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Trendlyne Marketwatch
Trendlyne Marketwatch
19 Apr 2023, 03:45PM
Market closes lower, IndusInd Bank signs agreement worth $100 million with a Japanese bank

Trendlyne Analysis

Nifty 50 closed at 17,618.75 (-41.4, -0.2%), BSE Sensex closed at 59,567.80 (-159.2, -0.3%) while the broader Nifty 500 closed at 14,856.90 (-40.1, -0.3%). Of the 1,942 stocks traded today, 940 showed gains, and 946 showed losses.

Indian indices extended their losses and closed in the red. The volatility index, India VIX, rose above 12 at the close. Air passenger traffic increased by 51.7% in Q4FY23. Indigo dominates, with 56.8% market share.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark. Nifty Pharma and Nifty Metal closed higher than Tuesday’s levels. Nifty IT closed sharply lower, led by industry heavyweight Infosys and HCL Tech. AU Small Finance Bank says RBI grants licence to act as authorized dealer to deal in foreign exchange.

Most European indices trade in the red, tailing Asian indices which closed lower today. UK CPI numbers for March at 10.1%, housing and household services (electricity, gas and other fuels) and food & non-alcoholic beverages major driving force. US indices futures trade in the red, indicating a negative start.

  • Relative strength index (RSI) indicates that stocks like Aurobindo Pharma, Dr. Reddy's Laboratories, DLF and Zydus Lifesciences are in the overbought zone.

  • Anuj Kathuria, President of JK Tyre & Industries, says that the company's ability to reduce tyre prices is limited in the current scenario. He adds that falling crude prices may help in reducing input costs. The stock is 2% up in trade today.

  • Mahindra Lifespace Developers, Rallis India and Tata Consumer Products fall 1.9%, 1% and 2.3% respectively over the past week, ahead of their Q4FY23 results in the coming week.

  • United Breweries trades in the green, driven by Heineken’s Q1CY23 results. In India, Heineken has reported high single-digit revenue growth on the back of volume growth and pricing. This is expected to improve UBL’s volume growth and EBITDA.

  • IndusInd Bank enters a long-term loan agreement worth $100 million with Japan Bank for International Co-operation. The funds raised will be used by IndusInd Bank to cater to the growth of Japanese construction equipment companies in India. The bank announces its results on April 24.

  • Marico and Orient Electric hit their new 52-week lows of Rs 466.55 and Rs 221.8 respectively, with the former falling 3.73% in the past month and the other 16.37%.

  • Data released by the DGCA shows that domestic airlines have recorded a 51.7% YoY passenger growth between January and March 2023. As a result, rating agency ICRA revised the outlook for the Indian aviation industry to ‘stable’ and projected passenger traffic to grow 8-13% in FY24.

  • HDFC Securities maintains a 'Weak' outlook on Jubilant Foodworks for Q4FY23, citing weakness in demand for quick-service restaurants (QSR). It expects a 14% YoY decline in EBITDA.

  • Commodity trading & distribution, non-electrical utilities and edible oils industries fall over 21% in the past 90 days.

  • Prabhudas Lilladher expects Zee Entertainment’s Q4FY23 net profit to fall 77.6% YoY and also sees a decline in net sales. The stock shows up in a screener with major fall in TTM net profit.

  • Lalit Agarwal, Founder and MD of V-Mart Retail, expects the company’s sales to improve from Q1FY24 but adds that the sales growth will be in single-digit in FY24.

  • Timken India, Rail Vikas Nigam and CG Power and Industrial Solutions rise more than 2.5% in the past week, outperforming the Nifty 50 index.

  • Bank of India approves the raising of capital worth Rs 6,500 crore for FY24, which willl include Rs 4,500 crore as equity and Rs 2,000 crore via bonds. The stock has gained 61% in the past year and shows up in a screener with improving RoE in the past two years.

  • Piramal Pharma rises more than 7% in trade after the US FDA closed an inspection of its manufacturing facility in the US. The stock is trading above its third resistance or R3 level but ranks medium on the Trendlyne checklist score.

  • Glenmark Pharma rises as it agrees with Merck Group to settle the patent litigation for cholesterol drug Zetia. They will pay $48 million to the direct purchasers for the settlement. The stock has touched its 52-week high in trade today.

  • NBFCs are expected to report strong results in Q4FY23 on the back of high disbursements and recoveries despite the potential impact of rising interest rates on NIMs. Housing finance companies could see growth in low to high teens, while the commercial vehicle segment will grow around 15-25%.

  • Metal stocks like Jindal Steel & Power, National Aluminium, Tata Steel and Steel Authority of India are rising in trade. The broader sectoral index BSE Metal is also trading in the green.

  • Zydus Lifesciences trades flat after touching a new 52-week high of Rs 519.4 today. The company has also received US FDA approval for the manufacturing and marketing of a drug for the prevention of postmenopausal osteoporosis. The drug will be manufactured at the Moraiya facility in Ahmedabad.

  • Zomato rises 3.5% following its clarification to the exchanges regarding a news article related to the disruption caused by the change in the pay structure of its Blinkit partners. The company has stated that the disruption had no material impact on its operations and financial performance. It also adds that it is a regular affair taken to improve customer experience and address the needs of delivery partners.

  • Bajaj Electricals is rising as reports suggest that 22.4 lakh shares (1.95% equity) of the company, amounting to Rs 233.8 crore, change hands in a large trade.

  • Prestige Estate Projects is rising as its wholly owned subsidiary acquires a 51% stake in a commercial office space developer company, Dashanya Tech Parkz, for Rs 66 crore. It shows up in a screener of stocks with consistently high returns over five years.

  • Macrotech Developers, IndusInd Bank and Bank of Maharashtra's weekly average delivery volumes rise ahead of their Q4FY23 results in April.

  • Centre increases the windfall tax on locally produced crude oil to Rs 6,400 per tonne and removes the export tax on diesel, which was previously Rs 0.5 per litre.

  • Vijay Kedia buys a 6.9% stake in Atul Auto in Q4FY23, taking his holdings in the company to 8.4%. He also adds Patel Engineering to his portfolio by buying a 1.3% stake during the same period.

  • Ashish Kacholia adds Aditya Vision to his portfolio in Q4FY23 by acquiring a 1.1% stake in the company.

  • Crisil’s Q4FY23 net profit rises 20% YoY to Rs 145.7 crore, led by a 20% increase in revenue. The company has declared an interim dividend of Rs 7 per share. It shows up in a screener of stocks with improving cash flow for the past two years.

