Diwali Portfolio
DIWALI RECOMMENDATION
BHARTI AIRTEL LTD.
CMP : Rs 699.00
BSE Code : 532454
Target 1 : Rs 775.00
Target 2 : Rs 820.00
Bharti Airtel Limited is a leading global telecommunications company with operations in 18 countries across Asia and Africa. The company ranks amongst the top three mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G, and 4G wireless services, mobile commerce, fixed line services, highspeed home broadband, DTH, enterprise services including national & international long-distance services to carriers. In the rest of the geographies, it offers 2G, 3G & 4G wireless services as well as mobile commerce. The latest consolidated quarterly financials of the company show that it recorded a 13.03 per cent increase in the net sales and operating income, which stood at Rs 28,326.40 crore for Q2FY22 as compared to the net sales & operating income of Rs 25,060.40 crore reported for Q2FY21. The quarter recorded an operating profit of Rs 13,919.30 crore in Q2FY22 as compared to the operating profit of Rs 11,172.80 crore posted in Q2FY21, a robust rise of 24.58 per cent. The company reported a net profit of Rs 1,399.30 crore in Q1FY22, which was attractively higher as compared to Rs 258.70 crore recorded in Q2FY21. The company continues to gain a strong share of the 4G Bosch Group is a leading global supplier of technology and services. Its operations are divided into four business sectors namely mobility solutions, industrial technology, consumer goods along with energy & building technology. As a leading IoT provider, Bosch offers innovative solutions for smart homes, Industry 4.0, and connected mobility. It is pursuing a vision of mobility that is sustainable, safe, and exciting. It uses its expertise in sensor technology, software & services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. On the consolidated quarterly front, the company recorded a robust increase of 146.44 per cent in the net sales and operating income, which stood at Rs 2,443.53 crore for Q1FY22 as compared to the net sales and operating income of Rs 991.54 crore reported for Q1FY21. The operating profit stood at Rs 405.61 crore in Q1FY22, gaining massively from Rs 70.92 crore posted in Q1FY21. The company's net profit was recorded at Rs 259.76 crore in Q1FY22, turning the net loss of Rs 120.83 crore incurred in Q1FY21. The company reported that product sales increased 181 per cent in the first quarter of FY21-22, with Powertrain Solutions division registering an customers in the market. The 4G data customers increased by 26.1 per cent on a YoY basis to 192.5 million. Over the last four quarters, the company has added 39.9 million 4G customers to its network. In its pursuit to optimally augment its coverage and offer a differentiated network experience, the company has rolled out additional around 3,500 towers and approximately 56,000 mobile broadband base stations in the quarter.
The stock broke the 64-week ascending triangle in August and met 60 per cent of the target. It is currently consolidating for the last six weeks in a Stage-2 tight flat base near the resistance. It has registered a higher volume than the previous week. The stock is trading 1.83 per cent above the 50-DMA and 19.16 per cent above the 200- DMA. The daily MACD is about to give a buy signal. The +DMI is above the -DMI. The weekly ADX (32.60) shows solid trend strength. The RSI (63.22) entered a strong bullish zone. The Elder impulse system is showing bullish signs. The anchored VWAP resistance is at Rs 728.85 on the weekly chart. In short, the stock is near the breakout level. A move above Rs 714 will result in a flat base breakout and it can test the level of Rs 775 in the short term. The ascending triangle target of Rs 820 will reach in the medium-term.
BOSCH LTD.
CMP : Rs 17,702.45
BSE Code : 500530
Target 1 : Rs 19,500.00
Target 2 : Rs 20,300.00
Bosch Group is a leading global supplier of technology and services. Its operations are divided into four business sectors namely mobility solutions, industrial technology, consumer goods along with energy & building technology. As a leading IoT provider, Bosch offers innovative solutions for smart homes, Industry 4.0, and connected mobility. It is pursuing a vision of mobility that is sustainable, safe, and exciting. It uses its expertise in sensor technology, software & services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. On the consolidated quarterly front, the company recorded a robust increase of 146.44 per cent in the net sales and operating income, which stood at Rs 2,443.53 crore for Q1FY22 as compared to the net sales and operating income of Rs 991.54 crore reported for Q1FY21. The operating profit stood at Rs 405.61 crore in Q1FY22, gaining massively from Rs 70.92 crore posted in Q1FY21. The company's net profit was recorded at Rs 259.76 crore in Q1FY22, turning the net loss of Rs 120.83 crore incurred in Q1FY21. The company reported that product sales increased 181 per cent in the first quarter of FY21-22, with Powertrain Solutions division registering an increase of 316 per cent and the two-wheeler division witnessing an increase of 156 per cent due to a low base in Q1FY20-21. Outside the mobility solutions business sector, the business recorded an increase of 82 per cent. In June 2021, the company witnessed a recovery in sales volume after the easing of the nationwide lockdown restrictions. The automotive industry was hit severely by the COVID-19 waves but is now regaining its momentum on the back of the festive period and vaccinations.
