Stock market analysis and stories by Abhiraj Panchal

Abhiraj Panchal

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Abhiraj Panchal is a data analyst at Trendlyne. He has completed a Master in Economics from Christ (Deemed to be University) in 2021. He has freelanced as a tutor for subjects like Economics, Maths, Accounts, among others.

Articles by Abhiraj Panchal

Vijay Kishanlal Kedia

05 Jun 2024

Portfolio X-Ray: Kedia keeps his SMILE intact

By Abhiraj Panchal

Vijay Kishanlal Kedia, the Mumbai-based investor well-known both for his stock picks and his singing, began investing in the stock market at the age of 19. He started Kedia Securities in 1992.

Kedia's portfolio is among the most followed in the Indian market, due to his reputation as a "market master" and the historical returns his portfolio has delivered over the years. Kedia prefers companies with good management and holds his position for a long period. He uses what he calls the ‘SMILE approach’ in investment – ‘small in size, medium in experience, large in aspiration, and extra-large in market potential’.

Kedia’s net worth currently stands at Rs 1,546.3 crore, and he publicly holds stakes in 16 stocks. (You can now invest in a shadow basket based on Vijay Kedia’s portfolio, available onStarfolio, which is updated and rebalanced as per the superstar portfolio).

Tejas Networks, Neuland Labs among top performers in Kedia’s portfolio

The best-performing companies in Kedia’s portfolio include Tejas Networks, Neuland Laboratories, Elecon Engineering, Sudarshan Chemical, and Affordable Robotic & Automation. Patel Engineering, a more recent buy, has also surged.

Telecom services company Tejas Networks has been an outsize gainer for Kedia, surging by 2345.4% since the time of purchase in Q1FY21. The investor holds a 1.9% stake in the company.

Kedia bought stakes in Neuland Laboratories and Elecon Engineering in Q3FY20 and Q1FY22, respectively. The share prices of the pharma and industrial machinery companies have risen by 1346.1% and 729.7%, respectively since his purchase. The investor booked profits on specialty specialty chemicals company Sudarshan Chemical (bought in Q3FY16), and industrial machinery firm Affordable Robotic & Automation (bought in Q2FY19). The prices of these companies rose by 604.7% and 514.8% respectively till Q4FY24, since his time of purchase.

Patel Engineering (construction & engineering firm), Vaibhav Global (textiles & apparels firm), and Talbros Automotive (auto parts & equipment company) are among other stocks in Kedia’s portfolio where he has booked profits since purchasing them, with share prices increasing by 315.4%, 337.4%, and 261.8%, respectively.

Atul Auto, Siyaram Silk, Reliance Infra form the portfolio bleed

Vijay Kedia’s portfolio includes many high-performing stocks, but also has its share of underperformers. His most recent buy Reliance Infrastructure (bought in Q4FY24) turned out to be the worst performer. Siyaram Silk Mills (bought in Q3FY23) is another double-digit loser. The share prices of these – electric utilities and textiles companies – have fallen by 36.5% and 16.2% since the time of purchase. Kedia cut a minor stake in Siyaram (0.1%) during Q4, taking his holding in the company to 1%.

Meanwhile, 2/3 wheeler maker Atul Auto witnessed a modest fall compared to the others, down 1.4% since he bought it in Q3FY16. He has consistently held a 20.9% stake in the company since Q2FY24.

Talbros Auto outperforms its industry, Innovators Facade underperforms

Kedia's portfolio includes several companies that have outperformed their industries over the past year. Top outperformers include Global Vectra Helicorp, Talbros Automotive, and Neuland Labs, outperforming the airlines, auto parts & equipment, and pharma industries by 111.8%, 80.3%, and 60.4%, respectively.

This is followed by specialty chemicals firm Sudarshan Chemical, and construction & engineering companies Om Infra and Patel Engineering, which also surged in the past year. These companies outperformed their respective industries by 51.7%, 46.9%, and 26.7%.

Meanwhile, Reliance Infrastructure, Affordable Robotic, Siyaram Silk, and Innovators Facade significantly underperformed the electric utilities, industrial machinery, textiles, and construction & engineering industries by 139.2%, 89.5%, 73.2%, and 58.1%, respectively, in the past year.

Telecom services and automobiles & auto components are among Kedia’s preferred sectors

Vijay Kedia has holdings in companies across different sectors. His most preferred sector currently is telecom services with an investment aggregating to Rs 366 crore. This is followed by automobiles & auto components,general industrials, and textiles apparels & accessories sectors, with holdings aggregating to Rs 335 crore, Rs 230.9 crore, and Rs 133 crore, respectively.

Kedia prefers telecom, automobile and general industrial sectors

Meanwhile, Kedia’s least preferred sectors are transportation,cement and construction, and commercial services & supplies, with investments of Rs 7.5 crore, Rs 63.5 crore, and Rs 66 crore, respectively.

Kedia adds three new companies to his portfolio in FY24

The marquee investor made a few additions to his portfolio in FY24. These are Global Vectra Helicorp (airlines company),Om Infra (construction and engineering firm), and Reliance Infrastructure (electric utilities company). Kedia currently holds 2.9%, 2.5%, and 1% stakes respectively, in these companies.

New additions to the portfolio in FY24

Most companies in Kedia’s portfolio were profitable last quarter

Most companies in Kedia’s portfolio that announced Q4FY24 results recorded profits in the quarter. Among them, eight companies reported YoY growth in net profit, while seven saw a smaller profit compared to the previous year’s quarter.Auto parts & equipment provider Talbros Automotive Components profit grew 194.4% YoY to Rs 49.8 crore while its revenue improved 10.5%.Speciality chemical company Sudarshan Chemical Industries profit increased by 78.2% YoY to Rs 58 crore during the quarter. Patel Engineering saw a 65.5% YoY growth in profit to 28.3% YoY to Rs 140.3 crore.

Most Kedia holdings record revenue growth in Q4FY24

Repro India (publishing company),Global Vectra Helicorp (airlines company), and Vaibhav Global (other apparels & accessories firm) reported a fall in net profit despite a rise a revenue. Neuland Laboratories (Pharmaceuticals manufacturer), Siyaram Silk Mills (textiles company), Om Infra (construction & engineering company) and Precision Camshafts ( auto parts and equipment manufacturer) reported revenue declines as well.

Neuland Labs, Sudarshan Chemicals, Siyaram Silk have high EPS TTM

Among the companies in the portfolio,Neuland Laboratorires (pharmaceuticals company) had the highest basic EPS TTM of Rs 233.9, followed by Sudarshan Chemical Industries (Rs 51.6),Siyaram Silk Mills (Rs 40.7),Elecon Engineering (Rs 31.7) and Talbros Automotive Components (Rs 17.8).

Around 50% of the companies in the ace investor’s portfolio trade in the PE Neutral Zone, 42.9% in the Sell Zone, and only 7.1% in the Buy Zone.

Repro India, Talbros Automotive Components, Precision Camshafts, and Patel Engineering are trading in the Neutral Zone, while Sudarshan Chemical Industries is in the PE Buy Zone.

Few stocks in Kedia's portfolio trade in PE Buy Zone, many in Sell Zone due to high valuations

Meanwhile, Global Vectra Helicorp, Tejas Networks, Vaibhav Global, and Elecon Engineering are among the companies currently trading in the PE Sell Zone.

How volatile is Kedia’s portfolio?

Over a year, the beta for all stocks in Kedia’s portfolio has been below 1 (signifying lower volatility). For the past quarter, only 1 stock has a beta higher than 1.

Overall, Kedia prefers stocks that are not as volatile as the benchmark index in the long run. He also prefers buying stocks with strong valuations. Kedia’s portfolio doesn’t see frequent changes. He holds onto stocks for long periods – once bought, he doesn’t let go easily. To quote the marquee investor, while luck plays a big part in stock market investments, knowledge, courage, and patience are the cornerstones.

The Baseline

03 Jun 2024

5 stocks to buy from analysts this week - June 3, 2024

By Abhiraj Panchal

1. J Kumar Infraprojects:

Axis Direct maintains a 'Buy' rating on this construction and engineering company with a target price of Rs 845, indicating a potential upside of 9%. The company’s revenue grew 25.4% YoY to Rs 1,433.7 crore in Q4FY24, and its net profit rose 34.9% YoY to Rs 99.7 crore.

Analyst Uttam K Srimal highlights the company’s order book of Rs 25,711 crore, which is 5X its FY24 revenue. He believes that its order inflow of Rs 11,810 crore will ensure revenue visibility for three to four years across diverse sectors and geographies.

The analyst emphasizes the company's bidding pipeline of Rs 20,000 crore, which targets metros, elevated corridors, road tunnels, and buildings. Srimal is upbeat about the company’s aim to diversify its project profile by bidding for irrigation projects as well. He says, “J Kumar Infraprojects remains one of the most established EPC contractors and will continue to benefit from its healthy order book position, strong execution capabilities, and healthy financial position.” He expects a revenue CAGR of 16.9% in FY25-26, buoyed by order inflows and expanded operational efficiencies in infrastructure projects.

2. NTPC:

ICICI Direct maintains a ‘Buy’ call on this electric utilities company with a target price of Rs 455, indicating an upside of 16.1%. The company’s net profit rose by 26.9% YoY to Rs 6,168.7 crore in Q4FY24, while its revenue increased 9.1% YoY.

Analyst Chirag Shah expects the company’s growth momentum to sustain as he says, “NTPC has been the only company that has added coal-based capacities over the past five years and reached an installed base of 73,000 MW.” He expects an 11% power generation growth, after the commissioning of the under-construction 9,300 MW of coal-based plants in FY26.

Shah is optimistic about NTPC’s aggressive approach to expanding its renewable energy portfolio, including green hydrogen. The company says that it is working to ensure that 45-50% of its capacity comes from non-fossil fuels by 2030. Shah believes that the company will also see growth in the conventional thermal portfolio. He estimates profit to grow at a 26% CAGR over FY25-26.

3. ITD Cementation India:

Edelweiss retains a ‘Buy’ call on this construction and engineering company with a target price of Rs 475. This indicates an upside of 12.7%. ITD’s net profit improved by 136.9% YoY to Rs 89.5 crore (12.5% higher than the brokerage's estimate) in Q4FY24, while its revenue grew 39.1% YoY (10% higher than the brokerage's estimate).

Analyst Mehul Mehta is optimistic about the company’s focus on the expansion of its bridges, marine and tunnel business overseas. It aims to balance its order inflow in the marine segment between overseas and domestic markets.

The analyst believes that the management’s focus on bidding for higher average ticket size orders across its projects should accelerate revenue growth and profitability for the company.

The company’s management says that the bid pipeline stood at Rs 28,000 crore at the beginning of FY25. According to Mehta, the current order book translates into revenue visibility of 2.6x of the FY24 revenue.

4. Ahluwalia Contracts (India):

IDBI Capital gives a ‘Buy’ call to this construction and engineering company with a target price of Rs 1,412, indicating an upside of 15.8%. In Q4FY24, the company’s profit increased 176.9% YoY to Rs 199.8 crore, while revenue grew 34.9% YoY. However, its EBITDA margin fell by 3.8 percentage points to 9%. Analysts Vishal Periwal and Shubham Shelar say, “The company’s EBITDA came in lower than our estimates as it was impacted by an increase in sub-contract expenses, due to a shortage of labour.”

Periwal and Shelar are upbeat about Ahluwalia Contracts’ order book, which currently stands at Rs 11,200 crore as it won orders worth Rs 5,500 crore in FY24. The management has guided to close FY25 with an order inflow of more than Rs 7,000 crore. The analysts expect revenue and profit to grow at a CAGR of 44.7% and 18.8%, respectively over FY25-26.

The company's current order book is divided in a ratio of 65:35 between the government and private sectors. The analysts are optimistic about the company’s plan to further improve private orders and maintain the ratio at 50:50.

5. ITC:

KR Choksey maintains a ‘Buy’ rating on this food and tobacco products company with a target price of Rs 517, indicating a potential upside of 20.1%. In Q4FY24, the company’s revenue increased 10.3% YoY to Rs 20,130.3 crore, while its net profit fell 1.1% YoY to Rs 5,120.6 crore. Analyst Unnati Jadhav notes that the decline in net profit was due to higher tax expenses and depreciation costs. She says, “ITC reported an in-line performance in terms of overall earnings.”

Jadhav says that the growth was led by improved volumes from cigarettes and strong performance in its hotel business. However, she is cautious as the paperboard and agribusiness continued to slacken during the quarter.

Going forward, the analyst believes that the FMCG business will see stable growth due to the company’s focus on new and innovative launches and will see further improvement as consumption sees an uptick. She also expects the pipeline of upcoming properties in the hotel segment to drive growth. Jadhav sees ITC’s profit and revenue growing at a CAGR of 8.6% and 7.3%, respectively, over FY25-26.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

20 May 2024

Five high-upside stocks from analysts this week - May 20, 2024

By Abhiraj Panchal

Today we take a look at five stock picks from analysts with high upside potential.

1. DLF:

Edelweiss maintains a ‘Buy’ rating on this realty developer with a target price of Rs 1,081, indicating a potential upside of 27%. In Q4FY24, the company reported revenue growth of 47% YoY to Rs 2,316.7 crore, with net profit rising 61.5% YoY to Rs 920.7 crore. Analysts Amit Agarwal and Rishith Shah say, “We are upbeat on the company’s growth story given its robust launch pipeline, brand recall, favourable dynamics in its home turf, improving annuity income, and market consolidation.” DLF’s recent luxury projects in North India have sold out within a few days.

Analysts are optimistic about the company’s steady presales of Rs 14,777 crore, down 2% YoY primarily due to a higher base in the previous year. New launches of around 6 million square feet (msf) constituted 82% of presales, while the remaining 18% came from existing projects.

Agarwal and Shah are positive about the company’s outlook as the management forecasted a launch pipeline of Rs 36,000 crore for FY25. They also forecast a revenue CAGR of 11% for FY25-26 owing to the launch pipeline of Rs 94,000 crore with an additional land bank of 132 msf, for which development plans are yet to be finalised.

2. Safari Industries (India):

IDBI Capital maintains a ‘Buy’ call on this luggage maker with a target price of Rs 2,535, indicating an upside of 20%. The company’s net profit grew by 13.4% YoY to Rs 43.2 crore in Q4FY24, while its revenue improved by 21.3% YoY to Rs 370.5 crore.

Analyst Ajit Sahu says, “Safari Industries Q4FY24 sales were in line with our expectations.” He believes that the growth occurred due to improvements in tourism activities. He also notes, “Over the past two years, Safari has gained market share from its peers”. The analyst states that Safari Industries' sales grew by 21% YoY outperforming VIP Industries’ sales growth of 15% YoY in FY24.

Sahu is optimistic about the company as it sets up a greenfield manufacturing unit in Jaipur. He believes that future growth will come from its initiative to sell premium products like Urban Jungle (the premium luggage collection). He applauds the management’s ability to outperform industry sales growth and also expand operating margins to higher levels. He estimates profit and revenue to grow at a 26.5% and 19% CAGR, respectively, over FY25-26.

3. CreditAccess Grameen:

KR Choksey maintains its ‘Buy’ call on this finance company with a target price of Rs 1,850, indicating an upside of 29.9%. In Q4FY24, the company’s net profit grew by 33.9% YoY to Rs 397.1 crore (1.1% above the brokerage’s estimates), while total revenue improved by 36.9% YoY to Rs 1,459.1 crore. Analyst Unnati Jadhav says, “CreditAccess Grameen reported stellar operating performance during the quarter, but saw deterioration in asset quality led by higher slippages.”

The analyst is optimistic about the company's expansion strategy and expects it to be key to business momentum going forward. The company added 194 branches during FY24, bringing its total infrastructure strength to 1,967 branches. The analyst also says that the NBFC succeeded in controlling its borrowing costs through a cost-effective borrowing mix, and expects it to remain stable and bring predictability to its overall margins in FY25.

Jadhav continues to be positive about CreditAccess Grameen due to its leadership, improving geographical footprint, superior return ratios, consistent operating performance, and industry tailwinds.

4. Sansera Engineering:

Axis Direct maintains a ‘Buy’ rating on this auto parts and equipment manufacturer with a target price of Rs 1,270. This indicates a potential upside of 19.8%. In Q4FY24, the firm reported revenue growth of 19.7% YoY to Rs 745.6 crore, with net profit rising 31.1% YoY to Rs 46.1 crore.

Analysts Shridhar Kallani and Aditya Welekar note, “For FY24, the share of auto components has reduced to 75%, while non-auto & tech and aerospace segment has increased to 20% and 5%, respectively.”

Kallani and Welekar are upbeat on the company’s capex plan of Rs 400 crore in FY25 and Rs 350 crore in FY26, mainly towards electric vehicle components and non-auto products. They expect the company to post a CAGR of around 20.8% for EBITDA and 29.4% for net profit over FY25-26. They attribute this growth to the sales mix tilting towards non-auto components, growth in the export business, and recovery in its its Sweden operations led by improved operational efficiency.

5. NCC:

ICICI Direct maintains its ‘Buy’ call on this construction and engineering company with a target price of Rs 320. This indicates a potential upside of 15.2%. In Q4FY24, the firm’s net profit increased by 25.3% YoY to Rs 239.2 crore, while revenue grew by 31.1% YoY.

Analysts Bhupendra Tiwary and Hammaad Ahmed Ulde are optimistic about NCC’s order book. Its order book stands at Rs 57,536 crore, largely driven by Rs 18,439 crore worth of orders secured in FY24, a growth of 37% YoY. The management has guided for an order book inflow of Rs 20,000-22,000 crore, with ordering likely to be impacted owing to elections in the first half. Considering the order book, the analysts expect a revenue CAGR of 15% over FY25-26. With healthy execution, the analysts estimate EBITDA margins at 10% and 10.5% in FY25 and FY26, respectively, and expect a 26% earnings CAGR over FY25-26.

The analysts say, “NCC is a key beneficiary of the tailwinds in the buildings, roads, water, mining and electrical segments. Given strong order book visibility and improving balance sheet strength, it is poised for healthy growth ahead.”

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

10 May 2024

Which stocks did superstar investors sell in Q4FY24?

By Abhiraj Panchal

Tracking superstar investors’ portfolio changes provides investors with useful clues about market trends and potential investment strategies. Their stock and sector choices tell us where they are optimistic or cautious, helping other investors decide on their approaches.

