SHARDACROP & DBCORP: Two Bright Spots in a Challenging MarketSharda Cropchem
● The stock price is evidently experiencing a robust upward trend.
● After a brief consolidation phase, it developed a Rounding Bottom pattern, and following a breakout, it has surged to an all-time high.
● The increasing buying volume suggests that the stock could continue to rise significantly.
D.B. Corp
● The stock price is currently moving within an Ascending Parallel channel.
● After reaching an all-time high around the 404 mark, the stock experienced a pullback to its trendline support level.
● Having rebounded from this support, the stock price is now poised for upward movement.
Sebiregistered
Gas Sector Gathers Steam: IGL & MGL's Future Open Interest JumpsIGL
● The stock has undergone a consolidation phase, formed an Ascending Triangle pattern.
● Following a breakout, it surged to an all-time high near ₹570 before experiencing a decline.
● Currently, a Rounding Top pattern has emerged, and after a gap down, the price is testing its trendline support.
● Importantly, there has been a notable increase in future open interest of about 25%, indicating that investors are eager to purchase at more favorable price levels.
MGL
● After encountering resistance around the ₹1550 level, the stock price dropped to ₹1200.
● From this support level, it made a strong recovery, breaking through resistance to achieve an all-time high close to ₹1990.
● However, selling pressure has led to a pullback to the previous breakout level.
● Like IGL, MGL has also experienced a significant rise in future open interest of approximately 16%.
● This trend suggests that investors are interested in accumulating shares at a lower price.
DIVISLAB's Open Interest Jumps 6%: Bullish Sentiment BuildsFollowing a strong upward trend, the stock encountered significant resistance near the 5,300 level, resulting in a steep drop.
Afterward, the price found support near the 2,700 mark and managed to bounce back.
During this consolidation phase, the stock price has developed a Rounding Bottom pattern.
With a clear breakout, the price is now set for an upside rally.
A notable increase in future open interest—around 6%—has been recorded for this stock.
This rise in both the stock price and future open interest indicates that significant investors hold a positive outlook on this stock.
Nifty's Dark Clouds Gather: Bearish Sentiment Takes HoldAfter reaching a high near 26,280, the index encountered considerable resistance and subsequently fell.
A Head & Shoulders pattern is currently developing, leading to a negative sentiment in the market.
If the neckline is broken, the index may quickly decline to the 24,000 level. This level will be critical in assessing whether the index can bounce back or if it will drop below the support level.
Cosmic Collision: DLF & Oberoi Realty Clash in Real-Estate Space◉ Abstract
The Indian real estate market is growing fast and is expected to reach $1 Trillion by 2030. Two big companies in this field are DLF and Oberoi Realty. DLF makes most of its money from commercial properties mainly through rental income, while Oberoi Realty focuses on homes.
Both companies are doing well, but Oberoi Realty is growing faster and making more profit. DLF's stock price might go up soon after being stable for a long time. Oberoi Realty's stock has been going up steadily. Both companies don't have too much debt and are attracting investors. DLF seems expensive when you look at its price compared to earnings, while Oberoi Realty looks like a better deal. Oberoi Realty is also spending more on growing its business.
In the end, both companies are in a good position to benefit from India's growing economy and increasing demand for real estate.
◉ Introduction
The Indian real estate sector has witnessed significant growth in recent years, driven by increasing demand, policy reforms, and infrastructure development. Two prominent players, DLF Limited and Oberoi Realty Limited, have been at the forefront of this growth, shaping the country's urban landscape. Both companies have established themselves as leaders in the industry, with a strong presence in residential, commercial, and retail segments.
◉ Indian Real Estate Sector: Future Growth Prospects
India's real estate market is expected to register significant growth in the coming years, driven by a number of factors. Here's a quick summary of the key trends:
● Market size and GDP contribution: The market size is expected to reach US$ 1 trillion by 2030, up from US$ 200 billion in 2021, and contribute 15.5% to GDP by 2047.
● Residential market growth: The residential market is witnessing strong growth, with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore (US$ 42 billion) in FY23. Demand is surging in top 8 cities across mid-income, premium, and luxury segments.
● Retail and office space: The retail and office space segments are also growing rapidly. Gross leasing in top 7 cities crossed 60 million sq ft for the first time in 2023, with technology companies leading leasing activity.
● Data centers: Data center demand is on the rise, with an expected increase of 15-18 million sq ft by 2025.
