Month: January 2021

Markets Nosedived During the Last Weekly Session Ahead of Budget

Maitri Parikh

During the previous week, Nifty witnessed a steep fall, going below the levels of 14,000 and nearing 13,700. The market has remained highly volatile, with Nifty and Sensex countersigning a movement of around 310 and 1,118 points respectively in a single day on 27th January. On 21st January, Sensex crossed 50,000 mark for the first time in the history, to reach 50,184 and touched the lows of 47,270 on 27th January.

Many events have played a major role which has resulted in a highly volatile market. Investors had mixed sentiments due to a mixed corporate results season. They were highly disappointed by the Reliance’s quarterly result, which resulted in sell-off of the script, dragging the markets to its lows. Additionally, monthly F/O expiry also weighed on the markets. Budget has also been one of the main reasons for high volatility. Also, the India’s volatility index has increased from 18 in mid-December to 25 in the last week. The markets have also been witnessing selling pressure from FIIs, and FPIs since a week, due to weak global cues. Additionally, the farmers’ protest which has been going on since last five months, has been having a worse effect on the economic activity of our country, which has impacted equity markets.

Major Economic events such as lower than expected UK’s retail sales, Flash Manufacturing PMI, Flash Services PMI, French Flash Services PMI, US’ crude oil inventories and Durable Goods Orders weighed on the equity markets. However, the losses were limited to some extent, after the investors’ sentiments were lifted a bit after the release of better than expected US’ unemployment claims numbers, Philly Fed Manufacturing Index, Flash Manufacturing and Services PMI, French Flash Manufacturing PMI, German Flash Services PMI and Eurozone’s Flash Services PMI.

As far as sectoral indices are concerned, all the indices were in red during the previous week, with Nifty Metals, Nifty Energy and Nifty Private Bank indices being the worst performers, losing around 6.2% each. Nifty Financial Services, Nifty PSU Banks and Nifty Realty lost more than 5% each, whereas, Nifty Auto, Nifty Pharma and Nifty IT indices fell by more than 1.5% each.

For the upcoming week, the equity market is expected to witness the highest volatility, as compared to past few weeks, ahead of the budget. We expect Nifty to be in the range of 14,662 to 13,000 for the week, whereas, we expect Bank Nifty to be in the range of 31,821 to 27,989.

Page 8, Nav Gujarat Samay Newspaper – 29 Jan 2021

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Precious Metals Witnessed a Volatile Weekly Session

Maitri Parikh

During the previous week in the COMEX market, prices of base metals such as Aluminum, Zinc, Iron Ore, and Lead continued its downward journey for the second consecutive week. However, Gold and Silver witnessed kind of a volatile weekly session, but gold managed to close almost at par, whereas silver gained marginally by 0.3% as compared to the previous week.

During the week, gold and silver reached highs of $1,874 and $26.1 respectively in the COMEX market, as the US President Joe Biden was preparing to be sworn into office as the 46th President and had declared his intentions to inject more stimulus ($ 1.9 trillion) to the country’s economy, which will revive the economic growth. As a result, the dollar index weakened 0.16% to 90.323 while the yield on 10-year Treasuries held at 1.08%. Gold and silver are considered a hedge against inflation and currency debasement that can result from stimulus measures, which explains the rise in the prices. Additionally, increase in new COVID-19 cases in the US and Canada, has also been supporting the prices of precious metals.

However, during the week, the precious metals prices lost all its gains after the COMEX market witnessed major profit booking by the investors in the following trading sessions. Also, the dollar index gained on the back of better than expected economic data for the US economy, such as Unemployment Claims, Building Permits, Housing Starts, Flash manufacturing and services PMI, which further resulted in the fall of precious metals prices.

For the current week, investors will have to keep a watch on certain global economic data such as US’ CB Consumer Confidence on 26th January, 2021, US’ crude oil inventories, FOMC’s statement and Federal Funds Rate on 27th January, 2021, US’ Advance GDP QoQ, Unemployment claims and goods trade balance on 28th January, 2021. Along with these data, development relating to virus outbreak and vaccine progress, trend in US dollar and more clarity on polices from Biden administration may continue to remain key price determining factor for gold and silver.

In the current week, we expect gold in COMEX market to be in the range of $1,912 to $1,787, while silver is expected to be in the range of $26.9 to $23.3. Whereas, as per our prediction for bullion market traders, gold futures will trade in the range of 46,983 to 51,826.


