MARKET CAPSULE 15th April'24 | A Volatile Week Ahead

samarwealth
Mar 30, 2024
6 min read

Updated: Apr 15, 2024

Global Factors can Impact the Markets This Week

Tensions escalate between Iran and Israel, the consequences could significantly affect the Indian stock markets in this week. Heightened geopolitical uncertainty typically prompts global investors to shift towards safer assets, introducing volatility across international markets including India. This change in investment behavior may result in increased market fluctuations.

On Friday, Foreign Portfolio Investors (FPIs) withdrew around Rs 8,000 crore or nearly $1 billion from India's financial markets, causing a significant 800-point drop in the Sensex. This pullout was triggered by a revised treaty between India and Mauritius, which imposed stricter regulations on investments routed through Mauritius.

The treaty revision modified the Double Taxation Avoidance Agreement (DTAA) to ensure that tax benefits are not indirectly transferred to residents of third countries, aiming to curb tax avoidance. This change reflects a global move towards greater transparency in international tax practices and is expected to influence future foreign investment patterns in India, particularly affecting capital flows from Mauritius.

Rising oil prices are another consequence of potential disruptions or perceived risks in oil supply due to the conflict. As India imports a substantial portion of its oil, any increase in oil prices could lead to higher inflation and adversely affect sectors like aviation, oil and gas, and petrochemicals, which are sensitive to changes in fuel costs.

Overall, the Global factors can play a key role and increase volatility in this week. Short term investors may step aside and wait for the volatility to settle and look out for sectors outperforming the major indices.

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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 Metals and Reality. Nifty Pharma index Underperformed the other indices considerably. Nifty Oil and gas index however stood strong and is likely to extend the gains with leading names like BPCL, IOC, OIL INDIA etc. showing relative strength and strong resilience in a stagnant market.

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.

EIH Ltd.

EIH Limited, the flagship of the Oberoi Group founded by Rai Bahadur M.S. Oberoi, boasts over six decades in India's luxury hospitality industry. The company excels in managing premium hotels and cruisers under the Oberoi, Trident, and Maidens brands, and diversifies with services in-flight catering, airport restaurant management, project management, and corporate air charters.

Due to health reasons, Mr. Prithviraj Singh Oberoi stepped down from his role as Executive Chairman and Director of the Company in FY23 and passed away in November 2023. Subsequently, Mr. Arjun Singh Oberoi was appointed as the Executive Chairman for a five-year term.

The company has three Indian subsidiaries, which are also joint ventures: Mumtaz Hotels Limited, Mashobra Resort Limited, and Oberoi Kerala Hotels and Resorts Limited. Additionally, the company's international subsidiaries include EIH International Ltd. and EIH Holdings Ltd., both based in the British Virgin Islands, along with PT Widja Putra Karya, PT Waka Oberoi Indonesia, and PT Astina Graha Ubud, all located in Indonesia.

The company operates three joint venture entities: one domestic, Mercury Car Rentals Private Limited, and two international, Oberoi Mauritius Limited and Island Resorts Limited, the latter being a subsidiary of Oberoi Mauritius Limited. These international ventures are managed through its wholly-owned foreign subsidiary.

Hotel Brands:

Financial Highlights:

New Projects in FY24:

Seven good-looking charts for next week 1. Electrosteel Casting Ltd.

2. Jio Financial Services Ltd.

3. DLF Ltd.

4. The Hi-Tech Gears

5. Hindustan Construction Company Limited

6. AU Small Finance Bank Ltd.

7. Punjab National Bank

Order Wins:

NIBE has secured a purchase order valued at 3.08 billion rupees from OrDefence Systems. Link
Maharashtra Seamless Limited has secured an order approximately worth Rs. 674 crores from ONGC Ltd. for the supply of casing seamless pipes. Link
ISMT announced that it has secured two contracts from Oil and Natural Gas Corporation. The combined worth of these contracts is approximately 3.44 billion rupees. Link
RVNL has received a Letter of Acceptance (LOA) from NFR-CONST HQ-ELECTRICAL/N.F.RLY CONSTRUCTION for an order valued at 95 crore rupees. Link

Bonus Share Issue & Share Splits:

The Anup Engineering Ltd has announced a fixed bonus with a record date set for April 23, 2024, to be issued in a 1:1 ratio. Link
Shukra Pharmaceuticals Ltd has announced a fixed bonus with a record date set for April 19, 2024, to be issued in a 3:1 ratio. Link
Integrated Industries Ltd has announced a fixed bonus with a record date set for April 16, 2024, to be issued in a 1:1 ratio. Link
Bharat Bijlee Ltd has planned a stock split to be executed on April 24, 2024, which involves reducing the face value of its shares from ₹10 to ₹5. Link
Suratwwala Business Group Ltd has planned a stock split to be executed on April 18, 2024, which involves reducing the face value of its shares from ₹10 to ₹1. Link

Appointments & Resignations:

Shalimar Paints has appointed C Venugopal as the Chief Operating Officer of the company. Link
Wipro Limited has appointed Malay Joshi as the Chief Executive Officer of its Wipro Americas 1 Strategic Market Unit, effective immediately. Link
RBL Bank's Board has approved the extension of Mr. Deepak Kumar's tenure as the Chief Risk Officer for an additional year, effective May 1, 2024. Link
RattanIndia Power has announced that Mr. Ankur Mitra, the Chief Financial Officer (CFO) and Key Managerial Personnel, resigned from his CFO position effective at the end of business hours on April 9, 2024. Link
Zee Media Corporation's Board has approved the appointment of Mr. Rahul Sinha as the Managing Editor of Zee News and Mr. Kamlesh Sutar as the Officiating Editor of Zee 24 Taas, both categorized as Senior Management Personnel. Link

Agreement:

JSW Infra signs agreement with Jawaharlal Nehru Port Authority for equipping, operation, maintenance and transfer of liquid cargo berths LB3 and LB4 at Jawaharlal Nehru Port through Public Private Partnership Mode. Link
Vakrangee has entered into an agreement with Global One Enterprises (Max TV) to offer OTT services through its Vakrangee Kendra Network. Link
Zaggle Prepaid Ocean Services Limited has signed an agreement with Yokohama India Private Limited. Link
Dixon has entered into a Share Purchase Agreement and Shareholders' Agreement for the proposed acquisition of a majority stake in Ismartu India Pvt Ltd. Link
Tata Power has signed a Share Purchase Agreement and acquired a 100% equity stake in Jalpura Khurja Power Transmission Limited, a project-specific special purpose vehicle. Link

Other Important News:

Metropolis Healthcare's business update for Q4FY24: The company's core business revenue saw a growth of around 15% year-over-year. This increase in core revenue was attributed to a volume growth of about 8% and a rise in revenue per procedure (RPP) of around 7% for the fourth quarter of the fiscal year 2024. Link
CAMS receives authorization from the RBI today to function as an Online Payment Aggregator. Link
Oil India Limited reported a leak at the X-Mass Tree of well no. BGN#24, situated at the Dighaltarang Tea Estate in Tinsukia District, Assam. The incident occurred around 11:30 pm on April 9, 2024. Personnel from OIL promptly responded to the site and managed to contain the leakage. Link
PVR Inox has expanded its presence with the opening of a 9-screen multiplex at Forum Mall in Kochi, Kerala, and the launch of a 14-screen megaplex at Phoenix Mall of Asia in Bengaluru. Link
Vodafone Idea is set to launch a Follow-on Public Offer (FPO) worth up to ₹18,000 crore on April 18. 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.