BTST stock ideas: September 1
5paisa analysts bring the best intraday, short-term and long-term ideas for you. In the morning we provide best momentum stocks to buy or sell, while in the last trading hour we provide buy today sell tomorrow (BTST) ideas.
Here are the two BTST ideas for today
Following are the strategies:
Current Market Price (CMP): 378
Stop Loss (SL): 368
Target Price (TP): 397
Real-estate sector is moving
Holding Period: buy today sell tomorrow
CENTURY TEXTILES (CENTURYTEX)
Current Market Price (CMP): 819
Stop Loss (SL): 811
Target Price (TP): 840
Stock is coming out of consolidation
Holding Period: buy today sell tomorrow
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Flipkart co-founder’s Navi set for 10 passive mutual fund offerings
Navi Mutual Fund, which is part of Flipkart co-founder Sachin Bansal’s financial services group Navi, has filed to launch ten new passive funds, as per documents filed with the Securities and Exchange Board of India (SEBI).
These would top up the maiden offering, Navi Nifty 50 Index Fund, which launched a new fund offering (NFO) in July. This is one of the cheapest index funds in the market.
The new funds for which the company has filed applications are Navi Nifty Next 50 Fund, Nifty Midcap 150 Index Fund, Nifty Smallcap Index 250 Fund, Navi Nifty 100 ESG Index Fund, Navi Nifty Bank Index Fund, Navi Nifty Commodities Index Fund, Navi Nifty IT Index Fund and Navi Nifty Pharma Index Fund. It has also filed for two US-focussed vehicles—Navi NASDAQ 100 Fund of Fund and Navi Total US Stock Market Fund of Fund.
All these are passive funds that trace the movement of an existing underlying index and does not involve a separate fund manager making investment calls. As a result, such funds are offered with negligible fee structures.
The international funds will give local investors an exposure to existing funds of global passive investments fund giant Vanguard. Interestingly, Vanguard had invested in Flipkart much before the Indian ecommerce major was acquired by Walmart three years ago.
Bansal had co-founded Flipkart and is its former CEO. He sold his stake in Flipkart after Walmart bought the company. He is now building a neo-financial services empire and has struck a string of deals, including the acquisition of Essel Mutual Fund earlier this year.
In July 2021, Navi MF had launched the Navi Nifty 50 Index Fund, which became the cheapest index fund in the mutual fund industry.
To be sure, Navi is not the only new player in town. A bunch of others are looking to enter the fund management business lured by the monetary liquidity in the country.
These include NBFCs such as Bajaj Finserv, discount broker Samco Securities, mutual fund distributor NJ India and a bunch of portfolio management services firms such as Capitalmind, Helios, Alchemy and Unifi. Another player is White Oak Capital Management, which had acquired YES Mutual Fund a year ago.
Nearly 18 unicorns could follow Zomato’s footsteps and float IPOs. Find out more
If the stellar Rs 9,375 crore initial public offering of food delivery company Zomato left you impressed, wait for more.
A recent report by the investment banking arm of Bank of America says that as many as 18 Indian unicorns may be on their way to joining India’s IPO rush over the next 18-24 months. These 18 unicorns could raise as much as $11-12 billion thanks to the ample liquidity and the rush of retail investors, who have been driving the ongoing market rally, Gaurav Singhal, managing director of investment banking at Bank of America, told the Press Trust of India.
Soonicorn, unicorn, decacorn
A unicorn is a startup that is valued at $1 billion or more. If a unicorn breaches the $10 billion mark, it is called a decacorn. A tech startupthat is on its way to becoming a unicorn is called a ‘soonicorn’.
How many unicorns does India have?
India has around 60 unicorns, with more than two dozen joining the list this year alone. Several reports, including one by Credit Suisse, say that the number of unicorns in India could cross the 100-mark this year, considering the amount of funding they are attracting.
So, which unicorns could float IPOs?