  • ICICI Lombard General Insurance’s Q4FY23 net profit rises 40% YoY to Rs 436.9 crore. Its gross direct premium increases 6.7% YoY, which is lower than the industry growth of 16.9%. However, net premiums have grown across all segments, except for fire insurance. The highest growth has been in corporate group health and crop insurance.

Riding High:

Largecap and midcap gainers today include Gland Pharma Ltd. (1,416.95, 15.05%), Hindustan Petroleum Corporation Ltd. (238.25, 4.22%) and Jindal Steel & Power Ltd. (579.85, 2.36%).

Downers:

Largecap and midcap losers today include ICICI Lombard General Insurance Company Ltd. (1,076.20, -4.82%), Balkrishna Industries Ltd. (2,023.90, -4.78%) and Coforge Ltd. (3,901.95, -3.13%).

Volume Shockers

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

Top high volume gainers on BSE included Gland Pharma Ltd. (1,416.95, 15.05%), KRBL Ltd. (384.90, 12.17%) and Prism Johnson Ltd. (129.10, 11.15%).

Top high volume losers on BSE were ICICI Lombard General Insurance Company Ltd. (1,076.20, -4.82%), Schaeffler India Ltd. (2,855.00, -2.99%) and PVR Ltd. (1,501.20, -2.98%).

Capri Global Capital Ltd. (626.60, 1.51%) was trading at 16.0 times of weekly average. Relaxo Footwears Ltd. (814.50, -0.35%) and ZF Commercial Vehicle Control Systems India Ltd. (10,248.75, -0.23%) were trading with volumes 14.3 and 10.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

8 stocks hit their 52-week highs, while 2 stocks hit their 52-week lows.

Stocks touching their year highs included - Zydus Lifesciences Ltd. (517.10, 0.23%), Dr. Reddy's Laboratories Ltd. (4,910.05, -0.05%) and Glenmark Pharmaceuticals Ltd. (512.00, 1.40%).

Stocks making new 52 weeks lows included - Marico Ltd. (468.15, -2.49%) and Orient Electric Ltd. (221.95, -2.31%).

17 stocks climbed above their 200 day SMA including KRBL Ltd. (384.90, 12.17%) and Hindustan Petroleum Corporation Ltd. (238.25, 4.22%). 11 stocks slipped below their 200 SMA including Balkrishna Industries Ltd. (2,023.90, -4.78%) and Schaeffler India Ltd. (2,855.00, -2.99%).

 
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The Baseline
18 Apr 2023, 04:20PM
Five analyst picks this week
By Abhiraj Panchal
  1. Mahindra CIE Automotive: Axis Direct initiates coverage on this auto parts and equipment manufacturer with a ‘Buy’ call and a target price of Rs 475. This indicates an upside of 29.1%. Analysts Aditya Welekar and Shridhar Kallani believe that the company has outperformed in Indian and European markets. Its sales reported a robust growth of 29% YoY in CY22, driven by the outperformance posted by key customers, increased orders and input cost pass-through to customers. The analysts note that new order wins in India stand at Rs 1,000 crore, and to meet the growing demand, Mahindra CIE is enhancing capacities across all verticals. 

Welekar and Kallani are optimistic about the company, due to the improving outlook of the PV business and negligible debt on the balance sheet. After considering the management’s focus on improving margin trends and the company’s capability to generate strong operating cash flow, the analysts say that “the stock is trading at a reasonable 1-year forward consensus PE multiple of 13x.”

  1. Tata Consultancy Services: ICICI Securities maintains a ‘Buy’ call on this IT consulting and software company with a target price of 3,786, indicating an upside of 21.1%. In Q4FY23, the company’s profit has grown by 5% QoQ to Rs 11,392 crore, while its revenue increased by 2.7% QoQ.  Over the entire FY23, its profit and revenue grew by 9.97% to Rs 42,147 crore and 16.9% respectively. 

Analysts Sumeet Jain and Aditi Patil believe that the company’s Q4 profit was 1.4% below consensus estimates due to lower margins caused by higher onsite manpower costs from subcontractor replacements and additional onsite hiring. 

Jain and Patil say, “We believe TCS remains a defensive play in the current environment where they are gaining market share by aggressively winning cost optimisation deals.” They also expect the company to benefit from a pickup in demand in FY25, as currently-postponed discretionary projects are starting to get executed.

  1. Coal India (CIL): ICICI Direct upgrades this coal company from ‘Hold’ to ‘Buy’ and gives it a target price of Rs 260. This indicates an upside of 12.1%. According to analyst Dewang Sanghavi, Coal India has extensive mining capabilities and possesses advanced technology in open-cast mining.

In March 2023, the company’s production volume increased 4% YoY to 83.5 million tonnes (MT), while the offtake volume grew by 3.4% YoY to 64.2 MT. For FY24, CIL has set a production and offtake target of 780 MT, but  Sanghavi believes that only 610 MT is needed to meet the power sector’s demand, leaving the rest for the non-regulated sector. “This augurs well for CIL’s e-auction volumes for FY24,” says Sanghavi.

Sanghavi also expects CIL’s consolidated top line to grow at a CAGR of 7.9%, and consolidated EBITDA and profit to register a CAGR of 13.5% and 16.4%, respectively.

  1. EPL: Motilal Oswal maintains its ‘Buy’ rating on this containers & packaging company with a target price of Rs 215, indicating an upside of 32.8%. Analysts Sumant Kumar, Meet Jain and Omkar Mangesh Shintre believe that the company has faced many challenges over the past few quarters due to pandemic-induced lockdowns and soaring raw material prices. But with demand recovering and raw material prices falling, they see the company’s plans to expand its business as a key positive. “With the demand recovery visible across geographies, along with the softening in raw material prices and price hikes across regions in recent months, we expect the sequential recovery in margins to continue,” the analysts add. 

Kumar, Jain and Shintre expect the firm’s profits to grow in double digits in the coming quarters, driven by rising customer additions, increasing geographical presence, cross-selling opportunities and focus on sustainability. The analysts expect the company’s net profit to grow at a CAGR of 34% over FY23-25.  

  1. Infosys: Despite a weak result and missed guidance, BoB Capital Markets maintains its ‘Buy’ rating on this IT consulting & software giant with a target price of Rs 1,760. This implies an upside of 39.4%. Analyst Saptarishi Mukherjee maintains his positive outlook on the company’s growth prospects, notwithstanding the lackluster Q4FY23 performance. While the analyst consensus on Infosys has moved to ‘hold’, Mukherjee makes his ‘buy’ case saying that  the firm’s “strength in managing the twin journeys of digital transformation (Cobalt) and cost takeout will drive growth leadership”, despite the management’s cautious outlook on key verticals like banking, financial services and insurance. 

