‘Expect Nifty to remain rangebound, stay stock specific’

We are expecting some rangebound movement in Nifty for some time but during this time stock specific rally will continue in a big way

BSE Sensex hit a record high of 39,270 in the week while Nifty hit a lifetime high of 11,761 during the week. Both indices witnessed some profit booking on higher levels, however, we have seen stock specific action.

Skymet said monsoon rains in India are expected to be below normal this year and Brent Crude jumped five-month high above $70 a barrel. These two are speed breaker for Nifty’s rally.

We are expecting some rangebound movement in Nifty for some time but during this time stock specific rally will continue in a big way. So stay stock-specific for next one month and try to pick some momentum stocks for positional trading.

For this week, Nifty has strong support at 11,560-11,500 and resistance at 11,760-11,820.

ONGC:

Maharatna ONGC is India’s third largest profit making company after Reliance Industries and TCS and is the largest crude oil and natural gas company in India, contributing around 70 percent to Indian domestic production.

The company has posted strong numbers for Q3FY19. During Q3FY19, its net profit increased 64.77 percent to Rs 8,262.7 crore from Rs 5,014.67 crore YoY on 20.43 percent higher sales of Rs 27,694.09 crore.

During 9MFY19, its PAT grew 61.59 percent to Rs 22,671.19 crore from Rs 14,030.14 crore on 35.82 percent higher sales of Rs 82,896.09 crore fetching an EPS of Rs 17.67. It paid 132 percent dividend for FY18 and paid 125 percent interim dividend for FY19.

Currently, the stock trades cheaper at P/E of 6.5x. For FY19, the company may declare the highest profit in the last five years but the stock trades 50 percent lower against its five year’s high price. Technically also stock is looking very strong. We recommend buying in a staggered manner for medium to long term.

Aarti Industries:

Aarti Industries is a leading Indian manufacturer of speciality chemicals and pharmaceuticals with a global footprint. Chemicals manufactured by Aarti are used in the downstream manufacture of pharmaceuticals, agrochemicals, polymers, additives, surfactants, pigments, dyes, etc.

The company has 200 plus products in its basket and serves 300 plus global customers and 600 plus local customers with its 17 manufacturing plants. It has posted fantastic numbers for Q3FY19.

For Q3FY19, its PAT grew 47.1 percent to Rs 132.65 crore on 28.1 percent higher sales of Rs 1,268.15 crore. During 9MFY19, its PAT soared 48.8 percent to Rs 344.85 crore on 36.6 percent higher sales of Rs 3,646.15 crore.

Currently, the stock trades at P/E of 29.3x on its TTM EPS. AIL has an equity capital of Rs 40.65 crore supported by reserves of Rs 1,537.26 crore. Mutual Funds hold 13.74 percent stake in this company. It paid 80 percent interim dividend for FY18. It has formed a small flag pattern on the chart. We recommend buying in a staggered manner for medium to long term.

Kaveri Seed:

Kaveri Seeds is lndia’s leading agriculture company specialising in hybrid seeds. It is one of the fastest growing seed company with a large network of over 15,000 distributors and dealers spread across the country. With one of the largest anthology of crop germplasm in the country, Kaveri’s draught and disease resistant as well as high yielding hybrid and varietal portfolio include cotton, corn, rice, jowar, bajra, as well as vegetables such as tomato, okra and gourds.

For 9MFY19, KSCL reported marginally lower PAT of Rs 226.17 crore on sales of Rs 724.27 crore and an EPS of Rs 35.07. With an equity capital of just Rs 12.63 crore and a reserve of Rs 1,008 crore, KSCL’s book value works out to Rs 160.19.

It is a debt free company and has total cash on books of Rs 389 crore as on December 31, 2018. Currently, the stock trades at P/E of 13.8x. The company has set up Asia’s largest corn cob drying facility in Telangana. The stock is looking strong on technical basis also. We recommend buying in a staggered manner for medium to long term.

Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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