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Trendlyne Marketwatch
05 Jul 2023
Market sees record close, Senco Gold’s Rs 405 crore IPO gets bids for 2.68X of shares

Trendlyne Analysis

Nifty 50 closed at 19,398.50 (9.5, 0.1%) , BSE Sensex closed at 65,446.04 (-33.0, -0.1%) while the broader Nifty 500 closed at 16597.20 (41.2, 0.3%). Of the 1,971 stocks traded today, 1,157 were in the positive territory and 756 were negative.

Indian indices rise from the day’s low and close flat, with the Nifty 50 closing just below the 19,400 mark. The volatility index, Nifty VIX rises by 1.5% and closes at 11.9 points. FIIs invested $5.4 billion in Indian equities in June 2023, the highest inflow since August 2022.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Auto and Nifty FMCG closed higher from Friday’s closing levels. According to Trendlyne’s sector dashboard, food beverages & tobacco emerged as the top-performing sector of the day with a rise of over 1.8%.

Most European indices trade in the red. US indices futures trade lower indicating a negative start. According to Hamburg Commercial Bank, Eurozone Purchasing Managers Index dropped to 49.9 in June against estimates of 50.3. The May PMI stood at 52.8

  • Relative strength index (RSI) indicates that stocks like JBM Auto, Angel One, Blue Dart Express and Bajaj Finserv are in the overbought zone.

  • RBL Bank and LTIMindtree touch their 52-week highs of Rs 194.2 and Rs 5,430 respectively. The former has risen by 12.1% in the past month, while the latter increased by 4.9%.

  • G R Infraprojects is rising as it announces that its subsidiary has executed a concession agreement with NHAI for the construction of a six-lane highway. The project cost stands at Rs 1,248.4 crore. The stock shows up in a screener for companies with zero promoter pledges.

  • Macrotech Developers falls despite its pre-sales revenue rising by 17% YoY to Rs 3,350 crore in Q1FY24. Although its collection has fallen by 8% YoY to Rs 2400 crore, the net debt currently stands at Rs 7,260 crore. The company appears in a screener of stocks with no promoter pledge.

  • Senco Gold’s Rs 405 crore IPO gets bids for 2.68X the available 94.2 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 3.67X of the available 47.1 lakh shares on offer.

  • Minda Corporation rises as Societe Generale buys a 0.7% equity stake (17,28,713 shares) in the company. The deal has been executed at an average price of Rs 281 per share, totalling to Rs 48.6 crore. The company also appears in a screener of stocks with increasing FII/FPI shareholding.

  • Larsen & Toubro's construction business secures an EPC order worth Rs 1,000-2,000 crore for an office space development in Mumbai. It will be constructed using composite steel construction technology. The project is estimated to be completed in 2026.

  • AU Small Finance Bank falls as its Q1FY24 gross advances improve by 29% YoY and total deposits increase by 27% YoY. However, its CASA ratio declines by 3.8% YoY. It appears in a screener for stocks with improving cash flow from operations.

  • The Association of Mutual Funds in India (AMFI) downgrades FSN E-Commerce (Nykaa) to the midcap category from the largecap after a 42% fall in its stock price from its 52-week high. Similarly, JSW Energy, Tata Elxsi, Macrotech Developers, and other companies have also been downgraded to the midcap category.

  • Axis Direct maintains 'Buy' rating on Federal Bank with Rs 155 target price, implying 15.8% upside. Despite margin pressure in H1FY24, the brokerage expects margins to recover in H2 with higher-yielding products and stable cost of funds. It estimates the bank’s net profit to grow at a CAGR of 18.4% over FY23-25.

  • Hindustan Oil Exploration is rising after HDFC Bank buys a 6.39% stake (84.4 lakh shares) in the company today.

  • Aurobindo Pharma rises as its subsidiary, CuraTeQ Biologics, announces positive results for phase three clinical trials of its Trastuzumab biosimilar. This drug, used in the treatment of breast cancer, has been found to be equivalent to its European counterpart, Herceptin. The company appears in a screener of stocks with increasing FII/FPI shareholding.

  • Bandhan Bank is falling despite its loans and advances increasing 6.7% YoY to Rs 1 lakh crore in Q1FY24. The bank's CASA deposits decline 2.8% YoY, causing its CASA ratio to contract by 7.2 percentage points to 36%. It appears in a screener of stocks with prices below their short, medium, and long-term averages.

  • PKH Ventures withdraws its IPO due to muted response from investors, particularly qualified institutional buyers (QIB). The IPO, which was open for subscription from June 30 to July 4, received bids for 65% of the available 2.6 crore shares on offer.

  • Yes Bank's net advances grow by 10% YoY in Q1FY24, deposits increase by 13.5% YoY and CASA ratio rises by 8.4 percentage points YoY. The bank appears in a screener of stocks with increasing quarterly revenue.

  • Gensol Engineering rises as it receives an order worth Rs 277 crore for supplying trackers and developing solar power projects in Andhra Pradesh, Chhattisgarh and Kerala, among others.

  • Bharat Heavy Electricals is rising as it signs an agreement with General Electric Technology GmbH, Switzerland, to provide gas turbines that can utilise fuel mixtures such as hydrogen, methanol, syngas, and operate in hybrid configurations. This development adds to India's energy revolution. It appears in a screener of stocks with strong momentum.

  • Tata Consultancy Services and HCL Technologies rise 3.9% and 2.6% respectively over the past week, ahead of their Q1FY24 results on July 12.

  • India’s Services PMI declines to 58.5 in June from 61.2 in May. However, the PMI reading has remained above the 50 mark for 23 consecutive months.

  • One97 Communications (Paytm) is rising as its average monthly transacting users in Q1FY24 rises 23% YoY to 9.2 crore, while its merchant payment volumes grow 37% YoY. The loan distribution business sees its disbursements jump 167% YoY to Rs 14,845 crore. The stock shows up in a screener for companies with improving cash flows from operations over the past two years.

  • Strides Pharma Science falls as its subsidiary, Stelis Biopharma, signs a binding term sheet with Syngene International to divest its manufacturing facility in Bengaluru. The acquisition will be done at Rs 702 crore. Syngene will further invest Rs 100 crore to repurpose the facility.

  • CLSA maintains its 'Sell' rating on Hero MotoCorp with a target price of Rs 2,708. The brokerage believes that the company is losing market share in its core segments and says there is rising competition in the 2-wheeler segment. However, it expects that the launch of X440 will help the firm gain market share in the 250cc segment.

  • Elevation Capital VI FII Holdings sells a 2.1% stake in TCNS Clothing for approx Rs 53 crore in a bulk deal on Tuesday.

  • Samvardhana Motherson International rises as its subsidiary, SMRP B.V, enters into an agreement to acquire an 81% stake in Yachiyo 4W. The cost of acquisition is at an equity value of JPY 22.9 billion (Rs 1,301 crore). The target company is engaged in the production of sunroofs, fuel tanks, and other resin products.

  • IndusInd Bank’s net advances in Q1FY24 rise by 21% YoY to Rs 3 lakh crore, while its deposits grow by 15% YoY. However, the bank’s CASA ratio falls by 3.3 percentage points. The bank shows up in a screener for stocks with high Piotroski scores, along with high RoE and EPS growth.

Riding High:

Largecap and midcap gainers today include Samvardhana Motherson International Ltd. (90.30, 6.05%), Bajaj Auto Ltd. (4,890.05, 5.72%) and Divi's Laboratories Ltd. (3,747.95, 5.57%).

Downers:

Largecap and midcap losers today include Dixon Technologies (India) Ltd. (4,206.10, -3.49%), HDFC Bank Ltd. (1,673.30, -3.18%) and Housing Development Finance Corporation Ltd. (2,796.15, -3.07%).

Movers and Shakers

23 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Mangalore Refinery And Petrochemicals Ltd. (88.80, 12.05%), Bombay Burmah Trading Corporation Ltd. (1,102.05, 8.82%) and Aegis Logistics Ltd. (353.05, 7.56%).

Top high volume losers on BSE were KIOCL Ltd. (185.90, -2.08%), FSN E-Commerce Ventures Ltd. (143.35, -1.48%) and KNR Constructions Ltd. (245.00, -0.91%).

MMTC Ltd. (33.40, 4.70%) was trading at 13.4 times of weekly average. Sun Pharma Advanced Research Company Ltd. (218.65, 6.27%) and Jindal Worldwide Ltd. (321.40, 4.49%) were trading with volumes 6.8 and 6.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

44 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Bajaj Auto Ltd. (4,890.05, 5.72%), Bajaj Finance Ltd. (7,838.75, -0.28%) and Bank of Baroda (205.20, 1.41%).

10 stocks climbed above their 200 day SMA including Aegis Logistics Ltd. (353.05, 7.56%) and Sun Pharma Advanced Research Company Ltd. (218.65, 6.27%). 4 stocks slipped below their 200 SMA including Eicher Motors Ltd. (3,309.75, -2.71%) and KNR Constructions Ltd. (245.00, -0.91%).

 
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The Baseline
04 Jul 2023
Five analyst picks this week
By Suhas Reddy
  1. Trent: Sharekhan maintains its ‘Buy’ rating on this retailing company with a target price of Rs 2,025. This implies an upside of 15.1%. The analysts at the brokerage remain positive about the firm’s growth prospects due to its “consistent double-digit same-store-sales growth (SSSG) that beats peers and well-defined store expansion strategy”. They add that the company has maintained its leadership position in FY23 with same-store sales growth in the Westside brands and the expansion of the Zudio business. 

The analysts are also upbeat about Trent's ability to generate a healthy cash flow of Rs 450 crore, despite a capex of Rs 215 crore in FY23. They expect robust revenue growth over the next two financial years to be driven by consistent high footfall, growing online traction, increased billing size and new store additions. The analysts anticipate the retail giant’s revenue to grow at a CAGR of 23% over FY23-25.

  1. Chalet Hotels: ICICI Securities maintains a ‘Buy’ rating on this hotels company with a target price of Rs 603, indicating a potential upside of 37%. Analyst Adhidev Chattopadhyay is optimistic about the company's future because of its strategy to expand through ownership. This includes the expansion of existing projects and entry into long-term leases. He expects Chalet Hotels' EBITDA to grow at a CAGR of 18%, with profit margins around 45% in the coming years.

Chattopadhyay believes that the company is well-positioned to take advantage of the hotel industry's expected growth over the next five years. He highlights that the company has set a target to increase its room capacity by 40% by FY26. Additionally, Chalet plans to expand its rental portfolio to reduce risk, considering the cyclical nature of the hotel business. Chattopadhyay predicts robust revenue growth for the company, with an expected CAGR of 11%. This would bring its revenue to an estimated Rs 1,390 crore in FY26.

  1. Bharat Forge: HDFC Securities maintains its ‘Buy’ rating on this industrial products manufacturer with a target price of Rs 998. This implies an upside of 18.7%. Analysts Aniket Mhatre and Sonaal Sharma are upbeat about the company’s long-term growth prospects given its diversified portfolio mix, which provides a more stable revenue stream. They also expect the company’s subsidiaries in Europe and the US to gradually recover in the coming quarters on the back of a robust orderbook. 

The analysts believe that investors' concerns regarding “a slowdown in US Class 8 truck orders in 2024 hurting business growth, are exaggerated as “the company has multiple growth drivers to offset this slowdown”. They expect new defence orders, an order backlog in aerospace, and rising exports to drive top-line growth. Mhatre and Sharma estimate the company’s revenue to grow at a CAGR of 12.6% over FY23-25. 

  1. Ultratech Cement: Axis Securities maintains a 'Buy' recommendation on this cement and cement products company, targeting a price rise of 10.5% to Rs 9,350. Analysts Uttam Kumar Srimal and Shikha Doshi have an optimistic view about the company's future due to several factors. First, they anticipate an expansion in the firm's production capacity to meet the growing market demand for cement. Second, they predict that a decline in fuel costs will lead to an improvement in the company's profit margins in the upcoming quarters.

The analysts also highlight the potential benefits of digitising sales channels, using a blended cement strategy, and optimising resource utilisation. All of these are expected to boost the company's profit margins. They also acknowledge the significant industry experience of the company's promoters, which spans several decades. Additionally, the company carries a low debt burden and consistently generates positive cash flow, according to Srimal and Doshi. They project a CAGR of 9% in the company's volume and revenue for FY23-25.

  1. ICICI Lombard General Insurance Co: Motilal Oswal keeps its ‘Buy’ rating on this general insurance company and raises the target price to Rs 1,550 from Rs 1,400. This indicates an upside of 16.6%. Analysts Prayesh Jain, Nitin Aggarwal and Nemin Doshi believe that the Indian general insurance industry is poised for robust growth, driven by new reforms and initiatives introduced by the Insurance Regulatory and Development Authority (IRDAI). They are positive about the company’s strategy to capitalise on industry tailwinds, with market share expansion, improving profitability, robust risk management and good customer service. 

In the health segment, the analysts expect the firm’s profitability to improve through price hikes and enhanced efficiency of the agency channel. However, they anticipate slower growth in the motor segment “as the company awaits the rationalisation of pricing in the Own Damage (OD) insurance segment”. The analysts estimate the firm’s net profit to grow at a CAGR of 20% over CY23-25. 

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

(You can find all analyst picks here)

 
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Trendlyne Marketwatch
04 Jul 2023
Market sees record close, Senco Gold’s IPO gets bids for 69% of the shares on offer

Trendlyne Analysis

Nifty 50 closed at 19,389.00 (66.5, 0.3%), BSE Sensex closed at 65,479.05 (274, 0.4%) while the broader Nifty 500 closed at 16,556.05 (28.1, 0.2%). Market breadth is in the red. Of the 1,968 stocks traded today, 809 were gainers and 1,100 were losers.

Indian indices fell from their day highs but still closed at their all-time highs, with the volatility index, Nifty VIX, rising by 1.4%. The benchmark Nifty 50 index has risen over 3.7% in the past week. Eicher Motors closed over 6% lower as Hero MotoCorp and Harley-Davidson launched a new premium motorcycle, X440, in India with a starting price of Rs 2.29 lakh.

Nifty Smallcap 100 closed in the green but Nifty Midcap 100 closed lower, despite the benchmark index closing in the green. Nifty IT and Nifty PSU Bank closed higher than their Monday’s close.  According to Trendlyne's sector dashboard, Diversified was the top-performing sector of the day.

Major Asian indices closed flat or higher, except for Japan’s Nikkei 225 index, which closed nearly 1% lower. European stocks traded mixed, despite the US index futures trading marginally lower. US markets will remain closed today in observance of the Independence Day holiday.

  • Money flow index (MFI) indicates that stocks like Nippon Life India Asset Management, Zydus Lifesciences, JBM Auto and Patanjali Foods are in the overbought zone.

  • HPL Electric & Power surges almost 20% as it bags an order worth Rs 903 crore for smart meters. The company's order book currently stands at approximately Rs 2,250 crore.

  • 360 One Wam and Global Health touch their 52-week highs of Rs 490 and Rs 692.3 respectively. The former has risen by 15% over the past month, while the latter increased by 17.2%.

  • NBCC (India) is rising as the Ministry of External Affairs sanctions Rs 261.7 crore for the redevelopment of the MEA Housing Complex (Old) at Kasturba Gandhi Marg, New Delhi. It appears in a screener of stocks with no debt.

  • GR Infraprojects signs an engineering, procurement and construction (EPC) agreement worth Rs 587.6 crore with East Coast Railway for the construction of tunnels (T-4, T-5, T-6 and T-7) on the Khurda-Bolangir new rail line project. The estimated time of completion of the project is 30 months for T-4, 18 months each for T-5 and T-6, and 24 months for T-7.

  • Eicher Motors is falling as Hero MotoCorp and Harley-Davidson launch a new bike, X440, in India. This model is a premium motorcycle with a starting price of Rs 2.29 lakh. Co-developed by the company and Harley-Davidson, this bike will likely be a competitor to Royal Enfield's Classic 350 and Hunter 350.

  • Senco Gold’s Rs 405 crore IPO gets bids for 69% of the available 94.2 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 1.12X of the available 47.1 lakh shares on offer.

  • PKH Ventures’ Rs 379 crore IPO gets bids for 65% of the available 2.6 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 99% of the available 89.7 lakh shares on offer.

  • According to S&P Global Ratings, Indian companies are in a favourable financial position due to the improvement in their balance sheets and strong economic growth in the country. The rating agency estimates that the aggregate EBITDA of corporate and infrastructure firms will be around 50% higher in FY24 compared to the past five years.

  • Zydus Lifesciences receives final approval from the US FDA for oxcarbazepine tablets, which are used to treat epilepsy. The tablets are estimated to have had annual sales of $105 million in the year ending May 2023. The drug will be manufactured at the company's formulation manufacturing facility in Himachal Pradesh.

  • KRChoksey maintains its ‘Buy’ rating on Axis Bank with a target price of Rs 1,160. This implies an upside of 18.6%. The brokerage remains positive about the bank’s prospects given its strong business momentum trends, improving operating performance, healthy asset quality and successful integration of the CITI business. It expects the firm’s net profit to grow at a CAGR of 79.4% over FY23-25.

  • Bharti Airtel is falling as Reliance Jio launches a Jio Bharat 4G feature phone for Rs 999. Beta trials for the phone will start on Friday for the first 1 million buyers, offering unlimited voice calls and 14 GB data for Rs 123 per month. Jeffries India states that Bharti Airtel could potentially lose 11 million subscribers a year after the release of the phone.

  • Senco Gold raises Rs 121.5 crore from anchor investors ahead of its IPO by allotting 38.32 lakh shares at Rs 317 per share. Investors include Ashoka WhiteOak Emerging Markets Trust, Nippon Life India, Bandhan Mutual Fund, Templeton India Value Fund, Sundaram Mutual Fund and Max Life Insurance Co.

