Special Report : TOP TEN MOVERS AND SHAKERS

GATI | BSE CODE: 532345 | FACE VALUE: Rs.2 | CMP: Rs.283.15

Fundamental

The movement of the share price of Gati symbolises its name and it has been the best performer among BSE 500. The reason for such tremendous movement is the expectation of pick-up in e-commerce and the likely gains this will accrue for the logistic companies. Nonetheless, the share price of the company, which is currently trading at TTM PE of 63.81 times, looks stretched and further movement may be limited.

Technical

The stock has seen a remarkable run-up in the last one year. In November 2013 the stock was hovering around the level of Rs 29-30. Since then it has continued its sequence of higher top and higher bottom pattern on the weekly chart and gone on to touch the level of Rs 342. Currently, on a weekly chart the stock is facing resistance around the median line of Andrew’s Pitchfork along with resistance on momentum indicators i.e. the RSI. This hints that any upside would be capped from its current levels.

CCL INTERNATIONAL | BSE CODE: 531900 | FACE VALUE: Rs.2 | CMP: Rs.614.15

Fundamental

CCL International, formally known as Chirawa International, has moved up by 580 per cent in the last one year and is one of the highest gainers among the BSE 500 companies. Such a steep rise in the share price, however, is not fundamentally supported. The current price of Rs 609 discounts its trailing twelve-month earnings by more than 7,000 times and the market cap to sales (FY14) of 73 times. It’s safe to stay away from this scrip.

Technical

The stock price has jumped multifold over the last one year. It formed a good base around the level of Rs 22-25 in the year 2013. In December 2013 the stock breached its trading range on the higher side and went on to touch the level of 158 with higher top and higher bottom pattern. However the stock is facing supply at a higher level and has formed a hanging man candlestick which is a bearish reversal pattern that can also mark a top or resistance level. Forming after a good uptrend, this pattern signals that selling or liquidation has begun to take place. This hanging man is followed by doji on the weekly chart. Therefore this signals that the stock may end its good times.

NBCC | BSE CODE: 534309 | FACE VALUE: Rs.10 | CMP: Rs.789.35

Fundamental

The latest entrant in the ‘navratna’ category, National Buildings Construction Corporation (NBCC) has seen its stock price moving up by almost five times in the last one year. The pick-up in economic activity along with some positive pace in execution has led to this increase in the share price of NBCC. Going ahead we believe that the momentum is likely to continue with the upcoming re-development opportunities, which are not reflected in the current results.  Moreover, the current order book, as of September 30, 2014, stands at Rs 18,600 core - implying TTM book:bill of 4.5x – and this provides good earning visibility.

Technical

The NBCC stock listed on the exchange in April 2012 and to say it’s been an excellent investment would be an understatement of sorts. The stock on a weekly chart is continuing its higher top and higher bottom formation. In mid-September it witnessed a good breakout of a rising trend line along with rise in volume; this is quite bullish for the stock. It has managed to clock the highest weekly closing as on the weekend of December 5, 2014 and this indicates that the bulls are still in momentum. Its RSI, which is a momentum oscillator, has never breached the level of 75 in the past three-four months. Therefore this suggests that the stock is likely to continue its journey upwards.

MAHINDRA CIE | BSE CODE: 532756 | FACE VALUE: Rs.10 | CMP: Rs.228

Fundamental

Mahindra CIE, formerly known as Mahindra Forgings, is now part of the CIE Automotive Group, Spain, formed through a merger of M&M’s Mahindra Systech and CIE Automotive. In the last one year the share price of the company has moved up by four times despite the company posting loss over the past two consecutive years. Currently the scrip is trading at EV/EBITDA of 26 times, which is comparable to other peers such as Bharat Forge. Nonetheless, there are many triggers going ahead that will keep the stock in momentum.

