In the weak gone by, global stock markets witnessed volatile movements as U.S. Federal Reserve Chairman Jerome Powell continued to beat a hawkish drum and suggested the central bank has not reached the end of its tightening cycle, but provided reassurance that the Fed would proceed with caution. Recent Powell's congressional testimony to lawmakers on Capitol Hill underscored the view that the U.S. central bank will hike rates further. The Fed targets an annual inflation rate of 2%. On the economic front, jobless claims held steady at a 20-month high and the Conference Board's Leading Economic index posted its 14th consecutive monthly decline, suggesting that the Fed's efforts to dampen the economy are beginning to have their intended effect. After the ECB’s and Swiss National Bank’s 25 bp rate hike, the Bank of England surprised yesterday with a 50bp rate hike. Investors were taken by surprise when the Bank of England implemented a larger-than-expected 50 basis point rate hike to tackle Britain's stubborn inflation, further evidence that hot price growth remains a global economic headwind. Concerns over slowing global demand loomed larger after China cut its lending benchmarks to jump start sluggish demand, which offset a 21.7% surge in housing starts, the largest monthly jump in thirty years.
Back home, domestic markets moved towards new high as optimism over the domestic economy, persistent inflows from foreign portfolio investors (FPIs), backed by the country's strong macroeconomic data boosted investors’ confidence. Also moderation in inflation coupled with a pause in the rate tightening cycle from the Reserve Bank of India (RBI) continued to boost the confidence of the investors. With the monsoon season well underway, the prediction of El Nino effect this year has raised concerns about the possible impact on Indian economy. As the Indian monsoon progresses, the full impact of the El Nino effect will become clear in the coming months. On another development front, US President Joe Biden and Indian Prime Minister Narendra Modi announced a series of defense and commercial deals designed to improve military and economic ties. Biden and Modi also announced new defense collaborations, including progress on an order for MQ-9B SeaGuardian drones made by General Atomics, and an agreement that will allow American Navy ships to undertake major repairs at Indian shipyards. And the two leaders debuted a series of semiconductor deals designed to take advantage of Indian subsidies intended to bring advanced technology manufacturing to the South Asian nation. Going forward, market will continue to take direction from the international and domestic factors.
On the commodity market front, CRB managed traded near 300 levels as dollar index continued to fall for fourth week; however, it closed in red on weekly basis. Bullion counter declined despite fall in dollar index; silver saw sharp fall as compared to gold. Bullion counter can see some lower level buying. Gold and silver can trade in a range of 57400-60000 and 66500-70000 respectively. In energy counter, natural gas is taking support from the low on lower level buying and rising temperature issue in West. Base metals may trade mix. In agri, spices may steal the limelight on aggressive buying. IFO Business Climate and Unemployment data of Germany, Core Inflation rate and Inflation rate of Canada, Durable Goods, Fed Chair Powell Speech, GDP Growth rate, Michigan Consumer Sentiments Final, Core PCE Price Index, PCE Price Index and Consumer Confidence of US, Inflation rate of Italy, France and Germany, Manufacturing PMI of China, GDP of UK, Core Inflation rate of Euro Area and many more 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.
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 reported strong business growth and expect to continue the growth momentum in FY2024. The company is investing on new technologies for further growth prospect. It is a dominating player in tractors in M&HCV, HCV and supported by many big ticket sister company in India. Thus, it is expected that the stock will see a price target of Rs. 23159 in 8 to 10 months’ time frame on one year average P/Ex of 38.89x and FY24 EPS of Rs.595.49E.
With stronger output for the sugar industry, higher capacity utilisation in the enlarged distillery facility, and a better order book in engineering, the company is well positioned to deliver strong double-digit earnings growth in the coming year. Through consistent investments in operational effectiveness and capacity development, it has kept its focus on its essential businesses. The return ratios will continue to increase in the upcoming years due to the anticipated larger contribution from the distillery company. Thus, it is expected that the stock will see a price target of Rs.345 in 8 to 10 months’ time frame on a three year average P/BV of 2.44x and FY24 BVPS of Rs.141.19.
