In the week gone by, global markets witnessed volatility as the spread of the Delta variant of the coronavirus across the region heightened worries about the global economic recovery. The number of Americans filing new claims for unemployment benefits declined further last week, while layoffs dropped to their lowest level in just over 21 years in July as companies held on to workers amid a labor shortage. The euro zone economy grew faster than expected in the second quarter, pulling out of a pandemic-induced recession, while the easing of coronavirus curbs also helped inflation shoot past the European Central Bank's 2% target in July. Japan’s household spending unexpectedly fell in June as cuts to summer bonuses hit consumption, data showed on Friday, adding gloom to an economy already struggling with the hit from resurgence in coronavirus infections.
Back at home markets also witnessed volatile session amid mixed global cues. As expected the Monetary Policy Committee (MPC) has decided to maintain status quo and keep interest rates unchanged. Currently, the repo rate is 4 percent and reverse repo rate is 3.35 percent. Reserve Bank of India (RBI) Governor Shaktikanta Das said the policy stance continues to be “accommodative”. India’s services activity contracted — though at a slower pace — for the third consecutive month in July, due to subdued demand conditions amid the coronavirus pandemic and local restrictions. On the flip side, India’s manufacturing activity revived in July and posted the strongest growth in three months along with a marginal increase in employment as states eased localised restrictions. GST collections rose to Rs 1.16 lakh crore in July as economic activity picked up after lockdown across several states due to the second wave of the pandemic. Latest data released by the finance ministry on Sunday showed that collections rose 33% over a year ago, with revenue from domestic transactions up 32% and from imports being 36% higher. Data for July collections are based on sales in June. Besides, as the festive season comes closer, auto companies started stocking up at dealerships and reported a healthy growth in wholesale numbers in July. In another development, the government has introduced a bill in the Lok Sabha to amend the Income Tax Act and do away with the controversial retrospective tax demands in the process. Now no retro tax will be applicable for indirect tax transfer of Indian assets made before May 28, 2012. Going forward, market will continue to track the global as well as domestic factors for its direction.
Back at home, with correction in crude prices and base metals, CRB took a pause from past few trading sessions. Mix triggers amid hawkish comment by Fed pressurized prices though upside in agri limited the downside. Tension in Middle East may limit the downside of Crude and it is likely to trade in a range of 4900-5300. Bullion counter may remain trade in a range on mix triggers. Gold and silver is likely to oscillate between 46500-49500 and 66000-70500 respectively. Base metals may see pressure from higher side as China has given indication of some slowdown in economy amid release of stocks from strategic reserve. Inflation Rate of China, Germany and Mexico, ZEW Economic Sentiment Index of Euro Area and Germany, New Yuan Loans of China, Core Inflation Rate, Michigan Consumer Sentiment Pre and Inflation Rate of US, GDP Growth Rate of UK, Unemployment Rate of Australia etc are some important events scheduled this week.
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.
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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.
partnership to deliver sustained innovation and access to novel antibacterial drugs, particularly against bio threats.
The company’s strong momentum continues across key markets including India, South Africa among others and according to the management the strong execution across all markets and continued efforts on cost optimization is helping the company to drive revenue growth. In India, it has maintained market beating performance across its core therapies and in the US, there is an expansion in market share for Albuterol. Moreover, its businesses in South Africa and other international markets continued the momentum driven by strong demand in the base business and ramp-up in new launches. Thus, it is expected that the stock will see a price target of Rs.1040 in 8 to 10 months time frame on a 3 year average P/E of 30.25x and FY22 (E) earnings of Rs.34.37.
customers in a better way both in domestic and international markets.
The company has been securing orders both from India and major international markets such as Central America, South America, North America, Turkey, South East Asia, Europe, Middle East, and North Africa. The Management has also mentioned that enquiry levels remained healthy both in domestic and exports market. Thus, it is expected that the stock will see a price target of Rs.134 in 8 to 10 months time frame on a current P/E of 33.11x and FY22 EPS of Rs.4.05.
The stock closed at Rs 87.15 on 06th August, 2021. It made a 52-week low at Rs 45.35 on 25th September, 2020 and a 52- week high of Rs. 92.50 on 04th March, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 77.90.
