In the week gone by, global markets witnessed volatile movement on inflation fears and supply chain concerns stemming from retailers' earnings, with investors betting the Federal Reserve will raise interest rates sooner than expected to tame rising prices. US October Retail sales data rose 1.7% MoM, beating estimates. The surge in fresh covid cases in Europe is keeping global investors on the edge fanning fears of an economic slowdown. European Central Bank President Christine Lagarde acknowledged that inflation “will take longer to decline than originally expected” but said it’s unlikely that the ECB will raise interest rates next year. Another data showed that UK's annual inflation rate reported at 4.2% in October from 3.1% a month ago. Conversely, upbeat data on China’s industrial output and consumer spending in the month of October couldn’t prevent the mainland markets from dipping.
Back at home, domestic markets witnessed selling pressure at higher levels as investors seem to be trimming their holdings in stocks that had risen sharply in recent upsurge. Weakness continued in the market as US inflation worries kept bulls on the sidelines. During the week, the auto sector was in focus as reports suggested relief in chip & semi-conductor shortages. Even the tepid listing of Paytm in the main bourses added to the negative sentiment. Midcap and small cap stocks were beaten down heavily. On the earning front, Overall 2QFY22 earnings came in above markets expectations, led by a) cyclical sectors (such asO&G and Metals), b) improved asset quality in the BFSI sector, and c) strong topline growth in the Technology sector. Meanwhile, India’s benchmark inflation rate, as measured by the Consumer Price Index (CPI), was flat between September and October. At 4.48% in October, annual growth in CPI was slightly higher than the September reading of 4.35%. While the headline inflation number is a result of a favourable base effect, core inflation—the non-food non-fuel component of the CPI basket—continues to remain high at 6.24%. While IIP suffered a sequential contraction for the second consecutive month in September. The Index of Industrial Production (IIP) September grew at 3.1%. Going forward, movement of Currency, inflow and out flow of foreign fund, crude oil prices amid other global factors will continue to dictate the trend of the market.
On the commodity market front, CRB was in a very tight range last week. After two weeks of upside bullion counter took downside on sharp recovery in dollar index; twin weights of rallying U.S. bond yields and the dollar. Gold and silver are likely to trade in a range of 48800-49900 and 65000- 67800 levels. U.S. President Joe Biden has been considering releasing oil from the Strategic Petroleum Reserve (SPR) to cool gasoline prices. It is giving bearish impact on crude prices. It may see further fall up to 5600 whereas resistance is near 6000 levels. Base metals saw sharp fall on weak property data and rising warehouse inventories in China. It may see some bounce. Markit Manufacturing PMI Flash, Durable Goods Orders MoM, GDP Growth, Durable Goods Orders MoM, Michigan Consumer Sentiment Final, PCE Price Index YoY and FOMC Minutes of US, Interest Rate Decision of New Zealand, Interest Rate Decision, Ifo Business Climate, GDP Growth Rate and GfK Consumer Confidence of Germany, GDP Growth Rate of Mexico etc are many data and events which will guide how to trade in commodities.
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.
The bank has exhibited healthy performance on various parameters with some parameters showing way better than industry performance and some showing in line with the industry performance. The strong underwriting practices have led to significant improvement in the asset quality of the bank. The bank aims to deliver 15% RoE on sustainable basis across economic cycles and expects to achieve target sooner. Thus, it is expected that the stock will see a price target of Rs.579 in 8 to 10 months’ time frame on current P/BVx of 1.67x and FY23 BVPS (Book Value Per Share) of Rs.346.65.
Motherson Automotive Systems Group BV) won EUR 4.5 Bn new orders and EV (emerging segment) accounts for 25% of order book.
The company is doing well and according to the management, the company is deriving a significant proportion of its order book from new EV orders, which offers comfort regarding its ability to keep up with evolving technological trends. Moreover, very strong demand scenario in European and North American Markets. The management also expects strong demand recovery in Europe and North America which contributes almost 80% of Company’s sales. The mnagement of the company also believes aerospace remains a highly attractive industry due to strong demand for new airplanes fuelled by growing passenger traffic and aviation infrastructure, across emerging markets like India. Thus, it is expected that the stock will see a price target of Rs.274 in 8 to 10 months’ time frame on current P/Bv of 5.93x and FY23 BVPS of Rs.46.17.
