Winning Strokes

The BSE Sensex closed at 56,975.99 down 84.88 points (-0.15%) while the Nifty was seen at 17,069.10 down 33.45 points (-0.20%). The indices closed with minor losses due to late buying in metals, private banks and media shares, while autos, IT and consumer durables dragged the markets.

Though rising dollar index and continuous selling by the FIIs dampened the mood, India's robust GST collection (GST revenue collection touched an all-time high of Rs.1,67,540 crore in April), firm commodity prices and improving Manufacturing PMI (Rose to 54.7 in April, from 54 in March) for the month of April supported the sentiment. 

The volatility in the domestic bourses is expected to continue as NSE's India VIX, the gauge of market's expectation of volatility over short term rose 4.46% to 20.2825.

In such circumstances, the traders are suggested to buy fundamentally good counters in market dips as I feel that there is minimum downside of Nifty from here.

In an encouraging development, the GST revenues for the month of April 2022 are 20% higher than the GST collection in the same month previous year.

During the month, revenues from import of goods was 30% higher and the revenues from the domestic transaction were 17% higher than the revenues from the same sources on MoM basis.

#The shares of Aban Offshore Ltd (Rs.58.15) is consolidating around Rs.57.50 - Rs.62, ranges. The company is taking steps to lower its debt burder and is looking to get fresh orders. It is India's largest drilling and exploration company. 

As long as there is buoyancy in the crude oil market, this stock should theoretically give good returns. 

However, the problem with the company is that, most of its contracts are old and hence even though the crude oil is boiling in the international markets, Aban Offshore is not able to take full advantage of the situation. Post recommendation, the stock reached all my short term targets. However, the long term investors or those who are still to book profits, can hold the stock with a SL of Rs.56. 

#The shares of RBL Bank Ltd closed at Rs.117.25 due to technical (chartical) adjustments. However, both the private banks Yes Bank (Rs.13.80) and IndusInd Bank closed in the Green on last Monday, buoyed by good quarterly results. The brokerage house Motilal Oswal Securities is bullish on RBL Bank and have placed a target of Rs.200 in their April, 2022 research report.

Motilal Oswal Securities has also come out with its fourth quarter (January-March  2022 quarter) earnings estimates for the Bank. The brokerage house expects RBL Bank Ltd (Rs.117.25) to report a net profit at Rs.198.4 Cr up 163.3% year-on-year (up 27.1% quarter-on-quarter).

The brokerage house expects the net Interest Income to rise by 15.40% on Y-o-Y (up 3.50% Q-o-Q) basis to Rs.1,045.6 crore.

RBL Bank is one of India’s leading private sector banks, with an expanding presence across the length and breadth of India. It offers specialized services under five business verticals, viz: Corporate & Institutional Banking, Commercial Banking, Branch & Business Banking, Retail Assets and Treasury and Financial Markets Operations. It currently services over 10.66 million customers through a network of 500 branches; 1,424 business correspondent branches (of which 274 banking outlets) and 407 ATMs spread across 28 Indian states and Union Territories. It is a massive bank, and at the CMP of Rs.117.25 its shares are available at a dirt cheap price. The company is also looking to raise funds.

Hence, the traders need to accumulate the stock of RBL Bank Ltd without fail for short term targets of Rs.151/157. When others sell you should accumulate as you know the story.

#The shares of Wockhardt Ltd (Rs.270.80) tested the support region placed at Rs.269/267. In February, this year, there were media reports that the company got  approval for the export of up to 8 crore doses of Sputnik Light and up to 2 crore doses of Sputnik V Component I vaccines.

The company said its state-of-the-art automated manufacturing facilities in Aurangabad are dedicated to producing world-class high-quality injectable products.

In an interesting development, with the onset of COVID-19, the demand for contract development and manufacturing organizations (CDMOs) services is skyrocketing, as CDMOs have stretched themselves to meet the needs of biopharmaceutical and pharmaceutical companies during the crisis. Such services allow pharmaceutical companies to reduce their development and manufacturing costs, timelines, and capital investments. The pre-pandemic situation resulted in trends wherein most pharma-CDMO relationships remained transactional.

Wockhardt has four decades of pharmaceutical manufacturing experience backed by a team of over 6,500 people, including more than 500 development scientists. Overall projects are managed by its highly responsive and dedicated contract manufacturing department, supported by local teams at each facility or group of facilities.

After selling a major part of its generic drug business to Dr Reddy’s Laboratories (DRL) in February 2020, Mumbai (Bombay) - headquartered Wockhardt took a strategic decision to channel its energies to 2 (two) core areas — Diabetes Therapies in regulated markets like the US and Novel Antibiotics Research.

The Covid-19 pandemic added a third focus: Vaccines. “In the next three to five years, vaccines will be an important part of our business,” said Habil Khorakiwala, chairman and CEO, in late May, 2021.

In October 2020, Wockhardt’s plant at Wrexham, North Wales, which had been supplying drugs to the  National Health Service, signed an agreement with the UK government for filling and finishing the Astra­Zeneca vaccine that was being developed in collaboration with Oxford University. In February 2021, the company said the contract had been extended to August 2022. 

Khorakiwala later said more Covid-19 vaccine will be produced at this site in the latter half of 2021 as well, though he did not disclose the collaborator. Explaining the move, he said, “The site is being utilised to the extent of 35-40% at the moment.” In FY22, Wockhardt aimed to have a top-line from Wrexham of £45 million, more than three times FY21’s revenues of £13 million, by filling and finishing around 80 million vaccine doses. The EU and UK’s share in Wockhardt’s turnover grew to 46% in FY21 from 35% in FY20.

Flush with the funds from its Rs.748 crore rights issue, we could see more releases of pledged shares. A substantial part of its revenue should come form its Diabetic therapies and vaccine delivery. 

The investors should do well to buy the scrip of Wockhardt Ltd, in market declines.

#Suzlon Energy Ltd (Rs.10) closed flat on Monday. With the demand of power set to peak in the coming days as the nation wide lockdowns are lifted, the power stocks have started to look attractive once again. I'm bullish on three power counters: Suzlon Energy Ltd, RattanIndia Power Ltd (Rs.5.15) and Indowind Energy Ltd (Rs.16.75). 

In another significant development, India would receive USD 10.5 billion assistance by 2030 to boost the use of clean energy. Moreover, I'm expecting the RE power tariff, to rise in view of the spike in the price of crude oil.

#The scrip of Global Vectra Helicorp Ltd (Rs.50.95) fell before the Q4FY22 results. The company is expected to declare reasonably good quarterly results, as the sky gets opened up and heli - tourism had again begun. We can look for targets of Rs.72/91/120/180, in the coming days. I'll speak with my sources this week.