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Current gold price trend

In the early trade today gold prices remained rather steady discounting in the fact of the probable unwinding of the stimulus which shall weigh on gold prices.

“Gold is trading above what we deem as fair value at this moment, and I believe this premium is due to the market pricing inflation fears,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “With the Fed due to begin monetary normalization, I still believe gold will face more downward pressure in the coming year.”

Factors that may lend support to gold prices in the near term

Nonetheless, sentiment back home remains promising for gold given few of the factors such as

1. Postponement of the withdrawal by the Fed Reserve to begin tapering and calls on this shall be likely known sooner.

2. Prices have fallen substantially and hence providing an impetus to demand. Evident through gold imports in India gaining substantially month on month.

3. Rupee weakness has been another trigger.

4. Inflation-the global concern is also pushing investors’ to hedge their investments.

Experts suggest that the buying in gold shall provide support while that for silver there is seen uneven recovery. For the precious yellow metal, gold prices are said to hit Rs. 48200 per 10 gm by Diwali and one can initiate trade at Rs. 47300.

Subdued dollar has been lending support to the gold, but in the near term gold will also face some of the headwinds such as the rising US yield, which diminishes the appeal of the safe-haven gold and any monetary tightening steps by global central banks.

Gold price outlook for the last quarter of Cy 2021

Earlier Bank of America in August this year suggested that given the holding pattern in gold, it could get a push to $1900 per ounce level.”In its latest forecast published Thursday, Bank of America expects gold prices could push to $1,900 an ounce at the end of the year,” a Kitco News article noted. “However, it expects the average price to come in around $1,800 an ounce in the final three months of the year. The fourth quarter could be the highwater mark for the precious metal as the bank sees prices gold steady at around $1,800 an ounce through the first half of next year.”

Now in the current scenario, for the bull case to persist in gold, the XAU/USD needs to surpass 50-DMA at $1779. XAU is The ISO 4217 standard code for one troy ounce of gold, considered as a currency.”It remains to be seen if the yellow metal manages to extend the recent gains, as the rally in the global yields will likely continue amid hawkish expectations from the key central banks, including the Fed and the BoE.”

“The 14-day Relative Strength Index (RSI) is trading flattish above the midline, backing the renewed upside. However, the bear cross confirmed on the daily sticks on Tuesday warrants caution for gold bulls. The 100-DMA cut the 200-DMA from above flagging a bearish signal.”

“XAU/USD is likely to face resistance once again at the horizontal 50-DMA at $1779. A sustained move above the latter could call for a retest of the 100 and 200-DMAs confluence zone at $1794. A sustained break above the latter could expose the $1800 round number.”

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Section 80D deduction in respect of health insurance premiums

Apart from the above said, the best part is that the deduction is also available for purchasing health insurance for the assessee or his family, which includes spouse and dependent children, or any contribution made to the Central Government Health Scheme or any other scheme as may be notified by the Central Government. The following is a list of the deductions allowed under section 80D.

The total amount paid to purchase or maintain a health insurance policy for the assessee or his family, or any contribution made towards the Central Government Government Health Scheme or payment made for such other scheme as the Central Government may notify in this regard, or any payment made for a health check-up for the assessee or his family, should not surpass Rs 25,000.

The total amount paid to purchase or maintain insurance by an individual on behalf of his or her parents or any payment made towards a preventive health check-up should be up to Rs 25,000.

The total amount paid for medical expenses for himself or any member of his family should be up to Rs 50,000 in a financial year. The entire amount paid on account of medical expenses expended on the health of any of the assessee’s parents should be up to Rs 50,000 in any given financial year.

Payment mode and eligible individuals

Payment shall be made in any method, including cash, for any sum paid on account of a preventive health check-up or a medical insurance premium paid for self, spouse, children, or for dependent parents in any mode other than cash for deductions. If the assessee is a Hindu undivided family, the entire amount paid to effect or maintain insurance for any member of that Hindu undivided family should not surpass Rs 25,000 in total.

And the entire amount paid for medical expenses on behalf of any member of the Hindu undivided family should be up to Rs 50,000 in total to claim a deduction. In the case of senior citizens, the deduction limit allowed is Rs. 50,000. An assessee can claim a tax deduction of up to Rs 25,000 for purchasing insurance for himself, for his spouse, or dependent children.

