In the week gone by, global stock market rallied as softer than expected US inflation data suggested a slower pace of rate hike. The next Fed rate hike is, therefore, likely to be 50 bp and not 75bp. US CPI inflation smoothened to 8.5% in July as lower energy prices offset increase in food and shelter cost. On the flip side, as per Nomura holding, many of the world’s leading economies will fall into a recession within the next 12 months as central banks move to aggressively tighten monetary policy to fight surging inflation. A Eurozone GDP increase of 0.7% has been predicted for the second quarter by the European Union’s statistical office Eurostat whereas Unemployment in the Eurozone appears to be stable. Japan’s economy likely grew at an annualized 2.5% rate in April-June, rebounding from a 0.5% contraction in the first quarter thanks to solid consumer spending in face-to-face services no longer hindered by coronavirus curbs. Global economic growth will slow to 3.2% this year from 6.1% in 2021, the IMF predicts.
Back at home, the fall in US inflation, better earnings growth in June FY23 quarter and consistent buying by FIIs lifted the sentiments of the market participants. With core inflation continuing to hover well above the upper tolerance limit, the RBI increased the repo rate by 50 bps, broadly in line with market expectations. In another development, RBI tightened norms for digital lending to prevent charging of exorbitant interest rates by certain entities and also check unethical loan recovery practices. Now the focus of the investors is on the geopolitical tensions, volatility in global financial markets, and emerging risk of the global recession besides other factors.
On the commodity market front, CRB gained from the low on value buying amid fall in dollar index; it closed near 310 levels. Base metals continued to trade up on lower US CPI numbers which raised the expectation of only 50 basis points interest rate rise in the month of September. The resumption of flows on the Russia-to-Europe Druzhba pipeline further calmed market worries over global supplies of crude oil. Comparatively lower demand amid smooth supply will keep crude oil in range. It can trade between 6800-7600 levels. Bullion moved up on improved sentiments. Downside in dollar index can add some appreciation and gold and silver will trade in a range of 51600-53800 levels and 56000-60000 levels respectively. GDP Growth Annualized of Japan, Employment Change and Unemployment Rate of UK, ZEW Economic Sentiment Index of Euro Area and Germany, Core Inflation Rate and Inflation Rate of Canada and UK, Retail Sales and FOMC Minutes of US, GDP and Core Inflation Rate of Euro Area etc are loads of Data and events scheduled this week, which will give further direction to the commodities prices.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001853. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
DISCLAIMER: This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, SMC, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the SMC is prohibited. Please note that we and our affiliates, officers, directors and employees, including person involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in this securities in ways different from those discussed in this report or (c) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instrument of the company (ies) discussed herein or may perform or seek to perform investment banking services for such Company (ies) or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect of any recommendation and related information and opinions, All disputes shall be subject to the exclusive jurisdiction or Delhi High Court.
SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The company enjoys strong brand recognition across product range. This helps the company`s new launches successful. Company`s focus towards reorganization and product premiumisation may help to gain market share going forward. Thus, it is expected that the stock will see a price target of Rs.926 in 8 to 10 months’ time frame on target P/BVx of 5.4x and FY23 BVPS of Rs.171.46.
The company is doing well with a healthy executable order book position and robust execution skills. Moreover, with the government's focus on expediting transportation projects via Gati Shakti Master Plan, the management expects healthy ordering activity to continue going ahead. Given the strong government push, the company expects robust financial growth. Thus, it is expected that the stock will see a price target of Rs.704 in 8 to 10 months’ time frame on a target P/BV of 2.6x and FY23 BVPS of Rs.270.91.
The stock closed at Rs 1921.35 on 12th August, 2022. It made a 52-week low at Rs 1560.10 on 20th June, 2022 and a 52- week high of Rs. 3014.95 on 07th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2027.02
After heavy correction from 2900 to 1650 levels, stock has rebounded sharply with positive bias and trading in higher highs and higher lows. Apart from this, it was formed an “Inverted Head and Shoulder” on weekly charts which is bullish in nature. Last week, stock has given the neckline breakout with volumes and also has managed to close above the same so follow up buying may continue for coming days. Therefore, one can buy in the range of 1890-1910 levels for the upside target of 2100-2160 levels with SL below 1795 levels.
