Markets closed slightly lower compared to yesterday’s closing point.
The fall could be due to the fall in most banking stocks.
Healthcare stocks and pharma stocks fell the most today. IT stocks and FMCG stocks rose the most.
Global markets: US markets fell on Monday. Most Asian markets fell on Tuesday. Most European markets traded in red (as of 6 pm IST).
News
India’s gross GST collections rose 14.80% year-on-year to Rs 1.99 lakh crore in August compared to Rs 1.74 lakh crore a year ago.
The government reduced the stock holding limit for sugar dealers to 2,000 quintals from 4,000 quintals, effective from 15 September to 30 November. This was done to prevent hoarding and speculative trading of sugar.
The government approved an 11 km bypass line worth Rs 272 crore between Adra and Joychadipahar, West Bengal to boost freight capacity.
The government approved Rs 233 crore for electronic interlocking at 21 stations in Samastipur Division, Bihar to strengthen signalling infrastructure.
IPO Corner
ESDS Software Solutions IPO was subscribed 135.88 times on day 3. Retail subscription: 39.64 times. The IPO closed for subscription.
Purple Style Labs IPO was subscribed 0.24 times on day 2. Retail subscription: 0.93 times. The IPO will close for subscription on 2 September.
Symbiotec Pharmalab listed flat at its issue price of Rs 988 on NSE and closed 10.73% higher.
Skyways Air Services listed at Rs 124 on NSE, a discount of 10.14% to its issue price and closed 9.14% lower.
Stock Updates
UltraTech Cement: started commercial production at its new wires and cables plant in Bharuch, Gujarat. The plant has an installed capacity of 10.98 lakh km of house wires and light-duty cables.
ITC: subsidiary, ITC Infotech, will acquire a 22.1% promoter stake in Happiest Minds for about Rs 1,330 crore, after which Happiest Minds will merge into ITC Infotech. ITC Infotech will then be listed on BSE and NSE, with ITC expected to own about 73.4% of the combined company.
HAL: announced a final dividend of Rs 10 per share.
Tata Steel: completed the previously announced sale of Jamshedpur Football and Sporting Pvt Ltd to Churchill Brothers Sports Club Pvt Ltd.
Adani Green: operationalised a 139 MW solar power project at Khavda, Gujarat, taking its total operational renewable energy capacity to 20,280.8 MW.
Lodha Developers: acquired the remaining 20% stake in Bellissimo Infratech Pvt Ltd for Rs 73.52 crore, making it a wholly owned subsidiary.
Tata Consumer: acquired another 5% stake in Capital Foods, increasing its holding from 75% to 80%.
Mankind Pharma: completed the sale of its entire stake in Broadway Hospitality Services Pvt Ltd to AKRK Projects LLP and its partners. The sale was originally announced on 11 July.
Aurobindo Pharma: subsidiary Apitoria Pharma incorporated Avogent Lifesciences Pvt Ltd with initial capital of Rs 5 crore for pharmaceutical manufacturing. Another subsidiary, Lannett, launched generic versions of GSK’s Advair Diskus in the US for asthma and COPD.
Word of the Day
Outlay
It is the amount of money a company spends upfront to buy, acquire, or invest.
This means that the company is committing to spend that amount towards a certain objective.
Example: company ABC will build 1 lakh square ft worth of data centre space using an outlay of Rs 3,000 cr.
6 Day Course
Theme: quarterly reports
Day 2: Tuesday
Yesterday, we spoke about turnaround/revival strategy.
Today, let’s talk about momentum.
The momentum strategy believes that good stocks will continue to climb. And bad stocks will continue to perform poorly.
So they buy stocks that do well, continue to hold them as long as they do well, and sell them off when they start doing poorly.
This method completely ignored the underlying business, fundamentals, and all other details about the company. It relies only on the price of the stock.
The exact method of implementing this varies from investor to investor.
The period after which you review performance and buy/sell, the number of stocks you hold at a time, etc vary based on finer details of the strategy.
But the rough idea still is the same.
Momentum investing can involve buying/selling more often than other strategies even if investing for the long term.
Also, note that momentum is not only a long-term strategy. Many traders also use it for short term trading.
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Featured Question
Q. “What is PEG ratio,how it calculate”
PEG ratio stands for Price-to-Earnings Growth Ratio.
Many investors use PE ratio (Price-to-Earnings Ratio) to determine if a stock is fairly priced.
They compare the price of one stock to its earnings per share.
PE Ratio = Price of One Share / Earnings Per Share (EPS)
The criticism of this method is that it fails to recognise fast-growing companies. Such companies attract more investment despite being priced higher — because they are growing fast enough.
PE ratio fails to account for such companies.
PEG ratio aims to solve for that by dividing the PE ratio by the earnings growth of the company.
PEG Ratio = PE Ratio / Annual Growth of EPS (%)
Usually, a number close to 1 is deemed ideal, below it is considered undervalued, and above it is considered overvalued.
These are not strict rules and investors tend to treat them solely as a guide.
Like other metrics, PEG ratio is not a fool proof method. It has its flaws too.
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