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Fundamental-analysis

Technical Analysis Part - 4The MACD is a momentum indicator that can be used to anticipate changes in market sentiment. However, it is not foolproof: experienced traders look to other metrics, such as trading volume, for a more complete perspective on market sentiment. Key Takeaways The moving average convergence divergence (MACD) is a popular momentum indicator that is used in technical analysis. The MACD is calculated by comparing exponential moving averages in a security's price. The MACD line is charted alongside a nine-day moving average of the MACD line, called the signal line, and a histogram representing the difference between these two curves. Traders use the MACD histogram to anticipate changes in market momentum. MACD analysis can still generate false price predictions. Experienced traders use additional metrics and fundamental analysis to support their forecasts.
NSE:BANKNIFTYEducation
by SkyTradingZone
Option's TradingOptions are a type of contract that gives the buyer the right to buy or sell a security at a specified price at some point in the future. An option holder is essentially paying a premium for the right to buy or sell the security within a certain time frame. Trading options offers a number of benefits for an active trader: Options can offer high returns and do so over a short period, allowing you to multiply your money quickly if your wager is right. With options, it can cost less to get the same exposure to a stock's price movement than it does to buy the stock directly.
NSE:BANKNIFTYLong
by SkyTradingZone
Update on #YESBANK The company has recently released its results and the results are outstanding with net profit rising 145 percent. I expect a strong rally with bullish momentum from here as we have filled the FVG between 17.5 to 19.5 and due to the strong financial result we could see serious bullish momentum take over. I had shared 3 entries at ₹23, ₹20 and ₹19.5 . All three of your entries should now be active. These entries were perfectly timed with the result of yes bank and correction in nifty . I believe we will reach the three targets that I had mentioned within 4 to 5 years from here now. Target prices ₹93, ₹120 and 280, check out my earlier post on Yes bank for more information about the company's fundamentals and technical.
NSE:YESBANKLong
by SkyTradingZone
Advanced Rsi Divergence TradingRSI Divergence occurs when the Relative Strength Index indicator starts reversing before price does. A bearish divergence consists of an overbought RSI reading, followed by lower high on RSI. At the same time, price must make a higher high on the second peak, where the RSI is lower. If used correctly, RSI divergence can be profitable, providing early signals of trend reversals. However, it also carries risks, and traders should use it alongside other indicators and proper risk management strategies.
NSE:BANKNIFTYEducation
by SkyTradingZone
Technical Analysis MACD HIstogram Key Takeaways The moving average convergence divergence (MACD) is a popular momentum indicator that is used in technical analysis. The MACD is calculated by comparing exponential moving averages in a security's price. The MACD line is charted alongside a nine-day moving average of the MACD line, called the signal line, and a histogram representing the difference between these two curves. Traders use the MACD histogram to anticipate changes in market momentum. MACD analysis can still generate false price predictions. Experienced traders use additional metrics and fundamental analysis to support their forecasts. This example should demonstrate how observing the MACD histogram can help anticipate changes in trends in both short-term and long-term price momentum. It is important for traders to learn to recognize these trends and not bet against them. Fighting a trend is a sure way to get pummeled.
NSE:BANKNIFTYEducation
by SkyTradingZone
Data Trading Part -1 It proves useful for assessing the depth and liquidity of specific strikes. It aids traders to find option premium against its corresponding maturity date and strike price. Option chain serves as a warning against breakouts or sharp moves in the index. How It Works: A long straddle options strategy involves simultaneously buying a call option and a put option on the same underlying asset with the same strike price and expiration date. This strategy becomes profitable when the stock significantly shifts in one direction or another.