The stock closed at Rs 2439.60 on 18th November, 2021. It made a 52-week low at Rs 1500.60 on 27th November, 2020 and a 52-week high of Rs. 2532.00 on 19th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2130.60.
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 charts. Apart from this, it was consolidated in narrow range and formed a “Bullish Pennant” pattern on weekly charts which is bullish in nature. Last week, stock tried to give the breakout of pattern, could not hold the highs due to market’s volatility but still managed to close in positive with positive bias. Therefore, one can buy in the range of 2410-2425 levels for the upside target of 2550-2580 levels with SL below 2460 levels.
The stock closed at Rs 1182.05 on 18th November, 2021. It made a 52-week low of Rs 825.20 on 22nd December, 2020 and a 52-week high of Rs. 1273.90 on 06th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1064.02.
As we can see on chart that stock is consolidating in narrow range and forming a “Bull Flag” pattern on weekly chart which is considered to be bullish. Despite the correction in the broader indices, stock showed some strength, hold and consolidate in narrow range with positive bias along with high volumes. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 1160-1170 levels for the upside target of 1320-1350 levels with SL below 1100 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
Bears clearly dominated the Indian markets in the week gone by as Nifty indices hammered down badly and slid below 17800 mark as well. Bank Nifty also ended the week in red zone with loss of more than 1.5%. From derivative front, call writers added hefty open interest at 17900 & 18000 strike while put writers seen shifting to lower bands. The Implied Volatility (IV) of calls closed at 12.82% while that for put options closed at 14.80%. The Nifty VIX for the week closed at 14.98% and is expected to remain volatile. PCR OI for the week closed at 0.89. From technical front Nifty slipped back below its 50 days exponential moving average on daily charts which points towards further weakness in trend for upcoming sessions. The immediate support for Nifty is placed at 17600 levels below which further weakness can prevail in upcoming sessions. On higher side, 17900 & 18000 levels now would act as a strong hurdle for Nifty.
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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
10 Turmeric futures (Dec) down 2% last week due to profit booking at higher levels and expected to trade lower towards 7050 levels with resistance at 7600. However, in the most of the trading centres prices are flat to higher due to good quality arrivals. Exports are not picking up as expected so the prices are correcting. In the first 6-months (Apr-Sep) of FY 2021/22, exports were down 26% to 77,250 tons Vs last year but still at par with 5-year average. This year the prices are higher by 30% as compared to last year throughout the year. Jeera futures (Dec) jumped more than 5% last week due to fresh buying sentiments among the traders and exporters as sowing area in Gujarat is expected to lower this season. We expect price to trade positive towards 17000 levels with support at 16100 levels. Until 15-Nov, area under jeera in Gujarat is only 8500 ha compared to 50,500 ha last year same time. Export demand for Jeera is good as production was poor in Turkey and Syria. As per Govt. data, exports of jeera for Apr-Sep are down by 14% Y/Y at 1.39 lakh tonnes but expected to improve in coming months. Dhaniya futures (Dec) closed 4.5% higher last week and is likely to trade sideways in the range of 8500 – 8950 with positive bias. Prices of dhaniya rose in Kota market due to lower arrivals and improving demand. Traders and stockits witnessed some fresh buying from the South and Eastern India and enquiries for the exports. As per govt. data, exports have been down 12.7% during Apr-Sep period to 24500 tonnes Vs 28000 tonnes last year but 11% higher as compared to 5-year average. Coriander area in Rajasthan and Madhya Pradesh have not pick up in current season.
