| 2024 | OCT 11 | OCT 18 | Ch % |
| NIFTY | 24964 | 24854 | -0.44 |
| BANK NIFTY | 51172 | 52094 | +1.8 |
| USD/INR | 84.00 | 84.07 | 0.08 |
MARKET REVIEW-The week was unnerving for most part as despite positive global cues, the domestic market was highly volatile with sharp bouts of selling at higher levels. Though there was recovery towards close of week, closing below 25000 will not be comforting for bulls.
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 |
| ICICI Lombard | 6141(+17) | 694(+20) |
| Himadri Special | 1137(+13) | 136(+34) |
| Pondy Oxide | 579(+45) | 15(+150) |
| Just Dial | 285(+9) | 154(+113) |
ICICI Lombard (2012) –The insurance major has a diversified portfolio comprising motor, health, travel, personal accident, fire, marine, crop and others. There is still significant under penetration in India as compared to rest of the world in these segments. The company has made investments in motor and health segments which continue to be its main source of business. A new product “Elevate “was launched a few months back and the company is betting big on the product gaining traction. In the near term a downward revision in medical insurance GST could be a good trigger for the industry as a whole. With an expected Rs 50 EPS for FY24-25 the stock is an investment candidate at every decline with strong entry barriers and an early entrant advantage.
Himadri Speciality –The company continues with its robust performance. The highlight of the quarter was the commissioning of high temperature Liquid coal tar pitch terminal at Haldia Port. The first shipment was done in Oct and the company is optimistic about this initiative as it opens up a huge export market .On the capex front the company is building the first commercial plant for 40000 MTPA of LFP Cathode Active Material with a planned outlay of Rs 1125 cr and is expected to be operational by Q3FY27.A new carbon black speciality line with capacity of 70000 MTPA involving capex of Rs 220 cr is also on the anvil and should be operational by Q3 26.The company already has planned investments in the cathode material space which goes into production of ion batteries and should be operational by FY27.Meanwhile the company along with Dalmia Bharat Refractory Ltd has also recently acquired Birla Tyre from NCLT at a cost of Rs 306 cr.This acquisition is a forward integration into tyre manufacture. The stock price has been on a rally for several months and with an expected EPS of Rs 11-12 for FY24-25, valuation is steep.
Pondy Oxide (1061)- is India’s leading recycling company with presence in Lead, lead alloys, copper, aluminium and plastics. The company has a capacity to produce 1.32 lac mtpa of lead derivatives and the company is in the process of expanding by another 36000 mtpa which is expected to commence production by Jan 25. The business is volume based and margins are low. The same increased to 5.2% fron 4,5% during the quarter. The revenue jump was sharp which resulted in profitability jumping significantly. With an EPS of 13 for the quarter the company could end up with an EPS in excess of Rs 50 for FY24-25. It has proposed a stock split from Rs 10- to Rs 5 and also fund raising of Rs 250 cr through QIP.At current levels the stock looks well priced.
Just Dial (1200) – Justdial’s services connect sellers of products & services with potential buyers/ users. With a constant use as a search platform the visitor traffic has seen a steady rise by around 4-5% every quarter. Reliance Retail Ventures holds a stake of 41% in the company which it acquired at a price of Rs 1022 per share in Sept, 2022.The company could end up posting EPS in excess of Rs 50 for FY24-25. With a steady growth and high cash generation, the stock looks interesting at current levels.
NIFTY –The index breached 24750 but finally closed at 24850. It finally closed below 25000 again. The coming week will be critical with HDFC results over the weekend. Banking has been an out performer which is an encouraging sign. A pull back above 25200 should put uptrend intact. A breach of 24570 could see a sharper slide to 24000.
BANK NIFTY-The index closed with a bullish engulfing pattern on Fri which looks encouraging for the uptrend to continue. Any dip to levels of 51500 should be a buying point.51000 will be a critical support below which level of 50000 could be touched and on the upside 52800 should be a resistance zone. On the whole a volatile week seems to be on cards.
PICKS FOR THE WEEK
HCC (41.4)-The stock has been on a strong run for the past few months and seen some correction in the past few weeks. It has come down to its support level of 38-40. Buying could be considered for a modest target of 44 in the coming weeks.
NMDC (231)-The stock has been an outperformer in the past few weeks along with other metal stocks. Buying could be considered at 225-230 levels for a possible target of 240.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam