins have seen a sharp rise in the last few quarters from 13.4% in March,23 to 30% in the Dec 24 qtr. Cash and equivalents stand at Rs 5062 cr for the Dec qtr. The company posted an EPS of Rs 15.4 for the qtr. It could end FY25 with an EPS of Rs 60-70 and at current valuations the scrip looks attractive.
KFin Tech (1165)-The company serves the mission-critical needs of asset managers with clients spanning mutual funds, AIFs (alternative investments), pension, wealth managers and corporates in India and abroad. The company provides SaaS based end-to-end transaction management, channel management, compliance solutions, data analytics and various other digital services to asset managers across segments, as well as outsourcing services for global players. With a boom witnessed in investor base post Covid and with an early entry advantage, the company has managed to add a rich client base which could steadily witness growth in the coming years. In the near term the stock looks stretched but on a strong correction below 1000, it could be an ideal stock for the long run.
NIFTY –The index managed to close above 23000 for the week. Levels of 23300 and above look critical and the index will have to close above that and also sustain to expect any meaningful pullback. Lower levels of 22800 -23000 could again be tested. With monthly expiry in the coming week and the Union Budget on Feb 1, the next few days could see volatility.
BANK NIFTY-The index traded below 50000 for the week and took support above 48000.The opening next week will be critical as heavyweight ICICI Bank will announce its results during the week. In the very near term the market looks oversold but any short covering rally looks unlikely to sustain above 50000.
STOCK PICKS
Indo National (535)-The stock has seen a strong correction from levels of 850 to 500 and buying has emerged around those levels. Accumulation could be considered for possible levels of 650-700 in the coming months.
Indus Tower (368)-The stock saw good short covering from lower levels of 320 and has been resilient in a falling market. Ideal levels for buying would be around 355-60 for a possible target of 400 in the coming weeks.
Wishing all readers a great week ahead!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam