In the week gone by, global stock markets reeled with unpredictability. The values of currencies are plunging be it Europe or Asia. Oil and other commodities are getting hammered. There is fear among the investors across the globe. Now markets wants clear guidance about where central banks across the globe think the economy is heading, and what’s their plans are. The comments from the Fed chairman that the central bank will continue to raise rates to end high inflation, even if it pushes the country into a recession, has been continuously creating havoc in the global markets. On the flip sides, the Bank of England announced a new bond-buying program, and its governor promised he and his colleagues "will not hesitate to change interest rates by as much as needed" to do whatever it takes to get inflation under control. Even the Bank of Japan boosted its planned bond purchases at a regular operation as it sought to cap upward pressure on yields fueled by volatility in global markets. Moreover, Japanese Prime Minister Fumio Kishida instructed the government to come up with an economic stimulus package by the end of October to help mitigate the impact of inflation. In another development, China's factory activity eked out growth in September, but a slowdown in services sector growth and a downbeat private manufacturing survey pointed to further cooling as the economy grapples with COVID-19 curbs and softening export demand.
Back at home, domestic markets continued to witness sea saw movements amidst wild swings and high volatility. The MPC delivered 50bps hike in line with expectations, in the recent meeting, the fourth straight increase in the current cycle, as policymakers extended their battle to tame stubbornly above-target retail inflation rate. The RBI governor’s comments on Indian economy are a reaffirmation of this ‘India resilient’ theme. However, Central bank lowered real GDP growth estimate for FY23 to 7% from 7.2%. As per RBI, the recent correction in global crude oil prices if sustained may provide relief to inflation. Though recession fear is looming across the globe, but India is relatively better placed as compared to its peers as economic activity is back to prepandemic levels and structural growth drivers are intact – Capex push by government, pickup in private CAPEX, revival in rural demand to remain supportive of growth. Sectors such as Financials, capital goods, utilities, manufacturing, autos and cement look promising. Going forward, market will continue to take direction from both global as well as domestic factors.
On the commodity market front, the entire commodities market majorly reacted on the move in dollar index, which reached multiyear high with supersonic speed in last few weeks and later saw a pause in the rally. Oil is back above the $80 level on seasonal stockpiling, hurricane Ian and mostly on expectations OPEC+ will cut production between 500k or 1 million barrels per day. Bullions saw strong gains, despite Wednesday’s rebound, gold remained down some 9% on the year. Focus now is turning to upcoming OPEC meeting that could potentially result in more supply curbs. Expectations of a supply cut grew after several recent warnings by OPEC members that they would act decisively to support prices. Crude is expected to trade in a range of 6400-7000 with upside bias. Gold can see more rise but the upside is capped near 50800; having support near 49500 levels. Base metals are lacking clear direction on mixed triggers. ISM Manufacturing PMI, Non Farm Payrolls, Unemployment Rate and ISM Non-Manufacturing PMI of US, RBA Interest Rate Decision, Balance of Trade, Employment Change and Unemployment Rate of Canada, Inflation Rate of Mexico, etc are some important 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 INH100001860. 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.
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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.
Asset quality of the bank has been resilient and demonstrates the underwriting, monitoring and collection capabilities of the Bank. As per the management, the bank reported strong broad based credit growth in Q1FY2023, along with the overall costs been well managed. The bank is comfortably capitalized and Liquidity is also supported by a healthy retail deposit base. All these are to benefit the bank to achieve higher credit growth and margin improvement going forward. Thus, it is expected that the stock will see a price target of Rs.135 in 8 to 10 months’ time frame on a target P/BV of 1.35x and FY23 BVPS of Rs.100.24.