NSE:BANKNIFTYEducation
by SkyTradingZone
DATABASE TRADING WITH OPTION CHAINOption chain data is the complete picture pertaining to option strikes of a particular stock or index in a single frame. In the Option chain frame, the strike price is at the center and all data pertaining to calls and puts on the same strike are presented next to each other. Traders use an options chain to choose the specific option contracts that best align with their trading strategy. They can select options with the desired strike prices and expiration dates based on their market outlook. Options chains are crucial for assessing and managing risk.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
ADC India, Great Fundamentals, at strong supportI am selecting this company primarily due to its strong fundamental performance. The company has demonstrated solid financial health, supported by outstanding quarterly results that exceeded expectations. Key indicators such as revenue growth, profit margins, and efficient cost management highlight its robust operational strength. Additionally, its consistent performance and sound business strategy position it well for future growth, making it a fundamentally strong investment opportunity.
BSE:ADCINDIALong
by ali000351
Beginner to Advanced Trading Every successful investor has one thing in common, they read as many investment books as they can. Trading in the share market requires a basic knowledge of all the aspects that can influence the prices of shares, and it can be gathered by reading books regularly. Skills #1 and #2 – Research and Analysis. ... Skill #3 – Adapting Your Market Analysis to Changing Market Conditions. ... Skill #4 – Staying in the Game. ... Skills #5 and #6 – Discipline and Patience. ... Bonus Skill #7 – Record Keeping. ... In the End.
NSE:BANKNIFTYEducation
by SkyTradingZone
4
Data Patterns Clear BUY!Stock Analysis Overview Technical Support: Strong support identified near the 2,250 level based on current data patterns. Fundamental Strength: The company remains fundamentally robust, showcasing solid financial health and growth prospects. Price Correction: The stock has retraced approximately 40% from its recent peak, presenting a potential entry point. Investment Classification: Positioned as a defensive growth stock, offering both stability and growth potential.
NSE:DATAPATTNSLong
by ali000351
7
PARAG MILK RR 1:5Parag Milk Foods is a well-known dairy company in India, recognized for its wide range of milk and milk products. They offer products like cheese, butter, yogurt, and ice cream, catering to both retail and institutional markets. The company emphasizes quality and sustainability in its operations, often promoting its use of advanced technology in dairy farming and processing. good volume and there is chance of rate increase in milk and milk product which improve margin. GOOD RR CMP: 200 TARGET : 335 SL : 169 CLOSING BASIS
NSE:PARAGMILK
by pronak101
XAUUSD - Financial Insights 26/09/2024Summary: Things are getting worse, slowly but worse, XAUUSD will reach 3K at the end of this year 1. Title: Xi’s Economic Adrenaline Shot Is Only Buying China a Little Time Source: Bloomberg Problem: China's economy faces a deflationary slump due to a property market crash, weak consumer demand, and trade tensions. Solution: The central bank launched aggressive easing measures, including interest rate cuts, more liquidity, and housing incentives. Result: Markets surged, but economists warn these actions provide only temporary relief without deeper reforms. Prediction: Further fiscal policies and structural reforms are needed to avoid long-term stagnation and drive sustainable growth. 2. Title: China Cuts One-Year Policy Rate by Most Ever in Stimulus Drive Source: Bloomberg Problem: The Chinese economy faces potential deflationary pressures, prompting the need for significant monetary stimulus. Solution: The People’s Bank of China (PBOC) cut the medium-term lending facility rate by 30 basis points to 2%, initiating a broader stimulus package to boost economic confidence. Result: The yuan strengthened, and Chinese stocks gained, with expectations for further monetary easing, including future rate cuts on reverse repurchase notes. Prediction: Analysts anticipate additional rate reductions and liquidity measures to support the economy, aligning funding costs more closely with market rates in the coming months. 3. Title: OECD Upgrades UK Growth by Most in G-7, Warns on Inflation Source: Bloomberg Problem: UK faces high inflation, with the BOE struggling to meet its 2% target. Solution: The government plans to increase investment, focusing on infrastructure and the green transition. Result: UK growth forecast upgraded to 1.1% in 2024 and 1.2% in 2025, but inflation remains high. Prediction: BOE may delay interest rate cuts due to persistent inflation and wage pressures. 