The stock has retraced 50 per cent of the prior five years downtrend. It gained 126 per cent from the low of March 2020. Recently, it has broken out of a 34-week consolidation. It retested the breakout level and bounced. It is trading above all the key moving averages and is 17.25 per cent above the 200-DMA as well as 12.34 per cent above the 50-DMA. The Elder impulse system is showing bullish bias on the weekly as well as the daily charts. Mansfield Relative Strength is above the zero line and shows outperformance as compared to Nifty 500 index. Pring's KST has given a fresh buy signal on the weekly chart. The weekly RSI (67.87) is in a strong bullish zone. The price is also above the anchored VWAP support. In short, the stock is in a clear uptrend and has the potential to move higher. Accumulate this stock between the zone of Rs 17,600 and Rs 17,920. Its short-term target is at Rs 19,500 while the medium-term target is at Rs 20,300.
Garden Reach Shipbuilders & Engg. Ltd.
CMP : Rs 247.45
BSE Code : 542011
Target 1 : Rs 290.00
Target 2 : .Rs 300.00
Garden Reach Shipbuilders & Engineers (GRSE) is a premier warship building company in India, under the administrative control of the Ministry of Defence. Over the last 61 years, GRSE has built 788 platforms including 107 warships for the Indian Navy, Indian Coast Guard, and Government of Mauritius & Seychelles Coast Guard, which are the highest warships built & delivered by any Indian shipyard till date. From frigates, corvettes, fleet tankers, landing ship tanks, landing craft utility to survey vessels, offshore patrol vessels, and fast attack craft, the repertoire is rich & varied. In addition to shipbuilding, GRSE is also engaged in engine production and other engineering activities. The standalone quarterly financials of the company revealed that it recorded a 176.64 per cent increase in the net sales and operating income, which stood at Rs 304.19 crore for Q1FY22 as compared to the net sales & operating income of Rs 109.96 crore reported for Q1FY21. The quarter recorded an operating profit of Rs 41.83 crore in Q1FY22 as compared to the operating profit of Rs 9.54 crore posted in Q1FY21, a robust rise of more than 300 per cent. The company reported a net profit of Rs 20.59 crore in Q1FY22, giving a hefty increase as compared to Rs 0.15 crore recorded in Q1FY21. While the overall Indian shipbuilding industry Founded nearly three decades ago and guided by a simple yet profound philosophy of ‘creation, not construction’, Kolte-Patil Developers is a leading real estate company with a dominant presence in Pune residential market. Headquartered in Pune, Kolte-Patil Developers Ltd was incorporated in 1991. The company has been creating landmarks for over three decades and till now, developed & constructed over 50 projects including residential as well as commercial complexes and IT parks thereby, covering a saleable area of approximately 20 million square feet across Pune, Mumbai & Bengaluru. Analysing the consolidated quarterly results, the company recorded a robust increase in the net sales and operating income, which stood at Rs 303.78 crore for Q2FY22 as compared to the net sales & operating income of Rs 65.58 crore reported for Q2FY21. The operating profit for the quarter was recorded at Rs 58.43 crore in Q2FY22 as against the operating loss of Rs 6.67 crore posted in Q2FY21. The company reported a net profit of Rs 20.49 crore in Q1FY22, flipping a net loss of Rs 23 crore recorded in Q2FY21. The company expressed that demand remains strong across product segments and through the three geographies has witnessed healthy growth in the recent past, defence shipbuilding segment looks promising on account of the ship acquisition plans of the Indian Navy and the Coast Guard. The company is predominantly in the defence shipbuilding segment and has gained sufficient expertise in the large, medium, and small size ships required by the Indian Navy and Indian Coast Guard, in particular, and generally enjoys an excellent reputation for ships that it has built.
