Tejas MD
23
Articles

Tejas M D is a research analyst at Trendlyne. He is an MSc in Finance graduate with a specialization in investment banking from Grenoble Ecole de Management, Singapore. He is also an alumnus of IE business school, Madrid, where he completed his Masters in Management in 2016. He has about three years of experience in the finance field. Previously, he worked as an investment analyst in the hospital sector. His main role included valuing private companies using different valuation methods for acquisition objectives and analyzing marketable securities investments of the hospital. After his undergraduate degree in mechanical engineering and a couple of internships at public manufacturing companies, he decided to switch to the finance field to pursue his interests. He has been following the financial markets using both fundamental and technical analysis since his MSc in Finance in 2019. At Trendlyne, he focuses on the pharmaceutical and healthcare space

Articles by Tejas MD

Pharmaceuticals & Biotech.    
SECTOR | 23 Feb 2023
For Indian pharma, growth has got tougher with competition. But some players are rising to the task
By Tejas MD

The pharmaceutical industry is a defensive sector, one that is expected to perform well even during market turmoil. Spending above a certain level remains steady, since a person’s health and medical care remains a priority irrespective of macroeconomic factors. As a result, drug makers have a beta considerably lower than 1 – their stock prices are less volatile than the …

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BOB Capital Markets Ltd. released a Sector Update report for Pharmaceuticals & Biotech. on 16 Mar, 2023.
Rakesh Jhunjhunwala and Associates    
17 Feb 2023
What did investors Rare Enterprises (Rakesh Jhunjhunwala), Ashish Kacholia, Singhania bet on in Q3?
By Tejas MD

Tejas MD looks at the biggest bet superstar investors like Rakesh Jhunjhunwala (managed by Rare Enterprises), Ashish Kacholia, Sunil Singhania, Dolly Khanna made in Q3FY23. Watch the video.

Chemicals & Petrochemicals    
SECTOR | 20 Dec 2022
Volatile prices squeeze chemical companies’ margins, but aggressive capex signals growth ahead
By Tejas MD

Chemical manufacturers enjoyed multiple tailwinds in FY21 and FY22. Besides low raw material costs and high end-product prices, the China plus one strategy made global companies diversify their supply chain to alternative destinations, which helped Indian companies.  Investments made by Indian chemical makers to foray into different molecules (Phenolics by Deepak Nitrite for example) also paid off. 

But what goes …

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ICICI Securities Limited released a Sector Update report for Chemicals & Petrochemicals on 15 Mar, 2023.
The Baseline    
15 Dec 2022
Screener of the Week: Rising durable stocks in the PE buy zone, with low volatility 
By Tejas MD

This stock screener looks at PE Buy Zone stocks with high Trendlyne durability scores, which outperformed both the benchmark index and their industry in the past month.

These stocks also have a beta lower than 1, meaning their stock prices are less volatile than the overall market. Beta is a measure of the volatility (or systematic risk) of a company compared to the market as a whole. It is important to note that this doesn't necessarily mean the company has fewer risks. It implies that its systematic market risk is lower compared to the benchmark index. It is possible for a firm to have low systematic risk but high firm-specific risks. 

Just twenty five companies from the Nifty 500 made it to the list. Companies from the pharma and agrochemical industries are well represented. The top two companies that rose the highest, outperforming both the industry and the benchmark, were Bank of Maharashtra and  Sharda Cropchem.

Bank of Maharashtra's share price rose over 50% in the past month. PSU banks have been in the news lately as the industry posted promising Q2FY23 results. Bank of Maharastra's revenue has been increasing for the past eight quarters. In addition, this PSU Bank's asset quality improving with rising net interest margins also excited investors.

Sharda Cropchem rose over 25% in the past month on the back of good Q2FY23 results. However, the company still trades in the PE Buy Zone, which means that its TTM PE ratio is lower than its historical PE ratio. According to Trendlyne's DVM classification, the stock comes under "strong performer, under radar stocks". 

You can find more screeners here.

Pharmaceuticals & Biotech.    
SECTOR | 17 Nov 2022
Pharma companies target niche segments in the US, as India business grows
By Tejas MD

Indian drug formulation companies are adapting to the fast-changing dynamics of the pharma industry. Top-listed players have been making their bets and changing the pattern of their capital allocation in the past two years. 

Until FY15, Indian drug makers thrived on their cash cow, the US generics drugs sector, with its low-cost exports.  However, the generic space has been under …

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BOB Capital Markets Ltd. released a Sector Update report for Pharmaceuticals & Biotech. on 16 Mar, 2023.
The Baseline    
05 Nov 2022
Midcap private banks celebrate a profit bonanza | stocks outperforming their sector and index post results
By Tejas MD

The month of October sparkled for Indian investors, with the Nifty 50 rising nearly 5% to cross the key level of 18,000 last week. It is now just 3% shy of a life-high. ICICI analysts predict that the Nifty will near 18,900 by December end. That would be quite a new year.

Global indices are also showing some spirit despite inflation fears. The US Dow Jones index posted a 14% rise – its best month in 46 years.

The US Federal Reserve delivered an expected 75 bps rate hike on Wednesday, taking the federal funds rate from 3.75% to 4%, its highest level in 15 years. But what investors were looking for from the Federal Reserve Chairman Jay Powell was any sign that the Central Bank plans to slow rate hikes going forward.

Fed watchers study Jay Powell with as much intensity as a mother may study a young child with a stomach ache. They parse everything from his expressions, his sighs, to his carefully chosen words. Before the meeting, Lloyd Blankfein, the former CEO of Goldman Sachs, joked that the Fed would be sitting with a thesaurus to find a word that meant both "pause" and "not pause".

Jay Powell managed to pull this off by disappointing everyone. He said that it was "very premature to think about pausing", but also said that the Fed "may slow the pace of increases."

Central Banks like the Fed and the RBI are caught between two fires: raise rates too fast and you trigger a recession, but go too slow and you worsen inflation. More rate hikes by the RBI could impact several sectors, and we look at one such sector this week. 

In this week’s Analyticks, 

  • Young rockets: Private Midcap banks see growth momentum in Q2, as they benefit from rate hikes
  • Screener: Stocks outperforming the Nifty50 and their sector post results, with rising operating profit margins and cash flows 

India's private mid-cap banks beat the index

The banking sector has outperformed the benchmark index comfortably in the past month, quarter, and half-year. Banks are taking advantage of the Reserve Bank of India (RBI) raising the repo rate. RBI has raised the key rate by 190 bps since May to 5.9%. And high inflation levels mean that more hikes are on the way. 

How does this help banks? Banks want the best of both worlds - they are quick to hike interest rates on loans (which adds to their income) but are slow to hike deposit rates (which they pay to account holders). So rate hikes by the RBI helps banks improve their net interest margin, since they benefit from the difference between the bank’s interest income and the interest they pay to their lenders. 

However, banks cannot benefit from this for too long, as they need to hike rates on deposits eventually. Higher interest rates also bring down loan growth, especially in retail sector lending, which is mainly consumption driven. Companies also postpone their spending plans when interest rates are high, as businesses have to shell out more money to service loans. 

So despite a sunny outlook by both analysts and banks, we are cautious. There are several factors that are potential roadblocks to rising net interest margins and strong loan growth. 

Mid-cap banks join the party, and outperform their bigger peers

Mid-cap banks’ share prices are sharply up on the back of improving net interest margins, strong loan growth, and asset quality. The banks in focus–IDFC First Bank, Federal Bank, Karur Vysya Bank, and RBL Bank–outperformed the Nifty 50 by at least 12%, with Karur Vysya Bank leading the pack. 

Over the past quarter, the stock performance of these banks has been even more impressive. 

The rise in share price has come with strong results over the past three quarters. Q2FY23 results did not disappoint either. The revenue and net income of these banks rose sharply.

Several tailwinds like rising repo rates and strong loan book growth from high retail consumption, have helped banks post strong Q2 results. 

Housing and vehicle loans were the star segments for banks in Q2. 

But is this demand sustainable?  Housing and vehicle loans may become less attractive with rising interest rates and analysts predicting more hikes in the coming months. In addition, according to CMIE data, new investment proposals by the private sector have been falling since Q1FY23. This could slow loan growth. 

As if on cue, RBL Bank’s business loans (12% of the loan mix) decreased by 21% YoY in Q2FY23 and IDFC First Bank’s corporate banking loan book is yet to reach pre-covid levels. However, IDFC First’s management has guided a 25% loan book growth in FY23. Federal Bank and RBL Bank expect their loan books to grow over 15%. 

The net interest margin (NIM) has been on the rise for all four over the past five quarters and accelerated in the last two-quarters, thanks to the rising repo rate. 

NIM of the banks in focus rose both YoY and QoQ in Q2FY23. IDFC Bank enjoys the highest NIM among the four at 5.98%. Its management is confident about maintaining NIM at 6% in FY23. 

Key ratios paint a bright picture

Banks provide several health-check metrics to assess asset quality, risk levels, etc. One key ratio is the gross non-performing assets (GNPA), which helps us understand the level of non-performing assets relative to total advances. This ratio has been on the decline for the past five quarters for the banks in focus, indicating a significant improvement in asset quality. 

All four banks have also made rising provisions in case of future losses.

Another positive factor for these banks is their improving CASA ratio. The CASA ratio is the ratio of deposits in current and saving accounts to total deposits. The higher the CASA ratio, the better. A higher percentage indicates a lower cost of funds because banks do not usually give any interest on current account deposits, and the interest on saving accounts tends to be very low. 

Current valuations look attractive, but there are potential roadblocks

Despite a sharp run-up in share prices, three out of the four banks in focus are in the PE buy zone. 

According to Trendlyne’s DVM classification, IDFC First Bank and Karur Vysya Bank are strong performers (high on DVM scores) and are also in the PE buy zone – meaning that their PE ratios now are lower than historical levels.

While the outlook is strong for these banks, investors should keep in mind key risks going forward. Rising interest rates may slow down loan growth. Loan growth is also dependent on consumption-driven retail loans (especially in the housing sector), and rising mortgage rates could hurt demand in this sector.

Corporate loan books could also get affected as private companies cut back on spending due to fears of an economic slowdown and rising interest rates. 

Screener: Stocks Outperforming the Nifty50 and their Sector, with rising Operating Profit Margin and Cash Flow

At a time of rising interest rates, having a healthy cash flow is important for companies to keep interest payments and debt low. This screener reflects stocks that are outperforming the Nifty 50 index and their sectors over the past month with a rise in operating profit margin and cash flow from annual operating activities. It also lists companies with TTM PE lower than their sector PE.

The screener results are dominated by the Banking and Finance sector with the Software & Services, General Industrials and Utilities sectors also turning up. Major stocks featured in the screener are Union Bank of India, Axis Bank, Persistent Systems, CG Power and Industrial Solutions, and Angel One.

Union Bank of India has the highest YoY growth of 126.6% in operating profit in Q2FY23. The company also saw a rise in annual cash flow of 77% in FY22. The stock outperformed the Nifty 50 index and the Banking and Finance sector over the past 90 days by 15.3% points and 13.5% points respectively. It also has a trailing twelve month PE of 6.1, which is lower than the sector average PE of 28.8.

Axis Bank has an 80.4% YoY growth of operating profit in Q2FY23. The bank has seen its annual cash from operating activity rise 122.7% in FY22. Over the past 90 days, the stock has outperformed the Nifty 50 index and the Banking and Finance sector by 18.3% points and 16.4% points respectively. It has a lower trailing twelve month PE than its sector of 15.2.

CG Power and Industrial Solutions has an operating profit growth of 51.7% YoY in Q2FY23. The company saw a rise in annual cash flow of 77% in FY22. Over the past 90 days, the stock has outperformed the Nifty 50 index and the General Industrials sector by 5% points and 4.2% points respectively. It also has a trailing twelve month PE of 41.1, which is lower than the sector average PE of 51.2.

You can find more screeners here.

The Baseline    
01 Nov 2022
As investors seek alpha, DVM investing strategies beat benchmarks by big margins
By Tejas MD

Investors and traders are always on the hunt for alpha –  gaining excess returns on an investment relative to the benchmark index. But managing a portfolio that delivers this magic consistently, and over a period of time is something very few investors/traders are capable of. 

Why is this so difficult? A lot of factors come in the way of consistent alpha. A rising dollar may force foreign investors to temporarily exit the market, and cause indices to fall. Stocks in entire industries may fall as the sector struggles. Trading volumes may decline with changes in government regulations, or with a sharp economic downturn.

Investors also differ from traders, in seeking returns over a longer period, while investing in fewer stocks.  These investors don’t like bear market periods as a result, as even sound investments can see share price declines. Traders on the other hand, take advantage of both rising and falling markets to enter and exit positions over a shorter period, and take smaller and more frequent profits. 

Using DVM scores to deliver alpha on investments

Trendlyne’s durability (D), valuation (V), and momentum (M) scores allow investors to evaluate all aspects of a stock. By choosing from curated screeners or by creating your own, users can make use of these stock scores to devise a high-return trading or investing strategy. One can also backtest these screeners on Trendlyne to see how a particular strategy performed in the past. The backtests also have various filters that let you change the frequency of portfolio review, control for the number of stocks invested in each period, etc. 

There is no one-size-fits-all strategy in investing or trading. A Momentum Score strategy, which looks for stocks with bullish technicals, is more suitable for traders with an appetite for higher risk, who are very active in the stock market. While the Valuation Score strategy is suitable for value investors who are always looking for stocks that are undervalued, a Durability Score strategy which selects financially healthy companies, is for those looking for lower risk and in it for the long game.

Finally, combinations of these scores help investors identify high-quality stocks that may favor one approach over another. 

Let’s look at strategies that use these three DVM metrics individually, evaluate the results and then move on to combining these parameters in search of a better strategy. 

A Momentum Score strategy favours traders, but comes with caveats

This Momentum Score screener helps select high-momentum (technically bullish) stocks with sufficient volumes, so that it is easy for investors to enter and exit. This strategy outperformed all others as it delivered the highest CAGR over a shorter time frame (one to three years). This is optimal for short-term traders who are active in the stock market. Surprisingly, it also performed the best even in volatile markets, as it focuses only on stocks with the highest momentum score. With weekly portfolio reviews, this strategy delivered a stellar three-year CAGR of 301% against Nifty 50’s CAGR of 16%. 

The period analysis, which shows the returns every week, is also mostly in green. However, the maximum drawdown over longer investing time periods. 

Maximum drawdown is the biggest observed loss from a peak to a trough of a portfolio before a new peak is attained. This did not have a stop loss, so the drawdowns show the maximum possible with this strategy. 

Things to watch out for while employing this strategy: 

  1. A weekly portfolio review is essential since the momentum score is sensitive to share price changes, and can cause higher stock entries and exits. A stop loss can also reduce negative return periods. 
  2. Some stocks hit the upper/lower circuit as soon as the markets open–sometimes even before the market opens–in pre-market trading itself. Hence, in some cases, it can become difficult to enter/exit the stock when required. 
  3. For longer term investors, other strategies are more optimal as weekly portfolio reviews may not be feasible for everyone. In those cases, valuation and other strategies perform better. 

A Valuation Score strategy delivers stellar long term returns, but has the highest drawdown

The Valuation Score trading strategy performs best in a longer time frame (10 years). This could be due to markets taking time to discover the stock’s true value and price it accordingly. The screener includes high valuation score stocks with sufficient volumes so that it is easy for investors to enter and exit.