With the strong carry forward order book at the end of Q1 FY 23, the company believes that the company is geared to push its growth levels further. The company foray into new segments, such as energyefficient API turbines for Oil & Gas industry and turbines between 30.1-100 MW, will help widen the net of addressable market. The company well equipped to expand fast into these new emerging markets, even as it continues to push the frontiers of growth in existing markets. Thus, it is expected that the stock will see a price target of Rs.266 in 8 to 10 months’ time frame on a target P/BV of 8.90x and FY23 BVPS of Rs.29.90.
The stock closed at Rs 537.85 on 30th September, 2022. It made a 52-week low at Rs 455.65 on 27th January, 2022 and a 52-week high of Rs. 607.70 on 18th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 511.77
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. Apart from this, it is forming an “Inverse Head and Shoulder” pattern on daily charts and is likely to give the pattern breakout along with high volumes so further buying may be expected in coming days. Therefore, one can buy in the range of 528-533 levels for the upside target of 580-600 levels with SL below 495 levels.
The stock closed at Rs 1104.75 on 30th September, 2022. It made a 52-week low at Rs 773.35 on 01st July, 2022 and a 52- week high of Rs. 1194.00 on 13th September, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 956.17
As we can see on chart that stock is continuously trading in higher highs and higher lows and has formed a “Bull Flag” pattern on weekly chart, which is bullish in nature. Last week, the stock held its support and moved higher with high volumes so further upside is anticipated in the stock from current levels. On the indicators front such as RSI and MACD, they are also indicating “Buy” signal. Therefore, one can buy in the range of 1090-1095 levels for the upside target of 1190-1230 levels with SL below 1040 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
Indian markets remained under pressure in the week gone by as Nifty and Bank Nifty, both the indices shattered down badly on the back of weak global cues. Nifty shed more than 1% while Bank nifty settled with loss of more than 2% last week despite a sharp pull back witnessed in Friday’s session after RBI’s monetary policy. From the derivative front, put writers were seen adding hefty open interest at 16800-16900 strikes while call writers were seen shifting at higher bands with marginal open interest seen at 17200 strike. Implied volatility (IV) of calls closed at 20.37% while that for put options closed at 21.64%. The Nifty VIX for the week closed at 21.3%. PCR OI for the week closed at 1.27 lower than the previous week. Technically both the indices i.e Nifty and Bank Nifty still managed to hold above their 200 days exponential moving average on daily charts and expected to trade sideways in the upcoming week. On higher side, 17200 to 17300 zone is likely to act as resistance zone for the index while 16900-16700 zone is likely to provide support on any downside. We expect that volatility is likely to grip Indian markets and bias is expected to remain in favor of bulls as far Nifty holds above 16800 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 (Oct) prices traded in narrow range at major trading centers mainly due to supply concerns. Arrivals have been down due to off season that keeping stockists active to buy turmeric at prevailing rates. Arrivals has been dropped by 26% Y-o-Y due to lower production as about 11248 tonnes of turmeric arrived at APMC mandies across India in Sep’22 as compared to 15758 tonnes of previous year for corresponding month. Apart from that gains in prices are likely to be supported by the increased export demand. India has exported around 62 thousand tonnes of turmeric during Apr’22-Jul’22 compared to 52 thousand tonnes of previous year, higher by 18% Y-o-Y. Bangladesh, UAE and USA have been the major buyer of Indian turmeric in recent months. Going forward, prices are likely to track the ongoing sowing activities in southern states which have been going on firm note. Turmeric acreages in Andhra Pradesh were reported at 15571 Hectares in year 2022 compared to 15521 hec of previous year. However, turmeric area in Maharashtra is likely to be down as farmers have shifted to other crops instead of turmeric. Going forward prices will remain volatile may find support near 6600 and likely to move towards the resistance of 7300 levels.
