IEM Market Buzz: 27.11.2021 – Edition No. 8

JP Associates proved to be the wonder boy last week when the big boys were falling. In the 5 trading sessions filled with panic everywhere, the stock moved from Rs 8.20 to Rs 11.30 giving investors 38 per cent return. Something never was expected from this stock. After June 14, it has shown the biggest volume. It seems something is brewing at this counter. Good for risk takers as it has the potential to give a 50-100 per cent return.

Cipla is ready to benefit from the newly-born Omicron variant of Covid 19. As the fear psychosis again looming large, pharma stocks are sure to get a kick. A kick-up. On the technical chart, it looks the best amongst the large-cap pharma stocks. It has been trading in a range for 8 months and is now about to break out with a 15-20 per cent upside move. Positional traders can keep an eye on.

Arrow Greentech introduced the first water-soluble film (Watersol) in the nineties. It provides solutions, applications, and management systems in the health, hygiene, packaging, printing, and security industries. Another product is BIOPLAST which is a plasticizer-free thermoplastic material. It has its manufacturing units in India and in the UK via its subsidiary. Traded at Rs 671 in September 2017, now on technical charts, it seems a breakout is imminent. It has recorded the biggest weekly volume after June 2018. Focus on a short-term investment.

Meghmani Organics became the toast when recently Abacus bought 27,41,000 shares @ Rs 82. After the demerger, agrochemical & pigment segment have come into it. It is the largest manufacturer of Phthalocyanine-based pigment with a 14 per cent global market share. With 6 plants, 650 registrations in agro-chemical, 36 pesticide brands, and exporting to 75 countries the stock is trading at 12 PE. Good for having in watch list.

Welspun Corp was also the rare stock that defied Friday’s gravity and became one of the top gainers last week. Trading at 7 PE with a Book Value of Rs 148, 3 per cent dividend yield, and more than Rs 500 crore worth orders the stock is ready for a breakout and heading towards Rs 200 mark. Buy at corrections.

Reliance Infrastructure was another Good Boy which didn’t look at the blood bath on Dalal Path last week and gave a 15 per cent return to investors who believe in its antics. It will receive Rs7,100 crore from the DMRC anytime soon and the company will become debt-free on a standalone basis. Last week’s traded volumes indicate that somebody knows something which is yet to come into the public domain. The counter has all the ingredients to reach Rs150 any time soon. But remember, such Good boys, are always only for risk-takers & smart investors.

Indiabulls Housing Finance stood tall, rampaging through the tough market sentiments regarding housing finance companies that emerged after DHFL fiasco. Not a single quarter it has recorded a loss. Rakesh Jhunjhunwala also holds this undervalued stock and now two rumors are being associated with it – first, it will be taken over by Carlyle or some other big name and second, Deepak Parekh’s son will soon be inducted on its board. If it happens the re-rating will make investors richer beyond their imagination,

Welspun India, which is basically into home textile and bath textile with big brands, has also entered into the flooring business. In the last 6 months (2 Qtrs) its sales, operating profit, and net profit were up by 48, 41, and 82 per cent respectively. India has continuously increased its share in textile export due to the China factor so it has a bright future. It is trading at 19 PE against its biggest competitor Trident which is trading at 45 PE. A Re-rating is possible sooner than later.

Zee Entertainment, which was in news due to Invesco raising hue and cry, is rumoured to be merged with Sony very soon. An insider claims the path is cleared and after the merger, the big names in the present management set-up will continue to occupy the same positions. Good to add after each fall as the counter will be re-rated and fly at the levels it should have already flown with strong brands and dedicated viewers.

Genesys International Corporation, on QOQ basis has posted good numbers as its sales were up 130 per cent, posted Rs 8.59 crore operating profit against Rs 4.64 crore loss, and recorded Rs 5.61 crore net profit against Rs 7 crore loss. Last week it also defied the market sentiments and was up by 15 per cent. Recently the company filed for two patents essentials for E-commerce and object recognition in 3D Max. A counter to keep an eye on as it can do wonders.

Vijaya Diagnostic Center is expected to get huge benefits with the new variant looming large. Its IPO came at Rs 531 recently and it is trading at Rs 585. It can show some momentum as it belongs to the select list of diagnostic counters which are sure to attract the attention of investors and traders alike by default.

Kopran Limited made its all-time high on last week Friday when most of the counters were running a high fever. This is the lone company in the mid and Smallcap pharma space which was seen in such a good shape that day. With an ROE of 28 per cent, 30 per cent ROCE, and active in API and formulations business with impressive financials it can make a triple century soon.

Everest Kanto Cylinder has been improving its fundamentals very fast. Its debt has reduced to the lowest in 10 years. In the last 6 months (2 Qtrs) its sales, operating profit, and net profit were up by 81, 167, and 298 per cent respectively. On TTM basis it has recorded the best ever performance. As CNG and Industrial Gas cylinder demand is every day increasing the counter is at the multi-year breakout and trading at the highest level after 12 years. Buy on the decline.

Redington (India) is an integrated supply chain solution provider and the second-largest distributor of IT products in India. Through its subsidiaries, it distributes more than 245 brands with 200 warehouses, 16 Own Service Centers and 23 Partner Service Centers, and over 39800 channel partners. It has a strong global presence. In the last 6 months (2 Qtrs) its sales, operating profit, and net profit were up by 17.5, 57 and 106 per cent respectively. On TTM basis it has recorded the best ever performance. Trading at 11 PE its re-rating is overdue. Keep it for the long term.

THE SCOOP OF THIS WEEK

PITTI ENGINEERING, which has given 15 percent return in last week’s mayhem. In the last 6 months (2 Qtrs) its sales, operating profit, and net profit were up by 113, 141, and a whopping 6468 per cent respectively. Net profit was Rs 20.36 crore against Rs 31 lakh in the same period previous FY. The management during Concall also mentioned that company is recording the highest demand in its history. With a longer investment horizon, it could be a good portfolio pick.