The stock closed at Rs.747.40 on 23rdJune, 2023. It made a 52- week low of Rs.599.10 on 26th April, 2023 and a 52-week high of Rs.885 on 01st August, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs. 712.50.
Since last two years, the stock has been trading under pressure and can be seen trading with formation of lower bottom pattern on daily and weekly interval. The stock has witnessed a correction from 1100 levels till 600 levels over the period. At current juncture, the stock has given a V shape recovery after making its 52 week low around 599 levels. The momentum has carried above its 200 days exponential moving average on weekly charts. Alongside fresh breakout has been observed above the long term falling trend line of downward sloping channel. The rising volumes along with rise in price point towards next upswing into the prices. Therefore, one can buy the stock in the range of 745-747 levels for the upside target of 870-875 levels with SL below 645 levels.
The stock closed at Rs.123.80 on 23rdJune, 2023. It made a 52- week low at Rs.83 on 21st June, 2022 and a 52-week high of Rs.133.95 on 019th April, 2023. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs. 116.
In the recent past, the stock has witnessed a steep fall from 130 levels and took support at 102 levels. Since then the stock took a steady recovery and once again managed to surpass above 125 levels. Technically formation of Double Bottom pattern has been observed on daily charts, which supported the up move in prices. Currently stock can be seen trading with a rising pattern with formation of higher bottom pattern. The momentum is expected to carry towards previous swing highs as, positive divergences on secondary oscillators points towards rise in price. Therefore, one can buy the stock in range of 122-124 levels for the upside target of 148-149 levels with SL below 107 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
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Throughout the past week, the Indian markets displayed significant volatility. The Bank Nifty closed the week in a negative zone, whereas Nifty also experienced selling pressure and settled with loss of nearly 1%. The Nifty index concluded the week above the crucial support level of 18600, while the Bank Nifty once again struggled to hold 44000 level. Notably, the pressure was seen coming from metal and realty counter while midcap along with financials supported the markets. From the derivative front, call writers added hefty open interest at 18800 strike which now act as a strong hurdle for index moving forward. The implied volatility (IV) for call options concluded at 10.89%, while put options closed at 11.79%. The Nifty VIX, which measures market volatility, ended the week at 11.55%. The PCR OI (Put-Call Ratio Open Interest) settled at 0.99 for the week less than previous week indicates more call writing. Technically Nifty has given a channel breakdown which points towards further downside in index on back of profit booking. On downside now, 1600 would act as strong support levels below which Nifty is expected to slide further towards 18500 levels. Traders are advised to adapt wait n watch strategy as of now, and keep focus on sector specific and stock specific moves.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric prices extended its gains last week following cues from the slower monsoon progress in major producing states. Deficit monsoon rainfall in Maharashtra and Telangana impacted the sowing adversely that reflected on prices. Going forwards, prices are likely to remain sideways in the wake of forecast of good rainfall in Maharashtra and Telangana in coming weeks. Sowing activities are likely to pick up that will weigh on market sentiments. However, losses in turmeric are likely to be limited due to slower arrival pace. More than 65% of arrivals have touched the market and supplies are likely to be bleak with each passing week. About 156.6 thousand tonnes of turmeric has arrived across India so far in year 2023 since 1st Apr’23 as compared to 156.4 thousand tonnes of previous year. Export demand of turmeric has improved in recent months that are likely to cap the excessive losses in prices. India exported about 19.6 thousand tonnes of turmeric in Apr’23 against the 13.76 thousand tonnes of previous year for corresponding month. Turmeric Aug prices are likely to trade in range of 8700-9800 in coming week.