Since the stock's Valuation Score changes with share price movement, it is necessary to review the portfolio every quarter. In fact, a quarterly review (as opposed to a yearly review) allows investors to select optimal stocks based on the screener and get maximum returns. In addition, limiting the number of stocks selected during each period keeps this number manageable (stocks can be limited under the ‘Advanced’ option in the screener - see image below)

Under these conditions, the strategy delivered a staggering 93.7% CAGR over 10 years. 

However, investors will have to endure a high drawdown when following this strategy. Another important thing to note is that a single stock could be responsible for a significant portion of the returns. 

In the top valuation score strategy for instance, Sunil HiTech Engineers (now delisted) delivered over 5,400% returns. So, missing a key stock could lead to lower-than-expected returns. In addition, not all low-valuation score stocks are undervalued stocks. There could be several reasons for low share price relative to earnings–litigations, distorted earnings due to one-time gains, etc. So, there is a chance that affordable stocks can plunge further in share price. In this strategy for example, Gitanjali Gems lost big as long-hidden fraud came into view –95% of its value. 

Good for low risk investors: With lower drawdowns, the Durability Score strategy delivers results when combined with other metrics

The Durability Score strategy is most effective in relatively short terms (three years) for investors, as it delivers higher returns during this period, compared to others. Like the other two strategies, a quarterly review of stocks and controlling the number of stocks to five shows high returns for investors.

Compared to other strategies which are heavily dependent on the share price, this has a relatively lower drawdown. This could be due to the presence of fundamentally strong companies in this screener. However, it becomes more effective when combined with other metrics like valuation score. 

One such strategy can be devised, by using a screener that lists high DVM-score stocks with tradable volume. Another option is to use one of Trendlyne’s expert screeners–DVM - High Return, Highly Durable Companies. This includes companies with high DVM scores with rising stock prices and strong fundamental growth. When this expert screener is used, returns increase significantly, compared to the high DVM strategy that only uses stock scores. 

This is particularly effective for a long term (10 years), with quarterly portfolio review, and controlled for five stocks. The top strategy in this category delivered 85.4% CAGR with a maximum drawdown of 53%. In addition, filtering for Nifty 500 stocks made marginal changes in the returns, but reduced drawdown. But filtering for Nifty 50 stocks led to underperformance, mainly because of the low number of stocks selected due to stringent parameters. 

Not surprisingly, period analysis is mostly in the green as the stocks selected here are fundamentally strong. 

The DVM expert screener performs the best, when accounting for drawdowns

When mid to long-term strategies across different categories are considered, high-valuation stocks deliver the highest returns. But when we consider the maximum drawdown along with the CAGR, the expert screener comes out ahead as it has a lower drawdown. 

The expert screener (DVM - High Return, Highly Durable Companies), delivered returns at a whopping 85% CAGR–meaning an investment of Rs 10,000 10 years ago is now worth over Rs 38.2 lakh. All an investor needed to do was to review the portfolio quarterly and shuffle it according to the entry and exit of stocks in the expert screener and stay invested. 

This is just the tip of the possibilities available to investors. Investors can use several different parameters such as PE ratio and ROE  to create screeners and backtest it to calculate the returns that particular strategy has delivered over a selected period. Combining these with Trendlyne’s stock scores can, as we saw above, substantially increase your alpha.

Investors can also choose several expert screeners encompassing different parameters and investment philosophies and backtest them to come up with a trading strategy that works for them. 

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02 Feb 2023
corporate.knight The backtest links that you have posted above is for Momentum. Can you post backtest results of DVM - High Return, Highly Durable Companies with 10 yr period (with 83.5% CAGR shown above in graph) for Nifty 50 stocks with optimisation for 5 stocks on Durability?

We (users) cannot do this backtest as it requires so many iterations (re-balances per backtest).
05 Feb 2023
Pharmaceuticals & Biotech.    
SECTOR | 15 Oct 2022
As big growth markets shift, which Indian pharma companies will outperform?
By Tejas MD

Tejas MD looks at how growth markets are changing for Indian pharma businesses in the formulations space, and which companies are expected to outperform. Top formulation companies in focus: Sun Pharmaceutical Industries, Cipla, Dr Reddy’s Laboratories, Torrent Pharmaceuticals, Zydus Lifesciences (previously known as Cadila Healthcare), and Alkem Labs. Watch the full video.

