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Trent shares gain more than 3 per cent on strong Q4 numbers

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New Delhi, April 30 (IANS) Shares of Trent Limited gained more than 3 per cent on Tuesday after reporting strong Q4 numbers.

Trent shares were trading at Rs 4494, up by 3.2 per cent.

Trent reported strong standalone revenue growth of 53 per cent (in line) in 4QFY24. “Trent’s strong performance and robust footprint additions is an outlier in our retail coverage universe, which is facing a challenging demand environment,” Motilal Oswal Financial Services said.

Unlike peers that passed on the sharp raw material price increases last fiscal, Trent absorbed the impact, seeing strong customer reception and is now reaping the benefits as raw material prices turn benign.

Trent’s industry-leading revenue growth, driven by healthy SSSG and productivity, robust footprint additions, and healthy scale-up in Zudio, offers a huge runway for growth over the next three to five years, Motilal Oswal Financial Services said.

Considering strong revenue growth, aggressive store additions, margin tailwinds from moderating raw material costs, and operating leverage, the brokerage estimates a CAGR of 32 per cent/38 per cent in revenue/PAT over FY24-26. The continued momentum in Star and improving store metrics offer further upside potential.

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Trent Limited is part of the Tata Group and operates a portfolio of retail concepts. The primary customer propositions of Trent include Westside, one of India’s leading chains of fashion retail stores, Zudio, a one-stop destination for great fashion at great value and Trent Hypermarket, which operates in the competitive food, grocery and daily needs segment under the Star banner.

–IANS

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Markets need correction but current momentum indicates otherwise

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New Delhi, June 16 (IANS) After the sharp gains witnessed in the previous week, markets were circumspect this time around but continued to post gains. Markets are at lifetime highs, and in the previous week, one saw the market breadth gaining substantially.

One reason for the above could be the fact that key portfolios of the Cabinet have been retained by the ruling party, and there is no significant change in ministers. This implies continuity. Probably, that explains why the markets rallied and why one saw such huge momentum. The market believes that the policies and thinking of the government in Modi 3.0 would be on similar lines as in the previous stint, even though this is a coalition government.

Sensex gained on three of the five trading sessions and lost on two, while NIFTY gained on four sessions and lost on one session. BSESENSEX gained 299.41 points or 0.39 per cent to close at 76,992.77 points, while NIFTY gained 175.45 points or 0.75 per cent to close at 23,465.60 points. The broader indices like BSE100, BSE200 and BSE500 gained 1.29 per cent, 1.68 per cent and 2.02 per cent. BSEMIDCAP gained 4.41 per cent, while BSESMALLCAP was up 5.07 per cent.

In the benchmark indices, one is seeing a churning of heavyweight stocks. In the previous week, the top gainers were FMCG and IT stocks. This week, they were under pressure, and we saw cement shares rallying. I believe this rotation will continue till the announcement of the budget and the onset of Quarter One results for the April to June Quarter.

If there is one serious concern in the market, it’s the fact that valuations have run up quite sharply, and we have not seen any meaningful improvement in results, which indicates a solid improvement in earnings growth.

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The Indian Rupee lost some ground and was down 19 paise or 0.23 per cent to close at Rs 83.56 to the US Dollar. There appears to be clarity in the US markets that there would be no immediate rate cut and that in the current calendar year, there would be just one rate cut. Dow Jones lost 209.83 points or 0.54 per cent to close at 38,589.16 points. Dow gained on just one of the five sessions and lost on four.

In primary market news, we had one issue which opened and closed for subscription last week. The issue from Le Travenues Technologies Limited was subscribed 98.1 times overall. The QIB portion was subscribed 106.73 times, the HNI portion was subscribed 110.25 times, and the Retail portion was subscribed 53.95 times. There were 26.75 lakh applications overall.

In the week ahead, we begin the week with a trading holiday on Monday. This will shorten the week and increase volatility to some extent. There are three issues which are opening in the coming week. The first of the lot is the issue from DEE Development Engineers Limited, which is tapping the capital markets with its fresh issue of Rs 325 crore and an offer for sale of 45.82 lakh shares in a price band of Rs 193-203.

The company is in the business of piping solutions for the oil and gas sector, chemical sector and supercritical and power sector. It also makes structural towers for the wind energy space. It began operations in Haryana and has now expanded operations into Kutch in Gujarat. This place is strategically located with two ports, Kandla and Mundra, in the vicinity, customers for wind energy having their sites in the vicinity, and major steel suppliers being in a 25-kilometre radius. The location helps in reducing costs on account of inward transportation significantly.

