DALAL STREET INVESTMENTJOURNAL DEMOCRATIZING WEALTH CREATION iesire cs OreUinntules IM S2-Wwe KSdelweiss Financial Services of- fersa broad range of financial products and services toa diversified client hase which includes individuals, corpo- rates and institutions. The company has a strong client base of 5 milion and has added 2 million customers in a year. Itis also the second largest non-bank wealth ‘manager in India. The company has a presence in three categories: credit business that services both retail and corporates; franchise and advisory which include wealth management, asset ‘management and capital markets; and life and general insurance. The company reported net sales of RS 9,357 crore in FY21 compared to Rs {9,860 crore in FY20. That is de-growth of, nearly 5.1 per cent. The operating profit stood at Rs 3,980 crore in FY21 as against Rs 2,336.4 crore in the previous yea That isa growth of over 70.3 per cent, Also, the PAT stood at Rs 254.6 crore while it had recorded a net loss of Rs (2,044) crore in FY20. The cash flows from operating activities decreased from Rs 12,098 crore in FY20 to Rs 3,458 crore in FY21, which declined by 71 per cent. The company added approximately Coen ee ere os 12. DALALSTREET INVESTMENT JOURNAL | 02° 20 Recommendations EDELWEISS FINANCIAL SERVICES MAKING SOUND FINANCIAL SENSE PRICED SCRIP 1 YEAR INVESTMENT HORIZON m8 3 lakh customers in Q2FY22. Total income for the quarter ended September 2021 stood at almost Rs 1,821 crore. “Thats a growth of 11.5 per cent on QoQ basis but de-growth of 18 per cent on YoY basis. ‘The net profit number stood at Rs 29 crore, which increased by 613 per cent QoQ and a rise of 152 per cent YoY. The profits were driven by the strong. performance of aset and wealth ‘management segments. There has been significant growth in mutual fund! AUM and alternative asset management AUM. Seer ray Se 5285 aw Pronaes cond ers a ar Equity The total AUM has crossed the Rs 1 akh crore mark in Q2FY22. The company continues to invest in its insurance segment and the management expects increased profitability in the coming, quarters. In life insurance, the gross premiums registered a growth of 59 per cent and in general insurance it wit- nessed a rise of 52 per cent over the previous quarter. The credit business has witnessed good traction in the quarter, The disburse- ‘ments in retail have picked up and the company has aso started co-lending with banks. Also, the asset reconstruc- tion segment ofthe company, known as ARC, has had a robust quarter. The recovery-focused strategy in the business has made Edelweiss Financial Services a leader in the segment. The stock is trading near the low PE level of 1.2. "The stock has a price-to-book multiple of 1,07. The company has a ROE of 4.07 per cent and ROCE of 10.23 per cent, Going ahead, the company is looking forward to the demenger and listing of Edelweiss ‘Wealth Management, “The demerger is expected to unlock some value for its sharcholders. The ‘company is also focused on reducing its wholesale credit assets as ithas already bbrought down the assets from about Rs 10,695 crore in September 2020 t0 Rs 4,900 in September 2021. Improvement in reduction of wholesale credit assets is expected over the next two years as the pandemics impact subsides. This private player has a strong balance-sheet and has been increasing equity and liquidity by ensuring robust gover- nance. By virtue of all these factors, we recommend our reader investors to BUY the scrip.Technicals Equity EVIDENCE OF DISCOMFORT AT HIGHER LEVELS Itis better to wait for a clear signal to take positions either way he domestic equity market continued its positive move for the second week, The new week began with a gap up opening traded with a sense of nervousness. The RBI's neutral monetary policy built positive momentum after a sharp decline of two ‘weeks amid Omicron uncertainties and a subdued global market sentiment. ‘The benchmark index, Nifty, gained 3146 points or 1.83 per cent and settled at 17,511.3 during the previous week, “The broader market indices Nifty Mid-Cap 100 and Small-Cap 100 indices outperformed 3 per cent. 3.9 per cent, respectively ‘Technically, the Nifty has formed a bullish weekly bar by closing above the previous week's high. It retraced above the 38.2 per cent of the prior down ‘move. In an increased daily range and volatility it oscillated in 651.55 points range. Last week began with a strong bearish candle and later recovered 3.7 per cent in just three days. The weekly price structure is very bullish, but the daily chart contradicts the tw consecutive indecisive candles at the swing high. It formed the Dragontly Doji on Thursday, followed by an inside bar and a hanging man, After a decline of 9 per cent from the lifetime high, we can consider this 4 per centrally as a countertrendd as long as itis below the 61.8 per cent retracement level 16 DALAL STREET INVESTMENT JOURNAL | DO eas a “etion tobe nite’ Probable Trgets ‘Ting above 17.03 on wey csr Bs Asse rte meu eomema tiene 1776517906 Suaertrtemedomtem 17309, met 1.2000 ewe cat Eye 16799 (017,908, which isalso a downward channel’ resistance line. The index was sustaining above the 20 DMA for now. If the 20-day moving average enters the uptrend it would be a positive trend indication, Itis also above the 20-weekly moving average of 17.433. As long as the Nifty stays above this weekly average it will bea good sign for the market. The 50 DMA placed at 17,765 may act as the next resistance level, and itis in a downtrend, reclaimed above the 100 DMA after declining for the second time this month, The index has oscillated around this average for the last 11 trading sessions. All the distribution days expired, The three consecutive follow through