The analyst sees an increase in orders related to cost optimisation projects, digital analytics and automation despite weak global macro-economic weakness as a key positive. 

Mukherjee also believes that the company achieving the guided target of 50,000 recruits for FY23 will benefit it in the long run. He expects the increased focus on fresher hiring to increase Infosys’ bench strength and support the employee pyramid in the long term. The analyst estimates the company’s revenue to grow at a CAGR of 19.2% over FY22-24. 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
18 Apr 2023, 03:45PM
Market closes lower, Axis Direct maintains ‘Buy’ rating on HDFC Bank

Trendlyne Analysis

Nifty 50 closed at 17,660.15 (-46.7, -0.3%), BSE Sensex closed at 59,727.01 (-183.7, -0.3%) while the broader Nifty 500 closed at 14,897.00 (-7.3, -0.1%). Of the 1,947 stocks traded today, 983 were on the uptick, and 907 were down.

Indian indices pared their opening gains and closed in the red on a volatile day of trade. The benchmark Nifty 50 index fell over 45 points and closed below the 17,700 mark. Tata Chemicals closed over 5.9% lower after the company cut its soda ash prices by 3-4%.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, despite the benchmark index closing in the red. Nifty Media and Nifty Energy closed lower than Monday’s closing levels. Nifty Pharma rose over 1.6% led by heavyweights Divi’s Labs and Cipla.

European indices traded higher, despite major Asian indices closing mixed. investors assessed the global economic growth outlook as China’s GDP growth showed a recovery in Q1CY23. Brent Crude oil futures traded in the green on positive demand outlook from China.

  • Infosys beats Tata Consultancy Services in PE ratio, durability score, FII & MF holdings and broker average rating. But it lags in QoQ revenue and net profit growth, annual RoE & RoCE and one-year dividend yield.

  • Glenmark Pharmaceuticals and Zydus Lifesciences hit their new 52-week highs of Rs 506.8 and Rs 518.5 respectively, with the former rising 14.55% in the past month and the other 8.1%.

  • Electronic components, fertilizers and education industries rise by over 14.8% over the past month.

  • India’s credit card spending rises 15.7% MoM to around Rs 1.4 lakh crore in March 2023, while credit card issuance grows by 15.9% YoY.

  • Axis Direct maintains its ‘Buy’ rating on HDFC Bank with a target price of Rs 1,975, implying an upside of 19.1%. The brokerage believes the bank’s growth momentum will sustain on the back of its distribution network, branch expansion and strong deposit growth. It expects the bank’s net profit to grow at a CAGR of 18.3% over FY23-25.

  • Pharma stocks like Lupin, Biocon, Divi's Laboratories and Aurobindo Pharma are rising in trade. The broader sectoral index Nifty Pharma is also trading in the green.

  • Crisil is falling despite a 19.8% YoY rise in net profit to Rs 145.75 crore in Q4FY23. Its revenue also increases by 20.2% YoY. The stock is trading in the overbought zone, according to the Money Flow Index.

  • Maruti Suzuki India, Syngene International and SBI Life Insurance's weekly average delivery volumes rise ahead of their Q4FY23 results in April.

  • Schaeffler India’s Q4FY23 net profit rises 6% YoY to Rs 219.4 crore. Its revenue also increases 8% YoY, however, revenue from exports falls 3%. The stock ranks high on the Trendlyne Checklist score.

  • Crude oil prices rise as China’s GDP expands 4.5% YoY. Brent crude oil price rises to $85.1 per barrel.

  • HDFC Bank, Infosys and Delta Corp see a QoQ fall in net profit growth after declaring their Q3FY23 results in the past week.

  • Mahindra CIE Automotive, Tata Consumer Products and L&T Technology Services fall 1.2%, 1% and 4.4% respectively over the past week, ahead of their Q4FY23 results in the coming week.

  • Realty stocks like Sobha, Oberoi Realty, Godrej Properties, Indiabulls Real Estate and DLF are rising in trade. The broader sectoral index Nifty Realty is also trading in the green.

  • JP Morgan is positive on the Indian pharma sector and says that India portfolio will likely see the highest price rise during the year. The brokerage adds that easing input and freight costs will help improve margins. Sun Pharmaceuticals and Cipla are its top picks in the space.

  • FIH Mauritius Investments, a subsidiary of Fairfax India Holdings, sells a 1.4% stake (49.9 lakh shares) worth Rs 209.8 crore in 360 One Wam in a bulk deal on Monday.

  • Porinju Veliyath sells a 1% stake in Orient Bell in Q4FY23, reducing his stake to 3.8%. The investor buys a 1.4% stake in Ansal Buildwell during the same period, increasing his stake in the company to 3.4%.

  • OFI Global China Fund, owned by Invesco, sells its entire stake of 5.11% (4.9 crore shares) worth Rs 1,004.3 crore in Zee Entertainment in a bulk deal on Monday. The shares have been picked up by Morgan Stanley Asia Singapore, Goldman Sachs Singapore and Segantii India.

  • Porinju Veliyath sells a 1% stake in Orient Bell in Q4FY23, reducing his stake to 3.8%. The investor buys a 1.4% stake in Ansal Buildwell during the same period, increasing his stake in the company to 3.4%.

  • Varun Beverages is falling as reports suggest that 10.17 lakh shares (0.23% equity) of the company, amounting to Rs 146.4 crore, change hands in a large trade.

  • Vijay Kedia adds a 1.1% stake in Affordable Robotic & Automation during H2FY23. He now holds 13.4%, as against 12.3% in H1FY23.

  • Ashish Kacholia buys a 0.2% stake in Yasho Industries in Q4FY23. He now holds a 4% stake in the company.

  • Tata Chemicals is falling as it cuts soda ash prices by 3-4%. Kotak Institutional Equities says this may have a negative impact on the soda ash market.

  • Shares of Avalon Technologies list at a 1.1% discount to the issue price of Rs 431 on its debut on the bourses. The Rs 865 crore IPO gets bids for 2.34 times the total shares on offer.

  • TV18 Broadcast is trading down as its Q4FY23 net profit falls 76% YoY to Rs 35 crore. Revenue also dips 6% YoY. The stock is trading 63% lower than its 52-week high.

  • Just Dial is rising as its net profit surges 3.7X YoY to Rs 84 crore in Q4FY23. Revenue increases by 40% YoY as user engagement and traffic on the website rise YoY. The stock is trading above its second resistance or R2 level.

