..... . VALI disclosures . .....: 27/05/25, Sumeet Bagadia, ED, Choice Broking

Tuesday, May 27, 2025

27/05/25, Sumeet Bagadia, ED, Choice Broking

Sumeet Bagadia's breakout stock recommendation

Sumeet Bagadia, Executive Director at Choice Broking, believes that the Nifty 50 index is expected to reach 25,400 in the 'near term' after the market's positive undertones. The stock market expert recommended that investors continue taking a stock-specific approach and invest in stocks that are strong on the technical front.

On the outlook for the Indian stock market today, Sumeet Bagadia said, "The undertone for the Indian stock market is positive as the Nifty 50 index retested 25,000. The benchmark index is set to touch 25,400 in the near term. So, one should maintain a stock-specific approach and look at those stocks that are looking strong on the technical chart. Looking at breakout stocks can be a good option."

Regarding breakout stocks to buy today, Sumeet Bagadia recommended buying GNFC, Olectra Greentech, KEC International, Modison, and Finolex Industries on Tuesday, 27 May 2025.

Stocks to buy today

1. Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC): Buy at ₹546.4; Target at ₹585; Stop Loss at ₹527.

2. Olectra Greentech Ltd (OLECTRA): Buy at ₹1,345.40; Target at ₹1,439; Stop Loss at ₹1,298.

3. KEC International Ltd. (KEC): Buy at ₹861.45; Target at ₹992; Stop Loss at ₹831.

4. Modison Ltd (MODISONLTD): Buy at ₹147.35; Target at ₹158; Stop Loss at ₹142.

5. Finolex Industries Ltd (FINPIPE): Buy at ₹223.51; Target at ₹240; Stop Loss at ₹215.

Stocks to trade today as recommended by Trade Brains Portal

Tata Chemicals Ltd

Current price: ₹ 873
Target price: ₹ 1,100 in 16 to 24 months
Stop-loss: ₹ 759
Why it's recommended: Tata Chemicals Ltd (TCL), a Tata Group company, is one of India's largest manufacturing firms, operating across two core verticals-Basic Chemistry Products and Specialty Products. Its basic chemistry portfolio includes essential inputs for industries such as glass, detergents, pharmaceuticals, food processing, and more. TCL operates Asia's largest saltworks, is the third-largest soda ash producer, and the sixth-largest sodium bicarbonate manufacturer globally, with a manufacturing footprint across four continents and 12 plants.

Key products include soda ash, sodium bicarbonate, cement, salt, marine chemicals, and crushed refined soda. In the specialty segment, TCL's agri-science offerings reach 80% of India's districts, servicing over 13 million farmers with crop protection and agri-input solutions. The company is also building a domestic platform for advanced chemical solutions, collaborating with R&D bodies such as ISRO, CSIR-CECRI, and CMET for the development of indigenous actives, battery cells, and recycling solutions.

TCL's India operations span Gujarat, Maharashtra, Andhra Pradesh, and Tamil Nadu, with key installed capacities including: Soda ash: 1.09 million tonnes (MTPA); Sodium bicarbonate: 0.29 MTPA; Salt: 1.6 MTPA; Cement: 0.5 MTPA; Prebiotics: 5,000 tonnes; Specialty silica: 10,800 tonnes

Global operations include: US: 2.54 MTPA of soda ash; UK: 90,000 tonnes of bicarbonate, along with salt and pharma-grade salt; Kenya: soda ash capacity (undisclosed MTPA in draft).

TCL plans to invest over ₹3,500 crore between FY26 and FY28 for regular maintenance and brownfield expansion-particularly in Kenya's soda ash operations. In FY25 alone, it invested nearly ₹2,000 crore, with another ₹550-600 crore earmarked for FY26. This includes: ₹18 crore to expand the prebiotics plant; ₹60 crore to add 50,000 tonnes of soda ash capacity in Kenya.

Risks factors: TCL's soda ash segment is vulnerable to volatility in international prices, driven by global currency movements, competition, and trade dynamics. While FY25 saw global soda ash demand rise-led by China (18%) and India (4.5%)-demand fell 2.3% in the rest of the world. Uncertainty around tariffs also poses risks to the sector's supply-demand balance.

Jupiter Wagons Ltd

Current price: ₹ 402
Target price: ₹ 489 in 16-20 months
Stop-loss: ₹ 358
Why it's recommended: Jupiter Wagons is a leading producer of various railway wagons, passenger coaches, load bodies for commercial electric vehicles, alloy steel casting for rolling stacks and tracks, and refrigerated containers, among other products. It caters to various sectors, including Indian Railways, commercial vehicles, defence, and logistics. As of FY25, the company has an order book of ₹6,303.6 crore. It has a capacity of 10,800 wagons per annum and plans to enhance the capacity to manufacture 12,000 wagons per annum by FY26. The company currently has 12 manufacturing facilities across various locations, including Odisha, Indore, Pune, Aurangabad, etc.

In FY25, the company reported a total income of ₹4,008 crore compared to ₹3,668 crore in FY24, up 9% year-on-year (YoY), while Ebitda stood at ₹578 crore, up 18% YoY, and margins grew by 14%. Net profit surged 15% to ₹380 crore from ₹331 crore in the previous year.

Earnings per share stood at ₹9.08 for FY25, a 10% increase YoY. In Q4FY25, the company secured an order worth ₹600 crore from Ambuja Cement and ACC Ltd. for manufacturing and supplying BCFCM (Bogie Covered Fly Ash/Cement Rakes) Rake Wagons.

Jupiter Wagon's subsidiary, Jupiter Tatravagonka Railwheel Factory Pvt Ltd, has also won a ₹255 crore order from Braithwaite & Co. for the supply of railway wheelsets. Additionally, the company is setting up a railwheel and axle forging plant in Odisha, with a phased investment of ₹2,500 crore. This plant will produce 100,000 forged wheelsets annually, which will cater to both Indian Railways and international clients.

The company has entered India's electric logistics segment, with its brand TEZ, in Indore. The company has set up a 2.5-acre manufacturing facility at Prithapur, where the company has invested ₹100 crore. This plant has an annual production capacity of 8,000 vehicles. In the brake business, the company has secured an order of about ₹150 crore for its joint venture (JV) with Dako and ₹60 crore for a JV with KOVIS and expects the revenues to be fairly strong in this segment going forward.

Risk factors: The company gets bulk orders from Indian Railways, private logistics, and industrial players. Any changes in budget allocation could squeeze down the orders to low units. In addition, an increase in raw material prices, primarily steel, could affect the company's production efficiency. The situation gets even worse if order execution delays and less consumer demand could adversely affect the profitability of the company.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.

source: mint

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Tuesday, May 27, 2025

27/05/25, Sumeet Bagadia, ED, Choice Broking

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20/09/26, Levels for 22/09/25

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