Some superstars see their net worth fall after Q4FY24

Previously, we looked at the key superstar buys in Q4FY24. Now, let's analyse their sells. Most superstars went on a selling spree this quarter as markets grew volatile. The chart shows their biggest sells during this period.

Biggest sells by superstars in Q4FY24

RARE Enterprises adjusts holdings in key sectors

Rakesh Jhunjhunwala’s portfolio, currently managed by Rekha Jhunjhunwala and investment firm RARE Enterprises, reduced stakes in multiple companies in Q4FY24. The portfolio’s net worth fell 9.5% to Rs 46,822.89 crore after Q4FY24.

RARE Enterprises cuts stakes in banking and finance stocks

In the January-March quarter, the late big bull’s portfolio cut a 0.9% stake in capital markets company Geojit Financial Services. Its share price rose by 139.1% in the past year, underperforming its industry by 31.6 percentage points. RARE now holds a 7.3% stake in the firm. RARE also reduced stakes in bank stocks — Canara Bank, Federal Bank, and Karur Vysya Bank by 0.6%, 0.4%, and 0.3% respectively.

RARE Enterprises cut a 0.6% stake each in construction company NCC, edible oils maker Agro Tech Foods, and healthcare facilities firm Fortis Healthcare in Q4FY24, reducing its holding to 12.5%, 7.5%, and 4.1% respectively. It also sold a 0.5% stake in internet software company Nazara Technologies, and 0.3% in cars & utility vehicles maker Tata Motors.

During Q4, Jhunjhunwala’s portfolio also trimmed its stake in Tata Communications by 0.3%. It now holds a 1.6% stake in the telecom services company. It cut a 0.2% stake in pharmaceuticals company Wockhardt, taking the holding to 1.9%. It also reduced its holding in other industrial goods firm Raghav Productivity Enhancers to 5.1% during the quarter.

Ashish Kacholia cuts stakes in four small-cap companies to below 1%

Ashish Kacholia’s net worth rose by 2.4% to Rs 2,991 crore after Q4FY24. He reduced his stakes in Likhitha Infrastructure to below 1% from 1.8% in Q3FY24. The construction & engineering company’s share price rose by 20.4% in the past year underperforming its industry by 59.6 percentage points.

In addition, Kacholia cut his stake in La Opala RG (houseware company) and Best Agrolife (agrochemicals company) to below 1% from previous stakes of 1.7% and 1.4% in Q3. La Opala RG and Best Agrolife fell by 14.8% and 46% over the past year. Kacholia also cut stake in packaged foods manufacturer ADF Foods to below 1%.

Kacholia cuts stakes in four companies to below 1%

The ace investor also sold 0.9% of his stake in Shankara Building Products, leaving him with a 1.1% holding in the iron and steel company. He reduced his stake in Garware Hi-Tech Films, a containers and packaging company, to 3.4%. He also sold a 0.4% stake in Repro India (publishing) and a 0.3% stake in Genesys International Corp (IT consulting and software), now holding 2.8% and 1.3%.

Kacholia sold a 0.2% stake each in Universal Autofoundry (auto parts manufacturer), Ador Welding (industrial goods), Xpro India (containers and packaging company), and Safari Industries (apparel and accessories). He now holds 8.3%, 4.2%, 3.7%, and 1.9%, respectively, in them. He reduced his stakes in apparel and accessories company Vaibhav Global to 1.1%, specialty retail company Aditya Vision to 1.9%, and education company NIIT Learning Systems to 2.1%.

In H2FY24, Kacholia sold a 2.8% stake in Virtuoso Optoelectronics. He now holds 2.6% in the consumer durables firm.

Sunil Singhania’s Abakkus Fund goes on a selling spree in Q4

Sunil Singhania’s Abakkus Fund saw its net worth fall -5.3% to Rs 2,680.9 crore after Q4FY24. The fund reduced its stake in Dreamfolks Services to below 1% during the quarter, after holding a 1.5% stake in the travel support services company in Q3FY24. Its share price rose by 20.9% over the past year underperforming its industry by 49.4 percentage points. It also cut its stake in AGI Greenpac and CMS Info Systems to below 1%. It held 1.1% in the containers and packaging firm and 1% in the financial services company in Q3FY24. Their prices increased by 43.8% and 37.7% over the past year.

Singhania trims stakes three companies to below 1%

Singhania’s fund also trimmed its stake in Siyaram Silk Mills by 0.2%, now holding 1.6% of the textile company. It sold a 0.14% stake in Route Mobile and now holds 2.44%in the internet software and services company.

Abakkus cut 0.1% each in Carysil (household products manufacturer), Mastek (IT consulting firm), and DCM Shriram Industries (sugar producer). It now holds 5.8%, 3.1%, and 2.9%, respectively. It also reduced its stake in Sarda Energy & Minerals and Ion Exchange (India). It now holds 2.1% in the iron and steel products manufacturer and 2% in the utilities company.

Vijay Kedia cuts stakes in four companies

Vijay Kedia’s net worth has risen 30.5% to Rs 1,622 crore. In Q4, he slashed his stake in Neuland Laboratories by 0.2% and now holds 1.1% in the pharma company. The company's share price rose by 262.9% in the past year outperforming its industry by 199.5 percentage points. He also sold a 0.13% stake in Elecon Engineering during Q4FY24. He now holds a 1.34% stake in the industrial machinery company.

Kedia sells stakes in Neuland Labs, Om Infra, Elecon Engineering

Kedia also cut his stake in Om Infra to 2.5% by selling a 0.1% stake in the construction and engineering company. He sold a 0.1% stake in Siyaram Silk Mills and now holds 1% in the textiles firm.

Dolly Khanna cuts stakes in two companies to below 1%

Dolly Khanna reduced her holdings in multiple companies in Q4FY24, including two where her stakes fell below 1%. Her net worth has increased by 10.7% to Rs 543.1 crore since the end of Q4FY24. During the quarter, she reduced her stakes in KCP (a cement & cement products manufacturer) and Simran Farms to below 1%, from the 1.1% and 1% held in Q3. This marks the fifth consecutive quarter where she has reduced her stake in the packaged foods company. Over the past year, KCP has risen by 56.6%, underperforming its industry by 24.3 percentage points.

