Introduction

Avanti Feeds Ltd. is a manufacturer of shrimp feed, which engages in the production and exports of shrimp. It operates through the following segments: Shrimp Feed, Shrimp Processing, Hatchery, and Power. The Shrimp Feed segment engages in manufacturing and marketing shrimp feed to the farmers, which is used in Aqua culture to grow shrimp. The Shrimp Processing segment involves purchasing shrimp from the farmers and are further processed and exported to various countries. The Power segment focuses on power generated from windmills.

Observation

Stock shows an open marubozu candlestick pattern on 4hr that represent a significant bullish moment coming ahead. if you see on day chart it is getting strong. stock breakout its last kink on day chart which is 734 levels it can retrace till my given levels which is shown on the chart after retracement level 1 and retracement level 2 stock can go as high as 875 level which is my first Target.

Relative valuation is a method of valuing a business by comparing it to similar companies in the same industry. This is typically done using valuation multiples like Price-to-Earnings (P/E), Price-to-Book (P/B), or Enterprise Value-to-EBITDA (EV/EBITDA). 

Example:

Suppose you want to value Company X, a retail business. You look at similar retail companies in the market and see they are trading at an average P/E ratio of 15.

If Company X’s earnings per share (EPS) is ₹20, using the relative valuation method, you can estimate the value of Company X as: 

Value of Company X = P/E Ratio × EPS

= 15 × ₹20

= ₹300 per share

In this example, if Company X's stock is trading at less than ₹300, it might be considered undervalued compared to its peers. Conversely, if it's trading above ₹300, it might be overvalued. This approach allows for quick comparisons but doesn't consider the specific risks or growth prospects of the company in question.

Undervalued Stock: Consider buying, as it may offer growth potential when the market corrects the price.

Overvalued Stock: Be cautious about buying. It may not offer as much upside and could drop in price if the market adjusts.

Let's touch fundamentals

1. Indian automaker Mahindra & Mahindra and China's Shaanxi Automobile Group have agreed to set up a $3 billion joint venture to build a car manufacturing plant in India and are awaiting New Delhi's approval, sources told Reuters. A majority stake in the proposed manufacturing venture will be owned by Mahindra, two sources with direct knowledge of the matter told Reuters, and is proposed to be set up in Prime Minister Narendra Modi's home state of Gujarat. Shares of Mahindra rose as much as 3.1% before settling 2.5% higher at 2,749.15 rupees on the Bombay Stock Exchange on Friday. The proposal includes building an export-oriented, integrated manufacture hub for assembled cars as well as engines and car batteries, the sources said. Indian government approval has been necessary for any Chinese investment into the country since 2020, when New Delhi tightened its restrictions on Chinese investment after deadly border clashes between the two neighbours.

2. Eicher Motors' consolidated attributable net profit in the fiscal first quarter ended June 30 rose to 11.01 billion Indian rupees from 9.18 billion rupees a year ago. The automobile and agri machinery manufacturer's earnings per share climbed to 40.11 rupees from 33.50 rupees, according to a Thursday filing to the stock exchanges. Revenue from operations in fiscal Q increased to 43.93 billion rupees from 39.86 billion rupees a year earlier.

3. Tata Chemicals, on Friday, received board approval to raise up to 17 billion Indian rupees through the issue of non-convertible debentures on a private placement basis. The company plans to issue 70,000 listed, unsecured, rated, redeemable, taxable, non-cumulative, non-convertible debentures of face value of 100,000 rupees each, according to a Friday filing to the stock exchanges.

Educational content

Mon Aug 12, 2024