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TCS 3642.90 (1.82%)
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Titan Company 2386.50 (1.11%)
UltraTech Cem. 7323.20 (0.01%)
UPL 698.20 (1.12%)
Wipro 646.80 (1.89%)

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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Trending stocks: Keep a close eye on these small-cap stocks for 20 October 2021.

Trending stocks: Keep a close eye on these small-cap stocks for 20 October 2021.
by 5paisa Research Team 19/10/2021

BSE Small-cap corrected by 1.79% and underperformed broader markets.

Headline indices Nifty 50 and Sensex recorded new highs during early market hours, but failed to hold the same and ended the session losing 58.03 points and 49.54 points respectively from yesterday’s closing. BSE Small-cap corrected by 1.79% and underperformed broader markets.

Keep a close eye on these trending small-cap stocks for Wednesday, 20 October 2021:

Saboo Sodium Chloro – The company has announced that its hospitality division is commencing development on a new property in Rajasthan. The company’s existing company property situated near Sambhar Lake, Rajasthan will be converted into a luxury short-stay accommodation. This is in line with successful strategies in North America and Europe where freestanding properties available for short-term rentals have found above-market rates and high occupancy levels.

The property currently features a swimming pool, tennis courts, sauna/spa facilities and multiple bedroom accommodations. In addition, the property is situated scenically amongst expansive acres of environment-conscious lawns and gardening. The new property will be developed fully out of internal accruals and no additional debt will be taken by the company for the project.

The Sambhar Resort and Salt Spa will be operational starting FY23. The project is expected to significantly add to both the top and bottom line of the company’s hospitality division.

Rane Brake Lining – The company has reported Q2FY22 results. Total revenue was Rs 126.2 crore as compared to Rs 107.7 crore in the Q2FY21 (an increase of 17.2%). EBITDA for Q2FY22 stood at Rs 14.1 crore relative to Rs 22.6 crore during Q2FY21. Net profit decreased by 53.1% from Rs 11.5 crore in Q2FY21 to Rs 5.4 crore in Q2FY22.

52-week High Stocks - The following small-cap stocks have made fresh 52-week high today – Pansari Developers, Sangam (India), Nahar Spinning Mills, Proseed India, Trident, Mastek, Sasken Technologies, Tata Communications and California Software Company. Keep a close eye on these counters on Wednesday, 20 October 2021.

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Hindustan Unilever Q2 earnings meet estimates but margin shrinks

by 5paisa Research Team 19/10/2021

Hindustan Unilever Ltd said Tuesday net profit for the second quarter of this fiscal year rose 8.86% from a year earlier as it increased prices of some products to offset a rise in input costs and controlled expenses.

Standalone net profit increased to Rs 2,187 crore for the quarter ended September 2021 from Rs 2,009 crore in the same period last year, India’s biggest fast-moving consumer goods company said. Profit grew 6.11% from the first quarter.

Operating revenue for the second quarter rose 11% to Rs 12,516 crore from Rs 11,276 crore a year earlier. On a quarter-on-quarter basis, the rise was a muted 6.7%. Total expenses grew 11.6% to Rs 9,883 crore.

HUL’s results matched analysts’ estimates of a 10-15% rise in revenue and 8-10% increase in net profit.

The company said its focused actions on net revenue management and savings enabled it to manage inflationary pressures and deliver a healthy bottom-line performance.

The markets were perhaps expecting a sharper spike in the top-line and bottom-line numbers, as the country’s economy has opened up and is looking to go full throttle ahead. But their disappointment showed in the company’s counter falling 2.67% to close the day at Rs 2,583 per share on the BSE. 

HUL Q2 other key details:

1) Revenue from the home care segment grew 15%, helped by price hikes to offset rising input costs.

2) Sales from the beauty and personal care segment rose 10%, thanks to price hikes and as mobility improved.

3) Revenue from the food segment increased 7% with health drinks volumes growing in double-digits.

4) EBITDA margins shrank by 40 basis points to 25%. EBITDA came in at Rs 3,132 crore versus Rs 2,869 crore.

5) The company declared an interim dividend of Rs 15 per share. 

Management Commentary:

Sanjiv Mehta, chairman and managing Director at HUL, said trading conditions improved sequentially in the September quarter but remained challenging with “unprecedented” levels of input cost inflation and “subdued” consumer sentiment.

“In this backdrop, we have delivered a strong performance growing top line in double digits and stepping up profitability sequentially,” he said.

Mehta said large parts of HUL’s business continue to gain market share. Calibrated price increases and a “laser sharp” focus on savings helped the company protect its business model, he said.

“Looking forward, we remain cautiously optimistic about demand recovery. In these times of uncertainty and unprecedented input cost inflation, we continue to firmly focus in delivering consistent, competitive, profitable and responsible growth,” he added.

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