Short term and medium term bias are positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, the stock is forming an “Inverse Head and Shoulder” pattern on weekly charts which is bullish in nature. Last few weeks, the stock is consolidating in narrow with positive bias, close on verge of breakout of same. So follow up buying may continue for coming days. Therefore, one can buy in the range of 85-86 levels for the upside target of 100-103 levels with SL below 81 levels.
The stock closed at Rs 1029.50 on 06th August, 2021. It made a 52-week low of Rs 485.00 on 24th September, 2020 and a 52-week high of Rs. 1119.50 on 25th February, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 935.23.
As we can see on charts that stock is forming a “Continuation Triangle” on weekly charts which is considered to be bullish. Last week, the stock gained around 5% and has closed on verge of breakout of pattern 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 1010-1015 levels for the upside target of 1130- 1160 levels with SL below 960 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
Nifty indices hit its record highs in the week gone by and settled the week above 16200 levels. After lot of attempts in recent past, finally Nifty indices surpassed above 16000 levels on the back of short covering done by call writers. The Implied Volatility (IV) of calls closed at 10.82 % while that for put options closed at 11.31%. The Nifty VIX for the week closed at 12.87%. PCR OI for the week closed at 1.77. From technical front, index has given a sharp breakout after a prolong consolidation of nearly two months. The rally was joined by banking index as well in later half of the week as Bank Nifty once again hit 36000 levels but could not manage to close the week above that. In pcoming sessions, it is expected that the bulls may keep control over markets as still lot of short positions are held among call writers. On higher side, 16300 levels would act as immediate hurdle for Nifty while bias will remain bullish as far 16000 levels are held on downside.
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**The highest call open interest acts as resistance and highest put open interest acts as support.
# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup
# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering
Turmeric futures (Aug) jumped 5% last week as physical demand is back as majority of states have eased the lockdown and even some export demand are also seen coming due to increase in corona virus cases in some parts of the world. It is likely to trade positively towards 8000 levels. The demand in spot market is improving from the upcountry traders. Turmeric prices rose in the spot markets of all South India. Turmeric sowing areas received consistent rains which will be beneficial for good crop. Normally, Turmeric exports volume is seen dropping after July which caps any significant demand. Jeera futures (Aug) witnessed some recovery from the lower levels but still looks in down trend on weekly and daily chart. Currently, 13700 is the main resistance. We have observed some demand from the traders to fill their stocks before the festival season so prices moved higher last week in major mandi- Unjha and Rajkot. In Unjha, the benchmark market for jeera in Gujarat, the average arrivals last week at 8,000/9,000 bags (1 bag = 55 kg), Exchange-quality jeera was sold at 13,600 rupees per 100 kg, up 200 rupees from last week. Dhaniya futures (Aug) jumped more than 8.5% last week as market participants added fresh buying positions in the counter tracking good demand from the wholesale traders and exporters. Now the immediate resistance is seen at 7600 levels while support at 6200 levels. There will be some correction towards 7200 levels. In the spot market, coriander prices increased about 8- 10% in the Kota mandi last week due to lower arrivals as rain in producing regions has affected supply. Demand is likely to increase on expectation of good festival demand in coming weeks.
Gold price are down and lingering near the key psychological level of $1,800 an ounce, pressured by a stronger dollar as investors eyed a U.S. jobs report for cues on the Federal Reserve’s future policy stance. Jitters around tapering set in after Fed Vice Chair Richard Clarida said conditions for a rate hike could be met in late 2022, and the central bank could start scaling back on its asset purchase program this year. Fed Governor Christopher Waller also saw the possibility of reducing accommodative policy sooner than some expected, given the progress in economic recovery and improving labour market. Higher interest rates raise the opportunity cost of holding non-interest bearing gold. The dollar index and benchmark 10-year Treasury note yields ticked higher, curbing the bullion’s appeal. India's gold imports in July more than doubled from a year earlier to their highest level in three months as demand improved after states lifted lockdown restrictions, allowing retail consumers to make purchases for weddings, a government source said. Higher imports by the world's second-biggest bullion consumer could support benchmark gold prices, which have corrected nearly 13% from an all-time high of $2,072 in August 2020. The surge in imports could increase India's trade deficit and pressure the rupee. India imported 74 tonnes of gold in July, compared to 32 tonnes a year earlier, the government source said. Ahead in the week we may see huge volatility in bullion counter, where gold may trade in the range of 46200-48900 levels, whereas silver may trade in the range of 65000-69500 levels. On Comex Gold may trade in the range of $1770-$1830 and Silver may trade in the range of $24-$27.