The stock closed at Rs 788.90 on 12th August, 2022. It made a 52-week low at Rs 607.50 on 23rd June, 2022 and a 52-week high of Rs. 848.00 on 04th May, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 734.25
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on chart. Apart from this, it was formed a “Continuation Triangle” pattern on daily charts and has given the pattern breakout along with high volumes and also has managed to close above the same so further buying may expected for coming days. Therefore, one can buy in the range of 775-780 levels for the upside target of 900-930 levels with SL below 730 levels.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: RELIABLE SOFTWARE
Charts by Reliable software
Indian markets ended on a positive note for the fourth consecutive week as Nifty surged towards 17700 levels while Bank Nifty also managed to close above key psychological level of 39000 mark last week on back of strong global and domestic factors. From derivative front call writers seen adding hefty open interest at 17800 strike and holds more than 60 lakh shares. On flip side put writers holds maximum open interest of nearly 45 lakh shares at 17500 strike. Implied volatility (IV) of calls closed at 16.27% while that for put options closed at 17.37%. The Nifty VIX for the week closed at 18.36%. PCR OI for the week closed at 1.39. From technical front both the indices are currently trading in positive territory and can be seen making higher highs. We expect markets to remain buoyant in upcoming sessions as well, and continue its journey towards north. However traders should use any dip for making long positions and avoid holding any short positions as of now. On dips Nifty is likely to face strong support in zone of 17500-17300 while 17800 levels likely to act as strong immediate resistance for Nifty. Bank nifty also likely to remain strong and remain well supported at 38800-38500 zone.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric (Sept) is likely to trade in the range of 6800-7650 levels with bearish bias. Last week prices plunged to 10-month lows due to selling pressure and on report of better sowing. As per Andhra Pradesh agricultural department, as on 27th July Turmeric sowing activity completed around 7,958 hectares as compared to last year (same period) 7,764 hectares. Sufficient stocks and good sowing reports kept turmeric prices under pressure. As per the trade analysts, local demand for turmeric is subdued and it is reported that south India has good sowing coverage of turmeric this season following which pressure is seen on its prices. Buyers from major consumption centres are staying away. They are buying turmeric as per their short-term demand. Fresh demand will appear after September.
Jeera future (Sept) prices climbed last week as lower mandi arrivals and less supply of Jeera as farmers and stockists were holding stocks, are supporting the prices. The support is seen at 23500 levels while resistance is at 25700 levels. Mandi arrivals of Jeera at all-India level decreased by 10% as compared to the previous month. As per the trade analysts, the buyers were seen reluctant to carry out their buying at higher level. However, prices are unlikely to see any big fall from the current level as cumin seed has attracted good demand from export front. Currently, prices were higher by 78% y/y on lower availability due to lesser jeera production in 2021/22 compared to previous year. As per Fourth advance estimates released by Govt of Gujarat Jeera production is likely to fall by 45% to 2.22 lakh tonnes over the previous year due to lower sowings.
Dhaniya future (Sept) prices may trade in the range of 10800-12200 on mixed fundamental. The prices may move lower amid subdued overseas as well as local demand at spot markets, while lower production reports of crop followed by limited supply may provide support to the counter. The buyers from south India as well as the local processors have reduced their buying currently, that’s why coriander prices are steady. Buyers stayed away in anticipation of more fall in its prices. As per the market sources, the stocks of imported coriander are now a low the demand and prices of domestic coriander have picked up. Currently, the prices are higher by almost 56% y/y due to lower crop estimates. India has imported about 11.5 thousand tons of dhaniya till May’22 in year 2022 compared to 2.4 thousand tons of previous year.