4. Title: Global Economy Moves Beyond Inflation Crisis to Stable Growth Source: Bloomberg Problem: The global economy faces risks from geopolitical tensions, soft labor markets, and potential financial market upheaval as inflation eases. Solution: Central banks can cautiously cut interest rates while monitoring data closely, avoiding rapid reductions. Result: OECD projects global growth to stabilize at 3.2% for 2024, with moderating inflation expected in G20 nations by the end of 2025. Prediction: While growth forecasts for the US and euro area remain steady, the OECD warns of significant risks that could impact the global economic outlook. 5. Title: Danish Central Bank Slashes Inflation Forecasts as Wages Cool Source: Bloomberg Problem: The Danish labor market pressure has eased, but there are concerns about potential inflationary risks from the government's proposed 2025 budget. Solution: The central bank has reduced its inflation forecasts for 2024 and 2025, anticipating slower wage growth due to a less tight labor market. Result: Inflation is now forecasted at 1.3% for 2024 (down from 2.2%) and 2.1% for 2025 (down from 2.6%), indicating a more stable economic environment. Prediction: The central bank warns against loosening fiscal policy too soon, as it could destabilize the current balance in the labor market. 6. Title: BOE’s Greene Calls for ‘Cautious’ Approach to Rate Cuts Source: Bloomberg Problem: Strong wage growth and resilient economic activity pose risks, prompting concerns about inflation remaining sticky in the UK. Solution: BOE policymaker Megan Greene advocates for a cautious and gradual approach to interest rate cuts, ensuring that inflationary pressures have subsided before making significant changes. Result: The market reflects skepticism about immediate rate cuts, with current pricing suggesting a cut in November but a 60% chance of a follow-up in December. Prediction: Greene emphasizes the need for ongoing observation of wage trends and consumer spending to gauge future monetary policy adjustments. 7. Title: Fed's Bumper Rate Cut Revives 'Reflation Specter' in US Bond Market Source: Reuters Problem: The Federal Reserve's aggressive rate cuts raise concerns about re-igniting inflation in the U.S. economy. Solution: The Fed's 50 basis point rate cut aims to recalibrate its approach, focusing on maintaining a strong labor market while managing inflation. Result: U.S. bond yields have risen as investors reassess inflation expectations, reflecting uncertainty over future economic conditions. Prediction: A gradual return to higher inflation could impact bond markets, and the central bank may need to adjust its strategy if inflation does not remain subdued. 8. Title: Investing.com Poll: Where do you see gold prices by the end of 2024? Source: Investing.com Problem: Gold prices have recently surged, driven by the Federal Reserve's rate cut and investor sentiment. Solution: Analysts expect ongoing rate reductions, which make gold more attractive as a non-yielding asset. Result: Gold prices have rallied over 5% this month, defying historical trends for September. Prediction: While traders anticipate potential cooling in gold returns, any downside is likely to be limited, suggesting a strong long-term outlook for the metal. 9. Title: With Fed Easing Underway, What's Next for Markets? UBS Weighs In Source: Investing.com Problem: The recent rate cut by the Fed raises questions about future economic conditions and market stability. Solution: UBS believes the rate cut signals a willingness to support the economy, but emphasizes the need for clear labor market data to ensure a soft landing. Result: Markets have reacted positively to the rate cut, but uncertainty remains regarding the ultimate impact on growth and inflation. Prediction: A "Roaring '20s" scenario is considered an upside risk, but market volatility could re-emerge as investors seek clarity on the economy's trajectory. 10. Will Fed policy trigger a US recession? Claudia Sahm: Does not believe the US is currently in a recession, despite her namesake "Sahm rule" being triggered. Is concerned about the direction of economic indicators, with payroll gains slowing and unemployment rising. Puts higher odds of recession now than earlier in the cycle, but doesn't provide a specific percentage. Believes the Fed is at risk of making an "unforced policy error" if they don't cut rates soon enough, potentially leading to an unnecessary recession. Bill Dudley: Puts 50-60% odds of a recession in the next 12 months. Believes the Fed is "a bit behind the curve" in reducing interest rates given increased economic risks. Thinks a soft landing is possible but historically difficult for the Fed to achieve. Expects any potential recession to be mild due to strong household and business balance sheets. Rob Kaplan: Seems less concerned about recession risk than Dudley. Believes the job market is softening as intended, but not "falling out of bed." Thinks the Fed may be tactically behind by "a meeting or two" but not strategically behind. Expects the Fed to likely cut rates in September, November, and December, despite potentially hawkish rhetoric. 