Soybean futures (Aug) was very volatile last week and touched all time high of 10,650 levels. The immediate resistance is seen above 10350 while support is at 9300 levels. Soybean demand is still higher due to it its meal consumption and stocks are limited going into the next season. New season soybean will arrive after the month of October. In India, farmers have sown soybean across 112 lakh ha, which is higher as compared to normal sowing area. IMD has said that the monsoon rains will be normal in the month of Aug and September which may improve the crop condition in the country. RM Seed futures (Aug) traded higher last week and achieved all time high of 7940 levels on reports of lower than expected stocks with the farmers and traders. As per market sources crushing of mustard seeds by oil millers declined by over 31% on year to 550,000 tn in July. Market is expecting shortage during end of the season as about 50 lt of mustard is crushed till June end out of 86 lt availability this season leaving only 36 lt for rest of the season. Mustard seed prices were steady 7800 levels at the benchmark market of Jaipur in Rajasthan last week. Edible oil prices corrected during the last week on reports of higher imports and good stocks at the ports. Moreover, corrections in the CPO in Malaysia and Soy oil in CBOT too pressure prices in domestic market. Going forward the weekly resistance for Ref Soy oil futures (Aug)is at 1434 levels and support at 1378. For CPO futures (Aug), the support is at 1118 and resistance at 1144 levels. We expect the prices to correct in coming week due to weaker trend in the international edible oil prices.
Crude Oil remained on track for its biggest weekly decline since late October on demand concerns as top consumers impose travel restrictions to curb the spread of the COVID-19 Delta variant. However, rising tensions in the Middle East provided a floor under the market. WTI crude futures have dropped 6.4% previous week, the biggest weekly loss since the end of October. The price action we see now is really a function of the macro picture, the Delta variant is now really starting to hit home and you see risk aversion in many markets. Japan is poised to expand emergency restrictions to more prefectures while China, the world's second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand. At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport. This could impact oil demand as it comes towards the end of the summer travel season. Daily new COVID-19 cases in the United States have climbed to a six-month high. However, worries over rising tensions between Israel and Iran limited the decline in prices. Ahead in the this week we may witness both side move in crude oil as movement is totally depend on news and range would be 4950-5380. Natural gas futures were higher owing to higher cooling demand and robust LNG exports. Ahead it may continue within the recent range unless there are fresh triggers. However general bias may be on the downside amid demand concerns. The focus may continue to be on US weather and trend in energy prices. In this week, the counter may trade in the range of 295-315.
Cotton futures (Aug) witnessed some pressure at higher levels last week due to lower demand at higher prices. We see immediate resistance above 27800 and support at 26400 levels. In daily chart, the trend is still positive may trade towards 27200. In India, lower stocks and higher auction price by CCI is keeping prices higher. The spinning mills in most of the states across the country are buying cotton in large quantities from the CCI due to limited stock of cotton in the private sector. Currently, the sowing area (110.73 lh) is lagging by almost 10 lakh hac compared to last year due to erratic rainfall distribution but higher than the average of last 5-years (107.30 lh.). Guar seed futures (Aug) increase by more than 7.5% last week due to higher demand from the feed industry coupled with report of lower area this season. It is now trading at long term resistance level of 4780 and if it breaks we can see a positive movement towards 5000. The demand for guar seed is increasing for its derivatives Churi & Korma for animal feed as other feed alternatives are ruling high. However, area under guar seed is improving in Rajasthan and now at 16 lakh ha compared to 15.9 lakh last year. Chana futures (Aug) fall more than 4.4% last week mainly on muted demand from the stockists and traders. We expect reversal and trade positively towards 4980/5000 in the coming week due low level buying and festive demand is also expected. Support is seen at 4900 levels. Market is expecting improving demand during raining season when the prices of vegetable are high.
