The Nifty witnessed a bloodbath on Thursday as Nifty logged a loss of nearly 2% and ended the session below its important psychological mark of 18,000. The price action for the day formed a sizeable bear candle carrying lower high-lower low and closed below the low of October 25th. With Thursday’s sharp fall, Nifty has slipped below the 13-day EMA, 21-day EMA and closed below the 61.8% retracement of the recent up-move from the low of October 01 to an all-time high. The banking benchmark index has tumbled by over 3%. The overall advance-decline was largely tilted in the favour of the decliners. The India VIX has surged by over 6.45%.

Here are the top trading set-ups to watch out for Friday.

Asahi India Glass: The stock has formed a Doji candlestick pattern as on the weekend of March 27, 2020, and thereafter marked the sequence of higher tops and higher bottoms. On Thursday, the stock has given a breakout of a downward sloping trendline resistance on the daily chart. Further, on breakout day the volume was expanded by nearly 18 times of 50-days average volume, which indicates important buying interest. The 50-days average volume was 2.18 lakh while today the stock has registered a total volume of 39.29 lakh. In addition, the stock has formed a sizable bullish candle on breakout day, which adds strength to the breakout.

As the stock is near to its 52-week high, it is trading above all the short and long-term moving averages. The stock is meeting the criteria of Mark Minervini’s trend template. The current stock price is above both 150-day (30-weeks) and 200-day (40-weeks) moving average price lines. Moreover, 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence. Also, the 10-weekly moving average is above both 30 and 40-weekly moving averages.

All the major indicators suggest a bullish momentum in the stock. The weekly RSI is in bullish territory and it is in rising mode. Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the upside, the targets are open towards Rs 448, followed by Rs 480 level. While on the downside, the zone of Rs 398-Rs 387 will act as strong support for the stock.

ABB India: On Thursday, the stock has given a 41-days consolidation breakout on the daily chart. This breakout was supported by robust volume. Currently, the stock is trading above its short and long-term moving averages. These averages are in the desired sequence, which suggests the trend is strong. Interestingly, the daily RSI has broken out of inverse head and shoulders, which is a very bullish sign. The weekly RSI is in the super bullish zone and it is in rising mode. The daily MACD stays bullish as it is trading above its zero line and signal line. The histogram is suggesting a pickup in upside momentum. Moreover, the surge in +DI is suggesting that the trend will strengthen further.

Considering all the above factors, we believe the will continue its northward journey. On the upside, the level of Rs 2066 will act as minor resistance for the stock. While on the downside, the 20-day EMA will act as strong support for the stock.

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Activity on the F&O market for the weekly expiry on November 3, 2021, shows 18,000 will act as strong resistance now.

The Indian equity market remained one of the worst-performing markets globally yesterday. This was led by weak global cues along with monthly F&O expiry. Frontline equity index Nifty 50 saw a fall of 2%, the highest fall since April 2021. In terms of sectoral indices Bank Nifty fell by almost 3%. FIIs continued their selling spree and have sold equity worth Rs 10,000 crore in the last five trading sessions.

Activity on the F&O market for the weekly expiry on November 3, 2021, shows 18,000 will act as strong resistance now. The highest put writing was seen at strike price of 17000 (20,552 contracts added on October 28), followed by 17,500 (17039 contracts added on October 27), while there was put unwinding at strike price 18200 (3324 contracts shed), followed by 18,250 (1026 contracts shed). Highest total put open interest (31010) stood at a strike price of 18,000. Although Nifty is trading below this level, it is likely that in the next few trading sessions market is likely to move towards the 18,000 level. This is followed by a strike price of 17,000, which saw a total put option of 27,767 contracts, while a strike price of 17,500 has 27,363 contracts in open interest.

In terms of overall open interest on the call option side, maximum open interest stood at strike price of 20000. Total call open interest of 67256 contracts stood at a strike price of 20,000. This was followed by a strike price of 18000 where 50374 contracts were added in open interest.

Following table shows the difference in open interest between call and put options at the different strike prices.

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Tata Power Ltd has reported a 36% increase in year-on-year net profit for the second quarter ended September, helped in lower finance costs and an uptick in its renewable energy business.

Consolidated profit after tax rose to Rs 506 crore for the July-September period from Rs 371 crore a year earlier, the private-sector electricity producer said. Consolidated revenue went up by 13% to Rs 9,502 crore from 8,428 crore.

The Tata Group company said its consolidated earnings before interest, tax, depreciation and amortisation fell to Rs 1,732 crore from Rs 2,276 crore in the corresponding quarter last year.

EBITDA fell mainly due to higher losses at its Mundra power project on account of higher coal prices, but this was offset at the net profit level by earnings at coal mines.

The bottom line was boosted also by an 11% drop in finance costs to Rs 946 crore from Rs 1,065 crore.

Tata Power also said that while the cost of fuel, mainly coal, was up 17.2%, on a year-on-year basis, the cost of power purchased was up 61%, more than offsetting the former. 

Tata Power’s numbers come as the country is facing an acute shortage of coal, and rising price of spot power. Both the government and industry say that the shortage is likely to persist at least for the next six months.

Shares of Tata Power closed 2.7% lower at Rs 218.05 apiece on the BSE on Thursday. The shares have lost almost a fifth of their value since touching a one-year high on October 19. However, the shares are still up fourfold over the past year.

Tata Power Q2: Other highlights

1) Revenue from the transmission and distribution segment jumped 48% year-on-year to Rs 6,787.4 crore.