Jeera NCDEX July futures rallied further on supply concerns. Bleak production of Jeera in major producing states has affected the arrival pace. Not only the arrivals are down but also the quality of the crop is questionable that is supporting the rally in jeera prices. Jeera prices have jumped to record level of 55000 and slowly moving towards 60000 due to limited supply of quality produce. About 71.5 thousand tones have been arrived so far in year 2023 since 1st Apr as compared to 69.22 thousand tonnes of previous year. Robust export demand and tighter inventory with millers is prompting them to buy jeera at every dip. India exported about 16.28 thousand tonnes of Jeera in Apr’23 against the 9.94 thousand tonnes of previous year. Jeera July prices are likely to trade in range of 52000-60000 levels.
Dhaniya NCDEX July prices are likely to trade on positive bias due to increased buying at prevailing levels. Export demand has improved that is supporting market sentiments. About 10.68 thousand tonnes of dhaniya was exported in Apr’23 as compared to 3.16 thousand tonnes of the previous year. However, gains in dhaniya are looking limited due to huge supply at physical market. About 236 thousand tonnes of dhaniya has been arrived so far in year 2023 since 1st Apr’23 against the 94 thousand tonnes of prior year. Dhaniya NCDEX July futures are likely to trade in range of 6100-6800.
Gold posted its worst week in over four months, with prices hovering at their lowest levels in 3 months. The metal has suffered a decline of more than 2% last week, primarily due to concerns over aggressive monetary tightening and hawkish messaging from major central banks. During his testimony to Congress, FED Chair Jerome Powell emphasized that the members of the FOMC are in broad consensus that interest rates need to continue rising due to persistently high inflation. This has led to market expectations of another 25 basis point rate increase by the Fed in July, contributing to the downward pressure on gold. Adding to the negative sentiment, the BoE surprised markets by implementing larger-than-expected 50 basis point rate hikes, while the Swiss National Bank raised rates by 25 basis points. Moreover, the labor market in the US showed signs of softening as jobless claims remained at a 20-month high. This raises concerns about the impact of the Fed's aggressive rate hikes on the economy and employment. Overall, the combination of hawkish central bank actions and the potential for further tightening measures has dampened investor sentiment towards gold and contributed to its decline this week. On COMEX, Gold prices are hovering near $1900 levels, a successful break below the level will push prices to $1860 levels, and on the higher side $ 1960 is strong resistance for the counter. Silver may continue to trade with bearish bias and the possible trading range would be 20.880-23.000 levels. Ahead in the week, gold prices on MCX may continue to witness selling pressure and the possible trading range would be 57000-59800, whereas Silver may trade in the range of 65400-70000.
Oil recorded weekly losses of nearly 4% as further monetary tightening and hawkish messaging from major central banks weighed on the global economy and energy demand outlook. The Bank of England and the Norges Bank implemented larger-than-expected interest rate hikes, while the Swiss National Bank continued its policy tightening. Additionally, PMI data from advanced economies indicated a significant slowdown in manufacturing and services activities, negatively impacting market sentiment. Furthermore, the latest EIA data revealed an unexpected decline of 3.8 million barrels in US crude inventories last week, contrary to expectations of a 0.33 million barrel increase. Stocks at the Cushing delivery hub in Oklahoma also decreased by 98,000 barrels. Concerns about a possible recession have resurfaced following the rate hikes by major central banks and the hawkish stance of the Federal Reserve. Higher interest rates raise borrowing costs for businesses and consumers, potentially leading to a slowdown in economic growth and a decrease in oil demand. The anticipation of rate hikes by major central banks has cast a shadow over the fuel demand outlook for the remainder of the year. Ahead in the week, prices of crude oil may continue to witness selling pressure where it may take support near 5390 levels and could face resistance near 5900 levels. Natural gas prices rallied as hot weather persisted, providing a bullish outlook. The scorching temperatures in Texas are anticipated to persist into the following week, with the possibility of extending to the Southwest, further supporting natgas prices. Ahead in the week, prices may continue to trade in the range of 180- 220 where buying near support is advised.
Base metals may trade in range. However, there are some opportunities for investors to buy on dips. The lack of further stimulus news from top consumer China may weigh on the prices. The market is still hoping China would release more measures to boost its economic growth following poor data. China recently unveiled a $72 billion tax breaks package over four years for electric vehicles and green cars lending metals some support. But it is not enough to kick start the economy, because it is not a fire hose. Copper may trade in the range of 710-750 levels. Copper supply concerns are also mounting as mine disruptions continue in key producing countries such as Chile and Peru. These disruptions have led to a decline in global copper output, which is supporting prices. Copper available to the market in LME approved warehouses fell to the lowest level since October 2021 after large amounts of inventory were earmarked to leave the LME system, data from the exchange showed. Zinc can trade in range of 205-225 levels. Lead can move in the range of 180-189 levels. Aluminum may trade in the range of 193-205 levels. Global primary aluminium output in May rose 0.6% year on year to 5.851 million tonnes, data from the IAI showed. Steel long (July) is likely to trade in the range of 45400-47500 levels with weak bias on NCDEX. Global steel demand will likely to decline on weaker offtake by the Chinese construction sector. According to Goldman Sachs, the risk of excess steel supply in China is becoming more and more obvious and a slower recovery in property sales will likely lead to a 5 per cent drop in steel demand.
Cotton prices are likely to trade down on reports of increased area. Reports of rising area under cotton will also keep market sentiments down for cotton. Area of Groundnut is shifting towards cotton due to better return on cotton. Area under cotton surged up by 5% Y-o-Y to 20.08 Lakh Ha across India due to smooth sowing in Gujarat. Kharif sowing is yet to pick up with advancement of monsoon. Cotton MCX July prices are likely to trade in range of 53000-59000. Similarly, Kapas Apr’24 futures are likely to trade in range of 1430-1520.
Cotton seed oil cake NCDEX July futures are likely to trade down due to muted demand in local market. Advancement of monsoon rainfall and increased availability of green fodder is likely to put pressure on prices. Moreover, weakness in relative oil meal prices will also keep buyers away from cotton seed oil cake. Cotton seed oil cake July prices are likely to trade in range of 2450- 2750.
Guar seed July futures are likely to trade higher due to weaker production prospects of upcoming season. Slower progress of monsoon rainfall and increased demand of guar meal is likely to keep market sentiments up for guar. Export demand for gum is also improved that will support firmness in prices. Major focus will be on monsoon progress and price will track sowing progress to decide the further trend. Guar seed prices will trade in range of 5250-5600/5800 in near term wherein Guar gum prices are likely to trade in range of 10000-11500 levels.
Mentha oil July contract is likely to trade sideways to higher with emerging buying in local market. Prices have dropped to multiyear low due to demand concerns. India exported about 708 tonnes of menthol during Apr’23 as compared to 877 thousand tonnes of previous year down by 19% Y-o-Y. However, reports of fall in acreages and increased buying activities will cap the major losses. Mentha oil June prices are likely to trade in range of 880-940.
Castor seed prices are likely to trade mixed to higher on increased buying against limited availability at major trading centers. However, gains will be limited due to higher production and limited export demand of castor oil. Overall Production is estimated at 18.82 lakh tonnes in year 2023 higher by 16% Yo- Y. Castor seed June prices are likely to trade in range of 5200-5900 levels.
It closed at Rs. 5705.00 on 22nd Jun 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 6024.50. On the daily chart, the commodity has Relative Strength Index (14-day) value of 36.388. Based on both indicators, it is giving a sell signal.
One can sell near Rs.5770 for a target of Rs. 5300 with the stop loss of 5980.
It closed at Rs. 217.20 on 22nd Jun 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 206.223. On the daily chart, the commodity has Relative Strength Index (14-day) value of 70.289. Based on both indicators, it is giving a sell signal.
One can sell near Rs. 218 for a target of Rs. 207 with the stop loss of 222.
It closed at Rs. 5727.00 on 22nd Jun 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 5924.88 On the daily chart, the commodity has Relative Strength Index (14-day) value of 42.688. Based on both indicators, it is giving a buy signal.
One can buy near Rs. 5650 for a target of Rs. 5900 with the stop loss of 5550.
NOTE: *M.High / M.Low stands for Monthly High / Monthly Low
In the week gone by, CRB managed to trade near 300 levels as dollar index continued to fall for fourth week; however, it closed in red on weekly basis. Bullion counter declined despite fall in dollar index; silver saw sharp fall as compared to gold. Fed Chair Jerome Powell in his second day of testimony said the U.S. central bank would move interest rates at a “careful pace” from here as policymaker’s edge towards a stopping point from their historic round of monetary policy tightening. Bullions witnessed their biggest weekly drop since February as prospects of additional interest rate hikes by the U.S. Federal Reserve this year weighed on bullion’s appeal. In the energy counter, natural gas and crude oil both were shy to face resistance. Crude oil prices headed for more than 3% drop for the week on worries about the outlook for fuel demand after a bigger-than expected interest rate hike in the UK and warnings about looming U.S. rate hikes. However, U.S. crude stocks posted a surprise draw, helped by strong export demand and low imports, the Energy Information Administration said on Thursday at the same time Gasoline and distillate inventories rose. Copper and zinc prices shed strength from the high and closed the week in red amid a lack of further stimulus news from top consumer China. The global refined copper market had a surplus of 42,000 tonnes in April, compared with a 3,000-tonne surplus the previous month, the International Copper Study Group (ICSG) said. Lead and aluminum traded weak. Steel prices corrected further on bearish triggers and ignored rate cut by China. U.S. jobless claims, meanwhile, held steady at a 20-month high last week, potentially signaling a softening labour market in the face of the Fed’s aggressive rate hikes. Japan’s core consumer prices in May rose 3.2% from a year earlier, data showed on Friday, while manufacturing activity fell back into contraction in June and service sector growth slowed for the first time in seven months.
Castor prices slipped from higher side on commencement of sowing activities and bleak export of castor oil. Cotton oil seed cake prices too witness dip. Isabgol prices appreciated further. Guarseed counter revived from the low. In spices, jeera travelled in unchartered territory supported by aggressive buying in local market. India exported about 16.28 thousand tonnes of Jeera in Apr’23 against the 9.94 thousand tonnes of previous year. Turmeric saw solid gain due to slower monsoon progress in Maharashtra and Telangana that affected the sowing activities. Coriander appreciated marginally on active buying by spices market along with increased exports enquires. Mentha slipped below 900 in many years due to reports of improved crop progress.
Majority of the crops in India are highly dependent on the monsoon. But this year, a sluggish monsoon and extreme weather in many parts of the country have slowed the planting of key kharif crops, which account for half of India’s food output, official data show. The sowing data released on June 16, 2023 show that a dry June is slowly becoming a chronic problem for farmers.
The monsoon, the lifeblood of Asia’s third-largest economy, was 47% below normal between June 1 and 13. It arrived a week late on June 8 in Kerala, its first port in the Indian mainland, and has been slow to advance into the rest of India due to Cyclone Biparjoy in the Arabian Sea.
As on 16.06.2023, the total kharif crops have been sown on 49.48 lakh ha against 97.84 lakh ha during the corresponding period of last year, thus decrease in area coverage by 49.43% compared to last year in the country.
The delay in monsoon progress is likely to affect sowing of paddy and soybean this harvesting season as key producing areas of these major kharif crops face an acute rainfall deficiency in June. Major agricultural states such as Maharashtra, Chhattisgarh, Madhya Pradesh, Uttar Pradesh and West Bengal stare at a rainfall deficiency of 88%, 94%, 77%, 66% and 31%, respectively, this month, according to the India Meteorological Department.
June and July are the two most important Kharif months, particularly for the 61 per cent of farmers who practice rain-fed agriculture. But a comparatively drier June is increasingly causing trouble for farmers. A dry June means the ground moisture levels are not conducive for sowing, and the delay can cripple food production.
The onset of the southwest monsoon, which typically lasts from June- September, has been delayed this year and happened on June 8. The monsoon typically hits the Kerala coast by June 1 and covers the entire country by June 15. Moreover, Cyclone Biporjoy, the very severe cyclonic storm in the Arabian Sea, is also likely to influence the monsoon progress, and rainfall is likely to be weak over peninsular India and several parts of the country.
Government has set the foodgrain production target of 332 MT for 2023-24. However, the sowing of rice has been lower by 14.6%, while the area under pulses is down 57%. The acreage of oilseeds is lower by 14.4% compared to the corresponding period of last year.
Robust output of oilseeds, whose prices hit a peak last year, and pulses are necessary to keep food inflation from rising. The arrival of an El Nino weather pattern that leads to reduced monsoon rainfall has stoked concerns over elevated prices of pulses, a common source of protein for most Indians.
The Dollar Index has surged above 102 due to central banks tightening policies and delivering hawkish messages, causing concerns about the global economy. Investors are seeking safer assets like dollar. Federal Reserve Chair Jerome Powell hinted at further interest rate increases, while the Bank of England implemented a larger-than-expected rate hike, raising worries about the UK's economy. US weekly jobless claims remain high, indicating potential labor market weakness. Currently, the USD/INR pair is consolidating between 81.90 and 82.20, indicating a sideways trend. The support level near 81.72 has acted as a reversal point multiple times. The long-term 200-day moving average around 82.60 adds significance to this support zone. On the monthly chart, USD/INR has been consolidating within a symmetrical triangle pattern for nine months, with the lower trend line aligning with the support zone at 81.72. Resistance is near the 21-day moving average at 82.27.Based on the current chart, the USD/INR suggests a sideways movement between 81.70 and 82.30 in the upcoming session. A break above or below this range could trigger a rally in the respective direction, potentially changing the overall trend. Considering the factors such as the strong dollar, weak yuan, growth outlook, central bank stance, and the sideways trend in USD/INR with strong support, the situation indicates a cautious outlook for the currency pair.
USDINR (JUN)pair is currently in an Sideways trend as trading between its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 82.27. However, the pair is in borderline territory with a Relative Strength Index (14- day) value of 41.19 on the daily chart. Major support is seen around 81.6 levels, while resistance is expected near 82.3 levels.
One can buy near 81.9 for the target of 82.70 with the stop loss of 81.50.
GBPINR (JUN)pair is currently in an Sideways trend as trading between its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 103.74. However, the pair is in borderline territory with a Relative Strength Index (14- day) value of 58.32 on the daily chart. Major support is seen around 103.3 levels, while resistance is expected near 105 levels.
One can sell near 104.5 for the target of 103.5 with the stop loss of 105.
EURINR (JUN) pair is currently in an Sideways trend as trading between its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 89.27. However, the pair is in neutral territory with a Relative Strength Index (14-day) value of 49 on the daily chart. Major support is seen around 88.6 levels, while resistance is expected near 90 levels.
One can buy near 89 for the target of 90 with the stop loss of 88.5.
JPYINR (JUN) pair is currently in an Bearish trend as trading below its major Exponential Moving Average where, the 21-day Exponential Moving Average is around 58.85. However, the pair is in oversold territory with a Relative Strength Index (14-day) value of 25.15 on the daily chart. Major support is seen around 57 levels, while resistance is expected near 58.83 levels.
One can buy near 57.25 for the target of 58.25 with the stop loss of 57.75.
(3/5)
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The company intends to utilize the net proceeds from
the issue towards the funding of the following objects:
Funding incremental working capital requirements of
the company,
Funding capital expenditure of the company,
Repayment/prepayment, in part or full, of certain of the
borrowings,
Achieving inorganic growth through acquisitions, and
General corporate purposes..
Considering the P/E valuation, on the upper end of the price band of Rs.265, the stock is priced at pre issue P/E of 31.82x on FY23 EPS of Rs.8.33. Post issue, the stock is priced at a P/E of 46.41x on its EPS of Rs.5.71. Looking at the P/B ratio at Rs.265, pre issue, book value of Rs. 51.94 of P/Bvx 5.10x. Post issue, book value of Rs. 136.11 of P/Bvx 1.95x.
Considering the P/E valuation, on the lower end of the price band of Rs.250, the stock is priced at pre issue P/E of 30.02x on FY23 EPS of Rs.8.33. Post issue, the stock is priced at a P/E of 43.79x on its EPS of Rs.5.71. Looking at the P/B ratio at Rs.250, pre issue, book value of Rs. 51.94 of P/Bvx 4.81x. Post issue, book value of Rs. 136.11 of P/Bvx 1.84x.
Incorporated in 1993, Cyient DLM Limited provides Electronic Manufacturing Services (EMS) and solutions. The company provides Electronic Manufacturing Services as Build to Print ("B2P") and Build to Specification ("B2S") services. B2P solutions involve clients providing the design for the product for which the company provides agile and flexible manufacturing services. And, B2S services involve designing the relevant product based on the specifications provided by the client and manufacturing the product. Cyient DLM's solutions primarily comprise Printed circuit board ("PCB") assembly ("PCBA"), Cable harnesses and Box builds which are used in safety critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment. The company's client list includes Honeywell International Inc. ("Honeywell"), Thales Global Services S.A.S ("Thales"), ABB Inc, Bharat Electronics Limited, and Molbio 152 Diagnostics Private Limited, and so on. As of March 31, 2023, the company has an order book of Rs. 2432.55 Crore.
Ability to provide integrated engineering solutions with capabilities across the product value chain:The Company is complete, end-to-end integrated EMS and solutions provider with robust capabilities providing both B2P and B2S services. As an integrated manufacturing partner providing ‘design-led-manufacturing’ solutions to its customers, it provides design through the design team of its Promoter and, manufacturing, testing and certification support to ensure that its customers’ products meet robust standards in reliability, safety and performance.
High entry barriers:Its position as one of the few EMS companies in India offering electronics solutions for safety and mission-critical applications in highly regulated industries acts as a significant entry barrier to new entrants.
Robust and industry leading order book with marquee customers:It believes it has built a diverse customer base with marquee clients over 22 years of its presence in the EMS industry. The company has an industry leading order book amounting to Rs. 2432.55 Crore as of March 31, 2023 and a pipeline of prospective projects for which the contracts are currently at various stages of negotiation.
Manufacturing infrastructure, stringent quality, diverse in-house capabilities and robust supply chain:Its operations are currently undertaken through its manufacturing facilities spread across two states and three cities in India, at Mysuru, Hyderabad and Bengaluru, with a total manufacturing area of 229,061 sq. ft.Strengthening its core capabilities across focus industries and building scale:It intends to continue to strengthen its capabilities across the focus industries by continuing to strengthen and expand its existing relationships with its current clients and by acquiring more strategic clients across its focus industries.
To strengthen B2S value proposititon: The company intends to invest in design and enhance its engineering capabilities by strengthening its engineering team, establishing independent design capabilities and building up competence to further bolster its B2S capabilities and bringing in more domain knowledge and expertise in relation to the industries it caters to.
Expanding inorganically to increase its geographic footprint and proximity with clients: The company intends to expand its geographical footprint, including by way of inorganic expansion in key geographies, particularly North America.
Strengthening its supply chain ecosystem and building on its operational efficiency: The company intends to further enhance the efficiency of its manufacturing operations. To this end, the company seeks to leverage the increasing automation in the industry, strengthen its operations and program management teams to focus on better client management and creating stronger client touch points, better understand client requirements and build relationships.
