In the week gone by, global markets rallied over optimism over the US stimulus, I ECB's dovish tone and strong jobless data in the US. Meanwhile, US President Biden has signed into law a $1.9 trillion coronavirus relief package, which includes provisions like $1,400 stimulus checks to most Americans, $300 per week in augmented unemployment benefits through early September, and $350 billion in state, local and tribal government aid. The bill cleared both the U.S. House of Representatives and Senate in the past week by party-line votes. Also US bond yields cooled off from the high as investors concerns eased about spiking inflation. Investors now bet that the global economic recovery will be hastened by the US stimulus. Meanwhile, Minutes from the Federal Reserve’s January policy meeting indicated that Fed officials would need to keep interest rates low and continue bond purchases to help the economy recover from the disruptions caused by the pandemic. Fed chair Jerome Powell said that the discussion on tapering of the Fed’s massive bond-buying programme is premature. Euro zone bond yields fell after the European Central Bank said it was ready to accelerate money-printing to keep a lid on euro zone borrowing costs, using its 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs. Chinese stock market also moved up amid a renewed focus on U.S.-China relations. Oil prices resumed their climb following two days of declines, buoyed by the brightening economic outlook and a decline in the dollar.
Back home, domestic market also looked firm boosted by strong cues from global markets. The passage of the $1.9 trillion US fiscal relief package has caused risk appetite to return. However on Friday market erased some of its gains on the back of weakness in auto, FMCG, pharma and state-run banking stocks. Meanwhile, the minutes of the RBI Monetary Policy Committee's February meeting showed members raised concerns about upside risks to inflation, but the bank kept its repo rate at a record low 4.0 per cent, saying it would ensure ample liquidity. But despite that liquidity assurance Indian bond yields have surged, mirroring global yields as inflation expectations rise on an improved outlook for the global recovery. India's gross domestic product is projected to expand by 12.6 per cent during the country's fiscal year starting in April, according to the Organization for Economic Cooperation and Development. The OECD also unveiled major upgrades to its global outlook, saying that "economic prospects have improved markedly in recent months" thanks to the deployment of coronavirus vaccines and additional stimulus announcements. Meanwhile, India has been a huge beneficiary of the inflows of foreign institutional money into emerging markets. Going forward, it is expected that a liquidity gush is likely to continue into stocks as the $1.9 trillion covid relief bill in the US received final approval. Besides, global cues, rupee movement along with the mood of foreign as well as domestic players and macroeconomic data will continue to dictate the trend of the stock market.
On the commodity front, CRB moved up with baby steps from last seven week; now trading above 194 levels. Dollar index couldn’t stay near its resistance level 92.5 and from there it saw fall, which propped up commodities prices. Appreciation in rupee which is now trading below 73, limited the volatility in commodities prices at home. Commodities are now stuck in a range and we may not see one sided move this week. Some bounce in base metals may be seen on fresh buying from lower levels amid some expected pause in treasury yield. Gold and silver should trade in the range of 43700- 46500 levels and 65000- 68500 levels respectively. Crude may see further rally as fundamentals are still supportive. ZEW Economic Sentiment Index and Core Inflation Rate Euro Area, ZEW Economic Sentiment Index of Germany, Retail Sales, FOMC Economic Projections, Fed Press Conference and Fed Interest Rate Decision of US, Core Inflation Rate and Inflation Rate of Canada, GDP Growth Rate of Newzeland, BoE Interest Rate Decision, BoJ Interest Rate Decision etc are only high importance data scheduled this week.
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.
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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 good and improvement in OPaL (ONGC Petro additions Limited) performance, consolidation of downstream entities OMPL-MRPLHPCL and subsequent synergies, foray into gas marketing (cleaner sunrise sector) and GST in gas would give financial growth. Moreover, management expects demand for crude oil would continue to rise from the strong consumption growth in petroleum products and prices are expected to firm up sharply. It is expected exploring and other activities would get benefit from free pricing, strong demand and stabilising capacity additions. Thus, it is expected that the stock will see a price target of Rs.142 in 8 to 10 months’time frame on an one year P/Bvx of 0.76x and FY22 BVPS of Rs.186.96.