  • L&T Finance Holdings is falling as Kotak Institutional Equities downgrades its rating on the company to a ‘Sell’ from 'Reduce', with a revised target price of Rs 95. The brokerage believes that the firm will continue to face the challenges of low near-term growth and muted RoE.

  • Media stocks like Dish TV India, TV18 Broadcast, Zee Entertainment Enterprises, Hathway Cable & Datacom and Sun TV Network are rising in trade. Barring PVR INOX, all other constituents of the broader sectoral index, Nifty Media, are trading in the green.

  • Mahindra & Mahindra Financial Services, Indus Towers,UPLand Polycab India witness a significant surge in mutual fund holdings in the past month.

  • PSU banks like Punjab National Bank, Bank of India, Bank of Baroda, Indian Bank and Canara Bank are rising in trade. Barring Punjab & Sind Bank, all other constituents of the broader sectoral index, Nifty PSU Bank, are also trading in the green.

  • Morgan Stanley maintains its ‘Equal-weight’ rating on Avenue Supermarkets with a target price of Rs 3,786, citing a lower-than-anticipated growth in Q1FY24. Meanwhile, the company's standalone revenue has risen by 18.1% YoY to Rs 11,584.4 crore in Q1.

  • Foreign institutional investors invest Rs 40,015.6 crore in the equity market over the past month, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest outflow of Rs 33,681.9 crore from foreign investors. Mutual funds also invest Rs 7,670 crore in the Indian markets.

  • Shares of HMA Agro Industries debut on the bourses at a 6.8% premium to the issue price of Rs 585. The Rs 480 crore IPO has received bids for 1.43 times the total shares on offer.

  • Ameera Shah, Managing Director of Metropolis Health, says the company targets to maintain its margin at around 25% despite lab expansion. She expects the contribution from the new network and premium wellness to rise from 3-5% and 15-20% respectively.

  • Vijay Kedia converts Atul Auto's 7.24% warrants into equity shares on Monday. He now holds a 12.86% stake in the company.

  • Bajaj Finance surges to its 52-week high of Rs 7,918 per share as its AUM grows 32% YoY to Rs 2.7 lakh crore in Q1FY24. The growth is backed by improvements in new loans booked and deposits. The lender shows up in a screener of stocks with improving return on assets over the past two years.

  • IDFC rises as the board of IDFC First Bank approves a merger proposal with IDFC and IDFC Financial Holding Co. However, IDFC First Bank is declining as the merger stands to favour IDFC shareholders by 16%. IDFC shareholders will receive 155 IDFC First Bank shares for every 100 shares held.

  • Genus Power Infrastructure is rising as it receives a letter of award worth Rs 2,207.5 crore for the installation and commissioning of 27.69 lakh smart prepaid meters. Joint Managing Director of the firm, Jitendra Kumar Agarwal says, “This order win provides added visibility to our revenues for coming years. It also signals a strong start to order inflow in FY24”.

  • Tube Investments of India enters the small commercial electric vehicle segment through its subsidiary, TI Clean Mobility. It partners with Anand Jayachandran, promoter of Jayem Automotives, for a joint investment in a new company. TI Clean Mobility will invest Rs 160 crore and Jayachandran will give Rs 40 crore. The company’s arm also agrees to acquire a 50% stake in Jayem Automotives for Rs 206 crore to improve its product development capability.

Riding High:

Largecap and midcap gainers today include Bajaj Finance Ltd. (7,892.00, 7.62%), Punjab National Bank (57.40, 6.59%) and Bajaj Finserv Ltd. (1,631.95, 5.96%).

Downers:

Largecap and midcap losers today include Eicher Motors Ltd. (3,417.95, -5.86%), IDFC First Bank Ltd. (79.10, -3.48%) and FSN E-Commerce Ventures Ltd. (144.40, -2.50%).

Movers and Shakers

17 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Aster DM Healthcare Ltd. (322.20, 12.28%), Bajaj Finance Ltd. (7,895.95, 7.68%) and Radico Khaitan Ltd. (1,365.15, 6.81%).

Top high volume losers on BSE were Eicher Motors Ltd. (3,417.95, -5.86%) and Minda Corporation Ltd. (282.70, -3.78%).

IDFC Ltd. (111.90, 2.47%) was trading at 8.0 times of weekly average. La Opala RG Ltd. (451.25, 4.08%) and Bajaj Finserv Ltd. (1,631.95, 5.96%) were trading with volumes 7.1 and 5.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

33 stocks overperformed with 52 week highs, while 1 stock tanked below their 52 week lows.

Stocks touching their year highs included - Bajaj Finance Ltd. (7,892.00, 7.62%), Bank of Baroda (203.30, 2.11%) and Can Fin Homes Ltd. (797.40, 2.43%).

Stock making new 52 weeks lows included - Rajesh Exports Ltd. (520.60, -4.22%).

13 stocks climbed above their 200 day SMA including Bayer Cropscience Ltd. (4,613.15, 4.27%) and Federal Bank Ltd. (132.80, 4.12%). 6 stocks slipped below their 200 SMA including Praj Industries Ltd. (372.90, -1.04%) and JK Lakshmi Cement Ltd. (700.00, -1.03%).

 
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The Baseline
03 Jul 2023
Chart of the Week: InterGlobe Aviation is increasingly dominant in the airline industry
By Akshat Singh

InterGlobe Aviation has been in the news with a landmark agreement to purchase 500 aircraft. The company also crossed a milestone of Rs 1 trillion in market capitalization on June 28, 2023 – it’s one of just 56 companies to hit this number. In this edition of Chart of the Week, we analyse the factors driving the performance of InterGlobe Aviation's stock from July 2021 to June 2023. 

InterGlobe Aviation's stock price has picked up pace in the past six months, after rising by 14.4% in 2022. IndiGo has held on to its position as the market leader, with a market share of 55.7% in Q1CY23 and an average market share of 56% from January 2021 to May 2023. 

Indigo’s dominance as a budget airline confirms what many airline companies across the world are discovering - customers may complain about bad food, limited legroom and zero perks, but finally it’s the cheap ticket that is the main deciding factor. 

In July 2021, the aviation company’s share price gained 15.6% due to considerable improvements in market share, passenger load factor, and available seat kilometres (ASK). ASK represents the total capacity available for sale by the airline and is a key indicator of its ability to fill up its capacity, and its operational performance.

IndiGo resumed UAE flights on August 20, 2021, after 17 months, leading to a 14.2% increase in share price during August-September. However, in November 2021, despite the government permitting 100% capacity, IndiGo's passenger load factor only improved by 2.5%, lagging behind Air India and GoAir (now GoFirst). As a consequence, the stock price dropped by 12.4% during the month. It was reported that IndiGo received 36 new planes during Jan-Nov 2021. 

With a 20% growth in its stock price in 2021, InterGlobe Aviation entered 2022 on a  high. But on January 10, 2022, the company reduced its capacity by 20% due to another Covid-19 wave. From March to May, the company lost 20.2% of its share price on the back of weak Q4FY22 results. It posted a net loss of Rs 1,681.8 crore amid weak market sentiment. However, there was a significant recovery in air traffic in June 2022. During this month, IndiGo’s market share grew by 1.3 percentage points MoM, resulting in a 16.3% rise in stock price. 

In July 2022, the price of aviation turbine fuel remained unchanged at an all-time high of Rs 1.4 lakh per kilolitre. Additionally, the Indian currency depreciated 6.3% against the US dollar from the start of the year. This has a significant impact because while a large portion of an airline's expenses (around 70%) are in dollars, including fuel, rental, and maintenance costs, most of its revenue is earned in rupees. When the rupee depreciates, it results in higher expenses, impacting the airline's profit margins. 

Another factor was multiple technical snags faced by SpiceJet, resulting in the DGCA ordering the airline to operate only 50% of its flights for eight weeks. As a result, InterGlobe’s market share increased by 1.9% to 58.9%. This resulted in an 8% growth in its stock price in July 2022. 

Promoter Rakesh Gangwal sold a 2.8% equity stake in the company on September 8, 2022, as part of his plans to exit the business by FY25. This caused the stock to plunge by 5% in the week ending September 11, 2022. In addition, the Chief Executive Officer (CEO), Ronojoy Dutta, retired on September 30, resulting in an 8% drop in its share price during the month. 

With the entry of budget airline Akasa Air on August 7, 2022, IndiGo had to offer a 20-25% discount on fares. This led to an 11.6% fall in its share price during August-September. On November 15, the company began operating its inaugural A321 Freighter aircraft on the Delhi-Mumbai route. Additionally, on November 23, 2022, it started services to Portugal and Switzerland through a codeshare collaboration with Turkish Airlines. These developments helped the stock price surge by 11% in November 2022.

In 2022, the stock price experienced a modest 8% gain. However, 2023 has been more promising, with the stock already soaring 28% as of June. The year began with the airline’s international operations recovering to pre-COVID levels, accounting for 23% of total capacity, while the fleet size expanded to 300 aircraft. On February 16, the Gangwal family sold another 4% equity stake in the company. 

