Contents

  • Equity 4-7
  • Derivatives 8-9
  • Commodity 10,15-17
  • Insurance 11-14
  • Currency 18
  • IPO 19
  • FD Monitor 20
  • Mutual Fund 21-22

From The Desk Of Editor

In the week gone by, by, global stock markets witnessed volatile movements as investors are still worried about the US debt-ceiling and stability of the banking industry. Also macroeconomic data from the United States and China triggered global growth concerns. Data showed US initial jobless claims reached the highest since October 2021 while producer prices rose 0.2% in April. The reports signal the Federal Reserve’s policy-tightening campaign may finally be having an effect on inflation as the central bank walks a tightrope between reining in rising prices and tipping the economy into a downturn. Recent, U.S. inflation data suggest that the U.S. Federal Reserve will not raise rates at its next meeting. Consumer price index inflation in the United States came it at 4.9% year-on-year in April. That was the 10th straight monthly fall and was marginally below the 5% figure economists expected. However, Fed will continue to keep close eye on jobs report and inflation print before the June meeting. Meanwhile, the Bank of England raised its benchmark lending rate to the highest level since 2008 and said further increases may be needed if inflationary pressures persist. The central bank no longer predicts recession after it revised up its growth forecasts from gloomy numbers released in February, the biggest such improvement since it first published forecasts in 1997. On the Chinese front, New Chinese bank loans tumbled far more sharply than expected in April, data showed on Thursday, adding to worries that the economy's post-pandemic recovery is losing steam.

Back at home, despite strong FIIs buying, markets continue to witness volatile trade. Domestic market sentiments also took a hit after data suggested a possible slowdown in the US economy. FPIs have invested over Rs. 21,000 crore in the Indian financial market in May so far. The return of FPIs can be attributed to India's economic resilience. Indian economy is expected to remain one of the fastest-growing large economies in the world in 2024 which will likely keep foreign investors glued to the country. At this juncture, market indicators suggest that both Fed and the RBI are close to the peak in the present rate hiking cycle. Yes, the anticipation of the end of aggressive rate hikes is adding confidence to FPIs for emerging markets. On the flip side, Fitch Ratings has lowered its 2023-24 GDP growth forecast for India to 6% from 6.2%, citing headwinds from elevated inflation and interest rates along with subdued global demand, with the economy expected to rebound to 6.7% in 2024-25 as opposed to 6.9% projected earlier. Besides, Q4 earnings, the momentum will depend on a host of macroeconomic factors and global economy going forward.

On the commodity market front, continuous fall was witnessed in commodities and this sent CRB below 290 levels. Dollar Index saw a pause in fall and closed the week marginally high. In bullion, gold continued to move up on third straight week whereas silver saw a massive correction from the top. Gold and silver may trade in a range of 59000- 62000 and 71000- 76000 levels respectively. In the energy counter, crude oil prices rebounded after a three week fall whereas natural gas was in a range with upside bias. Crude oil can see further downside; upto 5700-5650 levels. Base metals prices corrected on weaker data and rebound in dollar index. More fall is expected in base metals from higher side. BoE Monetary Policy Report Hearings, Reserve Bank of Australia Meeting Minutes, Retail Sales of China, Claimant Count Change and ILO Unemployment Rate of UK, GDP of Euro Area, Retail Sales of US, BoC Consumer Price Index Core and retail sales of Canada, Unemployment Rate of Australia etc are many important data scheduled this week, which one should watch while trading in commodity.

(Saurabh Jain)

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 INH100001849. 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.

EQUITY

NEWS

DOMESTIC
Economy
  • Global ratings agency Fitch reiterated its BBB- rating with a stable outlook on India’s long-term sovereign debt, saying that growth prospects have brightened as the private sector appears poised for stronger investment growth. This is on the back of improvement in corporate and bank balance sheets in the past few years, supported by the government’s infrastructure drive, the rating agency said.
Oil & Gas
  • Oil and Natural Gas Corp (ONGC) has made two oil and gas discoveries in Mumbai offshore. Named ‘Amrit’ and ‘Moonga’, these blocks are about 100 km and 30 km from the landfall points, respectively, and are located in the blocks the company won under the new Open Acreage Licensing Policy (OALP) in the last few years.
FMCG
  • Varun Beverages has invested 26.34 per cent in equity share capital of Huoban Energy 7 Private Limited, a special purpose vehicle inter-alia engaged to supply solar power to consumers in the State of Maharashtra.
Auto Ancillaries
  • HPL Electric and Power Ltd (HPL) won smart meter orders worth Rs 204 crore from customers with a pan-India presence. HPL currently has an order book of over Rs 1,500 crore.
  • Amara Raja Batteries Limited launched the first Gigafactory in Telangana. Considered to be one of India's largest gigafactory, it will manufacture lithium-ion batteries, with a planned investment of Rs 9,500 crore over the next 10 years.
  • Jay Bharat Maruti Limited will be setting up two new manufacturing plants in Haryana and Gujarat. The company planning to cater to the requirements of its key customer Maruti Suzuki in both regions.
Capital Goods
  • Thermax has bagged an order of Rs 271.50 crore from India’s biggest oil refinery in the private sector for mechanical balance of plant (MBoP) works for the captive power plant (CPP) at their new oil-to-chemical (O2C) facility in the western part of India.
Realty/ Construction
  • PNC Infratech has won an EPC project worth Rs 771.46 crore from Haryana Orbital Rail Corporation Limited.
  • Capacite Infraprojects Ltd received an order worth Rs 224 crore from Raymond. The order related to building a residential project in Thane.
Metal
  • Dr Reddy's Laboratories Ltd, announced the launch of Regadenoson injection, used as an agent in the imaging of heart muscle to check blood flow, in the US market.
Miscellaneous
  • Greenply Industries Ltd, a manufacturer of plywood and allied products, to enter into a joint venture agreement with Samet BV for manufacturing and selling functional furniture hardware. Greenply Industries will invest an amount of approximately Rs 34 crore in the joint venture over a period of the next four years.