Improving cash cycle, reduction in debt, growing free cash and asset monetisation through InvIT in the coming few months, are all indications of good days ahead.The pace of growth in capitalisation is now expected to be much better as execution challenges ease post the lockdown. This is going to drive growth in the next few quarters.In the December quarter, the company reported an 8 per cent year-on-year growth in revenues partly led by capitalisation of projects and higher utilisation of assets. Thus, it is expected that the stock will see a price target of Rs.256 in 8 to 10 months time frame on a current P/E of 8.98x and FY22 EPS of Rs.25.14.
The stock closed at Rs 137.70 on 12th March, 2021. It made a 52-week low at Rs 74.15 on 27th May 2020 and a 52-week high of Rs. 140.50 on 12th March, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 108.71.
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows. Apart from this, it has completed “W” Pattern on monthly charts and has given the breakout of pattern along with high volumes, and has closed above the same. So, it is expected that buying momentum may continue for coming days. Therefore, one can buy in the range of 133-135 for the upside target of 150-155 levels with SL below 124.
The stock closed at Rs 1003.25 on 12th March, 2021. It made a 52-week low of Rs 471.40 on 23rd March, 2020 and a 52- week high of Rs. 1081.55 on 11th January, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 839.22.
After registering yearly high, stock took a pause and consolidated in narrow range with positive bias. Moreover, stock has formed a “Bull Flag” pattern on weekly charts which is bullish in nature. Last week, stock has given the pattern breakout by registering gains over 4.5% and also has managed to close above the same. So further upside is expected from the stock. Therefore, one can buy in the range of 985-990 levels for the upside target of 1080-1090 levels with SL below 930.
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
From last few sessions we have been witnessing a tug of war among bulls and bears which is keeping Nifty in broader range of 14900 to 15300 with some volatility on cards. However Nifty indices managed to close above 15000 levels last week, after losing some ground in Friday’s session. Traders were seen booking profits at higher levels, as rising cases in Maharashtra kept Bulls on the back foot. The Implied Volatility (IV) of calls closed at 19.21% while that for put options closed at 22.19%. The Nifty VIX for the week closed at 20.75%. PCR OI for the week closed at 1.51 indicates more puts writing than calls. From derivative front, once again call writers are seen adding hefty open interest at 15300 strike which should act as strong hurdle for Nifty moving forward. On downside, 14800 to 14700 zone would act as strong support. Though, technical setup suggests that market is still likely to face a consolidation mode in upcoming sessions with Nifty likely to hover within broader range of 14800-15300 levels with some volatile moves. However traders should keep stock specific action on radar with bias likely to remain in favour of bulls as far nifty is holding above 14700 levels.
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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 futures (Apr) is expected to trade in a broader range of 7900-9000 levels. After reaching to a five year high the prices have taken a breather and the bull run has taken a pause due to profit booking and lack of demand at higher rates. However, after correction seen during last week, we may see some lower level buying again propping up in the counter as still there is constraints in the supply side and stockists are waiting to re-enter as the export demand is robust. The main compared to last year, exports increased by around 40%, up to 1.60 lakh tonne of turmeric is exported to Bangladesh, Malaysia, Singapore, Gulf nations. With prices rising, there is a buzz in the regulated market as hordes of farmers from across Tamil Nadu and Karnataka are converging on Erode. Jeera futures (Apr) will probably consolidate in the range of 13500-14500 with downside getting capped. Jeera production in India is likely to decline 11% to 478,520 tn in 2020-21 (Oct-Sep) because of lower acreage and yield in Rajasthan and Gujarat. Jeera yield in the current season is seen at 504 kg/ha, against 522 kg/ha a year ago. Dhaniya futures (Apr) may see further downside levels of 6700-6500 levels. Coriander production in India is likely to rise 2.3% to 391,740 tn in 2020-21 (Oct-Sep) due to marginal increase in acreage and yield, according to a survey by Federation of Indian Spice Stakeholders.Total area covered under coriander was at 303,890 ha in the current 2020-21 season, up 1.2% on year, the data showed. Coriander yield in the current season is seen at 1,289 kg/ha, against 1,275 kg/ha a year ago.The new crop has started hitting the spot market.
