In this Weekly Market Newsletter:
- Market wrap-up & what to expect next week
- Market Outlook: Technical Nifty & Bank Nifty Outlook
- Stock Recommendations
- Quick Bites: Key headlines of the week
- Key Results
- IPO Corner
- Electric Vehicles & Sustainability Corner
Indian markets corrected last week as global investors were in rush to withdraw money from equities due to hardening yields (Fed rate hikes), inflation woes, and valuation concerns. S&P500 witnessed its worst weekly drop since the start of the pandemic.
Back home, Nifty closed the week with a 3.8% loss ending at 17,617 down 691 pts while BSE Sensex ended the week at 59,037 down 2,272 pts or -3.7%. Muted corporate earnings also dampened D-street sentiments. Bank Nifty also recorded a 1.68% loss, during the week, ending at 37,574. IT stocks led the fall while outperformance was seen from the auto sector.
What to expect from the markets? by Mr. Abhishek Jain, Arihant Capital’s Research Head
Markets may open in the red owing to weak global sentiments. The markets may also react to Reliance Industries and ICICI Bank results. Reliance Industries posted decent numbers on an overall basis with good performance of the retail business.
The budget will also be vibing next week, so keep an eye on budget-related themes. One can add divestment candidates like MMTC, BPCL on weakness.
You can consider increasing allocation on financial stocks on dips. We like Axis Bank and Indian Bank. Some discretionary plays like ABFRL and Indigo also can be added on weakness.
|22-Jan||ICICI Bank Ltd, Yes Bank Ltd.|
|24-Jan||Axis Bank, HDFC Asset Management Company Ltd, Indiamart Intermesh Ltd, The Ramco Cements Limited, SBI Cards And Payment Services Ltd, Shriram Transport Finance Co.Ltd.|
|25-Jan||Cipla Ltd, Federal Bank Ltd, Maruti Suzuki India Ltd, Pidilite Industries Ltd, SRF Ltd, Torrent Pharmaceuticals Ltd.|
|27-Jan||Bharat Heavy Electricals Ltd, Canara Bank, Coforge Ltd, Colgate-Palmolive (India) Ltd, Dalmia Bharat Ltd, Indus Towers Ltd, Laurus Labs Ltd, LIC Housing Finance Ltd, Nippon Life India Asset Management Ltd, Punjab National Bank, RBL Bank Ltd|
|28-Jan||AU Small Finance Bank Ltd, Bharat Electronics Ltd, Crompton Greaves Consumer Electricals Ltd, Dixon Technologies (India) Ltd, Dr. Reddy’s Laboratories, Kotak Mahindra Bank Ltd, Larsen & Toubro Ltd, Marico Ltd, Max Financial Services Ltd, Info Edge (India) Ltd, United Breweries Ltd, Vedanta Limited, Indusind Bank Ltd, NTPC.|
🔭 Market Outlook
If we look at the daily chart of Nifty, a “Lower low” formation is visible and on the weekly front, the index has formed a “Bearish” candle formation. This indicates that Nifty may pause on higher levels and the market can show volatility due to F&O monthly expiry due next week along with the ongoing result season and the upcoming “Union Budget”.
Nifty has to cross 17,680-level to see a bounce towards 17,780 and 17,950. On the downside support, if it crosses below 17,500 then it can test the levels of 17,250 and 17,000 .
Bank Nifty Outlook
On the daily chart of Bank Nifty, the “Doji” candle formation is visible, and on the weekly chart, it came again near the short-term moving averages. When you combine both data points, it seems consolidation is on the cards. This week Bank Nifty closed at 37,748 levels. In the coming trading sessions, if it holds below 37,500 then weakness could take it to 37,100 and 36,800 levels. Meanwhile, minor resistance on the upside is capped at around 38,550-38,900 levels.
💰 Stock Recommendations
Technical Stock Picks from Kavita Jain’s Desk
CMP 225.20; TGT 254/260; SL 216 DURATION: 2-3 WEEKS
The counter is witnessing a breakout of falling trendline resistance with an increase in volume. We are also observing the breakout of descending triangle chart with rising volume. Stock is standing above all its important moving averages. Leading indicators are also showing potential upside.
BUY KNR CONSTRUCTION
CMP 315; TGT330/345; SL 299 DURATION: 2-3 WEEKS
The counter is in uptrend forming higher high -higher low formation on charts, standing at support trendline of upward sloping channel formation and close above its 10 days SMA with the rising volume. The leading indicator is showing further price strength in the northward direction.
📺 Quick bites
Few Headlines That Should Be on Your Radar
- Tata Motors announced the launch of its latest range of passenger vehicles, including Tiago and SUV Safari in Bhutan.
- Maruti Suzuki has increased prices of its models by up to 4.3% with immediate effect to partially offset the impact of the rise in input costs.
- Reliance Retail Ventures, the retail subsidiary of Reliance Industries, has bought a 54% stake in robotics startup Addverb Technologies for $132 million.
- Tech Mahindra announced the acquisition of 100% stake in Com tec Co IT (CTC) for 310 million euros (~ ₹2,628 crore).
- Tata Motors has hiked the prices of its passenger vehicles with effect from January 19, 2022.
- Reliance Jio added 20 lakh mobile subscribers in November 2021, taking its total subscriber base to 42.8 crore at the end of the month. Bharti Airtel gained 13 lakh subscribers for the month and its total customer base stood at 35.5 crore. Vodafone Idea’s lost 18 lac users, its customer base stood at 26.71 crore (Source TRAI).
- GAIL (India) confirmed suspension of its Director (Marketing) E S Ranganathan following his arrest by the CBI.