Jeera (Oct) futures prices are showing some correction due to profit booking at NCDEX. Arrivals pace in Sep’22 were almost most similar to the last year as about 12429 tonnes of Jeera was reported in Sep’22 against the 12524 tonnes of previous year. In wake of supply constrains in the market, jeera price may halt its downfall soon as most of the spice makers and retail sellers are running with tighter stocks. Apart from that, prices are likely to be supported by export demand as global buyers are looking for Indian jeera due to lower production in Syria and Turkey. Jeera prices are likely to find support near 23900 and will move towards resistance of 25000
Dhaniya (Oct) futures are likely to trade sideways to down due to surging imports. Supply shortage at domestic market is being filled up by surging imports at premium quality of coriander. Spices markers and stockists are avoiding bulk buying due to adequate supply at physical market. Surging cheaper imports from Russia, Syria and other global counties is likely to weigh on domestic prices. India has imported about 19 thousand tonnes of Dhaniya during the time period of Jan’22-Jul’22 as compared to 4.4 thousand tonnes of previous year. Some upward reversal is likely to be seen on increased festive buying by spices makers. Prices are likely to find support near 10300 with resistance of 11500 levels.
Bullion counter headed for a weekly gain, supported by a pullback in the U.S. dollar, but the Federal Reserve’s commitment to stay on an aggressive rate-hike path kept the metal on track for its sixth straight monthly decline. The dollar index held near a one-week low touched 111.64, making greenbackdenominated gold less expensive for overseas buyers. While gold prices are headed for their biggest weekly gain in seven, it is down 2.8% for the month so far. Fed policymakers will press ahead with raising U.S. borrowing costs to fight soaring inflation, taking in stride both turmoil in global financial markets and early signs their actions are weakening the job market. Euro zone economic sentiment fell sharply and by more than expected in September, as confidence dropped among companies and consumers, who are also downbeat about price trends in the coming months. The major global indexes were on pace for a weekly loss as worries about a possible recession and rising bond yields put the squeeze back on markets. Higher interest rates not only invite the possibility of a recession, but they also push down prices for stocks and other investments regardless of what the economy’s doing. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund began the year at around 975 tonnes and are currently at 940 tonnes showing that investment demand has been falling. On the technical front, COMEX Gold respected the 50 SMA and witnessed bounce after testing the level. The short-term resistance for the gold is seen near $1680 and support near $1600. Ahead in the week MCX Silver may continue to trade with bullish bias and may take support near 54800 and face resistance near 58000. MCX Gold may trade in the range of 49200-51500.
Crude oil witnessed a positive move throughout the week, bouncing off an eight-month low as the arrival of Hurricane Ian in the Gulf of Mexico caused disruptions in the U.S. crude supply. Prices were also supported by U.S. crude inventories showing a surprise drawdown, which dispelled some concerns over falling short-term demand at the world's largest consumer. The crude market is still set for its first quarterly loss in more than two years as central banks across the globe, and the Federal Reserve in particular, hike interest rates to combat soaring inflation, at the likely expense of future growth. U.S. GDP contracted by 0.6% in the second quarter, an indication of the economic slowdown at the largest economy in the world. Traders also have to factor in heightened tensions between Russia and the West, following the suspected sabotage of the Nord Stream gas pipelines in the Baltic Sea. Also due next week is a meeting of the OPEC+, where leading members have begun discussions about an oil output cut. Ahead in the week prices may continue to trade in the wide range of 6350-6890 levels. Natural gas prices getting support after prices have seen pressure on a bigger-than-expected storage build and after Hurricane Ian knocked out power to over 2.5 million customers in Florida, reducing the amount of gas needed to produce electricity. Technically market is under short covering as the market has witnessed a drop in open interest by -4.57%. On the technical front, natural gas prices have taken support near 540 levels, breaking and sustaining below the level may further push prices to the next support of 510. Ahead of the week, price is likely to trade in the range of 520-590 levels.