At least five unicorns have already filed for IPOs. These are Paytm (Rs 16,600-crore issue), Ola (Rs 11,000 crore), Policybazaar (Rs 6,000 crore), Nykaa (Rs 4,000 crore) and Freshworks, which filed for a $100 million IPO on the Nasdaq.
Several other marquee names including Flipkart, Byju’s, and Oyo could tap the capital markets in coming years.Others on the list include Grofers, Pinelabs, Pharmeasy, Droom, and Delhivery.
Many other tech startups that aren’t unicorns have also filed for IPOs. While CarTrade and gaming firm Nazara have already gone public, Tracxn and Mobikwik have also submitted their draft IPO documents.
Why the sudden rush?
Singhal attributes the surge in fund inflows into startups to the digital transformation that has disrupted everything in the wake of the coronavirus pandemic. He says that the pandemic-induced lockdowns have driven this rally, and that this along with the huge market potential for these companies has caught the attention of global investors.
Investors are looking for some sparks in new companies as they sit on a massive amount of capital. On top of this, India is a global growth story. Thus, lots of global funds and investors are chasing assets, he said.
But is there a significant potential for growth?
Singhal certainly thinks so. He says that in India, the internet companies do not even control 1% of the $3.4 trillion domestic equity market. In the US, the internet ecosystem dominates with 40% of the market capitalisation.
Maruti, Mahindra car sales slip, Honda an outlier but chip shortage a worry
In the first half of 2020, when the entire country went into a nationwide lockdown, automobile sales slumped to nearly zero as dealerships shut down and even factories had to stall or cut back on production.
Once the lockdowns lifted, it looked like India’s automobile industry will be able to bounce back as economic activity started picking up again.
While that did happen, during the second half of 2020 and during the first half of this year, latest data show that vehicle sales in August again took a beating as a worsening global chip shortage has forced automobile manufacturers to cut production.
Maruti cuts production
Factory output numbers released Wednesday show that Maruti Suzuki India, the country’s largest carmaker, reported a 19 per cent decline in total sales at 130,699 units in August, as against 162,462 units in the previous month.
The Business Standard newspaper said in a report that Maruti has announced an up to 60 per cent cut in production this month after Bosch – one of its largest chip suppliers – shutdown its factory in Malaysia owing to the pandemic.
Mahindra, Bajaj Auto
But the Gurgaon-headquartered Maruti is not the only carmaker that has had to take a steep production cut. Data put together by Business Standard shows that Mahindra & Mahindra and Bajaj Auto reported a drop of more than 23% and 8%, respectively, in August sales compared with July. Toyota reported a fall of about 2%.
Honda, Hero, Tata sales rise
To be sure, not all companies have had to go in for production cuts, at least not yet.
Figures show that Honda’s car and two-wheeler sales rose in August. In particular, Honda’s car sales jumped 84% to 11,177 units in August from 6,055 units in July.
Hero Motocorp and Tata Motors also saw their sales rise in August. Tata Motors sold 28,018 vehicles in August, up 51%from a year earlier but down 7% from July.
Citing auto dealers, the Business Standard report said that the semiconductor shortage, owing to coronavirus-induced lockdowns in countries like Malaysia, could result in sales dropping by about 30% during the upcoming festival season. Generally, the festival season accounts for a third of the yearly sales for most dealerships.
The semiconductor shortage could mean that dealerships would be considering a maximum of 30-day inventory during the Diwali-Navratri season this time, as against the usual 45-60 days.
The Society of Indian Automobile Manufacturers, the industry lobby group, has asked the foreign ministry to intervene so as to ensure that when semiconductor plants do reopen, Indian manufacturers are prioritised.
Bullish on economic cycle but not on market cycle in near term: Jefferies MD
India’s growth outlook is looking better but one has to differentiate between the economic cycle and the market cycle, according to Mahesh Nandurkar, managing director of institutional brokerage firm Jefferies.