Bullion prices rebounded on weaker U.S. bond yields and dollar weighed on the metal, and was on course for its biggest weekly gain in seven. The metal's prices had slumped to a nine-month low on Monday, but a pullback in Treasury yields helped spark a rebound that has put gold on track for a weekly gain of 1%. Investors are now awaiting the U.S. Federal Reserve meeting this week for direction on its monetary policy. President Joe Biden signed his $1.9 trillion stimulus bill into law and said he was working to speed COVID-19 vaccinations and move the country closer to normality by July 4. Bond yields have been rising in recent weeks on worries about problematic inflation surfacing as the major economies of the world have turned on their money spigots wide open over the past year. The European Central Bank said it would use its 1.85 trillion Pandemic Emergency Purchase Programme more generously over coming months to stop any unwarranted rise in debt financing costs. On the technical front, the Gold price may continue to trade with bearish bias where short term support holds near 43770 breaks and sustain below it may extend the bearish rally till 42200 levels whereas short term resistance is seen near 45800. Ahead in this week, we may continue to witness huge volatility and gold may trade with bearish bias and range would be 42200-45800 levels whereas, Silver may trade in the range of 62300-70800 levels. Whereas on COMEX gold may trade in the range of $1630-$1740 and Silver may trade in the range of $23.90-$27.90 levels.
Soybean futures, on the national bourse, are bullish as higher global prices are providing opportunity to Indian exporters. Robust purchases by countries such as the US, France, Indonesia and Vietnam has pushed up Indian soymeal exports. SOPA has pegged the export of soyameal at 18 lt for the 2020-21 oil year, more than twice of previous year’s 8.6 lt. Soybean arrivals in the first five months have been estimated by SOPA at 70 lakh tonnes and stocks with farmers, crushing plants and traders are pegged at 45.40 lt. Analyzing the factors of demand-supply, the April contract is likely to see higher levels of 5500-5600. Following the gains in this oilseed, soy oil futures (Apr) is also expected to follow its footsteps and witness 1350-1400. In the international market, soybean oil prices are skyrocketing on burgeoning biodiesel consumption at the same time loosened social distancing and business restrictions are beginning to accelerate demand for use of cooking oils at restaurants and other away from home eating establishments.CPO futures (Mar) is also bullish, can test 1170-1180 on higher side. Malaysian palm oil futures hit a fresh 13-year high on the back of tight inventories and strength in rival soyoil. Supply is tight as end-February inventories fell more than expected to 1.3 million tonnes while production declined to its lowest in five years, industry regulator Malaysian Palm Oil Board data showed. The rally of mustard futures (Apr) may get extended to 6000-6100 levels. Bullish sentiments in oilseeds as well as edible oil counters, higher demand from millers for crushing, bulk buying by stockiest and lesser carryover stocks will fuel the upside momentum in days to come.
Crude Oil prices dipped as the market struggled for direction amid mixed signals for demand following a recent rally to levels last seen before the worst of the Covid-19 pandemic. Oil has rallied more than 35% this year as the market tightens due to output cuts from OPEC+ members and as the rollout of vaccines spurs optimism over the demand outlook. On Monday, crude hit its highest level since the start of the coronavirus pandemic, a day after Yemen’s Houthi forces fired drones and missiles at Saudi oil sites. Saudi Arabia said it thwarted the strike, however, and prices slipped as supply fears eased. In a monthly report, the EIA said it now expects U.S. crude oil production to decline by 160,000 barrels per day (bpd) in 2021 to 11.15 million bpd, a smaller decline than its previous forecast of a 290,000-bpd drop. Ahead in this week crude price may witness huge volatility and continue to trade with mixed bias within the range of 4480-5020 levels, where buying near support and sell near resistance would be the strategy. In the wake of last month’s record-high natural gas prices in the physical market, the Energy Information Administration (EIA) is raising its projected 2021 Henry Hub spot price average to $3.14/MMBtu. According to NatGasWeather for March 11 to March 17, “Most of the U.S. will be mild to warm again across the southern U.S. Cooler exceptions will occur over the showery Southwest and the Northern Plains as a fresh cold shot arrives. Ahead in this week, we may expect prices may trade within a range where support is seen near 185 and resistance is seen near 205.
Cotton futures (Apr) may consolidate & trade range bound within 21900-22500 levels. The steady prices in the international market & prospects of higher domestic exports are adding support to the counter. The gains in the ICE cotton futures is being aided by an easing dollar that slipped to a one-week low and a U.S. weekly federal government report that showed higher U.S. export sales. The trend of guar seed (Apr) is bearish & the downside is expected to get extended towards 3770-3700, while guar gum (Apr) is expected to plunge towards 5900-5800. It is reported that the guar gum millers are not getting much interested for fresh buying as the export demand is not picking up despite the fact that the oil prices in the international market are at five months high. Current prices of gum, korma and choori were not profitable for millers so many millers have already halted production. Choori prices are under pressure as cheaper cattle feed are being blended so demand came is lackluster there also. Hence, the cues coming from the spot market is depicting that these counters are not likely to find support in current scenario. Chana futures (Apr) is expected to continue it bull run & may test 5200-5250 levels. Ahead of the festive season, heavy stockists have entered into the mandis to accumulate Chana from various mandis of Gujarat. The bulk buyers are already active in Maharashtra and buying in sizeable quantity draining down the mandis while arrivals are still on the lower side. At present, prices are near the minimum support price of 5,100 rupees in Indore, the benchmark market. In news, NAFED has withdrawn the 5-10% discount it had offered in January on chana produced in the 2019-20 (Jul-Jun) rabi season.
Base metals may trade with bearish bias as soaring US Treasury bond yields and possible tightening of Chinese monetary policy may weigh on counter. Copper can move towards 645 levels and facing resistance near 695 levels. Signs of weakening demand in top consumer China and rising mine supply from top copper producers in South America are weighing on prices. The premium of LME cash copper over the three-month contract fell to $11.50 a tonne, its lowest since Feb. 11, suggesting that the nearby supply tightness has eased. However, Workers at Antofagasta’s Los Pelambres copper mine in Chile rejected a contract offer, increasing the likelihood of a strike, may provide some support. Zinc may trade in the range of 210-225 levels. zinc output in Peru totaled 121,578 tonnes in January, down by 3.5% from 126,021 tonnes in the corresponding month in 2020. Lead can trade in the range of 152-165 levels. Nickel trade with sideways to bearish bias in the range of 1130-1250 levels. China's Tsingshan Holding Group, a nickel and stainless steel giant, said it would be produce 75,000 tons a year of nickel matte for conversion into nickel sulfate for battery-making customers. Russia’s Norilsk Nickel said it expects it will be another week before it has an idea of when it can restart two waterlogged mines in Siberia. Nornickel could lose 4-5% of its 2021 output, if the two mines are suspended for one month. Aluminum may trade in the range of 165-178. After slapping anti-dumping duties on common alloy aluminum sheet from 18 countries by US, the European Union is now fast building its own aluminium trade wall in the form of preliminary anti-dumping duties on Chinese extruded products.
GOLD MCX (APR) contract closed at Rs. 44879.00 on 11th Mar’2021. The contract made its high of Rs. 51931.00 on 06th Jan’2021 and a low of Rs. 44150.00 on 08th Mar’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 44475.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 32.263.
One can sell near Rs. 44700 for a target of Rs. 43500 with the stop loss of Rs. 45300.
NICKEL MCX (MAR) contract closed at Rs. 1181.30 on 11th Mar’2021. The contract made its high of Rs. 1457.00 on 22nd Feb’2021 and a low of Rs. 1145.50 on 09th Mar’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1162.20. On the daily chart, the commodity has Relative Strength Index (14-day) value of 31.184.
One can sell near Rs. 1172 for a target of Rs. 1130 with the stop loss of Rs. 1192.
COCUDAKL NCDEX (APR) contract was closed at Rs. 2313.00 on 10th Mar’2021. The contract made its high of Rs. 2389.00 on 18th Feb’2021 and a low of Rs. 2045.00 on 18th Jan’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 2340.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 58.745.
One can buy above Rs. 2389 for a target of Rs. 2550 with the stop loss of Rs 2310.
CRB moved up with baby steps from last seven week, now trading above 206. Dollar index couldn’t stay near its resistance level 92.5 and from there, it saw fall, which propped up commodities prices. Appreciation in rupee which is now trading below 73, limited the volatility in commodities prices at home. Gold was stuck in a range but was poised to end the best week in seven as falling U.S. Treasury yields and the dollar gave the yellow metal a boost. Silver somehow managed to close the week on positive note and outperformed gold. In energy counter, crude prices saw halt in rally after a superb performance whereas natural gas continued its down trend. Base metals were mostly down, aluminum saw fall after five week continuous upside. Prices were under pressure on soaring US Treasury bond yields and possible tightening of Chinese monetary policy. Signs of weakening demand in top consumer China amid rising mine supply from top copper producers in South America weighed on the copper prices. Russia’s Norilsk Nickel said it expects it will be another week before it has an idea of when it can restart two waterlogged mines in Siberia. Nornickel could lost 4-5% of its 2021 output, if the two mines are suspended for one month.
In agri, cotton oil seeds moved up now facing the resistance of 2330 levels. In spices, coriander and turmeric traded weak while jeera was stuck in a range. After reaching to a five year high, turmeric prices have taken a breather and the bull run has taken a pause due to profit booking and lack of demand at higher rates. However, exports increased by around 40%, up to 1.60 lakh tonne of turmeric is exported to Bangladesh, Malaysia, Singapore, Gulf nations. Coriander production in India is likely to rise 2.3% to 391,740 tn in 2020-21 (Oct-Sep) due to marginal increase in acreage and yield, according to a survey by Federation of Indian Spice Stakeholders. We have seen amazing bull run in ref soya and soyabean. R M seed too moved up on upside in other oil seeds amid physical demand ahead of Holi. Cotton was stuck in a range and market looked reluctant to go for aggressive buy on higher levels. The steady prices of cotton in the international market & prospects of higher domestic exports are adding support to the counter. Guar lost the strength further. It was reported that the guar gum millers are not getting much interested for fresh buying as the export demand is not picking up despite the fact the oil prices in the international market are at five months high . Chana futures continued its upward journey. Ahead of the festive season, heavy stockists have entered into the mandis to accumulate Chana from various mandis of Gujarat.
Department of Agriculture, Cooperation and Farmers Welfare has released the Final Estimates of 2019-20 and First Advance Estimates of 2020-21 of Area and Production of various Horticultural Crops. As per estimates, total Horticulture production in 2020-21 is estimated to be 326.58 million tonne, an increase of about 5.81 million tonne (increase of 1.81%) over 2019-20.
This week’s weakness in the US dollar continued driven by ease in US yields however the yields nudged back higher to 1.60% once again. Indian Rupee too joined the rally as concerns over rising US bond yields eases substantially for the time being. In the short term domestic headline CPI for the month of February and upcoming FOMC meeting next week will guide the dollar-rupee pair. Admittedly moves in the US government bond market notably the 10-year Treasury yield to 1.50% on having peaked above 1.62 % earlier last week which helped global equities and commodity based currencies to rise sharply this week. We think the risk-on sentiment due to ease in bond yields will support the emerging currencies and major pairs including pound as well. On the Euro front, the single currency rises sharply after euro zone government bonds gained in price and the region’s stock markets closed higher as the European Central Bank pledged to speed up its asset purchases to deal with a jump in global borrowing costs. The moves came after the ECB said it would tackle a rise in euro zone bond yields by speeding up its sovereign debt purchases under its €1.9tn pandemic emergency purchase.
USD/INR (MAR) contract closed at 73.1525 on 10-Mar-2021. The contract made its high of 73.5400 on 09-Mar-2021 and a low of 73.0000 on 10-Mar-2021 (Weekly Basis). The 21-day Exponential MovingAverage oftheUSD/INR is currently at 73.2240.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 42.52. One can buy at 72.60 for the target of 73.60 with the stop loss of 72.10.
GBP/INR (MAR) contract closed at 101.5650 on 10-Mar-2021. The contract made its high of 101.7200 on 09-Mar-2021 and a low of 101.1850 on 09-Mar-2021 (Weekly Basis). The21-dayExponentialMovingAverageoftheGBP/INRiscurrentlyat101.6720
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 52.80. One can buy at 101.50 for a target of 102.50 with the stop loss of 100.95.
| 11th MAR | UK pushes back full Brexit border checks by another six months |
| 11th MAR | ECB pledged to step up pace of stimulus to counter market sell-off |
| 11th MAR | UK manufacturers lose revenue and business since leaving EU |
| 11th MAR | UK food manufacturers face fresh hit from Brexit red tape |
| 10th MAR | EU governments back legal action against UK in Brexit row |
| 09th MAR | Biden stimulus will boost global recovery from Covid, says OECD |
| 09th MAR | Covid vaccine diplomacy is a dilemma for foreign embassies in Russia |
| 08th MAR | Pace of ECB bond purchasing slows despite market jitters |
| 08th MAR | EU and US agree to suspend tariffs in Airbus-Boeing dispute |
EUR/INR (MAR) contract closed at 87.0625 on 10-Mar-2021. The contract made its high of 87.5875 on 08-Mar-2021 and a low of 86.8400 on 10-Mar-2021 (Weekly Basis). The 21-day Exponential MovingAverage ofthe EUR/INR is currently at 88.1272.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 35.72. One can sell at 87.50 for a target of 86.50 with the stop loss of 88.00.
JPY/INR (MAR) contract closed at 67.2850 on 10-Mar-2021. The contract made its high of 67.8225 on 08-Mar-2021 and a low of 67.1450 on 10-Mar-2021 (Weekly Basis). The 21-day Exponential MovingAverage ofthe JPY/INR is currently at 68.5445.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 24.9580. One can sell at 67.25 for a target of 66.25 with the stop loss of 67.75.
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Considering the P/E valuation of expected annualised FY21, on the upper end of the price band of Rs. 130, the stock is priced at pre issue P/E of 34.38x on its FY21 EPS of Rs. 3.78. Post issue, the stock is priced at a P/E of 37.68x on its EPS of Rs. 3.45. on the upper end of the price band of Rs.130, the stock is priced at pre issue P/Bv of 6.62x on its FY21 BVPS of Rs. 19.65. Post issue, the stock is priced at a P/Bv of 4.19x on its BVPS of Rs. 31.03.
Considering the P/E valuation of expected annualised FY21, on the lower end of the price band of Rs. 129, the stock is priced at pre issue P/E of 34.12x on its FY21 EPS of Rs. 3.78. Post issue, the stock is priced at a P/E of 37.39x on its EPS of Rs. 3.45. on the lower end of the price band of Rs. 129, the stock is priced at pre issue P/Bv of 6.57x on its FY21 BVPS of Rs. 19.65. Post issue, the stock is priced at a P/Bv of 4.16x on its BVPS of Rs. 31.02.
Incorporated in 1989, Laxmi Organic Industries Ltd is a specialty chemical manufacturer that operates in 2 business segments; Acetyl Intermediates (AI) and Specialty Intermediates (SI). It is the leading manufacturer of ethyl acetate with over 30% market share in the Indian ethyl acetate market and the only manufacturer of diketene derivatives in India. The company has a global footprint with customers in 30 countries including but not restricted to China, Russia, Singapore, UAE, UK, USA, Netherland, etc. Currently, it has 2 manufacturing facilities in Mahad, Maharashtra for the manufacturing of AI and SI products. It is also proposing to set-up a new manufacturing facility at Lote Parshuram, Maharashtra to manufacture four specialty chemicals.
Leading manufacturer of ethyl acetate with significant market share: The company is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market. It is one of the largest exporters of ethyl acetate to Europe from India since 2012
Only Indian manufacturer of diketene derivatives with a significant market share and one of the largest portfolios of diketene products: Over the last decade, being the only manufacturer of diketene derivatives, pursuant to inter alia company’s R&D efforts and customer relationships, it has rapidly gained domestic market share and held a market share of approximately 55% of the Indian diketene derivatives market in terms of revenue in Fiscal 2020. The company believes that it is well poised to capture the growing demand for diketene derivatives globally.
