Markets from the peaks in September have now gone through 6-6.5 months of correction. Earlier corrections have lasted 8-12 months. A lot of leadership sectors start showing up on the momentum and consolidation screens post the 8-12 month period.
As a process, one needs to start tracking sectors from now on. How does one identify it - explained it in earlier webinars and videos.
So the general screening is to look for.
- Stocks/Sectors near all time highs/multi-year highs/52 week highs.
- Consolidation of many months and underperformance of years. ( this could take time to come up on screens.)
So let's look at places of strength
- Agri and Agri Related
Fertilizers – Chambal, Coromandel, Paradeep, Mangalore Chemicals
Agrochemicals – UPL Limited, Sumitomo, Deepak Fertilizers
Seeds & Crop Protection – Kaveri Seeds, Hikal
There could be more sub sectors - Rice etc
Example Chart - Chambal Fert
2) Cements - mainly Large ones
Ultratech Cements, JK Cements, Shree Cements etc
Example Chart - Ultratech Cements
3) Telecom
Slow and Steady but the trend up - Bharti Airtel, Bharti Hexacom, Indus Towers
Example Chart - Bharti Airtel
4) Banks and Financials
- HDFC Bank, Kotak Bank, ICICI Bank, Bajaj Finance, Bajaj Finserv
- NBFCs – aadhar, aavas, india shelter, SBI cards, Manappuram etc Some are even showing bottoming out signs here in smaller names in banks, nbfcs
Example chart - Bajaj Finserve
Some Random Charts
Kiri Inds - 15 years !!
Promoter has recently put money. An arbitration case, Big plans etc.
Panacea Biotech - Although panacea means Solution to all. The Problem of breakout continues for 20 years.
Random Observations
- Dream11 Advertising Cost is now greater than the Market Cap of Delta Corp.
- From hype of B2C to 10 years wasted with not so gr8 returns - Symphony, La Opala, Relaxo, Ceramics & Home Building Materials. Every cycle Indian investors get bullish on some Consumer theme and make it super expensive. So which sector is placed similarly now ?
- Restaurants - Every noninvestor thinks this is the easiest business, but no Indian homegrown brand has made a mark nationally. Even Global brands Jubilant, Westlife, Restaurant Brands etc have also not been great. A barbeque nation has been barbequed with 85% drop, Speciality Restaurants going nowhere, Cafe Coffee Day boom and bust. Will it be different in next decade. Which one will you bet on?
- Family / Inheritance Problems/Succession/Next Generation should remain the largest theme in coming years. A lot of promoters who listed their cos in 2003-2007 or 1990s now need to pass on the baton. Recent settlements – Vadilal Inds, Electrotherm India, Lodha
Disclosures
Mr. Nooresh Merani
SEBI Registered Research Analyst
Registration No. INH000008075
- Disclosures
- The analyst may have holding or position in the securities recommended herein.
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- The analyst has not received any kind of remuneration or consideration form the products/ securities recommended herein.
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Mr. Nooresh Merani
SEBI Registered Research Analyst
Registration No. INH000008075
GST Number : 27ALMPM5924E1ZX
Contact Details - 702 Om Viraj , Paliram Road,Andheri West , Mumbai 400 058
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