Market Capsule 1st June'24 | Election Results, Exit Polls and the Volatility

samarwealth
Jun 1, 2024
7 min read

The Election Week; What to Expect?

The major equity indices experienced notable declines this week, with the Nifty slipping below the crucial 22,550 mark. The benchmarks ended lower in three out of the five trading sessions, and the broader market struggled to maintain its prior outperformance. By the close of the week on Friday, 31 May 2024, the S&P BSE Sensex had dropped by 1,449.08 points, or 1.92%, to settle at 73,961.31. Similarly, the Nifty 50 fell by 426.40 points, or 1.86%, to end at 22,530.70. The BSE Mid-Cap Index decreased by 1.53%, finishing at 42,852.69, while the BSE Small-Cap Index also declined by 1.53%, closing at 47,263.66.

As the final hours tick down to the release of exit polls for 2024, anticipation builds. Following today’s final voting phase, all news channels will begin broadcasting exit polls at 6:30 pm. In the 2019 Lok Sabha elections, the BJP secured 303 seats, achieving significant wins across northern and western India. Markets overall are expecting a Higher score for BJP from the previous elections. Bigger the mandate bigger is the move expected in the indices. On the contrary, if the result comes below the expectation of the market, we might see a considerable dip.

Scenario 1 (BJP 303+ and NDA 330+): A strong mandate can give a much needed trigger to the Markets and should set the tone for next 6 months with an upside potential of 7-8% on index level.

Scenario 2(BJP 272-303 and NDA 300-330): Neutral with nothing to cheer for the Markets Volatility shall remain for next few months.

Scenario 3(BJP below 272): Negative for the markets with 4-5% immediate correction as the markets prefer stable and continuing govt over a new or unstable govt.

As we near the election results, the Sensex and Nifty indices are likely to witness heightened volatility. Focus needs to remain on Railways, Defense, Energy and Public sector enterprises for the coming news driven week. The technical parameters signify indecision in the markets currently, however Exit poll results may set the tone for the next week.

Quote of the Week:

"For the every Investor who knows what he is doing, Volatility creates an Opportunity" -- John Train

⭐Video Recommendation:

Blockbuster Results | 2 Companies That Smashed Earnings Expectations Raghav Wadhwa

Click to Watch

Charting the Pulse of Indices: A) Sector Wise Performance

This week, almost all Indian sectoral indices showed Stagnant Movement lead primarily by PSU Bank and Reality. Nifty IT index Underperformed the other indices considerably. Nifty Auto and Infra 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

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 ⭐⭐⭐⭐⭐

Good Results ⭐⭐⭐

Average Results ⭐

JTEKT India Ltd reports strong Q4 FY24 results: Revenue at Rs 632 crore, up 19%, with profit increasing by 31% year-on-year .

Salasar Techno Engineering Ltd reports strong Q4 FY24 results: Revenue at Rs 367 crore, up 25%, with profit increasing by 12% year-on-year .

Jash Engineering Ltd.

Jash Engineering Limited manufactures an extensive range of equipment for various applications, including water intake systems, water and wastewater pumping stations and treatment plants, stormwater pumping stations, water transmission lines, and industries such as power, steel, cement, paper and pulp, petrochemicals, chemicals, fertilizers, and other process plants. Jash provides a comprehensive single-stop solution encompassing design, casting, fabrication, assembly, and testing, offering the broadest range of products in the largest possible sizes. Jash is a leading industry player in India for most of these products and exports to over 45 countries worldwide.

Jash is a market leader in India for most of its manufactured products and ranks among the top five globally in the water control gates business. Currently, over 50% of the company's revenue comes from exports, and Jash aims to increase this to nearly 65% in the foreseeable future.The consolidated revenue distribution of Jash is evenly split, with 50% coming from domestic sales and 50% from exports.

The company has a diverse global customer base, with a presence in countries such as the United States, the UK, France, Germany, Qatar, Saudi Arabia, Bahrain, UAE, Hong Kong, Singapore, Thailand, and over 35 other nations. Some of their international clients include Hyflux, GE Power, and Veolia Engineering, while domestic clients include Reliance, Adani, and L&T. The top five customers contribute approximately 20-30% of the total revenue.

The company operates five manufacturing units, employing a total of 850 people. These plants are designed for "Zero Water Discharge" and are water sustainable, achieving 100% rainwater harvesting by recharging more water than their annual requirement. The total turnover potential from the existing facilities exceeds ₹500 crore.

Financial Highlights:

Product Portfolio:

Concall Updates:

1. Adani Ports & Special Econimic Zone Ltd.

2. Anant Raj Ltd.

3. Va Tech Wabag Ltd.

4. Housing & Urban Development Corporation Ltd.

5. PG Electroplast Ltd.

6. Bharat Electronics Ltd.

7. Ashok Leyland Ltd.

Order Wins:

Madhav Infra Projects has secured the order to set up a 15 MW floating solar PV project at Maroda Reservoir of NTPC-SAIL Power Co. Ltd (NSPCL) in Chhattisgarh. Link
Power Mech Projects Limited (PMPL) Achieves Milestone with New Project Win in Nuclear Power Plant Construction Worth ₹563 Crore. Link
Man Industries (India) Limited Secures New Orders Worth Approximately ₹490 Crore. Link
Suzlon Energy Limited has received a new order for 551.25 MW from the Aditya Birla Group for its 3 MW series. The order includes the installation of 175 wind turbines in Rajasthan and Gujarat, which will generate power for captive use by group companies. Link
Cochin Shipyard's subsidiary has secured an order valued between 100 and 250 crore from an Adani Group company for the construction of three ASD tugs. Link

Appointments & Resignations:

ICICI Prudential Life Insurance Company has received approval from the Insurance Regulatory and Development Authority of India for the appointment of Sandeep Batra as Chairman of the Board of Directors. Link
Aarti Industries has appointed Mr. Suyog Kotecha as Chief Executive Officer and Executive Director, effective June 17, 2024. Link
5Paisa Capital: Mr. Narayan Gangadhar has resigned from his position as Managing Director and Chief Executive Officer (CEO) of the company, effective at the close of business hours on August 28, 2024. Link
HDFC Life: Mr. Rangarajan BN has tendered his resignation as Chief Risk Officer to pursue opportunities outside his professional life. The company accepted his resignation on May 28, 2024. Link

Agreement:

Excel Industries has entered a 5-year supply agreement with a multinational company, expected to generate estimated revenue of ₹50-70 crores over the contract period. Link
Mahindra Logistics Forms 50:50 Joint Venture with Seino Holdings in India for Warehousing and Trucking Services. Link
Oil & Natural Gas Corporation is expected to establish an equal joint venture with EverEnviro Resource Management to construct ten compressed biogas plants.
Krishna Institute of Medical Sciences Ltd has entered into a definitive agreement with People Education Society (PES) for the lease of land and hospital building for a period of 25 years, along with the management of the super specialty hospital. Link
SJVN: The Board has approved the signing of a Joint Venture Agreement with Indian Oil Corporation Ltd for the formation of a Joint Venture Company to develop Green RTC/Renewable Projects and other New Technology-based Projects. Link

Other Important News:

KP Green Engineering Limited reports significant progress on the new manufacturing unit in Matar, Bharuch, funded by our recent IPO to expand production and enhance our product portfolio. Link
Transformers & Rectifiers India Ltd successfully tested and supplied a 220 MVA Electric Arc Furnace Transformer, the world's third-largest, to a leading global steel production company. Link
Radico Khaitan Limited announces that Morpheus Brandy, named after the Greek God of dreams, has sold 1 million cases for consecutive years and holds 64% of India's premium brandy market. Link
Marksans Pharma Ltd announces that its wholly owned subsidiary Relonchem Limited has has received Marketing Authorization for the product Levetiracetam Relonchem 100 mg/mL Oral Solution from UK MHRA. Link
Intellect unveils the groundbreaking eMACH.ai platform, featuring the contextual iCPX and iAPX modules, to revolutionize Corporate Procurement and Accounts Payable Processes. Link
Jash Engineering: The company announces the inauguration of a new manufacturing facility for Waterfront Fluid Controls Ltd in Glasgow, UK. 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.