Base metals may trade with bearish bias while lower level buying may cushion some support at the counter. The prices are under pressure due to the highly transmissible Delta variant in some major economies-including top metals consumer China and the world’s largest economy the United States-sparked fears of weaker demand for metals. Copper may trade with bearish bias in the range 715-760. Top copper miner Codelco's June output rose 14.9% year-onyear to 151,600 tonnes, while production at the world's biggest copper mine Escondida fell 21.6% in the same period. The copper prices may get support only on strike concern. The union representing workers at Chile's Escondida copper mine, the world's largest, instructed its members to prepare for a strike due to slow progress in contract talks being mediated by the government. Zinc can move in the range of 240-255 levels. Lead can move in the range of 173-180 levels. The premium of LME cash lead over the threemonth contract jumped to $60 a tonne, the largest premium since February 2020, indicating tightening nearby supplies as LME inventories fell to a twoyear low of 59,250 tonnes. Nickel may trade in the range of 1430-1500 levels. The rapid rise of electric vehicles and growing importance of battery technology are likely to increase demand for higher purity nickel. Vale SA may have finally resolved a strike at its Sudbury complex, but don’t expect it to resume nickel production anytime soon. Aluminum may move in the range of 200-210 levels. Aluminium prices are likely to outperform the rest of the base metals complex in the second half of 2021 on strong demand and tight supply, state-backed Chinese research house Antaike said.
CPO MCX (AUG) contract closed at Rs. 1139.70 on 05 Aug’2021. The contract made its high of Rs. 1164.00 on 30th Jul’2021 and a low of Rs. 936.70 on 14th Jun’2021. The 18- day Exponential Moving Average of the commodity is currently at Rs 1119.39. On the daily chart, the commodity has Relative Strength Index (14-day) value of 61.274.
One can buy near Rs. 1118 for a target of Rs. 1170 with the stop loss of Rs. 1090.
LEAD MCX (AUG) contract closed at Rs. 176.70 on 05th Aug’2021. The contract made its high of Rs. 183.20 on 30th Jun’2021 and a low of Rs. 171.25 on 28th Jun’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 177.46. On the daily chart, the commodity has Relative Strength Index (14-day) value of 45.975.
One can sell near Rs. 178 for a target of Rs. 168 with the stop loss of Rs. 183.
CASTORSEED NCDEX (AUG) contract was closed at Rs. 5652.00 on 05th Aug’2021. The contract made its high of Rs. 5772.00 on 29th Jun’2021 and a low of Rs. 4988.00 on 14th Jun’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 5570.31. On the daily chart, the commodity has Relative Strength Index (14-day) value of 60.931.
One can sell near Rs. 5620 for a target of Rs. 5350 with the stop loss of Rs 5755.
With correction in crude prices and base metals, CRB took a pause in past few trading sessions. Mix triggers amid hawkish comment by Fed pressurized prices, however upside in agri limited the downside. Fed Vice Chair Richard Clarida said the conditions for raising interest rates could be met by the end of 2022, and suggested the central bank could start cutting back on asset purchase program later this year. A measure of U.S. services industry activity jumped to a record high in July, boosted by the shift in spending to services. Gold and silver was in a range with some downside bias after the dollar firmed and remarks from a top U.S. Federal Reserve official signaled the possibility of bringing forward policy tightening. After many weeks, WTI crude plunged below $68 per barrel. U.S. Crude oil supply data from the U.S. Energy Information Administration on Wednesday showed a build of 3.636 million barrels in the week to Jul. 30. The fall in U.S. gasoline stockpiles to the lowest level since November 2020 suggests that fuel demand conditions in the U.S. are still quite resilient. However, with tensions brewing amongst Iran and world powers over last week's drone attack, it seems nuclear deal talks will be lengthy and unlikely to provide imminent sanction relief for Iran.Base metals took a correction from higher sideafter reports showing softer manufacturing growth in the US and China. China’s imports of unwrought copper have also been trending lower since the sharp recovery from the coronavirus pandemic amid stimulus spending in the middle of last year. Nickel prices saw correction as investors are wary about increasing supply from top producer Indonesia. Top copper miner Codelco's June output rose 14.9% year-on-year to 151,600 tonnes, while production at the world's biggest copper mine Escondida fell 21.6% in the same period.
