Sumit Bilgaiyan Equity99
With the conclusion of the first quarter results season, the market is back tracking global cues. Although there was a slight recovery in the rupee last week, the market will continue to track the currency along with crude oil prices, which is a crucial factor for India’s fiscal policy.
Monsoon has been better this year, but as it is still below normal in some parts of the country, its progress will need to be checked. Further, the government will announce Q2 GDP numbers on August 31, which are expected to be healthy.
The US will declare Q2 GDP numbers on August 29 and this could influence FOMC on the deciding interest rates.
Meanwhile, the market will see the expiry of F&O contracts on August 30. We are expecting stock specific movement this week. Our last recommendations like Ajanta Pharma, L&T Technology Services, Suven Life, Sun Pharma, ITC etc had given fantastic returns in very short term.
BHEL posted stellar performance in Q1FY19. During Q1FY19, its net profit zoomed 93 percent to Rs 156 crore from Rs 81 crore on a YoY basis on 8 percent higher income of Rs 5,790 crore.
Its order booking increase by two and half time to Rs 4,371 crore compared to Rs 1,744 crore in the corresponding quarter last year.
BHEL has a total order book of Rs 117,000 crore by end of Q1FY19. It has formed small inverted head and shoulder pattern on the daily chart which is bullish in its nature. On the back of this improved performance and technical structure, we are recommending a buy for short to medium term.
Balrampur Chini Mills, India's second largest sugar producing company, is engaged in the ancillary businesses of ethanol manufacture and co-generation. It has factories in Uttar Pradesh with crushing capacity of 76,500 tonnes per day, distilleries with a capacity of 360 kilolitres per day and co-generation capacity of 163.2 megawatts.
The sugar sector has given a negative return in the last one year, but now risk to reward ratio is favorable in selective sugar stocks. It is available 59 percent lower against its 52-week high price. The company has posted turn-around numbers on QoQ basis. Charts indicate that the rally can extend in coming days. We are recommending a buy for the short term.
Lupin has received an establishment inspection report from the USFDA for its Nagpur facility, which is positive for the company. It develops and delivers a wide range of branded and generic formulations, biotechnology products and APIs globally.
Recently, Lupin received FDA approves for many generic products and it has successfully launched new products in the US and Brazil. Its stock has given negative returns in the last three years, but now we are expecting a positive return in FY19. The stock is already bottomed out and its weekly chart looks highly promising. We are recommending a buy for the medium term.
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