In the week gone by, by, global stock markets continued to remain volatile as investors monitored Russia and Ukraine saga and adjusted to the Federal Reserve's monetary tightening plans. Besides, global markets closely followed high-profile meetings in Brussels on Thursday with a NATO summit, a meeting of EU leaders, and a G-7 summit. Besides, investors remained focused on news updates about rising coronavirus infections in China. Market participants fear that elevated inflation may push major central banks globally to tighten monetary policy aggressively. Actually Fed has said earlier this week that the central bank is set to take tough action on inflation, with investors now betting the Fed will drive up interest rates even faster than expected. Chinese stock market also looked perplexed; with sentiment dented by Sino-U.S. concerns after Washington sought to deter Beijing from aiding sanctionshit Russia. On the data front, euro zone and U.K. business growth came in stronger than expected in March, according to new purchasing managers’ index. Another data showed that U.K. inflation came in at an annual 6.2% in February; its highest since March 1992.
Back at home, domestic markets continued to trade volatile due to persistent FII outflows and surge in crude oil prices amid mixed global cues. Actually ongoing global uncertainties like war, rising crude price, Fed’s policy tightening along with a surge in covid cases is keeping the market highly sensitive. Investors looked worried because they thought that rising commodity prices will add additional upward pressure on already high inflation due to supply chain bottlenecks. Now focus of Investors is toward the outcome of the NATO summit as it could provide some direction to the lingering Russia-Ukraine tension. Going forward, investors will keep monitoring developments relating to Russia-Ukraine, crude oil Prices, inflow and outflow of the foreign funds among others.
On the commodity market front, Commodity continued its recovery; CRB traded near 325 levels. Dollar index recovered from the low and tried to reach 99 levels. The dollar strengthened as oil prices steadied, commodity currencies pulled back from some of their recent gains and the Japanese yen sunk to its lowest since 2015. U.S. President Joe Biden could announce further sanctions on Russia, in response to the latter's invasion of Ukraine one month ago on Feb. 24. Bullion can trade with upside bias. Crude oil can trade in a range of 7800-9000 levels. Base metals may see fresh buying. In agri, spices and cotton will appreciate further. GfK Consumer Confidence, Unemployment Change, Unemployment Rate and Inflation Rate YoY Prel of Germany, CB Consumer Confidence, Core PCE Price Index YoY PCE Price Index YoY and of US, GDP Growth Rate QoQ Final, Non Farm Payrolls, Unemployment Rate, Markit Manufacturing PMI Final and ISM Manufacturing PMI of US, NBS Manufacturing PMI of China, GDP Growth Rate YoY Final of UK, Inflation Rate YoY Prel of France, Inflation Rate YoY Prel of Italy, CPI Flash and Core Inflation Rate YoY Flash of Euro Area etc are many triggers scheduled this week, which will impact on commodities prices.
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’s financial performance remains supported by its diversified revenue mix covering sale of products, spares and services for multiple aircraft programmes, as well as the healthy profitability arising from the cost-plus nature of majority of contracts. Due to its large scale and healthy operating profitability, the debt coverage metrics remain strong. The GoI’s increased focus on indigenisation with the Make in India policy and mandatory offset policy for defence procurement by GoI, augur well for the company’s future growth. Thus, it is expected that the stock will see a price target of Rs.1676 in 8 to 10 months’ time frame on a target P/Bv of 2.75x and FY23 BVPS of Rs.609.46.
Over the years, the company has gained strong foot print in the media and communications space. Going forward, it is expected to benefit from the expansion in regional language newspaper readership and growth in ad revenue. It enjoys leadership in terms of readership among the Hindi language newspapers, we expect the stock to see a price target of Rs 76 in 8 to 10 months time frame on a 3 years average P/bv of 0.91x and FY23 BVPS of Rs.83.47.