Domestic passenger traffic in Q4FY23 grew by an impressive 51.7% YoY, leading to a 2.4% market share gain for IndiGo in January-March 2023. In February 2023, the company observed a 6.3% MoM decline in ASK. GoFirst filed for insolvency on May 3, 2023, enabling IndiGo to capture an additional 4% market share previously held by GoFirst. This sparked an 8% rally in InterGlobe's shares. 

The company’s recent purchase agreement - the largest in commercial aviation - of 500 Airbus aircraft on June 19, 2023, indicates a strategy shift. IndiGo is now purchasing aircraft instead of leasing them, and its debt levels have consequently increased at a three-year CAGR of 28.7%.

As a result, annual interest expenses have also been increasing at a five-year CAGR of 55.9%. In contrast, lease rentals decreased by 93% to Rs 311.7 crore in FY22. This, along with crossing a market capitalization of Rs 1 trillion, drove the stock to gain 29.7% in value during May-June

 
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Trendlyne Marketwatch
03 Jul 2023
Market closes higher, PKH Ventures’ IPO gets bids for 30% of the available shares on offer

Trendlyne Analysis

Nifty 50 closed at 19,322.55 (133.5, 0.7%) , BSE Sensex closed at 65,205.05 (486.5, 0.8%) while the broader Nifty 500 closed at 16,527.95 (98.0, 0.6%). Of the 1,998 stocks traded today, 1,073 were gainers and 863 were losers.

Indian indices maintain gains from the afternoon session and close in the green, with the Nifty 50 closing above the 19,300 mark. The volatility index, Nifty VIX, rises above 11 at the close.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty FMCG closed higher from Friday’s closing levels. According to Trendlyne’s sector dashboard, telecommunications equipment emerged as the top-performing sector of the day with a rise of over 3%.

Most European indices trade in the green. US indices futures trade higher indicating a positive start. Tesla stock price surged post-market hours as the June quarter vehicle deliveries beat analyst estimates by 4%. According to Goldman Sachs, Tesla’s recent price cut measures to boost sales have paid off.

  • Bank of Baroda sees a long buildup in its July 27 future series as its open interest rises 6.5% with a put-call ratio of 0.72.

  • Piramal Enterprises' annual return on equity (RoE) stands at 32.1% in FY24, rises 12.7 percentage points over the past five years.

  • Bajaj Auto is falling as its total monthly wholesales in June decline by 2% YoY to 3,40,981 units on the back of its overall two-wheeler wholesales falling by 7% YoY. This dip in sales is due to a fall in exports in the two-wheeler and commercial vehicle segments. The stock shows up in a screener for companies with declining net cash flows.

  • Lakshmi Machine Works, Ultratech Cement, Kennametal India and Reliance Industries are trading above their third resistance or R3 levels.

  • Asset management cos, biotechnology and movies & entertainment industries rise by more than 9% over the past week.

  • Zee Entertainment is rising as reports suggest that the firm has settled all its dues with IndusInd Bank. In light of this settlement, the National Company Law Appellate Tribunal (NCLAT) closes the insolvency resolution process.

  • IIFL finance raises Rs 1433.7 crore through the external commercial borrowing (ECB) route from HSBC, Union Bank and Bank of Baroda. The company expects these funds to strengthen their ALM position and support core business growth.

  • PKH Ventures’ Rs 379 crore IPO gets bids for 30% of the available 2.6 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 45% of the available 89.7 lakh shares on offer.

  • PSU Banks likeCanara Bank, Bank of Maharashtra, Bank of India, Punjab National Bank and Bank of Baroda are rising in trade. The broader sectoral index, Nifty PSU Bank, is also trading in the green.

  • Maruti Suzuki India is falling as its total wholesales in June grows marginally by 2.3% to 1,59,418 units, while its total domestic sales increases by 5.8% YoY. The firm’s total domestic passenger vehicle wholesales rise 8.4% YoY. The company believes that the shortage of electronic components has had a minor impact on the production of vehicles.

  • Adani Ports' cargo handled grows 11.5% YoY to 101.4 MMT in Q1FY24, backed by growth in the container, liquids & oil and dry bulk segments.

  • Metal & mining stocks like NMDC, Jindal Steel & Power, APL Apollo Tubes, Steel Authority of India and National Aluminium Co are rising in trade. All constituents of the broader sectoral index, BSE Metal, are also trading in the green.  

  • Goldman Sachs maintains its 'Buy' rating on Ultratech Cement with a target price of Rs 8,270. The brokerage highlights the company's strong volume growth of 20% in Q1FY24, surpassing their estimate of 16%. While the sector has limited upside, Ultratech Cement remains their top pick.

  • ICICI Securities initiates coverage on Chalet Hotels with a ‘Buy’ rating and a target price of Rs 603, implying an upside of 37.7%. The brokerage is optimistic about the company’s strategy of expanding its hotel portfolio through the ownership route and long-term leases during the industry upcycle. It believes the firm’s robust operating cash flows are sufficient to fund its capex plans. It expects the firm’s revenue to grow at a CAGR of 19.1% over FY23-26.                   

  • Ashish Kacholia buys a 2.74% stake in Vasa Denticity for approximately Rs 13.3 crore in a bulk deal on Friday.             

  • APL Apollo Tubes is rising as it reports a record-high increase of 56% YoY in sales volume for Q1FY24, supported by the highest contribution from its value-added segment.                                                                                                            

  • India’s manufacturing PMI falls to 57.8 in June compared to 58.7 in May. The PMI reading, however, stays above the 50-mark on the back of strong demand and output.

  • Mahindra & Mahindra is rising as its overall automobile wholesales in June increase by 15% YoY to Rs 62,429 units, led by a 22% YoY growth in SUV sales. The firm’s farm equipment sector’s total tractor wholesales improve by 6.3% YoY on the back of healthy domestic demand. It shows up in a screener for stocks with improving net cash flows over the past two years.

  • TVS Motor Co’s total monthly wholesales grow 3% YoY to 3,16,411 units, driven by domestic two-wheeler wholesales rising 22% YoY. However, the company’s total exports decline by 30.8% YoY due to a sharp fall in two-wheeler exports.

  • Kansai Nerolac Paints rises as reports indicate that the management has approved the sale of a land parcel in Kavesar, Maharashtra, for Rs 671 crore to Shoden Developers, a part of House of Hiranandani. It appears in a screener of stocks with strong momentum.

  • Oil & gas stocks like Hindustan Petroleum Corp, Gujarat Gas, Bharat Petroleum Corp, Indian Oil Corp and Indraprastha Gas are rising in trade. All constituents of the broader sectoral index, BSE Oil & Gas, are also trading in the green.

  • Morgan Stanley downgrades its rating on Apollo Tyres to ‘Equal-weight’ from Overweight with a target price of Rs 425, citing limited upside for the stock. However, the brokerage says the company is on track to meet its RoCE target.

  • Coal India is falling despite a 12.4% YoY increase in monthly production volumes to 58 million tonnes (MT) in June. The company's production during Q1FY24 has grown by nearly 10% YoY to 175.5 MT and the management believes it is on track to achieving its production target of 780 MT for FY24.

  • The Securities and Exchange Board of India imposes a fine of Rs 30 lakh on Vedanta for incorrect disclosures on the exchange and the company's website regarding announcements made last year.

  • Mazagon Dock Shipbuilders is rising as it signs a contract worth Rs 2,724.6 crore with the Indian Navy for medium refit cum life certification (MRLC) of a second Shishumar class submarine, INS Shankush.

Riding High:

Largecap and midcap gainers today include JSW Energy Ltd. (289.00, 5.96%), Canara Bank (318.50, 5.52%) and Bank of India (77.30, 5.03%).

Downers:

Largecap and midcap losers today include Persistent Systems Ltd. (4,861.75, -2.98%), Cummins India Ltd. (1,890.00, -2.73%) and Bandhan Bank Ltd. (235.45, -2.73%).

Volume Rockets

27 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included L&T Finance Holdings Ltd. (137.35, 7.56%), Latent View Analytics Ltd. (374.90, 6.61%) and IDFC Ltd. (109.20, 6.33%).

Top high volume losers on BSE were Anupam Rasayan India Ltd. (1,004.60, -2.47%), Krishna Institute of Medical Sciences Ltd. (1,756.30, -1.75%) and Tamilnad Mercantile Bank Ltd. (431.00, -1.56%).

Godrej Agrovet Ltd. (473.05, 4.26%) was trading at 21.0 times of weekly average. HLE Glasscoat Ltd. (676.40, 4.29%) and Rallis India Ltd. (204.55, 3.78%) were trading with volumes 11.2 and 8.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

50 stocks made 52 week highs,

Stocks touching their year highs included - Abbott India Ltd. (23,239.00, -0.77%), Amara Raja Batteries Ltd. (688.35, 1.05%) and Ashok Leyland Ltd. (167.15, -0.15%).

23 stocks climbed above their 200 day SMA including Latent View Analytics Ltd. (374.90, 6.61%) and JSW Energy Ltd. (289.00, 5.96%). 7 stocks slipped below their 200 SMA including Bandhan Bank Ltd. (235.45, -2.73%) and JK Lakshmi Cement Ltd. (707.25, -1.57%).

