Experts expect volatility to continue in the market, given the monthly expiry scheduled in the coming week. COVID-19 cases and US bond yields will be closely watched by the street as well.
The market may have shown a strong recovery on March 19 but for the week, it ended in the bear grip over fears of a second coronavirus wave and the volatility in US bond yields despite the Federal Reserve reaffirming its dovish stance. The volatility in FII inflows, too, caused caution in the market. The BSE Sensex corrected 933.84 points or 1.84 percent to close the week at 49,858.24, while the Nifty50 fell 286.95 points or 1.91 percent to 14,744 on selling pressure in banking & financials, auto, capital goods, healthcare and IT stocks. FMCG was the clear outperformed, with 2.8 percent gains. Experts expect volatility to continue in the market, given the monthly expiry scheduled in the coming week. COVID-19 cases and US bond yields will be closely watched by the street as well. “On a weekly basis and daily basis, the market has formed reversal formation after completing the corrective move at 14,350 levels. Even if the correction is completed, the current rally will be called a pullback until the Nifty crosses the 15,350 level. The Nifty could go up to 14,850 and 14,950 levels,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities, said.
Adani Power | The stock jumped over 22 percent after the Supreme Court (SC) dismissed a review petition filed by power distribution companies (discoms) of Rajasthan against paying compensatory tariff to the company. In September 2020, the apex court had ordered three Rajasthan power distribution companies to pay a compensatory tariff to Adani Power Rajasthan since 2013 to recover the higher cost of imported coal. “We would like to inform that the Hon’ble Supreme Court (“SC”) has dismissed the review petitions filed by Rajasthan Discoms in the matter of the SC Judgment dated August 31, 2020, pertaining to recovery of compensatory tariffs by Adani Power Rajasthan Limited, a wholly-owned subsidiary of the Company,” Adani Power said in a filing to the Bombay Stock Exchange on March 18. Adani Power had to import coal because of the non-supply of domestic coal. The company sought compensation for the time period between 2010 and 2018 for not receiving domestic coal linkage to its Kawai plant. From 2019 on, it got a supply of domestic coal under the Shakti scheme. The share touched its 52-week high Rs 93.05 and 52-week low of Rs 25.25 on March 19, 2021 and March 23, 2020, respectively. It is trading 0.86 percent below its 52-week high and 265.35 percent above its 52-week low.
Aarti Drugs | The share price gained 8 percent after the company approved the buyback of equity share worth up to Rs 60 crore. The company board approved the buyback of up to 6,00,000 fully paid-up equity shares of the face value of Rs 10 each, representing up to 0.64 percent of the total number of equity shares of the company at a price of Rs 1,000 per equity share payable in cash for an aggregate amount of up to Rs 60 crore. The buyback will be done on a proportionate basis through a tender offer to all the equity shareholders and beneficiary owners who hold shares on the record date. The board of directors has set the record date for the buyback as April 1, 2021. The share touched its 52-week high Rs 1,025.00 and a 52-week low of Rs 105.56 on October 8, 2020 and March 19, 2020, respectively. It is trading 26.89 percent below its 52-week high and 609.93 percent above its 52-week low.
ITC | The scrip was up over 8 percent last week. The share touched its 52-week high of Rs 239.15 and 52-week low of Rs 139 on February 9, 2021 and March 25, 2020, respectively. It is trading 6.71 percent below its 52-week high and 60.5 percent above its 52-week low. Global financial firm Morgan Stanley initiated coverage with ‘overweight’ rating on the company. “Valuations remain attractive, but more importantly we expect moderate tax increases over the medium term to bring profitability back to the cigarette business. The market has not priced this in, in our view,” said a team of researchers at Morgan Stanley. “We believe ITC has exited a painful decade of high cigarette taxes, ESG headwinds, diverging global trends, an underperforming FMCG business, and the loss of foreign flows,” said Morgan Stanley. ITC plans to expand its offerings in categories such as chocolates and staples after a foray into cakes and milkshakes, as it tries to boost its food portfolio. ITC is expected to launch packs of chocolates priced in the range of Rs 5 to 10, under the Fantastik brand, according to a BloombergQuint report. For this offering, it has already installed chillers in shops in North India.
Dalmia Bharat | The stock price gained more than 6 percent last week. CLSA upgraded the stock to buy and raised the target price to Rs 1,900 from Rs 1,650 per share. The research firm is of the view that the company has large capacity addition in its pipeline, adding that it has a presence in strong growth regions. At current valuations, Dalmia Bharat is well-placed in this upcycle, it added. The Supreme Court on March 16 ordered IL&FS Securities Services (ISSL) to release mutual fund units worth Rs 344 crore to the Dalmia Bharat Group. In August 2019, the Supreme Court had passed an interim order that Dalmia Cement, which is a subsidiary of Dalmia Bharat, may encash the securities and the said amount shall lie in fixed deposit with ISSL. “Vide an order dated March 16, 2021, the order of August 2019, has been modified by the Supreme Court on an application filed by DCBL. The modification allowed is to the effect that the said Securities of DCBL lying with ISSL be released in favour of DCBL subject to DCBL furnishing requisite Bank Guarantee to the satisfaction of the trial court,” Dalmia Bharat said in exchange filing. The share touched its 52-week high Rs 1,690.60 and 52-week low Rs 406.00 on March 17, 2021 and March 24, 2020, respectively. It is trading 6.97 percent below its 52-week high and 287.36 percent above its 52-week low.