Gold price steadied, heading for its fourth consecutive weekly gain, as broader weakness in the dollar countered pressure from an uptick in Treasury yields and prospects of U.S. interest rate hikes. Fundamentally gold is facing conflicting factors here. On one hand, we have a weaker U.S. dollar helping, but the other side of the equation is of course the rise in yields. The dollar was set for its third weekly loss in four, making gold less expensive for other currency holders. Data on Thursday showed U.S. producer prices unexpectedly fell in July. It came a day after news that consumer prices (CPI) were unchanged in July due to a drop in gasoline prices. With U.S. inflation data, it is almost like the calm after the storm and that has led to tight ranges for currencies and commodities after a spell of volatility a couple of days ago. San Francisco Federal Reserve Bank President Mary Daly said that while a halfpercentage- point interest rate hike in September "makes sense," she is open to the possibility of a bigger hike to fight too-high inflation. Fed funds futures traders are now pricing in a 61.5% chance of a 50-basis-point hike in September and a 38.5% chance of a 75-bp increase. Gold is highly sensitive to rising U.S. interest rates, as this increase the opportunity cost of holding nonyielding bullion. Weighing on gold by increasing the opportunity cost, benchmark U.S. 10-year Treasury yields hovered near a three-week peak. Ahead in the week, gold may continue to trade with positive bias where it may trade in the range of 51000-53800 and silver may trade within the range of 56500-60000.
Oil prices rose after the IEA raised its oil demand growth forecast for this year as soaring natural gas prices lead some consumers to switch to oil. Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries. It raised its outlook for 2022 demand by 380,000 bpd. The news has been received positively even though OPEC took a contrary view, cutting its forecast for growth in world oil demand in 2022 for a third time since April. The OPEC said, in its monthly report it expect oil demand to raise by 3.1 million barrels per day in 2022, down 260,000 barrels per day from the previous forecast. Global oil market fundamentals continued their strong recovery to pre-COVID 19 levels for most of the first half of 2022, albeit signs of slowing growth in the world economy and oil demand emerged. On the supply side, the IEA Russia’s oil output is set to fall roughly 20% by the start of next year as a European Union import ban comes into force, with close to two million barrels a day shut in by the start of 2023. Oil prices are up around 5% in the previous week, rebounding from the largest weekly drop since April 2020 last week, helped by a reassessment of the Federal Reserve’s likely monetary tightening path in the wake of the softer-than-expected U.S. CPI release. Ahead in the week, crude oil prices may continue to trade within the range of 7090-7890 levels. On the other hand natural gas prices may witness both side movements and the range would be 650-720 levels.
Base metals may trade sideways with a positive bias as weaker than expected U.S. inflation data have raised the hopes of less aggressive rate hikes in the world's biggest economy, leaving room for more growth and metals demand. Tight inventories across base metals may also support to prices. U.S. consumer prices did not rise in July compared with economists' expectation of a 0.2% gain, a report that could allow the Federal Reserve to dial down the size of its interest rate hike in September. Chinese auto sales surged in July as COVID-19 restrictions eased, though sales for the first seven months of the year were still down 2% year-on-year. However, the threat of more COVID-19 lockdowns looms over the market with several Chinese cities imposing fresh restrictions to contain flare-ups in case numbers. So profit booking at higher level cannot be denied. Copper may trade in the range 660-700 levels. ShFE copper stockpiles were at their lowest since Jan. 21, while LME inventories of the metal fell to their lowest since June 29 and were down 30% since May. Aluminum may trade in the range of 210-230 with a bearish bias. Aluminium inventory may continue to rise from early August to late August, which will increase resistance to the rise of aluminium price. Zinc can trade in the range of 310-345 levels. Zinc price are getting support after Glencore warned of the continuing margin squeeze on its European smelters. Refined zinc production at Glencore’s European operations fell by 47,500 tonnes year-on-year to 350,900 tonnes in the first six months of 2022. Lead can move in the range of 178-190 levels.
Cotton prices gained further on speculative buying supported by reports of crop damage in Haryana and Punjab due to pest attack. MCX cotton futures jumped 4% w-o-w touched the weekly high of 49250 on Friday. Firmness in ICE cotton futures driven by weakness in dollar index amid prevailing weather concerns in major cotton growing region in US also added strength in domestic prices. Moving forward, gains are looking limited in cotton prices due to sluggish export of cotton yarn and hand to mouth buying by spinning mills. Spinning mills have cut their operating capacity due to rising input cost. Increased area under cotton and better crop prospects will weigh on market sentiments. About 12.1 million Ha was sown under cotton till 5th Aug’22 compared to 11.3 million Ha of previous year higher by 7%. Prices are likely to face strong resistance near 50100 level.