The stock closed at Rs 186.10 on 25th March, 2022. It made a 52-week low at Rs 123.40 on 19th April, 2021 and a 52-week high of Rs. 203.80 on 06th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 150.77
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 charts, formed “Cup and Handel” pattern on weekly charts which is bullish in nature. Although we don’t have pattern breakout but its consolidation from past few weeks indicates that there can be a good spur in coming days. On the indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 182-184 levels for the upside target of 210-215 levels with SL below 170 levels.
The stock closed at Rs 345.45 on 25th March, 2022. It made a 52-week low of Rs 283.80 on 07th March, 2022 and a 52-week high of Rs. 476.45 on 19th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 355.75
After giving healthy correction from 470 to 280 levels in single down swing, stock has recovered sharply from last three week. Apart from this, it has formed an “Inverted Head and Shoulder” pattern on daily charts which is bullish in nature. Last week, stock has given the pattern breakout along with high volumes also has managed to close above the same so buying momentum may continue for coming days. Therefore, one can buy in the range of 339-342 levels for the upside target of 380-390 levels with SL below 320 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
After two weeks of consecutive gains, Nifty indices took a breather and ended the week with minor cuts. However, Bank nifty remained laggard during the week as index suffered loss of more than 2.5% in the week gone by. From the domestic front, hike in fuel prices third time in a week hurt the sentiments. Implied volatility (IV) of calls closed at 23.06% while that for put options closed at 24.01. The Nifty VIX for the week closed at 23.93% which was slightly higher than the previous week. PCR OI for the week closed at 0.97. Technically Nifty is holding above its short and long term moving averages on daily interval while bank nifty is still struggling below its 200 days exponential moving average on daily charts which is placed at 36000 levels. From derivative front, both call & put writers are seen adding open interest at 17200 strike. We expect market to remain sideways in upcoming sessions with bias likely to remain in favour of bulls. Traders should expect some more consolidation in index while stock specific action and sector rotation will remain under focus.
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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) witnessed recovery last week as demand in the physical
market is improving due to expectation of exports demand. Moreover, the arrivals have
been stabilized in the main physical markets. We expect the prices to trade higher
towards 9500 with major support at 8450. Currently, the prices are 6% higher compared
to last year. New season turmeric hitting the market but the arrivals has slowed down as
prices have corrected in last one month. The exports are normal this season due to
higher prices. As per data release by Dept. of commerce, turmeric exports in Jan 2022
is down by 25% on month to 10,600 tonnes compared to 14275 tonnes in Dec 2021. In the
first 10-months (Apr-Jan) of FY 2021/22, exports down 20.1% at 1.27 lakh tons
compared to last year but higher by 9.2% compared with 5-year average.
Jeera futures (Apr) traded positively last week and expected to continue in
coming week due to improving domestic and export demand. It is likely to
trade higher towards 22600 with support at 20310. The peak season for
arrivals of new season jeera commenced but the arrivals recorded lower
compared to last year. The physical arrival of old and new crop in Unjha
improved to around 28000 bags (1 bag = 55 kg) daily compared to about 40000
bags last year. In the new year, jeera prices have jumped more than 33% and
currently prices are higher by 46% y/y on lower crop estimates. In 2021/22,
area under Jeera in Gujarat was only 3.07 lakh ha Vs 4.69 lakh hac last year
and according to 2nd advance estimates production expected to fall by 41% to
2.37 lakh tonnes Vs 4.0 lt last year. As per data, release by Dept. of commerce,
jeera exports in Jan 2022 up by 19% m/m at 14725 tonnes compared to 12385
tonnes in Dec 2021. However, exports of jeera for Apr-Jan down by 23% Y/Y at
1.88 lt compared to 2.44 lt last year.
Dhaniya futures (Apr) seen recovering after taking support around 10200
levels mainly on diminishing arrivals in the physical market and likely to trade
higher 11300 with 10500 levels. Currently prices are higher by 56% y/y and up
22.5% since January on lower crop estimates while the exports are down. The
Russian invasion of Ukraine may affect supply of coriander from Romania and
Bulgaria, which is supporting Indian Market. As per government data,
coriander exports in Jan 2022 is down by 15% on month at 3590 tonnes
compared to 4630 tonnes in Dec 2021 while for fy 2021/22 (Apr-Jan) export
volume is down by 15% at 41,100 tonnes Vs 48,350 tonnes last year but 11%
higher compared to 5-year average.
