5 best swing trading ideas for the week
5paisa research provides investors with the best short-term and long-term investing ideas. Every morning we offer 5 best stocks to buy, in the afternoon we provide five best buy today and sell tomorrow (BTST) ideas, while at the beginning of every week we provide five best swing trading ideas. We regularly update our success rate and issue special commentary during special market events.
Swing Trading is a kind of fundamental trading strategy where positions are held for more than a single day. Since corporate fundamentals generally require several days or even a week to cause sufficient price movement to render a reasonable profit, most swing traders are also considered fundamentalists as well.
Some others also explain swing trading as a trading strategy in the middle of day trading and trend trading. While day traders hold stocks not more than a day the trend trader holds stocks as for a week or even a month or months based on fundamental trends. Swing traders trade in a particular stock based on intra-week or intra-month oscillations between pessimism and optimism.
Here is the list of 5 best swing trading strategies for the week
HLE GLASSCOAT (HLEGLASS)
Current market price: 5175
Stop loss: 5040
Target 1: 5350
Target 2: 5520
Reason: Strong volumes seen for HLE Glass share
AVENUE SUPERMARTS (DMART)
Current market price: 4240
Stop loss: 4100
Target 1: 4430
Target 2: 4600
Reason: Momentum is positive for DMART share
TATA ELXSI (TATAELXSI)
Current market price: 5491
Stop loss: 5135
Target 1: 5650
Target 2: 5800
Reason: Further buying is expected for Tata Elxsi share
VENKEY'S INDIA (VENKEYS)
Current market price: 3060
Stop loss: 2975
Target 1: 3130
Target 2: 3250
Reason: Sideways move is likely to end for Venkey’s India share
DCM SHRIRAM (DCMSHRIRAM)
Current market price: 1037
Stop loss: 1000
Target 1: 1065
Target 2: 1110
Reasons: Uptrend is expected to start in DCM Shriram stock
Will Puranik Builders be third time lucky as it files for IPO again?
Real estate developer Puranik Builders Ltd has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO).
The IPO comprises a fresh issue of shares worth Rs 510 crore and an offer for sale of up to 9.45 lakh shares by the company’s promoters, according to the DRHP filed with the capital markets regulator.
The offer for sale involves Ravindra Puranik and Gopal Puranik divesting up to 4.725 lakh shares each.
The Mumbai-based developer may also consider a pre-IPO placement to raise as much as Rs 150 crore. If it does so, it will reduce the amount to be raised via the fresh issue of shares in the IPO.
The company plans to use the fresh proceeds to repay loans and for other general corporate purposes.
Elara Capital (India) Pvt. Ltd and YES Securities (India) Ltd are the merchant bankers managing the issue.
This is the company's third attempt to go public. The company had first approached SEBI for IPO approval in June 2018. It filed its DRHP again in November 2019 and even received regulatory clearance to launch the offering but didn’t follow through with its plans.
Puranik Builders’ business
The company has been operating for three decades. It develops housing projects in the mid-income affordable segment in the Mumbai Metropolitan Region and Pune Metropolitan Region.
As of July 31, 2021, it had developed almost six million square feet of space across 35 completed projects in the two regions.
It also had 23 ongoing projects with an aggregate developable area of 14 million square feet with ticket sizes ranging between Rs 47.3 lakh and 1.25 crore in the MMR and between Rs 34.1 lakh and Rs 97.2 lakh in the PMR for mid-income affordable housing segment. The ticket size ranged from Rs 11.5 lakh to 34.2 lakh for low-income affordable housing segment.
In addition, it has 17 forthcoming projects with an aggregate estimated developable area of 13.6 million square feet.
The company develops most of its projects through joint development or joint venture arrangements with land-owners. As of July 31, it had carried out 32 projects on its own and 43 projects through the joint venture model. The company also has a land bank of 70.09 acres.
Puranik Builders’ finances
The company’s total income fell to Rs 513.56 crore for 2020-21 from Rs 730.24 crore and Rs 721.23 crore for the previous two financial years, as sales were affected because of Covid-19 and measures to tackle the pandemic including lockdowns.
“Due to the nationwide lockdown and inability to conduct site visits, sales enquiries from prospective customers that typically follow site visits were significantly affected,” the company said.
Similarly, its net profit for 2020-21 dropped to Rs 36.3 crore from Rs 51.23 crore for 2019-20 and Rs 71.27 crore the year before.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for 2020-21, 2019-20 and 2018-19 were Rs 164.27 crore, Rs 192.29 crore and Rs 209.26 crore, respectively. The EBITDA margin came in at 32.71%, 26.68% and 29.26% for the last three years.
For the four months ended July 31, 2021 it clocked a net profit of Rs 17.5 crore and EBITDA of Rs 51.3 crore on total income of Rs 191.13 crore.
Zee Entertainment to merge with Sony. All you want to know
India may have just got its biggest entertainment deal yet. The beleaguered Zee Entertainment Enterprises Ltd has got a saviour, with the Indian subsidiary of the Japanese media and electronics giant Sony Corp agreeing to merge the company with itself and taking a majority stake.
