§ Orient Refractories Q1FY18 Result Update; Strong performance on export front; capex to accelerate growth; BUY; Target: Rs183
At Rs1.41bn, Orient Refractories’ Q1FY18 revenue was marginally below our estimate of Rs1.49bn due to GST transition. Export revenue jumped 20% yoy (Contr. 22% to revenue v/s 20% in Q1FY17) while Domestic business delivered 4% yoy growth. Read more…
Key News Updates
§ OMCs – There was a news flash that the government may ask state-run OMCs to further absorb increase in oil price. However, it was a false alarm and the Oil Ministry has clarified that it won’t interfere in daily pricing. We maintain our positive stance on OMCs. Link
§ Aurobindo Pharma (ARBP) – USDFA issues 2 observations to ARBPs Unit VI in Hyderabad, which was inspected from 28th Aug ’17 to 1st Sept ’17. On the face of it, the 483 seems benign and we believe that Unit VI is not crucial or critical. Link
§ Jubilant Foodworks (JUBI) – News reports suggest that insects were found Dominos oregano sachets. However, the company clarified that all its food ingredients are safe for consumption and it maintains stringent hygiene and quality standards. Link
§ GAIL – GAIL swapped 60% of US LNG volumes. It has also taken more steps to cut costs. We see tying up of 60% volumes as a substantial improvement since it was a major concern on future growth. Research Comment
§ Reliance Communications (RCOM) - Ericsson India filed an insolvency case against RCOM. Ericsson India is an operational creditor of RCOM and has been fighting to retrieve its dues. Link
Technical View
Market Outlook
In line with expectation, the Nifty inched up till the mentioned resistance of 10130. We had highlighted “immediate resistance is seen at 10030 level - above which it can surge higher up to 10090 and 10130 levels.” This has appeared on the charts. Formation of Spinning Top suggests indecisiveness among traders. For showing further momentum on the upside, the Nifty has to cross its immediate hurdle of 10130-10150 zone decisively - above which it can extend up to 10200. Immediate support is seen at 10060 - below which it can slip up to 10030 and 9990 levels.
§ Support: 10060/ 10030
§ Resistance: 10130/10150
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