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The expansion happening at Kutch will take about 6-8 months to fructify. I believe the company has a great future, and it will do well after the commissioning of the new plant. The numbers of the company would reflect improved scale and efficiency for the year ended March 26. Only if you have an investment horizon of 18 months or more should you invest now. There may always be listing gains looking at the market mood, but otherwise, investment is for the medium to long term.

The second issue is from a NBFC based out of Rajasthan, Akme Fintrade (India) Limited. The company is raising through a fresh issue of 1.1 crore shares in a price band of Rs 114-120. The issue opens on Wednesday, June 19 and closes on Friday, June 21.

The NBFC space is crowded, and recent issues in this space have not done well. The company and its merchant banker have chosen not to have a roadshow in Mumbai for this issue. This speaks volumes for their confidence in marketing the issue. One wishes them luck.

The third issue is from Stanley Lifestyles Limited, which is tapping the capital markets with its fresh issue of Rs 200 crore and an offer for sale of 91,33,454 shares in a price band of Rs 351-369. The issue opens on Friday, June 21 and closes on Tuesday, June 25.

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The company is a bespoke manufacturer of super-premium and luxury furniture brands in India. It’s a home-grown brand, and a little over half its revenues come from sofas and recliners. The company crafts its products as per the requirements of its customers, and everything’s made to order.

The business has been growing, and with funds being raised to open more stores, benefits of the same would be available as time passes. The company is in a niche segment where luxury defines markets. Take a measured call, as growth in revenues will not be a factor of perpendicular growth.

Coming to the markets in the week ahead, as mentioned earlier, it would be a four-day week. Momentum and market breadth are in favour of the bulls, and there seems to be no letting go of them as of now. However, the run-up has been fast and other than the sharp one-day correction on June 4, no meaningful corrections as of now.

Market corrections come suddenly and without warning. Will it happen this week or the next? Not sure. Keep one ear to the ground and prepare for the same because that could be sharp and meaningful. Until that happens, ride the wave as long as the going is good.

A simple strategy for the period ahead would be to ensure that you have no overnight exposure, as markets could open gap-up or gap-down. This could be dangerous. Trading opportunities would exist galore and provide plenty of trades to be facilitated. Use the opportunities to trade and await the correction when it comes.

Trade cautiously.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)

–IANS

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Modi 3.0: Stock markets to touch new high in 1 yr, say global rating agencies

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New Delhi, June 16 (IANS) Indian stock markets have seen a robust rally since the new government’s formation, closing at an all-time high in the last week. According to top rating agencies, the indices are set to gain new highs in the next 12 months.

It was the second consecutive week when Indian frontline indices Sensex and Nifty made a new all-time high of 77,145 and 23,490 respectively, as inflation cooled off.

The stock market is attracting global funds which are going to accelerate soon.

Moreover, the stock markets have emerged as a favourite investment destination for retail investors.

According to global rating agency Moody’s, its “12-month forward BSE Sensex target is 82,000, implying 14 per cent upside”.

In its latest report, Moody’s said that the key benefit to the market of the NDA’s re-election is “policy predictability, which will influence how growth and equity return pan out in the coming five years”.

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“We believe the government is likely to continue focusing on macro stability (i.e., inflation hawkishness) to inform policy,” according to the report.

“With government continuity now in place, we believe the market can look forward to further structural reforms, giving us more confidence in the earnings cycle. Macro stability with rising GDP growth relative to real rates should extend India’s outperformance over emerging markets equities,” it added.

According to Moody’s, India’s stock market has been making new highs, and the debate now is over what could take the market materially higher.

“In our view, the government’s mandate is likely to result in policy changes that will lengthen the earnings cycle and surprise the market,” it emphasised.

With Modi 3.0 in power, more will come over the next five years in the form of positive structural shifts.

Moreover, India has reclaimed the fourth-biggest global equity market tag from Hong Kong. The country’s market capitalisation soared 10 per cent to reach $5.2 trillion.

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In comparison, Hong Kong’s equity market cap is $5.17 trillion, down 5.4 per cent from the high of $5.47 trillion this year.

At present, India is the second-largest emerging market after China.

Global investors now prioritise liquidity and can’t afford to ignore the Indian stock market, which is booming with retail investments, according to global analysts.

–IANS

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Collective action required to achieve renewable energy targets: MoS Shripad Yesso Naik

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New Delhi, June 16 (IANS) Collective action is required to achieve renewable energy targets, making India a leader in wind energy and creating a greener, brighter future for all, Minister of State of New and Renewable Energy and Power, Shripad Yesso Naik, said.

Speaking on the ‘Global Wind Day’, MoS Naik congratulated Gujarat, Karnataka and Tamil Nadu for achieving the highest wind capacity addition in the country during FY 2023-24.