Page 6, Nav Gujarat Samay Newspaper, 26 Jan 2021

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Morning Market Insight Report – 29 Jan 2021

Maitri Parikh

Bank Nifty Intraday Outlook

In yesterday’s trading session, Bank Nifty gained 0.24% after losing in the first session. Private Banks gained 0.17% and PSU banks fell 1.76%.

We expect intraday range could be 29,753-30,808 with sideways to negative momentum & broader range could be expected between 29,451 to 31,108 zone for this week.

Bank Nifty Daily Chart

Nifty Intraday Outlook

In yesterday’s trading session, Nifty closed in red again due to monthly F/O expiry and ahead of Union Budget.

We expect intraday range could be 13,493-14,068 with sideways to negative momentum while broader range could be 13,343 to 14,218.

Nifty Daily Chart

Short and Long term moving averages

Daily Market Statistics

Major global & domestic economic events

Results Calendar

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Morning Market Insight Repot – 28 Jan 2021

Maitri Parikh

Bank Nifty Intraday Outlook

In yesterday’s trading session, Bank Nifty nose dived 2.93%. Private Banks witnessed a steep fall of 3.00% and PSU banks fell 1.52%.

We expect intraday range could be 29,651-30,908 with sideways to negative momentum & broader range could be expected between 29,374 to 31,212 zone for this week.

Bank Nifty Daily Chart

Nifty Intraday Outlook

In yesterday’s trading session, Nifty lost 1.93% ahead of budget and monthly F/O expiry.

The fall was also due to weak global cues and mixed results session.

We expect intraday range could be 13,624-14,313 with sideways to negative momentum while broader range could be 13,451 to 14,466.

Nifty Daily Chart

Short and Long Term Moving Averages

Daily Market Statistics

Major Domestic and Global Economic Events

Results Calendar

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Morning Market Insight Report – 27 Jan 2021

Maitri Parikh

Bank Nifty Intraday Outlook

In Monday’s trading session, Bank Nifty dived 1.35%. PSU Banks witnessed a steep fall of 2.44% and Private banks fell 1.78%.

We expect intraday range could be 30,633-31,726 with sideways to negative momentum & broader range could be expected between 30,342 to 32,015 zone for this week.

Nifty Intraday Outlook

In Monday’s session, Nifty experienced a highly volatile trading session after the drag in the market by Reliance was recovered by an uplift in banking sector.

However, in the second half of the session, after the news of tensions between India and China, the markets again started its downfall and ended in red.

We expect intraday range could be 13,998-14,502 with sideways to negative momentum while broader range could be 13,856 to 14,657.

Daily Market Statistics

Major global & domestic economic events

Results Calendar

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Morning Market Insight Report – 25 Jan 2021

Maitri Parikh

Technical Outlook

Bank Nifty Intraday Outlook

In Friday’s trading session, Bank Nifty nose dived 3.5%. PSU Banks and Private banks lost 3.1% 3.4% respectively.

We expect intraday range could be 30,367-31,743 with sideways to positive momentum & broader range could be expected between 29,984 to 32,178 zone for this week

Nifty Intraday Outlook

In Friday’s trading session, Nifty closed in red, after a highly volatile trading session as the investors booked their profits ahead of a long weekend.

The equity markets are expected to tumble in today’s trading session

We expect intraday range could be 14,072-14,646 with sideways to positive momentum while broader range could be 18,873 to 14,851.

Daily Market Statistics

Major Global and Domestic Economic Events

Results Calendar

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Stove Kraft IPO Note – Brief Overview

Maitri Parikh

Company Highlights

Founded in 1999, Stovekraft manufactures cooking appliances under Pigeon and Gilma brands. Under the “Pigeon” brand, it has 651 distributors in 27 states & 5 union territories & 12 distributors for exports. It has distribution network in countries including USA, Mexico, Kenya, Qatar, Sri Lanka, Fiji, Bahrain, Kuwait.

It has manufacturing facilities at Bangalore (Karnataka) and Baddi (Himachal Pradesh).

Strengths

  • Diversified product portfolio
  • Well connected distribution network
  • Strong manufacturing capability

Strategies

  • Increase geographical reach
  • Scale up branding, promotional & digital activities
  • Expand portfolio in existing product segments
  • Invest in new plants and increase automation in existing manufacturing facilities

Issue Highlights

Valuation

The company is getting listed at a trailing 12M P/E of 34.5, which is below the industry P/E of 58.8.

Utilization of Funds

  • Repayment/pre-payment, in full or part, of certain borrowings (INR 76 Crores)
  • General Corporate Purpose

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Morning Market Insight Report – 22 Jan 2021

Maitri Parikh

Technical Outlook

Bank Nifty Intraday Outlook:

In Thursday’s trading session, Bank Nifty lost 0.8%. PSU Banks and Private banks lost 3.2% 0.7% respectively.

We expect intraday range could be 31,794-32,819 with sideways to positive momentum & broader range could be expected between 31,597 to 33,099  zone for this week.

Nifty Intraday Outlook:

In yesterday’s trading session, Nifty closed in red, after shedding the gains of earlier trading session, when the market rose after the inauguration of Joe Biden as the US President.

Also, investors remained positive on the continued expectations of  additional stimulus package by the US government.

Additionally, better than expected results season has been aiding the gains in equity market.

We expect intraday range could be 14,363-14,814 with sideways to positive momentum while broader range could be 14,212 to 14,952.

Daily Market Statistics:

Major Global & Domestic Economic Events

Results Calendar

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Morning Market Insight Report – 21 Jan 2021

Maitri Parikh

Bank Nifty Intraday Outlook:

In yesterday’s trading session, Bank Nifty gained 0.4%. PSU Banks outperformed by 2.0% and Private banks rose 0.1%.

We expect intraday range could be 32,038-33,019 with sideways to positive momentum & broader range could be expected between 31,848 to 33,243  zone for this week.

Nifty Intraday Outlook:

In yesterday’s trading session, Nifty closed in green  for the second consecutive day, as the traders remained optimistic ahead of Joe Biden’s inauguration as US president.

Traders also remained buoyant on the expectations of new additional massive round of stimulus for the economy by the US economy.

We expect intraday range could be 14,373-14,861 with sideways to positive momentum while broader range could be 14,222 to 15,021.

Daily Market Statistics

Major Global and Domestic Economic Events

Results Calendar

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Indigo Paints Ltd. IPO Note – Brief Overview

Maitri Parikh

Issue Highlights

After its inception in 2000, Indigo Paints – the fifth largest company in the paint industry is all set to smash the dalal street. Being the fastest growing company in the sector, the company has a huge potential to give remarkable equity gains.
The issue includes a reservation of up to 70,000 equity shares for subscription by eligible employees.

Strengths

  • Consistent & fastest revenue growth
  • Differentiated products leading to greater brand recognition
  • Extensive distribution network
  • Expertly located manufacturing facilities
  • Strong brand equity
  • Well-qualified and experienced management team

Valuation

The company reported its EPS at 10.49,bringing the IPO valuation to a P/E of 142 at upper price band, against sector PE of 89.02. Though it is costlier, we are positive towards the issue based on its strengths.

Utilization of Funds

Background highlights of the company in brief

  • Indigo Paints had commenced its journey in the year 2000, manufacturing lower-end Cement paints.
  • The company gradually expanded its range to cover most segments of water-based paints like Exterior Emulsions, Interior Emulsions, Distempers, Primers, etc.
  • As an additional services to its clients, the company also offers ready-made colour combinations for living room, bed room, kitchen, children’s room, bathroom, offices, among others. It also gives an option to try different colour combinations on its website to give visual of the after-effect.
  • Indigo Paints has made its place in the top five players in the paint industry in the country.
  • It is the fastest growing paint companies in India, and is the fifth largest in company in the Indian decorative paint industry in terms of our revenue from operations for Fiscal 2020.
  • Indigo Paints is the first company that started manufacturing some of the differentiated products like Metallic Emulsions, Bright Ceiling Coat Emulsions, Tile Coat Emulsions, Dirt proof & Waterproof Exterior Laminate, Floor Coat Emulsions, Exterior and Interior Acrylic Laminate, and PU Super Gloss Enamel.
  • The company has created an extensive distribution network across 27 states and seven union territories as of 30 Sep 2020, and has installed tinting machines across its network of dealers.
  • As of 30 Sep 2020, the company owns and operates three manufacturing facilities located in Jodhpur (Rajasthan), Kochi (Kerala) and Pudukkottai (Tamil Nadu) with an aggregate estimated installed production capacity of 101,903 KLPA for liquid paints and 93,118 MTPA for putties and powder paints.
  • The company also intends to expand its manufacturing capacities at its facility at Pudukkottai, by adding capacities to manufacture water-based paints to cater to the growing demand for these paints.
  • The proposed installed production capacity of the expansion unit is 50,000 KLPA and it is expected to be operational during Fiscal 2023.

Briefing about directors & key managerial personnel

Briefing Financials

Balance Sheet

Statement of Profit and Loss

Key Ratios

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