  • Angel One is rising as its Q4FY23 net profit increases 30% YoY to Rs 266.9 crore. The company’s revenue has also increased 21% YoY, driven by growth in its total client base. However, the finance and investing activities segment has seen a marginal dip in revenue QoQ. It shows up in a screener of stocks with high TTM EPS growth.

  • Network 18 Media & Investments posts a loss of Rs 36.8 crore in Q4FY23, compared to a net profit of Rs 61.9 crore in Q4FY22. Revenue declines 8.5% YoY due to a weak advertising environment. Rising employee costs, marketing expenses, and other expenses are hitting the firm's profitability, along with declining advertising revenue.

Riding High:

Largecap and midcap gainers today include YES Bank Ltd. (16.65, 8.47%), Lupin Ltd. (698.55, 6.14%) and Bajaj Holdings & Investment Ltd. (6,349.65, 4.14%).

Downers:

Largecap and midcap losers today include Schaeffler India Ltd. (2,942.85, -2.90%), Power Grid Corporation of India Ltd. (230.30, -2.68%) and Varun Beverages Ltd. (1,414.50, -2.59%).

Volume Rockets

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

Top high volume gainers on BSE included YES Bank Ltd. (16.65, 8.47%), Sobha Ltd. (467.10, 7.44%) and Ircon International Ltd. (61.15, 6.44%).

Top high volume losers on BSE were Tata Chemicals Ltd. (932.10, -5.93%), Tata Communications Ltd. (1,212.70, -2.54%) and Kansai Nerolac Paints Ltd. (380.00, -0.03%).

ITI Ltd. (94.70, 3.78%) was trading at 72.4 times of weekly average. Bajaj Holdings & Investment Ltd. (6,349.65, 4.14%) and Just Dial Ltd. (665.95, 2.51%) were trading with volumes 11.5 and 10.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

12 stocks overperformed with 52-week highs,

Stocks touching their year highs included - Zydus Lifesciences Ltd. (515.90, 2.75%), Cholamandalam Investment & Finance Company Ltd. (839.60, 0.38%) and Cyient Ltd. (1,108.65, 2.64%).

19 stocks climbed above their 200 day SMA including YES Bank Ltd. (16.65, 8.47%) and Lupin Ltd. (698.55, 6.14%). 15 stocks slipped below their 200 SMA including Tata Chemicals Ltd. (932.10, -5.93%) and Rashtriya Chemicals & Fertilizers Ltd. (102.85, -3.11%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 Apr 2023
Market closes lower, Kotak Securities maintains ‘Sell’ rating on Eicher Motors

Trendlyne Analysis

Nifty 50 closed at 17,706.85 (-121.2, -0.7%), BSE Sensex closed at 59,910.75 (-520.3, -0.9%) while the broader Nifty 500 closed at 14,904.30 (-50.0, -0.3%). Of the 1,979 stocks traded today, 971 were gainers and 955 were losers.

Indian indices extended their losses and closed in the red, with the Nifty 50 hovering over the 17,700 mark. The volatility index, India VIX, rose above 12 at the close. India’s consumer price index data for March was reported at 5.66%, slightly higher than economists’ estimates of 5.63%.

Finance Minister Nirmala Sitharaman suggested that India might buy Russian crude oil over the price cap imposed by the G-7, if crude prices increase following the cut in OPEC+ production. Regarding the sanctions, she said, "I hope the intent is not to hurt economies which have nothing to do with the war.”

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, despite the benchmark index closing in the red. Nifty Pharma and Nifty Media closed lower than Thursday’s levels. Nifty IT closed sharply lower, led by industry heavyweight Infosys, which missed street expectations and indicated a slowdown for the IT sector in its earnings commentary.

Most European indices trade in the green, except for Switzerland’s SMI trading in the red. US indices futures trade lower as data released by the US Commerce Department shows a 1% dip in retail sales in March, indicating lower spending by US consumers.

  • Relative strength index (RSI) indicates that stocks like Aurobindo Pharma, Bajaj Auto, Dr. Reddy's Laboratories and Anupam Rasayan India are in the overbought zone.

  • Vedanta is rising as reports suggest that it has signed a memorandum of understanding with 20 Korean companies from the display glass industry to develop a manufacturing hub in India. The stock shows up in a screener of stocks with improving RoA for the past two years.

  • BofA Securities downgrades its rating on Cummins India to ‘Underperform’ from ‘Buy’ and lowers the target price to Rs 1,434. The brokerage says price hikes based on the new emission norms will impact the company’s sales. It also expects a slowdown in exports.

  • Monte Carlo Fashions' quarterly sales for Q4FY23 rises 36% YoY, led by sustained high demand. The company’s sales have jumped 101% compared to the pre-covid quarter of Q4FY20. Its yearly sales grow by 22% YoY for FY23. The stock shows up in a screener for companies with high annual EPS growth.

  • Food, beverages & tobacco, health equipment & supplies and general industrials sectors rise more than 5.6% over the past 90 days.

  • Nestle rises 4% in a weak market today, ahead of its dividend payout date on April 21. The stock is trading near its 52-week high.

  • Nestle India, Gujarat Fluorochemicals, Asian Paints and InterGlobe Aviation trade above their second resistance or R2 level.

  • Kotak Securities maintains its ‘Sell’ rating on Eicher Motors with a target price of Rs 2,800. The brokerage says demand recovery for Royal Enfield remains dull and the intensity of competition will pick up soon.

  • Precision Camshafts surges as Vijay Kedia adds it to his portfolio in Q4FY23. He buys a 1.1% stake in the company.

  • Foreign institutional investors invest Rs 4,565.9 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index futures witness the highest inflow of Rs 6,965.8 crore from foreign investors.

  • Kalyan Jewellers, Campus Activewear and Hitachi Energy India underperform their industry by more than 10% in the past month.

  • ICICI Securities maintains its ‘Buy’ rating on Zomato with a target price of Rs 65, indicating an upside of 20.6%. The brokerage believes the stock is trading at an attractive valuation and remains positive about the firm’s outlook given the sustained improvement in its operating metrics. It expects the company’s revenue to grow at a CAGR of 39.7% over FY22-25.

  • Cyient and ICICI Prudential Life Insurance rise more than 12% in the past month, ahead of their Q4FY23 results on Thursday.

  • Wipro and MphasiS touch 52-week lows of Rs 352 and Rs 1,660.05, respectively. On the other hand, Ingersoll-Rand (India) and Zydus Lifesciences reach 52-week highs of Rs 2,826 and Rs 509.2, respectively.

