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Nifty must hold above 18081 to head towards 18350; buy these two stocks to pocket short-term gains

Equity benchmark Sensex climbed up nearly 1000 points or 1.7% to close at 60841 and Nifty advance 301 points to close at 18105 against the previous week’s close. On YTD bases, the BSE barometer closed the year 2022 with a 4.40% gain or 2,587 points while the Nifty ended the year higher by 4.30% or 751 points. Sensex touched its all-time high of 63,583 points on 1 December, after hitting its 52-week low of 50,921 points on 17 June. Sensex jumped 10,502 points or 22% last year. Sensex gained for seven consecutive years or 34723 points or 133% over the last seven years. Impressive quarterly results, strong domestic fund buying interest and higher govern spending (PLI scheme, higher spending in infra project) lifted the Indian market. GST collection run rate continues for the month of Dec as well with 1.5 lakh cr just above 2.5 percent above November

The year 2022 was extremely volatile not only for the domestic market but also across the global markets. Russia – Ukraine war, the energy crisis, the spiked in global inflation, the hike in interest rates across the world, US Fed’s hawkish stance, and a spike in China covid cases dampened the market sentiment. On the domestic front, RBI also kept an aggressive stance on its rate hike. Further, FIIs selling posted limited upside to the Indian bourses which resulted in a mere 4% gain in Sensex. However, Indian markets were much better than global markets. The US market fell to a decade low with S&P 500 losing over 20%, while European stocks posted their worst annual performance since 2018 as the Stoxx Europe index yearly losses by 13%. Asian markets like South Korea, Taiwan, and China Index slipped 20% each.

This week will be important in the market as the FOMC Minutes meeting will be announced on Thursday along with domestic GDP data and monthly auto sales data. When 2022 began, investors were looking forward to a rally similar to the past 2 years when the bulls were in charge. However, one month into 2022 and bears took over as markets reeled over uncertainties brought in by the Russia – Ukraine war. Global markets plunged into doldrums and struggled to recoup the losses for the most part of the year amid persistent inflation pressures, monetary policy tightening, global central bankers’ worries about a slowdown in growth, and fear of recession — all of it owing to the geopolitical crisis caused by the war along with surged in China covid cases.

Even though stock markets in India fell prey to such an uncertain global environment, both Sensex and Nifty still emerged as winners, performing better than any other indices globally. Domestic markets advance over 4% higher in CY2022 while US S&P 500 fell 20% to a 14-year low since 2008 and Bonds lost 16% of value, the biggest decline since at least 1990.

The year 2023 will be important for the domestic market with a series of events lined up to keep the market on its toes. 2023 will be a year when nine states and possibly the Union Territory of J&K will witness Assembly elections. These polls assume more importance because the Lok Sabha elections will be held in 2024. Union Budget will be announced on 1st Feb and will hold importance ahead of the Assembly election and next year’s Lok Sabha election. The Budget is likely to be more focused on the food and fertilizer sectors.

G-20 and SCO (Shanghai Cooperation Organization) meeting with leadership by Prime Minister Modi will be hosted on Indian grounds. India is likely to strengthen its leadership globally. From the economic point of view, the US Fed rate decision, global inflation, Fed commentary, and RBI policy will be in focus this year. Progress from China’s covid and the Russia-Ukraine war, global currency, and oil prices will be focused on next year. Domestic sentiment remains bullish due to favorable government policy, cool-down inflation data, and local funds & strong retail participation to support the market.

Nifty Outlook
Nifty has formed a Bullish candle or an Inside Bar on the weekly frame but continues to form lower highs from the last four weeks. Now, it has to continue to hold above 18081 zones, for an up move towards 18250 and 18350 levels whereas supports are placed at 18018 and 17950 levels.

Stocks to buy
Jindal Steel
CMP: Rs 580 | SL: Rs 568 | Target: Rs 615
Jindal steel has given a range breakout on the daily chart and managed to close above the same. Buying is visible across Metals space and small follow up can take it towards new high territories. Stock is making higher highs- higher lows formation from four trading sessions and supports are gradually shifting higher. Considering the current chart structure, we advise traders to buy the stock for an up move towards 615 with a stop loss of 568.

Titan
CMP: Rs 2597 | SL: Rs 2530 | Target: Rs 2720
Titan has surpassed the falling supply trend line on the daily scale and it has formed a bullish candle which indicates a positive price setup. It is forming a higher high since the last 3 sessions and it has given a close above the 20 DEMA indicating strength. RSI on the daily scale is reversing from the oversold territory and showing signs of reversal. Considering the current chart structure, we advise traders to buy the stock for an up move towards 2720 with a stop loss of 2560.