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The Baseline    
23 Sep 2022
FabIndia plans IPO as industry recovers | outperformer stocks with MFs buying shares
By Tejas MD

Another bumper interest rate hike came from the US Federal Reserve on Wednesday - a 75 bps increase which took the US interest rate to 3.25%, the highest it's been since 2008. It's surprising how quickly interest rates have moved up - the rate stood at 0.25% in January 2022. 

However, Indian markets have stayed resilient with the Nifty 50 among the best performing indices globally, and flirting with all-time highs over the past few months. There’s been continued momentum in IPOs as well, and we take a closer look at a familiar name that is getting ready to list - FabIndia.

In this week’s Analyticks,

  • Dressed for success?: FabIndia hopes to take advantage of the apparel industry's recovery
  • Screener: Stocks outperforming Nifty 50 with increasing mutual fund holding, and also in the PE Buy Zone

Apparel industry bounces back post-pandemic, clearing path for IPOs 

During Covid, no one was dressing up: it was all trackpants and old t-shirts. Work calls on Zoom got taken with the video off. Events and weddings were being cancelled or postponed. This hit the apparel industry hard, including FabIndia. 

Now however, apparel companies are staging a comeback. With the exception of TCNS Clothing, top listed companies like Page Industries, Trent, and Aditya Birla Fashion and Retail (ABFRL) have outperformed the Nifty 50 by a huge margin in the past year.

Companies like Vedant Fashions and Go Fashion, which were listed less than a year ago, have also managed to beat the benchmark index comfortably in the past six months. 

FabIndia - which is known for its use of traditional materials and contemporary ethnic wear - wants to time its IPO with the apparel industry’s dramatic recovery. The company filed its draft red herring prospectus (DRHP) with market regulators for its IPO, and received the Securities Exchange Board of India’s (SEBI) nod in January 2022. According to reports, the proposed IPO is sizeable at Rs 4,000 crore. Out of this, the company plans a fresh issue worth Rs 500 crore, on a valuation of Rs 20,000 crore. 

FabIndia's fresh issue is for the voluntary redemption of non-convertible debentures or NCDs issued by the company, and prepayment of a portion of its outstanding borrowings. This means that the IPO will not change the way the company does business. 

FabIndia's "inclusive capitalism" focus 

FabIndia is planning to share the wealth from the IPO with its broader network. Promoters Bimla Nanda Bissell and Madhukar Khera are transferring 4,00,000 equity shares and 3,75,080 equity shares respectively to the artisans and farmers engaged with the company or its subsidiaries. According to FabIndia’s DRHP, the company works with 50,000 artisans and 10,300 farmers as of March 31, 2021.

FabIndia's founders have long talked about "inclusive capitalism", and the business works with a network of "community owned companies" (COCs) owned by artisans and farmers. It remains to be seen how this ownership model will evolve post IPO.

Among the investors selling shares, PI Opportunities fund and Prazim Trading and Investment Company will sell up to 40% and 100% of the equity shares held by them respectively. 

Apparel companies’ topline and bottomline jump YoY in Q1FY23 as demand recovers post-Covid

Q1FY23 was the first quarter in two years without a single Covid-19 lockdown. This helped apparel companies post strong topline and bottomline growth YoY. Revenues and net profits of these companies doubled at minimum, with Go Fashion’s revenue jumping by over 5X YoY in Q1FY23 on a low base. 

This indicates a strong comeback for apparel companies including FabIndia in FY23. According to FabIndia's DRHP, the company had posted losses in FY21 and H1FY22 due to lockdowns. 

However, recent quarterly results from its competitors point to strong revenue and net profit growth in apparels post H1FY22. Barring the two years of the pandemic, FabIndia has been profitable. 