 
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The Baseline
30 Jun 2023, 05:11PM
Five Interesting Stocks Today
  1. L&T Finance Holdings Limited: Thisholding company has outperformed the Nifty Financial Services index by 21% in the past month. The stock rose 82% in the past year, according to Trendlyne’sTechnicals. The stock’s growth was backed by the firm’s ability to decrease its wholesale book concentration. The wholesale book has dropped from 42% of the loan book in FY22 to 25% by the end of FY23. The growth has primarily come from rural finance, particularly tractor loans. 

The finance firm plans to expand its loan book from Rs 18,693 crore currently to Rs 25,000 crore in the next two years. To manage the risk involved in rural finance, the firm has set a limit of Rs 15 crore per branch, and follows the RBI’s income assessment norms to analyze customer risk profile.

In urban finance, L&T focuses on two-wheeler loans with an interest rate range of 15-22%. Nearly 70% of its customers are salaried individuals. The firm has also ventured into mortgage lending, which has given a return on assets of 1.5%. This is expected to rise to 2% as the mortgage loan book expands.

L&T reported a net interest margin of 7.6% in Q4FY23, an expansion of 100 bps YoY.  The gross NPA has increased by 60 bps to 4.7%, while the net NPA declined by 50 bps to 1.5% due to higher provisioning. The stock shows up in ascreener for companies with high TTM EPS growth

ICICI Securities says that the firm’s focus on increasing the retail loan book to 90% of the AUM by the end of FY24 should help in valuation rerating. The firm’s improving financial ratios like RoA, GNPA, NIM and RoE are expected to enhance operational performance. The brokerage maintains a ‘Buy’ rating on the company.

  1. Shyam Metalics & Energy: This iron & steel manufacturing company touched its 52-week high of Rs 373.95 on Wednesday and has risen by 18.2% over the past month. This uptrend comes on the back of the company’s production capacity expansions and growing share of its value-added products. Its margins are also expected to expand as thermal coal and iron ore costs are declining. In an interview, Vice-Chairman & MD Brij Bhushan Agarwal said he is optimistic about the company’s prospects for the next two years on the back of the rising share of value-added products and timely execution of projects.

The firm shows up in a screener for stocks with improving cash flows from operations over the past two years. According to Trendlyne’s Forecaster, the company’s annual revenue and net profit are expected to rise by 28% YoY and 43.8% YoY respectively. 

Last week, the company announced a capacity expansion of its captive power plant by 90 MW to 357 MW. This allows the company to meet 80% of its energy requirements internally, resulting in lower input costs. The company has also more than doubled its sponge iron capacity to 2.7 MTPA to meet rising demand. Agarwal says,  “The addition to our captive power plant gives us a significant boost with reliable and low-cost power, and puts us in an even better position to supply sponge iron, which continues to see improving demand.”

ICICI Securities remains positive about the stock’s prospects due to an expansion in production capacity, volume growth in value-added products and declining input costs. It expects profitability to improve from Q2FY24 onwards, led by lower iron ore & thermal coal prices and higher realisations from value-added products. The consensus recommendation from three analysts on the firm is a ‘Strong Buy’.

  1. Bharti Airtel: This telecom service provider is currently trading near its all-time high. The rise follows the announcement of a strategic partnership between Airtel Business and Matter Motor Works, an EV manufacturing startup. Airtel will provide advanced automotive-grade E-Sims for all bikes produced by Matter Motor Works, allowing real-time tracking, security, and performance monitoring of these vehicles.

    Bharti Airtel’s share rose 2.3% on June 27 after it announced that Airtel Business’s Chief Executive Officer Ajay Chitkara has resigned, effective from August 2023. The resignation came as t, Airtel Business announced that it will be split into three verticals: global business, domestic business and Nxtra Data Centers. In Q4FY23, Airtel Business’s revenue grew 14.4% and gross margin expanded by 225 bps YoY. The margin expansion was on account of a drop in spectrum charges.

According to TRAI’s data released on June 28, Airtel’s wireline subscriber base increased by 1.4% MoM in April 2023, while the wireless subscriber base increased marginally by 0.02%. The company currently holds 28.7%, 24.7% and 32.5% market share in broadband, wireline, and wireless subscribers, respectively.

The company’s average revenue per user (ARPU) increased by 8.4% YoY to Rs 193, beating Reliance Jio’s ARPU of Rs 178.8 (up 6.7% YoY). The company also features in a screener for stocks near their 52-week highs with significant volumes.

Geojit BNP Paribas says that ARPU growth will be aided by higher data consumption and increased tariff plans. Also, the expansion into new business verticals like digital business, and cost optimisation measures will help in increasing the bottom line. Bharti Airtel has a consensus recommendation of ‘Buy’ from 29 analysts, of which 19 are ‘Strong Buy’, six ‘Buy’, one ‘Hold’ and three ‘Sell’. 

  1. Tata Motors: This commercial vehicles manufacturer rose by 3.9% in intra-day trade and touched its 52-week high of Rs 590 on Wednesday. This price rise is a result of SEBI’s approval of the IPO for its subsidiary, Tata Technologies. The subsidiary offers engineering, research, and development services in the automotive, aerospace and software sectors. Tata Motors currently holds a 74.8% stake in Tata Tech and plans to pare its stake by 26.8% to generate funds for debt reduction. This is in line with the automotive giant’s goal of becoming debt-free by FY25 achieved through the sale of its non-core assets and generating healthy cash flows. 

Another factor aiding the positive sentiment surrounding the stock is CLSA keeping its ‘Buy’ rating and raising its target price to Rs 690 from Rs 624, citing rising margins from JLR and stable domestic demand for commercial vehicles. Motilal Oswal chose Tata Motors as its top pick in the automotive sector as it believes the company is well-positioned to benefit from rising commercial vehicle demand. The consensus recommendation from 31 analysts on the stock is ‘Buy’. The firm also shows up in a screener for stocks with brokers upgrading recommendations or target prices over the past three months. 

Although the street remains optimistic about the company’s future growth, the automaker’s monthly wholesales fell 1.6% YoY in May. This was due to a 12% YoY decline in commercial vehicle sales, while passenger vehicle and electric vehicle wholesales grew.

The management expects a double-digit EBITDA margin in its PV & CV segments in the medium term, led by easing supply-side issues, declining raw material costs and moderating discounts. 

  1. V-Guard Industries Limited: Thiselectrical equipment firm is seeing an uptick in demand for stabilizers and inverters. Sales of high-margin products like television and refrigerator inverters are higher during the June-December cycle. However, higher inflation and high-interest rates have slowed down the consumer durable segment, especially for premium goods. The firm has also seen a moderation in southern markets.  To increase penetration in the non-southern regions, V-Guard plans to add 4,000 retailers to its existing network of 50,000 retail outlets. V-Guard Industries’ fan business faces saw increased competition from non-rated operators due to higher inventory build-up. According toTrendlyne Technicals, the stock has increased by 7.9% in the past week.

The firm plans to increase its revenue by spending 3% (2% in FY23) of the sales on advertising and plans to add more products to its portfolio to boost sales. In line with that, V-Guard acquired Sunflame in FY23 to venture into the kitchen appliances market. Sunflame is expected to contribute Rs 400– 425 crores to revenues in FY24. The decrease in raw material prices and liquidation of high-cost inventory will aid margins in FY24.The firm plans a capex of Rs 100 crore to boost  working capital and improve operating efficiency. The firm shows up in a screener for stocks with strong momentum with prices above short, medium and long-term moving averages.

ICICI Securities says improved recovery in consumer durable segments, led by the acquisition of Sunflame, dealer expansion, and higher marketing spending, will aid the top line. The softening of raw material costs will help margin expansion. The brokerage maintains a ‘Buy’ rating on the stock

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

 
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Trendlyne Marketwatch
30 Jun 2023, 03:45PM
Market sees a record close, ideaForge Technology’s Rs 567 crore IPO gets bids for 106.1X of shares

Trendlyne Analysis

Nifty 50 closed at 19,189.05 (217.0, 1.1%), BSE Sensex closed at 64,718.56 (803.1, 1.3%) while the broader Nifty 500 closed at 16,430.00 (152.8, 0.9%). Of the 1,976 stocks traded today, 1,089 were on the uptick, and 834 were down.

Indian indices touched their record highs and closed over 1.1% higher, with the benchmark Nifty 50 rising above the 19,150 mark. Power Grid Corporation of India touched its 52-week high and closed over 2% higher after its board approved investments in three projects worth Rs 390 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green but underperformed the benchmark index. Nifty Pharma and Nifty IT closed higher than Wednesday’s levels. According to Trendlyne's sector dashboard, Forest Materials was the top-performing sector of the day.

Major European indices traded in the green, following the US indices futures, which also traded higher after closing mixed on Thursday. Asian indices closed flat or higher, except for Taiwan's TSEC 50 Index, which closed marginally lower. Brent crude oil futures extended their gains and traded in the green for a third consecutive trading session.

  • Bosch beats Schaeffler India in PE ratio, one-year dividend yield %, price-to-book ratio and Trendlyne’s valuation score. But it lags in annual RoCE, one-year price change, MF holdings and broker-average rating.

