The Indian chemicals sector has built up world-class capabilities over the past few years and been moving up the value chain at a rapid pace.
The analyst believes 9,400 will act as support and Nifty is likely to march towards 9,800 in the coming trading session. The beach of 9,400 will drag Nifty to 9,200 – 9,000 levels.
We expect phenolic business to show improved profitability and any expected decline in temporary higher DASDA prices should offset the bottom line.
Rusmik Oza said a 5-6 percent correction from the peak levels could be a healthy one for the long-term market sentiment.
The company’s new Greenfield expansion plan at Dahej, Gujarat for manufacturing phenol (2, 00,000 ton/year) and acetone (1, 20,000T/year) has demonstrated successful operations and is currently operating at over 90 percent utilization levels.
The BSE mid-cap index added 2.35 percent, while the small-cap index rose 1.55 percent and the BSE large-cap index was up 1.20 percent in the past week.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Above 11800, Nifty could extend the gains towards 12000. Stock specific bullish move is expected to be there in the markets.
Traders should continue to remain on the long side as we expect the Nifty to head towards 11,450-11,550 levels
The company’s mega-project is commissioned on 1st Nov-18 post successful completion of trial runs in the plant. In two months of operation the company has reported revenues of Rs 3,210 million and plant has achieved utilisation of 80 percent.
On the profitability front, the company’s operating margins stood 14.6% at Rs 662 million in Q3-FY19 as against 14.1% at Rs 522 million in Q3-FY18, an improvement of ~50 basis points over same quarter previous year.
India VIX closed at 15.63, down 2.1 percent for the day. A steady decline in VIX over the last seven sessions has been supportive for the market. Further decline will aid the markets sustaining above 12,000
We are of the view this financial year will be for mid-caps positive performance due to improvement in earnings, inline monsoons as per expectation and constructive reforms by new government.
During the quarter the company has posted strong growth in its relatively smaller Performance products segment as a result of various reorientation efforts undertaken by the company over past few quarters.
The company commissioned the plant at Dahej, Gujarat, in November last year that can manufacture up to 200,000 tonnes of phenol and nearly 120,000 tonnes of acetone, a by-product, annually.
The broader markets, which had been underperformer for many months, turned outperformers in last one month rally.
The improvement in operating performance was mainly attributable to a combination of higher realisation of products across all business segments, operating leverage and cost rationalisation in operations.
The risks to portfolio would be geopolitical tension and global recession (as there are expectations of economy slowdown in US and Europe), Edelweiss said.
Rajesh Agarwal of AUM Capital recommends buying YES Bank with stop loss at Rs 213 and target of Rs 230, Hindustan Petroleum Corporation with stop loss at Rs 172 and target of Rs 188 and Hero MotoCorp with stop loss at Rs 2785 and target of Rs 2980.
We recommend accumulating Deepak Nitrite in the range of Rs 275-284 for the upside target of Rs 310, and a stop loss placed below Rs 268, says Nandish Shah of HDFC Securities.
Rajesh Agarwal of AUM Capital recommends buying Can Fin Homes with stop loss at Rs 252 and target of Rs 274 and Lakshmi Vilas Bank with stop loss at Rs 82 and target of Rs 90.
Nandish Shah of HDFC Securities advised investors to go long in Nifty with a stop loss of 10,800 levels
We have a buy rating on Deepak Nitrite with a target price of Rs 346 per share based on 21.90x FY19E EPS of 15.80.
Traders can accumulate the stock in a range of Rs 275-280 for the upside target of Rs 315 and a stop loss below Rs 252, says Shitij Gandhi of SMC Global Securities.
On the technical front, 10,920-10,950 spot levels is a strong support zone and expect Nifty to expire in the band of 11,000-11,200 levels.