Dolly Khanna pares stakes in multiple companies

The ace investor cut a 1.1% stake in Pondy Oxides & Chemicals and now holds 1.3% in the non-ferrous metals company. She had a 2.4% stake in Q3. Khanna also trimmed her stake in plastic products company Prakash Pipes by 0.27% to take her holding to 2.87%. She sold a 0.2% stake in Chennai Petroleum Corp and currently holds 1.1% in the refineries/ petro-products company.

The investor also reduced her holding in textiles company Deepak Spinners to 1.77% during the quarter.

Mohnish Pabrai reduces stakes in three mid-cap companies

Mohnish Pabrai’s net worth fell by 54.5% to Rs 483.1 crore after Q4FY24. During the quarter, he reduced his holding in Rain Industries to below 1%, from 4.4% in Q3. The petrochemical company’s share price has risen by 6.3% over the past year but underperformed its industry by 46.3 percentage points.

Pabrai cuts stakes in three companies

Pabrai cut his stake in Sunteck Realty by 4.5% during the quarter. He now holds a 2.2% stake in the realty company. He also reduced his stake in Edelweiss Financial Services to 5.1% by selling a 2.6% stake in the financial services provider.

Porinju Veliyath cuts stakes in three companies

Porinju V Veliyath’s net worth increased by 17.3% to Rs 224.2 crore after Q4FY24. During the quarter, he reduced his stakes in three companies, with holdings in one dropping below 1%.

Porinju cuts stakes in Arrow Greentech, Duroply, RPSG Ventures

Porinju also cut his stake in Arrow Greentech to below 1%. Porinju had added the company to his portfolio in Q2FY24, buying 1.1%. The company’s share price has risen by 93.5% over the past year outperforming its industry by 22 percentage points.

The ace investor also sold a 0.91% stake in forest products company Duroply Industries, taking his holding to 5.54%. During the quarter, he cut a 0.2% stake in RPSG Ventures and now holds 1.4% in the IT consulting & software company.

The Baseline

07 May 2024

5 stocks to buy from analysts this week - May 7, 2024

By Abhiraj Panchal

1. UltraTech Cement:

ICICI Direct maintains a ‘Buy’ rating on this cement manufacturer with a target price of Rs 12,430. This indicates a potential upside of 27.1%. In Q4FY24, the company’s revenue went up by 9.4% YoY to Rs 20,554.6 crore, and its net profit increased 35.6% YoY to Rs 2,258.1 crore. This surge in profit was on the back of improved EBITDA per ton at Rs 1,089 in FY24 from Rs 1,005 a year ago. The company reported volume growth of 13% YoY in FY24.

Analysts Vijay Goel and Ankit Shah expect EBITDA per ton to further improve to Rs 1,255 by FY26. They expect further cost reduction of Rs 200-300 per ton leading to improvement in EBITDA over the next three years. They attribute this development to be led by higher usage of low-cost energy from renewable sources and optimising freight costs. They forecast that volumes will grow from 119.1 million tonnes per annum (mtpa) in FY24 to 144 mtpa by FY26 due to capacity expansion of 21.5 mtpa. Analyst Goel and Shah say, “UltraTech is strongly placed to benefit from its aggressive capacity addition plans and its focus on further reducing its cost structure.” Goel and Shah also estimate revenue to grow at 10.8% CAGR over the same period.

2. Maruti Suzuki India:

KR Choksey maintains its ‘Buy’ call on this car manufacturer with a target price of Rs 14,975, indicating an upside of 20.4%. In Q4FY24, Maruti Suzuki reported a 48% YoY growth in its net profit to Rs 3,952.3 crore, while its revenue grew by 20.9% YoY. It sold 5.8 lakh units during the quarter, up by 13.4% YoY. Analyst Unnati Jadhav says, “Maruti Suzuki’s volume growth in terms of domestic business and exports was better than the industry’s.”

Jadhav says that the sequential decline in average realizations led to slightly lower revenue, 1.5% lower than estimated, while sequential gross margin pressure led to lower-than-estimated EBITDA and margin.

However, the analyst continues to be positive about the firm’s growth due to its capex plans in the medium term, focus on high-demand spaces (SUVs, CNG, and hybrids) along with penetration in electric vehicles, and strength in export markets. She expects margins to be largely steady on the back of better realization and cost reduction. She estimates a revenue and profit CAGR of 12.6% each over FY25-FY26.

3. Ajanta Pharma:

BOB Capital Markets maintains a ‘Buy’ call on this pharma company with a target price of Rs 2,585, indicating an upside of 7.1%. In Q4FY24, the company’s profit rose 65.8% YoY to Rs 202.7 crore while revenue increased by 18.6% YoY. The analyst Saad Shaikh says that the growth was led by a reduction in API prices, logistics costs and tailwinds from increased product shortages in the US.

Shaikh is optimistic about the firm because it has 22 products awaiting US FDA approval, and expects to launch six to eight products in FY25. He believes this will lead to an overall growth of 5-8% in the US business. In India, the analyst expects the company to maintain a 200-300 basis points outperformance over the Indian pharma market for FY25.

Although Ajanta’s management expects logistics costs to escalate due to the ongoing Red Sea crisis, Shaikh says that the EBITDA margin should hold at its current level in FY25. He anticipates Ajanta Pharma achieving a 13% revenue CAGR over FY25-FY26, driven by its continued outperformance over the Indian Pharma Market (IPM), recovery in the US, strong growth in recent quarters, and a good outlook due to the launch of new products.

4. KPIT Technologies:

Axis Direct maintains a ‘Buy’ rating on this IT consulting firm with a target price of Rs 1,750. This indicates a potential upside of 15.6%. In Q4FY24, the company’s revenue increased 30.4% YoY to Rs 1,334.4 crore, while its net profit rose by 47.3% YoY to Rs 164.4 crore. Analyst Omkar Tanksale says, “Strong revenue growth momentum will continue backed by robust deal wins and strong addition of capabilities.”

Tanksale is upbeat as the company outperformed its estimates on all fronts. He attributes this quarter’s 10 bps rise in profit margin to strong volume growth and a favourable currency mix. He is also positive about future revenue visibility as the company has multiple long-term contracts with the world’s leading automotive players. Tanksale expects KPIT to be one of the fastest-growing companies in Indian IT services moving forward.