11. Title: Powell Emerges Stronger After Leading Fed to Big Rate Cut Source: Bloomberg Problem: Federal Reserve officials were divided on how aggressively to cut interest rates, amidst weak jobs data and inflation pressures easing. Solution: Chair Jerome Powell advocated for a significant 50 basis point rate cut to safeguard against potential risks to the labor market. Result: The majority of Fed officials supported the larger cut, reflecting Powell's strengthened leadership and consensus around his approach to manage economic risks. Prediction: If labor market data continues to disappoint, another substantial rate cut could occur in the future, as Powell aims to ensure a soft landing for the economy. 12. Title: Gold price consolidates below all-time peak, awaits Fed Chair Powell’s speech Source: Investing.com Problem: Gold prices are confined below their all-time peak due to rising US yields and a strong USD, creating uncertainty in the market. Solution: Traders are awaiting comments from Fed Chair Jerome Powell and other influential FOMC members, which may influence expectations for another 50 bps rate cut in November. Result: Current gold prices are stable around $2,650, supported by dovish Fed expectations and geopolitical tensions, despite technical indicators suggesting overbought conditions. Prediction: Upcoming economic data and Powell’s speech will be critical in determining gold's direction, with potential fluctuations as traders evaluate the likelihood of further rate cuts and their impacts on market sentiment.
OANDA:XAUUSD
by TheChartist_Code2trade
Devyani International Ltd. (DIL) Analysis: A Techno FundaFundamental Analysis: Devyani International Ltd. (DIL) is a leading player in the Indian food and beverage sector, operating well-known franchise brands such as Pizza Hut, KFC, and Costa Coffee. 1. Business Overview: DIL holds a strong portfolio with global QSR (Quick Service Restaurants) brands, leveraging its vast network across India and several international markets. Its franchise agreements provide the company access to world-class products and marketing strategies. This strategic positioning gives it a competitive edge in the growing QSR market. 2. Financial Performance: Revenue Growth: The company has shown consistent revenue growth over the past few years, driven by strong demand in the QSR space. FY23 reported solid sales, attributed to increased consumer spending post-pandemic and aggressive expansion strategies. Profitability: Operating margins have been improving, mainly due to cost optimizations and increasing average order values across delivery and dine-in. Debt Levels: DIL's debt has been manageable. The company focuses on reducing its debt-to-equity ratio, improving long-term financial health. Expansion Plans: The aggressive store addition strategy in both metro and tier-2/3 cities has expanded their market share, with over 1,200 stores across 27 states. Such growth potential is attractive for long-term investors. 3. Valuation: PE Ratio: The stock currently trades at a price-to-earnings (PE) ratio higher than the industry average, indicating investor confidence but also a need to deliver robust earnings in the future to justify its valuation. Earnings Per Share (EPS): EPS growth is promising, with strong potential for future earnings as the Indian QSR market expands. 4. Key Risks: Competition: Intense competition from domestic and international players could pressure margins. Inflation and Supply Chain Costs: Rising raw material prices could impact profitability. Franchise Risks: Dependence on franchising contracts for top brands makes it vulnerable to changes in agreement terms. Technical Analysis: 1. Price Trends: Long-Term Trend: The stock has been in an uptrend since its IPO, reflecting investor optimism. Moving Averages: The stock is trading above its 50-day and 200-day simple moving averages (SMA), indicating bullish momentum. Short-term pullbacks have been absorbed quickly by the market, suggesting strong support levels. 2. Support and Resistance Levels: Support: A key support level is found near ₹160, where the stock has historically bounced back. Resistance: A major resistance level is around ₹230, where the stock has faced selling pressure. 3. Indicators: Relative Strength Index (RSI): The RSI currently hovers around 60-65, signaling that the stock is not overbought but has some room for further upside. MACD (Moving Average Convergence Divergence): The MACD line is above the signal line, further confirming the ongoing bullish momentum. Volume: The stock has shown increasing trading volume during upward moves, signaling strength in the trend. Conclusion: Devyani International Ltd. has strong fundamentals, backed by an aggressive expansion plan, solid revenue growth, and improving margins. Technically, the stock is in a bullish phase, but traders should watch for pullbacks near key resistance levels. For long-term investors, the stock's potential growth in the Indian QSR market makes it an attractive buy, but cautious monitoring of valuation and competition risks is essential. Disclaimer: This analysis is for educational purposes only. Always consult with a financial advisor before making any investment decisions.
