Weekly Market Analysis for Jan 15-19, 2024

Nifty scales new highs aided by Infosys and TCS; Q3 Results season off to a good start; Japan surging; and much more.

What happened last week?

• The start to last week was Bearish with Nifty breaking the previous Week’s low. However, Nifty witnessed a huge recovery of almost 500 points from the week’s lows aided by the IT sector. Nifty scaled a new high and closed at 21894.

  

• The Q3 earnings season has just begun. The IT index was up 4.79% last week aided by good results of TCS and INFOSYS. Infosys was up by 8% on Friday and it alone contributed 100 points to Nifty. Both future Earnings outlook and order book look strong for TCS and Infosys.

  

• Global Markets ended mixed last week. Tech stocks around the globe had a good week. The Nasdaq was up 3.19% last week. Microsoft overtakes Apple as the most valued company in the world.

  

• Japan’s stock market registered strong gains with the Nikkei Index rising 6.6%. The continuation of highly stimulative monetary policy and weakness in the Yen (benefits Exporters) helped the indices rally to their highest levels in almost 34 years.

• The Consumer Price Index (CPI) Inflation in India was at 5.69% in December 2023 compared to 5.55% in November 2023. It is the highest rate in four months, with food inflation rising to 9.5% from 8.7%. Prices rose the most for vegetables (27.6%), pulses (20.7%), spices (19.7%) and fruits (11.1%) but fell for oils and fats (-15%).

• Industrial production in India eased to 2.4% year-on-year in November 2023, marking the lowest reading since March last year. Output decelerated sharply across all key sectors: Manufacturing (1.2% vs 10.2%), mining (6.8% vs 13.1%) and electricity (5.8% vs 20.4%).

• The heavyweights such as HDFC Bank, Asian Paints, Hindustan Unilever, UltraTech Cement etc. will announce their quarterly results in the coming week.

Let us now dive deeper into FII DII positions.

FII Positions Analysis

• FIIs sold 3901 Crores and DIIs bought 6858 Crores in the cash market. FIIs have turned net sellers again after a couple of weeks of buying.

• However, FIIs have closed the week with net long positions in both the Index Derivatives and Stock Derivatives segments.

• Overall FII sentiment is still Bullish and there is no indication of Bearishness as per their latest Derivatives positions.

Nifty Analysis

• Both momentum (price) and sentiment (max pain) indicate bullishness in Nifty. There is no reason to short the market as of now. Do not short in an attempt to find the top. It is a loser’s game.

  

Key Upcoming Events

January 15 (Monday):

• Medi Assist Healthcare IPO opens

• India WPI Inflation data expected

• India Merchandise Trade deficit data

January 16 (Tuesday):

• Q3 Results: HDFC Bank, L&T Technology Services, Federal Bank

January 17 (Wednesday):

• Q3 Results: Asian Paints, LTIMindtree

• China GDP Growth Rate data

January 18 (Thursday):

• Q3 Results: IndusInd Bank, Polycab

• US Initial Jobless Claims Data

January 19 (Friday):

• Q3 Results: PayTM, UltraTech Cement, Hindustan Unilever.

• India Foreign Exchange Reserves Data

January 20 (Saturday):

• Q3 Results: ICICI Bank, Kotak Bank, Union Bank

Key Stock Announcements from Last Week

New Orders, Contracts & Projects

• Jupiter Wagons secured a ₹100 crore contract for manufacturing and supplying four double-decker automobile carrier wagons.

• Bhansali Engineering Polymers awarded a FEED contract for an ABS expansion project.

• Techno Electric & Engineering reveals new orders from Sterlite Power, PowerGrid, and RECPDCL worth ₹1691 Crores, outlining projects in Rajasthan and Kashmir for substations and smart meters.

• Solar Industries India discloses an export order of ₹994 Crores for defence-based products from an international client, to be fulfilled over three years.

• BEML: Secured a ₹329.87 crore order from the Ministry of Defence for Mechanical Minefield Marking Equipment Mark-II.

• Cupid Limited secures a domestic order from CMSS for male condoms worth ₹6.58 Crore, to be fulfilled by April 2024.

• Power Mech Projects secured an ₹825 Crore order for civil and mechanical works from Mahan Energen.

• RailTel Corporation received a significant work order worth ₹39.88 Crore from Bihar Education Project Council for providing Teaching Learning Material for Class IV to V, to be executed by February 28, 2024.

• GE Power India Limited has secured a purchase order from NTPC Ltd. The order involves supplying spares and repairing HP Inner Casing Module valued at ₹10.3 Crores plus GST (18%) for execution within 10.5 months.

• L&T Construction secured an order from HITES (A Mini Ratna PSU) under the Ministry of Health and Family Welfare to construct a new AIIMS at Rewari, involving a 720-bed Teaching Hospital, AYUSH Hospital, Medical College, and other facilities spanning 1.5 Mn Sq. ft.

• NBCC secured a ₹218 crore project for constructing a National Institute of Fashion Technology Campus in Varanasi, including modifications to existing facilities.

• NBCC secured approval for a ₹134.13 crore cost increase in the “Construction of Phase III, BPS Govt. Medical College” project, now totaling ₹419.13 crore

• RailTel Corporation received a significant work order from C-DoT for MPLS VPN connectivity at 26 sites across India, valued at ₹29.54 Crore (Excluding GST).

• Bajel Projects Limited received a Letter of Intent (LOI) from The Tata Power Company for a project in Uttar Pradesh worth ₹487.64 Crs. Completion period: 18 months.

