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Let us understand why the shares of VRL Logistics have surged close to 30% in November 2021

Trending Company VRL Logistics
by 5paisa Research Team 13/11/2021

The company is poised to register healthy revenue growth with faster addition of branches in untapped regions.

Shares of VRL Logistics Ltd have delivered more than 29.62% return to its shareholders so far in November 2021. The stock has gone on to hit its all-time high of Rs 534 on Thursday, November 11, 2021, on the BSE. Moreover, over the past year, the scrip has given a staggering return of 204.93% to its shareholders, with its share price standing at Rs 485.15 as of November 12, 2021, from Rs 159.1 at the same time last year.

VRL Logistics is the largest and leading transportation and logistics company in India. It operates through segments of Goods Transport, Bus Operations, Sale of Power, and Transport of Passengers by Air.

The company reported very strong Q2FY22 results with topline growth of 44.87% YoY to Rs 640 crore on the back of a 40% growth in the goods transport (GT) segment. Volumes in the GT segment have risen over 60% YoY in the first half of FY22. Even the bus operations business of the company which was the most impacted during the Covid-19 induced lockdown last year, saw a healthy recovery with revenue from this segment growing 3x to Rs 50.3 crore. Strong topline performance resulted in the PBIDT and PAT rising by 30.74% and 60.22% YoY respectively.

The company added 22 new branches in Q2FY22 and 31 new branches in H1FY22. It is also planning to expand its network by opening new branches in the untapped market. With the faster addition of branches in untapped regions, the company is poised to register healthy revenue growth going ahead.

Furthermore, ace investor Ashish Kacholia also added VRL Logistics to his portfolio during the June-September quarter. He purchased 12,07,632 equity shares, or 1.37% stake, of the company. The stock market investor is known for picking lesser-known stocks from the midcap and smallcap segments.

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Chart Busters: Top trading set-ups to watch out on Monday

Chart Busters: Top trading set-ups to watch out on Monday
by 5paisa Research Team 15/11/2021

In the last five trading sessions, the benchmark index Nifty has gained nearly 186 points or 1.03%. On the weekly chart, the Nifty has formed a bullish candle with a long lower shadow, which indicates buying pressure at lower levels. On Friday, the Nifty index has gained 1.28% but the advance-decline ratio was in the favour of decliners. Interestingly, the Indian Volatility Index (VIX), a gauge for the market’s short-term expectation of volatility, slipped by nearly 7% to end at 15.22.

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

JK Cement: Considering the daily chart, the stock has given a downward sloping trendline resistance breakout on November 08, 2021. After registering the high of Rs 3838, the stock has witnessed minor throwback along with low volume. During the period of a throwback, the stock has retested the breakout level and started rising higher. Further, since the last two trading sessions, the stock has formed a candle with a long lower shadow. The long lower shadow of the candle is indicating buying pressure near the support level.

Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory. One interesting observation on the leading indicator RSI is that in the recent throwback the RSI has never slipped below 60 levels and it has taken support near 60 and started rising higher. This indicates that the stock is in a super bullish range as per RSI range shift rules.

Talking purely about the trading levels, the zone of Rs 3570-Rs 3545 level is a crucial support area and the prior swing high of Rs 3838 will act as minor resistance for the stock.

Hisar Metal Industries: The stock has formed a bearish belt hold candlestick pattern as of July 23, 2021, and thereafter witnessed correction. The correction is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 35.20-Rs 165) and it coincides with the 50-week EMA level. Currently, the stock has formed a strong base near the support zone and it is on the verge of giving a downward sloping trendline breakout. Further, on Friday the volumes recorded were above the 50-days average, which is a sign of accumulation before the actual breakout happen.
 

In addition, on Friday, the stock has surged above its 20-day, 50-day and 100-day EMA levels. The 20-day EMA and 50-day EMA has started edging higher, which is a bullish sign. The leading indicator, 14-period daily RSI is currently quoting at 58.19 level and it is trading above its 9-day average. The momentum indicator MACD line has crossed above the signal line, which resulted in the histogram turning positive.

Going ahead, in case the stock is sustained above the trendline resistance then we may see a sharp upside in the stock. The trendline resistance is placed in the zone of Rs 132.50-133.50 level. On the downside, the recent swing low of Rs 121.30 will act as support for the stock.
 

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After blockbuster IPO and listing, Nykaa posts 96% drop in Q2 profit; shares slip

by 5paisa Research Team 15/11/2021

In quite an anticlimactic turn of events, fashion and cosmetics e-tailer Nykaa reported a staggering 96% year-on-year decline in its second quarter net profit barely days after its blockbuster initial public offering.

Net profit for July-September fell to just Rs 1.2 crore from Rs 27 crore a year earlier. 