Base metals may trade with a positive bias as China data showed a surprise expansion in September factory activity and a possible ban on Russian metal delivered to the London Metal Exchange (LME) raised supply concerns. The official manufacturing Purchasing Managers' Index (PMI) edged up to 50.1 in September, from 49.4 in August, data from the National Bureau of Statistics showed. A ban on Russian metal could lead to shortages and further price surges at a time of rising inflation around the world. However, the overall outlook for metals demand globally remained grim, as central banks around the world tightened their monetary policy to curb rising inflation and amid shortage of energy supply in Europe that could hurt economic activities. Copper may trade in the range 620-675 levels. China's bonded warehouse copper inventories were at their lowest on record of 81,800 tonnes. ShFE copper stocks were down 78% since March, while COMEX copper inventories dropped to their lowest since July 2021. Aluminum may trade in the range of 185-205 levels. Norwegian aluminium producer Norsk Hydro will cut output at two of its plants in Norway due to falling demand, the company said. Zinc can trade in the range of 260-282 levels. Lead can move in the range of 174-184 levels. Expectations of sliding demand for the battery material from the auto sector, despite the approach of winter when demand for replacement batteries typically rises, are behind the sell-off. Steel long is likely to trade in the range of 48200- 51000 levels with bearish bias on NCDEX. Slowing global economies and rising interest rates are adding to the concerns over global steel demand and pricing.
Cotton (Oct) MCX prices are expected to trade down mainly due to subdued demand from millers against the rising supply of new crop. Most of the millers are going for hand to mouth buying due to sluggish demand of domestic cotton yarn in India. India's cotton yarn imports have surged nearly three-fold this marketing year (MY21-22) so far, as higher costs of locally sourced yarn amid exhausting cotton stocks have encouraged textile millers/weavers to look for cheaper source in China. Yarn prices in China have dropped substantially due to US decision to impose a ban on imports of cotton and cotton products produced in Xinjiang. India is ready with bumper crop in year 2022-23 due to substantial rise in area and likely to produce 360 lakh bales higher by 17% Y-o- Y. Prices are expected to slip towards the support of 30500 and likely to face the resistance of 33200.
Cotton seed oil cake NCDEX (Dec) futures are likely to trade down due to increasing supplies of new cotton crop in the market. Supply of other kharif oil seeds is also likely to pick up that will weigh on the market sentiments. Prices are expected to trade in 2200- 2541 range.
Guar seed Oct futures are likely to be volatile may keep bias on down side. Demand for guar has been sluggish as arrivals of new crop are likely to pick up from Oct onwards. Millers are preferring hand to mouth buying in wake of bumper crop ahead. However, emerging export enquires of gum will cap the losses in guar seed. Guar seed prices may slip towards 4800 with resistance of 5350.
Mentha oil (Oct) is likely to trade on sideways to higher on improved buying in local market. Prices are holding the support of 960 and likely to move towards 1030 on improved industrial buying. Overall production of mentha oil has been down in year 2022 that will also support firmness in prices
Castor seed (Oct) prices are expected to trade down due to improved crop condition in major Gujarat. Production is likely to jump significantly on account of increased area under castor which has increased by 22% Y-o-Y in year 2022. Demand side fundamentals of castor are also looking weak as export of castor oil has dropped due to cut in buying from China. Going forward, castor seed prices are likely to find support near 7200 level in near term with resistance of 7600.
It closed at Rs. 647.75 on 29th Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 647.71. On the daily chart, the commodity has Relative Strength Index (14-day) value of 48.869. Based on both indicators, it is giving a buy signal.
One can buy near Rs. 645 for a target of Rs. 670 with the stop loss of 632.
It closed at Rs. 56160.00 on 29th Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 56190.17. On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.580. Based on both indicators, it is giving a buy signal.
One can buy near Rs. 55900 for a target of Rs. 57500 with the stop loss of 55100.
It closed at Rs. 11002.00 on 29th Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 11136.34. On the daily chart, the commodity has Relative Strength Index (14-day) value of 43.813. Based on both indicators, it is giving a sell signal.
One can sell near Rs. 11200 for a target of Rs. 10600 with the stop loss of 11500.