  • Tech Mahindra trades low after being downgraded to ‘Sell’ from ‘Neutral’ by brokerage firm Citi, which has also reduced the target price to Rs 955 from Rs 1,100. The brokerage believes that there are certain risks to growth in the communications vertical (which accounts for 40% of revenue). The company is set to announce its Q4FY23 results on April 27.

  • India’s WPI inflation eases to the lowest level in 29 months, registering at 1.34% in March, as compared to 3.85% in February. The decline is due to the fall in prices of basic metals, food products, textiles and non-food articles, among others.

  • PSU banks like UCO Bank, Punjab & Sind Bank, Central Bank of India, Union Bank of India and Indian Overseas Bank are rising in trade. All constituents of the broader sectoral index Nifty PSU Bank are also trading in the green.

  • Zee Entertainment Enterprises is falling as reports suggest that 5.48 crore shares (5.7% equity) of the company, amounting to Rs 1,119.7 crore, change hands via a block deal.

  • HCL Technologies, YES Bank and Persistent Systems fall 4.8%, 0.7% and 8.7% respectively over the past week, ahead of their Q4FY23 results in April.

  • Vijay Kedia buys a 0.2% stake in Neuland Laboratories in Q4FY23, bringing his holdings in the company to 1.2%.

  • Sunil Singhania buys a 2.3% stake in Uniparts India in Q4FY23, adding the company to his portfolio.

  • Transformers & Rectifiers (India) is rising as it bags an order of supplying transformers worth Rs 131 crore. Its total order book now stands at Rs 1,822 crore. It shows up in a screener for stocks with improving RoCE for the past two years.

  • Reports suggest that 1.26% equity of Poonawalla Fincorp changes hands in a block deal in pre-open.

  • Brightcom Group falls as the Securities and Exchange Board of India (SEBI) issues a show cause notice to the company saying that it has overstated its net profit for FY19 and FY20 by more than Rs 1,280 crore. SEBI has also asked the company to rectify the wrongly reported shareholding pattern.

  • IT stocks like Tata Consultancy Services, HCL Technologies, Wipro and LTIMindtree are falling in trade. Infosys has declined 11% after reporting a dip in Q4 net profit. Nifty IT is down 6% and all constituents of the broader sectoral index are also trading in the red.

  • Following the IMF and World Bank's estimation that India will be the fastest-growing economy in 2023, Finance Minister Nirmala Sitharaman says that the Indian economy is on track and is likely to grow at 7% in 2023.

  • HDFC Bank's net profit grows 20% YoY to Rs 12,047.8 crore as net interest income rises by 24%. Gross and net NPAs fall by 5 bps YoY to 1.12% and 0.27%, respectively. Motilal Oswal sees a 15% upside in the bank's target price after reporting robust Q4 results.

  • Infosys' Q4FY23 net profit falls 7% QoQ to Rs 6,128 crore, missing Forecaster estimates by 6.6%. Revenue dips 2.3% QoQ across all business segments except retail. However, the company reports an order inflow of $2.1 billion in Q4, bringing the total order book to $9.8 billion in FY23.

Riding High:

Largecap and midcap gainers today include Gujarat Fluorochemicals Ltd. (3,250.00, 4.98%), Union Bank of India (73.00, 4.73%) and Aditya Birla Capital Ltd. (164.65, 4.41%).

Downers:

Largecap and midcap losers today include Infosys Ltd. (1,258.30, -9.42%), LTIMindtree Ltd. (4,332.60, -6.75%) and Tech Mahindra Ltd. (1,029.95, -5.24%).

Volume Shockers

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

Top high volume gainers on BSE included HLE Glasscoat Ltd. (603.55, 15.92%), Punjab & Sind Bank (32.20, 15.83%) and KIOCL Ltd. (206.00, 14.35%).

Top high volume losers on BSE were Infosys Ltd. (1,258.30, -9.42%), LTIMindtree Ltd. (4,332.60, -6.75%) and 360 One Wam Ltd. (403.40, -5.78%).

Chalet Hotels Ltd. (363.10, 0.54%) was trading at 16.3 times of weekly average. Eureka Forbes Ltd. (394.00, 0.78%) and Bombay Burmah Trading Corporation Ltd. (914.30, 4.12%) were trading with volumes 11.3 and 9.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

17 stocks hit their 52-week highs, while 3 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Bajaj Auto Ltd. (4,255.00, -0.78%), Zydus Lifesciences Ltd. (502.10, -0.31%) and DLF Ltd. (415.35, 0.53%).

Stocks making new 52 weeks lows included - MphasiS Ltd. (1,736.55, -1.95%) and Wipro Ltd. (361.35, -1.89%).

21 stocks climbed above their 200 day SMA including KIOCL Ltd. (206.00, 14.35%) and Gujarat Ambuja Exports Ltd. (280.70, 5.71%). 10 stocks slipped below their 200 SMA including LTIMindtree Ltd. (4,332.60, -6.75%) and Tech Mahindra Ltd. (1,029.95, -5.24%).

 
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The Baseline
14 Apr 2023
Five Interesting Stocks Today
  1. Vedant Fashions Ltd. Thisspecialty retail firm has risen 40% since it went public in February 2022. According to Trendlynetechnicals, its share price has increased by 9.4% in the past week. Manyavar, as the company is known to its customers, specializes in Indian wedding and celebration wear and operates 640 franchise-owned brand outlets. The market for the celebratory wear segment is highly fragmented and dominated by informal players.  Manyavar’s inventory management through data-driven demand forecasting and tech-enabled supply chain management has led to cost optimization, while franchise-based outlets have helped achieve an ROIC of 58% with minimal capex requirements. The stock has seen a 10% increase in the past week.

Manyavar is nurturing its emerging brands like Mohey, Twamev and Manthan to cater to different segments with varying price points across geographies. Mohey, which caters to women's traditional wear, currently contributes 10% of the total revenues and has the potential to be a game changer for Manyavar. The women’s celebratory clothing market is roughly 5x bigger than the men’s market and is valued at Rs 74,000 crore. Indian customers are also notably less price-sensitive in the wedding and celebratory clothing category. 

Manyavar has generated Rs 1,317 crore in the trailing twelve months, with an operating margin of nearly 50%. The company has a cash surplus of Rs 790 crore on its balance sheets, providing a sufficient cushion for further expansion and brand building.