PIVOT SHEET

MACRO ECONOMIC METER

INTERNATIONAL NEWS
  • US initial jobless claims rose to 264,000, an increase of 22,000 from the previous week's unrevised level of 242,000. Economists had expected jobless claims to inch up to 245,000.
  • US producer price index for final demand inched up by 0.2 percent in April after falling by a revised 0.4 percent in March. Economists had expected producer prices to rise by 0.3 percent compared to the 0.5 percent drop originally reported for the previous month.
  • US consumer price index climbed by 0.4 percent in April after inching up by 0.1 percent in March. Economists had expected consumer prices to rise by 0.4 percent.
  • The Bank of England lifted its benchmark interest rate for the twelfth straight session and signaled more tightening to address the persistent strength in domestic price pressures amid an improvement in the economic growth outlook. The nine-member Monetary Policy Committee, led by Governor Andrew Bailey, decided to lift the bank rate by 25 basis points to 4.50 percent, the highest since 2008.
  • The M2 money stock in Japan was up 2.5 percent on year in April, the Bank of Japan said, coming in at 1,232.4 trillion yen. That was in line with expectations and unchanged from the March reading following a downward revision from 2.6 percent.
  • China's consumer price inflation reached its lowest level in more than two years in April largely due to the base effect and factory gate deflation deepened, providing space of monetary policy easing. The consumer price index posted an annual increase of 0.1 percent from the last year, slower than the 0.7 percent rise in March.
4

EQUITY

INDIAN INDICES (% Change)

SECTORAL INDICES (% Change)

GLOBAL INDICES (% Change)

FII/FPI & DII ACTIVITY (In Rs. Crores)

BSE SENSEX TOP GAINERS & LOSERS (% Change)

NSE NIFTY TOP GAINERS & LOSERS (% Change)

5

EQUITY

Beat the street - Fundamental Analysis

KALPATARU POWER TRANSMISSION LIMITED
CMP: 532.15
Target Price: 660
Upside: 24%
VALUE PARAMETERS
  • Face Value (Rs.) 2.00
  • 52 Week High/Low 597.15/332.30
  • M.Cap (Rs. in Cr.) 8644.57
  • EPS (Rs.) 23.87
  • P/E Ratio (times) 22.29
  • P/B Ratio (times) 1.83
  • Dividend Yield (%) 0.00
  • Stock Exchange BSE
% OF SHARE HOLDING

Investment Rationale

  • Kalpataru Power Transmission (KPTL) is one of the largest specialized EPC companies engaged in power transmission & distribution, oil & gas pipeline, railways and civil infrastructure business. The company is currently executing projects in over 30 countries and has global footprints in 70 countries.
  • KPTL has maintained leadership position in all its major business backed by strong organisational capabilities, superior technical knowhow and adherence to top-class sustainability standards.
  • The company witnessed a strong momentum in order booking across T&D, B&F, Water & Urban Infra business. The order book stood at Rs 45,918 crore as on 31 March 2023 and additional L1 of Rs 4,000 crore. It has received additional new orders of Rs 1,229 crore in month of April 2023 and May 2023, Order inflows of Rs 4,114 crore till date in FY24. According to the management of the company, considering current order book visibility all business segments except railways, are expected to register double digit growth for FY24.
  • In Q4FY23, revenue of the company grew by 18.07% driven by strong execution and healthy order book in the B&F, water and international business. EBITDA up by 46% YoY to ₹440 crores; EBITDA margin stood at 9.0%. On consolidated basis, the management of the company 25% plus growth for FY24 and PBT margin in 4.5-5% on the back of current order book and the diverse business mix. Brazil is expected to return to PBT positive this fiscal.
  • According to the management, the visibility in the T&D business remains robust in domestic and international markets given the push for renewables and the requirements for new transmission lines. The company continues to strategically scale up T&D business with notable order wins in key markets.
  • It has completed merger of JMC with KPTL, which is leading to the creation of one of India’s large listed diversified engineering and Construction Companies. The combined entity will bring together diverse capabilities and the ability to pursue accelerated growth.

Risk

  • Elevated logistics cost and volatility in commodity and currency
  • Geo-political issues

Valuation

According to the management of the company, it has strengthened its capabilities by expanding civil business in the international markets, adding large size orders in T&D in India and international markets, and ventured into newer areas like airports, solar EPC, data centers etc. The growing need for infrastructure development and higher adoption of renewables has resulted in a strong business momentum. The company has strong balance sheet and are continuously working on improving its working capital, return ratios and project closures along with divesting its non-core assets, which provides good visibility for growth in coming quarters. Thus, it is expected that the stock will see a price target of Rs. 660 in 8 to 10 months’ time frame on current P/BVx of 1.83x and FY24 BVPS of Rs.360.76.

P/B Chart

JYOTHY LABS LIMITED
CMP: 207.25
Target Price: 265
Upside: 28%
VALUE PARAMETERS
  • Face Value (Rs.) 1.00
  • 52 Week High/Low 222.90/142.00
  • M.Cap (Rs. in Cr.) 7610.40
  • EPS (Rs.) 6.38
  • P/E Ratio (times) 32.48
  • P/B Ratio (times) 4.91
  • Dividend Yield (%) 1.21
  • Stock Exchange BSE
% OF SHARE HOLDING

Investment Rationale

  • Jyothy Labs is primarily in the business of Home Care and Personal Care segments of FMCG. It is involved in the manufacturing and marketing of products in Fabric care, Dishwashing, Household Insecticides and Personal care. The Company has leading brands like Ujala, Exo, Henko, Pril, Margo, Maxo , Mr. White, MoreLight, Neem, and Maya. It operates with 2.8 Mn Outlets across India, 23 Manufacturing Plants, 2950+ Sales team members and 8200+ Channel Partners.
  • It made new launches in April 2023, notably Margo Neem Naturals with three new variants of Lime, Jasmine and Rose.
  • The company witnessed strong growth in fabric Care driven by its foray into liquid detergents is showing positive results and has strengthened the portfolio. Strong focus on building usership in post wash also helped driving the growth.
  • The company is focusing on strengthen its distribution network in this direction the company`s direct reach has crossed 1.1 million outlets. It has also implemented Botree, which is the most advanced distributor management system, which will further enhance its sales efficiency.
  • It is consistently gaining market share across brands. Its Exo Bar and Pril brand in dishwash has market share of 13.8% and 14.8% respectively, Ujala Supreme held its market share at 84%, Maxo Coil and liquid vaporiser market share stood at 23.1% and 8.9% respectively. Currently, it has nine celebrities endorsing its brands. It is committed for a higher allocation of resources towards brand building initiatives.
  • It is also investing in scaling manufacturing capacities. Recently, it has added a detergent powder line at its existing Pithampur plant in Madhya Pradesh.
  • In Q4FY2023, the company reported revenue of Rs 617 Crores, up 12.8%. EBITDA margin improved to 14.8% (Rs 91.3 Crores) versus 10.5% (Rs 57.3 Crores) in the same period last year, an increase by 59.4%. PAT at Rs 59.3 Crores as against Rs 36.9 Crores, in the same period last year, Up by 60.4%.
  • Healthy P&L growth, has strengthen the balance sheet with the company being debt-free, i.e, the gross debt is nil and has cash balance of Rs. 283 crores as of March 31, 2023.

Risk

  • High input cost
  • Economic slowdown

Valuation

The company has strong balance sheet with zero debt. It enjoy strong market share across its brand. Recent capacity addition and new launches across various categories indicated steady business growth of the company. Thus, it is expected that the stock will see a price target of Rs.265 in 8 to 10 months’ time frame on target P/BV of 5.7x and FY24 BVPS of Rs.46.42.

P/E Chart

Above calls are recommended with a time horizon of 8 to 10 months.

6

EQUITY

Beat the street - Technical Analysis

HAVELLS INDIA LIMITED (HAVELLS)

The stock closed at Rs 1305.95 on 12th May, 2023. It made a 52- week low of Rs 1024.50 on 23rd December, 2022 and a 52-week high of Rs.1405.55 on 02nd September, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1214.

Stock has been consolidating in a broader range of 1130-1270 since last four months as prices can be seen flirting around its 200 days exponential moving average on daily interval. At current juncture, a fresh breakout has been observed after a prolong consolidation phase with rise in average volumes. Alongside, positive divergences on secondary oscillators suggest for next upswing into prices as bullish momentum is expected to carry in upcoming sessions as well. Therefore, one can buy the stock in the range of 1300-1305 levels for the upside target of 1460-1465 levels with SL below 1200 levels.

HINDUSTAN UNILEVER LIMITED (HINDUNILVR)

The stock closed at Rs 2623.40 on 12th May, 2023. It made a 52- week low at Rs 2100 on 17th June, 2022 and a 52-week high of Rs.2741.60 on 09th December, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2517.

Since the beginning of year 2023, stock has been trading under pressure, with the formation of lower bottom pattern, visible on daily and weekly charts. On technical grounds, stock has formed triple bottom pattern around 2420 levels and risen sharply thereon to once again reclaim the momentum above its 200 days exponential moving average on daily charts. A fresh breakout has been observed above the falling trend line of downward sloping channel. Therefore, one can buy the stock in the range of 2600-2625 levels for the upside target of 2850-2875 levels with SL below 2475 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

Above calls are recommended with a time horizon of 1-2 months

7

DERIVATIVES

WEEKLY VIEW OF THE MARKET

Indian markets rebounded last week, as Nifty ended with gains of more than 1% while Banking index outperformed to end the week with gains of more than 2.50%. A slew of weak economic data points, from the US and China hinting towards a slower pace of economic growth disturbed the mood of the Indian markets over the week, but lower levels buying once again emerged in later part of the week as Nifty ended above key level of 18300. From the derivative front, hefty OI addition has been observed at 18200 put strike which will act as a strong support level for Nifty moving forward. The Implied volatility (IV) of calls closed at 11.86% while that for put options closed at 12.57%. The Nifty VIX for the week closed at 13.22%. PCR OI for the week closed at 1.28. Technically, both the indices are likely to remain bullish in upcoming session as well with volatility likely to grip the markets. Traders are advised to create fresh longs in case of any correction seen on the back of profit booking. On the higher side, now 18400-18500 zone would act as a strong hurdle for the index going forward.

DERIVATIVE STRATEGIES

NIFTY OPTION OI CONCENTRATION (IN QTY) (MONTHLY)

CHANGE IN NIFTY OPTION OI (IN QTY) (MONTHLY)

BANKNIFTY OPTION OI CONCENTRATION (IN QTY) (MONTHLY)

CHANGE IN BANKNIFTY OPTION OI (IN QTY) (MONTHLY)

8

DERIVATIVES

SENTIMENT INDICATOR (NIFTY)

SENTIMENT INDICATOR (BANKNIFTY)

FII’S ACTIVITY IN INDEX FUTURE

FII’s ACTIVITY IN DERIVATIVE SEGMENT

Top 10 Long Buildup

Top 10 Short Buildup

Note: All equity derivative data as on 11th May, 2023

**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

9

COMMODITY

OUTLOOK

SPICES

Turmeric June futures witnessed sharp recovery in prices during last week due to report of crop damage in Maharashtra. Arrivals dropped sharply due to unseasonal rainfall that lent support to prices. Turmeric prices are likely to trade on positive note due to weaker production for upcoming season. Gains in turmeric is likely to remain continue due to supply concerns as farmers are reluctant to release arrivals in better price realization. Growing worries over rising possibilities of El Nino during July- Aug’23 is also likely to support firmness in prices. Turmeric production is already down by 7%-10% in year 2022-23 and likely to down further in upcoming season due to weather concerns. Acreages under turmeric may shift to other kharif crops that will lead to fall in production. However, heavy stocks will cap the excessive gains. Turmeric June contract is expected to trade in range of 7400-8000.