“I am very bullish on the economy. The economic revival is just around the corner. We are already going through it,” he said.
However, he added a rider. “I just believe that the economic cycle and the market cycle have to be differentiated. So, while I am very bullish on the economic cycle, I am not so bullish on the market cycle at least in the near term,” he said in an interview with The Economic Times.
Stock market rally
Nandurkar said the unidirectional movement in the market has not been observed in the past and reflects the coordinated efforts of all the global central bankers.
“I feel that the longer the market runs in this unidirectional manner, greater are the chances of the type of correction that you talked about,” he said.
Capex cycle and bank lending
Nandurkar said he believes the housing market revival will eventually lead to a broader capex revival as well and there is already some initial movement on the infrastructure side as certain industries like steel are driving the capex.
“It will take two to four quarters for the broader capex cycle to be seen but we are seeing some initial signs of it,” he added.
Given the current valuations of many large private banks in India they are a better bet on the risk-reward parameter to take advantage of the capital expenditure revival in the economy, said Nandurkar.
According to him, the smaller non-banking financial companies and banks will probably give better returns. But they are not completely out of the woods in terms of the asset quality question marks. At the same time, the large banks are still trading at reasonable valuations.
“So, from the risk-reward perspective, large private-sector banks are best in my view. Within the broader banks and financials space, the non-lending part and especially the insurance side is also looking pretty attractive,” he said.
Devyani, four others gain but CarTrade, four others fall after August IPOs
Indian companies have been rushing to launch initial public offerings in 2021, and there are more to come over the next few months. In September alone, almost a dozen companies could float their share sales. But amid all this euphoria, how have companies that listed on stock exchanges last month performed?
Overall, at least 20 companies have gone public since April this year and raised around Rs 45,000 crore through IPOs. In August, 10 companies made their trading debuts, and the list of winners and losers is divided equally. Of these, three companies were from the healthcare sector—Glenmark Life Sciences, Krsnaa Diagnostics and Windlas Biotech—seeking to take advantage of the bullish sentiment in the wake of the Covid-19 pandemic.
The other companies that listed in August were KFC chain operator Devyani International, Rolex Rings, Exxaro Tiles, CarTrade, Chemplast Sanmar, Nuvoco Vistas and Aptus Value Housing Finance. All these IPOs were oversubscribed. In particular, Krsnaa Diagnostics and Devyani International attracted huge response to their offerings.
Analysts say excess supply and stretched valuations are among the factors that pulled shares of several companies down. Here’s a quick check on who gained and who didn’t since the listing.
Devyani and other winners
Devyani International Ltd, which operates Pizza Hut, KFC and Costa Coffee chains in India, had surged 37% on its debut against its issue price of Rs 90. Its shares are now trading around Rs 125 apiece.
Auto components maker Rolex Rings had jumped 30%on its debut on August 9 compared to the IPO price of Rs 900.Its shares are still 20% above the issue price.
Exxaro Tiles climbed 10% on its debut on August 16 and now around Rs 132.45 apiece versus the issue price of Rs 120. Specialty chemicals maker Chemplast Sanmar closed about 1% on debut but has since gained 14%.
Aptus Value Housing Finance had also fallen 1% on its trading debut but is now above its IPO price of Rs 353.
CarTrade and other losers
Glenmark Life was first of the block, listing on August 6. Its shares gained almost 4% on the first day against the issue price of Rs 720. The shares subsequently touched almost Rs 800 before falling to close at Rs 670.85 on September 2.
Krsnaa Diagnostics had closed 4%higher the same day against the issue price of Rs 954. But it has now slipped below the issue price.
Windlas Biotech had fallen 11% on its debut from the IPO price of Rs 460. Its shares are now at Rs 394.2 apiece.
CarTrade lost 8%on its debut and is now 10% below its issue price of Rs 1,618.
Cement maker Nuvoco Vistas Corporation dropped 7%on its first day but has inched up since then to close in on its issue price of Rs 570 per share.