Gold prices were up in the previous week as the dollar eased and U.S. bond yields retreated from a three-week high, lifting bullion’s appeal. The dollar fell 0.1%, pulling away from a 16-month peak. A weaker dollar reduces bullion’s cost to buyers holding other currencies. Also the inflation worries pushed investors to the safe-haven metal. The U.S. dollar, which also contends with gold as a safe store of value, touched its highest since July 2020, bolstered by better-than-expected U.S. retail data. Chicago Federal Reserve President Charles Evans reiterated that it will take until the middle of next year to complete the Fed’s wind-down of its bond-buying program even as the central bank checks to see if high inflation recedes as he expects. British inflation has hit a 10-year high as household energy bills rocket, bolstering expectations the Bank of England will raise interest rates in December. The European Central Bank must be ready to rein in inflation in the euro zone if it proves more durable than forecast, ECB board member Isabel Schnabel said. A hike in rates should reduce bullion’s appeal as higher interest rates raises the non-interest bearing metal’s opportunity cost. Indicative of sentiment, holdings in the SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose to 976.87 tonnes. Global silver demand will rise to 1.029 billion ounces this year, exceeding a billion ounces for the first time since 2015, the Silver Institute said in a report. Ahead in the week, the precious may continue to trade with sideways to bullish bias where gold may take support near 48000 and could face resistance near 49800, on the other hand Silver may trade with higher volatility where it may trade in the range of 64500-69800.
Soybean futures (Dec) jumped more than 8% and closed positive for 4th consecutive week. We expect it to trade higher towards 6400 levels with support at 5850. As per data from the SOPA, soybean arrivals in October were lower at 15 lakh tonnes as compared to 18 lt last year. Farmers are holding back their crop in anticipation of higher prices despite good production estimated this year. As per USDA November monthly report, soybean production in India revised higher by 8% m/m to 11.9 million tonnes. Domestic demand for the soybean is improving as the imports of edible oil is declining. CBOT soybean futures also rose 5.5% tracking strength in domestic cash and export markets. In domestic market, higher prices of soymeal sharply lower the exports to 30,000 tonnes in Oct from 1.35 lakh tonnes in the year-ago period. Edible oil prices jumped 2-3% last week tracking firm International prices. We have witnessed recovery in edible oil prices due to increasing demand, lower imports and declining stocks in ports. Moreover, hike in tariff duty by more than 1% on 15-Nov also support edible prices. As per SEA monthly data release, edible oil imports were down by 38.4% in Oct m/m while the stocks at port down 15% m/m. Malaysian palm oil futures climb about 0.5% on concerns over lower production. India’s palm oil imports in 2020/21 rose 15.2% from a year ago to 8.32 million tonnes, while soyoil imports fell 15% to 2.87 million tonnes. Higher tariff value on edible oils is supporting prices a higher level despite import duty cut by the govt. Ref Soy oil futures (Dec) may trade higher towards 1240/1245 while CPO futures (Dec) likely to trade positive towards 1140/1145 levels.
Crude oil prices slumped, driving major benchmarks to their lowest settlement levels since early October, after OPEC and the International Energy Agency warned of impending oversupply, while rising COVID-19 cases in Europe increased downside risks to demand recovery. The declines took Brent to its lowest close since Oct. 1 and U.S. crude to its lowest settlement since Oct. 7. Traders said funds apparently are weighing a greater likelihood that supply will start to outpace demand, with sharp declines in near-term futures pointing to funds closing long positions. The global oil market has been focused on the swift rise in demand against a slow increase in supply from the OPEC and its allies, along with reluctance from big U.S. shale players to overspend on drilling. However, both the IEA and OPEC in recent weeks said more supply could be coming in the next several months. OPEC Secretary General Mohammad Barkindo said the group sees signs of an oil supply surplus building from next month adding its members and allies will have to be "very, very cautious." New waves of COVID-19 cases in Europe have driven some governments to reimpose restrictions; Austria has ordered a lockdown on unvaccinated individuals. Ahead in the week price may continue to trade with bearish bias where it may take support near 5560 and face resistance near 5980. Natural gas prices were down in the previous week as output continues to rise and on forecasts for lower heating demand this week than previously expected. The decline came despite record gas futures in Asia and a 32% jump in European prices over the past three days. Ahead in the week it may trade in the range of 350-390 with huge volatility.