Jeera NCDEX June futures are likely to remain volatile as some kind of profit booking is likely to be seen as marginal traders are avoiding bulk buying in anticipation of rise in seasonal supply of jeera in Gujarat and Rajasthan. Export demand has also slowed down at this level that may lead to correction in prices. Major trend is still bullish due to tighter carryover stocks and below normal arrivals in the market. Quality of the new crop is also questionable after recent rainfall in Rajasthan and Gujarat. Jeera June futures are expected to trade in range of 42000-51000.

Dhaniya NCDEX June prices are likely to trade on weaker note due to increased supplies at major trading centers. Overall dhnaiya production is estimated to increase by 8%-10% across India that will keep supplies adequate in coming weeks. However, losses are likely to be limited as prices are ruling at multiyear low and stockiest are looking interested by buy at dip. Dhaniya NCDEX June futures are likely to trade in range of 6500-7300 levels.

BULLIONS

Gold prices remained relatively stable, posted flat returns, while the silver prices experienced a significant decline, falling from the high of 78120 to 73045 in one day move. The selling of precious metals was mainly due to the strength of the U.S. dollar index. The decline in silver prices was also attributed to concerns over a weak economic recovery in China, which is a major consumer of industrial metals. Furthermore, persistent economic fears and the U.S. debt ceiling standoff also cushioned bullion’s further decline. Investors are closely monitoring the on-going debt talks and expecting a pause in rate hikes by the Federal Reserve. While markets have priced in the idea that the Fed is probably done hiking at this point, traders are still looking for clear indications on the rate trajectory. Additionally, a debt limit meeting between U.S. President Joe Biden and top lawmakers has been postponed to early next week, adding to the uncertainty in the markets. This has led to some profit taking in precious metals, pushing prices down. Markets are currently pricing in an 87.1% chance of the U.S. central bank holding rates at its current level in June. On the technical front, COMEX gold is facing strong resistance near $2050 and taking support near $2000 levels. Break below the $2000 mark may push the prices to $1980. On the other hand, Silver may continue to trade in the range of 22.650-25.300 levels. Ahead in the week gold prices may continue to witness selling pressure where it may take support near 59500 and could face resistance near 62000. Silver on MCX will also follow the footsteps of gold and base metals and witness sharp selling pressure and trade in the range of 70000-77000 levels.

ENERGY COMPLEX

Crude oil prices posted their fourth weekly decline, as renewed economic concerns in the U.S. and China revived anxieties about fuel demand growth in the world’s two largest oil consumers. Both benchmarks fell by about 1.1% for the week, longest streak of weekly decline since November 2021. With talks over the U.S. government’s debt ceiling stalled and renewed fears that another regional bank is in crisis, there is mounting concern that the U.S. will enter a recession. A decline in new loans to businesses in China and weaker economic data there earlier in the week refocused doubts about its recovery from COVID restrictions driving oil demand growth. Additionally, cooler inflation data from both countries suggested consumer demand was weak. Oil is a growth-sensitive commodity, which was impacted by these bearish factors. Price rose, after falling, on some demand expectations following comments from the U.S. energy secretary that the U.S. could repurchase oil for the Strategic Petroleum Reserve (SPR) once some sales finish in June. The U.S. government has said it will buy oil when prices are consistently at or below $67 to $72 per barrel. Ahead in the week, prices continue to witness selling pressure but sell on rise advised and the possible trading range would be 5600-6200 levels. Natural gas posted flat returns due to low demand, which is likely to continue in the coming week. The weather forecast for the U.S. from May 11-17 suggests an active pattern with numerous weather systems tracking across the country, bringing heavy showers and thunderstorms. However, the temperature is expected to remain comfortable with highs in the 60s to 80s, resulting in light national demand for natural gas. Ahead in the week, prices will continue to witness sideways movement and the trading range would be 160-200 levels.

BASE METALS

Base metals may trade with bearish bias as the growing fear of global recession, tepid demand in top consumer China and improving supply may pressure the market. However, prices may get support as short covering cannot be denied due to softer dollar after the U.S. Federal Reserve opened the door to a pause in its aggressive tightening cycle. China's industrial metals consumption has remained subdued in the second quarter, which is traditionally a peak demand season, due to a slow economic recovery and sluggish export market. A slew of downbeat data last week suggested a sluggish economic recovery in the world's second largest economy, exacerbating concerns over metal demand outlook, amid rising supplies of the metal. Copper may trade in the range of 710-740 levels. Production at 22 smelters surveyed by Antaike, with a total capacity of 11.12 million tonnes, totalled 886,700 tonnes last month, up 18.5% from a year ago. Copper inventories in LME warehouses climbed to a near two-month high recently. Zinc can trade in range of 218-235. Lead can move in the range of 176- 186 levels. Global demand for refined lead metal will exceed supply by 20,000 tonnes in 2023, the ILZSG said. Aluminum may trade in the range of 195-210 levels. The share of Russian aluminium stocks in warehouses registered with the London Metal Exchange fell slightly-to 52% of the total in April, or 256,125 tonnes, from 53% in March, data on the exchange's website showed. Overall aluminium stocks in LME warehouses are up 27% so far this year to 570,150 tonnes. Steel long (June) is likely to trade in the range of 44500-47000 levels with bearish bias on NCDEX due to softened global cues.

