Thank you for sharing. Reading couldn’t help sharing a fascinating macro piece to my mind.
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@hitesh2710 Hitesh ji, long back you made investments in Kaveri Seed. Was wondering if you could help me with your experience with the following two things.
- What are your current views on Kaveri seed?
- Was there anything that you did not like about them?
Currently Kaveri seeds from a no growth scenario.
When we used to track it many years ago, it was an undervalued company with good balance sheet with a consistent growth track record. The only problem with the company was limited opportunity size in the main product which was cotton hybrid seeds.
@Akashdeep I dont track tube investments.
@Lavanya_Tomar I don’t track CGD companies.
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Hello sir,
As sector rotation is going on over last couple of years, metal nifty index is again close to its all time high.
Even during the weakness observed last and this week, metals were staying resilient.
There are contradictory signals- China reopening is positive while US and Euro recession fears are negative. Though charts are more tilted towards positive bias.
Your opinion would be welcome.
Thank you.
I am not a big fan of metal sector and don’t track it too closely. But from among metals pack, jsw steel and jindal steel and power have shown a lot of resilience during the prior downturn. Now JSW steel is close to all time highs and looks the strongest of the lot.
A lot of other metal stocks seem to be in a base formation stage.
Sector rotation has been the hallmark of the post Covid rallies and its often difficult to play these to get maximum advantage. Idea should be to get in well ahead of the pack into the sector showing strength and try to ride with strict stop losses. The usual story with most retail investors is that they get in quite late into the party and are left holding stocks bought at or near peak. That’s where one needs to be careful.
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Sir why do some companies which go through a big upcycle stop doing concalls all of a sudden when they go through down cycle?
I think for companies going through tough times, reason for not conducting concalls is pretty obvious. They don’t want to answer tough questions.
And many a times, there are not enough people interested in the company, so there is no reason to conduct a concall just for the sake of it. They can just give presentation and/or press note and that too should be enough.
I won’t read too much into these things, though companies which remain consistent in conducting concalls through thick and thin should be applauded.
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Hi Hitesh Sir, what’s your view on HBL power now?
Hitesh bhai how do you see Gujarat Fluoro on the chart. It has been a slow down slide since months now and currently 35% down from its 52week highs. Is the market discounting something which is not fully visible.
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Hitesh sir, hope you are well.
I would like to know your technical view on charts of small private sector banks (South Indian bank, Karnataka Bank) and public sector banks (Union, J&K Bank). All of these have corrected a bit from their highs after a good rally.
Do you see further upward movement in them and can they show one more leg of rally?
Thanks much in advance
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Views on HBL power remain same as before. It is a story which is expected to unfold in FY 24. The information about the company bagging important orders is out and how the company executes these orders needs to be seen. As of now its a narrative and numbers that follow need to be seen.
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Fluorochem as you mentioned is in a continuous slow slide. Expected support levels of 200 dema have not held and that has led to more pain. While going up, 2400-3000 was a broad range wherein a lot of consolidation happened. I expect some kind of support and bottom formation within that range. We have already reached and gone slightly below 2700, and need to see where it gets support and stabilises.
Personally I would like to see the slide stop, and some kind of consolidation develop and then take a call. As of now its just wait and watch.
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Most of these small private and PSU banks have had stellar rallies over past few months. Some of them have gone up two to three times and more from their bottoms within a matter of months. After such a big move, some amount of time/price correction is to be expected, and that’s what is happening in these names. And with the kind of sector rotation happening at a quick pace in the markets these days, who knows markets might latch on to another sector while these names take a rest.
For those invested at lower levels, its okay to hold on or book partial profits, but for those wanting to enter at current levels, its important to watch out for completion of the short term correction these names are going through.
Whenever everyone feels that a particular trade is a very easy way to make money, its time to be careful in those names. I have these names in my watchlist, but don’t feel confident enough to take a plunge at current levels.
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Hitesh Bhai, how do you see United Spirts on the charts. It didnt do much for a year now and businesswise there has been a lot of clean up going up with selling few brands and focus on core business, closing down subsidiaries with no turnovers etc.
The company is available at 7 billion USD, which is relatively low compared to liquor companies abroad and given the size of growing Indian Market, with business of this kind having low threat of new entrants.
PS: you had told once that you dont like liquor companies because of regulatory hurdles in India. But any change now in your views
United spirits chart does not show too much strength after recent correction from highs of 950. On short term daily charts, there are still no signs of any reversal.
Fundamentally I hold the same views as before. In India, alcohol prohibition can be used as a convenient political tool in state elections. This can seriously affect the business prospects. (and even if it does not affect business, it does affect investor sentiment leading to lower PE being assigned to these kind of businesses.)
Operationally there does not seem to be any impact on numbers inspite of all the talks of clean up etc. Sales growth remains muted which is expected in view of the removal of tail end brands and premiumisation strategy. But margins which should have shown an uptick still remain stagnant to weak.
The only big plus for a business like United spirits is the longevity of the business. It is going to remain around for years to come. And threat of disruption is negligible. But if I were to pay high PE of more than 50 (we have to account for extraordinary income received in q2 fy 23 while calculating PE) I expect most boxes to be ticked. It is not so in United Spirits.
Another aspect to consider in current market is the “anti - fancy” for high PE stocks. Most of these high PE stocks be it Asian Paints, Page Inds, United spirits or many comparable such businesses, have been hit hard by the markets. This is a market where value is outperforming so called quality by a wide margin. If one is a momentum investor, one has to position accordingly.
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Hitesh bhai your view on mirza Int… After almost 40% fall… No more weakness in the chart on daily and weekly chart also. Also above 21 Ema on daily chart. What can be criteria in entering these kind of setups.
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Mirza Intl has fallen from high of 375 to a low of 218 during the most recent correction. The correction was in the form of a daily rounding top. Now it has formed a double bottom on the very short term daily charts at 218-219 which has been confirmed on breakout above 258. But follow through buying is yet to be seen.
In stocks where fall is more than 20-25% from the peak, there is often a lot of consolidation and base building, and a lot of to and fro movements before the really big moves that take out previous tops come around. In some rare instances, stocks that have corrected significantly do make it above its previous ATH quickly but these are as said before rare.
In such situations, I would wait for some more time to see how it behaves, or wait for 30 Week moving average to be crossed and then 30 week moving average to turn up.
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Hitesh Bhai…your technical view on chart of CDSL…34% down despite robust revenue and profit growth and healthy ROCE & ROE ratios…
CDSL gave a breakdown below 1350 (these are levels on GMMA charts, so can be approximate levels, not absolute levels) and went to down and took support at around 1050 and gave a bounce to retest breakdown levels, and reached slightly above that and then started falling again. Currently it seems to be around crucial support levels, but structure does not seem too encouraging.
Personally I would like to see how it behaves for next few trading sessions and then maybe take a call. Its another of those stocks that had a fantastic run of almost 8-9 times from Covid lows after which I guess most of the positives were baked into price. I don’t track it fundamentally so cannot comment on that aspect.
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Hitesh bhai your views on GIC and PNB Housing…Both are in sideways / downtrend since past week and seems breakdown is on the cards…