Nifty 17196.7 (-1.18%)
Sensex 57696.46 (-1.31%)
Nifty Bank 36197.15 (-0.85%)
Nifty IT 35848.05 (-0.86%)
Nifty Financial Services 17779.5 (-1.13%)
Adani Ports 737.45 (0.00%)
Asian Paints 3100.00 (-0.34%)
Axis Bank 675.30 (0.34%)
B P C L 362.00 (-6.19%)
Bajaj Auto 3615.00 (9.95%)
Bajaj Finance 6645.00 (-6.00%)
Bajaj Finserv 16439.00 (-6.00%)
Bharti Airtel 718.00 (-0.05%)
Britannia Inds. 3542.75 (-0.31%)
Cipla 860.00 (-5.71%)
Coal India 152.00 (-4.85%)
Divis Lab. 4471.00 (-6.01%)
Dr Reddys Labs 4320.00 (-6.02%)
Eicher Motors 2701.00 (10.00%)
Grasim Inds 1874.25 (10.00%)
H D F C 2499.90 (-9.80%)
HCL Technologies 1101.00 (-6.01%)
HDFC Bank 1400.00 (-7.50%)
HDFC Life Insur. 645.00 (-6.65%)
Hero Motocorp 2699.90 (9.64%)
Hind. Unilever 2109.30 (-10.00%)
Hindalco Inds. 400.00 (-5.80%)
I O C L 130.00 (6.38%)
ICICI Bank 799.95 (11.68%)
IndusInd Bank 1040.00 (9.34%)
Infosys 1700.00 (-2.05%)
ITC 195.00 (-12.02%)
JSW Steel 703.00 (9.07%)
Kotak Mah. Bank 1999.00 (4.43%)
Larsen & Toubro 1975.40 (9.67%)
M & M 890.00 (6.34%)
Maruti Suzuki 6788.00 (-5.84%)
Nestle India 18162.00 (-6.00%)
NTPC 115.00 (-9.45%)
O N G C 145.00 (-0.62%)
Power Grid Corpn 206.10 (0.00%)
Reliance Industr 2122.65 (-11.86%)
SBI Life Insuran 1049.40 (-10.00%)
Shree Cement 24359.00 (-6.00%)
St Bk of India 567.65 (19.97%)
Sun Pharma.Inds. 676.65 (-10.00%)
Tata Consumer 850.00 (9.78%)
Tata Motors 450.00 (-6.27%)
Tata Steel 1215.00 (8.68%)
TCS 3448.00 (-5.29%)
Tech Mahindra 1470.00 (-7.74%)
Titan Company 2433.25 (2.70%)
UltraTech Cem. 6599.25 (-10.00%)
UPL 712.95 (0.03%)
Wipro 580.00 (-9.48%)

Quarterly IT services update

by 5paisa Research Team 19/10/2021

Indian IT services continued to perform strongly in Q3CY21 as the strong momentum continued in winning deals in managed and as-a-services deals.

It is estimated more than 2000 medium to small deals were won through CY22, a record high so far. Despite strong ACVs, pipeline remains strong. Managed services deals worth $8.4bn were signed, showcasing a strong growth of +21.7% YoY, and+2.4% QoQ even after a strong Q2 performance. Among these, ITO grew at +12% YTD21 and BPO grew at +40% YoY. As-a-Service generated deals worth $13.4bn and grew at +55.8% YoY, and +14.5% QoQ. Going forward, Managed services are estimated to grow at +10.1% YoY (revised from +9% YoY) and As-a-Service to grow at +25% YoY (revised from +21% YoY).

Between 2019 and 2021, the companies have been effective in passing on the cost to the clients in new contracts. A 4% growth in the new contract prices have already been witnessed and accepted. However, the pressure remains on the existing contracts.

Even with the increase in prices, the demand still high, especially in ADM, ER&D Services and Industry specific BPO. ER&D services are gaining high demand in Manufacturing, Hitech and Healthcare industries. Going forward, the tech companies may face issues as the spendings are estimated to increase in CY22 itself. Discretionary spending is improving and there is shift of spending from hardware to new-age tech services like Cloud, cybersecurity, analytics, data.

The maximum demand came from Retail & CPG (+38% YoY), followed by Travel (31% YoY), Business services (+30% YoY), Telecom (+28% YoY), Manufacturing (+27% YoY), Energy (+26% YoY), and BFSI (+20% YoY). While, there was a muted growth from the healthcare with only +13% YoY.

Geographically, Americas posted the maximum growth at 36.5% YoY and +19.6% QoQ while APAC reported a mute growth of 59.6% YoY, and -6.4% QoQ. EMEA contributed and grew at +35.4% YoY, and +3.2% QoQ

The future outlook and prospects look very positive and robust for the Indian IT industry.