Even on a sequential basis the net profit was down 66% as compared with Rs 3.5 crore for the April-June quarter, as the company spent more on advertising and marketing in a bid to acquire more customers. 

This is the first time that Nykaa is declaring its results following its bumper listing, which saw its market capitalization zoom past the Rs 1 trillion mark. Its IPO was covered 82 times and its shares had nearly doubled on debut last week. On Monday, shares of Nykaa fell nearly 5% to Rs 2,244.20 apiece in morning trade.

The decline in net profit came even as Nykaa’s revenue from operations zoomed 47% in the September quarter to Rs 885 crore from Rs 603.8 crore a year earlier. Revenue rose 8% sequentially, from Rs 817 crore in April-June.

Nykaa said gross profit margins were up 345 basis points to 39.3% over the same period last year. 

Nykaa reported a 286% increase in its marketing and advertising expenditure for the quarter to Rs 121.4 crore as against Rs 31.5 crore in the same quarter last year. This was the biggest expense item for Nykaa, and dragged the net profit down. 

Nykaa Q2: Other highlights

1) Beauty and personal care segment’s gross merchandise value grows 38% to Rs 1,186 crore.

2) The GMV for the fashion segment was up 215% YoY to reach Rs 437 crore.

3) Fashion segment contributed 27% to Nykaa’s GMV in Q2, up from 14% in the corresponding quarter last year.

4) Nykaa increased its warehouse storage capacity by 37,000 square feet to 665,000 sq ft. 

5) Annualised unique transacting customers reached 7.2 million in Q2.

6) Beauty and personal care vertical’s customers grew 40% to 1.3 million.

Nykaa management commentary

Nykaa founder and chief executive officer Falguni Nayar said the company maintained growth momentum in its beauty business, accelerated the fashion business and is now focussing on brand-building. 

“Increased marketing spends led to acceleration of customer acquisition, also evident in the unique visitor and transacting customer metrics. The company continues to invest in expansion of retail stores and fulfilment capacity ahead of the festival season,” she said. 

The company said that in the second quarter it opened eight new stores including in cities like Gwalior, Kochi, Mysuru, and Ranchi. Nykaa now operates 84 physical stores across the country. 

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FIIs have been bearish on many mid-cap stocks. Find out more

by 5paisa Research Team 15/11/2021

Indian stock indices are consolidating after hitting a new peak even as investors, anticipating a correction form these levels, are looking at shuffling their portfolio.

Foreign portfolio investors (FPIs) or foreign institutional investors (FIIs) had become more cautious about investing in India but they did pump in more money into a clutch of midcap stocks over the past few months.

On the flip side, quarterly shareholding data shows they also decreased their holding in more than 200 listed companies. Of these, the offshore investors pushed down their stake by two percentage points or more or nearly one in three companies.

There were at least 54 mid-cap stocks with current market valuation ranging from Rs 5,000 crore to Rs 20,000 crore where FPIs cut stake during the July-September quarter. This is just marginally lower than 57 mid-cap stocks where they bought additional stake last quarter. Interestingly, FIIs had sold shares of an equal number of companies (54) in the previous quarter ended June 30.

If we compare with the quarter ended June 30, there were many mid-caps that have seen FPIs cut stake for consecutive quarters. These include Thyrocare, Jubilant Ingrevia, Just Dial, Manappuram Finance, Natco Pharma, auto component maker Mahindra CIE, Apollo Tyres, CESC, City Union Bank and Redington.

A sector-wise analysis shows companies where FIIs cut stake in July-September are spread across a wide range of sectors. These are healthcare and pharmaceuticals, financial services, construction, engineering and industrial, logistics, technology and auto ancillaries.

Top mid-caps where FIIs cut stake

Among the largest mid-caps that saw offshore portfolio investors turn bearish during the three months ended September 30, 2021, are hospital chain operator Fortis Healthcare, real estate developer Phoenix Mills, gold loan financier Manappuram Finance, and mid-sized drugmakers Natco, Alembic and Glenmark.

Apollo Tyres, Affle India, Firstsource Solution and Cyient were among the other companies in the list.

FIIs also diluted stake in RBL Bank, City Union Bank, CESC, Amara Raja Batteries, Lux Industries, Route Mobile, Redington, Indiabulls Housing Finance, Laxmi Organic, Jubilant Ingrevia, Mahindra CIE and Zensar Technologies.

A quick look at the basket of companies commanding a market capitalisation of $1 billion or more where FIIs snipped their holding last quarter throws up a few more names.

These include Jubilant Pharmova, Century Textiles, CreditAccess Grameen, KIMS Hospitals, MCX, McDonald’s franchisee Westlife, Allcargo Logisics, Shyam Metalics, P&G Health, Dilip Buildcon, Mastek, Sobha, eClerx, IRB Infra, Kalyan Jewellers, V Mart and Delta Corp.