5. Poonawalla Fincorp:

Motilal Oswal reiterates a ‘Buy’ call on this finance company with a target price of Rs 570. This indicates an upside of 19.2%. In Q4FY24, the company’s net profit rose 83.6% YoY to Rs 331.7 crore (beating the brokerage’s estimate) and its net interest income increased by 48% YoY (in-line with the brokerage’s estimates).

Analysts Abhijit Tibrewal, Gautam Rawtani and Nitin Aggarwal say, “Poonawalla Fincorp is committed to boosting its productivity through digitization and is preparing for growth by introducing new products such as co-branded credit cards (to be launched in the next 2-3 weeks).” The analysts say that the company has laid down a robust foundation for sustainable profitability through initiatives that will lead to lower operating costs, higher business volumes, and robust asset quality.

The analysts estimate AUM and profit growth of 37% and 39% CAGR over FY25-FY26. They believe that the segments focused by the firm, namely consumer and small business finance, have a huge market opportunity and expect the firm to maintain its NIM of more than 9% over FY25-FY26.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

23 Apr 2024

5 stocks to buy from analysts this week - April 23, 2024

By Abhiraj Panchal

1. Amara Raja Energy & Mobility:

ICICI Direct reaffirms this auto parts and equipment company as a ‘Buy’ with a target price of Rs 1,200. This indicates an upside of 15.2%. Analyst Shashank Kanodia is bullish about the company’s strong presence in the automotive sector, which contributes 70% to its sales. He is also optimistic as the company has consistently reported better operating margins than its peers.

Kanodia is positive about the revenue visibility in the new energy space as Amara Raja entered an MoU with the government of Telangana to set up a Li-Ion Battery Gigafactory. He expects the facility to have a cell manufacturing capacity of up to 16 GWh & assembly capacity of up to 5 GWh. This venture involves an estimated investment of Rs 9,500 crore over the next decade. Kanodia is also upbeat as the company has an indirect presence in the new energy segment through its minority stake in Log9 Materials.

2. Indian Hotels Company:

Sharekhan maintains its ‘Buy’ rating on this hotel company with a target price of Rs 679, indicating an upside of 16%. The analysts point to the room demand being higher compared to supply, thanks to rising demand from domestic travellers and the growth of new tourism segments. Adding to this, the analysts note that demand is continuing to improve with India’s rising prominence in the global tourism market, along with strong support from the government in the form of improved infrastructure and favourable policies.

With good macroeconomic conditions, analysts anticipate average room rentals to grow by 10-12% in FY25. They also note a correlation between airline passenger movement and room demand and expect an increase in room demand alongside rising airline passenger numbers. Sharekhan analysts are positive about the company's plans to accelerate its hotel expansion, targeting the opening of 25 new hotels annually compared to the previous target of 15-20 hotels. In the past quarter, the company’s share price has risen by 22.2% underperforming its industry by 5.6 percentage points.

3. LT Foods:

Hem Securities initiates a ‘Buy’ call on this agricultural products manufacturer with a target price of Rs 237. This indicates an upside of 13.1%. Analyst Aarushi Lunia says, “We are positive on the future growth prospects of the company on the back of its robust distribution network, strong brand equity and endeavour to enrich its product portfolio by expanding into newer categories.”

Lunia points to LT Foods' expansion in Europe, Mauritius, Denmark, and Slovenia as a green flag. She also believes that the company’s strategic partnership with Saudi Agricultural and Livestock Investment will give boost its future growth plans in the Middle East and Saudi Arabia region, and fortify its position as one of the leading players.

The analyst notes that the company aims to enhance its product mix with a higher focus on margin-accretive premium basmati export business and plans to scale up new launches in the value-added segment. LT Foods is targeting a five-year revenue CAGR of 10-12%, driven by a focus on expanding its product portfolio, investments in branding, and strengthening its distribution network.

4. Equitas Small Finance Bank:

Motilal Oswal reiterates its ‘Buy’ call on this bank with a target price of Rs 125, indicating an upside of 27%. Analysts Nitin Aggarwal, Dixit Sankharva and Disha Singhal say, “Equitas Small Finance Bank has been delivering consistent performance, with steady improvements in both asset quality and return ratios. It ispoised to report steady operating performance, backed by robust loan growth, healthy margins and controlled credit costs.”

The bank has been investing in its business by adding new branches and building digital infrastructure and capabilities, which they believe has kept its operating expenses elevated. They expect the bank to continue investing in its tech capabilities.

Analysts note that the bank has been focusing on building a diversified loan book, with securities-based lending, vehicle finance, microfinance loans and housing finance being the key business segments. It is focused on growing the unsecured personal loan and credit card segments, and targeting the prime segment to improve its loan mix. The analysts estimate a 22% CAGR in loans and a 26% CAGR in deposits over FY24-26.

5. HDFC Life Insurance:

Bob Capital Markets maintains its ‘Buy’ call on this life insurance provider but reduces its target price to Rs 775 from Rs 850, indicating an upside of 27.9%. In FY24, the company’s net profit increased by 3.1% YoY to Rs 1,258.2 crore, while revenue grew by 5.5% YoY.

The company’s value of new business (VNB) fell by 5% YoY to Rs 3,500 crore, with margins decreasing by 130 basis points to 26.3%. Analyst Mohit Mangal notes that the margin decline is due to a one-time fixed cost of Rs 1,000 crore and a higher share of unit-linked insurance plans (ULIPs). He expects the company to report a VNB margin of 26.5% in FY25 and estimates a 17% VNB CAGR over FY24-FY26. The analyst adds, “HDFC Life’s market share (individual APE) decreased to 15.4% YoY at the end of FY24, indicating the company's growth struggles.”

However, Mangal maintains his positive stance on HDFC Life Insurance on the back of its innovative launches, balanced product mix, and increasing demand from tier-2 and tier-3 markets.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

Rakesh Jhunjhunwala and Associates

22 Apr 2024

Jhunjhunwala’s portfolio cuts stake in Geojit Financial Services

By Abhiraj Panchal

The selling spree by superstar investors continues with multiple superstars reducing their stakes in various companies. Rakesh Jhunjhunwala’s portfolio sold a part of its stake in capital markets company Geojit Financial Services. His portfolio is currently handled by his wife Rekha Jhunjhunwala and RARE Enterprises.

