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ET Intelligence Group: The stock of Kaynes Technology India, an electronics manufacturing company, has gained 26% in the past two trading sessions boosted by robust revenue growth in the March quarter and an upbeat margin outlook. The printed circuit board assembly (PCBA) supplier to leading automakers and healthcare companies has guided for revenue growth of 60%, which was 10-15% above analysts' expectations, and a margin expansion of 100 basis points for the current year. If it meets the guidance, it would be the fourth year in a row when the company would deliver more than 50% revenue growth.Mysuru-based Kaynes Technology's revenue grew by 75% year-on-year to ₹637 crore in the March quarter which helped the full-year revenue to grow by 60% to ₹1,804 crore. It was the second quarter in a row for revenue growth that stood at or above 75% led by the industrial segment where revenue rose nearly four times to ₹352 crore. The industrial segment accounts for around 55% of the company's revenue and fetches a high margin. As a result, the company's operating margin is 200-400 basis points better than its peers. Its margin expanded by 120 basis points sequentially to 14.9% in the March quarter.110285550Incremental revenues from smart meters and advanced computing segments are expected to keep the momentum high for the company's top line. These segments are likely to add ₹300 crore to the top line in FY25. The company's order backlog increased by nearly 50% to ₹4,115 crore at the end of March 2024. The average order inflow per month rose to ₹321 crore in the March quarter, nearly two-fold higher than the corresponding quarter of the previous year. The average order backlog is now equivalent to 25 months of revenue going by the past fiscal year's revenue.The company's plan to build an outsourced semiconductor assembly and testing project is facing delays due to pending government approvals. It is expected to get the final nod after the general elections. This would further enhance revenue visibility over the long term as Kaynes plans to reach $1 billion in revenue by FY28.The company's working capital efficiency has improved as reflected in a 30-day reduction in the cash conversion cycle in FY24 driven by a 23-day fall in the inventory days. The company, despite having a higher margin than its peers, struggled to generate operating cash flow due to high working capital requirements in the past. With an improving cash conversion rate, the operating cash flow is expected to get a boost. The cash flow from operations turned positive to ₹70 crore in FY24 from the previous year when it reported a negative cash flow of ₹41 crore.At Friday's closing price of ₹3,245, the stock was traded at 72 times one-year forward earnings compared with the long-term average of 59 times. The premium over the long-term average valuation reflects the expectation of a sustained growth momentum for Kaynes Technology.

The immediate support for Nifty is around 22,300, followed by 22,100-22,000; and any dips should be seen as a buying opportunity as the index could attempt to rally towards new record highs soon, according to technical analysts. Stocks such as M&M, TVS Motors, Coal India, Grasim, ACC, Gail, Concor, National Aluminium, MTAR Tech, APL Apollo, Exide, Aurobindo Pharma and HEG could witness strong buying interest, analysts said.SUDEEP SHAH HEAD - TECHNICAL & DERIVATIVE RESEARCH, SBI SECURITIESWhere is Nifty headed this week? Amid high volatility last week, indices retested the support zone at 21,825, which was closer to the previous three swing lows of February, March and April 2024, and after that, witnessed a strong rebound leading to a close above 22,500 with a gain of 2%. Chart patterns suggest that a 20-day exponential moving average of 22,200-22,250 will act as crucial support going forward, and a possibility of consolidation between the 22,200 and 22,800 zones looks more likely. Above 22,800, a fresh move up to 23,100-23,150 can be witnessed. Weekly options data coupled with India VIX sustaining at higher levels suggests possible consolidation for Nifty within the 22,200-22,800 range for the week. What should Investors do? While the short-term bias in Nifty is positive, we feel stock-specific action could continue in quality mid-caps and small-caps. We expect large-cap names from select private as well as power, capital goods, metals, defence, CPSE, as well auto to outperform going ahead. Positive trade setup is visible in select large-cap names such as M&M, TVS Motors, Coal India, Grasim, and ACC. Among the mid-caps, stocks like Gail, Concor, National Aluminium, Exide, BDL and RVNL could continue to witness strong buying interest.SAMEET CHAVAN HEAD RESEARCH - TECHNICAL AND DERIVATIVES, ANGEL ONEWhere is Nifty headed this week? Nifty levitated above its significant EMAs with strong participation from broader markets, especially the Midcap index, which registered its lifetime high. However, Bank Nifty still lacks conviction and its participation is crucial in strengthening the momentum. The 22,350-22,300 level is likely to cushion any Nifty intra-week blips, followed by the sacrosanct support of 22,200 in the short term. On the higher end, 22,600- 22,650 remains a sturdy resistance before Nifty could claim its lifetime high of 22,800. What should investors do? As far as stock specific ideas are concerned, we like APL Apollo for this week. With Friday’s strong upsurge, the stock has broken out from the congestion zone. In addition, the volume of activity has been decent for the last 2-3 sessions. We recommend buying for a target of Rs 1,822 with a stop loss at Rs 1,602. We expect some catch-up move to happen in MTAR Tech. Technically, the stock seems to have formed a strong base around Rs 1,600 odd levels; and on Friday, we witnessed the first sign of trend reversal. We recommend buying on a decline at around Rs 2,000–1,980 for a target of Rs 2,200. The stop loss needs to be placed at Rs 1,880. RUCHIT JAIN LEAD RESEARCH, 5PAISA.COMWhere is Nifty headed this week? Nifty formed a support base recently, around 21,800, and has resumed its uptrend as dips are getting bought, and the market breadth remains strong. The RSI on the daily and the weekly charts are positive, hence, the momentum remains positive. FIIs still have significant short positions in the index futures as their ‘Long Short Ratio’ is around 28%. If the uptrend continues, then they could look to cover these shorts, which would add fuel to the rally. INDIA VIX continues to be at higher levels owing to the event (elections), but markets will factor in the event outcome soon, and the volatility will start cooling off. What Should Investors Do? The immediate support for Nifty is placed around 22,300, followed by 22,100-22,000 and any dips should be seen as a buying opportunity. The index could attempt to rally towards new record highs soon. Stocks such as Aurobindo Pharma and HEG are hinting at a continuation of uptrend, while IEX (above Rs 162) and Shyam Metal (above Rs 650) are on the verge of breakouts. Traders can look to buy these names with a stop loss placed below their 20-DEMA for potential 5-8 % returns in the near term.