Motilal Oswal, in its initiating coveragereport, has highlighted Manyavar’s asset-light model and underpenetrated market, which provide an edge. Also, its higher margins and ability to scale different brands make it attractive. The brokerage has estimated profits to grow at 21% CAGR in FY23-25 and initiated a ‘Buy’ rating with a target price of Rs 1,400. 

  1. Anupam Rasayan: This agrochemicals company rose 3.9% and touched its 52-week high of Rs 993.7 on Thursday, after signing an agreement with a Japanese multinational. The letter of intent (LOI) is valued at $182 million (approximately Rs 1,500 crore) and covers the manufacture and supply of three specialty chemicals, which are advanced intermediaries for highly specialized polymers and liquid crystals. The period of the agreement is set for seven years. 

The stock has risen 32.8% over the past month, owing to multiple order wins and capex plans for expansion. This places the company in a screener of stocks that have gained more than 20% over the past month. 

On March 22, the company signed a memorandum of understanding (MoU) with the Gujarat government to establish three plants in Surat and Bharuch, with an estimated capex of Rs 670 crore. The company also signed another letter of intent worth $120 million (approximately Rs 984 crore) for a period of six years with a Japanese chemical company to supply an advanced intermediate as an active ingredient for life science on March 23. 

According to Nirmal Bang, the carry-over of higher cost inventory may subside compared to Q3FY23, while declining input chemical prices and container freight/shipping rates could reduce costs and support production growth. However, the brokerage sees a mixed trend for agrochemical stocks in Q4FY23 and has reduced the stock's target price to Rs 841 citing declining profit margins. 

  1. Bank of Baroda: This banking stock rose 3% in trade on Wednesday after reporting its Q4FY23 provisional data. The bank has seen growth in domestic advances by 17% YoY to Rs 7.9 lakh crore, while deposits rose 15% YoY. Its CASA ratio stands at 36.8% in Q4 and overall business has crossed Rs 21.7 lakh crore. The stock has risen 42.6% in the past year.

Nitin Agrawal, Head of BFSI Research at Motilal Oswal Financial Services, says that Bank of Baroda’s CASA and deposit growth are  better than its peers. He adds that the faster repricing of loans, compared to deposits, may lead to net interest margin (NIM) growth in Q4. However, according to him, Bank of Baroda’s advances growth may slow down in FY24.  Nevertheless, the bank’s CEO and MD, Sanjiv Chadha, says that it aims to grow better than industry standards.

Given the tightening liquidity by RBI, banks are expected to mobilize deposits to meet their credit demand, which bodes well for deposit growth for the bank and the sector in general. According to a report, deposit growth is likely to be around 10%-11% for FY24E. Trendlyne’s Forecaster estimates a 3.6% net profit growth for the bank in Q4FY23.  

Prabhudas Lilladher has given a ‘Buy’ rating on the stock with a target price of Rs 220, given its robust advances and deposit growth. It also expects the bank’s NIMs to improve in Q4. The bank’s main focus is on deposit mobilization aiding in a lower cost of funds, which is likely to support margin growth. 

  1. Eicher Motors: This automobile manufacturer has risen 9.5% over the past week till Thursday on the back of healthy growth in its wholesale volumes. The firm’s monthly wholesales of commercial vehicles in March rose 35.2% YoY to 11,906 units. In FY23, its sales increased 39.5% YoY, led by robust growth in its domestic business operations. However, Royal Enfield’s monthly wholesale volumes for March increased due to a 34% YoY rise in exports. But in FY23, its total wholesales expanded 39% YoY, led by growth in domestic wholesales (41% YoY). 

Despite reports of Macquarie downgrading its rating on Eicher Motors to ‘Neutral’, citing a weak earnings outlook on the back of lower volumes and margins, the stock continued its uptrend on Wednesday. On the other hand, Goldman Sachs initiated coverage on the stock with a ‘Buy’ rating, believing that the company faces the least amount of risk from electric vehicle disruption in the coming five years. It expects margins to expand due to an improving product mix for the international market. It also sees sales volumes in the domestic market rising due to the low sensitivity of its 250cc+ motorcycles to high-interest rates. 

Although different brokerages have divergent views on the company’s growth outlook, the street’s consensus remains largely positive. According to Trendlyne’s Forecaster, the consensus recommendation from 37 analysts on the company is a ‘Buy’. 

Going forward, the company’s management plans to increase its domestic sales by expanding into tier-3 and smaller markets. It also plans to ramp up exports by expanding its international presence and product portfolio. 

  1. Titan Company: This textiles, apparels & accessories company rose around 1.4% on Monday after reporting healthy growth across its key businesses. Titan has risen 10.9% in the past month and is currently trading near its 52-week high.  In Q4FY23, the company’s revenue grew by 25% YoY with help from its watches & wearables and emerging business categories. 

The watches & wearables segment expanded by 41% YoY, while emerging businesses, including fragrances & fashion accessories (F&FA) and Indian dress wear (Taneira), grew by 31% YoY. The company’s Managing Director C K Venkatraman expects Taneira, women’s bags, and the fine fragrances divisions to contribute significantly to its revenue in the next five years.

Despite gold prices rising significantly in 2023, Titan’s jewellery segment, which accounts for the majority of its revenue,  clocked a 23% YoY growth during the quarter. The segment’s strong performance was driven by growth in the new and existing customer base, high ticket sizes and a recovery in wedding sales. Titan has seen margin expansion to the tune of 60 bps in 9MFY23 on account of a better product mix. Also, the diversification of its  brand portfolio is helping margins improve with value-added products. 

ICICI Securities believes that the jewellery segment will likely outperform the consumer discretionary segment in the medium term. However, the pressure on gross margins will remain on account of increasing gold prices. Despite this, the brokerage has maintained 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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The Baseline
14 Apr 2023
By Abdullah Shah

Mutual funds have become an increasingly popular investment option in India, particularly direct growth mutual funds (which have lower expense ratios than regular mutual funds as no intermediary/manager is involved). 

In this edition of chart of the week, we examine the performance of equity mutual funds from three different angles. The first representation, a heatmap, shows yearly returns of the major mutual fund categories over the past six years. It indicates that equity mutual funds have been under pressure over the past two years due to rising inflation, repo rate hikes, and global conflicts resulting in muted returns.

Back in 2017, mutual funds posted strong returns, with all categories witnessing double-digit growth and small cap funds recording the highest return of 56.6%. However, in 2018, the performance of mutual funds largely declined – small cap funds fell the most by 16.9%, while multi & flexi cap funds had the highest returns of 5.4%. The Securities and Exchange Board of India (SEBI) changing its regulations regarding asset allocation for mutual fund houses in October 2017 also impacted returns in 2018. In 2021, the lifting Covid-19 lockdowns helped mutual funds post stellar returns, with small cap funds leading the way with 63.3% returns. 