OTHER COMMODITIES

Cotton prices are likely to trade sideways to higher on reduced supplies in physical market. Cotton Association of India (CAI) further lowered its cotton crop estimate by 465,000 bales for the 2022-23 season to 29.8 million bales as production is expected to decline in Maharashtra, Telangana, Tamil Nadu and Odisha. The latest estimate of cotton crop is the lowest since 2008-09 season which was 29.0 million bales. Growing worries over upcoming crop numbers due to rising possibilities of El Nio weather phenomenon in year 2023 is another factor that will cap the downfall in cotton prices. Cotton is likely to trade in range of 61000 -63000. Similarly, Kapas Apr’24 futures are likely to trade in range of 1580-1670.

Cotton seed oil cake NCDEX June futures are likely to trade on positive bias during the week due to reduced supplies in the market. Bleak production of cotton and lower arrivals has affected the overall production of cotton seed oil cake adversely. Cotton seed oil cake prices are likely to trade in range of 2650- 2930.

Guar seed June futures are likely to trade sideways to higher on rising possibilities of drier spell of monsoon in year 2023. The chance of an El Niño weather phenomenon developing in the coming months that will keep market sentiments up for guar. Drier monsoon is likely to directly affect the sowing progress and yield of guar seed in year 2023. However, market is running with huge stocks of guar seed and bleak demand prospects of gum in wake of weakness in crude oil prices is likely to cap the excessive gains. Guar seed prices will trade in range of 5400-6000/6200 in near term wherein Guar gum prices are likely to trade in range of 10500-12500 levels.

Mentha oil May contract is likely to trade down due to reports of tumbling export of menthol from India India exported about 11887 tonens of menthol during time period of Apr’22-Feb’23 as compared to 18386 tonnes of previous year for corresponding period. Moreover, improved sowing number will also weigh on prices. Recent spell of rainfall in Uttar Pradesh and Bihar has proved helpful for sowing activities. Forecast of above normal rainfall in May will be helpful for sowing activities of Mentha. Mentha oil prices are likely to trade in range of 945- 1000.

Castor seed prices are expected to trade sideways to higher as some recovery is likely to be seen in prices due to growing worries over weather in July-Aug, the peak sowing period of castor. However, gains are likely to be limited as higher production and limited export demand of castor oil will cap the major upside movement. Overall Production is estimated at 18.82 lakh tonnes in year 2023 higher by 16% Y-o-Y. Castor seed June prices are likely to hold the support of 5800 will face 6400 as resistance in near term.

10




COMMODITY

TREND SHEET

TECHNICAL RECOMMENDATIONS

GOLD MINI MCX
Contract: MAY
M*.High: 61775.00
M*.Low: 55150.00

It closed at Rs. 60886.00 on 11th May 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 60602.68. On the daily chart, the commodity has Relative Strength Index (14-day) value of 48.410. Based on both indicators, it is giving a sell signal.

One can sell near Rs. 61000 for a target of Rs. 59000 with the stop loss of 61900.

NATURAL GAS MINI MCX
Contract: MAY
M*.High: 249.80
M*.Low: 168.30

It closed at Rs. 179.80 on 11th May 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 187.23. On the daily chart, the commodity has Relative Strength Index (14-day) value of 38.421. Based on both indicators, it is giving a sell signal.

One can sell near Rs. 189 for a target of Rs. 165 with the stop loss of 200.

GUARSEED NCDEX
Contract: JUN
M*.High: 6600.00
M*.Low: 5431.00

It closed at Rs. 5707.00 on 11th May 2023. The 18-day Exponential Moving Average of the commodity is currently at Rs 5706.01. On the daily chart, the commodity has Relative Strength Index (14-day) value of 57.355. Based on both indicators, it is giving a buy signal.

One can buy near Rs. 5600 for a target of Rs. 6000 with the stop loss of 5400.

NOTE: *M.High / M.Low stands for Monthly High / Monthly Low

15

COMMODITY

NEWS DIGEST

  • India’s gold imports, which have a bearing on the current account deficit, dipped 24.15 per cent to USD 35 billion in 2022-23 due to global economic uncertainties, according to data from the commerce ministry. Silver imports, however, rose 6.12 per cent to USD 5.29 billion during the last fiscal.
  • India’s steel exports rise 13 per cent in April. Finished steel exports in April stood at 0.855 million tonnes (mt), as per provisional numbers available with Steel Ministry.
  • The Indian Bullion and Jewellers Association (IBJA) wants the Director General of Foreign Trade (DGFT) to scrap the special gold import quota from the UAE under the comprehensive economic partnership agreement allotted to 78 applicants this year, and call for fresh applications from eligible players.
  • India’s green energy share increases by 12.4% in ten years, coal-based power capacity falls by 9%: Council on Energy, Environment and Water’s Centre for Energy Finance.
  • World oil demand in 2023 will rise by 2.33 million barrels per day (bpd), or 2.3%, the Organization of the Petroleum Exporting Countries said in a monthly report.
  • Oil producers cartel OPEC‘s share in India’s oil imports fell to an all-time low of 46 per cent in April as purchases of cheaper Russian oil peaked, industry data showed.
  • Wheat procurement by the Food Corporation of India (FCI) for the Rabi Marketing Season (RMS) 2023-24 reached 249.58 LMT on 8 May 2023.
  • The finance ministry has announced a waiver of basic customs duty and agriculture infrastructure and development cess on crude soya bean oil and sunflower seed oil imports under the tariff rate quota (TRQ) system. This waiver will be effective from 11 May to 30 June, 2023, and applies exclusively to importers holding a TRQ license for the fiscal year 2022-23.