As part of the deal, which the Zee board has approved in principle, Sony Pictures Networks (SPN) India will effectively hold a 52.93% stake in the merged entity. The remaining 47.07% will remain with Zee shareholders.
The deal announcement propelled Zee’s shares higher by 25% to as much as Rs 319.50 apiece on the BSE. The shares later cooled off a tad to Rs 302.40 apiece, valuing the company at Rs 29,000 crore.
What exactly is Sony getting in the deal?
All assets owned by Ze including the entertainment TV channels it owns, its OTT platform Zee5, its catalogue of TV and online programmes and movies, and its film studio Zee Studios. These will be controlled by the merged entity.
The merged entity will also house Sony’s TV channels (75 in all), the OTT platform Sony LIV, Sony Pictures Films India and Studio NXT, which makes digital content.
The new entity will effectively own the biggest suite of entertainment content services in India, bypassing Disney India and Star India.
Why is Sony the majority owner here?
This is because SPN India, Sony’s India entertainment arm, is investing an additional $1.575 billion or Rs 11,615 crore, to capitalise the merged entity. This money will allow the new entity to grow its business further.
Had Sony not infused more cash, Zee shareholders would have held a majority stake with 61.25% shares.
What did Zee’s board of directors say about the merger?
Zee’s board said the “merger will be in the best interest of all the shareholders and stakeholders”. The board also said that the deal is in line with Zee’s strategy of achieving higher growth and profitability as a leading media and entertainment company across South Asia.
Who will head the merged entity?
Zee managing director and chief executive officer Punit Goenka will head the combined company for five years. This is significant because a group of Zee’s institutional investors led by Invesco had been demanding his ouster.
It is unclear if Sony India chief NP Singh will continue to be a part of the merged entity or will move on to another role.
How much stake does Zee’s promoter family own? What can they now do?
The existing promoter family of Zee, including Goenka and his father Subhash Chandra, currently own barely 4% stake in Zee Entertainment.
However, as per the deal with Sony, they will have an option to increase their shareholding to as much as 20% in the normal course of business.
Who will have a majority on the board?
A majority of the board of directors of the merged entity will be nominated by Sony Group.
What happens to Zee’s news business?
The news business is not part of the merger deal and remains under Zee Media Corp, which is controlled by Subhash Chandra’s Essel Group.
However, media reports this week speculated that Zee Media could be on the radar of billionaire Gautam Adani, India’s second-richest man who has announced his group’s entry into the media business.
Check out the mid-cap stocks where FIIs have sold shares
The Indian stock market’s rapid rise to record highs has made several foreign institutional investors (FIIs) more cautious over the past couple of months. As a result, there has been a rush of money towards large-cap counters as investors look for safer bets rather than chasing the riskier mid- and small-cap stocks.
Indeed, FIIs have dumped a clutch of mid-cap stocks over the last few months. Quarterly shareholding data show they cut their stake in as many as 54 listed companies that currently have a valuation between Rs 5,000 crore and Rs 20,000 crore or are presently included in the mid-cap index.
Also Read : Why did FIIs Invest Rs.16,300 crore in September?
A sector-wise analysis shows such stocks are spread across several industries. However, some sectors like financial services and hospital chains stand out.
Top mid-caps where FIIs cut stake
The largest mid-caps that saw offshore portfolio investors turn particularly bearish during the three months ended June 30 include diagnostics chain Thyrocare, Jubilant Ingrevia, Granules, Escorts, PVR, Hinduja Global, Just Dial, Rain Industries, Easy Trip Planners and Ceat.
In all these mid-cap stocks FIIs cut their holding by 3% or more.
To be sure, FII stake shrank the most in Poonawalla Fincorp (previously Magma Fincorp). Their stake skid 13.5% last quarter, but this had to do with fresh capital infusion by the new promoters rather than any actual selloff.
Interestingly, FIIs’ stake in at least two companies fell just ahead of separate deals where those firms are being acquired by other companies. For instance, Thyrocare is being bought by online medicine delivery company PharmEasy. Similarly, Just Dial is being acquired by Reliance Industries. While the Thyrocare deal was announced in late June, the Just Dial transaction was unveiled in July.
Other mid-caps that saw FIIs slash holding
FIIs cut their stake by two-three percentage points in around half a dozen mid-caps last quarter. These include gold finance company Manappuram Finance, drugmaker Natco Pharma, diversified financial services firm Edelweiss, Heidelberg Cement, Sunteck Realty, auto component maker Mahindra CIE and CCL Products.
Many mid-caps that command a market value of Rs 10,000 or more also saw FIIs selling less than a 2% stake. These companies include broadcaster Sun TV, Sanofi India, developer Prestige Estates, Apollo Tyres, UTI Asset Management, power utility CESC, Galaxy Surfactants, City Union Bank, Redington, and Mahanagar Gas.
Hospital chains Aster DM Healthcare and Narayana Hrudayalaya also lost favour among FIIs. Fortis, which now commands a market value just over Rs 20,000 crore assigned for a mid-cap firm, is another top hospital chain that saw FIIs turn bearish on its counter.