The pandemic changes FabIndia’s revenue mix, organic food segment gains

One factor that helped the company contain its losses during the pandemic was the increased demand for healthy food, with a growing preference for organic and immunity booster items. As a result, the revenue contribution from this segment rose from 18.9% in FY20 to 31.1% in FY21.

Low demand for ethnic wear during the pandemic meant revenue contribution from the apparel segment decreased by 12 percentage points in H1FY22 to 46.5% when compared to FY19. However, with demand for clothing bouncing back, the revenue contribution from this segment is expected to recover. 

Warning sign: FabIndia’s store count is below pre-pandemic levels

The pandemic was a blow to FabIndia, and in some ways the business may not have fully recovered. Even with the strong rebound in apparel, FabIndia’s store count is not yet back to FY20 levels. As of H1FY22, its total store count stood at 309 against the pre-Covid number of 328. 

In comparison, FabIndia's listed peers saw their store count surpass pre-Covid levels in FY22. But revenue generation is not entirely dependent on the number of stores,  especially when we consider rising sales from online channels in FY21.

FabIndia’s online retail revenue contribution rose to 18% in H1FY22 from 4% in FY19. Revenue from FabIndia's online channels rose 40-50% during FY20 and FY21, similar to growth for close competitors like Vedant Fashions and TNCS. 

But retail outlets still play a major role in capturing market share, and the slow recovery here cannot be ignored.

Can FabIndia capitalize on opportunities amid competition?

The long-term growth plan for FabIndia is on track when it comes to market size, both in apparels and ethnic wear. The apparel industry’s market size bounced back in FY22, and it looks likely that demand will sustain in the coming quarters.

The ethnic wear segment’s market size is expected to grow at a CAGR of 6% over FY20-25E. In addition, the organic foods industry is also on the rise and is expected to grow at a CAGR of 24% during 2021-2026E. 

There is no dearth of opportunities for FabIndia to drive its top line and bottom line. But what investors will look for is whether the company is able to capitalize on opportunities, amid competition from its peers. FabIndia is sandwiched between two competitive segments: it directly competes with private label, large-format stores, and also with companies that offer affordable products and sell through online channels. It will have to distinguish itself in an increasingly crowded space.

Screener: Stocks outperforming Nifty 50 with increasing mutual fund holding (PE Buy Zone)

As we see the return of institutional buying in the Indian market,this screener identifies stocks that have outperformed the Nifty 50 index over the past month, and also saw increasing mutual fund holding in the last 30 days. With concerns around market valuations, we only consider stocks in the PE buy zone with a high Trendlyne Durability Score.

The screener shows 27 stocks from the Nifty 500 index. It is not dominated by any one industry but includes stocks from coal, breweries & distilleries, housing finance, and restaurants. Major stocks featured in the screener are Westlife Development, Sapphire Foods, United Spirits and Coal India.

Sapphire Foods has the highest increase in mutual fund holding of 0.9% in August. 10 mutual funds bought into the stock, of which Invesco India Contra Fund is the largest buyer (2.3 lakh shares or 0.36% stake). The stock has outperformed the Nifty 50 index by almost 15 percentage points and is in the PE buy zone with just 14.5% of total trading days spent below the current PE.

United Spirits has one of the highest increases in mutual fund holding with a 0.4% rise in holdings in August. Out of the 66 mutual funds that bought the stock, Nippon India Large Cap Fund - Growth bought the most (14.9 lakh shares or 0.2% stake). The stock has outperformed the Nifty 50 index by 9.6 percentage points and is in the PE buy zone with 16.2% of total trading days spent below the current PE.

You can find more screeners here.

Healthcare    
SECTOR | 20 Sep 2022
Hospital business amps up profitability amid intense competition in the pharmacy and diagnostic segments
By Tejas MD

Since pandemic restrictions eased, revenues of hospital companies are on an uptrend. While this is driven mainly by the hospital business, some companies like Apollo Hospitals Enterprise and Max Healthcare Institute are also focusing on integrated healthcare services, ranging from pharmacy distribution to diagnostics - areas that are seeing intense competition from new players. The jockeying for revenue and market …

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