In the month of March, 2022, gold has traded in a wide range of $1895.2 - $2078.8 while silver range was of $24.55-$27.35. Back at home, gold and silver trading range for the month of March was of -51028-55558 and 67117-73078 respectively. Last week both the metals saw rebound from the lower side across the board despite rise in dollar index and Treasury Yield amid hawkish indications by Fed. Russia’s statement to take gold in the payment of natural gas from unfriendly country also added the premium. Uncertainty surrounding the war in Ukraine also lifted bullion's appeal as a safe-haven and an inflation hedge. The very strong underlying inflationary pressures continue to be the main supportive fundamental factor driving the gold price. The Federal Reserve raised borrowing costs by 25 basis points on March 16, and signalled a more aggressive approach. Gold, which pays no interest, tends to lose its appeal when interest rates rise, but the ongoing conflict in Ukraine and a spike in oil prices adding to existing inflationary pressures have put a floor under gold prices. The strength in the job market reported by the Labor Department may push the Federal Reserve to raise interest rates by half a percentage point at its next policy meeting in May. With bullion-backed ETF's elevated, gold could well attract more suitors if stagflation risks become more amplified over the near term. Holdings of SPDR Gold Trust the world's largest goldbacked exchange-traded fund, rose to its highest level since February 2021 on Wednesday. Gold and silver are likely to trade in a range of 51000-53500 and 68000-71000 levels.
Crude oil prices may continue to trade with high volatility as escalating fears of a supply crunch due to sanctions on Russia may continue to provide support the prices while any ease in situation between Russia and Ukraine and possibility of any coordinated release of oil from storage by the United States and its allies may pressurise the counter. Kazakhstan said it expects the Caspian Pipeline Consortium terminal, damaged by a major storm, to resume shipping crude within a month, but added it may reroute some oil towards tankers on the Caspian Sea and pipelines going to Russia's Samara and to China. Although many buyers are shunning Russian crude, especially former European purchasers, Asian users may be stepping in to take barrels at discounted rates. China’s refiners are discreetly purchasing cheap Russian oil and India processors have also scooped up some of the volumes. As the war drags on, there’s a growing willingness on both sides to use Russian energy supplies as a weapon. President Vladimir Putin ordered the nation’s central bank to develop a mechanism to force European customers to pay for Russian natural gas in rubles, spurring a rally in prices. In response, Germany and Italy said efforts to charge in rubles for gas would be a violation of their contracts. Crude oil prices may trade in the broad range of 7800-9000 levels while natural prices may continue to trade in the range of 370- 440 levels on forecasts for cooler temperatures and higher heating demand next week than previously expected. US President Joe Biden promised the United States would deliver at least 15 billion cubic metres (bcm) more LNG to Europe this year than planned before.
Choppy trade may continue to witness in base metals on mixed fundamentals. Supply disruptions due to continued conflict between Russia & Ukraine, sanctions on Russia, and low global stockpiles may provide cushion to the prices. Higher dollar, the COVID-19 outbreaks in many Chinese cities and the real estate sector reels from a liquidity crisis may dampen the demand of base metals. Strong US economic data and high inflation reinforced the market’s expectation that the US Fed will increase interest rates more significantly. Market participants have also been hoping China's infrastructure stimulus and monetary easing would drive up demand and imports for industrial metals. Copper may trade in the range 780-850 levels. The Serbian arm of China's Zijin Mining plans to stop production at its copper smelter for three months to carry out a planned work, the Tanjug news agency reported. Zinc can move towards 350 with support of 320 levels. Lead can move in the range of 180-188 levels. Zinc prices are driven by increased risks of European smelter disruptions due to the Russian crisis and higher energy costs, leading to a larger forecast deficit of refined zinc in 2022. Nickel may trade in the range of 2200-2750 levels. Concerns over supply in the wake of the Ukraine invasion by Russia, and possible short-covering may continue to underpin the metal. Despite Tsingshan striking a deal with banks to avoid further margin calls, it still has a large short position in the market. Aluminum may trade in the range of 280- 300 levels with positive bias. Russia might look to its giant neighbour to replace Australian alumina supplies cut off by sanctions, but Chinese aluminium smelters need all the feedstock they can get, analysts say.
Cotton futures (Apr) continue to trade higher to touch fresh all-time highs of
42280 levels last week on increasing International prices due to drought
situations in the US. We expect prices to trade higher towards 44000 levels if it
breaches its resistance of 42500. Currently, the domestic prices are high 99.65%
y/y and jumped about 19.2% in the New Year due to concerns over production,
slow arrivals, better domestic and exports demand. The domestic demand is
growing due to higher exports of textile products from the country. In the second
advance estimates, govt has cut cotton production in the country to 340 lakh
bales from 362 lakh bales in 1st estimate while the domestic demand is
increasing due to higher exports of yarn and textile produce.
Guar seed futures (Apr) traded in a very narrow range of 6100-6200 last week
due to balanced supply and demand situation. The exports of guar gum from
the country increasing due to higher crude oil prices. It is expected to trade
higher towards 6600 levels if it breaks resistance level of 6300. Support is at
6050 levels. Currently, prices are up 63.1% y/y on reports of lowest production
in last 5 years, multi-year lower stocks and improving export demand due to
higher crude oil prices. The oil rig count is at 663 up by about 248 compared to
last year. In Jan 2022, Guar gum exports are higher by 5% y/y at 22300 tonnes
while exports in 2021/22 (Apr-Jan) are up by 38.4% y/y at 2.64 lakh tonnes.
Castor Seed (Apr) continue to trade at higher levels due to good export
demand for castor derivatives. It has the resistance at all-time high at 7430
levels. The trend positive and expect it to trade higher towards 7600 if it break
its resistance. Prices jumped more than 24% this year due to its higher demand
and lower production estimates while prices are also higher by 63% y/y.
According to the SEA data, India’s castor seed production estimated at 17.95
lakh tonnes (lt) during the current 2021-22 season, against 17.89 lt last year.
Castor oil exports during Apr-Jan are at par with the last year export volume at
5.06 lakh tonnes despite higher export prices.
Mentha Oil (Apr) surged to 9-month high of 1107 last week but did not sustain
and slipped to 1050 levels due to profit booking by the market participation.
The immediate resistance is 1080 levels and support is at 1032. The trend
looks positive and likely to trade higher towards 1100 levels in coming weeks.
The area under mentha expected to be lower this season as farmers in Uttar
Pradesh likely to plant lesser area this season.
COPPER MCX (APR) contract closed at Rs. 812.75 on 24th Mar 2022. The contract made its high of Rs. 888.35 on 07th Mar’2022 and a low of Rs. 585.70 on 01st Feb’2021. The 18- day Exponential Moving Average of the commodity is currently at Rs 807.60. On the daily chart, the commodity has Relative Strength Index (14-day) value of 59.327.
One can buy near Rs. 810 for a target of Rs. 860 with the stop loss of 790.
ZINC MCX (APR) contract was closed at Rs. 333.70 on 24th Mar’2022. The contract made its high of Rs. 376.65 on 08th Mar’2022 and a low of Rs. 204.40 on 27th Jan’2021. The 18- day Exponential Moving Average of the commodity is currently at Rs. 323.18. On the daily chart, the commodity has Relative Strength Index (14-day) value of 61.891.
One can buy near Rs. 328 for a target of Rs. 350 with the stop loss of Rs 318.
DHANIYA NCDEX (APR)contract closed at Rs. 10884 on 24th Mar’2022. The contract made its high of Rs. 11300.00 on 24th Feb’2022 and a low of Rs. 5622.00 on 07th Jan’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 10727. On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.347.
One can buy near Rs. 10600 for a target of Rs. 11200 with the stop loss of Rs. 10400.
In the week gone by, Commodity prices continued to recover last week while CRB traded near 325. Dollar index recovered from the low and tried to reach 99 levels. The dollar strengthened as oil prices steadied, commodity currencies pulled back from some of their recent gains and the Japanese yen sunk to its lowest since 2015. Furthermore, Fed policymakers signaled on Wednesday that they could take more aggressive action to bring down inflation, including a possible halfpercentage- point interest rate hike at the next policy meeting in May. Bullion counter ignored the upside in dollar index and rose on the fear of more sanctions against Russia by US. It was another strong week for energy counter, including natural gas. Oil prices jumped 5% to over $121 a barrel on Wednesday as disruptions to Russian and Kazakh crude exports via the Caspian Pipeline Consortium (CPC) pipeline added to worries over tight global supplies. The situation adds to market worries about the ripple effect of heavy sanctions on Russia, the world's second-largest crude exporter, after its invasion of Ukraine. U.S. crude stocks fell 2.5 million barrels, compared with expectations for a modest increase. US natural gas futures traded around $5.2 per MBTU, hovering levels not seen since November 26th, supported by a double-whammy of colder weather forecasts and record overseas demand. European gas prices remain seven times over those in the US, as the region struggles to replace energy imports from Russia, and crude oil has been trading above $110 per barrel putting additional pressure on the energy market. Prices of base metals extended gains after Russia said it would seek payment in roubles for gas sales from "unfriendly" countries, sending European gas prices soaring and fuelling worries about more smelter closures. In base metals, lead and nickel saw fall whereas rest of them appreciated. The LME has no current plans to ban from its system metal from Russian producers, such as nickel and copper from Norilsk Nickel or aluminum from Rusal, despite calls from some members to do so. Australia's decision to ban exports of alumina to Russia tightens further the raw materials squeeze on Russian aluminum giant Rusal. German aluminum maker Trimet will cut production at its main factory in Essen by half in the coming weeks amid huge costs for the energy-intense production process.
Spices counter saw lower levels buying as recent fall made it more attractive for fresh buy. New season turmeric is hitting the market and the exports are normal this season. As per data release by Dept. of commerce, jeera exports in Jan 2022 was up by 19% m/m at 14725 tonnes as compared to 12385 tonnes in Dec 2021. The Russian invasion of Ukraine may affect supply of coriander from Romania and Bulgaria, which is supporting Indian Market. Cotton futures (Mar) climbed to fresh all-time high of 41330 on Wednesday, tracking higher international prices.
NCDEX launched trading in the futures contract on Refined Castor Oil on March 21, 2022. Initially four monthly contracts expiries from April to July 2022 are available for trade. The exchange already has a successful contract in Castor Seed and the launch of Refined Castor Oil will enhance the castor complex in the futures segment of NCDEX.
Castor Oil is the primary product obtained from Castor Seed. Castor oil and its derivatives have wide ranging applications in the manufacturing of soaps, lubricants, hydraulic and brake fluids, paints, dyes, coatings, inks, cold resistant plastics, waxes and polishes, nylon, pharmaceuticals and perfumes. It is also used for making bio-diesel.
Contract Specifications of Refined Castor Oil Futures contract
Demand & Supply Scenario
Despite being near-monopoly producers of Castor products, Indian growers as well as exporters are often exposed to volatility in prices due to various internal and external risks, raising the need for price risk management in the commodity. So the launch of refined castor seed oil future contract will enable Indian producers and exporters to hedge their risks, and will also enable e importers in other countries to use NCDEX to hedge their price risks.
Indian Rupee continues its losing streak below 76.00 vs dollar as volatility in oil prices kept oil-importer linked current vulnerable since Russia-Ukraine conflicts begun a month ago. This week rupee somehow managed to stay near 76.00 tracking some recovery in the global equities. However rising US yields always remain headwinds for Indian rupee unless RBI do not give hawkish guidance as well. We do think rupee may find steep resistance to cross above 75.75 in coming days while support now stands at 76.50 for next week. From the majors, EURUSD holds below the 1.10 handle throughout this week. Recent data out of Germany and France showed that business activity was supported by the service industry following the loosening of Covid restrictions. The economic activity in both regions is uncertain given the impact of the war on manufacturers. On euro-rupee fronts the weakness will continue in the pair and may head towards 83.30 in coming days. While sterling remains steady above $1.31 after recent rate hike of 25 bps from Bank of England. With record inflation in the UK along with low trajectory of growth in the UK may cap any potential upside in the GBPINR counter. We think GBPINR may follow typical range between 100.30 to 101.80 over the next few weeks.
USD/INR (MAR) contract closed at 76.6850 on 24-Mar-22. The contract made its high of 76.8650 on 22-Mar-22 and a low of 76.2725 on 21 Mar-22 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 76.1440.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 52.34.One can buy at 75.90 for the target of 76.90 with the stop loss of 75.40.
GBP/INR (MAR) contract closed at 101.1425 on 24-Mar-22. The contract made its high of 101.5825 on 23-Mar-22 and a low of 100.5250 on 21-Mar-22 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 100.8215.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 46.50. One can sell at 101.00 for a target of 100.00 with the stop loss of 101.50.
| 24th MAR | Zelensky pleads for more western weapons ahead of Nato summit |
| 24th MAR | Biden warns Russia of ‘response’ if it uses chemical weapons |
| 24th MAR | The United States and allies considered releasing more oil from storage to cool markets. |
| 24th MAR | Durable goods orders excluding defence in the US fell 2.7 percent in February |
| 23th MAR | UK Manufacturing PMI was at a 13-month low of 55.5 in March |
| 23th MAR | New home sales in the United States fell 2% from a month earlier |
| 23th MAR | Annual inflation rate in the UK increased to 6.2% in February from 5.5% in January |
| 22th MAR | Powell comments that opened the door to take a more aggressive monetary policy path |
EUR/INR (MAR) contract closed at 84.3875 on 24-Mar-22. The contract made its high of 84.7800 on 21-Mar-22 and a low of 84.2475 on 22-Mar-22 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 84.2970.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 44.42. One can sell at 84.50 for a target of 83.50 with the stop loss of 85.00.
JPY/INR (MAR)) contract closed at 63.2700 on 24-Mar-22. The contract made its high of 64.5750 on 21-Mar-22 and a low of 63.1725 on 24-Feb-22 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 64.5470.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 27.95. One can buy at 62.70 for a target of 64.00 with the stop loss of 62.20.
(2/5)
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The IPO aims to utilize the net proceed for the following objectives;
Repayment and/or prepayment of company's borrowings either partially or fully.
Funding working capital requirements.
General Corporate purposes.
Considering the P/E valuation on the upper price band of Rs.650, EPS and P/E of estimated annualised FY2022 are Rs.22.84 and 28.46 multiple respectively and at a lower price band of Rs. 615, P/E multiple is 26.93. Looking at the P/B ratio on the upper price band of Rs.650, book value and P/B of estimated annualised FY22 are Rs. 160.20 and 4.06 multiple respectively and at a lower price band of Rs. 615 P/B multiple is 3.84 . No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
Incorporated in 1986, Ruchi Soya Industries, a part of Patanjali Group, is one of the leading FMCG brands in the Indian edible oil sector. It is the largest manufacturers of soya foods with a presence across the entire value chain in upstream and downstream businesses with secured palm plantations. Currently, it is leveraging its brand "Neutrela" with a range of premium products like "Neutrela High Protein Chakki Aata" and "Neutrela Honey". Till June 2021, Ruchi Soya owns 22 manufacturing units with a total refining capacity of 11000 tonnes per day, currently, 16 plants are operational. It has a strong network distribution of 100 sale depots, 4763 distributors, and 457,788 retail outlets.
Strong promoter pedigree of Patanjali group: It has benefitted from the strong promoter pedigree. It leverages Patanjali Ayurved Limited’s sourcing capabilities, technical know-how and benefit from the Patanjali Ayurved Limited’s in-depth understanding of local markets, its brands, extensive experience in manufacturing of FMCG products and trading and advanced logistics network in India.
Upstream and downstream integration and one of the key players in Oil Palm Plantation: The edible oil industry in India is fragmented wherein 13% of oil is sold as loose/unbranded and the consumers are shifting to branded oils, which presents a large market for its products. The company has developed relationships with some of the large oil suppliers in the world and supply chain is further bolstered, with the palm plantation business which works with farmers in a total aggregate area of 2,99,245 hectares of which 56,106 hectares is under cultivation across nine states, in certain specified areas.
Strong brand recognition in the Indian market: It has strong portfolio of brands focused on various types of edible oils and soya foods. Its brand ‘Nutrela’ is synonymous with TSP and is a household and generic name. Its nutraceuticals brand Patanjali – Nutrela is focused on health and wellness and reaps the benefits of the association with a proven brand like, Patanjali.
Strong, established and extensive distribution network: It has gained access to Patanjali’s welldeveloped pan-India distribution network consisting of around 3,409 Patanjali distributors, 3,326 arogya kendras, 1,301 Patanjali chikatsalya, 273 Patanjali mega stores and 126 Patanjali super distributors. Such, 126 Patanjali super distributors and 3,409 Patanjali distributors provide access to 5,45,849 customer touch points including approximately 47,316 pharmacies, chemists and medical stores, as of March 31, 2021.
Foray into health and wellness space with launch of Nutraceuticals: To capitalize on the demand related to health and wellness space, the company is in the process of broadening its offering capabilities in the products portfolio and enhancing its brand visibility. It has currently 18 nutraceutical products, in product basket, offering wide array of choice for its customer in sports, medical and general nutrition. Its association with Patanjali, that has been into the natural health and wellness space, for over a decade, will support its entry into the nutraceuticals space.
Pioneer and market leader in branded TSP space: The company is the market leader with a share of 40% in branded soya chunks. Its brand Nutrela is positioned well to tap the growing opportunity.
Continue to leverage the Patanjali brand and enhance synergies with PAL’s food portfolio: Its key strengths are being part of the Patanjali group and the strong brand equity generated by the “Patanjali” brand name. The management of the company believes that the Patanjali brand commands a recall amongst the consumers in India due to its image and goodwill established over the years.
Enhance the high margin premium food portfolio through the Nutrela brand: It has entered the FMHG segment through the launch of nutraceuticals which are marketed under Nutrela and Patanjali joint branding. It has also launched Nutrela’s health portal www.nutrelahealth.com, in 2018 and the ‘The Soya Cook Book’, in July 2019, which contains multiple recipes with the soya products.
Expanding its 100% plant based and vegetarian nutraceutical products portfolio: Its nutraceutical products portfolio contains tremendous growth opportunities for the company. It has 18 nutraceutical products, in its product basket, offering wide array of choice for its customer. It intends to further diversify its product base, by over twentyfive products, by leveraging its Nutrela brand and include more value-added products which yield better margins.
Expansion of its distribution network through diversification and supply chain optimization: It has strong distribution network in India, the company’s focus is to further strengthen its pan India presence for its products by diversifying its distribution network. It has also access to Patanjali’s welldeveloped pan-India distribution network consisting of 1,301 Patanjali chikatsalya, 3,326 arogya kendras and 273 Patanjali mega stores. Further, 126 Patanjali super distributors and 3,409 Patanjali distributors provide access to 5,45,849 customer touch points including over 47,316 pharmacies, chemists and medical stores, as of March 31, 2021.
The company is a diversified FMCG and FMHG focused company with having a wide range of products. The company is a pioneer in soya chunks which are associated with nutrition and good health. However, on valuation part, it looks expensive. The company plans to utilize the entire issue proceeds for furthering the company's business by repayment of certain outstanding loans, meeting its incremental working capital requirements, and other general corporate purposes. The meaning thereby is that the company is not in the expansionary mode and still trying to repay its existing debt. A long term investor may opt the issue.