• H.G. Infra Engineering Limited is declared L-1 bidder by Central Railway for the construction of a new railway line in Maharashtra, valued at ₹716.11 Crore.

• KPI Green Energy Limited’s subsidiary, KPIG Energia Private Limited, secured a 2 MW solar power plant order from Sanwariya Processors. The project aims for completion in the 2024-25 fiscal year.

Partnerships, Acquisitions & Investments

• Godrej Industries signed an MoU with Gujarat Govt, planning a ₹600 crore investment in Valia’s expansion over four years.

• Eicher Motors: Signed a non-binding MoU with the Tamil Nadu government to invest Rs 3,000 crore over 8 years for projects in Chennai.

• Cipla: Entered a joint venture in the US to develop and commercialize novel cell therapy products for medical needs in multiple regions.

• Oil India: Signed a Joint Venture Agreement with Assam Power Generation Corporation for renewable and green energy business.

• Brigade Enterprises: Signed MoUs worth ₹3400 crore with the Tamil Nadu government for project development in Chennai.

• IRM Energy: Signed a MoU with the Tamil Nadu government to invest ₹858 crore for a project, aiming to employ 2200 people in the state over 5 years.

• Mahindra & Mahindra: Expanding collaboration with Mobileye to develop advanced driving technology for a fully autonomous driving system.

• Karnataka Bank: Partnered with fintech company Digivriddhi (DGV) to offer financial services to dairy farmers and milk societies, focusing on credit and digitized payments.

• Steel Strips Wheels: Acquired AMW Autocomponent for ₹138.5 crore through equity infusion and an intercorporate loan.

• CESC: Subsidiary Noida Power Company approved for a 5-year power purchase agreement for 95 MW of RTC power per year.

• Nuvama Wealth Management: Announced a joint venture with Cushman & Wakefield to launch the PRIME Offices Fund, aiming to raise ₹3,000 crore.

• UltraTech Cement: Acquiring 26% equity shares of Amplus Ages for ₹49 crore to meet green energy needs.

• Pondy Oxides and Chemicals: Signed a MoU with Tamil Nadu government to invest Rs 300-500 crore in a recycling and manufacturing plant, aiming to employ 1200 people.

Business Operations

• Narayana Hrudayalaya’s subsidiary, Narayana Health Insurance, obtained a license to conduct health insurance business exclusively.

• JSW Steel received possession of forest land for a greenfield integrated steel plant in Odisha, aiming for 13.2 MTPA production.

• Shreyas Shipping Logistics reported a fire incident in the engine room of one of its vessels, with no casualties or pollution.

• RPSG Ventures faced a fire incident at a job worker’s factory in Uttar Pradesh and is assessing the damage.

• Aurobindo Pharma: Received an establishment inspection report from the US FDA for its Telangana unit, classified as “Voluntary Action Indicated.”

• Lemon Tree Hotels announced a new addition in Meerut, UP, slated to open in FY25, expanding their presence and offerings in the region.

• Lupin: Launched Bromfenac Ophthalmic Solution (0.07%) in the US after FDA approval for postoperative inflammation and ocular pain reduction in cataract surgery patients.

• KIOCL: Temporarily suspended operations at the Pellet Plant Unit in Mangalore due to non-availability of iron-ore fines.

• PFC: Received RBI’s no objection letter to establish a wholly owned subsidiary finance company at GIFT City, Gujarat.

• Atul: Commenced operations of a 300 tpd caustic and 50 MW power plant at the Atul site with an approved investment of Rs 1,035 crore.

• Thirumalai Chemicals: Wholly owned subsidiary TCL Intermediates commenced commercial production from its greenfield plant at Dahej, producing fumaric acid.

• Tata Power Company: Subsidiary to develop 10,000 MW renewable energy projects in Gujarat with Rs 70,000 crore investment.

• Bhansali Engineering Polymers: Received environmental clearance for the expansion of ABS and saleable SAN resin in Rajasthan.

Key Buying and Selling Deals

• Honasa Consumer (MAMAEARTH): Stellaris Venture Partners India I sells 3217468 Shares at ₹437.04

• Hitech: Bandhan Mutual Fund buys 1000000 Shares at ₹141

• Zee Entertainment: Societe Generale sells 7836744 Shares at ₹259.1

• NCC Limited: Smallcap World Fund buys 3615365 Shares at ₹185.23

• Goyal Salt: Tryrock Capital Trust sells 192000 Shares at ₹177.09

• Polycab: Smallcap World Fund sells 851003 Shares at ₹3955.87

• Bharat Wire Ropes: Destinations Int Eq Fund buys 415474 Shares at ₹382.95

• Samhi: Abu Dhabi Investment Authority buys 5000000 Shares at ₹185; Sarvara Investment Fund I sells 4999782 Shares at ₹185.

Fund Raising & IPOs

• Shyam Metalics and Energy: Raised ₹1385 crore via Qualified Institutional Placement (QIP) at ₹576 per equity share.

• Angel One: Considering raising funds through the issuance of non-convertible securities.

• Satin Creditcare Network: Board meeting on January 15 to consider raising funds through the public issue of non-convertible debentures.

• Safari Industries (India): Board meeting on January 15 to consider raising funds through the issue of securities on a preferential basis.

• RPSG Ventures: Board to consider raising funds on January 17.

Regulatory & Legal

• MedPlus Health Services: Received orders for the suspension of drug licenses for specific storage locations for 6-7 days.

• LIC: Received demand orders for GST and penalty amounting to Rs 191.01 crore for FY17-18 and FY18-19 in Gujarat. Also received demand orders worth Rs 3,528.75 crore from Income Tax authorities in Mumbai.

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