NOTE: *M.High / M.Low stands for Monthly High / Monthly Low
The entire commodities market majorly reacted on the move in dollar index, which reached multiyear high with supersonic speed in last few weeks and later saw a pause in the rally. The plunge in over-hyped U.S. bond yields and the dollar arrived. And it hasn’t disappointed gold bulls, who saw their biggest one-day gain in two months. Gold jumped as the Dollar Index, which pits the U.S. currency against the euro and four other rivals, hovered at 112.5 — down 1.3% on the day for its sharpest tumble since the 1.45% drop on June 16. Bullion counter too moved up and domestic gold added more premium as INR hit all time low of 82. MCX gold crossed 50000 whereas comex gold traded near$1650. Energy counter witnessed much needed upside after a four week continuous decline. Oil had rebounded since Tuesday on reports of precautionary shutdowns in production on the Gulf of Mexico by Chevron and BP in anticipation of damage feared from Hurricane Ian. Oil bulls also leveraged on expectations that global oil producing alliance OPEC+ will announce an output cut next week to try and put an end to the worst market selloff in two years. U.S. crude and fuels stocks posted surprising declines in the most recent week as fuel demand rose and refiners cut runs, the Energy Information Administration said on Wednesday. Prior to the decline, crude stocks had risen non-stop for three weeks, growing by nearly 12 million barrels. Natural gas also rose on the news of sabotage in Nord stream pipeline. In base metals only copper appreciated; rest of the base metals slipped further on weakness in Chinese economy front which is again reopening but its impact is yet to come. Red metal rose in a broad-based rally triggered by a weakening dollar. The global zinc market moved to a deficit of 72,800 tonnes in July from a surplus of 34,600 tonnes a month earlier, data from the International Lead and Zinc Study Group (ILZSG) showed.
Cotton which was talk of the town because of its massive rally few weeks back is now witnessing nonstop fall as the fresh arrivals hit the market. Cotton Corporation of India (CCI) has estimated cotton production is likely to reach up to 360 lakh bales in year 2022-23 higher by 15% Y-o-Y. Guar saw fall for continuous two week. Arrivals of new crop have started and likely to pick up with improved harvesting activities. Castor was in range with negative bias on improved crop condition facilitated by favorable weather in central India is likely to pull down the prices. Shortage of premium and good quality of dhaniya has kept demand active.
Coffee is one of the popular beverages globally. It is also one of the most traded commodities globally in terms of value next to only petroleum products due to the risks associated with its unique supply. Other than beverage, it is also used as a key ingredient in chocolates, cosmetics and beauty products, fragrances & surprisingly, art, furniture and jewelry too.
NCDEX has launched the coffee futures contract to provide a platform to the domestic value chain participants of Coffee Industry to manage their price risk by using the contract. Currently, the contract is available for trading from September 30, 2022 with contracts for Feb, March and April 2022 delivery.
Coffee is often subjected to price volatility due to its longer supply chain, productivity impact, inventory shortages etc. This exposes the value chain participants of Coffee to price risk. Any kind of impact on the weather conditions can affect the supply and in turn pricing.
Global Production of coffee
Coffee is cultivated in more than 70 countries. Much of coffee is cultivated in Brazil, Vietnam, Colombia, Indonesia, Ethiopia, Guatemala and India. Brazil is the largest producer of Coffee contributing approximately 1/3rd of total production. Globally, over 90 percent of the coffee is produced in developing countries mainly South American while it is consumed in industrialized economies– largely US and Europe.
