MC Inside Edge : Dr Copper shines bright for stock market bulls, Honey regains Midas touch in Manappuram, bad news for EVs good news for Castrol, bulls hedge bets with Century Ply

MC Inside Edge

MC Inside Edge : Know all the major deals and the inner goings-on from Dalal Street; what stocks veteran bulls are eyeing, what the bears are ganging up against

Well-oiled story

Castrol shares have caught the attention of some PMS fund managers and high networth individuals of late. The narrative around the stock has changed over the last three months ever since global news flow on electric vehicles has turned negative. For a company that primarily caters to the internal combustion engine (ICE) segment, a slower adoption of EV is good news. Bulls are pushing the story that EVs are turning out to be a high maintenance product contrary to earlier perception. But more importantly, the foreign parent’s holding at just 51 percent is a major source of comfort to bulls as it lowers the possibility of a promoter stake sale. MC Inside Edge

  • Dr. Copper: This is likely a reference to Copper metal prices. Since it’s shining bright for bulls (investors expecting rising prices), copper prices might be rising, which is typically seen as a positive indicator for the overall stock market.
  • Honey regains Midas touch in Manappuram: This could be referring to a turnaround in Manappuram’s gold loan business. “Honey” might symbolize the profits they generate, and “Midas touch” refers to King Midas who turned everything he touched into gold, implying a profitable period for Manappuram.
  • Bad news for EVs good news for Castrol: This suggests something negative might be impacting the Electric Vehicle (EV) sector, potentially leading to lower demand. Conversely, this could benefit Castrol, a major manufacturer of motor oil, as more people might rely on traditional gasoline vehicles.
  • Bulls hedge bets with Century Ply: “Bulls” again refers to investors expecting rising prices. Hedging bets means taking a secondary position to minimize risk. So, investors who are bullish might be investing in Century Ply, a company in the plywood industry, as a backup option. MC Inside Edge

It’s important to note that this is just an analysis based on the headline. To get the full picture, you’d need to refer to the full MC Inside Edge report. You can try searching for “MC Inside Edge” and the date (April 5, 2024) for a more detailed report on these specific news items. MC Inside Edge

Golden touch

Just when it seemed that the honey-tongued fund manager-turned-ultra HNI was losing control in the Manappuram stock, a sharp rise in gold prices has put him back in the game. Honey has been one of the biggest cheerleaders of the stock for a while, even as it has had a roller-coaster ride since pe

aking on November 2021. Rising gold prices spells good news for gold loan companies as their customers can borrow more funds against the same quantity of gold. RBI keeping a hawk’s eye on NBFCs in general is a bummer, but Manappuram bulls feel they have a free run for the time being as rival IIFL Finance has been restrained from handing out gold loans. MC Inside Edge

Crawling into the woodwork

A cartel of HNIs are learnt to be accumulating shares of Century Plyboards. One of the promoter group entities sold a million shares a week back. This was quietly mopped up without the buyers’ name(s) showing in the stock exchange disclosure. A few days back, nearly 2.3 million shares were traded on the NSE with a little over 2 million shares resulting in delivery. Things are not going too well for wood-based

home décor firms in general at the moment as analysts are still divided on which of the segments will see faster growth—medium density fibre board or good old plywood. Given that Century Ply has a presence in both segments, bulls of the stock already seem to have a readymade hedge built in. MC Inside Edge

Dr Hindustan Copper

Retail investors and high networth individuals suddenly

cannot get enough of Hindustan Copper. Massive buying in derivatives has pushed the stock into the NSE’s ban list. Strong production numbers for FY24 and copper prices at a 14-month high are fuelling a bullish mood. Last week’s derivatives positions showed higher concentration in terms of entities holding

more than 3 percent of the market wide position limit. The concentration coming down in this settlement cycle even as the stock in the ban period indicates that retail participation has increased. The narrative right now is that if the Adani and Birla groups are stepping up their investments in copper, it surely means better days ahead. But bulls could do well to look at the 20-year chart of the stock. Desp

ite the doubling of the stock in the last four months, the price is nowhere the peaks of 2007 and 2010. Also, annual revenues are not much higher than what they were in 2012. Copper prices have been fickle over the last couple of years with reports of the world-is-running-out-of copper soon narrative followed by reports of oh-there-is enough-copper. Getting the timing right in commodity stocks is always a tricky affair. MC Inside Edge

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