  • One97 Communications (Paytm) is rising as it partners with Shriram Finance to provide financial services to its users. Under the partnership, Shriram Finance's products will be available on Paytm's digital platform to expand access to loans.

  • Tata Chemicals rises as Life Insurance Corporation of India (LIC) acquires a 2% equity stake (52,46,927 shares) in the company. After this deal, LIC holds a 7.1% equity stake (1,81,45,978 shares) in the company.

  • CreditAccess Grameen is falling as reports suggest that nearly one crore shares (around 6.5% stake) of the company, amounting to Rs 1,277 crore, have changed hands on the exchanges. The promoter, CreditAccess India BV, is the likely seller.

  • Automobile companies like Mahindra & Mahindra, Hero MotoCorp, Maruti Suzuki India, Bharat Forge and Bosch are rising in trade. The broader sectoral index, Nifty Auto, is also trading in the green.

  • PKH Ventures' Rs 379 crore IPO gets bids for 0.06X the available 2.6 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 0.13X of the available 89.7 lakh shares on offer.

  • Cyient DLM’s Rs 592 crore IPO gets bids for 67.3X the available 1.3 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 49.2X of the available 23.1 lakh shares on offer.

  • ideaForge Technology’s Rs 567 crore IPO gets bids for 106.05X the available 46.5 lakh shares on offer on the last day of bidding. The retail investor quota gets bids for 85.16X of the available 8.4 lakh shares on offer.

  • Block agreements have gained momentum in June due to the strong equity market, with shares worth $3.9 billion changing hands. This marks the highest volume of block transactions in three years, after the previous record of $4.7 billion in May 2020.

  • Fertilizers, general industrials, transportation and pharmaceuticals & biotechnology sectors rise more than 10% in the past month.

  • Balkrishna Industries, Colgate-Palmolive (India), Tata Elxsi and Schaeffler India witness a significant surge in mutual fund holdings in the past month.

  • Kalpataru Projects International is rising as the company and its international subsidiary bag orders worth Rs 1,008 crore. The company's T&D business has received multiple orders worth Rs 635 crore from both domestic and international markets, and civil works order worth Rs 373 crore in India.

  • Jefferies maintains its 'Hold' rating on Mankind Pharma with a target price of Rs 1,830. Although the brokerage expects the company to continue outperforming the market, given its sustainable earnings profile and solid franchise model, it believes the stock is trading at an expensive valuation.

  • Sharekhan maintains a 'Buy' rating on Mahanagar Gas with a target price of Rs 1,285, implying a 22.7% upside. The brokerage expects the company's growth to be driven by healthy volume growth and industry-leading EBITDA margin. It also believes that Mahanagar Gas's high margins will protect it from potential cuts in petrol and diesel prices. Sharekhan forecasts a 13.3% CAGR in the company's net profit for FY23-25.

  • ABB India wins an order from John Cockerill India to supply electrification and automation systems for an advanced steel cold rolling mill of ArcelorMittal Nippon Steel India.                                                                                                            

  • PSU stocks like Punjab National Bank, Indian Bank, Canara Bank, Punjab & Sind Bank and UCO Bank are rising in trade. Barring Bank of India, all other constituents of the broader sectoral index, Nifty PSU Bank, are trading in the green.                                   

  • Adani Transmission falls more than 4% in trade today following reports that 3.8 crore shares (3.45% equity), amounting to Rs 3,103 crore, have changed hands in a block deal.

  • SB Adani Family Trust sells a 1.58% stake in Adani Enterprises for approx Rs 4,140 crore in a bulk deal on Wednesday.

  • Deepak Agarwal, promoter of Bikaji Foods International, sells a 0.6% stake in the company on Wednesday. He now holds a 15% stake.

  • Multi Commodity Exchange falls 10% as it renews its contract with 63 Moons Technologies for six months at a higher cost. MCX has paid the service provider Rs 250 crore for the period, compared to Rs 81 crore paid for the first six months. The company appears in a screener of stocks with declining ROE.

  • Easy Trip Planners falls more than 3% in trade today following reports that 4.1 crore shares (2.35% equity), amounting to Rs 164 crore, have changed hands in a large trade.

  • IT stocks like Persistent Systems, Infosys, Mphasis, Tata Consultancy Services and LTIMindtree are rising in trade. The broader sectoral index, Nifty IT, is also trading in the green.

  • Bharat Petroleum Corp's board approves raising Rs 18,000 crore by issuing equity shares on rights issue basis. It appears in a screener of stocks with increasing FII/FPI shareholding.

  • Power Grid Corporation of India rises to a new 52-week high of Rs 259.7 as its board approves investments in three projects. Projects include dedicated telecom network development (Rs 164.4 crore), regional expansion (Rs 115.1 crore), and information and communication technology integration at Navsari with 7GW renewable energy power integration at Khadva RE park (Rs 109.47 crore)

  • Tata Communications plans to acquire Kaleyra, a US-based mobile communications provider, for $100 million (around Rs 820.5 crore). AS Lakshminarayanan, the MD & CEO of Tata Communications, says, "With this investment in Kaleyra, we will accelerate our expansion into the customer interactions platform market and strengthen our position in global communications technology."

Riding High:

Largecap and midcap gainers today include HDFC Asset Management Company Ltd. (2,295.65, 11.98%), Biocon Ltd. (265.50, 8.37%) and Indian Bank (292.55, 5.10%).

Downers:

Largecap and midcap losers today include Adani Transmission Ltd. (767.25, -6.34%), Solar Industries India Ltd. (3,740.30, -2.67%) and Dalmia Bharat Ltd. (2,164.00, -2.50%).

Crowd Puller Stocks

28 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included HDFC Asset Management Company Ltd. (2,295.65, 11.98%), Nippon Life India Asset Management Ltd. (288.15, 11.60%) and Biocon Ltd. (265.50, 8.37%).

Top high volume losers on BSE were Multi Commodity Exchange of India Ltd. (1,500.40, -8.64%), Adani Transmission Ltd. (767.25, -6.34%) and CreditAccess Grameen Ltd. (1,247.65, -5.89%).

Aditya Birla Sun Life AMC Ltd. (372.35, 0.83%) was trading at 34.2 times of weekly average. Easy Trip Planners Ltd. (40.50, -3.46%) and Eris Lifesciences Ltd. (698.90, 3.43%) were trading with volumes 27.8 and 13.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

40 stocks overperformed with 52-week highs,

Stocks touching their year highs included - Amara Raja Batteries Ltd. (681.20, 3.90%), Axis Bank Ltd. (987.45, 0.95%) and Birla Corporation Ltd. (1240.00, 1.38%).

17 stocks climbed above their 200 day SMA including Biocon Ltd. (265.50, 8.37%) and UTI Asset Management Company Ltd. (785.05, 8.19%). 8 stocks slipped below their 200 SMA including Multi Commodity Exchange of India Ltd. (1,500.40, -8.64%) and Hatsun Agro Products Ltd. (921.60, -3.63%).

 
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Trendlyne Marketwatch
28 Jun 2023
Market closes higher, Cyient DLM’s IPO gets bids for 7.6X of the available shares on offer

Trendlyne Analysis

Nifty 50 closed at 18,972.10 (154.7, 0.8%), BSE Sensex closed at 63,915.42 (499.4, 0.8%) while the broader Nifty 500 closed at 16,277.20 (113.7, 0.7%). Of the 1,967 stocks traded today, 923 were in the positive territory and 979 were negative.

Indian indices maintained their gains from the afternoon session and closed in the green, with Nifty 50 hovering just below the 19,000 mark. The volatility index, Nifty VIX, fell below 11 at the close.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Healthcare closed higher compared to Tuesday's closing levels. According to Trendlyne's sector dashboard, commercial services & supplies sector emerged as the top-performing sector of the day, with a rise of over 3%.

Most European indices are trading in the green, while US indices futures are trading lower, indicating a negative start. A Wall Street Journal report suggested that the US could impose more restrictions on exporting artificial intelligence chips to China. Chip manufacturing firms like NVIDIA, AMD, and Broadcom dropped in post-market hours on Tuesday.

  • Relative strength index (RSI) indicates that stocks like V-Guard Industries, Patanjali Foods, The Fertilisers and Chemicals Travancore and Poly Medicure are in the overbought zone.

  • Piramal Enterprises rises over 4.5% and ranks high on Trendlyne's checklist with a score of 65.2%. The stock is in the 'Strong Buy' zone and has 'Buy' ratings from 8 brokerage firms. It appears in a screener of stocks with strong momentum.

  • The Indian housing market’s uptrend continues despite rising home loan rates. The number of housing units sold across the top seven cities in India rises 36% YoY to 1.15 lakh units in Q2CY23.

  • Cyient DLM’s Rs 592 crore IPO gets bids for 7.6X the available 1.3 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 64.48X of the available 23.1 lakh shares on offer.

  • ideaForge Technology’s Rs 567 crore IPO gets bids for 50.3X the available 46.5 lakh shares on offer on the third day of bidding. The retail investor quota gets bids for 56X of the available 8.4 lakh shares on offer.