Strategically located manufacturing facilities, vertical integration and supply chain efficiencies: The company currently has 2 strategically located Manufacturing Facilities for Acetyl Intermediates and Specialty Intermediates which are located in Mahad, Maharashtra, in close proximity to several ports including the Jawaharlal Nehru (Nhava Sheva) Port, JSW port and Mumbai port which ensures that it has ready access to port facilities and are able expediently import its raw materials and export its products thereby providing them with a cost and logistical advantage. It also has 2 Distilleries located in Maharashtra for the manufacturing of ethanol and specially denatured sprit from molasses.
In-house research and development capabilities and consistent track record of technology absorption: The research and development of new products to meet company’s customers’ requirements is a key growth driver of its business. As on September 30, 2020, it had more than 34 products as part of the Specialty Intermediates product category. Through its R&D efforts, in addition to the products acquired from Clariant, it has added 20 new products (the “New Products”) to its Specialty Intermediates portfolio over the last decade. The company has developed 5 different chemistry platforms on a commercial scale.
Global presence and low geographical concentration: In addition to India, it has customers in over 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America. Its international operations are supported by its offices in Leiden (Netherlands), Shanghai(China) andSharjah(UnitedArabEmirates).It alsohas arrangementswiththirdparties forusageof storage tanks in inter alia Rotterdam (Netherlands), Antwerp (Belgium) and Genoa (Italy) for storage of finished products which enables the company to deliver its products on short notice.
Volume maximisation at the Manufacturing Facilities by expanding installed capacities to support the growth initiatives: As a part of the growth strategy, the company intends to maximise production volumes at its Manufacturing Facilities. It is also in the process of expanding its manufacturing capabilities for the Acetyl Intermediates by acquiring AHPL, which through its wholly owned subsidiary-YCPL is engaged in the manufacturing of acetaldehyde and ethyl acetate.
Expanding and optimising the product portfolio: The company intends to diversify its existing product portfolio by adding new products (including downstream and value added products) which are synergistic with its existing products and chemistries.
Increasing the globalfootprint and augmenting growth in current geographies: With a view to further diversify its customer base and increase the market share, the company intends to augment its sales in the geographic markets where it sells its products as well as expand into new geographic markets.
Laxmi Organics is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates and has good experience in large scale manufacturing of chemicals. The company has a global footprint with customers in 30 countries including but not restricted to China, Russia, Singapore, UAE, UK, USA, Netherland, etc. Considering its long-standing relations with leading global customers and it plans to shift for high margin speciality chemicals business, it is expected that the company would see good growth going forward.
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Investors pumped Rs 491 crore in gold exchange traded funds (ETFs) in February as they seem be taking advantage of the lower domestic prices caused due to declining international rates, appreciating rupee and reduction in custom duty. This came following a net investment of Rs 625 crore in January and Rs 431 crore in December. Prior to this, gold ETFs had seen an outflow of Rs 141 crore in November, data available with Association of Mutual Funds in India showed.
Rising equity markets failed to convince investors to stay put, indicate monthly numbers released by Association of Mutual Funds In India (AMFI). Investors sold equity mutual funds worth Rs 4,534 crore in month ended February 28, 2021. For the previous month, the number stood at Rs 9, 253 crore. Among equity funds, flexi cap funds lost Rs 4,497 crore in February 2021 compared to net redemptions of Rs 5,933 crore in January 2021. This category saw the highest redemptions across equity fund categories.
The Securities and Exchange Board of India (Sebi) ordered mutual funds to cap ownership of bonds with special features at 10 percent of the assets of a scheme and value them as 100 yearinstruments from next month. The regulator said additional TeirI bonds and Teir 2 bonds, which are popularly known as perpetual bonds, issued under Basel III framework, are some with special characters like converting into equity when financial institutions such as banks face stress. Mutual funds have been directed to value these bonds on the assumption thatthese would be redeemed after 100 years essentially leading to steep losses in the nearterm. Currently,these bonds that come with call and put options are traded on the basis thatthey would be called by the issuer.
Investment through the systematic investment plan (SIP) route continued to fall for the second consecutive month in February 2021 notwithstanding the sustained market rally. According to the Association of Mutual Funds in India (AMFI) data, the SIP inflow fell to Rs 7,528 crore in February from Rs 8,418 crore in December 2020. It fell by 11.5% compared with the year-ago level of Rs 8,513 crore.
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