● Housing shortage: There is a significant housing shortage in urban areas, with the current shortage estimated at 10 million units. An additional 25 million units of affordable housing are required by 2030.
Overall, the Indian real estate sector presents a promising picture for growth and development. The sector is benefiting from a number of factors, including a growing economy, rising urbanization, and increasing disposable incomes. This is leading to strong demand for both residential and commercial properties.
◉ Company Overviews
● DLF NSE:DLF
DLF Limited, along with its subsidiaries, focuses on colonization and real estate development across India. Their activities encompass land acquisition, project planning, construction, and marketing. The company specializes in developing and selling residential projects, while also managing commercial office spaces and retail properties, including malls and hospitality ventures. Notably, it owns The Lodhi Hotel and Hilton Garden Inn in New Delhi, as well as the DLF Golf & Country Club in Gurugram. Additionally, DLF is involved in leasing, maintenance, power generation, and recreational services. Established in 1946, DLF Limited is headquartered in Gurugram and operates as a subsidiary of Rajdhani Investments and Agencies Private Limited.
● Oberoi Realty NSE:OBEROIRLTY
Oberoi Realty Limited, along with its subsidiaries, focuses on real estate development and hospitality in India. It operates in two main segments: Real Estate and Hospitality. The company develops and sells various projects, including residential, commercial, hospitality, retail, and social infrastructure. It also leases office and retail spaces. Additionally, it manages hotel operations, which include room sales, food and beverage services, and related offerings, as well as constructing residential apartments and providing property management services. Established in 1998, the company is based in Mumbai, India.
◉ Market Capitalization
● DLF - ₹ 2,26,256 Cr. ($26.8 B)
● Oberoi Realty - ₹ 68,970 Cr. ($8.2 B)
◉ Relative Strength
The chart vividly demonstrates that neither company has managed to surpass the performance of the real estate sector over the past year. The realty sector has achieved an impressive return of 94%, while DLF and Oberoi Realty have delivered returns of 73% and 67%, respectively.
◉ Technical Aspects
● DLF
➖ Since its listing in July 2007, DLF reached an impressive peak of ₹ 1046 in January 2008.
➖ However, the stock faced a significant decline following the Lehman Brothers crisis later that year.
➖ After enduring a lengthy period of consolidation lasting eight years, the price stabilized around ₹ 66 in February 2016 and began its upward trajectory.
➖ Now, after nearly 17 years of consolidation, the stock is trading just below a critical resistance level, with a breakout anticipated in the near future.
● OBEROIRLTY
➖ Since its launch in December 2010, Oberoi Realty has shown a consistent upward trajectory
➖ During this ascent, the stock formed a Bullish Pennant pattern, and after breaking out, it surged to an all-time high of ₹ 1970 in September 2024.
➖ Currently, it is trading just below this peak. Analysts expect the stock to continue its upward momentum and reach new heights in the coming days.
◉ Revenue Breakdown
● DLF
DLF mainly generates its revenue from real estate development, concentrating on both commercial and residential areas. Significantly, the commercial real estate sector contributes a considerable 74% of the company's total revenue, largely through rental income.
● OBEROIRLTY
The company predominantly earns around 97% of its revenue from the real estate development sector. Furthermore, it also participates in the hospitality industry, which adds the remaining 3% to its overall revenue.
◉ Revenue & Profit Analysis
● DLF
➖ Over the past three years, DLF has recorded a modest compounded annual growth rate of 6% in sales.
➖ Despite this, the company has seen remarkable profit growth, which surged by 33% during the same timeframe.
➖ Currently, DLF enjoys a robust operating profit margin of 33%, an increase from 30% in FY23.
➖ In fiscal year 2024, earnings per share have jumped to 11.02, up from 8.22 the previous year, reflecting a consistent upward trend in EPS over the last four years.
● OBEROIREALTY
➖ In the last three years, Oberoi Realty has achieved an impressive compounded annual growth rate of 30% in sales.
➖ Profit growth has closely mirrored this success, with a CAGR of 34% during the same period.
➖ The company currently boasts an outstanding operating profit margin of 55%, a figure that continues to rise.
➖ While the EPS growth from FY23 to FY24 is modest, with EPS standing at 52.99 compared to 52.38 the previous year, the overall trend in EPS has been positive over the last four years.
◉ Valuation
● P/E Ratio
➖ DLF's current price-to-earnings (P/E) ratio stands at 79.6, slightly exceeding its 1-year median P/E of 76.7. However, when juxtaposed with the industry average of 34.4, it becomes evident that DLF is significantly overvalued at this time.
➖ In contrast, Oberoi Realty presents a P/E ratio of 31.50, which is just above its 1-year median P/E of 29.6. Yet, when compared to the industry P/E of 34.4, it appears to be undervalued.
● P/B Ratio
➖ DLF's price-to-book (P/B) ratio is 5.74, indicating a substantial overvaluation relative to the industry average of 3.54.
➖ Similarly, Oberoi Realty also seems overvalued with a P/B ratio of 4.98.
● PEG Ratio
➖ Oberoi Realty's PEG ratio of 1.83 positions it as an attractive investment opportunity, especially when compared to DLF's considerably higher PEG of 4.79.
◉ Profitability Analysis
➖ DLF ROCE - 6% in FY24
➖ OBEROIRLTY ROCE - 15% in FY24
➖ These numbers clearly demonstrate that Oberoi Realty is more profitable than DLF, as it efficiently leverages its total capital—comprising both equity and debt—to yield higher returns.
◉ Capex Analysis
● DLF
➖ The cash flow statement for DLF reveals a negative capital expenditure, indicating that the company is selling or disposing of its existing capital assets.
➖ This suggests a strategic decision to reduce its portfolio of office spaces and similar fixed assets, as they are no longer deemed necessary.
● OBEROIRLTY
➖ In contrast, Oberoi Realty has ramped up its capital expenditure from 601 crore to 677 crore compared to the previous year.
➖ This increase is a positive sign for the company, reflecting its ambition for expansion and growth in the market.
◉ Cash Flow Analysis
➖ DLF has demonstrated impressive growth in its operating cash flow, rising to 2,539 crore from 2,375 crore in FY23.
➖ Oberoi Realty has also performed exceptionally well, transforming its cash from operations to an impressive 2,810 crore, marking a significant recovery from a considerable negative of 2,383 crore in FY23.
◉ Debt Analysis
➖ DLF demonstrates robust financial health with a manageable debt level of 4,894 crores and an impressive debt to equity ratio of just 0.12, signaling that debt is not a significant issue for the company.
➖ On the other hand, Oberoi has a debt of 2,495 crores, resulting in a debt to equity ratio of 0.18, which indicates that the company is also not worried about its debt situation.
◉ Shareholding Pattern
● DLF
➖ Currently, Foreign Institutional Investors (FIIs) possess a 16.17% stake, reflecting a decline from the previous quarter.
➖ On the other hand, Domestic Institutional Investors (DIIs) have increased their holdings to 4.81% as of the June quarter, a slight rise from 4.77% in the last quarter.
● OBEROIRLTY
➖ Foreign Institutional Investors (FIIs) have made a notable increase in their investment in this stock, now holding 18.05%, up from 16.96% in the last quarter.
➖ Conversely, Domestic Institutional Investors (DIIs) have reduced their stake to 12.30%, down from 12.83% in the March quarter.
◉ Conclusion
After a comprehensive assessment of the technical and financial metrics, we have concluded that Oberoi Realty has surpassed DLF in terms of valuation, profitability, revenue growth, and future expansion prospects. However, this does not imply that DLF cannot enhance its performance in the future. In fact, DLF is on the verge of a significant multi-year breakthrough, and if this happens, it could create an excellent opportunity for investors to take advantage of any price declines.
In the end, both companies exhibit strong growth potential as they are leaders in the real estate sector. As the economy continues to grow, both Oberoi Realty and DLF are well-positioned to capitalize on this expansion.
Tata Power & Tata Communications: Dynamic Duo Poised for UpswingTata Power
The stock has shown a significant upward trend, reached at the 460 level, where it encountered strong resistance.
As a result, the price pulled back and found support around the 405 level, entered a consolidation phase.
During this phase, a Pole & Flag pattern developed on the chart, and with a recent breakout supported by robust trading volume, the stock is primed for further upward movement.
Tata Communications
Overall, the price is on an upward trajectory, consistently making higher highs and lows.
After hitting an all-time high close to the 2070 level, the price faced a notable rejection, resulted in a sharp decline followed by a consolidation phase.
During this period, an Ascending Triangle pattern developed, and the stock has recently achieved a successful breakout.
The current price action indicates that the stock is poised for another significant rally.