With over two decades of experience in developing high-mix, low-to-medium volume highly complex systems, it is a qualified supplier to global OEMs in the aerospace and defense, medical technology, and industrial sectors. However, the business of the company is dependent on the sale of its products to certain key customers. A significant portion of its revenue from operations is derived from its B2P solutions, and from the manufacture and sale of PCBAs. Also all of its manufacturing facilities are located in southern India. Any disruption in any of its manufacturing facilities may adversely affect its business.
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LIC Mutual Fund (LICMF) is all set to take over the schemes of IDBI Mutual Fund (IDBIMF). IDBIMF has sent a letter to all unitholders of its schemes to this effect. The communication also specifies the proposed change in sponsorship, trusteeship, management, and administration of the IDBIMF schemes. Since these changes are fundamental in nature, as per norms, the unitholders of IDBIMF are also offered an exit option without any exit load. Out of the 20 schemes of IDBIMF, 10 will be merged with schemes of LICMF in the same categories. For example, the IDBI Equity Advantage Fund, an ELSS, will be merged with the LICMF Tax Plan. These 10 include five equity funds, one hybrid, and the remaining debt products. The remaining 10 schemes of the fund house will be transferred to LICMF and renamed. These include two schemes that invest in gold, one hybrid, and the remaining, equity schemes.
DSP Mutual Fund has launched DSP Nifty IT ETF, an open ended scheme replicating/tracking Nifty IT Index. The new fund offer of the scheme is open for subscription and will close on July 3. The performance of the scheme will be benchmarked against Nifty IT TRI. The scheme will be managed by Anil Ghelani and Diipesh Shah. The investment objective of the scheme is to provide returns that, before expenses, correspond to the total return of the underlying index (Nifty IT TRI), subject to tracking errors. The scheme will invest around 95-100% in equity and equity-related securities of companies constituting Nifty IT Index, the underlying index and 0-5% in cash and cash equivalents. “The Indian IT sector has been a consistent performer in the long term thanks to the global competitiveness and edge that they possess which also bodes well for the foreseeable future. Investors looking to benefit from this long-term growth story may consider investing in the Nifty IT index which is interestingly poised after underperforming in the recent past. We believe that at current levels, valuations are approaching average multiples, and many companies in this sector appear financially healthier and relatively cheaper when compared to global IT peers”, says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund.
HDFC Mutual Fund has announced the launch of HDFC Non-Cyclical Consumer Fund that intends to invest across India’s consumption categories with a bottom-up stock selection approach for portfolio construction. The New Fund Offer ( NFO) will open on June 23 and will close for subscription on July 7. The fund will invest in a core of the portfolio (at least 80%) of stocks that represent the non-cyclical consumer theme within the basic industries like Consumer Goods, Consumer Services, Telecom, Healthcare, Media, Entertainment and Publication. The universe for this theme is diverse – with 300+ companies having market caps more than Rs 500 crores. The fund will invest across market cap segments (largecaps, midcaps and smallcaps), and diversify within consumer sectors and sub sectors. Navneet Munot, Managing Director and Chief Executive Officer, HDFC Mutual Fund, said, “As India moves further into Amritkaal, the consumption sector finds itself at an inflection point. Aided by factors such as India’s GDP per capita surpassing US$2000, themes including Demographic Dividend, Premiumization, Formalization, and Digitization which are expected to drive growth in this sector.”
ICICI Prudential Mutual Fund has elevated Manish Banthia as CIO- Fixed Income. Banthia was deputy CIO of fixed income at the fund house. His appointment as CIO of Fixed Income will be effective from June 20 June, as per Notice–cum–addendum to the Statement of Additional Information of ICICI Prudential Mutual Fund. Banthia has nearly two decades of fund management experience in the asset management industry. He joined ICICI Prudential AMC in October 2005. His core competency lies in portfolio management, rates trading and credit research. At ICICI Prudential AMC, he has successfully anchored key roles which include fixed income trading, credit analysis and product development. He also advises Indian Fixed Income Fund domiciled in Japan.
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