NSE:DEVYANILong
by Sanil1912
Cartrade Tech Ltd | momentum stockCartrade Tech Ltd CarTrade Tech Ltd is a multi-channel auto platform provider company with coverage and presence across vehicle types and Value Added Services. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. fundamentals :great Market Cap₹ 4,707 Cr. Current Price₹ 995 ROCE 4.20 % ROE 0.42 % Debt to equity 0.05 Profit Var 3Yrs -54.6 % Sales growth 3Years 25.2 % great momentum achieve recently . keep eye on chart. debt free company. every quarter FII AND DII increase hold. Note: I am not SEBI registered financial Adviser. I solely present my views on chart .I do not charge any kind of service. This is not buy sell recommendation. If you like my ideas than like boost and follow me for more ideas. Thanks and comment freely
BSE:CARTRADELong
by Momentuminvesting5540
Bajaj Finance LtdAll important points are marked. 𝐃𝐢𝐬𝐜𝐥𝐚𝐢𝐦𝐞𝐫: 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐢𝐧 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐦𝐚𝐫𝐤𝐞𝐭 𝐚𝐫𝐞 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐦𝐚𝐫𝐤𝐞𝐭 𝐫𝐢𝐬𝐤𝐬, 𝐫𝐞𝐚𝐝 𝐚𝐥𝐥 𝐭𝐡𝐞 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐝𝐨𝐜𝐮𝐦𝐞𝐧𝐭𝐬 𝐜𝐚𝐫𝐞𝐟𝐮𝐥𝐥𝐲 𝐛𝐞𝐟𝐨𝐫𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠. 𝐒𝐭𝐨𝐜𝐤𝐬 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐠𝐫𝐨𝐮𝐩 𝐚𝐫𝐞 𝐟𝐨𝐫 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧 𝐩𝐮𝐫𝐩𝐨𝐬𝐞. 𝐖𝐞 𝐝𝐨𝐧𝐭 𝐦𝐚𝐤𝐞 𝐚𝐧𝐲 𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐟𝐫𝐨𝐦 𝐭𝐡𝐢𝐬 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐚𝐭𝐢𝐨𝐧𝐬 𝐞𝐯𝐞𝐫𝐲𝐭𝐡𝐢𝐧𝐠 𝐬𝐡𝐚𝐫𝐞𝐝 𝐡𝐞𝐫𝐞 𝐚𝐫𝐞 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐥𝐲 𝐨𝐟 𝐟𝐫𝐞𝐞 𝐨𝐟 𝐜𝐨𝐬𝐭.