It was a good week for spices in which, turmeric and jeera got support from the low on fresh buying. There is an expectation of improving demand of turmeric from the upcountry traders. Currently demand for turmeric is steady but likely to improve, as supply from the primary sources also seems better.Higher availability of stocks with the farmers and uncertainty of local demand have kept the prices under pressure this season.Cotton prices corrected on profit booking, though fundamentals are still strong. The spinning mills in most of the states across the country are buying cotton in large quantities from the CCI due to limited stock of cotton in the private sector.There is increase in demand from the feed sector and lower stocks with the farmers. The demand for guar seed is increasing for its derivatives Churi& Korma for animal feed as other feed alternatives are ruling high.The rates are unlikely to come down anytime soon as India meets more than half of domestic demand through imports. The soybean oil price has surged due to efforts of making renewable bio-diesel fuel from it in the US, Brazil and other countries.
Indian has extraordinary attraction for gold across generations. Gold meets the ordinary Indians’ need for a long-term store of value, better than bank deposits or mutual funds. Gold is also an effective demonstrator of status of the Indian household.
India's gold demand
Going forward, demand is expected to come back in a big way, however, the consumer confidence and business response are subject to the impact of a looming threat of third wave of COVID and the pace of economic recovery. The upcoming festive season and more auspicious wedding days in Q4 2021 may appear positive for demand. Gold demand may increase from rural India with good monsoon and the subsequent larger agricultural growth. As of August 1, monsoons were nine per cent above normal. In 26 out of 35 meteorological areas, rainfall was excess or normal.
For the gold investment segment, however, attractive equity markets and volatile gold prices are strong headwinds. Consumer behaviour is linked to several economic and non-economic variables that pose great difficulty in making any forecast of full year gold demand in India.
Indian Rupee continues its winning streak this week after bulk IPO flows hit into domestic markets. Additionally lower oil prices supported the domestic unit to rise towards 74.00 from 74.95. Going forward upcoming RBI policy likely to keep rupee on a positive note in coming days with major support placed at 73.93 on spot reference. On the global front, amid risk-on sentiment, the dollar retreated for the third day this week following comments from Fed Vice Chair Clarida that 2023 rate hikes were on track. Clarida’s hawkish comments signaled a move to taper bond buying in late 2021 or early 2022 depending on labor market recovery. Jobless claims fell to 385K, down from 400K the week before. On the majors, sterling remains flat to positive after Bank of England kept benchmark rates unchanged and warned tightening may be needed if inflation spikes above 4% this year. Going forward we will remain slightly negative for GBPINR in coming days in the wake of rise in rupee. On the other hand after finding a 1.19 top, the euro quickly gave up gains but losses were capped. Hawkish comments from Fed Vice Chair Clarida capped upside for the euro. We can expect some more downtick in EURINR for the next week.
USD/INR (AUG) contract closed at 74.2825 on 05-Aug-21. The contract made its high of 74.6325 on 02-Aug-21 and a low of 74.2525 on 05-Augl-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 74.6752.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 44.78.One can sell at 74.60 for the target of 73.60 with the stop loss of 75.10.
GBP/INR (AUG) contract closed at 103.3925 on 05-Aug-21. The contract made its high of 103.8200 on 02-Aug-21 and a low of 103.2125 on 05-Aug-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 103.5150
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 49.05. One can buy at 103.40 for a target of 104.40 with the stop loss of 102.90.
| 05th AUG | BoE sees tight labour market as trigger for higher rates |
| 05th AUG | BoE signals ‘modest tightening’ of monetary policy in next 2 years |
| 05th AUG | US considers requiring foreign visitors to be ‘fully vaccinated’ |
| 05th AUG | Bond rally pushes global stock of negative-yielding debt above $16tn |
| 04th AUG | Fed officials sketch out conditions for scaling back monetary support |
| 03rd AUG | Bank of England confronts policy dilemma over inflation surge |
| 03rd AUG | IMF allocates $650bn to boost pandemic-hit economies |
| 02nd AUG | UK construction faces ‘perfect storm’ as supply shortages loom |
| 02nd AUG | Global house price boom, Climate change and food |
EUR/INR (AUG) contract closed at 88.0675 on 05-Aug-21. The contract made its high of 88.6800 on 02-Aug-21 and a low of 87.9950 on 05-Aug-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 88.5797.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 39.45. One can sell at 88.50 for a target of 87.50 with the stop loss of 89.00.
JPY/INR (AUG) contract closed at 67.8875 on 05-Aug-21. The contract made its high of 68.2700 on 03-Aug-21 and a low of 67.765 on 05-Aug-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 67.9582.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 50.37. One can sell at 68.00 for a target of 67.00 with the stop loss of 68.50.
