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Maruti is topping the leaderboard with a ~10% weekly gain as the stock kept rising during the week expecting good quarterly earnings.
HUL was down 4.7% this week mostly because of a disappointing earnings report. Bajaj twins also didn’t do much on the exchanges this week.
Nifty 50 index inched up 1.2% extending its monthly gains to 5.6% and turning positive for the year. Yet, on the yearly time frame, it does worse than gold. Crude continues to hover between $90 and $100 while silver & gold closed flat for the week.
On valuations, the price-to-earnings (PE) ratio for the Sensex was at 22.5, and there’s a graph below for historical comparison.
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Capitalmind Outliers is our in-house screening tool that helps you discover stocks with trends and momentum in their favor. Every week, we at Capitalmind discuss what’s behind an outlier standing out.
This week, we have a Gujarat-based stainless-steel pipes & tubes manufacturer ($32.4 bn global industry) in the limelight: Venus Pipes & Tubes, which has doubled up before even celebrating its half-year anniversary of listing.
The young company (incorporated in 2015) seems to have listed at an opportune time when the industry is experiencing a trifecta of tailwinds
Looking at the demand generation that imports substitution and end-user capex cycle could create, Venus Pipes & Tubes has planned its own capex of ~108 crores to backward integrate (from currently procuring hollow pipes, to manufacturing them via converting stainless steel rounds bars through a piercing unit) and double its capacity to become the second largest player in India, taking over from Jindal SAW.
While Venus Pipes has grown significantly faster than peers (which also produce carbon steel pipes) on the back of capacity expansion and is more efficient owing to high capacity utilization, it is worth noting that the industry leader Ratnamani Metals & Tubes is less levered, has higher margins due to its much larger scale, and is probably just as ready for the industry tailwinds.
Whether there’ll be a sequel on the cards, with the utilization of new capacity driving growth all while maintaining efficiency, who knows. The markets sure seem convinced.
Venus Pipes & Tubes is one of many stocks that ranked Grade 10 on the Capitalmind Outliers platform this week.
(Disclaimer: The information conveyed in this post is intended for informational purposes and shouldn’t be considered as investment advice. Please do your own research before making investment decisions)
Our latest episode, released yesterday, had two fantastic discussions: 1) Reliance demerging its financial arm 2) The hammering of $META, $AMZN & $GOOGL. Tune in to watch Deepak Shenoy and Krishna Appala discuss the latest trends in the markets
(If you have questions you would like to ask us, do join in live on Fridays at 4.)