Production of coffee in India
India is among the top 10 coffeeproducing countries producing 3.5 lakh MT of Coffee and being a net exporter of 75-80% of its total production. Indian coffee is one of the best coffees in the world due to its high quality and gets a high premium in the international markets. The area under coffee cultivation in India is estimated to be 4,65,000 ha and it provides livelihood for nearly 1.5 million families. Coffee is largely used in making different coffee blends due to its unique cup taste. India’s Coffee output for marketing year 2022-23 is expected to be lower by 15% against initial estimates. Coffee Board, in its initial estimates, had pegged the 2022-23 crop at a record 3.93 lakh tonnes—about 15 per cent higher than the current year’s final estimates of 3.42 lakh tonnes. The 2022-23 crop comprised 1.169 lt of Arabicas and 2.77 lt of Robustas.
Price discovery of Indian Coffee
Indian Coffee prices are not immune to global price volatility. It also gets impacted by coffee price basis ICE Coffee Futures for Arabica and Robusta, which has an impact on the price to the Coffee producer. The variation in rainfall, temperature, humidity, soil moisture and nutrient availability impact the growth and productivity of coffee plants. Rainfall occurring after the blossoming stage delays the harvest and also leads to low crop quality. NCDEX Robusta Cherry AB Futures contract aims to act as a benchmark contract for domestic value chain to hedge their price risk and protect their business margins.
The week recorded a new historic fall for rupee to 81.94 vs the dollar after a global spill-over pushed the Chinese yuan to new lows while the pound faced a new lifetime low. On top of that Indian currency market was highly expected to reach a wide consensus for the Indian bond inclusion into the key global bond index which is pushed back to next year. Possibly the policymakers may not step in aggressively which is a matter of debate in India since 2013 during the ongoing rout in global bond markets. Indeed preliminary thoughts were that such inclusion may result in an additional flow to the tune of $30 billion within 10 months into the G-secs space. Later RBI brought some stability in rupee space as the ratesetters has gone for a fourth rate hike in FY23 to lift the repo rate to 5.90% while forecasted headline inflation to be moderated around 6.7% with real growth may be seen around 7.2%. We don’t think Rupee has the scope to rise sharply in the coming days while 82.00 on spot can act as an immediate hurdle for the USDINR pair. However, some modest green-shot came after India reported its current account deficit widened to the highest in a decade in the June quarter to $23.9 billion or 2.8% of GDP versus an estimated $30.8 billion which certainly helps the rupee whenever the dollar is higher trend get subdued. On the global front, the forex volatility continues to drive steep choppy moves in major pairs especially sterling reversed its losses caused by the mini-budget announced by the UK Finance Minister. However such push-back in the dollar is likely to be short-lived unless Fed does not un-lever the rate hike machine.
USDINR (OCT)is trading above its major Exponential Moving Average indicating upward trend for short term view. The Pair has major support placed around 81.29 levels while on higher side resistance is seen around 82.29 levels. The 21-day Exponential Moving Average of the USD/INR is currently around 80.71 Levels. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 69.00.
One can buy at 81.40-81.50 for the target of 82.50 with the stop loss of 80.95.
GBPINR (OCT)is trading between its major Exponential Moving Average indicating sideways trends for short term view. The pair has major support placed around 87.87 levels while on higher side resistance is seen around 91.73 levels. The 21-day Exponential Moving Average of the GBP/INR is currently around 90.94. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 48.10.
One can sell at 91.20 for the target of 90.20 with the stop loss of 91.70.
EURINR (OCT) is trading between its major Exponential Moving Average indicating sideways trends for short term view. The pair has major support placed around 79.62 levels while on higher side resistance is seen around 80.77 levels. The 21-day Exponential Moving Average of the EUR/INR is currently around 79.75.On the daily chart, the EUR/INR has Relative Strength Index (14-day) value of 54.61.
One can buy at 79.70-79.80 for the target of 80.80 with the stop loss of 79.25.
JPYINR (OCT) is trading between its major Exponential Moving Average indicating sideways trends for short term view. The pair has major support placed around 56.29 levels while on higher side resistance is seen around 57.31 levels. The 21-day Exponential Moving Average of the JPY/INR is currently around 56.69. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 48.65.
One can buy at 56.50 for the target of 57.50 with the stop loss of 56.00.