NCDEX cotton seed oil cake Sep futures prices traded sideways to down on sluggish domestic demand. After touching the weekly high of 2768, prices ruled at 2684 on Friday. Improved crop condition and reports of rising acreages under cotton put pressure on prices. Prices are likely to honor resistance of INR 2800 trade lower towards 2550 in coming weeks.
Mentha oil prices remained under pressure on subdued buying at local market as sellers were active due to fear of further fall in prices. Abundant stocks and limited industrial buying will pull down the prices further in coming weeks. Prices may find support near 930-950 and can see fresh buying on lower production estimates for year 2022.
NCDEX Guar seed futures for Sep dropped further due to better production outlook for upcoming season wherein Guar gum prices slipped on bleak export enquires. Area under guar seed in Rajasthan has been reported at 30 lakh Ha as on 10th Aug’22 as compared to 17.9 lakh Ha of previous year higher by 76% Y-o- Y. Guar seed prices are likely to find strong support at 4730 level and may fall to 4500, if 4730 level is breached wherein Guar gum futures will be supported at 8200 level.
Castor seed futures are likely to trade sideways to higher on supply shortage in domestic market. However, limited export demand of oil and increased area under castor in Gujarat and Rajasthan will cap the excessive gains. Prices will face strong resistance near 7650-7700 zone. Castor area in Gujarat has increased by 41% Y-o-Y reached up to 3.05 lakh Ha as on 8th Aug’22.
CRUDE OIL MCX (AUG)contract closed at Rs. 7526.00 on 11th Aug 2022. The contract made its high of Rs. 9227.00 on 14th Jun’2022 and a low of Rs. 6944.00 on 05th Aug’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 7494.78. On the daily chart, the commodity has Relative Strength Index (14-day) value of 47.549.
One can buy near Rs. 7400 for a target of Rs. 7900 with the stop loss of 7150.
ALUMINIUM MCX (AUG)contract was closed at Rs. 218.15 on 11th Aug’2022. The contract made its high of Rs. 219.60 on 12th Aug’2022 and a low of Rs. 203.10 on 15th Jul’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs. 213.15. On the daily chart, the commodity has Relative Strength Index (14-day) value of 59.169.
One can buy near Rs. 215 for a target of Rs. 223 with the stop loss of Rs 211.
COCUDAKL NCDEX (SEP)contract closed at Rs. 2683.00 on 11th Aug’2022. The contract made its high of Rs. 2995.00 on 10th Jun’2022 and a low of Rs. 2473.00 on 03th Aug’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs. 2670.43. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.789.
One can sell near Rs. 2700 for a target of Rs. 2540 with the stop loss of Rs. 2780.
In the week gone by, CRB gained from the low on value buying amid fall in dollar index; it closed near 310 levels. Base metals appreciation continued on lower US CPI numbers, which indicated only 50 basis points interest rate rise in the month of September. Copper climbed towards 5 week highs on Thursday as improving demand and lower dollar. The spike in industrial metal prices came despite a decline in factory activity across the globe. Producer price inflation in China fell through July, while manufacturing activity contracted in the face of COVID-19 lockdowns. Aluminum prices are on rise due to extreme energy crisis in Europe which is halting the production of aluminum. The premium for the cash over the three-month aluminium contract is trading at around $9 per tonne compared with levels near zero early last week. Energy counter saw a rebound from the low despite rise in inventory amid smooth supply from Russia. US crude oil stocks rose by 5.5 million barrels in the most recent week, the U.S. Energy Information Administration said, more than the expected increase of 73,000 barrels. Oil prices slipped in Asia on Thursday after gaining more than $1 in the previous session, as concerns over supply disruptions eased and markets looked for evidence of improving fuel demand. Natural gas prices moved higher on high European gas prices. Bullion rose on fall in dollar index after release of lower CPI data of US. Money market traders immediately priced in a higher probability for a 50-basis point, hike at the Federal Reserve’s next rate revision meeting on Sept. 21. Prior to this, bets had been heavy for a 75-basis point, or three quarter percentage point, increase.
