WEEKLY TRENDSETTER (AUGUST 23,2024)
| 2024 | AUG 9 | AUG 16 | Ch % |
| NIFTY | 24367 | 24541 | +0.71 |
| BANK NIFTY | 50484 | 50517 | +0.07 |
| USD/INR | 83.95 | 83.95 | 0.00 |
MARKET REVIEW-The domestic market was distinctly weak to begin with. However, the US markets came to the rescue with strong gains which changed the sentiments and provided ammunition to the bulls and forced a short covering rally.
BACK TO RESULT SEASON
June 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 June,23 quarter.
| Company | Revenue | Net profit |
| Heranba | 304(+7) | 34(+1600) |
| Polyplex Corp | 1686(+8) | 97(+999) |
| Entero Health | 1097(+22) | 20.08(+221) |
| IFB Inds | 1269(+16) | 40(+900) |
Heranba (458)-The company has been listed for 2 years but has seen a strong correction from levels of 866 to 265 before recovering to levels of 450 and above. It is one of the largest manufacturers of synthetic pyrethroids & its intermediates in India. The history of the company suggests that it has planned its growth in an astute manner with timely forward and backward integration which ideally should enable to create a value chain resulting in decent margins. However, in the last 5 years margins have actually been dipping alarmingly from 15.3% to 9.96% in the FY 20-24 period. The June quarter has seen some resurgence and translated to EPS of 4.1. Considering its erratic track record its performance is too early to judge though potential remains.
Polyplex Corpn (1294)- The company has the 7th largest capacity of PET (polyester film) globally used in packaging with user industries of food & beverage, personal care, healthcare &pharma, electrical and electronic, building & construction, etc. The promoter holding in the company is 26% and 64% is with general public. After some woeful performance in the last 3 years the company seems to have turned the corner with some robust performance in the June quarter. The packaging industry is rich in potential with a diverse user base which can only accelerate with e-commerce making rapid strides. The company has posted an EPS of Rs 17 for the quarter. At current levels it offers good potential and accumulation can be considered.
Entero Healthcare (1239) -The company was founded only in 2018 but has made rapid strides with topline almost touching 4000 cr in FY2024.It is one of the fastest growing healthcare products distribution platforms. With a large hospital customer network among pharma distributors in India. After 3 years of losses, it has turned positive in FY24.The June quarter has further seen another robust quarter and it has posted EPS of Rs 4.62. Having established itself in the thriving space of pharma and healthcare, the stock clearly is likely to engage investor attention. At declines buying could be considered.
IFB Inds (2030)-The domestic appliances major saw a strong surge in margins of 300 basis points and further 16% growth in topline which ensured strong profits for the quarter. The revenue presence provides interesting insight.AC (32%), washing machine (37%) microwave (5%), are the chief contributors. Service income contributes 15% of revenue which is recurring in nature and provides boost to the bottomline. The company posted EPS of Rs 9.3 for the quarter. At current levels it looks well priced though around 1700-1800 investment could be considered.
NIFTY –The index was witnessing selling pressure for most part of the week. However, support came at around 24200 thanks to positive global cues and it zoomed to 24541 by close of week with bulls finally looking like taking control. The coming week should see support at around 24400 and levels of 24800 -900 could be seen.
BANK NIFTY-For the short term a double bottom appears to have been established at around 49500-600 levels. On the upside levels of 50800 will be critical. However, odds are high that it should breach this level for an upside of 51500.
PICKS FOR THE WEEK
BEL (303)-After a decent correction the stock appears to have bottomed out around levels of 280.Accumulation could be considered for possible levels of 320-25 in the coming week.
Cosmo Film (912)-The stock has been on a comeback trail after months of underperformance. The long-term term trend appears to have turned positive. Accumulation could be considered for possible levels of 1200 in the medium to long term.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam