In the week gone by, markets across the globe witnessed volatile movements as investors got spooked by better-than-expected data from the services sector reevaluated whether the Federal Reserve could hike interest rates for longer. To note, US services industry activity unexpectedly picked up in November, with employment rebounding, offering more evidence of underlying momentum in the economy as it braces for an anticipated recession next year. However, on Thursday the S&P 500 broke its longest losing streak since October and Wall Street evaluated the odds of a recession ahead. European markets continued to look fragile on rising concerns over a slowdown in economic growth ahead of a slew of interest rate decisions from major central banks next week. Euro zone business activity declined for a fifth month in November, suggesting the economy was sliding into a mild recession as consumers cut spending amid surging inflation. Japanese markets too witnessed volatility as investors looked worried about some weak domestic economic data.
Back at home, the domestic markets witnessed significant volatility as global markets tumbled due to fear of an economic slowdown and worries over a Fed rate hike. The Reserve Bank of India (RBI) in its monetary policy meeting held on December 7, 2022 has yet again hiked the repo rate by 0.35%. This is the fifth consecutive repo rate hike since May of this year. Automobile retail sales in India clocked best-ever performance last month aided by robust registrations across segments including passenger vehicles, two-wheelers and commercial vehicles, automobile dealer' body FADA said. It is expected that volatility will continue in the global market as Investor attention remains laser-focused on next week’s Federal Reserve policy meeting, where the central bank is widely expected to issue a 50 basis point interest rate hike. Since the ECB and Bank of England meetings also are due next week it would be important to know the leading central banks’ view on the emerging economic scenario and their policy response. Investors should keep stock-specific trading approach and focus on buying opportunities.
On the commodity market front, CRB saw further decline on ride in dollar index amid news of slowdown. Crude prices continued to fall. Crude prices cooled off on slow down concern. Even fall in dollar index and reopening of China couldn’t lend any support. It can trade in a range of 5800-6400 levels. Natural gas is most likely to continue its upside upto 525-545 levels. Bullion saw magical rally on weakness in dollar index. It can see limited upside now as rally is overheated. Gold can trade in a range of 52800-54800 levels. GDP, GfK Consumer Confidence, BoE Interest Rate Decision, Core Inflation Rate, Inflation Rate and Employment Change of UK, Inflation Rate of Germany, New Yuan Loans of China, ZEW Economic Sentiment Index of Germany and Euro Area, Core Inflation Rate, FOMC Economic Projections, Fed Interest Rate Decision, Fed Press Conference, Retail Sales and Inflation Rate of US, ECB Interest Rate Decision, ECB Press Conference, Core Inflation Rate etc are many data and events scheduled this week, which will keep commodities traders on toes.
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 has strong balance sheet with zero net debt. Stability in taxes, deterrent actions by enforcement agencies, enables continued cigarette volume recovery from illicit trade. Recent launches in the cigarette business continue to gain traction indicates future growth visibility. In the other FMCG segment, the strategic cost management, premiumisation, supply chain agility, judicious pricing actions, fiscal incentives and digital is expected to achieve cost optimization. Thus, it is expected that the stock will see a price target of Rs.404 in 8 to 10 months’ time frame on a current P/E of 24.93x and FY24 (E) earnings of Rs.16.22.
The company’s strong momentum continues across key markets including India, South Africa among others and according to the management, the strong execution across all markets and continued efforts on cost optimization is helping the company to drive revenue growth. In India, it has maintained market beating performance across its core therapies and in the US, there is an expansion in market share for Albuterol. Moreover, its businesses in South Africa and other international markets continued the momentum driven by strong demand in the base business and ramp-up in new launches. Thus, it is expected that the stock will see a price target of Rs.1282 in 8 to 10 months time frame on a target P/BV of 3.65x and FY24 BVPS of Rs.351.10.
The stock closed at Rs 2722.25 on 09th December, 2022. It made a 52-week low at Rs 1901.55 on 08th March, 2022 and a 52-week high of Rs. 2741.60 on 09th December, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2477.61
As we can see on chart that stock is trading in higher highs and higher lows on charts which is bullish in nature. Apart from this, stock has formed a “Continuation Triangle” pattern on weekly chart, and has given the breakout of pattern. It also has managed to close above the same; so follow up buying is anticipated from the stock in coming days. Therefore, one can buy in the range of 2700-2710 levels for the upside target of 2900-2950 levels with SL below 2600 levels.
The stock closed at Rs 2733.80 on 09th December, 2022. It made a 52-week low at Rs 2043.85 on 20th June, 2022 and a 52-week high of Rs. 2862.50 on 19th October, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2465.43
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on chart which are bullish in nature. Apart from this, stock is forming an “Inverse Head and Shoulder” pattern on weekly chart, which is considered to be bullish. On the indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 2710-2720 levels for the upside target of 2900- 2950 levels with SL below 2610 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.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
In the week gone by, Indian markets witnessed some volatile moves as Nifty slipped back towards 18500 level on the back of profit booking while Bank Nifty once again outperformed overall market as Index posted gains of more than 1% for the fifth consecutive week. From derivative front, call writers remained active at 18600 & 18700 strike. Put writers, however remained on the back foot and seen shifting at lower bands. Overall data suggests that Nifty is likely to remain under pressure as far holding below 18650 levels. Implied volatility (IV) of calls closed at 11.19% while that for put options, it closed at 12.88%. The Nifty VIX for the week closed at 13.40%. PCR OI for the week closed at 1.27. From technical front, Nifty has tested its 20 days exponential moving average on daily charts and can be seen trading in downward sloping channel with formation of lower highs, which suggests limited upside in prices. For upcoming sessions, 18350-18250 zone is likely to provide some support to Nifty while 43300-43100 zone should act as immediate support for banking index.
|
|
|
|
|
**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 witnessed sharp recovery last week mainly due to short covering supported by emerging demand at recent lows on prices. Weaker crop prospects and growing fear of crop damage in wake of forecast of moderate to heavy rainfall in Andhra Pradesh helped prices to trade on positive note. Gains in turmeric futures are expected to remain intact in coming week as well due to active demand in local market. Robust export demand and increasing wedding season demand will keep the turmeric prices up in line with its seasonal trend. India exported about 14 thousand tonnes of turmeric in Sept’22 compared to 12.59 thousand tonnes of previous year for corresponding period. Turmeric NCDEX Apr prices are likely to sustain the support of 7750 and will move towards 8260 in near term.
Jeera NCDEX Jan futures witnessed sharp recovery last week due to supply tightness. Emerging export demand from gulf countries and China helped prices to trade on positive bias. Rally in jeera prices are expected to remain continue due to weaker production outlook for upcoming season. About 1.44 lakh hectares were sown under jeera in Gujarat till 5th Dec’22 compared to 1.71 lakh hectares of previous year, down by 15% Y-o-Y. Buying activities has resumed in wake of seasonal wedding demand ahead that will support firmness in prices. Farmers and Stockists are reluctant to release stocks in anticipation of further rise in prices. Jeera Jan prices are likely to trade in range of 25600 - 26400
Dhaniya NCDEX Jan prices are expected to trade mix to down due to improved supply outlook. Reports of rise in area under dhaniya and better yield prospects supported by normal crop progress will weigh on the market sentiments. Prices are likely to track the cues of improved yield prospects supported by normal crop condition. Area under dhaniya jumped sharply in Gujarat in year 2022 reported at 1.75 lakh hectares as on 5th Dec compared to 86 thousand hectares of previous year, higher by 103% Y-o-Y. Supplies are adequate at major trading centers due to rising imports that is keeping buyers away from bulk buying. India has imported about 22.4 thousand tonnes of dhaniya during Jan’22-Sep’22 compared to 4.7 thousand tonnes of previous year. Dhaniya NCDEX Jan Prices are likely to honor the resistance 9500 and likely to slip towards 9000.
Gold prices witnessed positive move helped by a softer dollar, while investors braced for key U.S. inflation data and Federal Reserve's rate hike decision due next week. Dollar index witnessed selling and weaker dollar makes gold more attractive to buyers holding other currencies. There is a real chance of upward accretion in gold as we head into next week's Fed meet and CPI data. Market participants now expect a 93% chance of a 50-basis point rate hike at the Federal Reserve's policy meeting on Dec. 13-14. Investor will also watch out for the U.S. Consumer Price Index (CPI) report for November due on Dec. 13. If the Fed slows the pace as per expectations, along with a relatively moderates CPI print, then dollar might weaken and all of sudden you could see a perfect storm rushing over gold's horizon. Lower interest rates tend to be beneficial for bullion as they decrease the opportunity cost of holding the non-yielding asset. The economists said Top gold consumer China’s shift from tough COVID policies, with its promise of driving an economic recovery next year, will instead likely depress growth over the next few months as infections surge, bringing a rebound only later in the year. On the technical front, gold on COMEX looks positive any dip near $1790 considered as buying opportunity major resistance seen near $1825. Silver COMEX looks positive buying on dips advised support near $ 22.40 and could face resistance near $ 23.90. Ahead in the week MCX Gold may continue to trade with positive bias and the possible trading range would be 53000-55200. Silver may trade in the range of 65000- 69000.
Crude oil prices witnessed selling throughout the week as traders shrugged off the closure of a major Canada-to-U.S. crude pipeline, focusing instead on concerns that global economic slowdowns would slash fuel demand. Canada's TC Energy said it shut its 622,000 barrel-per-day Keystone pipeline, which is the primary line shipping heavy Canadian crude from Alberta to the U.S. Midwest and Gulf Coast, after a spill into a Kansas creek. The energy markets are weighed down by fears of an economic slowdown, weakening fuel demand amid the prospect of more U.S. interest rate hikes, with the Federal Reserve widely expected to raise interest rates by 50 basis points next week. Limiting losses was an announcement by China detailing the most sweeping changes to its strict anti-COVID regime since the pandemic began, while at least 20 oil tankers faced delays in crossing to the Mediterranean from Russia's Black Sea ports. Both Brent and U.S. crude hit 2022 lows, unwinding all the gains made after Russia's invasion of Ukraine exacerbated the worst global energy supply crisis in decades and sent oil close to its all-time high of $147. Western officials were in talks with Turkish counterparts to resolve the tanker queues, a British Treasury official said, after the G7 and European Union rolled out new restrictions aimed at Russian oil exports. Ahead in the week, crude oil may witness some pullback but main trend remains bearish, possible trading range would be 5650-6300 levels. A near 25% plunge over five days naturally makes any market feel oversold, and natural gas is no exception. Ahead in the week prices may continue to trade within the range of 460-520 levels, sell on rise would be strategy.
Base metals may trade sideways with a bullish bias as investors bet that slower U.S. interest rate hikes and an easing of COVID-19 curbs in China boosted demand expectations in the world's top consumer of the metal. China's Bank of Communications said it had signed pacts to support eight property firms, easing a liquidity crunch in the sector, which is a major user of metals. However, prices may remain under pressure as data showed that China's passenger vehicle sales fell for the first time in six months in November, and some fear that relaxed COVID rules will cause a huge increase of infections. Weighing on the market was data showing China’s exports and imports in November shrank at their steepest pace in at least 2-1/2 years. Copper may trade in the range of 690-725. China November copper imports were the highest for any month this year, signalling restocking by consumers ahead of easing of restrictions. Goldman Sachs raised its 2023 forecast for average copper prices to $9,750 per tonne from $8,325 previously. It said that copper surplus is no longer likely to happen in 2023, with global visible stocks falling to their lowest in 14 years. Zinc can trade in the range of 275-295. Nyrstar NYR.BR has completed scheduled maintenance work at its Auby operation in Northern France, but the smelter will not resume zinc production due to challenging market conditions, the Nyrstar did not specify the challenges. Lead can move in the range of 181-193. Aluminum may trade in the range of 205-222 levels with bearish bias. Steel long (Dec) is likely to trade in the range of 46500-48500 levels on NCDEX.
Cotton MCX Dec prices are expected to trade on down due to bleak demand. Export demand for Indian cotton has been sluggish as Indian cotton prices are ruling higher by 14% compared to international prices. Domestic millers are also waiting for cool down in prices and going for hand to mouth buying. The Cotton Association of India (CAI) has urged the central government to withdraw the 11 per cent import duty on cotton to help the textile industry access raw material, or ginned cotton, at economical prices. Increased imports of cotton yarn in India also dampened the demand prospects as millers preferred imported cotton yarn due to higher domestic price. Losses will be limited due to lower supply as cotton arrivals are below normal in this season as farmers are not releasing their produce in anticipation of better price realization in coming future. Prices are likely to hold the resistance of 32100 and expected to move towards 30400.
Cotton seed oil cake NCDEX (Jan) futures are likely to trade higher due to active demand at physical market. Spot demand is good due to supply tightness as farmers are not releasing cotton in anticipation of better price outlook. Stockists are active in wake of lower production of cotton seed oil cake as pace of cotton arrivals has been slower. Prices are likely to hold the support of 2550 and will move towards 2850 in coming week.
Guar seed Jan futures are likely to trade sideways may keep bias on negative side. Farmers are releasing their stocks after strong rally in prices that will pull down the guar prices in near term. Lowering demand for guar meal with increasing availability of alternative feed meal and weakness in crude oil prices is likely to put pressure on prices. Guar seed prices are likely to trade in range of 5600-6200 in near term.
Mentha oil (Dec) is likely to trade in mixed to positive next week. Buying interest in mentha oil has increased which is helping prices to recover from the recent lows. Production is lower that the affected the pace of arrivals as well. Prices are likely to hold support of 950 and will move gradually towards 1010 in near term.
Castor seed (Jan) prices are likely to trade on limited range due to mixed sentiments of the market. Bleak demand prospects and lower export demand for castor oil suggests weaker trend in castor seed wherein supply tightness in physical market is restricting the major downfall. Supplies are likely to remain down as new crop of castor will pick up after Jan Going forward, castor seed prices are likely to trade in range of 7200-7600.
It closed at Rs. 284.60 on 08th Dec 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 273.08. On the daily chart, the commodity has Relative Strength Index (14-day) value of 66.2545. Based on both indicators, it is giving a buy signal.
One can buy near Rs.277 for a target of Rs. 300 with the stop loss of 268
It closed at Rs. 5968.00 on 08th Dec 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 6423.10. On the daily chart, the commodity has Relative Strength Index (14-day) value of 30.454. Based on both indicators, it is giving a sell signal.
One can sell near Rs. 6100 for a target of Rs. 5500 with the stop loss of 6350.
It closed at Rs. 6088.00 on 08th dec 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 5878.59 On the daily chart, the commodity has Relative Strength Index (14-day) value of 59.472. Based on both indicators, it is giving a buy signal.
One can buy near Rs. 5950 for a target of Rs. 6400 with the stop loss of 5800.
NOTE: *M.High / M.Low stands for Monthly High / Monthly Low
CRB saw further decline on ride in dollar index amid news of slowdown. Fall in Crude prices deepened the fall. Crude prices saw sharp decline on demand dullness, however it saw marginal bounce on Thursday as data showed U.S. inventories shrank at a faster-than-expected rate, although rampant fears of a recession dimmed the outlook for crude markets after causing sharp losses this week. China, the world’s largest crude importer, announced the relaxing of more COVID-related restrictions this week- a move that is eventually expected to help support global oil demand. A bigger-than-expected rise in gasoline and distillate inventories also drove up concerns over slowing consumer demand for fuel, which is a major driver of U.S. oil consumption. Prices of base metals saw limited gain as the dollar edged up amid a darkened outlook for global economic growth, although expectations of improving demand from China limited the decline. However, a relaxation in COVID-19 curbs in China raised hopes of better demand and capped losses for the metal. Zinc and copper edged higher on low production issue amid expected demand from China. Gold prices remained below key levels on Thursday, but fared somewhat better than the broader metal market as growing fears of a global recession drove some safe haven buying into the yellow metal.
In spices, jeera flared up whereas turmeric and dhaniya saw dip correction. Jeera saw sharp upside. Weaker production prospects in wake of fall in acreages under Jeera in Gujarat supported firmness in prices. About 1.44 lakh hectares were sown under jeera in Gujarat till 5th Dec’22 compared to 1.71 lakh hectares of previous year, down by 15% Y-o-Y. Expected Chinese demand also improved sentiments. Area under dhaniya jumped sharply in Gujarat in year 2022 reported at 1.75 lakh hectares as on 5th Dec compared to 86 thousand hectares of previous year, higher by 103% Y-o-Y. Normal crop progress and improved yield prospects for upcoming season put pressure on prices. Guar counter witnessed impressive buying. Prices are recovering due to renewed buying in the market. Below normal supplies in the market supported firmness in prices. Cotton saw marginal gain as arrivals were down as farmers are optimistic to further gains in prices. The cotton consumption for 2022-23 is estimated at 300.00 lakh bales of 170 kgs compared to 318 lakh bales of previous year. Castor saw gain but erased some of its gain due to sluggish demand of castor oil. Lukewarm export of castor oil is likely to put pressure on prices in near term. However, losses are likely to be limited due to weaker production outlook. Millers and stockiest are running with tighter stocks that will cap the major downfall in prices.
Silver is known as precious metals as well as an industrial commodity. This is most versatile metal from industrial use to decoration; technology, photography and medicine. Silver had witnessed overall weak demand in 2020 amid the COVID-19 pandemic, which crippled the industrial sector that accounts for roughly 60% of the global silver consumption. However, with the resumption of businesses and the ongoing economic recovery stared in 2021, silver demand has picked up in industrial, photography, jewelry, and silverware. Investment purposes have been contributing to the momentum as well. According to the Silver Institute, silver demand is forecast to reach a record total in 2022, driven by new highs for industrial demand, jewelry and silverware offtake and physical investment.
Important fact about silver demand
The ongoing revolution in green technologies, aided by high growth of new energy vehicles and investment in solar photovoltaic energy, will act as a major catalyst for silver in the days ahead.
The Indian Rupee managed to restrict its fall below 82.50/$ after the dollar slide across the board against a basket of currencies ahead of the FOMC meeting next week. On top of that India being the net importer of oil further got support when oil prices plunged nearly 10% this week to hit as low as 76.18 in the Brent benchmark. Further on the hope that the Federal Reserve will dial down the rate hike prospects from December onwards, the rate-sensitive US 2-year treasury yield now hit a 4.30% way dip below from 4.90% traded last month. It is expected that USD INR has the scope to fall further towards 81.20-81.30 in the coming days from the present level of 82.25 to a dollar. Accordingly, expectations of a dovish stance from the Fed triggered the dollar index to lost nearly 7.00% in this running quarter on track for the steepest quarterly decline since 2010 and technically set to close below its 200 moving average of 105.70 for the straight second week. On the major’s euro & pound, both are trading high above 5 months against the dollar on the back of broad dollar weakness. Even EURINR & GBPINR surpassed key technical levels of 86.00 and 100.00 respectively this week. Next week hefty monetary policies from FOMC, ECB & BoE will drive the forex volatility before year-end. It is expected that the broad weakness in the dollar will continue in the coming days.
USDINR (NOV)is trading between its major Exponential Moving Average indicating sideways trends for short term view. The Pair has major support placed around 81.60 levels while on higher side resistance is seen around 82.85 levels. The 21-day Exponential Moving Average of the USD/INR is currently around 81.97 Levels. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 55.55.
One can sell on bounce 82.60 for the target of 81.60 with the stop loss of 83.10.
GBPINR (NOV)is trading above its major Exponential Moving Average indicating upward trends for short term view. The pair has major support placed around 99.50 levels while on higher side resistance is seen around 101.50 levels. The 21-day Exponential Moving Average of the GBP/INR is currently around 98.35. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 72.33.
One can buy on dip near 100.50 for the target of 101.50 with the stop loss of 100.00.
EURINR (NOV) is trading above its major Exponential Moving Average indicating upward trends for short term view. The pair has major support placed around 86.25 levels while on higher side resistance is seen around 87.75 levels. The 21-day Exponential Moving Average of the EUR/INR is currently around 85.08. On the daily chart, the EUR/INR has Relative Strength Index (14-day) value of 71.34.
One can buy on dip near 86.75 for the target of 87.75 with the stop loss of 86.25.
JPYINR (NOV) is trading between its major Exponential Moving Average indicating upward trends for short term view. The pair has major support placed around 59.50 levels while on higher side resistance is seen around 61.00 levels. The 21-day Exponential Moving Average of the JPY/INR is currently around 56.62. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 67.00.
One can sell on bounce 61.00 for the target of 60.00 with the stop loss of 61.50.
(2/5)
|
|
The company will not receive any proceeds from the Offer and all such proceeds will go to the Selling Shareholders.
Considering the P/E valuation on the upper price band of Rs.357, EPS and P/E of Estimated Annualised FY2023 are Rs.7.25 and 49.27multiple respectively and at a lower price band of Rs. 340, P/E multiple is 46.92. Looking at the P/B ratio on the upper price band of Rs.357, post issue book value and P/B of FY23 are Rs. 46.94 and 7.60 multiple respectively and at a lower price band of Rs. 340 P/B multiple is 7.24 . No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
Incorporated in 2003, Sula Vineyards Limited is the India's largest wine producer and seller as of March 31, 2022. The company also distributes wines under a bouquet of popular brands including "RASA," "Dindori", "The source," "Satori", "Madera" & "Dia" with its flagship brand "Sula" being the "category creator" of wine in India. The company's business is broadly classified under two categories (i) the production of wine, the import of wines and spirits, and the distribution of wines and spirits (the "Wine Business"); and (ii) the sale of services from ownership and operation of wine tourism venues, including vineyard resorts and tasting rooms (the "Wine Tourism Business"). Currently, the company produces 56 different labels of wine at four owned and two leased production facilities located in the Indian states of Maharashtra and Karnataka.
Established market leader in the Indian wine industry:The company has consistently gained market share (on the basis of its total revenue from operations) from 33 per cent in Fiscal 2009 in 100 per cent grapes wine category to 52 per cent in value in Fiscal 2022. The company is among the top 10 most followed vineyards in the world, having a large following on social media.
Largest wine producer in India: The company is the clear market leader in the Indian domestic wine industry, with its market share by value being 52 per Cent in Fiscal 2022. The company been a consistent market leader in the Indian wine industry in terms of sales volume as well as value (on the basis of total revenue from operations) since Fiscal 2009 crossing 50 per cent market share by value in the domestic 100 per cent grapes wine market in Fiscal 2012.
Largest wine distribution network and sales presence: As of September 30, 2022, it has a presence in 25 states and six union territories in India. It also entered the overseas markets in 2003, and currently offers its wines in over 20 countries, including Spain, France, Japan, the United Kingdom and the United States. The company has managed to build the largest distribution network among wine companies in India, with close to 13,000 retail touch-points across the country in 2021.
Leader and pioneer of the wine tourism business in India: The company has been a pioneer of wine tourism in India, which has led to a strong D2C presence. It believes with its combination of resorts, tasting rooms and restaurants, it has helped to create a unique wine culture in India. As part of its Wine Tourism Business, it owns and/or operates “The Source at Sula” and “Beyond by Sula” vineyard resorts located at and adjacent to its facility in Nashik, Maharashtra, having a combined room capacity of 67 rooms as of September 30, 2022.
Continuous focus on its Brands:The company’s main strategy is to continue focusing on its Own Brands over Third-Party Brands that it imports and distributes. Sales of its own Brands accounted for 85.49%, 82.75% and 83.91% of the revenue from operations for the 6 months period ended September 30, 2022 and September 30, 2021, and Fiscal 2022, respectively, as compared to 63.57% in Fiscal 2020, when the company had a significant Third Party Brand distribution business, contributing 30.96% of the revenue from operations during the same period.
Focus on premiumization of the product portfolio: Sula intends to continue to leverage its distribution capability to launch new products under these categories to further increase their revenue and market share in the Indian wine market. To this end, the company has launched “The Source” brand with 4 labels in Fiscal 2018, 2019, 2020 and 2022, and undertook a rebranding of its “RASA” brand in Fiscal 2022.
Pursue strategic investments and acquisitions to further consolidate the Indian wine industry: Sula has demonstrated record in acquiring and successfully integrating companies and teams over the last few years, with 2 significant acquisitions in the last 5 years. Through these acquisitions, the company seeks to consolidate its position further in the Indian wine market, increasing its scale and market share. The company’s acquisitions of the brands and assets of Heritage Winery and York Winery in Fiscals 2017 and 2022, respectively, are testament to this.
Sula Vineyards ltd is India’s largest wine producer and seller. The company is an established market leader in the Indian wine industry with the leading brand “Sula”. The company stands to benefit largely from the current high import duties on international wines. The wine industry in India is seasonal. In addition to that, the wine tourism business is also cyclical in nature and thus can result in fluctuations in cash flow for the company. The IPO is entirely an offer for sale (OFS) aggregating to 26,900,532 equity shares by the promoter, investors and other shareholders. It means money raised through the issue won’t go to the company.
|
HSBC Asset Management (India) has said that it has completed the acquisition of L&T Investment Management for a consideration of US$ 425 million, subject to closing adjustments. L&T Investment Management is a wholly-owned subsidiary of L&T Finance Holdings and the investment manager of L&T Mutual Fund. The schemes of the mutual funds operated by L&T Mutual Fund will be transferred to HSBC Mutual Fund or merged with HSBC schemes. The sponsorship, trusteeship, management and administration of the schemes of L&T Mutual Fund are correspondingly changed to HSBC Securities and Capital Markets (India) Private Limited, Board of Trustees of HSBC Mutual Fund and HSBC Asset Management (India) Private Ltd respectively.
IIFL Mutual Fund has launched the new fund offer (NFO) of IIFL ELSS Nifty 50 Tax Saver Index Fund, India’s first Tax Saver Index Fund. The NFO opens on December 1 and closes on December 21. The scheme will re-open for subscription and redemption on an ongoing basis from January 02. Parijat Garg will be the fund manager for IIFL ELSS Nifty 50 Tax Saver Index Fund. Like other ELSS funds, the scheme will provide the dual advantage of tax saving under Section 80C and the potential to benefit from a diversified exposure to the equity markets. According to the press release, the scheme aims to have a portfolio that mirrors the Nifty 50 Index, which comprises large cap Indian companies. This is a passive fund that is relatively low cost, compared to actively managed schemes that tend to have a higher expense ratio. “The Nifty 50 accounts for about 50% of India’s market cap. Taking exposure to the Nifty companies through a passive fund is an opportunity for investors to harness the growth potential of equities, reduce tax outgo, lower the cost of investing, and gain diversified exposure,” says Parijat Garg, Fund Manager, IIFL AMC.
Edelweiss Mutual Fund has launched the fourth tranche of BHARAT Bond ETF. The BHARAT Bond ETF is India's first corporate bond ETF and it is an initiative of the Government of India, from the Department of Investment and Public Asset Management and the latter has given the mandate to Edelweiss Mutual Fund to design, launch and manage the product. This new BHARAT Bond ETF and BHARAT Bond Fund of Fund (FOF) series will mature in April 2033. The NFO will start on December 2 and end on December 8. Through the launch of this new series in the fourth tranche, Edelweiss Mutual Fund proposes to raise an initial amount of Rs. 1,000 cr. with a green shoe option of Rs. 4,000 cr. So far, five maturities of Bharat Bond ETFs have been launched - 2023, 2025, 2030, 2031, & 2032. “'BHARAT Bond ETF program has received an enthusiastic response from all categories of investors since its launch. BHARAT Bond has created a unique opportunity for all Indian investors to invest in PSU Bonds and fuel India’s growth story. Crossing a landmark Rs. 50,000 cr. AUM is a testament that BHARAT Bond has emerged as a trusted investment avenue with better tax efficiency for many Indian investors,” says Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance.
Markets regulator Securities and Exchange Board of India (SEBI) on Wednesday cleared Bandhan-led consortium's proposed acquisition of IDFC Asset Management Company. Earlier this year, a consortium of Bandhan Financial Holdings GIC, and ChrysCapital signed an agreement to buy IDFC AMC and IDFC AMC Trustee Company from parent IDFC, for Rs 4,500 crore. After the transaction, BFHL will own about 60% and GIC and ChrysCapital will hold 20% each in IDFC AMC. Last month, the deal got approval from the Reserve Bank of India (RBI) and antitrust body competition commission of India (CCI) had already cleared it in August. Post the acquisition, IDFC AMC will be renamed as Bandhan AMC and IDFC Mutual Fund is proposed to be renamed as Bandhan Mutual Fund. "The consortium of incoming shareholders envisages the continuity of the current management team and investment processes at IDFC AMC," according to an official statement from IDFC. "As a result, the unitholders of IDFC MF would continue to benefit from the same high-quality investment approach and focus that IDFC AMC is reputed for," the release said. IDFC AMC is one of the top 10 AMCs in the country with an average assets under management of over Rs 1.2 lakh crore. It has investment products across equities, fixed income, and hybrid.
|
|
|
|
|
|
|