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(1.5/5)
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Considering the P/E valuation on the upper price band of Rs.1618, EPS and P/E on FY2021 are Rs.22.05 and 73.37 multiple respectively and at a lower price band of Rs. 15185, P/E multiple is 71.88 Looking at the P/B ratio on the upper price band of Rs.1618, book value and P/B on FY21 are Rs. 384.52 and 4.21 multiple respectively and at a lower price band of Rs. 1585 P/B multiple is 4.12. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
Incorporated in 2000, CarTrade Tech Ltd is a multi-channel auto platform provider company. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities. Its platforms are operated by 221 technology employees working at its 3 technology centers as of June 30, 2021.
Leading Marketplace for Automotive Sales with a Synergistic Ecosystem: Its platforms, CarWale and BikeWale, ranked number one on relative online search popularity when compared to their key competitors over the period from April 2020 to March 2021, while Shriram Automall is one of the leading used vehicle auction platforms based on number of vehicles listed for auction for the financial year 2020. The company believes that its combination of online and offline auctions as well as related services is synergistic and drives customer traffic, creates competition among its network of professional dealers and helps ensure that it can achieve the best price for its users.
Brands and Customer Experience Driving Powerful Network Effects: The company believes that the strength of its brands and their association with trust, quality and reliability is a key attribute in its business, which increases consumer confidence and influences their consumption behaviour. Its monthly average number of unique visitors was 2.71 crore , 2.56 crore , 2.05 crore and 1.92 crore in the three months ended June 30, 2021 and the financial years 2021, 2020 and 2019, respectively, and it had 212,552, 814,316, 809,428 and 709,190 listings on its online and offline auction platforms for the same periods.
Scalable Business Model: The company operates on an asset-light business model, operating only 114 automalls, a large majority of which it lease or rent from third parties. It has invested significantly in building technology platforms that can manage considerably increased offerings without requiring sizable additional investments, and its growing scale has resulted in a decrease of the share of fixed costs. Its operating expenses have grown at a lower rate than its revenues, as it is able to leverage its operations, sales and marketing and technology over a broader revenue base.
Well Positioned to Benefit from Growth of the Automotive Sector and Digitalization: In addition to the growth in the automotive market, which it expects will benefit it greatly, it also expects a further increase in digitalization of the automotive sector. It expects that its advertisement income will increase with the expected increased spending by OEMs on digital advertising due to its market leadership and brand strength.
Grow its Business through its Digital Ecosystem, Online-Offline Presence and Vehicle-Agnostic Approach: Leveraging its leading brands, it provides services across different vehicle categories, including new and used cars, new and used two-wheelers and used commercial vehicles and farm equipment. It believes this online and offline pan-India presence will enable it to efficiently grow its products and services and cater to its customer needs across touch points.
Create an Opportunity to Monetize Value-Added Services and Untapped Opportunities Through Strong Customer Base and Technology Platform: It believes that its technologically advanced online experience for consumers attracts a large and quality customer base which is of great value to its dealers and OEM partners. It intends to increase monetization opportunities by introducing complementary, value-added products and services to improve the experience of buying, selling and owning vehicles. It also plans to provide vehicle servicing, automobile accessories and automobile insurance by engaging with product and service providers who will provide these to consumers on its websites.
CarTrade Tech Ltd. (CTTL) is a multi-channel auto platform with coverage and presence across vehicle types and value-added services. The company relies on third-party service providers for many aspects of its business. Moreover the company had negative cash flows. The issue is offer for sale (OFS) and the amount raise through IPO will not go to the company. A risk taker investor may opt the issue for long term.
(2.5/5)
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As the earnings of the companys is negative and we are considering the P/Bv valuation, on the upper end of the price band of Rs.570, the stock is priced at pre issue P/bv of 2.57x on FY21 Book Value of Rs. 221.37. Post issue, the stock is priced at a P/Bv of 2.31x on its Book Value of Rs. 247.05.
On the lower end of the price band of Rs.560 the stock is priced at pre issue P/Bv of 2.53x on FY21 BVPS of Rs. 221.37. Post issue, the stock is priced at a P/bv of 2.27x on its BVPS of Rs. 247.05.