ICICI Bank & M_M See Significant Open Interest GrowthICICI Bank
The current stock price is navigating through an ascending parallel channel, demonstrating a strong upward trend characterized by a series of higher highs and higher lows.
Recently, the price has successfully breached the upper boundary of the parallel channel and is attempting to maintain its position above this breakout level.
A significant rise in future open interest—approximately 27%—has been observed for this stock.
This increase in both the stock price and future open interest suggests that major investors are optimistic regarding this stock.
As long as the price stays above the 1300 level, the overall sentiment is expected to remain positive.
Mahindra & Mahindra
The stock is experiencing a robust upward trend, consistently achieving higher highs and higher lows.
During this upward movement, the price has formed a bullish Pole & Flag pattern.
Recently, following a notable breakout accompanied by substantial trading volume, the stock has reached its all-time high.
Additionally, there has been a significant increase in future open interest, which has risen by nearly 16%.
This growth in both the stock price and future open interest indicates that major investors are confident about this stock.
The Banking-FMCG-Realty Trifecta Turbocharges Market Growth.Nifty Bank
The Bank Nifty is on a strong upward trend, consistently making higher highs and lows.
It has recently broken through its previous all-time high while moving within an ascending parallel channel, indicating potential for further gains.
Nifty FMCG
The FMCG sector is a major player in the market, and with a recent breakout, the index has reached its all-time high.
The price action indicates bullish momentum, suggesting it could continue to rise.
Nifty Realty
While the overall trend is positive, the realty sector has struggled to make a significant impact in recent months.
However, a bullish Pole & Flag pattern has appeared on the chart, signalled a possible continuation of the upward trend.
A recent breakout shows the index is active again.
Tech-Finance Synergy Could Boost Nifty This Week!Nifty It NSE:CNXIT
The IT index has been in a consolidation phase for an extended duration and developed a Cup & Handle pattern.
After breaking out, the index has effectively retested the breakout level and is now on an upward trajectory.
In the past week, the index gained approximately 3% and is showing robust strength, with expectations for further upward movement.
Nifty Private Bank NSE:NIFTYPVTBANK
The Private Bank index is currently experiencing a positive upward trend.
It previously established a Cup & Handle pattern, and following a breakout, the index saw substantial gains, consistently recording higher highs and lows.
After hitting an all-time high near the 26,650 level, the Private Bank index retraced to its immediate support zone and is now rising once more.
With a significant increase of almost 2.7% last week, the index seems to be in a bullish phase at present.
Crisil: The Credit Rating Agency is Set for Significant Growth!
The price is currently on an upward trajectory, characterized by a series of higher highs and higher lows.
After hitting resistance around the 3,740 level, the stock price pulled back but found strong support near the 2,700 level.
It then bounced back and surpassed its previous resistance.
This breakout was significant, as it emerged from the Rounding Bottom pattern that had formed during the consolidation phase.
Following the breakout, the stock price stabilized just above the breakout zone for a while.
Then, with a dramatic surge, the stock reached an all-time high of ₹6200.
However, a wave of selling pressure caused the price to drop back to its trendline support.
At present, the stock price is steadily climbing, indicating promising growth potential.
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.
Bearish RSI divergence in Nifty, indicating a potential decline!
Since October 2023, Nifty has demonstrated a robust upward trend, reaching an impressive peak of 25,333, marked an all-time high.
However, the index has recently faced a setback, pulled back from this peak and currently indicating a downward movement.
A significant bearish RSI divergence is evident on the daily chart, signaling a further potential decline for the index.
On the downside, important support levels are lies between 23,900 and 24,100.
It is crucial to recognize that a break below this support could lead to a significant drop in the index.
Dixon & Bajaj-Auto Showing High Rise in Future OIDIXON
Following a significant upward trend, the stock price experienced a correction and later established a Double Bottom pattern.
Recently, a breakout occurred, backed by strong volume, suggesting that the price is set for further gains.
Additionally, a notable increase in future open interest—nearly 11%—has been recorded.
This rise in both stock price and future open interest signals that big investors are optimistic about this stock.
As long as the price remains above the 12,900 level, the overall sentiment is likely to stay positive.
BAJAJ-AUTO
During the upward movement, the price experienced a brief consolidation phase, resulted in the formation of a Rounding Bottom pattern.
Recently, a breakout occurred, supported by significant volume, suggested that the stock price is poised to maintain its upward trajectory.
Moreover, there has been a remarkable surge in future open interest, climbed nearly 19%.
