Sumit Bilgaiyan
The domestic equity market ran a record marathon during the week gone by, with the indices getting sold off due to weak quarterly earnings and rising crude and bond yields.
On Friday, the benchmark indices slipped into the negative zone amid profit booking in midcaps and smallcaps. Investors are also cautious due to uncertainties over Karnataka election.
Among key events, Indostar will get listed on Monday, 21st 2018. Apart from that, coming week is result heavy. Pharmaceutical majors Cipla and Dr Reddy’s Labs, OMC majors IOC & HPCL and PSU bank mammoth SBI will declare its result on Tuesday.
Ratnamani Metals’ board will discuss fund raising on Tuesday’s board meeting. Grasim and Tata Motors will come out with their numbers on Wednesday. GAIL will declare results on Thursday while Tech Mahindra and Sun Pharma will come out with numbers on Friday. On Saturday, 2018 Modi government will complete four years.
Radhakrishna Damani, founder of Avenue Supermarts, the parent of D-Mart, will offload 62.40 lakh shares, or 1 percent of total equity, between May 21 and June 14, to achieve minimum public shareholding requirement. Damani family owns 82.2 percent in Avenue Supermarts.
Under SEBI norms, a listed company needs to maintain a minimum public shareholding of 25 percent. The promoter group will have to sell over 7.2 percent stake to bring public holding to that level.
D-Mart has reported 73 percent rise in net profit on YoY basis led by better operating efficiencies. While revenue increased by 22.5 percent to Rs 3,810 crore and EBITDA comes at Rs 294 crore with margin expansion of 100 bps on a YoY basis. We remain bullish on Avenue Supermarts for long term.
Pidilite Industries is the market leader in adhesives and sealants, construction chemicals, hobby colours and polymer emulsions in India. It has brands like Fevicol, Dr. Fixit, Cyclo, hobby ideas, Roff and M-Seal.
Under adhesives and glue segment it has manufactured wide range of products white glue, paper glue, termite treatment, PVC insulation tape, epoxy putty, etc. It has created brand like terminator, Fevi Stik, Fevikwik, etc.
The repeated usage of its existing well-penetrated categories, along with rising penetration of the newer categories, will drive growth for Pidilite. In the project and construction businesses, Pidilite has taken various initiatives to educate builders and contractors regarding its product benefits, which should drive penetration and in turn sales.
Pidilite offers a high quality discretionary play with strong competitive positioning, proven in market excellence and an excellent track record of generating long term shareholder value over multiple periods. We are quite positive on Pidilite Industries.
Power Grid Corporation of India
Power Grid has more than Rs 1 lakh crore of orders to execute which provides strong visibility of earning growth. It has been moving strength to strength in terms of asset capitalisation and financial performance.
China and US markets suggest that the transmission infrastructure continues increasing in tandem with generation growth. India, with just one third of the world’s per capita electricity consumption, has huge growth potential.
In addition to the core business, the company is making efforts to diversify and take exposure to renewables by battery storage and EV charging infrastructure. To leverage its existing capabilities, it is also planning to foray into railway electrification, wire business and telecom towers & data centres. We have a Buy rating on Power Grid.
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