Mid-caps where FIIs sold 2% or more

Foreign portfolio investors cut their stake by over 2% in 20 mid-cap firms. These included names like Just Dial, Jubilant Ingrevia, Indiabulls Housing Finance, Tejas Networks, Allcargo Logistics, Religare Enterprises, RBL Bank, eClerx Services, Cyient and MCX.

Of these, Just Dial has been acquired by Reliance Industries while Tejas has been bought by Tata Group.

Laxmi Organic, Chalet Hotels, BSE, Greenpanel, Apollo Tyres, Mahindra CIE, Redington (India), Phoenix Mills, Affle (India) and Great Eastern Shipping were the other mid-caps where offshore investors diluted significant stake.

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Should investors take profits off the table in this red-hot stock after a vertical rise? Read to know more!

Should investors take profits off the table in this red-hot stock after a vertical rise? Read to know more!
by 5paisa Research Team 15/11/2021

Historically we have seen whenever the stock’s RSI inches close to the 91-94 mark, it witnesses profit booking.

Olectra Greentech Ltd (OGL), a group company of MEIL is a pioneer in electric bus manufacturing and insulators in India. With this endeavour, OGL has been a part of building Power Transmission and distribution in India.

The stock has registered a fresh 52-week high on Monday and interestingly it is locked at the upper circuit limit at Rs 789.45 on NSE. The stock is on a roll hitting upper circuit limits frequently. The stock did touch the upper circuit on Friday as well today (Monday).

On an MTD basis, the stock is up by over 40%. And if this isn’t enough to excite you, the gains delivered by the stock on a YTD basis would certainly amaze you. The shares of Olectra Greentech Ltd are up by a staggering 481% and in the last one year, the stock price has witnessed over a 10-fold jump in its stock price. It has outperformed not only frontline indices but also the broader market. As a result, the stock has an RS (Relative Strength) rating of 98 which is great indicating the outperformance as compared to other stocks.

The stock from a technical standpoint is comfortably placed above its key moving averages and is up by 54% from its 50-DMA and 167% from the 200-DMA.

Recently, the company announced that it has been awarded an order of 100 electric buses from one of the State Transport Corporations under the FAME-II scheme of the Government of India. This order for the supply of 100 electric buses on a gross cost Contract (GCC)/OPEX model basis (for Inter-City Operations) is for a period of 12 years (Contract Period). The value of this contract is approximately Rs 250 crore.

These e-buses shall be delivered over a period of 10 months. Maintenance of these buses shall also be undertaken by the Olectra during the contract period. With this, the total order book of Olectra for electric buses against the above and earlier orders stands around 1,550 electric buses.

The 14-period RSI on the daily chart has marked a fresh high, which is positive, but its reading stands at 87.63. Historically we have seen whenever the stock’s RSI inches close to the 91-94 mark, it witnesses profit booking. Will the history repeat? Only time would tell.

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IRCTC: Is the stock back on a bullish track?

IRCTC: Is the stock back on a bullish track?
by 5paisa Research Team 15/11/2021

A largecap company and a sector leader, IRCTC has the potential for strong growth and provide good business management.

Indian Railway Catering and Tourism Corporation (IRCTC) is engaged in Catering, Hospitality, and transportation. Their main share of revenue comes from internet ticketing, travel and tourism, and packaged drinking water (Rail Neer). A largecap company with a market cap of Rs 72,844 crore and a sector leader, IRCTC has the potential for strong growth and provide good business management. IRCTC has a PE of 171.83 which is lesser than its sector PE of 295.87 indicating that the price is not trading at a higher premium. The major stake is held by the promoters (67.4 per cent) which includes the Government of India.

IRCTC was in the news for the last couple of weeks due to its stock split and sharp sell-off. After the corporate action, the stock took a deep dive as it witnessed a correction of as much as 50 per cent from its all-time high levels and on the way down the stock breached its 20-DMA. Currently, the stock is trading at the level of Rs 909 and it has reclaimed its key short-term moving average i.e. 20-DMA. The 20-DMA moving average is one of the key moving averages used by short-term traders to gauge the short-term trend of the stock. The stock is trading strongly for a few days accompanied by above-average volumes and interestingly took support at 50-DMA. The RSI is positioned at 56, showing strength in the stock. It is showing a U-shape recovery and is expected to trade strong in the upcoming trading sessions.

On Monday when the stock is up almost 5.5 per cent, the change in futures open interest is up by 3.65 per cent indicating that long positions have been added. On the call side, the highest open interest has been seen at the strike price of 1000. The PCR stands at the very low of 0.47 which indicate that reversal is on cards. The stock looks attractive from a short term perspective and traders must keep an eye on this stock.

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