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Multibagger Alert: This top multibagger from the forgings sector gained 247% in one year!

Multibagger Alert: This top multibagger from the forgings sector gained 247% in one year!
by 5paisa Research Team 19/10/2021

Ramkrishna Forgings has generated over 20% return in the last month.

In the last year (year-to-date or YTD) as of October 19, 2021, Ramkrishna Forgings Ltd (RKFL) has been a multibagger, increasing shareholders' wealth by almost 3.5 times. This ‘A’ graded small-cap stock has been in the buzz lately due to its strong quarterly results and robust order pipeline.

RKFL is primarily engaged with the automotive sector where it supplies rolled, forged and machine products. The Indian Government’s PLI for the sector of Rs 57,042 crore is expected to boost manufacturing which augurs well for RKFL. The net sales for Q2FY22 jumped sequentially by 38.77% to Rs 579 crore. The net profit too soared to Rs 44 crore, a substantial growth of 78%. The fundamentals have been crucial to make this stock a multibagger.

Ramkrishna Forgings Ltd had announced on October 18 that it had bagged an order from Indian Railways for the manufacturing and supply of loco shells. This order is further strengthening the company’s diversification into the non-auto segment, especially into railways.

With this order, the stock had rallied 3.15% on that day. In the latest quarter, it had received total contracts amounting to Rs 620 crore from varied geographies and segments. The macroeconomic scenario can be favourable for this multibagger stock as there has been a positive outlook on stimulus packages for infrastructure and manufacturing space.

Ramkrishna Forgings Ltd is one of the leading suppliers of rolled, forged and machine products. It primarily serves the automotive sector along with railways, bearing, oil & gas, earthmoving & mining industries.

The stock is trading flat at Rs 1199.65 as of October 19, 2021, on BSE. It has a 52-week high and low of Rs 1259.60 and Rs 320.15 respectively.

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Superstar Stocks: BTST Trading and stocks that could deliver good returns till October 20, 2021.

Superstar Stocks: BTST Trading and stocks that could deliver good returns till October 20, 2021.
by 5paisa Research Team 19/10/2021

Stocks that are in focus, Stocks to buy for tomorrow, Superstar Stocks selected on basis of a three-factor model, Deepak Nitrite, M&MFIN and TCNS Clothing.

Many times market participants see a stock opening with a gap-up and wish they should have bought this superstar stock a day before to take advantage of the gap-up move. To fulfil this wish, we have come out with a unique system, which would help us to get the list of candidates that can be the probable superstar stocks for tomorrow.

The superstar stocks for tomorrow selected are based on a three-factor prudent model. The first important factor for this model is price, the second key factor is pattern, and last but not least is the combination of momentum with volume. If a stock passes all these filters, it would flash in our system and as a result, will help traders to spot the superstar stocks for tomorrow at the right time!

Here are the superstar BTST stocks for October 20, 2021.

Deepak Nitrite: The stock has gained nearly 3.25% on Tuesday and it has formed a bullish candle along with a surge in the volumes. The volume for the day has already surpassed its previous trading session volume. The RSI on an hourly, daily and weekly time frame is in the super bullish territory. The stock can probably test levels of Rs 3050 followed by Rs 3100 on the upside, while on the downside, support is seen around Rs 2900. 

Mahindra & Mahindra Financial Services (M&MFIN): The stock has gained 3.5% on Tuesday and formed a supersized bullish candle. With this, it has witnessed a breakout of the consolidation pattern along with a surge in the volumes. The stock has already surpassed the volume of its previous trading session and is the highest since October 5. The 14-period RSI is in the bullish super territory on hourly, daily and weekly time frame. The stock has the potential to test levels of Rs 200 followed by Rs 206 on the upside. On the downside, the level of Rs 189 is likely to act as immediate support for the stock.

TCNS Clothing: The stock has jumped over 6% on Tuesday and formed a sizable bullish candle on the daily chart. The volume for the day is the highest single-day volume since September 27. The RSI on the hourly, daily and weekly chart is in bullish territory. The stock has the potential to test levels of Rs 740-750 and immediate support for the stock is placed at Rs 700.

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Marquee Investor Rakesh Jhunjhunwala digs a 'Ratna' from Government Kitty.

Marquee Investor Rakesh Jhunjhunwala digs a 'Ratna' from Government Kitty.
by 5paisa Research Team 19/10/2021

New addition to the ace investor’s portfolio as of September 2021, is a 1.4% stake in NALCO.

S&P BSE Metal Index is witnessing favourable market sentiment with 17.55% price returns in the last one month, amid higher metal prices globally. LME (London Metal) Index reached an all-time high of 4762.80 in October of 2021. It consists of six metals with aluminium accounting for 42.8% weightage.

Industry Dynamics

  • Aluminium is the second-most used metal globally, after Iron.