In agri, cotton continued to shine amid continued demand from spinning mills. Ginners are not selling bales by cutting prices in the domestic market, while the balance stock with the mills is also less as compared to the last year. Guar turned weaker further on higher production expectation. Main gaur producing belts have received good rainfall so far. As on 01st August, Guar area in Rajasthan is higher by 117% at 29.39 Lakh hectare as compared to 15.18 Lakh hectare last year. Castor rose from the low due to good export demand and lower carry-over stocks. Local demand for turmeric is subdued and it is reported that south India has good sowing coverage of turmeric this season following which pressure is seen on its prices. The buyers from south India as well as the local processors have reduced their buying currently, that’s why coriander prices traded weak.
The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
India’s manufacturing sector activity hit the highest level in eight months in July, driven by a significant rise in business orders, a monthly survey said. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index rose from 53.9 in June to 56.4 in July, reflecting the strongest improvement in the health of the sector in eight months.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change. The Indian manufacturing industry recorded a welcome combination of faster economic growth and softening inflation during July.
Manufacturing purchasing managers’ Index of China & US
China’s official manufacturing purchasing managers’ Index (PMI) fell to 49.0 in July from 50.2 in June, below the 50-point mark that separates contraction from growth, the National Bureau of Statistics (NBS) said. Continued contraction in the oil, coal and metal smelting industries was one of the main factors pulling down the July manufacturing PMI. The reading was the lowest in three months, with new orders and employment all contracting. Chinese manufacturers continue to wrestle with high raw material prices, which are squeezing profit margins, as the export outlook remains clouded with fears of a global recession.
US manufacturing activity continued to cool in July as more factories dialled back production in the face of shrinking orders and rising inventories. The Institute for Supply Management’s gauge of factory activity eased to 52.8, the lowest level since June 2020, from 53 a month earlier, according to data released. The group’s measure of production also fell to a more than two-year low, and its gauge of new orders remained in contraction territory for a second month. The figures highlight softer demand for merchandise as the economy struggles for momentum.
The ISM and S&P Global manufacturing data are consistent with a general slowdown in other parts of the world. European factory activity slumped last month and manufacturing output in Asia continued to weaken. Purchasing managers’ indexes for the euro area’s four-largest members all indicated contraction, with shrinking confirmed for the region.
Overall, lower PMI data for July point to a worrying deterioration in the global economy. Manufacturing has stalled and the service sector’s rebound from the pandemic has gone into reverse, as the tailwind of pent-up demand has been overcome by the rising cost of living, higher interest rates and growing gloom about the economic outlook.
Indian Rupee continued its losing streak this week with falling more than quarter percent this month so far as any relief coming from global factors are getting offset as Indian Importers are largely bidding dollar to hedge their FX risk aggressively. Earlier dollar softened this week when US CPI dropped to 8.5% vs estimated of 8.7% on a YoY basis. Global markets are remaining divided over 50 bps and 75 bps FOMC hike in September. However bunch of Fed speakers notably who are considered to be dove are releasing hawkish comments - although few dove non-voting members hawkish comments does not bring material impact in the markets. We think the weakness in rupee will continue in coming days with a possible weekly range between 79.30 - 79.95 as well. On the majors, ahead of UK Q2 GDP, pound remains vulnerable to the outcome. Accordingly GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. Notably as BoE stated that UK is now projected to enter a recession from Q4, real household income projected to fall sharply in 2022 and 2023, consumption growth turns negative. Technically big miss in GDP print will plunge GBP pairs heavily in coming days.
USD/INR (AUG)contract closed at 79.7400 on 11-AUG-22. The contract made its high of 79.8175 on 08-AUG-22 and a low of 79.2900 on 09-AUG-22 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 79.5381.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 55.42.One can buy at 79.50 for the target of 80.25 with the stop loss of 79.10.
GBP/INR (AUG)contract closed at 97.2550 on 11-AUG-22. The contract made its high of 97.3875 on 11-AUG-22 and a low of 96.0575 on 08-AUG-22 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 96.3267.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 59.05. One can sell at 97.50 for a target of 96.75 with the stop loss of 97.90.