  • Titan Co and JSW Steel reach their all-time highs of Rs 3,040.7 and Rs 791.45 per share, respectively. The former has risen 10.8% over the past month, while the latter grew 12.2%.

  • Narayana Hrudayalaya falls as Kotak Institutional Equities downgrades its rating on the stock to ‘Reduce’ from ‘Add’. The brokerage considers the stock overvalued, given its uptrend over the past year, and recommends booking profits.

  • Commercial services & supplies stocks like EPL, Delta Corp, Century Textiles & Industries, SIS and Redington are rising in trade. The broader commercial services & supplies sector is also trading in the green.

  • Energy and oil & gas stocks like Adani Transmission, NTPC, Bharat Petroleum Corp, Reliance Industries and Oil & Natural Gas Corp are rising in trade. Barring Adani Green Energy, all other constituents of the broader sectoral index, Nifty Energy, are trading in the green.

  • India’s current account deficit falls 92.3% QoQ and 90.3% YoY to $1.3 billion in Q4FY23 due to a moderation in the trade deficit and robust services exports.

  • Nifty 50 reaches its all-time high of Rs 19,011.25. It rises for three consecutive days.

  • Housing Development Finance Corp, a promoter of HDFC Life Insurance, buys 1,48,80,000 equity shares in the company at an average price of Rs 667.1 per share, totalling to Rs 992.6 crore.

  • BEML is rising as it bags orders worth Rs 385 crore from Bharat Dynamics and Bharat Electronics for the supply of high-mobility vehicles. The stock shows up in a screener for companies with low debt.

  • Tata Motors rises as SEBI approves the IPO of its subsidiary, Tata Technologies. The IPO is purely an offer for sale (OFS), with shareholders planning to sell 9.57 crore equity shares, equivalent to around 23.6% of the total paid-up share capital. Tata Motors plans to offload a 20% stake in the company through the OFS.

  • Swan Energy's board approves a preferential issue of 2.3 crore equity shares with a face value of Re 1 each. The issue will be done at a premium of Rs 299, resulting in a share price of Rs 300. The total amount raised through this issue will be Rs 690 crore. The company appears in a screener of stocks with improving book value per share.

  • Metal stocks like Adani Enterprises, JSW Steel, Ratnamani Metals & Tubes and Hindustan Copper are rising in trade. The broader sectoral index Nifty Metal is also trading in the green.

  • Infosys, JBM Auto, Adani Transmission, and UTI Asset Management Company are trading above their third resistance or R3 levels.

  • CLSA maintains its "Buy" rating on SBI Life Insurance Company with a target price of Rs 1,550. The brokerage expects healthy revenue growth in FY24 and margins to remain stable between 29-31%.

  • Motilal Oswal maintains its ‘Neutral’ rating on Wipro with a target price of Rs 360, implying a downside of 5.7% from the current market price. The brokerage expects the company’s FY24 growth to be one of the lowest among the top-tier IT firms, with its margin missing the management’s guidance of 17-17.5%. It estimates the company’s revenue to grow at a CAGR of 7.8% over FY23-25.

  • Aditya Birla Fashion & Retail (ABFRL) and TCNS Clothing Co (TCNS) are rising as reports suggest that the Competition Commission of India has approved the acquisition of TCNS by ABFRL. In May, Aditya Birla Fashion announced that it had entered into definitive agreements to acquire a 51% stake in TCNS for Rs 1,650 crore.

  • Zydus Family Trust, promoter of Zydus Wellness, buys a 0.41% stake in the company through an open market transaction. It now holds a 9.5% stake in the company.

  • Gland Pharma receives one 483 observation from the US FDA during their pre-approval and good manufacturing practice inspections. The inspections took place at the company's Pashamylaram facility in Hyderabad between June 15 and June 27.

  • According to reports, 75.6 lakh shares (3% equity) of Bikaji Foods International, amounting to Rs 322.6 crore, have changed hands in a large trade.

  • Titagarh Rail Systems rises as it receives letter of acceptance for an order worth Rs 857 crore from Gujarat Metro Rail Corporation. The order encompasses the complete process of designing, manufacturing, supplying, commissioning, and training for a total of 72 standard gauge cars required for the Surat Metro Rail Phase-I Project.

  • Shapoorji Pallonji and Company, promoter of Sterling and Wilson Renewable Energy, sells a 1.85% stake in the company on Tuesday.

Riding High:

Largecap and midcap gainers today include Adani Transmission Ltd. (819.15, 5.94%), Adani Enterprises Ltd. (2,402.00, 5.15%) and Adani Ports & Special Economic Zone Ltd. (756.50, 5.03%).

Downers:

Largecap and midcap losers today include PB Fintech Ltd. (693.10, -3.29%), HDFC Life Insurance Company Ltd. (651.95, -2.29%) and Bandhan Bank Ltd. (233.45, -1.91%).

Crowd Puller Stocks

37 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included EPL Ltd. (221.00, 7.33%), Quess Corp Ltd. (446.50, 5.27%) and Adani Enterprises Ltd. (2,402.00, 5.15%).

Top high volume losers on BSE were Vedant Fashions Ltd. (1,254.80, -1.51%), Bikaji Foods International Ltd. (424.10, -1.17%) and Max Healthcare Institute Ltd. (603.30, -1.04%).

Sheela Foam Ltd. (1,214.25, 3.61%) was trading at 17.7 times of weekly average. Adani Green Energy Ltd. (956.65, -0.30%) and IFB Industries Ltd. (818.75, 2.41%) were trading with volumes 13.3 and 12.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

35 stocks hit their 52-week highs, while 1 stock was an underachiever and hit its 52-week low.

Stocks touching their year highs included - Abbott India Ltd. (23,277.55, 2.51%), Aurobindo Pharma Ltd. (738.75, 2.86%) and Zydus Lifesciences Ltd. (582.45, 2.06%).

Stock making new 52 weeks lows included - Rajesh Exports Ltd. (542.35, -0.38%).

12 stocks climbed above their 200 day SMA including Quess Corp Ltd. (446.50, 5.27%) and Adani Ports & Special Economic Zone Ltd. (756.50, 5.03%). 9 stocks slipped below their 200 SMA including Rain Industries Ltd. (162.10, -3.45%) and Restaurant Brands Asia Ltd. (108.50, -2.60%).

 
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The Baseline
28 Jun 2023
US becomes India’s largest trading partner | Stocks set to outperform in the June quarter
By Tejas MD

Last week, the India and the US pulled closer together, with a toast to a new relationship. President Joe Biden emphasized the similarities between the two countries. “Two great nations, two great friends, and two great powers," he said.

It is a moment that the US Ambassador Eric Garcetti noted, "will go down in history as a new chapter."Modi’s visit was front-page news in the US, and USA Today declared, “For nearly a decade, Narendra Modi wasn’t allowed to set foot in the United States. But times, titles and political agendas change.” 


The US displayed Modi's face in Times Square and lit up Niagara Falls in the tricolour, marking a major shift in trade relations. This change has been underway since FY19, when the US overtook China to become India’s largest trading partner for the first time. 

In this week’s Analyticks,

  • New best friends: How did the US emerge as India’s top trading partner?
  • Screener: Companies beating analyst estimates, and set for high revenue growth in Q1FY24

US becomes India’s largest trading partner, as it imposes sanctions on China

Historically, China has been India’s top trading partner. But this changed after Donald Trump won the presidency in 2016. Trump was not a fan of China, and wanted to reduce US dependence on the country. In 2018, the Trump administration imposed trade sanctions on the Chinese, including investment restrictions and tariffs on products worth $60 billion.

The Americans started looking elsewhere in Asia for trade. And so for the first time in FY19 and FY20, the US replaced China as India’s top trading partner.

Under President Biden, trade barriers between the US and China have only increased. After Russia invaded Ukraine in 2022, the US imposed sanctions on several Chinese businesses for supplying Russian military networks. 

In October 2022, the US also announced limits on the sale of new semiconductors to China, with the intention of slowing down its tech sector. 

These events presented an opportunity for India to ramp up its trade with the US. As a result, the US has become India’s top trading partner in four out of the past five years. The economic slowdown in China has also impacted China’s trade.

India has a trade surplus with the US. But while the US is India's largest trading partner, this is not true the other way round - the US still has larger trading relationships with China, the EU, and its North American neighbours.

One goes east, the other goes west: India exports raw materials to China, diversified goods to the US

India has an unequal trade relationship with China. It mainly exports basic raw materials, and imports finished goods. In FY23, 50% of India’s imports from China were electrical machinery, nuclear reactors, and mechanical appliances, while 40% of India’s exports were raw materials.

However, it is a different story when it comes to US trade. India has a trade surplus of $28 billion with the US. India’s exports to the US are also more diverse, with a focus on finished goods such as pharmaceuticals, electrical machinery and parts.

Modi and Biden sign multi billion-dollar deals, but India needs to step up execution 

PM Modi’s visit to the US comes at a time when Indian benchmark indices are hovering near their all-time highs. India’s economy is also in good shape, as it is among the fastest-growing economies, with zero recession possibility.

