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 EVs is good news. Bulls are pushing the story that EVs are turning out to be a high-maintenance product contrary to earlier perceptions. 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.

Golden touch

Just when it seemed that the honey-tongued fund manager-turned-ultra HNI was losing control of the Manappuram stock, a sharp rise in gold prices 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 peaking in November 2021. Rising gold prices spell 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.

Crawling into the woodwork

A cartel of HNIs is learned 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 fiberboard 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.

Dr. Hindustan Copper

Retail investors and high-net-worth 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. Despite the doubling of the stock in the last four months, the price is nowhere near 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.