In the weak gone by, global stock markets moved higher as fear of recession appears bleak after the recent policy measures by central banks across key economies. A strong US retail sales shows that the US economy remains resilient. On the flip side, the US producer price index increased a seasonally adjusted 0.7% in August, higher than the 0.4% estimate and the biggest monthly gain since June 2022. However, excluding food and energy, core PPI rose 0.2%, in line with the estimate. While the Federal Reserve is expected to stay on hold at its September policy meeting, the European Central Bank on Thursday hiked rates by an expected quarter percentage point. However, the ECB noted inflation is easing and hinted it could be near the end of its rate-hiking campaign. The ECB move also takes the interest rates on its main refinancing operations, marginal lending facility and deposit facility 25 basis points higher, to 4.5%, 4.75% and 4%, respectively. However, at this juncture Europe’s biggest economy has shown continued deterioration, with business sentiment plummeting and services now declining along with manufacturing. On the Chinese economy front, China’s August retail sales and factory output beat expectations, but the print for fixed asset investment came in slightly below expected. Home prices slipped 0.1% in August from the year before. China’s retail sales grew 4.6% compared to a year ago. Similarly, industrial production grew by 4.5% in August from a year ago, also better than the 3.9% forecast.
Back at home, the domestic markets touched new high helped by fag-end buying in oil & gas, metal and commodity stocks amid a largely firm trend in global Stock market. Actually, the rotational buying across sectors is helping the index to inch gradually higher. Rising global crude oil prices are also making investors jittery as this could stoke inflation and force central banks worldwide to maintain the rate hike regime. Concern over the valuation and inflation trajectory due to increasing oil prices may keep the market volatile going forward.
On the commodity market front, the CRB index experienced an upward trend driven by increasing energy and base metals prices, despite a rise in the dollar index. However, both gold and silver had to relinquish their previous gains. Natural gas managed to end the week on a positive note but faced resistance at the 2.83 mark. Crude oil continued its impressive performance for the third consecutive week. The better-than-expected economic data from the United States, coupled with a rate cut by China, prompted increased buying in industrial metals, including steel. Gold and silver can trade in a range of 57500-60000 levels and 69500- 73500 levels respectively. Crude oil can remain trade firm in a range of 7300-7650 levels. This week, there is a lineup of crucial events and data releases that are expected to have a significant impact on commodity prices. These include the Core Inflation Rate of the Euro Area, US Building Permit data, Core Inflation Rate and Inflation Rate figures from the UK and Canada, the Fed Interest Rate Decision, FOMC Economic Projections, the Fed Press Conference, GDP Growth Rate of New Zealand, as well as interest rate decisions from the Bank of England and the Bank of Japan, and Germany's Manufacturing PMI, among others. These events will be closely watched for their potential influence on commodity markets.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
DISCLAIMER: This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, SMC, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the SMC is prohibited. Please note that we and our affiliates, officers, directors and employees, including person involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in this securities in ways different from those discussed in this report or (c) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instrument of the company (ies) discussed herein or may perform or seek to perform investment banking services for such Company (ies) or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect of any recommendation and related information and opinions, All disputes shall be subject to the exclusive jurisdiction or Delhi High Court.
SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The company is doing well and has strong balance sheet. According to the management of the company, different end-user applications, value-added products, a shift from metal to plastic pipes, ongoing consolidation and infrastructure demand will help the large plastic pipe manufacturers to post healthy double-digit volume growth. It is believed that large organised manufacturers with pan-India facilities will take advantage of this opportunity to increase market share over the coming years. Thus, it is expected that the stock will see a price target of Rs.283 in 8 to 10 months time frame on a target P/BV of 3.65x and FY24 (E) BVPS of Rs.77.40.
With these acquisitions being streamlined, inventories normalized and upward momentum in topline and margin, the business is well placed to execute on plans for growth. Increasing contribution from the nonsouth market auger well for the company and with upcoming festive season, the company is hopeful to sustain the growth momentum during the quarters ahead. Thus, it is expected that the stock will see a price target of Rs.369 in 8 to 10 months time frame on a target P/BV of 8.85x and FY24 (E) BVPS of Rs.41.73.
The stock closed at Rs.930.75 on 15th September, 2023. It made a 52-week low of Rs.669.80 on 22nd May, 2023 and a 52-week high of Rs.951.30 on 02nd November, 2022, 2023. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs.832.
The stock has been trading under pressure since last two years and few weeks ago the stock marked its 52 week low of 669.80 as well in the month of May’2023. Subsequently a sharp recovery has been witnessed in prices as once again the stock has managed to catch up a fresh momentum above its 200 days exponential moving average on weekly interval. On the broader charts, the stock has given afresh breakout above the falling trend line of downward sloping channel, which suggest for limited downside in prices, while on short term charts, breakout has been observed above the rectangle pattern after a series of consolidation phase. Therefore, one can buy the stock in the range of 925-930 levels for the upside target of 1075-1080 levels with SL below 830 levels.
The stock closed at Rs.595 on 15th September, 2023. It made a 52-week low at Rs.380.70 on 16th March, 2023 and a 52-week high of Rs.615.60 on 13th July, 2023. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs.513.
In recent past, the stock has given a sharp rally from 380 levels and tested 615 levels in short span of time. Since then the stock has been consolidating in broader range of 530-590 levels as rally has taken a pause or breather after a stunner move. Technically, the stock has managed to give a fresh breakout above the Bullish Flag pattern on weekly charts, which suggests for a next upswing into the prices. The rise in volumes along with rise in price also suggests a long build up into a stock. Therefore, one can buy the stock in the range of 590-595 levels for the upside target of 700-710 levels with SL below 525 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
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On the weekly chart, Nifty gained over 1%, while Banknifty surged by more than 2%, showcasing notable outperformance. Noteworthy, buying interest was seen in PSU banks over the last few sessions, as well as in Auto stocks. A technical breakout is evident on the healthcare, IT and pharma indices. However, profit booking was witnessed in media and consumer durable stocks. Analyzing the derivative data for Nifty, the highest call writing activity was recorded at the 20,200 and 20,300 strikes. In contrast, the highest put open interest was concentrated at the 20,100 and 20,000 strikes. Shifting focus to Bank Nifty, the 46,500 strike exhibited the highest call open interest, closely followed by the 47,000 strike. On the put side, the 46,000 strike held the highest open interest. In terms of Implied Volatility (IV), call options for Nifty settled at 10.00%, while put options concluded at 11.09%. The Nifty VIX, a gauge of market volatility, closed the week at 11.32%. The Put-Call Ratio Open Interest (PCR OI) stood at 1.47 for the week, indicating a greater inclination towards put writing as opposed to calls. Looking forward to the upcoming week, it is anticipated that Nifty's trading range will be bound between the psychological levels of 20,000 and 20,400. The prevailing sentiment suggests adopting a "buy on dips" strategy, provided Nifty remains above the 20,000 level.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric prices traded higher last week on weaker production outlook amid active buying by stockists in wake of rising festive demand. Reports of slower sowing progress and fall in area under turmeric supported firmness in prices. Total arrivals of turmeric were reported at 229 thousand tonnes during the time period of Apr’23- Sep’23 as compared to 197 thousand tonnes of previous year. Despite witnessing higher arrivals in year 2023, turmeric price remained higher due to lack of premium quality of produce in the market. Larger part of arrivals touched the market were inferior quality. Gains are likely to be limited due to subdued export. Export declined in recent weeks due to higher prices. India exported about 57.7 thousand tonnes during Apr-June’23 as compared to the 49.4 thousand tonnes of previous year. Bangladesh, Morocco and China remained the largest buyer of Indian turmeric. India exported about 18.35 thousand tonnes in June’23 against the 18.5 thousand tonnes of previous year. Revival of monsoon rainfall in Telangana in Sep facilitated the crop progress will restrict the major gains in prices. Turmeric Prices are expected to trade in range of 13000-17500 levels.
Jeera futures are likely to trade on positive bias due to shrinking supplies in the local market. Increased festive demand and limited availability of quality crops in the market is prompting miller to buy with every dips in prices. Prices moved in line with its seasonality Index in year 2023. About 94 thousand tonnes of jeera arrived during Apr’23-Sep’23 as compared to 121.2 thousand tonnes of the previous year. However, sluggish export demand is still a major concern for Indian traders as Indian jeera prices remained in competitive in global market that kept overseas demand subdued. Official export data for July- Aug is due that will decide the further trend in prices. India exported about 9.2 thousand tonnes of jeera in June as compared to 20.4 thousand tonnes of previous year. During April-June 2023, jeera exports increased by 13.16% compared to the same period in 2022, reaching 53,399.65 tonnes. Going forward, prices are expected to move up in the wake of festive demand ahead. Apart from that sowing of new crop will also commence in OND quarter that also will be major price driver for jeera. Jeera Prices are likely to trade in range of 58000-67000.
Dhaniya NCDEX Oct prices are likely to trade higher with increased export demand. India exported about 11.3 thousand tonnes of dhaniya in June’23 as compared to 2.4 thousand tonnes of previous year. China, Malaysia and UAE have been the major buyers of Indian coriander in year 2023. Going forward, prices are expected to move up in the wake of price seasonality. Expectation of rise in festive demand will support firmness in prices. Apart from that sowing of new crop will also commence in OND quarter that also will be major price driver for coriander. Area under dhaniya is projected to rise in wake of fair return in dhaniya. Dhaniya prices are likely to trade in range of 7000-7700 levels.
Gold prices may trade sideways in the range of 57500-59000 levels with bearish bias as the possibility of further U.S. interest rate hikes may pressurise the counter while continued buying by central banks and recovery hopes after promising China economic data in the world’s top bullion consumer may provide some support to the prices. China's central bank is again easing its monetary policy, this time by cutting its reserve requirement ratio for banks by 0.25%. This will boost the demand in the world's second-largest economy. Higher-thanexpected U.S. producer prices and retail sales data raised worries U.S. interest rates are likely to stay higher for longer, boosting the dollar and bond yields. U.S. consumer prices in August increased by the most in 14 months, keeping bets alive for further rate hikes by the Federal Reserve after a likely pause next week. Although markets are pricing in that the Fed would hold rates unchanged at their policy meeting next week. The European Central Bank also raised its key interest rate to a record high of 4%, but signalled that the hike was likely to be its last. In Comex, gold prices may continue to trade in the range of $1880-$1945 levels. Silver prices are likely to trade in the range of 68500-73000 levels. Global demand for silver will decline by 9.4% this year largely due to a drop in investment, but the market will maintain a deficit, according to a report from Chilean state agency Cochilco. Silver’s industrial demand continues to be driven by the global green energy transition.
The rally in crude oil prices may continue bolstered by supply constraints from leading oil producers Saudi Arabia and Russia. The International Energy Agency (IEA) and the Organization of Petroleum Exporting Countries both expressed concerns over a potential market deficit that could continue until the end of the year. These warnings have played a significant role in driving the recent surge in oil prices. Crude prices were at their highest level since early-November 2022, with their latest round of gains coming as China said it will cut the reserve requirement ratio for local banks by 25 basis points- its second such cut this year. The move is expected to release more liquidity into the Chinese economy and potentially shore up economic growth. U.S. crude production has also flattened in recent months on a 17% drop in drilling rigs in the last 52 weeks. But profit booking at higher level cannot be denied. Crude prices may trade in the range of 7100-7900 levels. Forecasts for hot U.S. temperatures next week that will boost natural-gas demand from electricity providers to run air conditioning pushed prices higher. The Commodity Weather Group said above-average temperatures will be seen in the central U. S. next week. Natural-gas prices also have support from labour unrest in Australia. LNG workers at key Chevron sites in Australia began partial strikes last week after talks with management failed to reach an agreement. An increase in U.S. electricity output is bullish for natural-gas demand from utility providers. The Edison Electric Institute reported that total U.S. electricity output in the week ended September 9 rose +8.4% y/y to 90,200 gigawatt hours. Natural-gas prices may trade in the range of 210-245 levels.
Base metals may trade in the range as the rising inventories and a clouded outlook for demand from top consumer China may weigh on counter, though expectations of further policy by China to boost sputtering economic recovery may support the metal prices. China’s industrial output grew 4.5% in August from a year earlier, accelerating from the 3.7% pace seen in July. China's central bank said that it would cut the amount of cash that banks must hold as reserves for the second time this year to boost liquidity-the latest in a series of stimulus measures, including steps to spur housing demand. Copper may trade in the range of 720-755 levels. Copper stocks in LME-registered warehouses are at their highest since October 2022, after a sharp growth over July-September. Zinc can trade in range of 215-240 levels. The discount on zinc for near-term delivery versus the three-month contract on the LME has reached its highest since March 2021, indicating plentiful immediate supply. Lead can move in the range of 185- 193 levels. Aluminium can trade in the range of 197-210 levels. China's primary aluminium output in August rose by 3.1% from a year prior to an all-time monthly high, data released on Friday showed, as production in the south western province of Yunnan continued to ramp up after hydropower generation recovered. Aluminium stocks of Russian origin in LME-approved warehouses that are available to the market have risen this year to 81% of the total in August, from 41% in January. Steel long (Oct) is likely to trade in the range of 46000- 47800 levels. Rising domestic demand, increasing coking coal prices and production related dynamics in China, are likely to prevent the slide of prices.
Cotton prices are likely to trade sideways to higher on weaker production prospects in India as well as in global market. India planted about 125 lakh Ha under cotton as on 8th Sep as compared to 126.87 lakh Ha of previous year. Lower acreages in India will keep overall production down in year 2023. Lean arrivals in local market and emerging export enquires will support firmness in prices. Apart from that prices will track the weather condition in Northern and central part of India. Recent rainfall in northern part of India during mid of Sep is likely to affect the crop yield and that will reflect as firmness in cotton and Kapas prices. However, crop condition improved in Gujarat with recent rainfall that will cap the major gains in prices. Cotton MCX Nov prices are likely to trade in range of 59500-64300 levels. Similarly, Kapas Apr’24 futures are likely to trade in range of 1550-1670 levels.
Cotton seed oil cake NCDEX Dec futures are likely to trade mixed to down on sluggish buying in the domestic market. However, reports of fall in area under cotton will cap the losses. Price seasonality of cotton seed oil cake suggest prices fall in Sep. Cocud prices are likely to trade in range of 2560-2900 levels.
Guar seed Oct futures are expected to trade mixed to down in anticipation of rise in arrivals in coming month. Fresh arrivals are expected to improve in by end of Sep that will weigh on the market sentiments. Stockists are also expected to offload their stocks before commencement of new crop that will put pressure on prices. However, weaker production prospects and expected rise in seasonal export demand of gum will cap the major downfall in prices. Area under guar already down by 10%-12% in year 2023 and now bleak yield prospects is likely to keep production down. Demand for guar derivative products has increased that will support guar prices. Guar seed prices are likely to face resistance near 6700 whereas support is likely to be seen at 5850 levels. Gum prices are likely to trade in range of 11400-14500 levels.
Mentha oil Sep contract is expected to higher on active demand in physical market. Stockists are showing buying interest with emerging fresh export enquires for menthol. Overall production of mentha oil is likely to be down on yearly basis due to lower acreages that will cap the downfall in prices. Mentha oil prices are likely to trade in range of 905- 1010 levels.
Castor seed prices are likely to trade mixed to down on reports of rise in area under castor in Gujarat. Reports of higher area under castor will keep prices under pressure as about 9.00 lakh Ha was sown under castor as on 8 Sep across India Vs 7.26 lakh Ha of previous year. Castor seed Oct prices are likely to trade in range of 5900-6600 levels.
It closed at Rs. 737.10 on 14th Sep 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs734.155. On the daily chart, the commodity has Relative Strength Index (14-day) value of 53.178. Based on both indicators, it is giving a sell signal.
One can sell near Rs.740 for a target of Rs. 720 with the stop loss of 748.
It closed at Rs. 7453.00 on 14th Sep 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs.6997.78. On the daily chart, the commodity has Relative Strength Index (14-day) value of 76.518. Based on both indicators, it is giving a buy signal.
One can buy near Rs.7250 for a target of Rs.7800 with the stop loss of 7030.
It closed at Rs.2704.00 on 14th Sep 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs.2592.60 On the daily chart, the commodity has Relative Strength Index (14-day) value of 73.521. Based on both indicators, it is giving a sell signal.
One can sell near Rs.2750 for a target of Rs. 2400 with the stop loss of 2900.
NOTE: *M.High / M.Low stands for Monthly High / Monthly Low
The CRB index experienced an upward trend driven by increasing energy and base metals prices, despite a rise in the dollar index. However, both gold and silver had to relinquish their previous gains. Gold prices were on track for their second straight weekly decline on Friday as U.S. inflation readings for August reinforced market bets for further rate hikes by the Federal Reserve after a likely rate pause next week. The European Central Bank raised its key interest rate to a record high of 4% on Thursday, but signaled that the hike was likely to be its last. On physical demand front, global demand for silver will decline by 9.4% this year largely due to a drop in investment, but the market will maintain a deficit, according to a report from Chilean state agency Cochilco. Natural gas managed to end the week on a positive note but faced resistance at the $2.83 mark. Crude oil continued its impressive performance for the third consecutive week. Oil prices rose to their highest level in 10 months on Friday on persistent worries about supply, and expectations of the U.S. central bank holding rates after Europe hinted its Thursday hike would be its last, have put oil prices on track to finish higher for a third straight week. The International Energy Agency said this week it expects Saudi Arabia's and Russia's extended oil output cuts to result in a market deficit through the fourth quarter. The better-than-expected economic data from the United States, coupled with a rate cut by China, prompted increased buying in industrial metals, including steel. China cut banks' cash reserve requirements to boost its economic recovery, and on expectations that major global interest rate hike cycles were nearing their end.
In spices, turmeric prices traded higher tracking increased demand in local market. Limited availability of quality produce at major trading centers amid rising festive buying helped prices to trade on positive bias. Jeera couldn’t stay at higher side on mix triggers. Festive demand has been good whereas supplies have declined and likely to remain lower unless new crop touches the market. However, sluggish export demand is still a major concern for Indian traders as Indian jeera prices remained uncompetitive in global market that kept overseas demand subdued. Coriander prices bounced back after six weeks fall. Not only domestic, export demand of dhaniya has also increased in recent months. India exported about 11.3 thousand tonnes of dhaniya in June’23 as compared to 2.4 thousand tonnes of previous year. Castor prices closed down on sluggish buying in domestic market.
Auto sales are the most important indicator for the automotive sector. More auto sales lead to increased sales and earnings for automakers, which then order more parts from auto part makers. For much of the 20th century, auto sales steadily trended higher.
The automotive sector is a cyclical business, so sales in the automotive sector are higher when economic activity is strong and people feel confident about their future economic prospects. In this environment, more people are likely to make a major purchase, such as an automobile. Automotive sales are one of the main drivers of base metals demand as it is used in car manufacturing. A strong automobile sales data indicates a rise in demand for base metals.
Global Auto sales
Global light vehicle sales are expected to grow by 4.8% in 2023, to 85.0 million units, according to S&P Global Mobility. This growth is being driven by the recovery of the global economy, as well as the increasing demand for electric vehicles.
The growth in electric vehicle sales is expected to be a major driver of the global light vehicle market in the coming years. Electric vehicle sales are expected to reach 12.5 million units in 2023, up from 9.6 million units in 2022. This growth is being driven by government policies, such as emissions regulations, as well as the increasing availability of electric vehicles.
U.S.: U.S. auto sales are expected to decline by 1.5% in 2023, to 13.5 million units, according to S&P Global Mobility. This decline is being driven by a number of factors, including the on-going chip shortage, rising interest rates, Inflation & the war in Ukraine that is disrupting the supply of commodities, such as steel and aluminium, which are used in cars.
China: Automobile sales in China are expected to grow by 6.7% in 2023, to 28.3 million units, according to the China Association of Automobile Manufacturers (CAAM). This growth is being driven by the recovery of the Chinese economy, as well as the increasing demand for electric vehicles. Electric vehicle sales are expected to reach 6.3 million units in 2023, up from 3.5 million units in 2022. This growth is being driven by government policies, such as emissions regulations, as well as the increasing availability of electric vehicles.
Europe: Automobile sales in Europe are expected to grow by 3.7% in 2023, to 11.3 million units, according to the European Automobile Manufacturers' Association (ACEA). Passenger car sales are expected to grow by 4.0% in 2023, to 9.9 million units. Commercial vehicle sales are expected to grow by 2.5%, to 1.4 million units.
Japan: Automobile sales in Japan are expected to decline by 2.3% in 2023, to 4.1 million units, according to the Japan Automobile Manufacturers Association. This decline is being driven by the ongoing chip shortages. However The Japanese government has announced a stimulus package that includes measures to support the automobile industry.
India: In August, retail sales of automobiles in India increased by nine per cent, with growth observed across all segments, including passenger vehicles and two-wheelers, as reported by FADA, the dealers' body. The total retail sales across segments reached 18,18,647 units last month, marking a nine per cent rise compared to August 2022 when the figure was 16,74,162 units. According to a report by the Society of Indian Automobile Manufacturers (SIAM), the Indian automobile industry is expected to grow by 8-10% in 2023-24. However, the report also warned that a weak monsoon season could derail this growth.
Indian Rupee remained largely range bound in the week gone by despite oil prices hit fresh 10-months high of $92 with the help of possible RBI interventions to prevent rupee not to slide below 83.29, which is the life-time low made in October 2022. Additionally, the expected influx of $500 million associated with the FTSE index review provided some support to Rupee at the lower levels. Globally the latest dovish hike from ECB along with upbeat U.S economic data including August continues to favors dollar over rupee in coming days. We think the weakness in the rupee will continue ahead of FOMC next week on September 20. Globally Euro faces a steep weakness after ECB signaled recent hike will be its last. ECB raises policy rate by 25-bps to 4%. We highlighted earlier than expected rate differential between Fed and ECB will support dollar over in near term. Meanwhile Sterling drops to fresh three weeks low against dollar after dollar strengthens further backed by strong US economic data. After a crack in the U.K GDP numbers, the latest industrial survey released recently showed British house prices had fallen the most in 14-years in August, which added more negative sentiment to the pound. The yen remains near 147.41 per US dollar despite some verbal intervention from BoJ Governor. With the yen hovering close to a 10-month low, market participants are monitoring the possibility of further intervention by Japanese authorities in coming days.
USDINR (SEPT)pair is currently in an Bullish trend as trading above its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 82.86. However, the pair is in Borderline territory with a Relative Strength Index (14- day) value of 60.13 on the daily chart. Major support is seen around 82.7 levels, while resistance is expected near 83.5 levels.
One can buy near 83 for the target of 83.6 with the stop loss of 82.7
GBPINR (SEPT)pair is currently in an Bearish trend as trading below its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 104.1. However, the pair is in Neutral territory with a Relative Strength Index (14-day) value of 39.5 on the daily chart. Major support is seen around 101.9 levels, while resistance is expected near 104.1 levels.
One can sell near 103.5 for the target of 102.5 with the stop loss of 104
EURINR (SEPT) pair is currently in an Bearish trend as trading below its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 89.34. However, the pair is in Neutral territory with a Relative Strength Index (14-day) value of 40 on the daily chart. Major support is seen around 87.9 levels, while resistance is expected near 89.3 levels.
One can sell near 88.8 for the target of 87.8 with the stop loss of 89.3
JPYINR (SEPT) pair is currently in an Sideways trend as trading between its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 56.57. However, the pair is in Neutral territory with a Relative Strength Index (14-day) value of 41.8 on the daily chart. Major support is seen around 55.8 levels, while resistance is expected near 56.6 levels.
One can buy near 56 for the target of 57 with the stop loss of 55.5
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The company intends to utilize the net proceeds from
the issue towards the funding of the following objects:
Strategic investments, acquisitions, and inorganic
growth,
Investment in customer acquisition and retention,
technology, and other organic growth initiatives, and
General corporate purposes.
Considering the P/E valuation, on the upper end of the price band of Rs.142, the stock is priced at pre issue P/E of 213..08x on FY23 EPS of Rs 0.67. Post issue, the stock is priced at a P/E of 291.96x on its EPS of Rs.0.49. Looking at the P/B ratio at Rs.142, pre issue, book value of Rs. 9.59 of P/Bvx 14.80x. Post issue, book value of Rs. 49.17 of P/Bvx 2.89x.
Considering the P/E valuation, on the lower end of the price band of Rs.135, the stock is priced at pre issue P/E of 202.57x on FY23 EPS of Rs 0.67. Post issue, the stock is priced at a P/E of 277.56x on its EPS of Rs.0.49. Looking at the P/B ratio at Rs.135, pre issue, book value of Rs. 9.12 of P/Bvx 14.80x. Post issue, book value of Rs. 49.17 of P/Bvx 2.75x.
Incorporated in 2005, Yatra Online Limited provides information, pricing, availability, and booking facilities for domestic and international customers. The company provides domestic and international air ticketing on Indian and international airlines, as well as bus ticketing, rail ticketing, cab bookings, and ancillary services within India, hotels, homestays, and other accommodations bookings, with about 105,600 hotels in 1,490 cities and towns in India, as on Fiscal 2023 and more than two million hotels globally through its website yatra.com, mobile applications, corporate SaaS platform, and other associated platforms.
Trusted brand with a proven track record and targeted marketing strategy: The company believes that its leading market position and operational history have led to wide scale recognition of the “Yatra” brand in India which enables it to target new customers who are coming into the category and also helps to provide better leverage when contracting with airlines and hotel suppliers.