This increase in both the stock price and future open interest indicates that big investors are bullish about this stock.
As long as the price remains above the 10,000 level, the overall sentiment is likely to stay positive.
Buy Aurobindo Pharma Short Term Trading Advice by Goodluck Capital
Buy Aurobindo Pharma
Buy Range- 1240 - 1260
Target- 1330 - 1350
StopLoss- below 1175
Potential Return- 6-8%
Approx trade duration 9 - 10 days
SHYAMMETL & RPSGVENT - Cup & Handle Breakout!!SHYAMMETL
Following an upward trend, the stock price encountered resistance around the 740 level, resulting in a correction that brought the price down to the 530 level, where it established support.
Subsequently, the price entered a consolidation phase before successfully breaking through its trendline resistance.
With a surge, the stock price climbed back to its previous resistance level but faced rejection once more.
After a period of consolidation just below this resistance level, the price ultimately broke out with significant volume support.
During this time, a cup & handle pattern emerged, and with this breakout, that pattern was also surpassed.
If the price can hold above this breakout point, we could witness another rally in the days ahead.
RPSGVENT
After a tough rejection around the 840 level, the price started to decline.
Once it successfully broke through the trendline resistance, the stock price jumped back to its earlier resistance level but was rejected again.
After a period of consolidation just beneath that resistance level, the price has finally made a breakthrough recently, supported by substantial volume.
A cup and handle pattern formed during this period, and with the breakout, that pattern was also exceeded.
If the price remains above this breakout level, there could be more upward movement.
BALRAMCHINI & MPHASIS Showing High Rise in Future OIBalrampur Chini
The stock price saw a notable decline after dropping beneath the Rising Wedge pattern.
Subsequently, it entered an extended phase of consolidation, during which it formed an Inverted Head and Shoulders pattern.
After the breakout, the price surged initially but then experienced a short consolidation period before breaking out again.
This movement also shows a breakout from the Rounding Bottom pattern, which is allowing the stock price to go up even higher.
Mphasis
The stock price is currently in a strong consolidation phase.
The chart shows that an Inverted Head & Shoulder pattern is developing, suggesting that this phase might end soon and the price could rise after a major breakout.
To see an upward movement, the price needs to break through the 3,100 level and stay above it.
WOCKPHARMA: W pattern breakout may drive the price higher!
The 1700-1800 range has acted as a formidable barrier for this stock, with the price faced rejection at these levels on two separate occasions.
After experiencing a significant downturn, the price eventually found support around the 135 level, led the price to a period of consolidation.
During this time, the stock developed a Double Bottom pattern.
Following a substantial gap, it successfully broke out of the Double Bottom pattern with strong trading volume and is now positioned just above that breakout level.
At present, the stock is trading at nearly half its all-time high, making it an appealing option right now.
Buy Sharda Motors Short Term Trading Advice by Goodluck Capital
Buy Sharda Motors
Buy Range- 2560 - 2630
Target- 2930 - 2950
StopLoss- below 2420
Potential Return- 13-14%
Approx trade duration 14 - 15 days
Welspun Corp could excel in your Investment PortfolioInvestment Advice by Gooodluck Capital (SEBI Registered)
Buy Welspun Corp
NSE:WELCORP
● Buy Range (1) - CMP (current market price)
● Buy Range (2) - 660 - 665
● Buy Range (3) - 620 - 630
● Target - 960 - 970
● Stoploss - below 500
● Potential Return - 50 - 52%
---------------------------------------
Approx investment period 18 - 24 months
Company Overview
Welspun Corp Limited manufactures and sells steel pipes, coatings, plates, and coils in the US, Europe, Saudi Arabia, and India. The company offers helically, longitudinally, and electric resistance welded pipes, pig iron and ductile iron pipes, billets, thermo mechanically treated rebars, stainless steel pipes, tubes, and bars. Its products are used in various industries, including oil, gas, water transmission, infrastructure, and defense. The company was incorporated in 1995 and is based in Mumbai, India.
Sector - Iron & Steel
Technical Analysis
(1) In January 2008, the stock faced significant resistance around the 500 level, leading to a substantial price correction.
(2) Over time, it established a support base near the 45 level, from which it began to rebound, climbing back towards the 300 level.
(3) However, the stock struggled to break past the 300 threshold and eventually retreated to its former support.
(4) Following this, it entered an extended phase of consolidation until it finally broke through the 300 level in July 2023.