Eqwires Research Analyst

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Union Budget 2023: Commerce Ministry seeks cut in gold import duty to push jewelry exports

The commerce ministry has sought a reduction in the import duty on gold in the forthcoming budget with a view to push exports and manufacturing of the gems and jewelry sector, sources said. In July this year, the center hiked gold import duty to 15 percent from 10.75 percent to check the current account deficit (CAD) and rising import of the yellow metal. The basic customs duty on gold is 12.5 percent. Along with the agriculture infrastructure development cess (AIDC) of 2.5 percent, the effective gold customs duty will be 15 percent.

“As the gems and jewelry industry has recommended the commerce ministry for a cut in the duty, the commerce ministry has urged the finance ministry for the same. The ministry has also asked for tweaking import duty on certain other products to boost manufacturing and exports,” the sources said. Every year, the gems and jewelry export industry seeks a reduction in import duty.

Former chairman Gems and Jewellery Export Promotion Council (GJEPC) Colin Shah said that the industry is pinning its hope on the forthcoming Budget to push exports and generate jobs in the sector. “Customs duty cut on gold and a progressive repair policy for jewelry will help the sector immensely. We are also very hopeful that there will be presumptive taxation on our special notified zones for rough diamonds and abolition of duty on the seed used for lab-grown production,” Shah, who is also the founder and MD of Kama Jewelry, said.

According to the council, India has the potential to be the repair hub of the world and this policy can help increase exports by up to USD 300-400 million. The gems and jewelry exports rose by 2 percent to USD 26.45 billion in April-November 2022 this year. Gold imports dipped by 18.13 percent to USD 27.21 billion from April-November this fiscal year. Gold imports have a bearing on the current account deficit (CAD).

India is the largest importer of gold, which mainly caters to the demand of the jewelry industry. In volume terms, the country imports 800-900 tonnes of gold annually.

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Mamaearth parent files for IPO; Shilpa Shetty, and Kunal Bahl to sell the partial stake, Sequoia not to sell in OFS

Mamaearth’s parent firm Honasa Consumer Ltd, co-founded by Shark Tank fame entrepreneur Ghazal Alagh, has filed DRHP for an IPO to raise up to about Rs 3,000 crore for existing selling shareholders and fresh issue, according to reports. Honasa Consumer is the owner and operator of personal care brands such as Mamaearth, BBlunt, and The Derma Co. Honasa’s IPO will consist of a fresh issue of shares worth about Rs 400 crore, according to the DRHP filed with capital markets regulator SEBI. Existing investors and promoters will sell 46.8 million shares via Offer For Sale (OFS), which could fetch about Rs 2,500 crore, reports said.

Promoters and shareholders who will partially sell their holdings in Honasa Consumer include the Alagh family, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, entrepreneur Kunal Bahl, and actor Shilpa Shetty Kundra. Founders Varun and Ghazal Alagh will sell a combined 3.2 million shares, totaling just over 6% of the OFS shares. The IPO proceeds will be used to fund a variety of objects, including advertisement expenses to enhance brand awareness and visibility, the establishment of new exclusive brand outlets, investment in wholly-owned subsidiary BBlunt for setting up new salons, and general corporate purposes.

About Honasa Consumer
Honasa Consumer attained their unicorn status in 2022, when the firm raised $52 million dollars at a $1.2 billion valuation, in a fundraising round led by Sequoia Capital. The famed VC will not sell its stake in the OFS. The book-running lead managers for the IPO are Kotak Mahindra Capital, JM Financial, JP Morgan India, and Citigroup Global Markets India.

Honasa Consumer is one of India’s largest digital-first beauty and personal care (BPC) brands. The company has six brands under its umbrella, including its flagship company, Mamaearth. Mamaearth has emerged as one of the fastest-growing BPC brands in India. Honasa believes the market for BPC products will grow from approximately $17 billion in 2021 to approximately $30 billion in 2026 at a CAGR of approximately 12%, which is among the highest within the broader retail categories, they said in the DRHP filed with Sebi.

The company is largely dependent on sales from its top 10 products. In FY20, FY21, FY22, and the six months period ended September 30, 2022, Honasa Consumer derived Rs 421.58 million, Rs 1,397.26 million, Rs 2,846.38 million, and Rs 2,128.53 million, or 38.40%, 30.38%, 30.17% and 29.45% of their revenue from operations, respectively, from the sales of their top 10 products. Further, sales of the top two products, which are under the Mamaearth brand, resulted in the company netting between 12.41% to 14.42% during the time periods mentioned.

Eqwires Research Analyst

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