Diwali Recommendation
ALKYL AMINES CHEM. LTD.
CMP : Rs 3,360.00
BSE Code : 506767
Target 1 : Rs 3,900.00
Target 2 : Rs 3,950.00
Alkyl Amines Chemicals Ltd is a supplier of amines & amine-based chemicals to the pharmaceutical, agrochemical, rubber chemical & water treatment industries. The company is one of the world's leading amine manufacturers. It has been manufacturing and marketing various aliphatic amines, amine derivatives, and other speciality chemicals for the last 30 years. The company has established itself at a leading position in the domestic market as well as secured its presence in the international market with a reputation for reliable service & quality products. Looking at its quarterly results on a standalone basis, for Q2FY21, the company reported net sales of Rs 291.27 crore, an increase of 23.96 per cent as against the net sales of Rs 234.97 crore for Q2FY20. For Q2FY21, the company gained an operating profit of Rs 97.97 crore, expanding by 67.18 per cent compared to the operating profit of Rs 58.60 crore gained in Q2FY20. Alkyl Amines Chemicals gained a net profit of Rs 65.47 crore in Q2FY21, which is an expansion by 21.48 per cent compared to the net profit of Rs 53.90 crore gained in Q2FY20. The company is continuously adding capacities, new products, and investing in the up-gradation of its manufacturing capacities. The industries in which the company's products have an application, like pharmaceuticals, agrochemicals, rubber chemicals, etc, are also growing at a reasonable pace. The company has a leadership position in some of its products in the domestic market, driven by strong in-house technology, diversified product portfolio, and customer base.
The stock has given a breakout of the bullish squeeze alert like candlestick pattern as on the weekend of April 09, 2020, and thereafter, witnessed a sharp bounce. However, the stock has formed a Doji candle as on the weekend of August 28, 2020, and witnessed a throwback. The throwback is arrested near the 20-week EMA level. Currently, the price is trading at nearly 49 per cent above the 50-week average and that indicates the technical strength of the stock. The relative strength index (RSI), which is a momentum indicator, is trading in a bullish territory in all the timeframes. Also, if we look at the higher timeframe i.e. of the monthly timeframe, the RSI has never dropped below 60 levels since August 2019. Hence, buy this stock as strong fundamentals and a favourable price setup auger well for a strong rally towards the levels of Rs 3,900, followed by Rs 3,950.
BAJAJ ELECTRICALS LTD.
CMP : Rs 548.70
BSE Code : 500031
Target 1 : Rs 625.00
Target 2 : Rs 640.00
Bajaj Electricals Limited is engaged in the engineering and other projects related to power distribution, illumination & consumer durable businesses. Its business products consist of lamps, tubes, luminaries, electrical appliances, and fans. The company's engineering & project segment includes transmission line towers, telecommunications towers, high mast, poles, and special projects. Looking at the quarterly trends on a consolidated basis, for Q2FY21, its net sales increased by 12.58 per cent to Rs 1,209.80 crore from Rs 1,074.65 crore reported in Q2FY20. The company gained an operating profit of Rs 91.78 crore in Q2FY21 as against an operating loss of Rs 10.12 crore posted in Q2FY20. Bajaj Electricals gained a net profit of Rs 53.11 crore in Q2FY20 whereas the company had incurred a net loss of Rs 31.85 crore in Q2FY20. The company reported a healthy revenue growth led by demand recovery in consumer products such as fans and other electrical appliances. Supply chain disruptions negatively impacted the rapid growth in sales. As logistical operations have recovered, the company is striving to bring up its stock inventories, which will further boost its sales. Being one of the leaders in this sector, Bajaj Electricals was able to capture market share given up by unorganised firms, which faced the much wider impact of disruptions. Going forward, it will benefit from the price hike of selected products, focus on acceleration of collections in the EPC business, growth in consumer products segment led by increased demand due to the festive season as well as home decoration, etc.
The stock has formed a morning star candlestick pattern as on the weekend of April 09, 2020, and thereafter, marked the sequence of higher tops & higher bottoms. During this process, the stock has surpassed the resistance one after the other in the form of 200-day EMA as well as the prior swing high of Rs 460 level. Currently, the stock has given a downward sloping trendline breakout on the daily timeframe. Further, this breakout is supported by a robust volume, indicating strong buying interest by the market participants. The stock is meeting Daryl Guppy’s multiple moving averages set up rules as it is trading above both, the short and long-term moving averages. The leading indicator i.e. the 14-period weekly RSI is currently quoting at 66.14 and it is in a rising trajectory. On the higher timeframe, i.e. monthly, the RSI has moved above the 60 mark for the first time since May 2019. The weekly ADX is very strong at 48.12. The -DI is much below the +DI and the ADX is above the -DI and +DI. This shows a technical strength in the stock. Based on the above observations, we expect the stock to continue its upward movement and the test levels of Rs 625, followed by Rs 640, in the medium term.