Cotton futures (Dec) corrected from record levels for third consecutive week due to reduced demand from mills, at higher prices and likely to trade lower towards 30500 levels with resistance at 31250. Moreover, kapas arrivals have started increasing in the physical market. Currently, cotton prices are high y/y 55% due to concerns about a likely fall in the production and demand for raw cotton exports remains firm as Indian fiber prices are competitive in global markets. World global stocks may remain low on possible surge in demand as China's imports likely to remains higher. For 2021/22, CAI has estimated cotton crop at 360.13 lakh bales higher than last year by over 7 lakh bales. Guar seed futures (Dec) closed lower for third consecutive week and expected trade in range 6200-6600 with positive bias. Currently, the prices are higher by 45% y/y on expectation of lower production, multi-year lower stocks and good export demand. The arrival of new season guar seed has declined last week as prices corrected. The area under guar this season in Rajasthan was down at 21 lakh hac, lowest acreage in a decade. Guar gum exports expected to pick-up in coming weeks due to increase in US rigs. Castor Seed (Dec) was very volatile last week and closed by 1% and likely to trade in range 6250-6650 with positive bias. Persistent export demand throughout the year for castor oil and meal is keeping the prices at higher levels as stocks are lower with the oil-mills. Castor meal exports up y/y by 16% in first 6-monhts of FY 2021/22 while Castor oil exports for Jul -Aug 2021 down y/y but higher for Apr-Aug period. However, due to higher area in Gujarat, there is expectation of higher production in the coming season may put pressure.
Base metals may trade with weak bias. China's property crisis worsened on all fronts in October amid deeper contractions in construction starts and investment by developers, data showed last week. A liquidity crisis triggered by debt worries at property giant China Evergrande Group has weighed on investor sentiment towards the vast real estate sector. Chinese coal prices continued to plummet as Chinese mines ramp up production. Cheaper coal should reduce energy costs for metal smelters. Copper may move towards 678 with resistance of 740. The prices may fall as growing inventories in London Metal Exchange warehouses eased traders' concerns over tightness in global supply of the metal. In October, China's copper output fell 0.3% yearon- year, official data show. The world will need to double its copper supply and quadruple its nickel supply in the next 30 years to facilitate a decarbonised world, an executive at miner BHP said. Nickel may fall to 1465 . The nickel ore inventory continued to increase. The demand for nickel ore in China was weaker than the normal levels as the NPI production in some regions has not fully recovered. Zinc can move in the range of 255-275. In October, China's zinc output fell 9.2% from a year earlier. Lead can move in the range of 182-190. Aluminum may move to 195 with resistance of 215. In October, China's alumina production hit a 10-month low as power curbs on smelters and refiners constrained supply. Power restrictions during China's heating season might further restrict aluminium output, but potentially weak consumption from the real estate sector and from the automobile industry due to chip shortage could weigh on prices.
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SILVER MCX (DEC) contract closed at Rs. 66625.00 on 17th Nov 2021 . The contract made its high of Rs. 73999.00 on 03rd Jun’2021 and a low of Rs. 58150.00 on 30th Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 65410.62. On the daily chart, the commodity has Relative Strength Index (14-day) value of 60.170.
One can buy near Rs. 66000 for a target of Rs. 69500 with the stop loss of 64200.
NATURAL GAS MCX (DEC) contract closed at Rs. 371.40 on 17th Nov’2021. The contract made its high of Rs. 502.40 on 06th Oct’2021 and a low of Rs. 360.00 on 10th Nov’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 400.84. On the daily chart, the commodity has Relative Strength Index (14-day) value of 42.570.
One can buy near Rs. 370 for a target of Rs. 410 with the stop loss of Rs. 350.
MCX COTTON (NOV) contract was closed at Rs. 1133.50 on 17th Nov’2021. The contract made its high of Rs. 1181.00 on 06th Nov’2021 and a low of Rs. 1062.00 on 14th Nov’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1122.12. On the daily chart, the commodity has Relative Strength Index (14-day) value of 57.682.
One can buy near Rs. 1135 for a target of Rs. 1195 with the stop loss of Rs 1100.