The Competition Commission of India (CCI) is seeking to raise its manpower, possibly after the general election, for better regulation of both traditional and new and emerging areas of the economy, a person close to the development said.The regulator is firming up a proposal to enhance its strength to strictly enforce regulations under the amended competition law of 2023, which has significantly widened the scope for oversight. On top of this, it is also planning to bolster its oversight of the digital market by adding quality manpower should the government come out with a new digital competition law and give it the oversight responsibility, said the person.The emergence of complex areas such as digital technology and new ones like artificial intelligence have made it incumbent on the regulator to have adequate manpower – in terms of both quality and quantity – for effective oversight.The regulator currently has 15 officers in its two anti-trust divisions, 10 in the combination wing, six each in the legal and research and trend analysis divisions, five each in economics and advocacy divisions and four in international cooperation division, among others, according to its website.Leniency-plus frameworkThe regulator has received a “good response” to its leniency-plus and the new settlement and commitment regimes rolled out in recent months, said the person quoted above.The so-called lesser-penalty plus or, more commonly, the leniency-plus regime, allows companies that are under probe for cartelisation to report other cartels and get their own penalties reduced. The regulations were notified in February. Good response to the framework means companies are coming forward with information to bust cartels.This was launched to bust cartels and ensure fair competition in the economy.Similarly, the settlement and commitment frameworks and regulations enable companies charged with anti-competitive conduct, including Big Tech, to approach the regulator to resolve the matter expeditiously, experts have said.The commitment mechanism typically requires the applicant to propose commitments to address the anti-competitive concerns of the regulator.M&A regulationsThe authorities are also planning to introduce the merger control regulations, in sync with the amended competition Act, after the general election is over in early June, said the person quoted above.

The Department of Telecommunications (DoT) has put in additional know-your-customer (KYC) conditions for getting business connections, earlier called bulk conditions, in cases where the end users are not identifiable. The move is aimed to stop online fraud and meet specific needs of the industry.In such a scenario, only telecom operators can issue connections after taking an undertaking from the subscribing entity that the SIMs would be used for specific purposes like testing etc. The retailers won’t be allowed to issue such connections as KYC of every number won’t be done in such cases.The telcos can also issue a maximum of upto 100 connections for any given entity at a given time and such connections should not be used for machine-to-machine communications.In August last year, DoT had made KYC mandatory for every SIM, even in case of business connections. But the industry was facing issues with this provision as in certain instances, the bulk connections have not identifiable end users, so the KYC can’t be done.“In those scenarios where end-users are not identifiable in a business connection such as SIMs obtained for R&D & testing activities for a specified purpose, the requirement of end-user KYC is optional,” DoT said in its directions issued to telecom operators on Monday.However, for this category of customers, mobile connections shall be issued by the licensee's employees only, the DoT added.Putting in additional safeguards, the DoT said before issuing such connections, the telco shall obtain an undertaking from the subscribing entity detailing the use case scenarios having no end users and the telco should satisfy itself that the use cases are realistic.“During physical verification of the entity's address and premises before issuing such connections, the licensee shall verify that the proposed use case scenarios of the subscribing entity are realistic,” the DoT said.Further, the telco should monitor use of such connections by the subscribing entities.The telcos should inform in writing to the subscribing entity that the responsibility of bonafide usage of such business connections lies with the subscribing entity. “If it comes into the notice of licensee, licensor, or designated LEAs about misuse of these connections by the subscribing entities, such business connections shall be disconnected immediately without prejudice to any other action that may be taken under the law,” the DoT added.The telcos are required to provide such connections with limited call/SMS/data facility with a definite validity period of maximum one year at a time as per the use case scenarios of subscribing entities.During the renewal of validity, the telco should satisfy itself by usage patterns from the past as well as proposed usage for the upcoming year.Further, it is also clarified that the license conditions related to ‘bulk connections’, and ‘bulk users’ in the existing license agreements, shall also be applicable mutatis mutandis for ‘business connections’ and ‘business users’.Resale of SIMs by business connections subscribing entities is not permitted and the telcos shall ensure that subscribing entities obtain mobile connections for their own use and shall not obtain such connections for third parties.