Technical

The stock has been a good investment bet for investors as it has rallied smartly in the last one year. This rally in the stock has been fuelled by lots of development in the company related to the merger. On a weekly chart the stock has formed a double bottom pattern around the level of Rs 36.40 and has breached its resistance as defined by a horizontal trend line in the later half of June 2014 along with high volumes. The stock did re-test its resistance of the horizontal trend line in the later half of October 2014 and the earlier resistance line acting as a good support is a positive sign for the stock. Currently the stock is into a consolidation phase and once it manages to breach the level of Rs 244-250 on the weekly chart will resume its uptrend and may hit higher levels.

JK LAKSHMI CEMENT | BSE CODE: 500380 | FACE VALUE: Rs.5 | CMP: Rs.388.40

Fundamental

All the cement stocks performed well over the past 12 months due to expected recovery in the domestic market since this industry is largely driven by domestic demand. Meanwhile, JK Lakshmi was clearly an outperformer among the cement stocks. After witnessing a run-up of 455 per cent in the last one year the stock now seems to be overvalued and is currently trading at an EBIDTA per tonne of more than Rs 600 and PE of more than 50 times. Hence it is likely to underperform.

Technical

This commodity stock has emerged as one of the best performers in the last one year. On the weekend of November 29, 2013 the stock was at Rs 70.10. Nearly a year later the stock touched a high of Rs 426.25. Its performance has been stellar. Currently on a weekly chart the stock has seen a breakdown of the rising wedge. A rising wedge formed during an uptrend usually serves as a reversal signal, suggesting that the stock may go through some correction. The momentum indicators are supporting the breakdown and forming lower highs by pointing downwards.  Considering the current technical picture, the stock movement is likely to be lacklustre and it may underperform.

TVS Motor | BSE CODE: 532343 | FACE VALUE: Rs.1 | CMP: Rs.229.15

Fundamental

TVS Motor’s share price has moved up by almost five times in the last one year due to good sales volume and the market share gains supported by a series of launches from the second half of FY14 onwards, led by its scooter brand TVS Jupiter as well as Star City+. However, an improvement in its operating margins with return ratios (RoE) will be seen mostly in FY16. Currently the shares of the company are trading at TTM PE of 41.85 times. Though the valuation looks stretched, we believe long-term investors can still take limited exposure to the counter with a distant horizon.

Technical

The stock traded in the narrow range for a year and a half and witnessed a breakout of this range in early January 2014 along with a rise in volumes. Currently the stock on a weekly chart has formed a hammer candlestick pattern on the week ended November 28, 2014. This candlestick pattern was formed post a three-week correction and indicates that the prior downtrend is about to end and may reverse to an uptrend. The confirmation of the downtrend being over was provided by a big bullish candlestick pattern formed on the weekly chart as on the week ended December 5, 2014. RSI has also formed a double bottom around the level of 60-62. With a positive candlestick pattern set up, it’s likely that the stock may carry on its upward momentum.

HSIL | BSE CODE: 500187 | FACE VALUE: Rs.2 | CMP: Rs.364.10

Fundamental

HSIL’s share price has been moving up by four times in the last one year due to recovery in its operating margins and the focus on improving the sanitation level by the new government. Going forward, HSIL may better its margins through changing its product mix by increasing the contribution from faucets and value-added product segments in addition to recovery in the container glass segment. A few months ago we had given a ‘buy’ call in our magazine and we continue to maintain that perspective.

Technical

This stock has delivered heroic returns to investors in the last one year. It broke out of its inverted head and shoulder pattern in the second week of March 2014. Post that the stock has moved one way up. Currently the technical indicators are beaming healthy signals as the stock is trading above its important short and long-term moving average i.e. 21-Weekly EMA, 50-Weekly EMA, 100-Weekly EMA and 200-Weekly EMA. This suggests that the current structure of the stock is positive with respective to its price. Post registering an all-time high of Rs 424.40, the stock price declined with low volume and formed a bullish pattern of an inverted hammer at around Rs 356.84. This candlestick pattern suggests that the stock is likely to resume its uptrend post consolidation.