CRB was in a very tight range last week. After two weeks of upside bullion counter took downside on sharp recovery in dollar index twin weights of rallying U.S. bond yields and the dollar. Gold’s recent run-up was heightened by a Labor Department report that the U.S. Consumer Price Index, which represents a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% during the year to October. Energy counter slipped despite better than expected retail sales from US. Oil fell after an industry report showed U.S. gasoline stocks dropped more than expected last to last week, potentially heightening pressure on the Biden administration to release oil from emergency reserves to cap soaring fuel prices. With holiday season around the corner, increase in travelling demand may be the reason behind the decline in U.S. gasoline stocks. Natural gas prices rebounded slightly after closing down 13% last to last week. The weather is expected to be normal and then turn cooler than normal throughout most of the United States. However it saw a fall later on. It was a bearish week for base metals on weak property data and rising warehouse inventories in China. Prices nosedived as China's vast real estate sector has been a liquidity crisis that was triggered by debt woes at property giant China Evergrande Group. Copper breached 715 levels on MCX due to accelerated ramp-up of mine supplies and falling demand. China exported 15,545 tonnes of refined lead in September, the highest monthly tally since 2007. The country has turned significant net exporter for the first time since 2018.
Soya pack gave strong return on firm international market. Internationally prices have increased in due to expectation of lower ending stocks in coming season. We have witnessed recovery in edible oil prices due to increasing demand, lower imports and declining stocks in ports. As per SEA monthly data release, edible oil imports were down by 38.4% in Oct m/m while the stocks at port down 15% m/m. rise in Dalian palm and a jump in export shipments over the Nov. 1-15 period gave upside to CPO prices too. Cotton traded weak for continuous third week amid reduced demand from mills. For 2021/22, CAI has estimated cotton crop at 360.13 lakh bales higher than last year by over 7 lakh bales. Guar saw decline for third week on profit booking from higher side. Castor too traded bearish as due to higher area in Gujarat, there is expectation of higher production in the coming season. It was firm week for spices. Turmeric rose due to low acreage in Telangana and unseasonal rains. Jeera crossed 16300 as export demand for Jeera is good as production was poor in Turkey and Syria. Prices of dhaniya rose a little at Kota market due to lower arrivals and good demand.
India is the world's leading spice producer, exporter and consumer. Despite the COVID-19 Pandemic, export of spices from India continued its upward trend during 2020-21 and scaled the landmark level of $4 billion in value realization during 2020–21. As per the data of Spice Board of India, export of spices attained an alltime record in terms of both volume and value in the year registering an increase of 37% in volume, 16% in rupee terms and 11% in dollar terms of value compared to the previous year. The Spice Board has been aggressively taking a lead in strengthening and promoting the Indian-International spice trade for the larger benefits of the spice community, more so during the pandemic time.
Exporting pattern……all time high
The Indian rupee traded higher this week by more than a half a percent amid dollar inflows into the IPO markets as well decline in oil prices. Additionally dollar index hit 16 months high after latest economic data supported dollar in anticipation that U.S. Federal Reserve may go opt for to raise interest rates sooner. After upbeat U.S. retail sales and industrial output data, few fed official said that the U.S. central bank could speed up the taper to $30 billion a month from the current $15 billion amid inflation risks. Going forward, we do think that USDINR likely to head higher tracking the broad dollar gains. From the majors, EURUSD dropped to fresh 16- month lows as monetary policy divergence between the Federal Reserve and the European Central Bank is in focus. Accordingly EURINR fell close to 84.00 as well. We think the weakness in euro will continue in the coming days and may fall below 83.80. While Sterling jumped nearly versus the US dollar after UK economy showed positive trend for labor, which supports the case for the Bank of England to hike interest rates at its next meeting in December.
USD/INR (NOV) contract closed at 74.3200 on 17-Nov-21. The contract made its high of 74.6175 on 16-Nov-21 and a low of 74.3000 on 17-Nov-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.7156.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 37.92.One can buy at 73.90 for the target of 74.90 with the stop loss of 73.40.