NSE:BAJFINANCELong
by sreekumars
Bitcoin Looks Promising on Bullish SideBitcoin has made double bottom base at around 53000 price range. Also in weekly time frame, coin is in consolidation to negative pattern which shows a FLAG AND POLE pattern possibility. Other support is near to 40000 to 40600 price range. In Monthly Time Frame it is just showing profit booking. If price breaks above 64000 in weekly candle or sustains above 70000 (Safe Side+ breakout of flag and pole pattern) the price can reach to the levels given in chart. Follow for more such content. Disclaimer: Above is just my own opinion about the coin and is for educational purpose only.
by YogeshVerma1
1
Electrosteel: The Dark Horse in the Ductile Iron Pipe Industry!Summary ● Electrosteel Castings Limited (ECL) is a prominent Indian company specializing in ductile iron (DI) pipes, fittings, and cast iron (CI) pipes. With a market cap of ₹13,640 Cr, ECL generates 88% of its revenue from India, holding a 28% domestic market share. ● Over the last 3 years, ECL recorded a 29% sales CAGR and 97% profit growth. Its current PE ratio of 15.3 is below the industry average, suggesting undervaluation. ● ECL plans to boost DI pipe capacity to 1 million tons by FY26. The ductile iron pipes industry is poised for growth due to urbanization and government initiatives. ● With its strong market position and robust financials, ECL is well-positioned to capitalize on this opportunity and deliver shareholder value. Investment Advice by Goodluck Capital Buy Electrosteel Casting NSE:ELECTCAST ● Best Buy Range - 210 - 220 ● Target - 275 - 280 ● Potential Return - 28 - 30% ● Approx holding period 8 - 12 months Company Overview Electrosteel Castings Limited produces and supplies ductile iron (DI) pipes, fittings, and accessories, as well as cast iron (CI) pipes, both in India and globally. Their DI pipes and fittings are used in various applications such as water transmission, potable water distribution, industrial water supply, ash-slurry systems, fire-fighting systems, desalination, sewerage, stormwater drainage, and recycling. They also offer ductile iron flange pipes for temporary installations and restrained joint pipes. Additionally, the company supplies metallurgical coke, sinter, sponge iron, ferro silicon, pig iron, and silico manganese ferro alloy, along with cement branded as SPL GOLD. Originally named Dalmia Iron and Steel Ltd, the company was established in 1955 and is headquartered in Kolkata, India. Market Capitalization - ₹ 13,640 Cr. Peer Companies ● Jindal Saw NSE:JINDALSAW - ₹ 22,576 Cr. ● Jai Balaji Industries NSE:JAIBALAJI - ₹ 19,682 Cr. ● Welspun Corp. NSE:WELCORP - ₹ 18,092 Cr. Technical Aspects ● In January 2008, the stock reached an impressive peak of ₹71 but subsequently faced a significant decline. ● The price eventually stabilized around ₹8, leading to an extended period of consolidation. ● During this time, a Rectangle pattern, often referred to as the Darvas Box pattern, took shape. ● After breaking out of this pattern in May 2023, the stock price surged past its previous strong resistance level in October 2023. ● Since then, the stock has maintained its upward momentum and is currently trading just shy of its historical high of ₹226. ● Expectations are high that this momentum will sustain and lead the stock to reach new peaks in the near future. Relative Strength ● The chart clearly illustrates that Electrosteel Castings has greatly outperformed the Nifty Smallcap 250 index, boasting an impressive annual return of 219%, which is truly an outstanding achievement. Revenue Break-up ● Product wise break-up ➖ The primary source of the company's revenue comes from the production of Ductile Iron pipes and fittings, which alone makes up about 86% of its total income. Additionally, the company manufactures Cast Iron pipes, contributing roughly 2.8% to the overall revenue. ● Location wise break-up ➖ The company generates nearly 88% of its revenue from India, where it holds a 28% share of the domestic market. The remaining 12% of its income is sourced from international markets. Revenue & Profit Analysis ● Over the last three years, this stock has recorded an impressive compounded annual growth rate (CAGR) of 29% in sales. Additionally, the total profit growth during this period has been remarkable, achieving a staggering 97% CAGR. ● Furthermore, the company has successfully maintained an operating profit margin of 16%, a notable increase from 10% in FY24. ● For the