DFM FOODS LTD.
CMP : Rs 360.00
BSE Code : 519588
Target 1 : Rs 420.00
Target 2 : Rs 435.00
DFM Foods is engaged in the manufacturing and marketing of snacks. It markets corn rings and wheat puffs under the brands 'Crax' and 'Natkhat', respectively. Snacks of both these brands have become extremely popular, especially among children. It offers a wide range of products, consisting of over 12 product variants. The company sells products in several pack sizes to cater to both impulse consumption as well as for consumption at home. The company sells its products through a distribution network spanning the states of north and western India. Looking at the quarterly results on a standalone basis, for Q2FY21, the company reported net sales of Rs 141.27 crore, an increase of 3.98 per cent as against the net sales of Rs 135.86 crore for Q2FY20. For Q2FY21, the company gained an operating profit of Rs 19.71 crore, expanding by 9.74 per cent compared to the operating profit of Rs 17.96 crore gained in Q2FY20. DFM Foods gained a net profit of Rs 10.32 crore in Q2FY21, which is a contraction of 30.13 per cent compared to the net profit of Rs 14.77 crore gained in Q2FY20. The company has introduced new flavours called 'Rings' & 'Fritts' and also, launched a new variant with the name, 'Noodle Crunch' in the market. The company has mitigated rising prices of edible oil and other raw materials through supply chain efficiencies & cost optimisation measures. DM Foods is continuously focussing on bringing back its business to pre- COVID levels through strong consumer focus and by driving execution excellence & efficiency in operations.
After registering the low of Rs 175.35 on the weekend of August 07, 2020, the stock has witnessed a sharp bounce of nearly 123 per cent in just seven weeks. However, the stock has formed a gravestone Doji candlestick pattern as on the weekend of September 18, 2020, and thereafter, witnessed a throwback. During the throwback phase, the volume activity was mostly below the 50-day average volume. Hence, it should be viewed as a routine decline after a robust move. The throwback is halted near the 38.2 per cent retracement level of its prior upward move and it coincides with the 50-day EMA level. The stock is trading above all the 12 short and long-term moving averages. The averages are all trending up, and they are in a sequence. The 14-period weekly RSI is in a super bullish zone. Buy this stock at the current levels as the stock has the potential to move towards the level of Rs 420-Rs 435.
DILIP BUILDCON LTD.
CMP : Rs 353.35
BSE Code : 540047
Target 1 : Rs 420.00
Target 2 : Rs 435.00
Dilip Buildcon Limited is engaged in the business of infrastructure facilities on an engineering procurement and construction (EPC) basis. It undertakes contracts from various government & other parties and special purpose vehicles (SPV) promoted by the company such as DBL Sardarpur Badnawar Tollways Limited, DBL Silwani Sultanganj Tollways Limited, DBL Sitamau Suwasara Tollways Limited, etc. On a consolidated basis for Q2FY21, its net sales increased by 9.64 per cent to Rs 2,186.67 crore from Rs 1,994.40 crore posted in Q2FY20. PBDT for Q2FY21 came in at Rs 168 crore expanding by 4.03 per cent compared to Rs 161.49 crore reported in Q2FY20. Dilip Buildcon gained a net profit of Rs 17.18 crore in Q2FY21, contracting by 33.39 per cent when compared to Rs 25.80 crore gained in Q2FY20. Amid the COVID-19 pandemic, Dilip Buildcon has seen a strong order inflow of around Rs 13,608 crore in H1FY21. As the availability of labour is back to almost 100 per cent, the execution of projects is also almost back to normal levels. Additionally, the revenue growth is expected to continue to remain flat with a slight positive bias as the government is making timely payments thus, supporting the company's cash flow. Dilip Buildcon is expecting to have a strong order inflow from various sectors in the coming fiscal year as well. Recently, the company was declared as L-1 in the tender floated by MCL for the development & operation of Siarmal Open Cast Project in the state of Odisha with a contract for 25 years, having a value of around Rs 37,215.58 crore.
From the low of Rs 190 registered as on the weekend of March 27, 2020, the stock has witnessed almost 123 per cent upward momentum along with robust volume. However, after registering a high of Rs 424, the stock has witnessed a correction. During the correction, the volume activity is below the average, which suggests that it is just a routine decline after a robust move. Considering the daily timeframe, the stock has recently given a falling wedge pattern breakout, which suggests bullish momentum. Further, since the last five trading sessions, the volume was above the 50-days average volume, which indicates that it is accumulated by smart investors at a lower level. Among the momentum indicators, the weekly RSI and the stochastic has recently a given positive crossover, which supports the overall price structure. Hence, one should accumulate this stock for a target of Rs 420, followed by Rs 435.