days placed the Nifty ina comfortable place. Inthe current scenario, we need to watch the price behaviour. On a 75-minute chart, the Nifty moved ina very tight, range and it traded in Thursday's first two hours of range for 11 consecutive hours. After breaking out of this range at the Monday opening, it did not sustain and declined sharply with renewed profit booking. Pattern-wise, Nifty met 90 per cent of the head and shoulders pattern target of ‘hanger an rigs ree 16,700, Generally, after completing the pattern targets the price enters into a countertrend. This retracement should not exceed 61.8 per cent. In any case if the Nifiy retraces 17,908, which is 61.8 percent of the retracement level, it would reverse the intermediate downtrend into a decisive uptrend. The increased volatility in recent days is the inherent nature of the corrective phase. During this phase, the bounces or countertrends are used to sell ‘opportunities by the institutions. That is exactly what is happening with the FUls. The other characteristic of these corrective countertrends is that it consumes more time than declines. Since the October 19 top, the Nifiy fel bby 5.33 per cent in the first fall and 7.84 per cent in the second decline. These two declines happened in eight and nine sessions, But the rise of 3.3 per cent is in 10 sessions in the first countertrend and the current up move is already nine sessions old with a 4.18 per cent rise. The current countertrend is already nine days old. Generally, | these will be limited to not more than three weeks. As of the prior price, corrections are limited to two weeks. ‘The next week's price action may unveil the new down move. Market participants are hesitant to take aggressive positions as there is clear evidence of discomfort at higher levels. It is better to wait for a clear signal to take positions either way Higher leveraged positions are not advisable now. As long as the Nifty trades above 17,300 oF a prior day low, be with a positive bias. None of the sector indices, are ina place to lead the market. The relative rotation graphs show thatthe sectors in the leading quadrant have also lost their momentum. stainTechnicals ‘STOCK RECOMMENDATIONS ANANT RAJ LTD » BUY. CMP %79.15 BSE Code : 515055 | Target 1....%100 | Target 2..... 2124 | Stoploss....%68(CLS) Formerly known as Ananth Raj Industries, the company isa real estate developer and has the largest land bank. ‘The company is in the process of building an array of special economic zones (SEZs), T parks, hotels, and commercial complexes. Itis uniquely poised to leverage the existing and ensuing explosion in real estate development inthe National Capital Region constantly enhancing its land bank portfolio. The stock is trading a the previous pivots. Ithas formed a 10-week consolidation with 26.68 per cent depth. Itis trading above the key moving averages. It sabout 10 per cent above the 50 DMA and 24 per cent above the 200 DMA. ‘A massive volume was recorded in the last week. “The relative price strength is good at 70, and the Mansfield relative strength indicator ist 1.73 indicates the out-performance ‘compared to the broader market. The stock is trading above the VWAP and Anchored VWAP resistance. Elder impulse system and Pring's KST has given fresh buy signals. The weekly RSI took support atthe 50 zone and bounced into the strong bullish zone, The weekly MACD has also given a fresh buy signal. ADX (28.79) shows.a solid trend strength. In short, the stock is trading near the pivot and technically bullish. A move above & 81 is positive, and itcan test 8100, Maintain a stop loss at 268, Above %100, itcan test®124 in the medium to long term. CMP 398.75 %511 | Stoploss....%365 (CLS) Max Healtheare Institute is the second-largest hospital chain in . India. It operates 17 facilities and 3,400 beds. Almost 85 per cent of bed capacity is in metro cities, It has presence in NCR Delhi, Haryana, Punjab, Uttarakhand and Maharashtra, Max Healthcare aso ‘operates the home care and pathology businesses. iechnically, the stock has formed a 59 days’ cup pattern with a20 percent depth Itis {trading atthe pivot level All the short and long-term averages are in an uptrend, The RSI (69.14) isin a strong bullish zone, and it moved MAX HEALTHCARE INSTITUTE LTD .. BUY BSE Code : 543220 | Target 1 .....%440 | Target 2 above the prior swing highs. Today's higher volume indicates a stronger buyer interest. The +DMI isabove -DMI and ADX. An uptick in ADX is an improvement in the trend strength, The Elder impulse system and Pring's KST shows strong bullish signal, After listing, the present consolidation is longer and traded within the range. Itis also above the Anchored VWAP resistance. The stock also meets the CANSLIM characteristics of investing, One can buy this stock above Rs 403 with a stop loss of 8365, The short-term target is 8440, and the medium target is ® 511 TTRGEND: © FNIA™ Faponcnll Moving Average i MACD Noving Average Convergence Divergence W RMI Relative Momentum Indes 18 ROC- Rate of Change M RSI - Relative Strength Indes (Ching price af De 12021) ‘arr Abo ecrmndr obs onoctecnal partrsrdy hrdeertaltaswbmncordt corners Flore icp terre ome ee 29 2021 JaN02 29221 OALALSTRAETINVESTMENT JoURNAL 174 Investment Oppgrtunities PPA ech ei ScaC em Markets when in uptrend invite lot of momentum investors to participate in the rally. Buying stocks that are close to their respective 52-week highs is a one-way momentum that investors identify as investing opportunities. But does this strategy always work? How does one use the 52-week high data effectively? Yogesh Supekar discusses the pros and cons of investing in stocks at 52-week high levels. ately foreign to me, the top 20 —ALALSTREET INVESTMENT JOURNAL esuin