Bhupinder Singh Bhalla, Secretary, MNRE, said that combining solar and wind energy is essential for a reliable grid and meet the country’s target of 500 GW renewable energy capacity by 2030 and net zero by 2070.

India has a history of wind energy generation spanning more than four decades.

With a cumulative installed wind power capacity of 46.4 GW by May, it has progressed to become the fourth largest in the world.

Bhalla highlighted the previous year’s achievements and motivated the stakeholders to collaborate to realise the short term as well as long term goal for the sector.

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The event witnessed panel discussions on the potential of both onshore and offshore wind energy, with the active participation from Central and state government authorities, manufacturers and developers, academia, think tanks, and other key stakeholders.

–IANS

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India's first Metro stretch to be upgraded with aluminum third rails

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Kolkata, June 15 (IANS) India’s first Metro link, between Tollygunge (Mahanayak Uttam Kumar) and Dum Dum stations in Kolkata, is going through a major upgrade nearly 30 years after its completion.

The 16.45 km stretch was completed in 1995 though trains were already running between the intermediate stations (the 3.4 km stretch between Esplanade and Bhowanipur) since 1984.

The Metro Railway has now taken up the replacement of the steel current conducting third rail with an aluminum one. This will not only be energy efficient, but also ensure faster running of trains.

According to Metro engineers, the change will ensure 84 per cent reduction in energy loss, which is Rs 1 crore per year per km.

For the entire stretch, this amounts to Rs 16.45 crore per year.

“Such replacements have already taken place in older Metro stretches in the world like in Singapore, London, Moscow, Berlin, Munich, and Istanbul. The new stretches that we introduced in Kolkata, such as the East-West and Joka-Taratala corridors, have aluminum third rails.

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“Work has already started from Noapara (the carshed beyond Dum Dum) and it is expected to be completed in the next two years. A German company has been entrusted with the project. Normal services will not be hampered during the upgradation process,” said Kausik Mitra, CPRO, Metro Railway.

The high-conductive aluminum third rail will have a stainless-steel top. It will have the capacity to reduce system voltage drops and subsequent energy losses, thanks to its superior electrical conductivity.

This reduction in voltage drop in the third rail will allow quicker acceleration. This will also allow the Metro Railway to increase frequency during peak hours. The huge energy savings will bring down operational costs.

The expense involved in replacing the third rail would be realised within three years due to a drop in operational costs.

Additionally, the aluminum third rail will reduce carbon emissions by 50,000 tonnes in its lifetime. The aluminum rail also requires less maintenance and will be highly reliable and stable in a hot and humid city like Kolkata.

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Less heat will also be generated inside the tunnel when the Third Rail Current Collector (TRCC) comes into contact with the third rail. No welding will be required to join two aluminum rails, as it can be done with the help of a splice joint. This will help in maintaining air quality inside the tunnel,” Mitra said.

–IANS

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Indian stock markets breaking global benchmarks in equity market cap

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New Delhi, June 15 (IANS) As Indian stock markets continue to touch fresh new highs almost every day post the formation of the new government, they are also breaking global benchmarks.

In a new feat, India has reclaimed the fourth-biggest global equity market tag from Hong Kong.

The country’s market capitalisation soared 10 per cent to reach $5.2 trillion (BSE-listed companies).

In comparison, Hong Kong’s equity market cap is $5.17 trillion, down 5.4 per cent from the high of $5.47 trillion this year.

On a price-to-book basis, India trades at 3 times, while Hong Kong is at just one time.

This comes as the Indian stock market has seen a significant rally in recent months and is now attracting global funds which are going to accelerate in the near future.

The National Stock Exchange (NSE) benchmark Nifty surged nearly 6 per cent in the last month and 11.84 per cent in the last six months.

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According to market analysts, Nifty is expected to reach 25,816 in the next 12 months.

The Prabhudas Lilladher experts anticipate that the BJP-led NDA government will sustain its focus on capital expenditure-driven growth, particularly in sectors such as production-linked incentives (PLI), infrastructure development, including roads, ports, aviation, defence, railways, and green energy.

This expectation is supported by a 20 bps reduction in the fiscal deficit for FY24, normal monsoon forecasts, and an anticipated dividend of Rs 2.1 trillion from the RBI.

The analysts expect the NDA government to increase focus on farmers, rural, urban poor and middle class to arrest the impact of new social engineering-cum-freebies led reversal in certain states in recent elections

Meanwhile, the stock markets have emerged as a favourite investment destination for retail investors.

According to experts, the major driving forces in this bull market are the Indian retail investors, including HNIs, and big selling by the FIIs is getting eclipsed by the aggressive buying of DIIs and retail investors.

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–IANS

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