WEEKLY COMMENTARY

Continuous fall was witnessed in commodities; and this had sent CRB below 290 levels. Dollar Index saw a pause in fall and closed the week marginally high. The dollar rose to its highest since May 1 as against a basket of major currencies, after recent U.S. jobless claims data strengthened the case for the Federal Reserve to halt interest rate hikes but did not prompt expectations of year-end rate cuts. In bullion, gold continued to move up on third straight week whereas silver saw massive correction from the top. Concerns over slowing U.S. economic growth also supported safe haven demand for gold in recent weeks, as the country grapples with high inflation and interest rates. The Fed recently warned that the U.S. faces a mild recession this year. Silver saw a weekly fall from 77248 to 72861 levels. In the energy counter, crude oil prices rebounded after a three week fall whereas natural gas was in a range with upside bias. Upside was limited on build up inventory in US. U.S. natural gas inventories rose by 78 billion cubic feet, or bcf, the Energy Information Administration, or EIA, announcing a higher-thanexpected build in an oversupplied market that needs to see less stockpile increases and more demand in order to rally. The stockpile build comes after another round of barely supportive weather. Base metals prices corrected on weaker data and rebound in dollar index. Copper prices nosedived amid signs of weakening demand in major importer China. Chinese imports missed expectations in April, with copper shipments to the country falling nearly 13% from the prior year amid continued weakness in the real estate and manufacturing sectors. Oil prices fell about 2% to a one-week low on Thursday as a political standoff over the U.S. debt ceiling stoked recession jitters in the world's biggest oil consumer, while rising U.S. jobless claims and weak Chinese economic data weighed.

In Agri, castor witnessed pause in the fall. Cotton and cotton oil seed cake prices slipped further on weakness in global cotton prices and bleak export demand. Guar gum prices were slightly up and Guarseed prices closed marginally lower. Growing worries over drier spell of monsoon in year 2023 due to strengthening possibilities of El Niño weather phenomenon has triggered fresh buying in guar complex. In spices, jeera continued its massive bull runs; turmeric too closed up whereas dhaniya was in a range with some weak bias. Turmeric added more colors in portfolio on reports of crop damage in Maharashtra due to recent rainfall. Below normal arrivals along with increased export demand stimulated buying. Turmeric production is already down by 7%-10% in year 2022-23 and likely to down further in upcoming season due to growing worries over weather phenomenon. Jeera prices have jumped more than 90% in year 2023 due to crop concerns. Market is lacking with quality produce as the recent rainfall in Rajasthan and Gujarat damaged larger part of jeera crop.

NCDEX TOP GAINERS & LOSERS (% Change)

MCX TOP GAINERS & LOSERS (% Change)

WEEKLY STOCK POSITIONS IN WAREHOUSE (NCDEX)

WEEKLY STOCK POSITIONS IN WAREHOUSE (MCX)

16

COMMODITY

Spot Prices (% Change)

WEEKLY STOCK POSITIONS IN LME (IN TONNES)

PRICES OF COMMODITIES IN LME/ COMEX/ NYMEX (in US $)

Global gold demand…… Central banks were on front foot

Yellow metal is always the prominent choice among the investors to park their money and diversifying their portfolio in troubled times of geopolitical uncertainty, pandemic related environment and global economic slowdown concerns. In times of current global crisis and uncertainty, gold has become the most reliable reserve for global central banks as well. Geopolitical crises, supply chain difficulties and surging inflation weighed heavily on the global economy and reinvigorated investor interest, pushing the gold price briefly to USD 2,080 an ounce in April. Investment demand was already picking up in March as bank failures spread fear through markets and analysts anticipated the end of U.S. interest rate increases.

  • Global gold demand fell in the first three months of 2023 as large purchases by central banks and Chinese consumers were offset by reduced investor buying, the World Gold Council (WGC) said in its latest report.
  • Total demand amounted to 1,081 tonnes, down 13% from the first quarter of 2022, the WGC said.
  • Around half of gold demand comes from jewellers, with investors and states responsible for most of the rest.
  • Among the bright spots during the first quarter, central banks bought 228 tonnes of gold, more than in any January-March period in data going back to 2000, the WGC said. This represents a rise of 176% over what these institutions purchased in Q1 2022, signalling strong demand.
  • China's jewellery demand was 198 tonnes, the most for any quarter since Q1 2015, as the end of COVID-19 controls unleashed consumer spending.
  • U.S. buyers worried about banking and economic turmoil meanwhile bought 32 tonnes of gold bars and coins, the highest in any quarter since 2010.
  • Purchases of gold bars and coins fell in Europe, Indian jewellery demand slipped to a three-year low and Exchange Traded Funds (ETFs) storing bullion for investors sold gold, the WGC said.

Gold demand in India

  • The demand for gold in India declined 17 per cent to 112.5 tonnes in January- March 2023 owing to higher volatility and an increase in gold prices.
  • Total jewellery demand in India declined by 17 per cent at 78 tonnes during the first quarter of 2023, compared to 94.2 tonnes in the corresponding period of last year, mainly on account of the sharp increase in domestic gold prices to over Rs 61,000 per 10 grams and continued volatility in price.
  • The total investment demand decreased by 17 per cent for the first quarter of 2023 at 34.4 tonnes in comparison 41.3 tonnes in the same period last year.
  • Total gold recycled in the country went up by 25 per cent in the first quarter at 34.8 tonnes compared to 27.8 tonnes in the same period last year.

Considering the current market conditions, investment demand is expected to remain strong as the combination of high inflation and heightened geopolitical tensions will likely to push demand for gold amongst investors.