(2/5)
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The Net Proceeds from the Issue are proposed to be utilized by the Company for the following objects:
Considering the P/E valuation, on the upper end of the price band of Rs.59, the stock is priced at pre issue P/E of 17.04x on FY22 EPS of Rs.3.46. Post issue, the stock is priced at a P/E of 21.85x on its EPS of Rs.2.70. Looking at the P/B ratio at Rs.59, pre issue, book value of Rs. 21.27 of P/Bvx 2.77x. Post issue, book value of Rs.30.63 of P/Bvx 1.93x.
Considering the P/E valuation, on the lower end of the price band of Rs.56, the stock is priced at pre issue P/E of 16.07x on FY22 EPS of Rs.3.46. Post issue, the stock is priced at a P/E of 20.74x on its EPS of Rs.2.70. Looking at the P/B ratio at Rs.56, pre issue, book value of Rs.21.27 of P/Bvx 2.63x. Post issue, book value of Rs.30.63 of P/Bvx 1.83x.
Incorporated in 1980, Electronics Mart India Limited is the 4th largest consumer durable and electronics retailer in India. The company offers a diversified range of products with a focus on large appliances (air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. The company's offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands. Electronics Mart India Limited business models: Ownership Model & Lease Rental Model. The company operates its business activities across three channels retail, wholesale and e-commerce.
4th largest consumer durable and electronics retailer in India: The company is the 4th largest consumer durable and electronics retailer in India with a leadership position in South India. The company was able to achieve revenue from operations of Rs 14,08.45 Crore and Rs. 4349.31 crore for three month period ended June 30, 2022 and for the Financial Year ended 2022, respectively. The company is currently associated with more than 70 electronic brands and has a long-standing relationship of more than 15 years with a certain number of brands which operate in product categories such as large appliances, mobiles, small appliances, IT and others.
One of the fastest growing consumer durable and electronics retailers: The company has been one of the fastest growing consumer durable and electronics retailer in India with Revenue CAGR of 18.10% from Financial Year 2016 to Financial Year 2022.
Increasing market presence and geographic reach with cluster-based expansion: Its business has grown steadily in the recent years, primarily through expansion of its store network. The company has started its business operations by setting up its first consumer durable and electronic retail store in Hyderabad it opened stores to deepen its reach in the Hyderabad market and gradually opened stores in Tier-II and Tier-III cities in Telangana and Andhra Pradesh. As of Financial Year 2021, it is the largest player in the Southern region in revenue terms with dominance in the states of Telangana and Andhra Pradesh. It had the second highest operating margin amongst its peers in Fiscal Year 2021.
Business model provides operational flexibility to create long term sustainable footprint: The company operates with a mix of ownership and lease rental model. The company gives emphasis on identifying ‘growth pockets’ – places in major cities where addressable population density is high. It follows an extremely meticulous approach in choice of locations - Partial investment in refurbishment of the locations allows the management to keep the rentals & subsequent annual hikes low. As on August 31, 2022, 100 MBOs (Multi Brand Outlets) were operative, having an average store area of 10,876 sq. feet per store.
Expand reach across select geographies and deepen the footprint in its existing markets:Company aims to deepen its store network in its existing clusters to increase its market share in the Hyderabad, Telangana, and Andhra Pradesh markets. The company also intends to open stores and build its store network in the NCR region by opening 26 MBOs with the proceeds of the IPO.
Enhancing sales volumes: The company has enhanced sales volume by continuing to prioritise customer satisfaction through optimal product assortment and offering value for money through:-
Maintaining & forging new relationships with leading brands:The company intends to expand its relationship with existing business partners as well as forge new relations with renowned brands in order to set up and operate increased number of stores including EBOs. It also intends to increase the product range presently available across its MBOs. As of August 31, 2022, out of 112 stores, 100 stores are MBOs, including three specialized stores and 12 stores are EBOs.