JINDAL POLY FILMS LTD.
CMP : Rs 494.50
BSE Code : 500227
Target 1 : Rs 565.00
Target 2 : Rs 580.00
Jindal Poly Films Limited is a part of BC Jindal Group, which has been offering a wide range of products and solutions for more than six decades. This group is involved in various businesses including polyester & polypropylene films, steel pipes, thermal power generation & photographic products. Jindal Poly Films is the largest manufacturer of BoPET and BOPP films in India. The company's manufacturing plant at Nashik (Maharashtra) is the world's largest facility for the production of biaxially-oriented polyethylene terephthalate (BoPET) and biaxially oriented polypropylene (BOPP) films. Looking at the quarterly trends on a consolidated basis, for Q1FY21, the company reported net sales of Rs 771.25 crore, a decrease of 8.32 per cent, as against the net sales of Rs 841.21 crore for Q1FY20. For Q1FY21, the company gained an operating profit of Rs 235.66 crore, expanding by 61.37 per cent compared to the operating profit of Rs 146.04 crore gained in Q1FY20. Jindal Poly Films gained a net profit of Rs 130.40 crore in Q1FY21, which is an expansion of 93.96 per cent compared to the net profit of Rs 67.23 crore gained in Q1FY20. The company has established itself as a significant player in the BOPP and BoPET. There is a high demand for thin BoPET films. The penetration of flexible packaging in the developing economies of Asia is still low but huge opportunities do exist. The products of the company are well-known in the market for its good and consistent quality. Considering the company's successful approach towards research & development (R&D), so as to innovate customer's centric products, strong marketing network & logistics strength, its outlook remains positive.
The stock of Jindal Poly Films Limited witnessed almost 250 per cent from its 52-week lows to the high of Rs 525, and the stock has given over 115 per cent returns from year-to-date. However, the stock has formed a shooting star candlestick pattern as on the weekend of August 28, 2020, and thereafter, witnessed a throwback. The throwback was arrested near the 23.6 per cent retracement level of its prior upward move and resumed its northward journey. Currently, the stock is meeting the criteria of Mark Minervini’s trend template. The current stock price is above both, the 150-day (30-weeks) and 200-day (40-weeks’) moving average price lines. Moreover, the 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence. Talking about the indicators, the 14-period weekly RSI is above the 60 mark since May 2020. Furthermore, in the recent throwback, the RSI never breached its 60 mark, which indicates that the stock is in a super bullish range as per the RSI range shift rules. Hence, one should accumulate this stock for a target of Rs 565, followed by Rs 580.
RAMCO INDUSTRIES LTD.
CMP : Rs 203.45
BSE Code : 532369
Target 1 : Rs 235.00
Target 2 : Rs 245.00
Ramco Industries Limited is involved in the manufacturing of fibre cement (FC) sheets and calcium silicate boards (CSBs). Its business segments include building products, textiles, and power generation from windmills. On a consolidated basis for Q2FY21, the company posted net sales of Rs 260.65 crore, increasing by 18.76 per cent when compared to the net sales of Rs 219.48 crore posted in Q2FY20. PBDT for Q2FY21 came in at Rs 44.31 crore, which is an increase of 4.36 per cent from Rs 42.46 crore reported in Q2FY20. Ramco Industries gained a net profit of Rs 22.44 crore, decreasing by 20 per cent compared to Rs 28.05 crore gained in Q2FY20. The company has a healthy revenue growth. Since it belongs to Ramco Group and is the holding company of Ramco Systems & Ramco Cements, it has a very stable business as well as a long-term growth trend. The company's products are expected to hugely benefit from rural demand growth. It also continues to enjoy a strong position in the fibre cement roofing market. Stronger business across cement and building materials business in Southeast Asia will further aid in the company's growth.
After registering a 52-week low, the stock has marked the sequence of higher tops & higher bottoms. Currently, the stock is trading above its weekly pivot and above its long and short-term moving averages, i.e. 20-day, 50-day, 100- day, and 200-day EMAs, and these moving averages are exactly in an ascending order, which suggests that the trend is strong. Taking about the indicators, the stock's relative strength index (RSI) has reached its highest value in the last 14-weeks, which is bullish. Also, it sustained above its prior swing high of 61.85, which was registered in early February. The stock is clearly on an uptrend and the trend’s strength is extremely high. The average directional index (ADX), which shows the strength of the trend, is as high as 28.58 on a daily chart and 27.15 on a weekly chart. Generally, the level above 25 is considered a strong trend. In both the timeframes, the stock is meeting the criteria. We recommend a buy as the stock has the potential to extend uptrend and reach the levels of Rs 235, followed by Rs 245.