INTERNATIONAL COMMODITY PRICES

17

CURRENCY

Currency Table

Economic gauge for the next week

Major Macroeconomic Indicators

Market Stance

The US dollar index recorded a notable uptick this week, registering its first weekly gain in three weeks despite concerns about a slowing US economy. The latest economic data reveals that consumer inflation unexpectedly slowed to 4.9% in April, falling below 5% for the first time in two years, while producer inflation rose less than anticipated. Furthermore, weekly jobless claims reached a 1.5-year high, indicating a weakening labor market due to sluggish demand. Presently, the market projects a 98% chance of the Federal Reserve keeping interest rates unchanged in June, with rate cuts anticipated by the end of this year. Investors remained vigilant about potential risks related to the banking sector and the impasse over the US debt ceiling. The dollar index has been range-bound between 100.50 and 102.00, and a breakout above 102 levels could potentially trigger a renewed upward trend. On the domestic front, the USD/INR pair witnessed a bounce back from its three-month low of 81.7 levels, closing the week above the 82.00 mark, as the greenback gained some momentary strength and there were dovish expectations for the Reserve Bank of India. The pair has given a breakout from the falling wedge chart pattern near 82.20 levels, which acted as a robust resistance in the last few sessions, indicating positive momentum for the coming sessions. Additionally, the USD/INR has also given a positive crossover from the 5 and 21 Exponential Moving Averages (EMA), confirming a bullish bias. For now, 81.70 will act as a strong support zone while the next resistance, after breaking 82.20, is seen around 82.58-82.60. Given the breakout, EMA positive crossover, and the strength of the dollar index, the current trend for the USD/INR currency pair is bullish as long as it remains above the critical breakout level of 82.20.

USDINR (MAY)is trading above its major Exponential Moving Average indicating upwards trends for short term view. The Pair has major support placed around 81.60 levels while on higher side resistance is seen around 83.00 levels. The 21-day Exponential Moving Average of the USD/INR is currently around 82.08 Levels. On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 54.74.

One can buy near 82.00 for the target of 83.00 with the stop loss of 81.50.

GBPINR (MAY)is trading between its major Exponential Moving Average indicating sideways trends for short term view. The pair has major support placed around 102.10 levels while on higher side resistance is seen around 103.70 levels. The 21-day Exponential Moving Average of the GBP/INR is currently around 102.48. On the daily chart, the GBP/INR has Relative Strength Index (14-day) value of 59.49.

One can buy near 103.10 for the target of 102.10 with the stop loss of 103.60.

EURINR (MAY) is trading below its major Exponential Moving Average indicating downwards trends for short term view. The pair has major support placed around 89.00 levels while on higher side resistance is seen around 90.58 levels. The 21-day Exponential Moving Average of the EUR/INR is currently around 89.97. On the daily chart, the EUR/INR has Relative Strength Index (14-day) value of 50.47.

One can sell near 90.00 for the target of 89.00 with the stop loss of 90.50.

JPYINR (MAY) is trading between its major Exponential Moving Average indicating sideways trends for short term view. The pair has major support placed around 60.51 levels while on higher side resistance is seen around 61.90 levels. The 21-day Exponential Moving Average of the JPY/INR is currently around 61.24. On the daily chart, the JPY/INR has Relative Strength Index (14-day) value of 48.83.

One can buy near 61.00 for the target of 62.00 with the stop loss of 60.50.

18

IPO

IPO NEWS

Mankind Pharma takes a 32% leap on debut despite volatility gripping the market

Mankind Pharma staged a stellar performance on its listing day despite volatility in the overall equity markets. The stock opened with more than 20 percent gains at Rs 1,300 on the NSE, which was way above analysts' expectations as well as the grey market premium. The price band for the offer was Rs 1,026-1080 per share. The public issue received a robust response from qualified institutional investors including the anchor book.

Tata Play, ideaForge get nod for IPOs

Two companies - Tata Play, formerly known as Tata Sky, and drone maker ideaForge Technology - have received capital markets regulator Securities and Exchange Board of India's (Sebi) approval to raise funds through IPOs. Tata Play, the first company in India to use the confidential pre-filing of draft papers option for an initial share sale in December 2022, obtained the regulator's observation letter on April 26. IdeaForge Technology, which filed its preliminary papers with the regulator in February this year, got its observation letter on April 13, an update with Sebi showed on Tuesday. In Sebi parlance, its observation implies its go-ahead to launch the IPO. Under the pre-filing route, there is no pressure on the company to go for an IPO, experts said. Moreover, unlike the traditional route where companies have to launch the IPO within 12 months from the Sebi approval, or final observation; in the pre-filing route, an IPO can be floated within 18 months from the date of Sebi's final comments.

JSW Infrastructure files draft IPO papers with Sebi to raise Rs 2,800 crore

JSW Infrastructure Ltd has filed a draft red herring prospectus with the Sebi to raise around Rs 2,800 crore through an initial public offering. The entire IPO will be a pure fresh issue. Out of the total proceeds Rs 880-crore public issue will be used to invest in its arm JSW Dharamtar Port Pvt Ltd and JSW Jaigarh Port Ltd for repayment of their debt. The company will use part of the proceeds for investment in its arm JSW Jaigarh Port Ltd for financing its capital expenditure requirement for proposed expansion and upgrade. It will use Rs 868.03 crore for LPG Terminal project, Rs 59.40 crore will be used to set up an electric sub station, Rs 102.58 crore will be used to purchase and installation of dredger. The firm will also use Rs 151.63 crore for investment in its arm JSW Mangalore Container Terminal Pvt Ltd for financing its capital expenditure requirement. JM Financial, Axis Capital, Credit Suisse, Dam Capital Advisors, HSBC, ICICI Securities, Kotak Mahindra Capital, SBI Capital Markets are the lead managers to the issue. JSW Infrastructure offers a range of maritime services such as cargo handling, storage solutions, logistics services, and other value-added services to its clients. The company is expanding to become a comprehensive logistics solutions provider. In line with this goal, it develops and manages ports and port terminals under Port Concession agreements. These concessions have extended periods, usually lasting between 30 to 50 years, which provide the company with a long-term outlook on revenue streams. As of December 2022, JSW Infrastructure handles nine port concessions in India with cargo handling capacity at 153.43 MTA, while the cargo volume it handled was 61.96 MMT.