2022 is a different story. As we can see in the second chart, sectoral/thematic funds dominate the top-performing mutual funds over the past year. Kotak Infra & Econ Reform Dir Gr had the highest returns of 18.9% over the past year, while it rose 13.5% over the past five years. Also, the safe-haven asset, gold hitting all-time highs in India amid recession fears, helped mutual funds investing in gold post strong returns in the past year.

How has performance been over the long term? The third chart shows that Quant Small Cap Dir Gr has the highest five-year annualized returns of 23.9%, outperforming the small-cap funds category by 8.5 percentage points. Quant Tax Plan Dir Gr returned 22.2% over the past five years, enabling the fund to outperform its ELSS category by 12.1 percentage points over the same period

 
Trendlyne Marketwatch
Trendlyne Marketwatch
13 Apr 2023
Market closes flat, India Inc’s revenue growth expected to fall in Q4

Trendlyne Analysis

Nifty 50 closed at 17,828.00 (15.6, 0.1%) , BSE Sensex closed at 60,431.00 (38.2, 0.1%) while the broader Nifty 500 closed at 14,954.25 (12.7, 0.1%). Of the 1,948 stocks traded today, 984 were on the uptick, and 906 were down.

Indian Indices settled flat after switching between losses and gains throughout the day, with the Nifty 50 closing above the 17,800 mark. Au Small Finance Bank closed over 16% higher as 33.48 lakh shares (0.5% equity) of the company, amounting to Rs 212.9 crore, change hands at an average of Rs 637.5 per share.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Realty and Nifty FMCG closed higher than Wednesday’s closing levels. Infosys fell sharply ahead of its Q4 results, to be announced later today.

European stocks traded mixed after opening higher, in line with the Asian indices, which closed mixed. US indices futures traded flat as investors assess US Fed rate hike expectations. Goldman Sachs expects the US Fed to pause rate hikes in June after hiking by 25 bps in its May meeting.

  • Goldman Sachs initiates coverage on Eicher Motors with a ‘Buy’ rating and a target price of Rs 3,660 as it expects the company to fare better than its peers in the electric vehicles segment. Macquarie, on the other hand, downgrades its rating on Eicher to ‘Neutral’, citing lower volumes and a slower growth outlook. It has also reduced earnings estimates for FY24 and FY25 to 12% and 10%, respectively.

  • Jindal Steel & Power plans to commission a 1.2 MTPA rail and heavy structure mill at its Angul Steel complex in Odisha, which will take the company's total capacity to 2.2 MTPA. The stock is currently trading 83% higher than its 52-week low.

  • Anupam Rasayan is rising as it enters a 7-year agreement with a Japanese multinational to produce and deliver three specialty chemicals, valued at $ 182 million (approximately Rs 1,500 crore).

  • The Society of Indian Automobile Manufacturers (SIAM) reports that two-wheeler sales have risen by 7.7% YoY to 12.9 lakh units, while passenger car sales have fallen by 11.6% YoY to 1.2 lakh units in March.

  • Axis Direct initiates coverage on Mahindra CIE Automotive with a ‘Buy’ rating and a target price of Rs 475. This implies an upside of 29.3%. The brokerage is positive about the firm’s prospects on the back of market share gains in India and Europe, strong cash flow generation and a healthy balance sheet. It expects the company’s net profit to grow at a CAGR of 24.8% over CY22-25.

  • Goldman Sachs believes that the US Federal Reserve will not raise interest rates in the June meeting, as the March inflation data has been in line with its expectations.

  • Rites is rising as it secures an order worth Rs 72 crore from the Kerela Infrastructure Investment Fund Board for project management consultancy work. The company shows up in a screener of stocks with prices above their short, medium and long-term moving averages.

  • Transformers & Rectifiers (India) is rising as it bags orders worth Rs 192 crore from a central utility company for the supply of transformers. With this order, the firm’s order book stands at Rs 1,691 crore.

  • Rail Vikas Nigam is rising as it bags an order from the North Western Railway for the block signalling of the Jaipur division. The estimated project cost is Rs 63.17 crore. It shows up in a screener of stocks with highest recovery from their 52-week lows.

  • India’s CPI inflation eases to a 15-month low of 5.66% in March, down from 5.95% in February, due to a moderation in food prices.

  • Campus Activewear is rising as it acquires a land parcel and building in Ponta Sahib, Himachal Pradesh, from Marico Industries for capacity expansion. The total cost of acquisition is Rs 16.7 crore. The company plans to manufacture semi-finished goods and establish footwear assembly operations in the newly acquired facility.

  • ICICI Prudential Life Insurance, Cyient and Tata Communications rise 12.8%, 14.4% and 6% respectively in the past month, ahead of their Q4FY23 results next week.

  • SRF is rising as it receives the board’s approval to build a pharma intermediates plant that will serve as backward integration to produce pharma products at the Dahej plant. The project, with an estimated cost of Rs 223 crore, was commissioned on April 12.

  • Tata Consultancy Services’ net profit rises 5% QoQ to Rs 11,392 crore in Q4FY23. Revenue increases 1.6% QoQ, led by growth across all segments except communication, media & technology, which has marginally fallen by 0.6%. Rajesh Gopinathan, the company’s CEO, says that the weak result in Q4 is because of the uncertainty in the banking, financial services and insurance segment of North American markets.

Riding High:

Largecap and midcap gainers today include Au Small Finance Bank Ltd. (679.20, 17.07%), IDBI Bank Ltd. (51.70, 9.77%) and NHPC Ltd. (42.85, 3.75%).

Downers:

Largecap and midcap losers today include LTIMindtree Ltd. (4,646.40, -3.76%), Persistent Systems Ltd. (4,391.75, -3.34%) and Laurus Labs Ltd. (3,13.90, -2.85%).

Volume Rockets

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

Top high volume gainers on BSE included Au Small Finance Bank Ltd. (679.20, 17.07%), IDBI Bank Ltd. (51.70, 9.77%) and Gujarat Ambuja Exports Ltd. (265.55, 7.66%).

Top high volume losers on BSE were LTIMindtree Ltd. (4,646.40, -3.76%), PNB Housing Finance Ltd. (423.45, -3.51%) and Persistent Systems Ltd. (4,391.75, -3.34%).