(5) This pivotal moment propelled the stock into strong upward momentum, culminating in a multi-year breakout at the 500 mark after nearly 16 years.
(6) Subsequently, the stock not only maintained this breakout level but has also begun to steadily rise.
Entry, Target & Stop-loss
● Entry with Capital allocation strategy
(1) consider adding 40% of your desired quantity at the current market price.
(2) The second buying opportunity will be in the 660-665 range, where you can also add another 40% of your quantity.
(3) If the price dips to the 620-630 range, that will present the best buying opportunity. Make sure to reserve 20% of your quantity to take advantage of this level.
● Target
Chart analysis indicates a promising upside potential of above 50% for this stock from the current level, with a target around the 960 to 970. There is also a strong likelihood that the stock could exceed this target.
● Stoploss
It is crucial to implement a strict stop-loss below the 500 level, as we anticipate that the stock may encounter challenges if it drops to this point.
Fundamental Analysis
● Stock Valuation ●
(1) Intrinsic Value
➖ The current price-to-earnings ratio for the stock is 14.5.
➖ The median price-to-earnings ratio for the stock over the past year stands at 15.4, while the earnings per share for the trailing twelve months is 45.55.
➖ This leads us to calculate the intrinsic value of the stock as follows: 15.4 * 45.55 is equals to 701.47.
➖ With the current market price hovering around 695, which is below the intrinsic value of 701, it clearly indicates that the stock is considerably undervalued right now.
(2) P/B Ratio
The present PB ratio for this stock stands at 3.06, indicating a slightly high valuation but not reaching overvalued territory.
● Debt Analysis ●
(1) The company's current debt is Rs. 1,949 crore, which is quite minimal compared to its market capitalization of Rs. 17,249 crore.
(2) With a debt-to-equity ratio of just 0.35, it’s evident that the debt level is relatively low for this type of capital-intensive business, providing the company with the flexibility to secure additional funding as needed.
(3) A glance at the balance sheet reveals a significant reduction in debt, dropping from Rs. 3,381 crore last year to the current Rs. 1,949 crore.
● Revenue Break-up ●
(1) Product wise break-up
The company generates its revenue through three primary product categories:
➖ HSAW Pipe, which accounts for approximately 76% of the total revenue,
➖ LSAW Pipe, contributing close to 15% of the total revenue,
➖ ERW Pipe, responsible for about 8% of the total revenue.
(2) Location wise break-up
The company derives approximately 54% of its revenue from India. Additionally, Welspun Corp. operates facilities in the USA and Saudi Arabia, contributing around 8.6% and 34.2% to its overall revenue, respectively.
● Profit & Loss Analysis ●
(1) Over the past three years, this stock has achieved an outstanding compounded annual growth rate of 34% in sales.
(2) The cumulative profit increase over the past three years has been an impressive 21%, indicating a strong upward trend.
(3) The profit margin has seen a significant boost, rising to 9% from 5% YoY.
For the fiscal year 2024, the growth in earnings per share is striking, skyrocketing to 42.41 from 7.90 in fiscal year 2023.
● Cash Flow Analysis ●
Operating cash flow has seen a remarkable surge, soaring to 1,306 crore from a negative 185 crore in FY23.
● Shareholding Pattern ●
(1) As of the June 2024 quarter, the promoters own a notable 50.03% stake in the company.
(2) Goldman Sachs possesses a notable 10.51% share in the company, reflecting a slight decline from 10.70% in March 2024.
(3) Domestic Institutional Investors (DIIs) have reduced their stakes since the previous quarter, yet they still hold over 9%, which remains quite significant.
● Conclusion ●
The steel industry in India is set for expansion, bolstered by new government initiatives. Lower import duties on essential raw materials, combined with heightened public investment in infrastructure and housing, are anticipated to greatly enhance the sector's performance. Therefore, we are excited to see how Welspun Corp will thrive in the near future.
Cera is on a bull run, chart indicates further rise in price!Weekly Chart
The stock has been experiencing a strong upward trend, consistently pushing its highs and lows to new heights.
We've noticed that the bullish pole and flag pattern appeared twice in a row, indicated a solid presence of buyers in this stock.
Recently, a breakout occurred on the weekly chart with high trading volume, suggesting that the price is set to rise again.
Daily Chart
Following a notable rejection around the 9,600 mark, the stock experienced a considerable correction.
The formation of a Double Bottom pattern signaled a reversal in the downtrend, leading to a robust upward movement.