TVS Supply Chain Solution files fresh draft papers for IPO; cuts issue size to Rs 750 crore

TVS Supply Chain Solutions, part of TVS Mobility Group, has re-filed draft IPO papers with capital markets regulator Sebi and cut the fresh issuance size to Rs 750 crore from Rs 2,000 crore planned earlier. The company, which got approval from Sebi in May 2022 to float the IPO, did not launch the issue amid weak market conditions. It had earlier filed its draft papers in February 2022. As per rules, a firm gets one year to hit the primary market after receiving an approval from Sebi. In case a firm fails to launch an IPO during this period, it has to refile the prospectus with the regulator to seek fresh clearance. According to the DRHP uploaded on Sebi's website on Wednesday, TVS Supply Chain Solutions' initial share-sale consists of a fresh issue of equity shares aggregating up to Rs 750 crore and an OFS of over 2 crore equity shares by promoters and existing shareholders. Those offering shares in the OFS include Omega TC Holdings Pte. Ltd, Tata Capital Financial Services Ltd, Mahogany Singapore Company Pte. Ltd, TVS Motor Company Limited, Kotak Special Situations Fund, Andrew Jones, Ramalingam Shankar, Ethirajan Balaji, Dinesh Narayan and Sargunaraj Ravichandran.

Fincare Small Finance Bank refiles IPO papers with Sebi

Fincare Small Finance Bank has filed a DRHP with the capital markets regulator Sebi again on May 1, to raise funds via an IPO. The public issue comprises a fresh issuance of shares worth Rs 625 crore and OFS of 1.7 crore equity shares by promoter and investors. The small finance bank is going to utilise fresh issue proceeds for augmenting its Tier-1 capital base to meet future capital requirements. ICICI Securities, Axis Capital, IIFL Securities, SBI Capital Markets, and Ambit are acting as book-running lead managers to the issue.

TPG-backed RR Kabel files IPO papers with Sebi

TPG-backed RR Kabel, India’s fifth largest branded wires and cables manufacturer, has filed its DRHP papers with capital markets regulator SEBI to raise funds through an IPO. According to the draft papers, the fresh issue aggregates up to Rs 225 crore and an offer for sale of up to 17,236,808 equity shares of the face value of Rs 5 each. RR Kabel proposes to utilise the net proceeds towards the funding of repayment or prepayment, in full or in part, of borrowings availed by the Company from banks and financial institutions estimated to be Rs 170 crores. TPG Asia VII SF Pte Ltd, a US-based private equity firm, which holds a 20.99% stake in RR Kabel, will be selling some of its stake in the company through the IPO. R R Kabel is a part of R R Global Group with revenues of Rs 4,386 crore in FY22. The company’s revenue for the nine months ending December 2022 stood at Rs 4,083 crore. Net profit came in at Rs 214 crore and Rs 125 crore for FY22 and nine months ending December 2022, respectively. The firm is a leading company in the Indian consumer electrical industry comprising wires and cables and fast-moving electrical goods (FMEG), with an operating history of over 20 years in India. RR Kabel is also the fastest-growing consumer electrical company among our peers in India, growing at a CAGR of 33% between FY20 and FY22, as per the Technopak report.

IPO TRACKER

19

FIXED DEPOSIT MONITOR

FIXED DEPOSIT COMPANIES

20

MUTUAL FUND

INDUSTRY & FUND UPDATE

Silver ETFs getting investors' traction; asset bases reach Rs 1,800 crore

Silver exchange-traded funds (ETFs) are becoming popular among investors as the newly-created investment class has attained an asset base of nearly Rs 1,800 crore till March 2023 within one and half years of the introduction of the product by markets regulator Sebi. Silver ETFs are following the trajectory of Gold ETFs as the ETF route offers the assurance of metal purity, no storage hassles of the physical metal, and ease of buying, Hemen Bhatia, Head - ETF, Nippon Life India Asset Management Ltd, said. According to data from the Association of Mutual Funds in India (Amfi), the industry has seven silver ETFs-- Nippon India Silver ETF, ICICI Prudential Silver ETF, Aditya Birla Sun Life Silver ETF, HDFC Silver ETF, Axis Silver ETF, Kotak Silver ETF, and DSP Silver ETF-- with an asset under management of Rs 1,792 crore as of March 2023. All these funds were launched in 2022. In addition to these, UTI Silver Exchange Traded Fund was launched in April this year. Of these Rs 1,792 crore asset bases, Nippon India Silver ETF and ICICI Prudential Silver ETF contributed 80 per cent of the total AUM.

Kailash Kulkarni becomes CEO of the HSBC MF

HSBC Mutual Fund has appointed Kailash Kulkarni as the new CEO of the fund house. Prior to this, he was Co-CEO of the company. Before HSBC MF, Kailash was the CEO of L&T Mutual Fund which merged with HSBC Mutual Fund last year. Kailash has extensive sales and distribution experience in mutual fund and insurance. In the past, he has worked with Kotak Mutual Fund and MetLife India Insurance.

NEW FUND OFFER

21

MUTUAL FUND

Performance Charts

EQUITY - LARGE CAP FUND

EQUITY - MID CAP FUND

EQUITY - SMALL CAP FUND

EQUITY - TAX SAVING FUND

BALANCED ADVANTAGE FUND

Note: Indicative corpus are including Growth & Dividend option . The above mentioned data is on the basis of 11/05/2023
Beta, Sharpe and Standard Deviation are calculated on the basis of period: 1 year, frequency: Weekly Friday, RF: 5.5%
*Mutual Fund investments are subject to market risk, read all scheme related documents carefully.
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