Tata Chemicals, L&T Finance, Minda Industries, Happiest Minds Technologies, M&M Financial, Zee Entertainment and Endurance Technologies are other such firms that are still seen as a mid-cap even though their current market cap is above the threshold. These companies, too, reported a fall in their FII shareholding.
Defence electronics firm Data Patterns files for IPO. Find out more
Data Patterns (India) Ltd, a Chennai-based supplier of electronic systems to defence and aerospace sectors, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO).
The IPO comprises a fresh issue of shares worth Rs 300 crore and an offer for sale of 60.7 lakh shares by promoter and individual selling shareholders. The OFS includes the sale of up to 19.7 lakh shares each by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. Sudhir Nathan, GK Vasundhara and other existing shareholders will sell the remaining shares.
As per market sources, the overall IPO size is expected to be Rs 600-700 crore.
The company plans to use the net proceeds from the fresh issue to repay debt, fund its working capital, and upgrade and expand its existing facilities.
The defence electronics company may also consider a pre-IPO placement aggregating for up to Rs 60 crore. If it does so, it will reduce the amount from the fresh issue, according to the DRHP.
Data Patterns’ IPO comes close on the heels of another defence component supplier hitting the public markets with its IPO. Paras Defence and Space Technologies Ltd’s IPO opened Wednesday and has already been subscribed nearly 40 times with more than a day to go before the bidding closes.
Data Patterns’ business and financials
Data Patterns was founded by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. The defence and aerospace electronics systems provider’s core competencies include design and development across electronic hardware, software, firmware, mechanical and product prototype, besides its testing, validation and verification.
The company’s product portfolio ranges from building blocks to end systems. Its involvement has been found across radars, underwater electronics, communication and other systems, electronic warfare suites, avionics, small satellites, automated test equipment, and programmes catering to Tejas Light Combat Aircraft, the BrahMos missle and other communication and electronic intelligence systems.
Data Patterns had developed the first nano satellite, NiUSAT, which deployed in 2017. Two more satellites are in progress, the company said.
Data Patterns works closely with state-run defence companies such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd as well as government organisations involved in defence and space research like the DRDO.
The company’s order book has grown at a compound annual pace of 40.72% over the last four years. As on July 31, 2021, it had orders worth Rs 582.30 crore in hand.
For 2020-21, the company’s revenue from operations was at Rs 226.55 crore as against Rs 160.19 crore for the previous year. Net profit jumped to Rs 55.57 crore from Rs 21.05 crore.
Data Patterns is backed by Florintree Capital Partners LLP, an investment firm run by former Blackstone executive Matthew Cyriac. Florintree holds a 12.8% stake in the company.
IIFL Securities Ltd and JM Financial Ltd are the book running lead managers to the issue.
Sansera Engineering lists at 9% premium after mixed IPO show
Sansera Engineering Ltd, which makes components for automotive and aerospace companies, made a positive stock market debut on Friday as its shares listed at a 9% premium to its initial public offering (IPO) price.
The company’s shares listed on the BSE at Rs 811.35 apiece, up from the issue price of Rs 744. The shares touched a high of Rs 842 apiece before paring the gains to trade around Rs 829.65 around 10:30 AM.
The company now commands a market valuation of around Rs 4,262 crore.
The BSE’s 30-stock benchmark was up 0.5% in morning trade and crossed the 60,000-mark.
Sansera is the third company to list on the bourses this month, after the September 14 debut of speciality chemicals maker Ami Organics Ltd and Vijaya Diagnostic Centre Ltd.
Ami Organics had listed at a 48% premium and while the Hyderabad-based pathology chain’s shares had begun trading at a premium of barely 2%. However, both have charted different paths since then. While Vijaya Diagnostic’s shares are up 9% from the IPO price, shares of Ami Organics have jumped 117% in just eight trading sessions.
Sansera’s debut comes after its IPO received a lukewarm response from retail investors even though the overall issue sailed through easily. The IPO was covered 11.5 times, thanks mainly to strong interest from qualified institutional buyers (QIBs).
The QIB portion was subscribed 26.5 times, as they bid for more than 9 crore shares. Non-institutional investors, which include corporate houses and high-net-worth individuals, bid for 11.4 times the shares reserved for them.
The quota reserved for retail investors was covered only about 3.15 times.
Sansera’s IPO involved a sale of 1.7 crore shares by its promoters and Rohatyn, a private equity firm. This included about 51 lakh shares that anchor investors bought a day before the IPO opened for public bidding.
The overall IPO size is Rs 1,280 crore at the upper end of the Rs 734-744 price band.
The company had earlier attempted an IPO in 2018-19. It had filed its draft proposal in August 2018 and received regulatory nod in November that year. However, it deferred its IPO owing to stock market volatility.
Sansera began operations almost 40 years ago. It makes components for automotive and aerospace clients that include Bajaj Auto, Yamaha, Honda Motorcycle and Maruti Suzuki.