This impressive rally brought the price back to its former resistance level, but it struggled to break through, leading to a period of consolidation just beneath that threshold.
In an unexpected turn, the stock gapped up and successfully surpassed its immediate resistance, maintaining its position above this critical level.
With trading volume on the rise, there is a promising outlook for a significant upward surge in the stock price.
NATCO PHARMA: A Multiyear Breakout Set to Double Your Investment Investment Advice by Goodluck Capital (SEBI Registered)
Buy Natco Pharma NSE:NATCOPHARM
Buy Range- 1210 - 1220
Target- 1950 - 1960
Potential Return- 60-62%
Approx investment period 12 - 14 months
TECHNICAL ANALYSIS NSE:NATCOPHARM
(1) Back in 2017, Natco Pharma encountered several rejections around the 1,050 level, leading to a subsequent decline.
(2) The 500 level has emerged as a crucial support point, allowing the stock to bounce back from this threshold.
(3) Although the stock made an attempt to surpass its trendline resistance in July 2021, it ultimately fell short, resulting in another correction before finding support at the 500 level once more.
(4) Since March 2023, the stock has been on an upward trajectory, successfully breaking through the resistance level in July 2024.
Following this significant multi-year breakout , there is a strong expectation that the stock will remain above the breakout zone, paving the way for a robust upward rally.
● ENTRY & EXIT LEVELS
- Look for the best buy levels between 1,210 and 1,220, as this is also the breakout level. However, if the stock begins to consolidate at that level and subsequently breaks out, the upper boundary of this consolidation could present another lucrative entry point.
- Based on the chart analysis, it appears that there is a 60% upside potential for this stock, hovering around the 1,950-1,960 level. Moreover, there is a possibility that the stock may surpass this level.
FUNDAMENTAL ANALYSIS NSE:NATCOPHARM
● PE RATIO
- The stock's current PE stands at 16.9, slightly higher than the 1-year median PE of 14.2 but lower than the 5-year median PE of 26.3.
- With an industry PE of 36.6, the stock appears undervalued.
● PB RATIO
- The present PB ratio for this stock stands at 3.96, indicating a slightly high valuation but not reaching overvalued territory.
● DEBT TO EQUITY RATIO
- The company's debt to equity ratio of 0.06 indicates that it is nearly debt-free.
● PROFIT & LOSS ANALYSIS
- Over the last three years, this stock has experienced a remarkable compounded annual sales growth rate of 25%.
- The cumulative profit increase over the past three years has been an impressive 49%, indicating a strong upward trend.
- The profit margin has seen a significant boost, rising to 44% from 35% YoY.
- The EPS growth for FY24 is remarkable, soaring to 77.5 compared to just 39 in FY23.
● CASH FLOW ANALYSIS
- There is a substantial increase in operating cash flow, jumping by almost 43% to 1,212 crore from 849 crore in FY23.
● SHAREHOLDING PATTERN
- The promoters have consistently held their stakes at 49.71% over the past three quarters.
- Over the last four quarters, FIIs have been steadily increasing their investments, in contrast to DIIs who have been offloading their stakes.
DIVISLAB and CHAMBLFERT showing high rise in Future OIDIVISLAB
The price has been stuck in a tight range for over a year.
Then it broke through its resistance level.
Since then, the price has stayed above that point and is rising steadily.
A breakout has occurred, and the stock price continues to climb
CHAMBLFERT
The stock price was gradually rising within a parallel channel.
After breaking out of the channel, there was a significant price surge followed by a period of consolidation.
Now, the price is attempting to surpass its resistance and continue moving upwards.
Realty & Auto: Massive sell-off opens up a chance for shorting!REALTY
Following an impressive bull run, the index has begun to consolidate and has taken the shape of a Rounding Top pattern.
With significant selling pressure, the index is currently hovering around its trendline support level, which also happens to be the neckline of the Rounding Top pattern.
If the trendline is breached, we could potentially witness a correction in the real estate sector.
This sell-off presents an opportunity to take short positions in stocks like DLF, Godrej Properties etc.
AUTO
The automotive industry has experienced a significant increase and is one of the key sectors contributing to the strong rally of Nifty.
Following a period of consolidation, a breakout occurred but the index encountered a notable rejection at its all-time high.
Following a significant gap, the auto index dropped and is anticipated to decline even further.
Given this situation, there is a chance to open short positions in certain stocks such as M&M, Escorts etc.
