Market Capsule 11th May'24 | A Weak Week for the Bulls
- samarwealth
- May 11, 2024
- 7 min read
Broader Markets Faces the Heat!
The principal equity indices suffered substantial declines over the past week, attributed to the ambiguous election outlook and an intensified sell-off by foreign institutional investors (FIIs). The Nifty finished the week below the 22,100 level, with broader markets underperforming the main indices. As of last week, 10 May 2024, the S&P BSE Sensex fell by 1,231.07 points or 1.67%, closing at 72,664.47, while the Nifty 50 index dropped by 388.10 points or 1.73%, to finish at 22,054.60. The BSE Mid-Cap index decreased by 3.27%, closing at 41,027.75, and the BSE Small-Cap index declined by 3.80% to end at 45,396.99.
In contrast, typically defensive sectors such as FMCG and Automobiles have not been as impacted by the current market downturn. The Percentage of stocks above 20Day Moving average declined considerable from 53% at the start of the week to 34% by the end of the week., signalling increased momentum on the downside.
Separately, India’s foreign exchange reserves saw a decline for the third consecutive week, dropping by $2.412 billion to $637.922 billion as of the week ending April 26th. This reduction was primarily due to decreases in foreign currency assets and gold reserves.
Looking ahead, market volatility is expected to persist as investors anxiously await the Lok Sabha election results on June 4, 2024. The uncertainty has prompted some investors to reduce their market activity. Foreign investors continue to sell, while domestic institutions have taken a buying stance, setting the stage for a continuing tug-of-war that will likely influence market trends. Investors should monitor individual stock performances as the Q4 earnings season unfolds and slowly increase the allocation in companies coming out with stellar Q4 performance and trading at reasonable valuations. Key support levels for the Nifty 50 are projected at 21,700-21,800.
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Charting the Pulse of Indices: A) Sector Wise Performance
This week, almost all Indian sectoral indices showed Stagnant Movement lead primarily by FMCG and Autos. Nifty PSE index Underperformed the other indices considerably. Nifty IT and Consumption index however stood strong and is likely to extend the gains and showing relative strength.
B) Heatmap
Heatmap helps investors quickly understand the performance of multiple stocks or sectors in a single view. Color coding, with varying shades indicating the degree of movement - red for declines, green for gains, and sometimes grey or other colors for little or no change. Heatmaps are effective for spotting market patterns and can be a time-saving resource in investment analysis.
C) Market Breadth
A) Nifty 500
Source: Stockedge
Analyzing market breadth is important as it provides insight into the underlying strength or weakness of the market, beyond just looking at benchmark indices. Breadth measures the percentage of securities in NIFTY 500 surpassing specified moving averages over the specified period. Comparing the market breadth of nifty 500 during the previous week's trading sessions, we can analyze that number of stocks above key moving average support areas are reducing by the end of week. This can be considered as a sign of weakness if change is seen to be significant.
Blockbuster Results ⭐⭐⭐⭐⭐
BSE Ltd reports strong Q4 FY24 results: Revenue at Rs 545 crore, up 110%, with profit increasing by 21% year-on-year.
Choice International Ltd reports strong Q4 FY24 results: Revenue at Rs 215 crore, up 56%, with profit increasing by 27% year-on-year.
Jupiter Wagons Ltd reports strong Q4 FY24 results: Revenue at Rs 1,113 crore, up 56%, with profit increasing by 156% year-on-year.
Home First Finance Company India Ltd reports strong Q4 FY24 results: Revenue at Rs 313 crore, up 38%, with profit increasing by 30% year-on-year.
Nuvama Wealth Management Ltd reports strong Q4 FY24 results: Revenue at Rs 927 crore, up 51%, with profit increasing by 112% year-on-year.
Good Results ⭐⭐⭐
Polycab India Ltd reports strong Q4 FY24 results: Revenue at Rs 5,592 crore, up 29%, with profit increasing by 28% year-on-year.
Cholamandalam Financial Holdings Ltd reports strong Q4 FY24 results: Revenue at Rs 7,083 crore, up 37%, with profit increasing by 26% year-on-year.
Kalyan Jewellers India Ltd reports strong Q4 FY24 results: Revenue at Rs 4,535 crore, up 34%, with profit increasing by 50% year-on-year.
Piramal Pharma Ltd reports strong Q4 FY24 results: Revenue at Rs 2,552 crore, up 18%, with profit increasing by 129% year-on-year.
Waaree Renewables Technologies Ltd reports strong Q4 FY24 results: Revenue at Rs 273 crore, up 344%, with profit increasing by 342% year-on-year.
Average Results ⭐
HPL Electric & Power Ltd.
Founded in 1992, HPL Electric & Power Ltd (HPL) is a leading manufacturer of electrical equipment in India, operating across two key segments: 1) Metering & Systems and 2) Consumer & Industrial. The former focuses on institutional and B2B markets with smart and conventional meters, while the latter serves B2C markets with switchgears, LED lighting, and wires & cables.
The organization holds a dominant position as the leading producer of on-load change-over switches, boasting a commanding 50% market share within the nation. Furthermore, it commands a substantial 20% share in the domestic electric meters market, along with a notable 5% share in the Low-voltage Switchgear Market. Additionally, it ranks as the fifth-largest manufacturer of LEDs within the country.
