NR Agarwal, Monthly – Strong breakout on the monthly and also hit 52 week high today with volumes. This is also incidentally a 3.5 year high. AGM transcript gives some insight on where the business is heading. It looks like writing-printing paper contribution will reduce from 54% to 25% and duplex board (used in packaging in FMCG like Colgate) contribution will increase. The 600 Cr capex should contribute 1000 Cr to the topline from late next year. The market cap is around cumulative CFO of last 5 years and around 1x P/B and is cheaper even when compared to other peers, so not very demanding and more can go right than wrong from here.
Nifty, Monthly – The tidal shift that started in early July has continued in August despite global headwinds (or perhaps because of gloabal headwinds). August close is all time high close on the monthly and appears to be a flag breakout. Domestic consumption and resumption of FII flows is a theme that is playing out and I suspect we are barely scratching the surface. There aren’t many avenues for capital to go to in ’22 with China and Europe going through a crisis, Russia wreaking havoc in the energy markets and several countries going belly up and US markets which are mostly global focused going through de-rating with no strong re-rating in sight. We probably have one of the highest growth adjusted for inflation, a stable regime, a relatively strong currency and regulator, great demographic and prospects. Let’s see
Disc: I continue to stay invested in domestic consumption themes in VBL, IDFC First, Devyani, Manyavar, Metro. Sold whatever is left of ITC as better opportunity was available in NR Agarwal where I have positions between 330-360
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