2) Revenue from the power generation segment fell 36% YoY to Rs 2,216.9 crore.

3) Revenue from the renewable energy segment rose 35% to Rs 1,494.9 crore from Rs 1,105.6 crore a year ago.

Tata Power management commentary

The company said that its strong performance was thanks partly to its transmission and distribution segment, which benefitted from the surge in domestic power demand.

Its power generation business suffered due to reduced run time as thermal power stations across the country faced a coal shortage during the quarter.

Tata Power chief executive officer and managing director Praveer Sinha said the company aims to scale up its renewable energy business towards its 2030 target. “Clean energy currently makes up 32% of Tata Power's portfolio. This is expected to touch 80% by 2030,” Sinha said. 

Sinha said all business divisions and subsidiaries reported strong results and that consolidated financial performance was “exceptionally strong” on the back of robust underlying business performance. 

“Our focus continues to remain towards the expansion of our renewable and distribution businesses and go green strategy in our existing generation business,” he added.

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Leading industrial and automotive supplier, Schaeffler India announced that its board has approved results for the quarter ending on September 30, 2021. The board also approved a stock split and target dividend payout ratio.

Total revenue from operations for Q2FY22 was Rs 1,487.6 crore, higher by 32.7% than the corresponding quarter of the previous year and 20.7% higher than the preceding quarter. Profit before tax (before exceptional items) for the quarter was Rs 229.6 crore, which happened to be 50.3% higher than the corresponding quarter of 2020 and 34.6% higher than the preceding quarter. PBT margin for the quarter stood at 15.4%, against 13.6% during the corresponding quarter of 2020. Net Profit for the quarter was Rs 170.8 crore while the margin for the quarter stood at 11.5%.

To quote, Harsha Kadam, Managing Director of Schaeffler India from a filing with the exchange, “This is our fourth consecutive quarter showing a strong performance. The performance demonstrated during the first half of the year further improved in the third quarter, despite significant input cost pressures. Our business divisions – automotive technologies, automotive aftermarket and industrial have delivered resounding performance and further consolidated our position of being the preferred technology partner. However, we do see some headwinds due to the global chip shortage and the resultant supply chain disruptions, which we are monitoring closely. Our continued focus on countermeasures and deeper customer engagements have yielded impressive results.”

The Board of Directors approved a subdivision of each equity share of the face value of Rs 10 per share into five equity shares of the face value of Rs 2 per share, subject to the approval of the shareholders. The 5 for 1 stock split will see existing shareholders issued with five new shares, in lieu of every one share they currently own. The rationale behind the stock split is to encourage wider participation of investors and to improve the liquidity of the equity shares in the stock market.

The Board of Directors also approved the target dividend payout ratio of 30%-50% of the annual standalone profits after tax (PAT) to be announced by the company from time to time, subject to the applicable rules and regulations. The company has adopted a progressive dividend policy, intending to sustain or raise the dividend each year, in conjunction with the financial performance and free cash flow generation each year. The company shall endeavour to consider a total dividend payout ratio as indicated above subject to the circumstances and scenarios mentioned in the dividend distribution policy.

Schaeffler India’s share price rallied 4% during early market hours on Friday, 29 October 2021.

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Shares of CarTrade Tech plummeted by more than 5% to touch an intra-day low of Rs 1,155 per share on the bourses on Friday, 29 October 2021.

One of India’s largest online auto platforms, CarTrade Tech Limited recently declared its standalone and consolidated financial results for the quarter and half year ended September 30, 2021. Total revenue for Q2FY22 stood at Rs 88 crore, as compared to Rs 63 crore in the same period last year. Adjusted EBITDA in Q2FY22 stood at Rs 24 crore, as compared to Rs 18 crore during H1FY21. The adjusted EBITDA margin for Q2FY22 was 28%.

Total revenue for the half-year ended September 30, 2021, stood at Rs 150.75 crore, showing a growth of 46%, as compared to Rs 103.26 crore in the same period last year. Adjusted EBITDA in H1FY22 stood at Rs 33 crore, showing a growth of 104% as compared to Rs 16.18 crore in the corresponding period. Adjusted EBITDA margin stood at 22% in H1FY22 as compared to 16% in H1FY21.

An exceptional and non-recurring, non-cash adjustment of Rs 93 crore for employee stock options granted in FY21 has been accounted for, resulting in a net loss after tax for H1 FY22 of Rs 81 crore (net loss before tax of Rs 75 crore) for H1FY22 as compared to a net profit after tax of Rs 64 crore (net profit before tax of Rs 0.75 crore) for H1FY21.

CarTrade Tech received over 34 million average monthly unique visitors for Q2FY22, of which 86.68% was organic. This was a growth of over 34% over Q2FY21. The number of vehicles listed for auction were 3,00,671 for Q2FY22. This was a growth of over 73% over Q2FY21. The number of vehicles sold via auction were 63,533 for Q2FY22. This was a growth of over 104% over Q2FY21. In Q2FY22, the company successfully launched CarWale abSure in nine cities. CarWale abSure will deliver a world-class online-offline shopping experience for used car buyers and sellers.

CarTrade Tech Ltd is a multi-channel auto platform with a presence across vehicle types and value-added services. The brand’s platforms operate under several brands: CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz. These platforms enable new and used automobile customers, vehicle dealerships, vehicle OEMs and other businesses to buy and sell their vehicles in a simple and efficient manner.

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