The stock has been consolidating for the last 64 weeks between the range of Rs 166 and Rs 248. Currently, the stock is exactly at the resistance of this Stage-1 base. This consolidation range is about 32 per cent. With the prolonged consolidation, the relative price strength (RS) is at 38, and is showing an improvement, moving above the prior high. Its Mansfield Relative Strength (0.88) is above the zero line thereby, indicating the outperformance compared to the broader index i.e. Nifty 500. It has broken out of a 13-day base (bull pennant) with a higher volume. The RSI is in a strong bullish zone. The weekly MACD has given a fresh buy signal. The ADX (24.54) is showing signs of trend strengthening. The Elder impulse system is also showing a bullish bias. The stock is above the anchored VWAP resistance. In short, it has registered a bullish breakout. Accumulate this stock between the zone of Rs 239 and Rs 249. The short-term target is placed at Rs 280. The mediumterm (64-weeks consolidations) target is placed at Rs 300.
KOLTE-PATIL DEVELOPERS LTD.
CMP : Rs 335.60
BSE Code : 532924
Target 1 : Rs 380.00
Target 2 : Rs 415.00
Founded nearly three decades ago and guided by a simple yet profound philosophy of ‘creation, not construction’, Kolte-Patil Developers is a leading real estate company with a dominant presence in Pune residential market. Headquartered in Pune, Kolte-Patil Developers Ltd was incorporated in 1991. The company has been creating landmarks for over three decades and till now, developed & constructed over 50 projects including residential as well as commercial complexes and IT parks thereby, covering a saleable area of approximately 20 million square feet across Pune, Mumbai & Bengaluru. Analysing the consolidated quarterly results, the company recorded a robust increase in the net sales and operating income, which stood at Rs 303.78 crore for Q2FY22 as compared to the net sales & operating income of Rs 65.58 crore reported for Q2FY21. The operating profit for the quarter was recorded at Rs 58.43 crore in Q2FY22 as against the operating loss of Rs 6.67 crore posted in Q2FY21. The company reported a net profit of Rs 20.49 crore in Q1FY22, flipping a net loss of Rs 23 crore recorded in Q2FY21. The company expressed that demand remains strong across product segments and through the three geographies of Pune, Bengaluru, and Mumbai. Residential sector performance continues to witness an improvement due to India’s robust economic performance post the second wave of the pandemic The company foresees the reinforcement of structural themes around the value of owning a home. It expects traditional outperformance to be repeated during the latter part of the year.
The stock has given a downward sloping trendline breakout as on the weekend of September 03, 2021 and thereafter, witnessed over 28 per cent upside in just three weeks. After registering a high of Rs 360, the stock has witnessed a minor throwback along with low volume. The throwback is halted near the 50 per cent Fibonacci retracement level of its prior upward move and coincides with the 20-week EMA level. The stock has formed a strong base near the support zone and resumed its upward journey. All the moving averages-based trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. The 14-period RSI on the weekly timeframe is in a bullish territory. Furthermore, in the recent sideways to corrective mode, 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. Considering the robust technical structure of the stock, we believe that it is likely to touch new highs and hence, one can accumulate this stock for a target of Rs 380, followed by Rs 415.
Orient Electric Ltd.