- 😊 Reliance Industries net profit zooms 41% year on year (yoy) to ₹18,549 crore for Q3FY22 while its revenue from operations rose 54% to ₹1.91 lakh crore.
- 😊 ICICI Bank reported 25% yoy increase in its profit for Q3FY22 at ₹6,194 crore, while net interest income grew by 23% to ₹12,236 crore in Q3 FY22 from ₹9,912 crore in Q3 FY21. Bank’s net NPA ratio in Oct-Dec quarter declined from 0.99% on September 30, 2021, to 0.85% at December 31, 2021, which is the lowest since March 31, 2014.
- 😊 JSW Steel reported a consolidated net profit of ₹4,357 crore for the quarter ended 31st December 2021 – up 69.2% yoy. Revenue from operations increased 74% to ₹38,071 crore.
- 😊 HDFC Life Insurance clocked 3.3% yoy increase in its profit after tax to ₹273.7 crores for the December quarter. Company’s net premium income increased 27.8% to ₹12,124.4 crore while its assets under management stood at ₹1.95 lakh crore, up 18%.
- 😊 SBI Life Insurance reported a net profit of ₹364.6 crore, up 56.34% yoy. The company’s net premium income rose 30.39% to ₹18,025 crore. AUM was up 23% to ₹2.56 lakh crore as of December 31, 2021.
- 😊 Bandhan Bank reported a 35.7% yoy growth in net profit to ₹859 crore for Q3FY22.
- 😞 Vodafone Idea Ltd loss widens to ₹7,230 crore in Q3FY22 from ₹7,132 crore in the September quarter and ₹4,532 crore in the last year period. Its revenue from operations fell 11% yoy to ₹9,717 crore.
- 😊 UltraTech Cement reported 8% rise in its consolidated net profit at ₹1,710 crore for Q3FY22. Its revenue from operations jumped by 5.89% to ₹12,984.93 crore.
- 😞 Asian Paints net profit falls 18% yoy to ₹1,015 crore. Revenue from operations, however, rose 26% to ₹8,527 crore as against ₹6,788 crore.
- 😞 Bajaj Finserv’s consolidated net profit fell 2.6% yoy to ₹1,256 crore. Its revenue, meanwhile, rose 10.21% to ₹17,587 crore and its AUM also increased by 26% yoy to ₹181,250 crore as of December 31, 2021.
🚀 IPO Corner
- Delhivery gets Sebi’s go-ahead to raise ₹7,460 crore via IPO.
- FabIndia files DRHP with Sebi for IPO. The company plans to raise ₹4,000 crores via its IPO.
- Car dealership chain Landmark Cars aims to file DRHP for IPO with Sebi this week; plans to raise ₹750 crore via IPO.
- Entero Healthcare Solutions Pvt. Ltd, a private equity (PE)-backed pharma products distribution platform, plans IPO to raise capital for expanding its operations.
- Ascent Capital-backed Radiant Cash Management Services gets Sebi nod for IPO.
- AGS Transact Technologies Ltd IPO was subscribed 7.79 times on final day.
- Adani Wilmar Limited IPO Opens: Jan 27, 2022 Closes: Jan 31, 2022 Price Brand: ₹218 to ₹230 Issue Size: ₹3,600 cr
🔌EV and Sustainability Corner
- Adani plans foray into electric mobility space. Adani will initially look at electric commercial vehicles and deploy them at its own airports and ports. The conglomerate plans to manufacture batteries for EVs and set up charging stations across India. They also plan to build a R&D center for EVs in its special economic zone in Gujarat.
- Tata Power Renewables commissions 100-MW through two solar plants (50MW each) in Uttar Pradesh. The company aims to increase the share of green energy in its power generation portfolio to 80% by FY30, up from the current level of 31%.
- Rasandik Engineering Industries India Ltd’s share price hits new 52-week high at ₹136.40 on Sensex after launching its new “Electric Auto/ E-Auto” under the Brand Name ‘Samrat’.
- Delhi govt launches one-stop e-vehicle website for the promotion and adoption of EVs across the capital. The key features of the website ev.delhi.gov.in – include ‘charging stations explorer’, ‘EV calculator’, ‘EV search’ and ‘EV dashboard’ among others.
- Hero MotoCorp to invest in Taiwan-based Gogoro’s EV battery swap technology as part of its committed to sustainability and playing a key role in bringing clean mobility across the world.
- The Society of Manufacturers of Electric Vehicles (SMEV) has requested the Centre to issue some incentives in the form of subsidies on exports of budget small cars and scooters from India in the Union Budget FY23 to be tabled in the Parliament on February 1.
- India’s largest electric two-wheeler company Hero Electric, and the Mahindra Group announced a strategic partnership to manufacture Hero Electric’s electric bikes — Optima & NYX at their Pithampur plant in Madhya Pradesh. Hero Electric is not part of the listed Hero MotoCorp, but is promoted by Munjal family only.
- Tata Motors, which has more than 70% market share in the 4-wheeler electric segment, announced that the company’s electric vehicle production to get priority over other cars.
- NITI Aayog has proposed government to include electric vehicles in the Reserve Bank of India’s priority-sector lending guidelines, the move it says will give a significant push to retail lending for EVs.
- LML Electric has entered into a strategic partnership with Saera Electric Auto — the former manufacturing partner of Harley Davidson in India — to produce its electric two-wheelers.
- FedEx Express, a subsidiary of FedEx Corp., has announced the start of EV trials in India as part of its global goal to achieve carbon neutral operations by 2040.
- Reliance Industries, Ola Electric, and Mahindra & Mahindra have submitted bids under India’s $2.4 billion battery scheme which aims at encouraging companies to invest in the local manufacturing of batteries.
That’s all for this week’s market wrap-up. We will be back with new market insights next week!