The company operates seven state-of-the-art manufacturing facilities in Haryana and Himachal Pradesh, along with two R&D centres in Gurugram and Kundli, employing over 100 expert engineers. In terms of capacity, HPL produces 11 million units annually in the Metering & Systems segment and has substantial capacities in other segments, including 16 million switchgears, 194 million meters of wires & cables, and 26 million lighting units.
HPL has established a comprehensive pan-India distribution network that includes more than 90 branch and representative offices, 15 warehouses, over 900 authorized dealers, and 72,000+ retailers. Financially, the company has shown robust growth with an 8.9% CAGR in revenue over the last three years (FY20-23). In FY23 alone, revenue grew by 24.5% YoY to ₹1262.0 crore, with a stable EBITDA margin of 12.4% leading to a 25.4% YoY increase in EBITDA to ₹156.9 crore. The PAT for FY23 also increased significantly, rising by 3.9 times YoY to ₹30.2 crore.
Financial Highlights:
Product Portfolio:
Concall Updates:
Seven good-looking charts for next week 1. Vedanta Ltd.
2. Jana Small Finance Bank Ltd.
3. Kirloskar Industries Ltd
4. Escorts Kubota Ltd
5. Tejas networks Ltd
6. GPT Infraprojects Ltd
7. Epigral Ltd
Order Wins:
Patel Engineering and its joint venture partner have been identified as the lowest bidder for an irrigation project valued at Rs 343 crore. Link
BharatForge has successfully secured new orders totaling Rs 1,350 crores for the fiscal year 2024. The company's order book now stands at Rs 5,192 crores. Link
NBCC (India) has secured two significant orders valued at Rs 250 crore and Rs 150 crore from the Hon'ble Court Receiver of the Supreme Court of India. Link
SJ Logistics has recently clinched a substantial contract valued at 80 crore. Link
RVNL has been awarded contracts totaling 167 crore by the South-eastern Railway. Link
L&T has recently been awarded multiple significant contracts, amounting to an estimated value between Rs 5,000 crore to Rs 10,000 crore, which includes projects such as floating solar plants.
Bonus Share Issue & Share Splits:
Appointments & Resignations:
One97 Communications announced that Mr. Bhavesh Gupta, the President and Chief Operating Officer, has tendered his resignation. Effective May 31, 2024, Mr. Gupta will transition into an advisory role within the CEO's office, continuing to provide support to the company. Link
Avenue Supermarts has appointed Mr. Stephen Thomas as the 'Head of Food Services,' designating him as Senior Management Perso nnel, effective from May 4, 2024. In this role, Mr. Thomas will oversee the company's food services business. Link
Titan Company Limited has approved the re-appointment of Mr. C K Venkataraman as the Managing Director of the company. His re-appointment is effective from October 1, 2024, until December 31, 2025. Link
Suven Life Sciences has announced that the Board has approved the reappointment of Shri Venkateswarlu Jasti as Managing Director (MD) of the Company for an additional five-year term starting from November 1, 2024. Link
Bajaj Healthcare's Board has approved the appointment of Mr. Dayashankar Patel as the Chief Financial Officer and Key Managerial Personnel (KMP) of the Company, effective from May 6, 2024. Link
Agreement:
Tata Power Renewable Energy Limited, a subsidiary of Tata Power, has entered into a Power Purchase Agreement with SJVN Limited for a 460 MW Firm and Dispatchable Renewable Energy Project. Link
HCL Technologies has announced a global strategic collaboration agreement with Amazon Web Services (AWS) to expedite enterprise digital transformation led by GenAl. Link
Dixon Technologies' subsidiary, Dixon Electro Appliances Pvt Ltd, has entered into an agreement with Nokia Solutions and Networks OY for the development and manufacturing of telecom products. Link
Astra Micro and Teledyne e2v HiRel have entered into a collaboration agreement to provide semiconductor services for the aerospace, defense, and high-reliability electronics markets. Link
Wipro Infrastructure Engineering's Hydraulics division has reached a definitive agreement to acquire Mailhot Industries. Link
Dixon Technologies' subsidiary, Dixon Electro Appliances Pvt Ltd, has recently entered into an agreement with Nokia Solutions and Networks OY for the development and manufacturing of telecom products. Link
Other Important News:
Gulshan Polyols announced that the company has received authorization from the Pollution Control Board of Assam to commence operations at its ethanol plant. Additionally, the company has obtained approval for its ethanol plant unit situated in Goalpara. Link
DCM Shriram has approved a capital expenditure proposal amounting to 1.20 billion rupees for a power efficiency project within the company's chemicals business located in Jhagadia, Gujarat. Link
Delta Corp has announced plans to establish a real estate development platform in collaboration with Alpha Alternatives and Peninsula Land. The platform aims to invest ₹765 crores in residential redevelopment projects in Mumbai. Additionally, Peninsula Land is raising ₹145 crores through Optionally Convertible Debentures (OCDs) priced at ₹56 per share, as compared to the current market price (CMP) of ₹64, with investment support from Alpha Alternatives. Link
LTIMindtree and IBM are joining forces to establish a global Generative AI Center of Excellence (CoE) in India. This collaborative endeavor will merge IBM's Watson AI and data platform with LTIMindtree's engineering expertise to create a co-innovation center. Link
That's all for now! I hope you enjoyed the content. Do share your comments below! Disclaimer: Any stock or company discussed above should not be considered as a Buy/Sell recommendation. We personally or our clients might or might not have a position in any of the stocks discussed. This newsletter is purely is for educational purposes only.
Very useful
Thank YOU
Ravindran