How are you analysing the Nifty charts and when you talk to the big traders among your clients?
First of all, the volatility in the market is really high. The state governments have been imposing restrictions to control the spread of coronavirus. Maharashtra has already imposed strict actions and Delhi has announced recently that they will be imposing the night curfew. These things are making the market sentiments really weak and right now, sell on rise should be the strategy to follow. If there is a market closing above 14,900 on Nifty, sell on rise would be my advice and strategy for the market.
Similarly for Bank Nifty, 34,000 will act as a strong hurdle till we get a closing above 34000. Here also, sell on rise would be the correct strategy. Defensive stocks like pharma as well as FMCG and IT will come back in action.
Which are the stocks that you have on your radar? Why do you like ? What are the targets here?
The API demand is back. The company has shown great returns in the recent past, after three months of consolidation from the lower range of Rs 340 and the upper range of Rs 380. This consolidation has given a breakout on the upper side today. Speaking about the nine months’ performance, the income has increased from Rs 1,993 crore to Rs 3,402 crore. Net profit of the company has been increased by Rs 145 crore to Rs 687 crore. These are massive numbers and on the technical aspect, the MSCD has given the breakout. I have set my target for Laurus Labs at Rs 440 and stop loss is placed at Rs 375.
What about Granules India? What kind of targets are you setting here and why do you like it?
Granules India manufactures paracetamols. The last nine months’ performance has been great. Sales have increased from Rs 2,000 crore to Rs 2,440 crore; net profit has increased by Rs 240 crore to Rs 422 crore and we are expecting that in FY2022, the company can show overall growth of 25%. Valuations are attractive at the current price and available at the six months bottom from the lower level. The MSCD has given a good breakout on the buy side. I have set the target at Rs 350 and a stop loss of Rs 308.
What about ? What is the potential there?
IOL Chemicals has got really good potential although the stock has corrected recently. It is the largest manufacturer or ibuprofen in the industry. The price of Ibuprofen got corrected a bit and so the stock price also got corrected from the higher levels of Rs 899 to the current rate of Rs 570. The joint MD of this company resigned which also impacted the prices of the company. The new CEO, Dr Sanjay Chaturvedi, has great experience in this industry as he was working with Dr Reddy’s as the global head of the company. With him joining IOL Chemicals, the management has completely changed. There is very little room for the stock price to go the downside so it becomes very attractive at the current market price. I have set a target for IOL chemicals at Rs 675 with stop loss at Rs 540.