The company is the 4th largest consumer durable and electronics retailer in India. It is one of the largest players in the southern region in the states of Telangana and Andhra Pradesh. Its business model is a mix of ownership and lease rental model. The Company is increasing market presence and geographic reach with cluster-based expansion. However, there is stiff competition from online retailers like Amazon or Flipkart or any other offline brands who are offering at lower prices and it can impact company business.
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HDFC Mutual Fund has launched HDFC NIFTY200 Momentum 30 ETF and HDFC NIFTY100 Low Volatility 30 ETF. The New Fund Offers are open and will close on October 06. Smart Beta investing involves stock selection and weighting based on factors, rather than size, as defined in the underlying index methodology by NSE Indices Limited (NIFTY 50). These investment strategies endeavour to provide better risk-adjusted returns than broad market cap weighted indices. According to the press release, the indices underlying the additional Smart Beta ETFs - HDFC NIFTY200 Momentum 30 ETF & HDFC NIFTY100 Low Volatility 30 ETF – have generated higher long-term returns than the NIFTY 200 TRI and the NIFTY 100 TRI, respectively. Both have generated higher average rolling returns over 1, 3, 5 and 10 year horizons compared to the NIFTY 200, 100 and 50 TRI.
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Transportation and Logistics Fund, an open-ended equity scheme predominantly investing in equity and equity related securities of companies engaged in transportation and logistics theme. The scheme may invest in sectors/stocks that form a part of Nifty Transportation and Logistics TRI which is also the benchmark of the offering. The scheme may follow a buy and hold approach and hence an investment horizon of minimum five years is recommended. NFO opens on October 06 and closes on October 20. The fund will be managed by Mr. Harish Bihani and Ms. Sharmilla D’Mello (for Overseas Investments).
Aditya Birla Sun Life Mutual Fund has announced the launch of a Multi-Index Fund of Funds (FoF), an open-ended fund of funds that invests in ETFs and Index Funds. A multi-index fund of funds invests in passively managed instruments such as ETFs and Index Funds of equity and equity-related instruments (domestic index funds & ETFs as well as overseas ETFs ), fixed income securities, Gold / Silver. The Aditya Birla Sun Life Multi-Index FoF will be available for subscription from 26 September 2022 to 10 October 2022. According to the fund house, a multi-index fund of funds is a credible solution to some investment pain points. An inhouse model determines optimal asset allocation to invest in the most apt themes across the industry. Equity exposure can help provide growth and diversification, debt can help provide stability while gold and silver can act as a hedge against any macro risk. All of this is at a low cost due to investments in passive funds.
Edelweiss Asset Management has launched two new target maturity index funds - Edelweiss CRISIL IBX 50:50 Gilt Plus SDL June 2027 & Edelweiss CRISIL IBX 50:50 Gilt Plus SDL April 2037 Index Fund. This fund will invest in a mix of Indian Government Bonds (IGBs) and State Development Loans (SDLs). The Edelweiss CRISIL IBX 50:50 Gilt Plus SDL April 2037 Index Fund will be open for subscription between September 27 to October 6. Edelweiss CRISIL IBX 50:50 Gilt Plus SDL June 2027 Index Fund will be open for subscription between October 6 to October 11. Both the schemes are open-ended target maturity Index Funds investing in the constituents of CRISIL IBX 50:50 Gilt Plus SDL Index – April 2037 & June 2027, respectively. “After the successful launches of target maturity funds over the last 2 years, we are pleased to announce the launch of 2 more target maturity index funds- Edelweiss CRISIL IBX 50:50 Gilt Plus SDL June–2027 & April-2037 Index Fund. Our new fund with April-2037 maturity will be India’s first Target Maturity Fund with 15 year-long maturity. Our endeavor has been to get long-term money through these target maturity funds and we are now the largest player managing long-term fixed income money of investors. We strive to deliver more in the future and continue our leadership position.” said Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited.
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