During the PM’s visit, Modi and Biden struck multibillion-dollar deals in areas such as semiconductors, critical minerals, technology, space cooperation, and defence.

In defence, Biden and Modi signed an agreement allowing General Electric to produce jet engines in India for Indian military aircraft, in partnership with Hindustan Aeronautics. India will also procure US-made armed MQ-9B SeaGuardian drones, amounting close to $3 billion. 

India already imports high-value aircraft and spacecraft from the US. In FY23, the import value was $1,565.1 million and exports around $462.2 million. However, the new deal could change these numbers, with total trade increasing on the back of these agreeements.

In the semiconductor space, US chipmaker Micron Technology plans a $2.7 billion semiconductor testing and packaging unit in Gujarat. While Micron will contribute 30% of the investment, the remaining funding will come from the Indian government. 

In electrical machinery and equipment, India has maintained a trade surplus with the US since FY20. As the US reduces its dependence on China in electronics, India is capturing some of that market share. 

Modi’s meeting with tech CEOs like Satya Nadella, Sundar Pichai and Elon Musk also made headlines. 

While Amazon committed to an additional $15 billion investment in India by 2030, Google pledged $10 billion to the India Digitization Fund, to accelerate the country's digital revolution. 

Will we always be the 'country of the future'?

India has won some impressive new deals, but execution remains a daunting task. Problems like infrastructure gaps, delays in approvals and permits have long held us back - China works like a smoothly-oiled machine compared to India's creaky bureaucracy.

Apple, for instance, faced several issues while setting up operations in India, including challenges in finding local partners similar to its 150 component suppliers in China. Getting state labor law updated for iPhone factories required meetings with senior political figures in Karnataka and Tamil Nadu. To fast-track deals and improve execution, India must fix long-standing problems like poor port infrastructure, policy inconsistency, and British-era labour regulations. 

The US-China trade war has given India the opportunity to rise as a prominent manufacturing power. India's US relationship also comes with less baggage: we have a trade surplus with the US, and unlike exports to China, exports to the US include finished goods. A rise in finished goods trade can help India move up the value chain, and improve its manufacturing ecosystem.

India's promising growth outlook, and a recovering US economy present a historical chance. But this promise for now, is still only half-complete. Some analysts remain skeptical of India being able to fix its problems. "India is the 'country of the future', with the future never arriving", Graham Allison wrote last week. It's about time we changed that.

Screener: Rising companies beating estimates and poised for high YoY revenue growth in Q1FY24

As Q1FY24 draws to a close, we take a look at stocks with the highest revenue YoY growth potential in the upcoming June quarter, according to Trendlyne’s Forecaster. This screenershows stocks that have beaten Forecaster estimates of revenue growth in Q4FY23, and are also set for further growth in revenue and net profit in Q1FY24.

The screener identifies 13 stocks from the Nifty 500 and one stock from the Nifty 50. It is dominated by stocks from the banking & finance, pharmaceuticals & biotechnology and general industrials sectors. Major stocks that appear in the screener are MTAR Technologies, Biocon, KPIT Technologies, Craftsman Automation, Bank of Baroda and Cummins India.

Trendlyne’s Forecaster estimates Biocon’s revenue to grow by 66.2% YoY in Q1FY24. The company saw a 56.7% YoY growth in revenue in Q4FY23, outperforming the biotechnology industry by 8.3 percentage points. This was helped by the Viataris deal, which more than doubled the revenue from the biosimilars business. Its net profit also improved by 31.3% YoY.

According to analysts, KPIT Technologies is expected to clock a revenue growth of 53.7% YoY in Q1FY24. The stock saw a 56.1% YoY growth in revenue in Q4FY23, outperforming the IT consulting & software industry by 37.5 percentage points. This improvement was driven by orders from big accounts (like Renault’s $100 million deal extension), new engagements and an increase in revenue from the mobility & autonomous segment. Its net profit increased by 41.5% YoY in the same quarter, which outperformed its industry’s net profit growth by 33.4 percentage points.

For Bank of Baroda, consensus estimates from analysts point to a revenue growth of 39.9% YoY in Q1FY24. The company’s revenue rose 41.8% YoY in Q4FY23, outperforming the banking industry by 9.9 percentage points. This was due to improving net interest margins (NIM) and lower credit costs. 

You can find some popular screenershere.

Signing off this week, 

The Trendlyne Team

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The Baseline
27 Jun 2023
Five analyst picks this week
By Abhiraj Panchal
  1. Prudent Corporate Advisory Services: ICICI Securities maintains its 'Buy' rating on this financial services company with a target price of Rs 1,048. This implies a potential upside of 13.7%. Analysts Ansuman Deb and Ravin Kurwa are optimistic about Prudent as it is one of the premier mutual fund distributors with assets under management (AUM) amounting to Rs 56,000 crore as of March 2023.

In FY23, the company earned commissions of Rs 500 crore on the back of its extensive network of 27,000 distributors across the country, giving it a notable competitive edge. The analysts also point out that the firm's stock-based business model and growing AUM contributed to a 30% revenue CAGR and a 54% earnings CAGR  in FY19-23, supported by a monthly Systematic Investment Plan (SIP) of Rs 520 crore.

The analysts predict that the company’s shift to digital platforms will unlock new revenue streams from non-mutual fund financial products. They foresee an 11% CAGR in non-mutual fund revenue from FY24-25, driven by effective cross-selling of insurance through existing distributors. Positive trends in the capital market could also boost the broking segment, the analysts say.

  1. Blue Dart Express: Motilal Oswal upgrades its rating on this logistics services provider to ‘Buy’ from ‘Neutral’, with a target price of Rs 8,040. This indicates an upside of 11.6%. Analysts Alok Deora and Saurabh Dugar note that Blue Dart’s margins were impacted in FY23 as aviation turbine fuel (ATF) prices did not align with the declining trend of global Brent crude prices. However, “ATF prices have still corrected significantly over the past months, and Blue Dart implemented a 10% annual general price hike in January 2023,” the analysts add. They believe that these factors, along with improvement in volumes, will lead to margin improvement in the coming quarter.

Blue Dart added two Boeing 737 aircraft to its fleet in FY23 to cater to the growing demand for air express services. With a robust network, the analysts believe that the company can capitalize on the growth opportunity in the express logistics space. Deora and Dugar remain positive on the company due to its 60% market share in the organised air express segment and the growth in market share in the surface express segment.

  1. Bharat Petroleum Corp (BPCL): HDFC Securities upgrades its rating on this petroleum products company to a ‘Buy’, with a target price of Rs 442. This indicates an upside of 22.7%. According to analysts Harshad Katkar, Nilesh Ghuge, Akshay Mane and Rutvi Chokshi, BPCL has performed well in the past six months on the back of improving auto fuel marketing margins. This was due to an 11% decline in Brent crude prices. The analysts expect refining margins to remain robust, supported by improving global petroleum product demand, limited supplies and lower inventories. 

Given the current trend in crude oil prices, the analysts believe that “the oil marketing companies are likely to be allowed to recover losses incurred on the sale of petrol and diesel before implementing any cuts in retail selling prices”. BPCL has committed a capex of Rs 35,000 crore over the next few years, with an expected capex of Rs 13,000 crore in FY24. The analysts expect capex intensity to sustain in FY25 as well. Political stability in oil markets such as Russia and the Middle East will continue to be an important factor.

  1. Gujarat State Petronet: Bob Capital Markets initiates coverage on this utility services provider with a ‘Buy’ call and a target price of Rs 370, indicating an upside of 25.3%. Analyst Kirtan Mehta expects growth in the refining and petrochemicals businesses, and in city gas distribution, to drive volume recovery in the short term. Average monthly LNG imports in March-May were around 50% higher than the levels in January-February. As the company has four key LNG terminals and is also expanding its capacity, the analyst believes that it will benefit from increased gas penetration in Gujarat and north India. 

Addressing investment concerns, Mehta says that the company has already repaid loans taken for the acquisition of a stake in Gujarat Gas. Its city gas distribution business has also shown substantial progress. Factoring in FY23 volume returns and upcoming tariff revision, the analyst expects Gujarat State Petronet to post 3% YoY revenue growth and 26% YoY volume growth in FY24.  

  1. Cholamandalam Investment & Finance: Sharekhan upgrades its rating on this non-banking financial company to a 'Buy', with a target price of Rs 1,350. This implies a 23.4% upside. The analysts at Sharekhan are positive about the company due to its strong performance in existing businesses and the expansion of new ventures. They expect the company’s assets under management to grow by 20-25% in FY24, with home loans and new businesses outpacing the vehicle finance sector.

According to the analysts, the company will fully offset the additional cost of funds with incrementally higher disbursement yields. They say this will help the firm maintain net interest margins at FY23 exit levels. They are optimistic about its growth in the medium term, especially in tier-II and tier-III cities, and predict a sustainable return on equity of around 20%. The company's strong performance in past business cycles gives the analysts confidence in the quality of its high growth. They also speculate that an equity fundraising in FY24 could serve as an additional growth catalyst.

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

(You can find all analyst picks here)