GBP/INR (NOV) contract closed at 99.9125 on 17-Nov-21. The contract made its high of 100.3900 on 16-Nov-21 and a low of 99.8425 on 17-Nov-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 101.3472
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 31.45. One can sell at 100.60 for a target of 99.60 with the stop loss of 101.10.
| 17th NOV | High shipping costs to push up global inflation, UN warns |
| 17th NOV | 17th NOV The UK misreads the EU’s resolve on Northern Ireland dispute |
| 17th NOV | UK inflation rises to highest level since 2011 |
| 16th NOV | Biden and Xi fail to ease Taiwan tensions |
| 16th NOV | High inflation returns to Brazil: ‘each week there are different prices’ |
| 16th NOV | Covid-19 shock responsible for global inflation, says Australian central bank |
| 15th NOV | Bailey hints that main hurdle to UK rate rise has been cleared |
| 15th NOV | Europe is better able to withstand Covid winter wave, economists say |
| 15th NOV | China accuses EU of threatening global trade |
EUR/INR (NOV) contract closed at 84.1575 on 17-Nov-21. The contract made its high of 85.4900 on 15-Nov-21 and a low of 84.0925 on 17-Nov-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 86.1782.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 18.07. One can buy at 83.90 for a target of 84.90 with the stop loss of 83.40.
JPY/INR (NOV) contract closed at 64.8000 on 17-Nov-21. The contract made its high of 65.5650 on 15-Nov-21 and a low of 64.7425 on 17-Nov-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 65.8340.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 27.57. One can sell at 65.40 for a target of 64.40 with the stop loss of 65.90.
(2.5/5)
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The company has negative earnings so valuation cannot be done on P/E basis. Therefore, we are considering the EV/EBIDTA ratio valuation of actual Fy21, on the upper end of the price band of Rs. 690, the stock is priced at post issue, EV/EBIDTA of 47.50x on its FY21 EV of Rs. 3701.96 and EBIDTA of Rs77.93.
Incorporated in 2010, Go Fashion (India) Limited is one of the largest women's bottom-wear brands in India. The company is engaged in the development, design, sourcing, marketing, and retailing of a range of women's bottom-wear products under the brand, 'Go Colors'. As of May 31, 2021, the company has 450 exclusive brand outlets (EBOs) that are spread across 23 states and union territories in India. The company also sells its products through its website, online marketplaces, and multibrand outlets (MBOs).
Women’s bottom-wear brand in India with well-diversified product portfolio: The company is a women’s bottom-wear brand in India, with a market share of approximately 8% in the branded women’s bottom-wear market in Fiscal 2020. Go Fashion is among the first companies to launch a bottom-wear brand in the organized market that has led to a significant first mover advantage for the company and have been recognized as a category creator for bottom-wear in India.
Multi-channel pan-India distribution network with a focus on EBOs, enhancing brand visibility: Go Fashion has a multi-channel retail presence across India. It retails its products directly to consumers primarily through its network of EBOs and as of September 30, 2021 it operated 459 EBOs across 118 cities in 23 states and union territories across India. As of March 31, 2021, it had the largest network of EBOs among key women’s apparel brands in India. Further, as of September 30, 2021, it also retailed its products through 1,270 LFSs, such as Reliance Retail Ltd, Central, Unlimited, Globus Stores Pvt Ltd and Spencer's Retail among others, across 499 cities spanning the entire country covering 31 states and union territories. It also sells its products through online marketplaces and through its own website.
Strong unit economics with an efficient operating model: Go Fashion has a standardized and scalable development model for its EBOs based on its know-how and experience. It opened 305 new stores in the EBO format and more than 400 new stores in the LFS format in the last 3 Fiscals across 507 tier I/ II / III / IV cities in India. Its COCO model of operating its EBOs is supported by streamlined store network planning, a robust supply chain network and an efficient staff recruitment and development program.
Extensive procurement base with highly efficient and technology-driven supply chain management: The company offers customers premium quality products at affordable prices and in Fiscal 2021, more than 88.32% of its products were retailed at a price lower than Rs. 1,049. As of September 30, 2021, it has a network comprising over 120 suppliers and job-workers across India many of whom it has longstanding relationship with its suppliers and job-workers.
In-house expertise in developing and designing products: The company develops products inhouse based on demand for such products and the sale of similar products that it tracks and monitors through its ERP system. It designs its products keeping in mind trends in fashion, fabric, textiles, wearability, stitch and pricing. Its products are designed for every occasion and are available in over 120 colours. It has a skilled team of in-house designers and merchandisers that focuses on creating quality products with innovative designs and optimal fit and sizing.