Incorporated in 1999, Nuvoco Vista Corporation Ltd, a part of Nirma Group Company is among one of the largest cement companies and concrete manufacturers in India. It offers a diversified range of products such as cement, Ready-mix Concrete (RMX), and modern building materials i.e. adhesives, wall putty, dry plaster, cover blocks, and more. It has a strong distribution network with 15,969 dealers and 225 CFAs. Its cement plants are located in the states of West Bengal, Bihar, Odisha, Chhattisgarh, and Jharkhand in East India and Rajasthan and Haryana in North India with an aggregated installed capacity of 22.32 MMTPA.
Largest cement manufacturing company in East India in terms of total capacity: The company is the largest cement manufacturer in East India and the fifth largest cement manufacturer in India in terms of capacity. It has a capacity share of approximately 17% in terms of consolidated capacity in East India.
Market-leading brands that establish and enhance its leadership: It believes that its established record of strong performance and reputation for quality products in cement, RMX and modern building materials has helped the company build reputable brands in the building materials industry in India. It has a comprehensive suite of brands across all these segments.
Strategically located cement production facilities that are in close proximity to raw materials and key markets: Its Cement Plants are located at various strategic locations in East and North India. These locations allow it to effectively sell and market its products in East and North India as well as access to select key markets in Central India.
Extensive sales, marketing and distribution network with diversified product portfolio: It has strong sales, marketing and distribution capabilities in East and North India, and strategic access to some key markets in Central India. This distribution network allows it to effectively target and drive sales within the Trade Segment. As at March 31, 2021, it has 244 CFAs (162 in East India and 82 in North India) and 16,076 dealers in India (10,091 in East India and 5,985 in North India).
Growth in its business and operations from acquisitions and, in particular, the recently concluded acquisition of NU Vista: It has grown its manufacturing capacity, sales and distribution network, and market position through acquisitions over time. It has a successful track record of executing acquisitions that aid in the growth of its business based on a careful selection of potential assets and the integration of these assets with its business. It has recently successfully completed the acquisition of NU Vista, the cement business of Emami Group.
Consolidate and grow its market share in East, North and Central India: It intends to leverage its existing manufacturing facilities and distribution network to capitalise on the expected demand for cement products from its customers. It also has a third-party procurement agreement in the State of Uttar Pradesh for manufacturing and packaging certain cement products, thereby establishing a presence in the high growth market of Central India.
Focus on operational efficiencies and synergies to improve returns, whilst expanding manufacturing Capabilities: The company had focused on the reduction of electricity and heat consumption to reduce its production costs and to lessen the environmental impact of its operations. It is focused on the reduction of power consumption in its clinker and grinding units, as well as heat consumption in integrated units. As of March 31, 2021, its captive power plant capacity is 105 MW, and 29.25% of the total power demand of its units is serviced by captive power plants. The company is in the process of implementing clinker debottlenecking at its integrated cement units located at Risda, Nimbol and Sonadih. Additionally, it is undertaking capacity expansion exercises at its Jojobera Cement Plant, to increase its capacity to 6.45 MTPA and at its Bhabua Cement Plant, to increase its capacity to 2 MTPA. It also has the option to undertake expansion in West India by utilising its limestone reserves in Chittapur, Gulbarga in Karnataka.
Growth through expanding operations and through acquisitions:Through the merger of the Nimbol Cement Plant and the acquisition of NU Vista, Nuvoco has enhanced its business operations, growth and prospects. It is also well- positioned to undertake both core and value-add acquisition opportunities in the future given its pan-India presence, knowledge of local markets, proven management capabilities and deep customer relationships. As of March 31, 2021, it has a strong balance sheet, resulting in high capital structure flexibility. As of March 31, 2021, its net debt is Rs. 6,730.06 crore. Further, the use of the proceeds from the Fresh Issue will further reduce its total indebtedness. The reduction in the total borrowings will de-lever the balance sheet and will enable it to undertake future acquisitions.
The company is the fifth-largest cement company in India in terms of capacity with a consolidated capacity of 22.32 million metric tonne per annum (MMTPA). The Central government's focus on roads, railways, urban infrastructure and irrigation will boost infrastructure investments. Thus Considering mega spending for infra developments including affordable housing plans afoot, demand for cement is going to be high and thus, the company would see good growth going forward.
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