CMP : Rs 377.65
BSE Code : 541301
Target 1 : Rs 430.00
Target 2 : Rs 450.00
Orient Electric operates with a philosophy to carve out a niche in the global fan industry and evolve into a premier lifestyle home solutions provider. With operations spanning over 35 countries, Orient Electric has earned the trust of millions of customers by providing cutting-edge lifestyle electrical products. It is the largest manufacturer and exporter of fans in India with more than 60 per cent share in exports. OEL is a nimble organisation focussed not merely on carving out larger market shares but delivering compelling consumer experiences and creating markets niches through differentiated products. On the standalone quarterly front, the company recorded an increase of 37.03 per cent in the net sales and operating income, which stood at Rs 594.38 crore for Q2FY22 as compared to the net sales and operating income of Rs 433.77 crore reported for Q2FY22. The operating profit rose by 8.07 per cent to reach Rs 63.22 crore in Q2FY22 from Rs 58.50 crore posted in Q2FY21. The company reported a net profit of Rs 34.77 crore in Q2FY22 as compared to Rs 32.42 crore recorded in Q2FY21, exhibiting a growth of 7.25 per cent. The management interaction revealed that the pent-up demand was strong towards the beginning of Q2FY22 but declined towards the end. However, it is likely to stick to normal and is expected to gather pace in the coming quarters. On the back of the gradual recovery in demand and the upcoming festive season ahead, the company is best placed to capture this trend with its strong manufacturing and distribution capabilities.
Considering the weekly chart, the stock has given a 14-week consolidation breakout. This breakout was confirmed by the above 50-week average volume, indicating strong buying interest by the market participants. As the stock is trading at an all-time high level, it is trading above its short and long-term moving averages. These averages are in a rising trajectory. All the major indicators suggest a bullish momentum in the stock. The leading indicator i.e. the 14-period weekly RSI is in a bullish territory and it has also given a downward sloping trendline breakout. The daily MACD is above the zero line and signal line. The daily MACD histogram suggests a bullish momentum. And most importantly, the MACD line crossed the prior swing highs. On the daily timeframe, the ADX is 18.49, which suggests that the trend is yet to be developed. The directional indicators continue in the ‘buy’ mode as +DI continues above the –DI. Based on the above observations, we expect the stock to continue its upward movement and test the levels of Rs 430, followed by Rs 450 in the medium term.
VIMTA LABS LTD.
CMP : Rs 353.50
BSE Code : 524394
Target 1 : Rs 410.00
Target 2 : Rs 425.00
Established in 1984, Vimta Labs Ltd is a company driven by its vision and enduring strength. Its business landscape includes analytical, clinical, preclinical services to life sciences industries; quality and safety testing for food & beverage industries along with environmental services to a wide spectrum of industries. It has been supporting many national and overseas companies for more than three decades for their third-party testing, research & outsourcing needs. Along with the growth in pharma, food, and other manufacturing sectors, the company has been able to grow and also, expand its services to the international markets. On the consolidated quarterly front, the company recorded an increase of 27.14 per cent in the net sales and operating income, which stood at Rs 75.5 crore for Q2FY22 as compared to the net sales and operating income of Rs 59.38 crore reported for Q2FY21. The quarter recorded an operating profit of Rs 20.07 crore in Q2FY22 as compared to the operating profit of Rs 16.03 crore posted in Q2FY21. The company reported a net profit of Rs 9.74 crore in Q2FY22 whereas it was Rs 7.54 crore in Q2FY21. The performance ratios, namely RoA, RoCE, and RoE have decently improved for the company in FY21 as compared to FY20. The company’s RoE has jumped from 4.02 per cent to 11.58 per cent whereas its RoCE zoomed from 6.01 per cent to 14.24 per cent. The growth ratio has also turned positive as against the negative one reported in FY20. The company has registered a strong financial performance and is well poised to grow in the coming quarters. Also, the outlook for the diagnostics industry in India is very promising as doctors are increasingly relying on evidencebased treatment.
After registering the high of Rs 346.50, the stock has witnessed a minor correction. The correction is halted near the 38.2 per cent Fibonacci retracement level of its prior upward move. Recently, the stock has given a horizontal trendline breakout on the weekly chart. This breakout was confirmed by the above 50-week average volume. The stock is meeting Daryl Guppy’s multiple moving averages set-up rules and is also meeting Mark Minervini’s trend setup criteria for investing. The momentum indicators and oscillators are also suggesting a bullish momentum. The weekly RSI is in a bullish territory and it is trading above its nine-day average. The stock is clearly in an uptrend and its trend strength is extremely high. The average directional index (ADX), shows trend strength, which is as high as 39.94 on the daily chart and 29.68 on the weekly chart. Generally, a level above 25 is considered as a strong trend. In both the timeframes, the stock is meeting the criteria. Hence, one should accumulate this stock for a target of Rs 410, followed by Rs 425.