Godrej Industries | The share price was up 6 percent during the week. The company informed exchanges that the rating agency ICRA has assigned ‘AA’ rating to the company’s proposed issue of non-convertible debentures of up to Rs 1,500 crore, the company said in an exchange filing. Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations, and such instruments carry very low credit risk. The share touched its 52-week high Rs 524.20 and 52-week low of Rs 234.00 on March 19, 2021 and May 7, 2020, respectively. It is trading 1.33 percent below its 52-week high and 121.05 percent above its 52-week low. Vinay Rajani, Senior Technical Research Analyst at HDFC Securities suggests buying the stock with a target price of Rs 575 and stop loss at Rs 455. The stock has broken out from bullish inverted head and shoulder patterns on the monthly charts. It has recently taken out the crucial double top resistance placed at Rs 483. Moving average and oscillator setup looks bullish on daily and weekly charts.
Shipping Corporation of India | The stock was down over 11 percent last week. Life Insurance Corporation of India sold a 2.01 percent stake in the state-owned Shipping Corporation of India through an open market transaction. The life insurance major reduced the stake in the company to 8.04 percent from 10.05 percent. The Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said multiple expressions of interest were received for the privatisation of the company and the said transaction would now move to the second stage. DIPAM, in December, had invited expressions of interest (EoI) for strategic disinvestment of the government’s entire stake of 63.75 percent in Shipping Corp of India along with the transfer of management. The last date for submitting the bids was February 13, which was extended to March 1. The share touched its 52-week high of Rs 134.60 and 52-week low of Rs 31.65 on March 4, 2021 and March 24, 2020, respectively. It is trading 20.32 percent below its 52-week high and 238.86 percent above its 52-week low.
Tata Communications | The stock price was down over 8 percent last week. The government on March 19 said it has exited Tata Communications after selling a 10 percent stake to Tata Sons’ arm Panatone Finvest in an off-market trade. The Government of India held a 26.12 percent stake, while Panatone Finvest had 34.80 percent, Tata Sons 14.07 percent and the remaining 25.01 percent was with the public before the transaction. “We wish to inform you that we have 2,85,00,000 equity shares held by us in Tata Communications Limited, representing 10 percent of the total shareholding of the company, to the buyer on March 18, 2021 by way of an off-market trade,” the Department of Telecom said in a regulatory note. The government has reserved a minimum of 25 percent of the offer share for mutual funds and insurance companies subject to valid bids and 10 percent for retail investors. The OFS was subscribed 1.33 times. Tata Communications was formed after Tata Group acquired a stake in 2002 in erstwhile Videsh Sanchar Nigam Limited set up by the government in 1986. The stake is part of the government’s disinvestment process. The government has set a target to realise Rs 32,000 crore in this fiscal. The share touched its 52-week high Rs of 1,365.00 and 52-week low of Rs 205.70 on March 8, 2021 and March 19, 2020, respectively. It is trading 13.89 percent below its 52-week high and 471.44 percent above its 52-week low.
Strides Pharma | The share price was down 8 percent in the week gone by. Stelis Biopharma, the biotech division of Strides Pharma, on March 19 announced that it has partnered with Russia’s sovereign wealth fund RDIF to produce and supply a minimum of 200 million doses of Sputnik V vaccine. The agreement between RDIF and Stelis Biopharma was reached under the aegis of Enso Healthcare LLP, RDIF’s coordination partner for sourcing Sputnik V vaccines in India. The parties intend to commence supplies from Q3 2021. Stelis will also continue to work with the RDIF to provide additional supply volumes beyond the initial agreement. The share touched its 52-week high of Rs 1,000 and 52-week low of Rs 271.00 on January 8, 2021 and March 20, 2020, respectively. It is trading 23.19 percent below its 52-week high and 183.45 percent above its 52-week low.
Hathway Cable | The stock shed over 7 percent last week. The company has entered into an agreement for disposing its entire 50 percent stake (5,000 equity shares having face value of Rs 10 each) of Net 9 Online Hathway, a joint venture company, on March 18. The company has received a consideration of Rs 99 lakh after selling the stake in the joint venture company, said Hathway in its BSE filing. Subsequent to the sale, Net 9 Online Hathway ceased to be a joint venture of the company. The company said it had sold its entire shareholding of 50 percent in Net 9 Online Hathway, to other existing joint venture partners—Satish Walke (13.33 percent stake), Deepak Panchal (18.33 percent) and Albert Dias (18.34 percent). This sale does not fall within the purview of a related-party transaction, it added. The share touched its 52-week high of Rs 57.45 and 52-week low of Rs 10.70 on July 22, 2020 and March 24, 2020, respectively. It is trading 48.65 percent below its 52-week high and 175.7 percent above its 52-week low.
Shriram City Union Finance | The scrip was down over 6 percent last week. Banking and Securities Management Committee of the company on March 16, 2021, approved the issue of secured rated listed redeemable principal protected market-linked (PP-MLD) non-convertible debentures (NCDs) of face value Rs 10,00,000 each, aggregating up to 5,000 NCDs, or Rs 500 crore, in one or more tranches either as fully paid-up or partly paid-up on private placement basis. The share touched its 52-week high of Rs 1,640.00 and 52-week low of Rs 617.00 on March 1, 2021 and May 29, 2020, respectively. It is trading 13.58 percent below its 52-week high and 129.71 percent above its 52-week low.
Sandip Das
