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NIFTY analysis with experts, Q2 review of Insecticides India, Indian markets advance and move above 10,650…. Market updates for 27/11/18

PurpleTrades - stock market courses > News > NIFTY analysis with experts, Q2 review of Insecticides India, Indian markets advance and move above 10,650…. Market updates for 27/11/18

Report by- Sabyasachi Bhattacharya

 

Insecticides India’s Q2 results review; Q2 net sales up amidst healthy volume growth-

In a quarter hit by rising input costs and a weaker rupee, Insecticides India (IIL) was able to deliver a decent performance. It reported a strong growth in Q2 FY19 with a 10 percent year-on-year (YoY) uptick in revenue owing to healthy volume growth. Earnings before interest, tax, depreciation and amortisation (EBITDA) saw a 24 percent uptick with a 170 basis point (100 bps = 1 percentage point) margin expansion due to a favourable product mix, with lower share of generic products, better utilisation at the Dahej plant and improved B2C sales. The management was able to substantially reduce interest cost, which resulted in an 18.9 percent YoY growth in net profit. Let us take a look at the key insights of their report-

  • The company has strategically started exiting low margin products and is now looking to capture higher market share in superior margin products. The management aims to improvise its product mix by reducing concentration of generic products to around 5 percent. This should aid margin in coming quarters.
  • Disruptions in Chinese supply and a weaker rupee have led to a surge in raw material prices, thus pressurising margins across the industry. Since 25 percent of its raw material needs are sourced from China, IIL saw a rise in input costs. However, it sees scope for an uptick in product prices, which would help protect margin.
  • The management is planning a backward integration plant, which is scheduled to be completed by FY19-end. While the same augurs well for its own raw material sourcing, the company is also planning to capture the void in the market created due to missing Chinese supply.
  • The six new products launched in the H1 FY19 are now gaining traction. It has a strong line-up in technical grade agrochemicals and formulation products. These are expected to drive volumes in coming quarters. The company has a strong R&D focus and intends to launch 6-7 new products every year. It is focussing on its branded B2B business and plans to spend on a branding exercise.
  • The management has started focusing on the export segment and is planning to export branded formulations and technical grade agrochemicals to high growth emerging markets like Middle East, Africa and South East Asian regions. With rigorous registration rules, exports to the US and European nations are relatively more difficult and hence emerging markets seem like a thoughtful approach.
  • The management is planning a brownfield expansion of its technical grade agrochemicals facility at Dahej. It is planning to fund the capital expenditure from internal accruals. With substantial capacity expansion on cards, we see improved volumes and benefits of operating leverage in the future.

 

Let us take a look at Q2 outlook of different companies-

Source- MoneyControl, Purple Trades Research Department 

 

 

Indian Indices move ahead as Nifty closes above 10,600-

Chart source- ChartInk

Indian markets had a bullish day today as both the Indices SENSEX and NIFTY moved forward. Nifty had a GAP-DOWN opening after which it started to fall down till it reached the next support at 10,600. This support was predicted by our experts at PURPLE TRADES  in the last report published yesterday. The Index fell throughout the early morning session. Then it hit the support from there it went on a range bound movement. The Index then later broke the crucial resistance of 10,650 after which it went on to close near the 10,685 mark. As you can see on the chart given above Nifty had a range bound market throughout the morning session which shows that the trend is yet to be clear for the investors but this up move today was a continuation of yesterday which might indicate that the BULLS are slowly gaining pace. It’s a green close for the market on Tuesday, with the Nifty ending well above 10,650-mark. A rally among PSU banks, energy names as well as IT boosted the market. In the broader market, the Nifty Midcap index ended over half a percent higher. At the close of market hours, the Sensex ended up 159.06 points or 0.45% at 35513.14, while the Nifty was higher by 57.00 points or 0.54% at 10685.60. The market breadth was narrow as 1238 shares advanced, against a decline of 1320 shares, while 161 shares were unchanged. Infosys, TCS, and BPCL were the top gainers, while Sun Pharma and Hero MotoCorp lost the most. Punjab National Bank shares gained 2.5 percent after the lender expects Rs 2,500 crore recovery from Essar Steel resolution.

 

 

 

Let’s take a look at the performance of major Indices-

Equities in Europe dipped as investors continued to monitor developments around the Brexit deal, markets in Asia markets were mixed. The Straits Times was seen in the RED by 2.98% whereas NIKKEI was seen in the GREEN, up by 0.64%. US Index NASDAQ performed well today as it moved up by almost 2%.

Source- MoneyControl, Purple Trades Research Department 

 

 

Key Points for Traders to watch out for while trading Nifty tomorrow-

  • 10,645 is a short term support for Nifty.
  • If Nifty breaks 10,645 then it has the potential to go down.
  • 10,710 is a short term resistance for Nifty.
  • If Nifty breaks 10,710 then it has the potential to go up.

 

 

Top sectors that moved the market today- Data source- Moneycontrol

 

 

Top Gainers for today-   Data source- Moneycontrol

 

 

Top losers for today- Data source- Moneycontrol

 

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