  • India is the third-largest producer of aluminium after China and Russia. The share of India in the world production was 5.76% during April - June 2021.

  • The principal user segment of the aluminium industry in India continues to be the electrical and electronics sectors followed by automotive, transportation, building, construction, packaging, consumer durables, industrial and defence.

This heavy captive industry is dominated by few large players that include, Vedanta, HINDALCO, BALCO and NALCO. NALCO is the only public sector player in the segment.

NALCO

National Aluminium Company Limited (NALCO) is a Navratna CPSE having inte­grated and diversified operations in min­ing, metal and power. NALCO is one of the largest integrated Bauxite-Alumina- Aluminium-Power Complex in the coun­try. It is a low-cost producer of Alumina and Bauxite. In FY 2020-21, NALCO achieved the highest ever Bauxite production (73.65 lakh tons) from its captive mines, since inception.

The debt-free PSU has reported a phenomenal jump of 1990 % in net profits (Rs 347.73 crore) for the last reported quarter Q1 FY 2022 on a YoY basis, largely on account of a low base. However, the recent price hike has positively impacted the profitability of the metal producer. For the quarter, the net sales amounted to Rs2475 crore, with a 79% increase on a YoY basis.

Given the rising demand in automotive, real estate, white goods, infrastructure and others, the ever-present demand for aluminium is sustainable in the near future. This increased demand along with the forecast for LME (London Metal Exchange )to trade at 4912.82 in 12 months.

The PSU has also committed to investing around Rs 30,000 crore by the financial year 2027-28 on various expansion and diversification plans. Of this proposed investment, the company will spend over Rs 7,000 crore on the fifth refinery, development of Pottangi bauxite mines and transportation and Utkal D&E coal mines. The remaining Rs 22,000 crore will be spent on the smelter and captive power plant (CPP) expansions, which also include expansion of the company’s smelter plant at Angul district in Odisha with the construction of a 1400 MW feeder CPP.

One of the most popular figures of the Indian stock market Rakesh Jhunjhunwala bought NALCO’s shares during the September quarter fuelling the momentum in the metal space. His stake in the state-run aluminium maker is to the tune of 1.4% which have caught the attention of the retail investors.

The stocks of the PSU have touched their week high yesterday at Rs 124.75 and closed at 121.70 showing a gain of 13.1% in one trading session. The stock has since seen some profit booking and is trading at Rs 122 in the morning session on October 19, 2021.

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Interview with Meghmani Finechem Ltd.

Interview with Meghmani Finechem Ltd.
by 5paisa Research Team 19/10/2021

Meghmani Finechem: Serving growth with strategic capacity expansion plans and products.

"We are investing more to maintain the growth and create exceptional value for our shareholders," says Maulik Patel, Chairman and Managing Director of Meghmani Finechem Ltd.

What is your outlook on the chemicals sector?

Indian chemical sector has done well in the past few years and is further expected to improve its good momentum. Even if you see during the Covid-19 pandemic, sections like necessity products, agrochemicals and pharmaceuticals were not much impacted. As the Indian economy would grow in the upcoming years, the overall chemical sector is also expected to perform well. Multiple factors are expected to support this growth. Both the domestic and export demand for all types of chemicals is expected to witness a significant jump. Much talked about China plus one strategy is going to be a key growth driver in this area. With a recent initiative like PLI schemes to boost manufacturing, the chemical sector is also expected to benefit to a great extent because of feedstock demand from those industries. So overall, we are very optimistic about the growth of the chemical sector and we are also preparing to serve that growth well with strategic capacity expansion plans and the launch of new products.

Meghmani Finechem’s sales and net profit for Q1FY22 almost doubled as against Q1FY21. Which factors have contributed the most to help you outperform?

One obvious factor behind growth is the recovery from Covid-19 shock which is leading to recovery across sectors. But if I talk about Meghmani Finechem in particular, the most crucial factor behind the good growth in both the topline and bottomline is the capex we incurred last year and the improvement in realization. We have started to enjoy the fruits for which we invested last year in terms of capacity expansion of the caustic soda plant. In the second quarter of the last fiscal, we commissioned a Hydrogen Peroxide plant as well which significantly helped us improve our revenues and profits. In upcoming quarters too, we are expected to continue benefiting from the strategic investments we made in FY21. In the meantime, we are investing more to maintain this growth and create exceptional value for our shareholders.

China power shortage and the hurricane IDA strike in the US have resulted in a strained supply chain for caustic soda. How are these developments expected to help your revenues?

