Gladiator Stocks: IndusInd Bank, VIP Industries - ICICI Direct
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We have covered IndusInd Bank and VIP Industries in this edition of Gladiator Stocks. Both companies have exhibited resilience in the face of recent corrective phase and elevated volatility in equities. At the same time, both are well placed for structural turnaround after significant price/time correction over past three years and provide attractive risk-reward setups over medium term.
The stock is in strong up trend forming higher peak and trough in the Monthly chart and has generated a bullish Flag breakout signalling a resumption of the primary up trend and offers fresh entry opportunity
We expect the stock to continue with its positive momentum and head towards our target of Rs. 1270 as it is the 80% retracement of the entire previous decline of CY 2020 (Rs. 1585-236)
Structurally, in the last five months the stock is exhibiting resilience with stronger rallies and shallow correction as highlighted in the adjacent chart.
Key point to highlight is that 52 weeks EMA which was acting as major hurdle in CY19 and CY20 has reversed its role and acting as support signalling positive trend
IndusInd Bank (IIB) has emerged as one of the fastest-growing private banks in India. Currently, the bank caters to the needs of both consumer and corporate customers. The bank has seen healthy 23% CAGR in its business (loans + deposits) over FY16-20 It has a robust technology platform supporting multi-channel delivery capabilities. IndusInd Bank has 5004 branches and outlets, and 2,036 ATMs spread pan-India as on December 2020
With CVs and other auto segment showing some pick-up as the economy unlocking has begun, we believe this would bodes well for IndusInd as it is among key players in the vehicle financing segment
With balance sheet realignment over, the management is geared to pedal growth ahead with focus on certain segments. Thus, we expect business momentum to pick from here on with operational parameters expected to show improvement
The share price of VIP Industries has shown resilience during recent market consolidation and currently logged a resolute breakout from long term falling trend line, indicating conclusion of multi-year corrective phase that augurs well for resumption of primary major uptrend
We expect the stock to accelerate upward momentum and gradually head towards Rs. 478 levels as it is confluence of the upper band of the rising channel (as shown in adjoining chart) coincided with 61.8% retracement of CY18-20 decline (Rs. 647 to 188) Rs. 472
Key point to highlight is that, entire up move since March 2020 low of Rs. 188 has been confined in a well-defined channelized move. In the process, stock has respected 10 weeks EMA on multiple occasions, signalling elevated buying demand
VIP Industries is one of Asia's leading seller/manufacturer of various types of luggage's, backpacks, and handbags. Luggage being the proxy play to travel and tourism industry was amongst the worst impacted sectors owing to pandemic. Gradual re-opening of economy and higher push towards domestic travel has perked up demand for luggage space. VIP Industries reported sharp recovery on a QoQ basis with sales increasing 126% to Rs. 232.6 crore in Q3FY21. Revenue recovery rate stood at 54% of pre-Covid levels
The company has been able to materially reduce operating overheads by 50% (employee and other expenses down 46% and 52% YoY, respectively). This led to VIP reporting positive EBITDA of Rs. 8.1 crore in Q3FY21 vs. EBITDA loss of Rs. 22.1 crore in Q2FY21. Also the company is net cash positive with Cash and debt worth Rs. 219 crore and Rs. 148 crore, respectively. The company is planning to be debt free by end of Q2FY22
Shares of INDUSIND BANK LTD. was last trading in BSE at Rs.1093 as compared to the previous close of Rs. 1100.05. The total number of shares traded during the day was 352932 in over 10541 trades.
The stock hit an intraday high of Rs. 1115.95 and intraday low of 1069.75. The net turnover during the day was Rs. 386276327.
Shares of V.I.P.INDUSTRIES LTD. was last trading in BSE at Rs.411 as compared to the previous close of Rs. 408.95. The total number of shares traded during the day was 72973 in over 2560 trades.
The stock hit an intraday high of Rs. 421.95 and intraday low of 406.45. The net turnover during the day was Rs. 30141733.
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