RARE Enterprises, Kacholia reduce stake in multiple companies in Q4FY24

With these new changes, Jhunjhunwala’s portfolio publicly holds 26 stocks with a net worth of over Rs 48,772.8 crore. It sold a 0.9% stake and now holds a 7.3% in Geojit Financial Services. The capital markets company rose by 84.3% in the past year but underperformed its industry by 90 percentage points. It has a medium rank on Trendlyne’s checklist, scoring 34.8%. It has medium financial strength, with a Durability score of 55 and a moderately bullish Momentum score of 67.

During Q4FY24, RARE Enterprises reduced its stake in Nazara Technologies by 0.5%. It now holds an 8.5% stake in the internet software company. In the past year, the share price of Nazara Technologies rose only by 12.2% while its industry’s average rose by 131.9%.

The firm also sold a 0.3% stake in Karur Vysya Bank, bringing its holding to 4.3%. The bank ranks high on Trendlyne’s checklist, scoring 61.5%. It has high financial strength, with a Durability score of 65, and an affordable Valuation score of 69. RARE also cut a 0.2% stake in Wockhardt and now holds 1.9%.

New additions by superstars

In Q4FY24, Ashish Kacholia, who currently has 50 stocks in his portfolio, bought Walchandnagar Industries, purchasing a 3.2% stake in the industrial machinery company. The stock ranks medium on Trendlyne’s checklist, scoring 34.8%. During the same period, Vijay Kedia bought a 1% stake in Reliance Infrastructure. This electric utilities company ranks low on Trendlyne’s checklist with a score of 27.3%.

Kacholia, Kedia and Porinju add new stocks to their portfolio

Porinju Veliyath added Mitsu Chem Plast to his portfolio, buying a 1.7% stake in the containers and packaging company.

Recent stake changes by other superstars

Ashish Kacholia sold a 0.9% stake in Shankara Building Products in Q4FY24. He now holds a 1.1% stake in the iron and steel company. Its share price rose by 12.3% in the past year underperforming its industry by 58.4 percentage points. The ace investor also cut a 0.4% stake in Repro India taking his holdings down to 2.8% in the publishing company. Kacholia also reduced a 0.2% stake in each, Xpro India (containers and packaging company) and Ador Welding (industrial goods manufacturer).

Dolly Khannasold a 1.1% stake in Pondy Oxides & Chemicals, and now holds a 1.3% stake. The non-ferrous metals company ranks high on Trendlyne’s checklist, scoring 61.1%. Its share price grew by 116% in the past year, outperforming its industry by 18.9 percentage points. The marquee investor also sold a 0.1% stake in Control Print. She now holds a 1.2% stake in the computer hardware company.

Porinju V Veliyath sold a 0.2% stake in RPSG Venture. He now holds a 1.4% stake in the IT consulting and software company.

Ashish Kacholia

15 Apr 2024

Ashish Kacholia adds a newly listed company to his portfolio in Q4

By Abhiraj Panchal

Ashish Kacholia has added Megatherm Induction to his portfolio in Q4FY24. He bought a 1.7% stake in the industrial machinery company.

Kacholia, Kedia make multiple portfolio changes in Q4FY24

With these new changes, Ashish Kacholia publicly holds 48 stocks with a net worth of over Rs 2,997.4 crore. Megatherm Induction listed on the stock exchange on February 5, 2024. The share price has increased by 166.7% from its listing price.

The ace investor also bought a 0.4% stake in Basilic Fly Studio during the quarter. He now holds a 2.8% stake in the movies and entertainment company. The firm listed on the stock exchange on September 11, 2023, and Kacholia added it to his portfolio in Q3FY24 via the purchase of a 2.4% stake. Since listing, its share price has grown by 280.4%.

During Q4FY24, Kacholia sold a 0.2% stake each in Safari Industries (India) and Universal Autofoundry. He now holds 1.9% in the apparel and accessories manufacturer and 8.3% in the auto parts manufacturer. Safari Industries ranks high on Trendlyne’s checklist, scoring 69.6%. It has high financial strength, with a Durability score of 65, but an expensive Valuation score. Safari Industries’ share price rose by 78.6% in the past year outperforming its industry, while Universal Autofoundry’s price rose 11.3%, underperforming its industry by 45 percentage points.

Kacholia also sold a 0.1% stake in Aditya Vision and now holds 1.9%. He had consistently held a 2% stake since Q1FY24 in the specialty retail company.

Recent stake changes by other superstars

Dolly Khanna cut her stake in Simran Farms to below 1% in Q4FY24. She has consistently reduced her stake in the packaged foods company for four consecutive quarters. Its share price has risen by 11.5% in the past year but underperformed the industry by 19.3 percentage points.

In Q4FY24, Vijay Kedia sold a 0.2% stake in Neuland Laboratories, and he now holds a 1.1% stake. The pharma company ranks high on Trendlyne’s checklist, scoring 82.6%. It has high financial strength, with a Durability score of 90, and moderately bullish Momentum, scoring 64. Neuland Laboratories’ share price grew by 237.6% in the past year, outperforming its industry by 174.8 percentage points. The marquee investor also sold a 0.1% stake in industrial machinery company, Elecon Engineering. He now holds a 1.34% stake in the company.

Rakesh Jhunjhunwala and Associates

08 Apr 2024

Rakesh Jhunjhunwala’s portfolio cuts stake in a banking stock

By Abhiraj Panchal

Rakesh Jhunjhunwala’s portfolio has cut stake in a bank stock in the Q4FY24 quarter. His portfolio is currently handled by his wife Rekha Jhunjhunwala and Rare Enterprises.

Rare Enterprises cuts stake in Canara Bank

Rare Enterprises’ portfolio publicly holds 26 stocks with a net worth of over Rs 51,902.9 crore (this is likely to change as more holding updates come in). The firm sold a 0.6% stake in Canara Bank during the last quarter of FY24. It now holds a 1.5% stake in the bank. Jhunjhunwala had added the stock to the portfolio in Q2FY22. From July 2021 to the end of Q4FY24, the share price has risen by 280.8%.