| 11th AUG | British energy bills forecast to soar above £5,000 next year |
| 11th AUG | US petrol prices fall below $4 a gallon in sign of lower inflation |
| 11th AUG | Fed’s Mary Daly says it is too early to ‘declare victory’ on inflation fight |
| 10th AUG | US inflation falls to 8.5% in July but still close to multi-decade high |
| 10th AUG | Taiwan security officials want Foxconn to drop stake in Chinese chipmaker |
| 09th AUG | Bangladesh’s finance minister warns on Belt and Road loans from China |
| 09th AUG | UK retail sales growth fails to keep pace with soaring inflation |
| 08th AUG | US Senate passes Biden’s flagship economic package |
| 08th AUG | ECB injects billions of euros into weaker euro zone debt markets |
EUR/INR (AUG) contract closed at 82.3925 on 11-AUG-22. The contract made its high of 82.4250 on 11-AUG-22 and a low of 81.0800 on 08-AUG-22 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 81.4757.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 59.22. One can buy at 82.00 for a target of 82.75 with the stop loss of 81.60.
JPY/INR (JUL) contract closed at 60.1300 on 11-AUG-22. The contract made its high of 60.1700 on 11- AUG-22 and a low of 58.9025 on 08-AUG-22 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 59.1157.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 61.61. One can sell at 60.00 for a target of 59.75 with the stop loss of 60.40.
(2/5)
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The company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:
Considering the P/E valuation, on the upper end of the price band of Rs.220, the stock is priced at pre issue P/E of 54.89x on FY22 EPS of Rs.4.01. Post issue, the stock is priced at a P/E of 68.41x on its EPS of Rs.3.22. Looking at the P/B ratio at Rs.220, pre issue, book value of Rs. 41.22 of P/Bvx 5.3x. Post issue, book value of Rs.76.54 of P/Bvx 2.87x.
Considering the P/E valuation, on the lower end of the price band of Rs.209, the stock is priced at pre issue P/E of 52.15x on FY22 EPS of Rs.4.01. Post issue, the stock is priced at a P/E of 64.99x on its EPS of Rs.3.22. Looking at the P/B ratio at Rs.209, pre issue, book value of Rs. 41.22 of P/Bvx 5.07x. Post issue, book value of Rs.76.54 of P/Bvx 2.73x.
Incorporated in 2004, Syrma SGS Technology Limited is a Chennai-based engineering and design company engaged in electronics manufacturing services (EMS). The company provides integrated services and solutions to original equipment manufacturers (OEMs) from the initial product concept stage to volume production through concept co-creation and product realization. SSTL currently operates through 11 strategically located manufacturing facilities in north India (i.e. Himachal Pradesh, Haryana and Uttar Pradesh) and south India (i.e. Tamil Nadu and Karnataka).
Leading design and electronic manufacturing services: Syrma is one of the leading design and electronic manufacturing services companies in terms of revenue in Fiscal 2021, driven by the focus on quality and customer relationships. Its leading position in the market is driven by its focus on quality and customer relationships nurtured through prompt responsiveness and ensuring reliability.
Consistent track record of financial performance: The company has shown consistent growth in terms of revenue and profitability. The financial illustrates not only the growth of its operations over the years but also the effectiveness of the administrative and cost management protocols that it has implemented. Among other things, its strong financial position and results of operations have enabled it to further its inorganic growth initiatives.
Diversified and continuously evolving and expanding product portfolio and service, backed by strong R&D capabilities: Its continuously evolving product portfolio has helped accelerate its growth and in innovating the manner it caters to and thus retains both new and existing customers. Its product portfolio has helped them forge strong relationships with major clients. Its R&D team also aims to provide solutions to improve of its existing manufacturing processes, including by adoption of advanced manufacturing technology, improve manufacturing efficiency on its existing products and reduce manufacturing costs. This helps the company to produce high quality products consistently and also enables it to maintain a cost advantage over its competitors.
Established relationships with marquee customers across various countries: It has established and will continue to focus on strengthening long-standing relationships with well-known customers across the end-use industries that they work with. Certain of its marquee customers across the end-use industries that it caters to, include TVS Motor Company Limited, A. O. Smith India Water Products Pvt. Ltd., Robert Bosch Engineering and Business Solution Pvt Ltd, Eureka Forbes Ltd Limited, CyanConnode Limited, Atomberg Technologies Private Limited, Hindustan Unilever Limited and Total Power Europe B.V.