fiscal year 2024, earnings per share (EPS) have surged from 5.31 in fiscal year 2023 to an impressive 11.97. Currently, the EPS for the past twelve months is at 14.69. ● A closer look at the quarterly results shows that the company reached a record high in quarterly sales, reporting 2,012 crore in June, up from 2,004 crore in the March quarter. This figure significantly exceeds last year's June quarter sales of 1,685 crore. Product Demand Analysis ● Inventory Turnover Ratio ➖ Current Inventory Turnover - 1.82 ➖ Inventory Turnover 3 years ago - 1.70 ➖ These figures indicate that product demand has risen over the past three years. Valuation ● P/E Ratio ➖ The company's current price-to-earnings (PE) ratio is 15.3, which is below its one-year median PE of 15.8. Compared to the industry average PE of 36.76, this suggests that the stock is significantly undervalued at present. ● P/B Ratio ➖ The stock seems to be undervalued, with a price-to-book (PB) ratio of 2.67, particularly when compared with the industry average PB ratio of 5.52. ● Intrinsic Value ➖ Electrosteel Castings is presently priced at ₹220, which is significantly below its intrinsic value of ₹258, suggesting that the stock is currently undervalued. ● Peg Ratio ➖ A PEG ratio of 0.47 suggests that the stock is undervalued relative to its expected earnings growth. Cash Flow Analysis ● The operating cash flow has experienced an impressive leap, climbing to 806 crore from 452 crore in FY23. This remarkable growth highlights the company's robust financial health. Furthermore, the current CFO/PAT ratio stands at 0.9 of its five-year average, reflecting the company's exceptional capability in turning profits into cash efficiently. Debt Analysis ➖ The company's existing debt stands at Rs. 2,332 crore, a figure that is notably low when juxtaposed with its market capitalization of Rs. 13,655 crore. ➖ With a debt-to-equity ratio of merely 0.46, it is clear that the debt burden is manageable for a capital-intensive enterprise, allowing the company ample room to pursue further financing if required. ➖ Examining the balance sheet shows a remarkable decrease in debt, which has fallen from Rs. 2,667 crore last year to the present Rs. 2,332 crore. Capex Plans ➖ The ongoing capital expenditure stands at around ₹700 crores and is on track, with ₹410 crores already utilized by the end of Q1 FY25. ➖ There are ambitious plans to boost the total manufacturing capacity of DI pipes to 1 million tons by FY26. ➖ Additionally, land is being acquired in Odisha for a new Greenfield project focused on DI pipes and fittings. Shareholding Pattern ➖ The promoters currently hold about 46.22% of the company, up from 44.08% in December 2023, indicating growth during the March quarter. ➖ Foreign Institutional Investors (FIIs) have been consistently increasing their stakes, with total holdings reaching 21.16% as of June 2024, a significant rise from 14.93% in June 2023. On a quarter-to-quarter basis, ➖ Domestic Institutional Investors (DIIs) have raised their holdings to 0.44% from 0.36% in the March quarter; however, this represents a notable decline from the 1.68% recorded in the same period last year. Ductile Iron Pipes Industry Outlook ● Advantages of choosing DI pipes over PVC pipes ➖ According to the analysis of the ductile iron pipes market in India, these pipes are made up of approximately 90% recycled materials and are fully recyclable. ➖ Additionally, using ductile iron pipes instead of PVC can lead to an energy consumption reduction of around 40%. ● Ductile Iron Pipes Market Growth ➖ Ductile iron pipes play a crucial role in public infrastructure, serving irrigation, drinking water distribution, sewage, and wastewater systems. ➖ With India's economic growth, the rise of smart cities and projects like Bharatmala Priyojana and the Narmada Valley Development Project is driving the demand for extensive pipeline networks, boosting the ductile iron pipes market. ➖ Factors such as increasing urbanization and government initiatives like Jal Jeevan Mission, AMRUT, and Smart City Mission, focused on delivering drinking water to households, are further fueling this demand. Conclusion ● After thoroughly examining both the technical and fundamental factors, we have concluded that Electrosteel Castings is well-positioned for substantial growth, driven by the increasing market demand for ductile iron pipes, which is likely to positively impact its share price as well.
NSE:ELECTCASTLong
by GoodluckCapital
4