Canara Bank ranks high on Trendlyne’s checklist, scoring 69.2%. It has medium financial strength, with a Durability score of 55, and an affordable valuation, scoring 64.3. The bank also has a technically bullish momentum with a score of 71.5. It has a PE ratio of 7.6, which is low in its industry, but it is trading in the PE-neutral zone.

Rare Enterprises also made a marginal cut, selling a 0.06% stake in Raghav Productivity Enhancers. It now holds 5.06% in the company. The industrial goods company’s share price has risen by 43.8% in the past year but underperformed its industry by 8.3% points. The firm also sold a minor stake in Crisil, a financial services, company during the quarter.

New additions by other superstars

Dolly Khanna added exploration and production company, Selan Exploration Technology, to her portfolio in Q4FY24. She bought a 1% stake in the company. Selan Exploration Technology ranks high on Trendlyne’s checklist, scoring 56.5%. It has a Durability score of 60 and a valuation score of 43.8.

Recent stake changes by superstars

Dolly Khanna sold a 0.2% stake in Chennai Petroleum Corp in Q4FY24. She now holds a 1.1% stake in the refineries company. Its share price has risen by 275% in the past year, outperforming its industry by 234.8% points.

Ashish Kacholia bought a 0.1% stake in Brand Concepts in Q4FY24. He now holds a 1.56% stake in the specialty retail company. He had added the company in Q3FY24. For the two quarters he has held the stock, its share price rose by 42.4%. The marquee investor also sold a 0.15% stake in Vaibhav Global during the quarter. He now holds a 1.06% stake in the apparel and accessories company. Vaibhav Global rose by 30.9% in the past year.

The Baseline

02 Apr 2024

5 stocks to buy from analysts this week

By Abhiraj Panchal

1. Dalmia Bharat:

BOB Capital Markets upgrades this cement products manufacturer to ‘Buy’ with a target price of Rs 2,443. This indicates an upside of 22.7%. Analysts Milind Raginwar and Shree Kirloskar say, “Dalmia Bharat is set to tap growth opportunities by consolidating its India presence, and its plans to address shortages by enhancing capacity in its major regions.” They expect the company’s market share to grow in FY25-26.

Dalmia Bharat plans to enhance capacity utilisation to 27.1 million tonnes in FY26 from 22.9 million tonnes currently. It also plans to raise cement capacity by 13.3% to 49.5 million tonnes in FY26. The analysts are also optimistic about the company due to its plans to enhance its alternative energy sources. Raginwar and Kirloskar expect these measures to improve EBITDA margin by 4.7% points to 21.7% in FY26.

Given its healthy margins, focus on calibrated growth and limited balance sheet stress, the analysts believe that Dalmia Bharat is poised for sustained growth.

2. Birlasoft:

Sharekhan maintains a ‘Buy’ call on this IT consulting and software company with a target price of Rs 950. This indicates an upside of 24.7%. The analysts at Sharekhan met the company’s management to get an update on its outlook and growth plans. They say, “Birlasoft remains well placed to deliver top-quartile performance, guided by a revamped management, a robust order book and deal ramp-ups.” They believe that the company is witnessing a decent flow of cost take-out deals, which should drive a rebound in new deals after the moderation in Q3FY24.

With the senior leadership hiring complete, the analysts are positive that the management is focused on agile growth. They say that it is investing in emerging technologies such as generative AI along with scaling up its existing capabilities in Microsoft Azure, AWS, GCP, and Cloud platforms.

The analysts expect 15% and 23% CAGR growth in sales and profit respectively, over FY25-26.

3. BSE:

HDFC Securities maintains a ‘Buy’ call on this exchange with a target price of Rs 3,050. This indicates an upside of 12.6%. Analyst Amit Chandra says, “BSE has attained a 20% and 7% notional and premium market share, respectively, largely driven by the rising popularity of its derivatives contracts.” He is optimistic as the Sensex weekly contract has been a success, and Bankex is gaining strength. The analyst believes that BSE derivatives will continue to grow, with the growth led by the scaling of the Bankex contract, a higher volume of proprietary traders, and greater participation of Foreign Portfolio Investors.

Chandra believes that the core settlement guarantee fund (SGF) pool is increasing across exchanges, led by regulatory initiatives to mitigate risk. Also, the settlement costs for BSE are 2.5X that of NSE. The analysts expect SGF and settlement costs to fall gradually as economies of scale come into play. Assuming an 11% market share in premium in FY26, the analyst expects derivatives to contribute 43% of the company’s total revenue. He expects a revenue CAGR of 34% over FY25-26, led by a revival in transaction revenue.

4. Sagar Cements:

Geojit BNP Paribas upgrades this cement products manufacturer to ‘Buy’ with a target price of Rs 246, indicating an upside of 11.6%. The company’s Q3FY24 revenue grew by 16% YoY, which the analyst Vincent Andrews believes was aided by volume growth of 14% YoY and realisation growth of 2.4% YoY. However, capacity utilisation was lower due to state elections, floods and festivals. The analyst reduces volume guidance for FY24 due to low capacity utilisation but expects an improvement in capacity utilisation over the next financial year.

Andrews expects margin improvement, supported by a ramp-up in recently acquired units, improvement in the green power mix, and deployment of electric trucks and wheel loaders. He believes that the healthy demand outlook, given the strong government focus on infrastructure along with the company’s consistent focus on lowering costs and improving operational efficiencies, will aid growth and margins. The analyst expects revenue to grow at a 17% CAGR over FY25-26.

5. South Indian Bank:

ICICI Direct recommends a ‘Buy’ call on this bank with a target price of Rs 35, indicating an upside of 19.5%. The analyst Vishal Narnolia says, “Post restructuring, the bank now is focused on a five-step strategy to steer its growth and profitability.” According to him, this ‘five-step strategy’ includes a focus on accelerating growth in MSME and retail portfolios, improving branch productivity, and lowering a relatively higher cost-to-income ratio. The other two steps are sourcing new business through partnerships and enhancing compliance architecture.

Narnolia believes that focusing on MSME and retail loans will improve margins. He also notes that a healthy liabilities franchise, recent capital raising and scope to increase the credit-to-deposit ratio will keep margins steady. He expects advances to grow at 13% CAGR over FY25-26. He concludes, “With business transformation imbibed and new competitive leadership, the current trajectory of business restructuring is expected to continue.”

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)