FINOLEX CABLES | BSE CODE: 500144 | FACE VALUE: Rs.2 | CMP: Rs.262.30

Fundamental

Finolex Cables is one of the largest producers of electric and telecom cables in the Indian market with over 9 per cent market share. There was a time when nobody wanted to touch Finolex Cables as it had entered into exotic derivative contracts and lost a massive sum of Rs 300 crore over FY06 to FY13. However, after that debacle, Finolex Cables got its act in order and began a slow but steady march towards recovery. Therefore the stock price saw some re-rating in the market and moved up by 3.5 times in the last one year. The company’s prosperity is intimately linked to the growth of construction and industrial activity. Currently the company is trading at TTM PE of 19.6 times and therefore we feel there is little scope for new investors. Nonetheless, the existing shareholders can hold it.

Technical

The stock was trading at around the level of Rs 60.95 in early November 2013. Nearly a year later the stock has risen 4.5 times to touch a high of Rs 283.90. Currently the stock is in an uptrend phase and trading above its important moving average i.e. 21-day EMA, 50-day EMA, 100-day EMA and 200-day EMA. This suggests that the bullish momentum is likely to continue. On a weekly chart the stock is trading above its important support level as defined by upward rising joined from a low of Rs 73.50. The momentum oscillators are indicating continuation of uptrend after consolidation. Considering the promising chart pattern, investors and traders can hold this stock for good gains.

AUROBINDO PHARMA | BSE CODE: 524804 | FACE VALUE: Rs.1 | CMP: Rs.1092.80

Fundamental

Aurobindo Pharma has now become the fifth most valuable Indian pharmaceutical company. Its stock price has moved up by three times in the last one year due to better than expected performance and a strong pipeline of products. Currently it is trading at TTM PE of 19.86 times. Going forward, Aurobindo Pharma’s RV formulations and injectable business will drive future growth.

Technical

This pharmaceutical sector stock has gained from strength to strength after reporting robust operating performance in its quarterly results. It has outperformed the benchmark indices and pharmaceutical peers by a huge margin. In November 2013 the stock was hovering around the level of Rs 236-238. Since then it has continued its succession of higher top and higher bottom pattern on the weekly chart. On a weekly chart the stock price has been moving above the cloud for the past one year, indicating an uptrend. The Tenkan Sen Line (turning line) is trading above the Kijun Sen Line (standard line) and this is a strong bullish signal. Its RSI is forming a higher top and higher bottom pattern – a positive signal for the stock. The technical indicators suggest that the stock will continue to be in the pink of health

SYMPHONY | BSE CODE: 517385 | FACE VALUE: Rs.2 | CMP: Rs.1882.55

Fundamental

Symphony is the largest air-cooler company in India with 50 per cent market share in the domestic organised market. The stock price moved up by three times in the last one year due to its asset light model of outsourcing the manufacturing of air-coolers and carrying out sales on a cash and carry basis. This has enabled Symphony to maintain a minimal gross block; operate at negative working capital; enjoy a zero-debt status; and clock high return ratios with robust cash flows. Nonetheless, the share price of the company is currently trading at TTM PE of 62.9 times and this looks on the higher side so that on fundamental grounds any further movement may be limited.

Technical

The stock was trading in a narrow range from October 2012 to January 2014. It then broke out of this range in the second week of February 2014 on the back of healthy volumes. On a weekly chart the stock price has been moving above the cloud for the past eight to nine months; this indicates an uptrend. The Tenkan Sen Line (turning line) is trading above the Kijun Sen Line (standard line), thus indicating a strong bullish signal. The stock has formed a reversal candlestick pattern on the weekly chart. The RSI is trading near an important support zone and is consistently trading above the level of 60. Considering the positive technical set-up, the stock is likely to inch higher from its current levels.