Large and Loyal Customer Base: Yatra Online has served over 1.4 Crore cumulative travel customers as of March 31, 2023, with over half of them having signed up for its eCash loyalty program. Yatra websites and mobile applications have been designed to provide customers with flexibility in choosing travel options. It recorded a booking success rate of 97.8% on its websites and mobile applications in the B2C channel for domestic transactions during fiscal 2023. In its corporate travel business, Yatra has served over 800 large corporate customers where its customer retention rate in relation to corporate accounts has improved from 97% in fiscal year 2021 to 98% in fiscal year 2022 and remains consistent in fiscal year 2023 i.e., 98% .
Synergistic Multi-Channel Go to Market approach for Business and Leisure Travelers: Yatra has designed a unique “go-to-market” strategy that is a mix of B2C and B2B. This comprehensive approach creates a robust network effect resulting in cross-sell between business and leisure travellers, which Yatra believes addresses the entire travel market in India.
B2B Channel: Yatra’s B2B channel includes corporate travel and its travel agent business
Corporate Travel: Its corporate travel business commenced operations in 2013 and it provides an endto- end software-as-a-service -based travel solution to corporates. It also utilizes data and analytics to offer its corporate customers a personalized experience on its website and App. As of March 31, 2023, it had over 800 large corporate customers and over 49,800 registered SME customers. B2B segment in the Indian OTA is expected to grow at CAGR of 14% to 15% over a period of 5 years i.e., from FY 2023 to FY 2028.
Travel Agents: As of March 31, 2023, Yatra had over 29,800 travel agents registered with it across most major cities in India. Its network of travel agents has allowed it to expand its footprint and distribution network in India.
Comprehensive Selection of Service and Product Offerings: Its comprehensive travel-related offerings are customized to the needs of both domestic and international travellers. Its travel-related inventory in India includes access to all major domestic and international airlines operating within India. Further, Yatra has hotel and accommodation tie-ups of over 105,600 domestic hotels, in about 1,490 cities in India in Fiscal 2023, which is highest amongst the key players in domestic OTA market.
Growth in the customer base using cost-effective technology solutions: Yatra intends to grow its customer base by continuing to provide business and leisure travellers, a seamless and integrated technology platform that meets all their travel needs. Its corporate customers collectively employ 0.70 Crore workers who Yatra believes form part of a vibrant, fast-growing customer base with disposable income.
Grow “Share of Wallet” With Existing Customers—Leverage its Multi-Channel Approach and its Loyalty Further Strengthen its focus on corporate business: As of March 31, 2023, Yatra had over 800 large corporate customers and over 49,800 SME customers. Its corporate travel business commenced operations in 2013 and now provides an end-to-end SaaS-based travel solution to corporates.
Fuel Growth through Innovative Acquisition Strategies: The company has leveraged its leading position in the Indian travel ecosystem to make several “acqui-hires,” including the teams from mGaadi and dudegenie, in order to grow its business. It expects to continue to pursue acquisitions that it believes will provide services, technologies or people that complement or expand its current offerings.
Leverage its existing travel agent network in Tier II and Tier III cities: With the development of airport infrastructure in Tier 2 and 3 cities, many domestic and international carriers have started direct flights on international routes, to/from these cities. It expects increased travel within and between Tier 2 and Tier 3 cities to drive growth in air and hotels, by leveraging its existing travel agent network in Tier II and Tier III cities.
The company is India's largest corporate travel service provider enjoying third largest status on the basis of its gross booking and operating revenues for FY23. However, as the issue looks expensive, an investor who wishes to bet on booming travel industry can look at other choices available in the secondary market in the segments like hotels.
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Inflows into equity mutual funds surged 165 percent to Rs 20,245 crore in August driven by heavy demand in small-cap and sectoral funds, data from the Association of Mutual Funds in India (AMFI) released on September 11 showed. Open-ended equity mutual funds had recorded a 12 percent decline in net inflows to Rs 7,626 crore in July as large-cap funds grappled with outflows. Net inflows into equity funds have remained in the positive territory for the 30th month in a row in August starting with March 2021. AMFI data also showed that the contribution via systematic investment plans (SIPs) hit a fresh all-time high of Rs 15,814 crore in August. In July as well, the SIP book was at record high of Rs 15,245 crore. Total assets under management (AUM) of open-ended funds at the end of August stood at Rs 46.63 lakh crore against Rs 46.37 lakh crore with equity AUM contribution at Rs 18.4 lakh crore against Rs 17.8 lakh crore on a month-on-month basis. Due to the selling in debt funds, the overall net inflows into the open-ended mutual funds slumped 80 percent to 16,181 crore in August against Rs 82,467 crore in July.
DSP Mutual Fund announced the launch of DSP Multi Asset Allocation Fund (DSP MAAF), an open-ended scheme that aims to offer investors long-term returns like what equities may offer but with added resilience against market falls. DSP MAAF aims to benefit investors by diversifying their investments between asset classes like domestic equities, international stocks, debt instruments, gold ETFs, other commodities and ETF & Exchange Traded Commodity Derivatives (ETCDs), aiming to reduce overall risk, a press release said. Historical data has repeatedly shown that the best-performing asset class can vary significantly over the years, making it difficult to predict the winner each year. Hence one’s best bet is to invest across asset classes. DSP MAAF will allocate assets based on 3 key but simple factors – long-term expected returns from different asset classes, their realized volatility and the correlation among each asset class. The key idea is that when assets with low correlation among one another are added into a portfolio, even if one asset class faces a downturn, another one might perform well, potentially smoothening out the investor experience. Further, historical returns of a multi asset model portfolio have shown similar to those from domestic equities with significantly lesser volatility than equities.
Zerodha Asset Management Ltd, one of India’s newest fund houses, is getting to ready to launch mutual fund schemes, nearly a month after it got its final license by the Securities and Exchange Board of India (SEBI). In keeping with its mandate to launch passive scheme, Zerodha has filed draft offer documents with the market regulator to launch two schemes -- Zerodha Tax Saver (ELSS) Nifty Large Midcap 250 Index Fund and Zerodha Nifty Large Midcap 250 Index Fund (ZN250). Both the schemes would be benchmarked against Nifty Large Midcap 250 Index Fund. While one is a normal diversified equity fund, the ELSS scheme is a tax saver scheme that will give the Section 80C tax deduction benefits, up to an investment of Rs 1.5 lakh. As per its business plan, Zerodha AMC will launch passive schemes. According to industry officials, the fund house will launch a mix of index funds as well as Exchange-Traded Funds (ETF).
Bandhan Mutual Fund has filed a draft for a micro cap fund. Bandhan Microcap Fund will be an open-ended scheme investing in micro cap companies. The scheme will be benchmarked against Nifty Microcap 250 TRI. The scheme will be managed by Sumit Agrawal and Kirthi Jain (equity investments), Brijesh Shah (debt investments), and Nishita Shah (overseas investments). According to the scheme information document, the investment objective of the scheme is to provide long-term capital appreciation by investing predominantly in equity and equity-related instruments of microcap companies. The scheme will have a regular and direct plan with both growth and IDCW options. The scheme will allocate 80-100% in equity and equity-related instruments of microcap companies, 0-20% in equities and equity related securities other than microcap companies and overseas securities, 0-20% in very high debt securities and money market instruments (including government securities and securities debt), and 0-10% in units issued by REITs & InvITs. The minimum application amount will be Rs 1,000 and in multiples of Re 1 thereafter.
Bandhan Mutual Fund has filed a draft for a multi asset allocation fund. Bandhan Multi Asset Allocation Fund will be an open-ended scheme investing in equity and equity-related instruments, debt and money market securities, and gold/silver index/ETFs. The scheme will be benchmarked against 35% S&P BSE 500 TRI + 55% NIFTY Short Duration Debt Index + 10% Domestic prices of gold. The scheme will be managed by Vijay Kulkarni (equity investments), Nemish Sheth (equity investments), Gautam Kaul (debt investments), and Nishita Shah (overseas investments). According to the scheme information document, the investment objective of the scheme is to generate income and provide long-term capital appreciation by investing in instruments across multiple asset classes namely equity and equity related instruments, debt and money market securities, and gold/silver index/ETFs. The scheme will have regular and direct plans with growth and IDCW options. The minimum application amount will be Rs 1,000 and in multiples of Re 1 thereafter. The minimum application amount for SIP will be Rs 100 and in multiple of Re 1 thereafter with six instalments. The scheme will offer SIP facility with weekly, monthly, and quarterly frequencies.
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