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ICICI Prudential Mutual Fund has launched ICICI Prudential Housing Opportunities Fund, an open-ended equity scheme investing in equity and equity-related instruments of entities expected to benefit from the growth in housing theme. The new fund offer opens on March 28 and it will close for subscription on April 11. The scheme will invest in basic eligible industries that form a part of Nifty Housing Index. S Naren and Anand Sharma will be the fund managers of the scheme. The benchmark of the scheme is Nifty Housing TRI. The minimum application amount at the time of NFO is Rs 5,000 (plus in multiples of Re.1). Housing as a theme encapsulates various sectors like cement, consumer electronics, housing finance, banks, power, steel, LPG/CNG/PNG/LNG suppliers etc. The fund house believes that housing as a theme seems to be poised for a turnaround as the real estate oversupply of 2008-2012 appears to be digested. This may lead to less pressure on real estate prices thereby aiding housing as a theme to perform better. With the number of Indians living in urban areas expected to reach 525 million by 2025 and 600 million by 2036, Real Estate sector in India is expected to reach USD $1 trillion by 2030.
HSBC Mutual Fund has launched HSBC CRISIL IBX 50:50 Gilt Plus SDL Apr 2028 Index Fund (HGSF), an open-ended Target Maturity Index Fund tracking CRISIL IBX 50:50 Gilt Plus SDL Index - April 2028. The fund house says that the scheme has relatively high interest rate risk and relatively low credit risk. According to the press release, HGSF with a mix of quality debt papers aims to provide better risk-adjusted performance and liquidity. The fund will be benchmarked against CRISIL IBX 50:50 Gilt Plus SDL Index - April 2028 and managed by Kapil Punjabi, SVP - Fund manager Fixed Income. The fund aims to focus on the six-year target maturity segment and gain from the current volatile outlook on long-term securities. The fund will invest in government securities forming part of the GSec portion of CRISIL IBX 50:50 Gilt Plus SDL Index – April 2028, State Development Loans securities forming part of the SDL portion CRISIL IBX 50:50 Gilt Plus SDL Index – April 2028. Apart from this, the scheme will also have an allocation to money market instruments including cash and cash equivalents (Treasury Bills, Government Securities with residual maturity of up to 1 year and Tri-Party Repos and any other like instrument as specified by the Reserve Bank of India from time to time).
Edelweiss Mutual Fund has decided to revoke the limit for subscriptions in Edelweiss Recently Listed IPO Fund with effect from April 1. In other words, all lumpsum investments including all systematic investments in units of the scheme shall be accepted. Earlier, the fund house had restricted investments to a maximum of Rs 1 lakh per day per investor in February this year. Edelweiss Recently Listed IPO Fund was launched as a closed-end scheme in 2018 and was converted into an open-ended fund in May 2021. The assets of the scheme had doubled in a very short time frame and hence the fund house had decided to put restrictions on the inflows. The fund invests in newly-listed companies or those that plan to hit the capital markets soon. Before it turned into an open-ended scheme, the fund was called Edelweiss Maiden Opportunities Fund - Series 1 (EMOF).
Aditya Birla Sun Life Mutual Fund and HDFC Mutual Fund will merge their Fixed Maturity Plans (FMPs) - fixed tenure debt products - coming up for maturity in April and May into their existing open-ended fixed income schemes. The move will be more tax-efficient for investors who do not need the investment proceeds immediately, said investment advisors. Aditya Birla Sun Life Mutual Fund said it will merge 17 FMPs with total assets under management of ₹4,000 crore maturing between April 15 and May 23 into Aditya Birla Sun Life Low Duration Fund and Aditya Birla Sun Life Nifty SDL April 2027. HDFC Mutual Fund plans to merge five FMPs with AUM of about ₹1,100 crore into HDFC Corporate Bond fund.
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