For purchasing insurance for parents aged less than 60 years, a deduction is available of up to Rs 25,000, and for parents aged more than 60 years the deduction available is Rs 50,000 in a given financial year. Individuals, families, and parents over the age of 60 who pay a premium of Rs 50,000 for themselves, their families, and their children, and a premium of Rs 50,000 for their parents, are eligible for a total deduction of Rs 1 lakh.

How to claim an 80D deduction without paying a health insurance premium for your parents?

While we’re on the subject of how to claim an 80D deduction without paying a health insurance premium for your parents, the country’s largest lender State Bank of India (SBI) revealed today on Twitter that “Now save more! Avail 80D Deduction without paying Health Insurance premium for your parents. Simply log in to YONO & file your ITR with Tax2win for FREE.”

Individuals can file their Income Tax Return (ITR) with Tax2win on YONO and claim all 80D deductions without paying Health Insurance premiums for their parents. Apart from that, taxpayers can have eCA assistance for just Rs 199. By login into YONO SBI >> Shop & order >> Tax & Investment >> Tax2win, eligible individuals can claim their 80D deductions.

Ultratech Cement- Margins to sustain despite cost escalations

The consolidated EBITDA of UltraTech Cement (UTCEM) in Q2FY22 was Rs27.1 billion (flat YoY), which is in line with consensus projections.

ICICI Direct expects shares to rise from their current market price and has set a target price of Rs 8,880 for the stock.

Target and valuation

“We believe UTCEM with its large pan-India diversified market presence, premium brand positioning, and increased focus on cost efficiencies is better placed to sustain/improve margins in the medium term. We maintain BUY with a revised target price of Rs8,880/share (earlier: Rs8,600) based on 15x Sep’23E EV/E on quarterly rollover. Key risks: Lower demand/pricing,” the brokerage has said.

According to brokerage, volumes grew 6.5 percent year over year but were unchanged quarter over quarter at 20.11 million tonnes, reflecting a 73 percent utilization rate. EBITDA from India operations increased 2% YoY to Rs27.1 billion, with EBITDA/te falling 17% QoQ and 4% YoY to Rs1,321/te. The company is still concentrating on growing its blended cement market share. The cost of adding 19.5 million tonnes of capacity is projected to be Rs68 billion.

L&T Infotech- Consistently consistent!

Larsen & Toubro Infotech (LTI) wowed with solid (8% QoQ, CC) and broad-based growth – across verticals, geographies, and service lines – in a traditionally weak quarter.

ICICI Direct expects shares to rise from their current market price and has set a target price of Rs 7,050 for the stock.

Target and valuation

“If LTI is able to achieve such exit-rate in H2, revenue growth in FY23E too will remain robust (24% YoY, USD) even if demand moderates during FY23. Confident commentary and a stable margin outlook despite the impending cost pressures are encouraging. We upgrade our FY22E-FY24E EPS by up to 11% on back of the strong beat and solid outlook. LTI remains our top midcap BUY and we value it at ~40x Sep’23E EPS, the brokerage has said.

According to brokerage, offshore effort climbed 90 basis points QoQ to 83.6 percent, sustaining margins in a post-wage hike quarter. On the strength of the ‘Great Resignation’ theme playing out globally – across economies and industries – management anticipates the offshore effort share to remain elevated. This is also expected to be a major demand driver in the medium run. It’s commendable that you’ve added good clients to crucial buckets.

ACC- Improving margins to narrow valuation gap

ACC‘s Q3CY21 EBITDA of Rs7.1 billion (up 6% YoY) was in line with consensus expectations. Total cost/te grew 4.6 percent quarter over quarter (6.8% year over year), owing to increasing gasoline, packing materials, and maintenance costs.

ICICI Direct expects shares to rise from their current market price and has set a target price of Rs 2,710 for the stock.

Target and Valuation

“We believe ACC with its large pan-India diversified market presence, premium brand positioning and increased focus on cost efficiencies is better placed to sustain / improve margins in the medium term. We maintain BUY with revised target price of Rs2,710/share (earlier: Rs2,610) based on 11x Sep’23E EV/E on quarterly rollover. Key risks: Lower demand/prices,” the brokerage has said.

According to ICICI Direct, revenues increased 5% year on year to Rs36.5 billion, which was in line with our expectations. RMC revenues increased by 55 percent year on year to Rs3 billion, mainly to volume growth of 48 percent year on year, boosted by the expansion of the ECOPact concrete range. PAT grew by 24% YoY to Rs4.5 billion, supported by a lower tax rate of 26% vs. 33% YoY.

Disclaimer

The above 3 stocks to buy are picked from the report of ICICI Securities. Please note investing in stocks is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision made.