April 23rd 2024 Stock Market analysis

Sensex and Nifty Extend Winning Streak: Bullish Trend Bolstered by Easing Volatility

Sensex and Nifty Extend Gains for Third Consecutive Day as West Asia Tensions Ease and Volatility Declines. Market Optimism Prevails Amidst Positive Sector Performance."

On April 23, both benchmark indices, the Sensex and the Nifty, continued their upward trajectory, with the Sensex rising by 89.83 points (0.12 %) to 73,738.45 and the Nifty gaining 31.60 points (0.14 %) to reach 22,368. Market sentiment favoured gainers, with 2,151 shares advancing, 1,353 declining, and 89 remaining unchanged.

As the Lok Sabha elections and corporate earnings season unfold, analysts anticipate the bullish momentum to persist. Nifty Realty emerged as the top sectoral gainer, surging over 2 percent, fueled by strong performances from DLF, Macrotech Developers, and Godrej Properties. Telecom stocks also performed well, with the BSE telecom index soaring over 4 percent, driven by gains in Tejas Networks, Vodafone Idea, and Avantel. Tejas Networks particularly stood out, hitting a 20 percent upper circuit following robust fourth-quarter results.

However, regulatory concerns surrounding Sun Pharma's Dadra facility led to weakness in Sun Pharma shares, resulting in a 0.9 percent decline in the Nifty Pharma index amidst an otherwise bullish market.

Regarding investment strategy, analysts at ICICI Securities recommend adopting a stock-specific approach as the corporate earnings season progresses. They reaffirm a structurally positive stance, noting that historical trends indicate markets typically resume their primary uptrend once concerns surrounding such events subside.

Technical Outlook on 24th April

Nifty is likely to find immediate support around 22320, followed by 22272, with resistances at 22417 and 22465. Currently, Nifty is showing signs of mixed trading sentiment. As for Bank Nifty, immediate support is anticipated around 47770, then 47570, while resistances are seen at 48171 and 48371. Bank Nifty is currently poised for mild profit booking.‍

Derivative Outlook on 24th April‍

PCR Analysis: Nifty PCR-OI has decreased with nifty has positive which shows CALL BUYING.

Open Interest Analysis: Nifty future April contract OI has increased with slight negative close which shows Short Buildup.

Cost of Carry Analysis: Nifty April month contract has ended in low compare with MAY contract and negative range compare with previous session which indicates a recover from lower levels

India VIX Analysis: India VIX has closed at 10.2 vs 12.70 (DoD) basis which shows decrease in volatility.

‍Tejas Networks Skyrockets 20% to Reach 52-Week High Following Outstanding Q4 Performance; Emkay Raises Target‍

Shares of Tejas Networks surged by 20 percent on April 23, reaching a 52-week high of Rs 1,088.25 on the NSE, driven by the company's impressive quarterly earnings report for the period ending March 2024, which surpassed market expectations in terms of both margins and revenue.

At 10:11 am, Tejas Networks' shares hit the 20 percent upper circuit, with pending buy orders of 25,679 shares and no sellers available. Over the past year, the stock has surged approximately 65 percent, outperforming the benchmark Nifty 50, which has risen by 26 percent during the same period.

The company recorded a consolidated net profit of Rs 146.78 crore for the quarter, a significant improvement compared to a loss of Rs 11.47 crore in the corresponding period last year, driven primarily by the execution of BSNL’s 4G project. Tejas Networks witnessed growth across all product segments, particularly in the wireless business.

Benefiting from government initiatives such as local manufacturing incentives and the PLI scheme, along with significant investments in projects like BSNL, BharatNet, and railways, Tejas Networks also secured new clients through referrals from TCom and TCS. Additionally, the global shift away from Chinese telecom equipment further contributed to the company's robust performance in Q4 FY24.

Emkay Global analysts anticipate Tejas Networks' FY25 revenue to quadruple compared to FY24, driven by BSNL and BharatNet execution. As a result of the revenue beat, Emkay revised its revenue forecast for FY25 and FY26 upwards by 6 and 7 percent, respectively, while also increasing the EBITDA margin estimate by 150-10 bps based on Q4 margin performance.

Tejas Networks disclosed receiving a Rs 32.66 crore incentive under the PLI scheme for telecom and networking products in FY23. The company reported a 669 percent year-on-year surge in EBITDA to Rs 248 crore in the January-March quarter, with an order book of Rs 8,221 crore by the end of Q4.

Following the outstanding performance in Q4, Emkay reiterated its 'buy' rating on Tejas Networks, raising the target price to Rs 1,100 per share from Rs 975 previously.