The Indian chemical industry faced impact due to China power shortage, as the facilities over there are not working on their full capacity and thereby entire chemical supply chain has been impacted. China has been the major supplier of all chemical products, and hence it will have an impact on global supply and price for all sorts of chemicals. Along with that, the Hurricane IDA strike in the US too had pressure on the supply of caustic soda and also drastic hike in logistic cost had an impact on the supply chain. The cost of various raw materials started moving up due to the supply issue and at the same time because of high demand globally and also in India, realization prices for various products have also moved up. In such a scenario, topline growth will be achievable for all the companies, but the challenge will be to pass on the hike in price to its customers. This can be a structural change and which might open avenues for chemical companies in India and we (India) can stand strong for the alternate hubs (other than China) for sourcing various materials. 

Can you shed some light on your capital expansion plans? What are your top strategic priorities? 

We are getting into Epichlorohydrin (ECH), CPVC Resin and increasing the capacity of Caustic Soda. Capex for the same has already started and all the projects are moving as per schedule.

We are quite optimistic about the ECH (Epichlorohydrin) production facility, as we will be the first in India to produce the same using raw material from 100% renewable resources. Demand for the same is expected to grow in double digits in the coming years. Currently, we are planning to set up a 50,000 tons per annum of ECH production facility at our existing factory in Dahej. It is expected to get commissioned in Q1FY23.

Apart from our investment in the ECH segment, we are also aligned to set up a chlorinated polyvinyl chloride (CPVC) facility with an estimated annual production capacity of 30,000 tons. Currently, 95% of India’s CPVC resin demand is fulfilled by importing and also demand of the same is expected to grow at 13% CAGR in India. Once we commission our plant, we will be the largest producer of CPVC resin in India. CPVC resin plant is expected to get commission in Q2FY23.

Also, we are expanding our caustic soda capacity from 2,94,000 TPA to 4,00,000 TPA. We will be benefited from it as the demand for caustic soda and realization of it has surged since last six months and it is expected to continue with the same momentum.

These investments will strengthen our fully integrated complex as part of raw material for ECH and CPVC will be coming from the plant itself. It is in line with the overall growth trajectory of the company of reaching Rs 2000 crore as topline by FY2024 from Rs 831 crore in FY2021.

What are your growth drivers? 

The company’s current growth driver is its product portfolio: Chlor-alkali, Chloromethanes and Hydrogen Peroxide. The demand for all these products is expected to surge in coming years and hence there will be growth led by these segments. Also, FY22 will be the year when our Hydrogen Peroxide plant will be utilized for an entire year.

Medium-term growth drivers are the new product segments we are entering, i.e. Epichlorohydrin and CPVC resin, and additional capacity expansion in Chlor-alkali production. The demand for ECH and CPVC that are currently imported in India is expected to grow at a CAGR of double-digit owing to which there is vast scope in these two products. Full utilization of existing capacity and new capacity additions will lead to further growth.

For long-term growth, the management is strategizing to get into more speciality chemicals, in which we will be the first in India to produce and it will be intermediate for the Pharmaceutical and Agrochemical industry. It will improve our margins and be based on our core strengths (fully forward and backward integrated plant) hence further improving our efficiency.

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These stocks see huge volume burst in the last leg of the trading session.

These stocks see huge volume burst in the last leg of the trading session!
by 5paisa Research Team 19/10/2021

Manappuram Finance, AIA Engineering and JK Cement have witnessed volume burst in the last 75-minutes of the trade.

As the saying goes, the first and the last hour of each trading session is the most important and active in terms of price and volume. More so, the activity in the last hour is said to be of utmost importance because most of the pro traders and institutions are active at this time. Hence, when a stock sees a good spike in volume in the last leg of trade along with price rise it is said to be the pro and institutions have a keen interest in the stock. Market participants should keep a close watch on these stocks as they can witness good momentum in the short-medium term.

So, based on this principle we have shortlisted three stocks, which have witnessed volume burst in the last leg of trade along with price rise.  

Manappuram Finance: The stock of Manappuram Finance outperformed the broader as well as frontline indices as it ended the session with modest gains of 0.30% on Tuesday. Interestingly, over 50% of the total traded volume of the day was witnessed in the last 75-minutes. Hence, market participants can keep a close watch on this stock. In addition to this, the icing on the cake is that the stock closed near days high.

AIA Engineering: The stock managed to rebound from the lower levels, and it settled above the 1900 mark. The stock witnessed a massive jump in volumes in the last 75-minutes of the trade. Over 80% of the total traded volume of the session was seen in the last hour of the trading session. A bullish bias in the price was also witnessed in the last 75-minutes. Considering the robust volume move in the last leg of the session, traders can keep an eye on this stock.

JK Cement: Even though the stock ended in red on Tuesday with a drop of over 2%, it witnessed a good spike in volume in the last 75-minutes of the trade. Over 50% of the total traded volume of the day was witnessed an hour before the closing bell. Furthermore, the stock price rebounded from the lower levels with a surge in the volumes. Keep this stock on your radar.

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