Leverage leadership position in women’s bottom-wear market and focus on additional product launches and Same Store Sales Growth: The company’s diverse product portfolio available in varied price ranges, styles and colours ensures that it is well positioned to cater to the needs of women of varied ages, economic backgrounds and segments and address the growing demand in this segment.
Continue to expand retail network with a focus on EBOs: The company intends to follow the COCO model that will ensure better operational control over its stores. As part of its growth strategy, it intends to expand its EBO network in other regions across India.
Grow sales through online channel: Factors such as increased internet penetration, increased usage of smart phones, convenience provided by e-retailing in terms of payment and return policies as well as discounts offered, coupled with a low base effect is enabling e-retailing’s sharp growth in the recent years.
Go Fashion (India) Limited is among the few apparel companies in India to have identified the market opportunity in women's bottom-wear and have acted as a 'category creator' for bottom-wear. The company has widespread and well diversified product portfolio. However, Company carries operations from a single warehouse located in Southern India. Its dependence on third party contracts remains a major concern. A long term investor with high risk appetite may opt the issue.
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Nippon India Mutual Fund launched the Nippon India Taiwan Equity Fund. The Fund will be India's first open ended equity scheme following a Taiwan focused theme. This fund will be advised by Cathay SITE, the largest Asset Manager in Taiwan with $42.8 Bn in AUM. The NFO will open for subscription on November 22 and will close on December 06. The Benchmark Index of the fund is Taiwan Capitalization Weighted Stock Index (TAIEX). The minimum investment required is Rs 500 and in multiples of Re 1 thereafter. The fund will be managed by Kinjal Desai.
Mirae Asset Mutual Fund has launched the ‘Mirae Asset Hang Seng TECH ETF’, an open-ended scheme replicating/tracking Hang Seng TECH Total Return Index and the ‘Mirae Asset Hang Seng TECH ETF Fund of Funds’, an open-ended fund of fund scheme predominantly investing in units of Mirae Asset Hang Seng TECH ETF. The NFO for both the funds will open for subscription on November 17. While the Mirae Asset Hang Seng TECH ETF will close on November 29, the Mirae Asset Hang Seng TECH ETF Fund of Fund will close on December 1. The minimum initial investment in both the schemes will be Rs 5,000 and multiples of Re 1 thereafter. The Mirae Asset Hang Seng TECH ETF will be managed by Siddharth Srivastava and the Mirae Asset Hang Seng TECH ETF Fund of Fund will be managed by Ekta Gala. The Mirae Asset Hang Seng TECH ETF Fund of Fund will also offer investors the options for a Regular Plan and Direct Plan with Growth Option.
ITI Mutual Fund has announced the launch of ‘ITI Banking and Financial Services Fund’. The NFO will be available for subscription till November 29. Minimum application amount is Rs 5,000 and in multiples of Rs. 1 thereafter. The fund will be jointly managed by Pradeep Gokhale and Pratibh Agarwal. This is the 15th fund launched by the AMC in two years of its existence. The fund will invest in banking and financial services which will include banks, insurance companies, rating agencies and new fintechs that are emerging among others. According to the press release, the current AUM of the fund house is Rs 2,239 crore as on 31st October, 2021. Out of the total AUM, equity AUM accounted for Rs 1,588 crore while hybrid and debt schemes accounted for Rs 319 crore and Rs 333 crore respectively.
Edelweiss Asset Management Limited on Monday launched Edelweiss Large & Midcap Index Fund, an open-ended equity scheme replicating Nifty LargeMidcap 250 index. The NFO will be available for subscription between 15 November and 26 November. The fund will be managed by Bhavesh Jain, Edelweiss AMC said. Edelweiss AMC said the index fund will provide equal exposure to large and midcap stocks in one portfolio and ensure a balance between growth (mid-cap) and stability (large-cap). "Edelweiss Large and Midcap Index Fund is a perfect blend of 100 large cap stocks, represented by established companies in the Nifty 100 index and 150 midcap stocks, represented by emerging and high growth companies in the Nifty midcap 150 index," said Edelweiss AMC. Edelweiss AMC further said that the investment objective of this scheme is to provide returns that closely correspond to the total returns of the Nifty Large Midcap 250 index, subject to tracking errors.
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