State-of-the-art manufacturing capabilities: The company currently operates through 11 manufacturing facilities spread across five states namely - Tamil Nadu, Karnataka, Himachal Pradesh, Haryana, and Uttar Pradesh. Its manufacturing facilities are equipped with modern and high-speed equipment that can handle surface mount components and through hole components. The company is also focused on vertical integration in its manufacturing process. As part of its product portfolio, it manufactures various electromagnetic components parts such as transformers and chokes, which are required for the manufacture of its PCBA products.
Solidify and strengthen its core competitiveness of technology innovation: The company intends to continue to invest in technology infrastructure to enable further technical innovation, improve its operational efficiencies, increase customer satisfaction and improve its sales and profitability.
Pursue inorganic growth through strategic acquisitions: The company has continuously sought to diversify its product portfolio which could cater to customers across various end-use industries and geographies. The company may pursue similar opportunities to undertake acquisitions (i) that allow it to enhance its scale and market position; (ii) that allow it to strengthen its range of product offerings and customer base; and (iii) that enable access to new clients and enter high-growth geographies in a cost effective manner and provide it with a platform to extend its reach to new geographic markets within India; and (iv) that add new products to its portfolio or that allow it to enter strategic businesses to capture additional revenue opportunities from its existing customer base.
Cater to more end-use industries: The market size and future outlook of few of the end-use industries that it intends to focus on going forward are Lighting, Medical electronics and Aerospace and defence. The company intends to evolve its product and service offerings and accordingly grow its business, by leveraging on the growth and technological requirements of any industry (including but not limited to those set out above), that it believes can effectively utilise its manufacturing and inhouse R&D capabilities.
The company is one of the fastest-growing companies in India in the EMS segment. It is also one of the leading players in customized Radio-frequency identification (RFID) tags. The company is focusing on a high-margin product portfolio for marquee customers. A long term investor may opt the issue.
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The mutual fund industry's net assets under management (AUM) in July 2022 stood at Rs 37.74 lakh crore, and the net average assets under management (AAUM) came in at Rs 37.76 lakh crore, the Association of Mutual Funds in India (AMFI). The overall mutual fund folios crossed at an alltime high of 13.55 crore, and retail folios also peaked to a record high of 10.80 crore. At Rs 37,74,803.20 crore, the net AUMs for the Indian mutual fund industry marked a 7 percent on-year growth. The average AUMs, at Rs 37,76,911 crore, also increased by 7 percent YoY. Number of mutual fund folios have risen 29 per cent YoY to an all-time high of 13,55,73,653, compared to 10,54,97,837 as on July 30, 2021.
Net inflows (more inflows than outflows) in equity mutual funds fell by 42 percent in July to Rs 8,898 crore compared to Rs 15,497 crore in June 2022 – a drop of 42 percent, as per the monthly data released by the Association of Mutual Funds in India. The total assets under management for the mutual fund industry rose to Rs 37.74 trillion as of July 31, 2022, compared to Rs 35.64 trillion. The debt funds saw net inflows of Rs 4,930 crore in July compared to net outflows of Rs 92,247 crore in the previous month. Contribution through systematic investment plans – the preferred means of investing in mutual funds for individual investors, fell marginally to Rs 12,139 crore in July compared to Rs 12,275 crore in the previous month. The SIP accounts went up to 5.61 crore in July compared to 5.55 crore in the previous month. Among equity funds, small-cap funds and flexi cap funds were prominent gainers as they received net inflows of Rs 1,779 crore and 1,381 crore respectively. All open-ended equity fund categories received net inflows in July.
Kotak Mutual Fund has launched Smart Facility for SIP, STP and SWP for all investors. According to the fund house, the new feature takes the traditional SIP/STP/SWP facility a step further, where investors’ instalment (in case of SIP/STP) or withdrawal (in case of SWP) varies based on market valuation. The new facility is available for all open-ended equity schemes, Equity Index Funds and Kotak Equity Hybrid Fund. With the new facility, the amount of investment or withdrawal is based on equity valuations – Cheap, Neutral and Expensive. When valuations are expensive the default SIP instalment will be half (0.5x) of the base SIP amount and when valuations are cheap the instalment would be (2x) of the Base SIP amount. This facility also allows you to choose the minimum and maximum SIP amount. Investors can also opt for this option through the Systematic Transfer Plan (STP) route.
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