Gujarat Alkalies & Chemicals Ltd. (647.70, 2.66%) was trading at 15.6 times of weekly average. Welspun India Ltd. (81.15, 6.64%) and Graphite India Ltd. (278.40, 4.56%) were trading with volumes 10.1 and 6.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks made 52 week highs,

Stocks touching their year highs included - Zydus Lifesciences Ltd. (503.65, -0.19%), Godrej Consumer Products Ltd. (963.20, -0.58%) and Housing Development Finance Corporation Ltd. (2,786.85, 0.64%).

16 stocks climbed above their 200 day SMA including Au Small Finance Bank Ltd. (679.20, 17.07%) and Gujarat Ambuja Exports Ltd. (265.55, 7.66%). 4 stocks slipped below their 200 SMA including 3M India Ltd. (22,861.60, -0.74%) and Brigade Enterprises Ltd. (481.55, -0.66%).

 
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The Baseline
13 Apr 2023
Screener of the week: Nifty 500 companies that will gain from shifting global supply chains
By Abdullah Shah

This week, we take a look at stocks that stand to gain from the China+1 strategy. This screener reflects companies that have a global presence and are likely to see QoQ revenue growth of over 5% in Q4FY23 and revenue growth of over 10% YoY in FY23.

Industries like electrical equipment, pharmaceuticals and consumer electronics feature in the screener. Major stocks in the screener are Larsen & Toubro, Varun Beverages, Havells India, Voltas, Natco Pharma and Amber Enterprises.

Natco Pharma may see the highest revenue growth of 70% QoQ in Q4FY23, according to Trendlyne’s forecaster. ICICI Direct reports that the company plans to expand its presence in other geographies and in the crop protection segment in Brazil, Canada and China. This move is likely to contribute significantly to revenue growth in the medium to long-term.

Forecaster estimates Varun Beverages’ quarterly revenue to increase by 62.1% QoQ in Q4FY23, with an 18.7% YoY growth in revenue for FY23. The  company is set to increase its capacity by 20%, which will be operational before the summer, according to Motilal Oswal.

Amber Enterprises may clock an estimated revenue growth of 42% QoQ in Q4FY23 and 43.3% YoY in FY23. ICICI Securities sees strong growth from the refrigeration and air conditioning, and electronic component segments, which are focused on exports. 

You can find some popular screenershere

 
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The Baseline
12 Apr 2023
Can India come out of China's shadow? | Stocks set to gain from shift in global supply chains
By Deeksha Janiani

The world is a more stressed-out place today compared to five years ago, and a big reason for that is China.

China's current leader Xi Jinping has proved to be a thin-skinned and power-hungry man. Under him, China has made aggressive territorial claims in the South China Sea, Taiwan and in the Himalayas, causing its relationships with India, the US and Europe to deteriorate. China is fast becoming the unpopular kid in class, and negative views of the country are near historic highs.

China however, is a major player in global supply chains. These supply chains are increasingly at risk as tensions rise, particularly in the semiconductor chip industry, which is concentrated in a few countries. Taiwan’s TSMC chips for example, account for one-third of new computing supply. These chips power our smartphones, electronics, AI and advanced missiles.

Faced with Chinese aggression and American sanctions, multinational companies are belatedly trying to diversify their supply chains across industries. Companies like Apple, Google, Sony, Adidas, Nike and Samsung have already set up shop in other Asian countries as a hedge against supply chain risks. This trend is likely to intensify if the relationship between China and the West continues to deteriorate. 

The global supply chain rejig gives India a once-in-a-millennium opportunity. India has built-in strengths that would help it to take advantage as the world searches for a China alternative: a young workforce, a large base of entrepreneurs and the Centre’s push towards manufacturing. But is India doing enough? 

In this week’s Analyticks:

  • Can the tiger beat the dragon?: India has a golden chance to boost manufacturing and exports. But there are obstacles in its way  
  • Screener: Indian companies set to gain from shifting global supply chains

Let’s get into it.

India needs to get its act together fast, as global supply chains shift away from China  

This isn’t the first time that China has presented India with an opportunity in world trade. Since 2008, China has been exiting low-cost and labour-intensive manufacturing as it moved up the value chain. This opened up a $150 billion opportunity for India.

However, India managed to capture only 10-15% of the market vacated by China. Most of this low-end space was snapped up by other Asian countries like Vietnam and Bangladesh. Despite the Indian government's efforts to boost domestic manufacturing with schemes like ‘Make in India’ and PLI, little changed on the ground.

The share of manufacturing activity in India’s real GDP has remained flat in the past seven years, indicating weak domestic and export demand. Exports clocked a growth of just 4% CAGR in FY15-FY22. 

Compare this with Vietnam, which saw a sustained rise in its manufacturing activity and double-digit growth in its exports between 2014-21. This was led by sectors like textiles, footwear and furniture. 

India’s services exports are growing at a much faster clip than goods exports, thanks to business services like accounting, audit and R&D. 

An unequal relationship: India exports raw materials to China, imports components, finished goods

India has barely moved up the value chain when it comes to merchandise exports. It was mainly exporting raw materials and intermediate goods to China in 2021. India's mix is comparatively more diverse for the US, as textiles and pharma exports come into play. 

Over 50% of India’s imports from China consist of capital goods and consumer durables. This reveals a key weakness for India: the lack of a component manufacturing ecosystem.

It is often cheaper for India Inc to import finished goods and key inputs from China. An IIFT study showed that Indian companies preferred Chinese suppliers across industries like pharma, telecom and textiles, both due to price and better quality. "Without Chinese imports, pharma manufacturing in India would come to a halt," one observer noted.

However, there are advantages that India can leverage as countries increasingly opt to trade with trusted allies, popularly known as ‘friendshoring’. 

Where does India hold an edge over China?

One long-standing factor playing out in China is rising labour wages.This has prompted China to shift away from labour-intensive manufacturing in the past decade.Between 2013 and 2022, hourly wages in China doubled to an average of $8.27, while they remain below $3 in India, Vietnam and Thailand. 

Business disruptions during China's ‘zero-covid’ days, and the whimsical decisions of a single leader have also sped up the supply-chain ‘de-risking’ drive. In contrast, India offers a stable and democratic government committed to pro-reform policies. 

India’s younger demographic is also a natural advantage. The median age in India is only 28, while it is 39 in China. Effectively, India has a higher number of young, energetic people available for work in factories. 

India however, is still struggling with structural problems, many of which came to the forefront during Apple’s recent entry into the country.  

India has a long way to go before it can emerge as a global manufacturing hub

Apple faced many teething issues while setting up operations in India, including the inability to find local partners similar to its 150 component suppliers based in China. To manage this, India is giving out faster clearances to Apple’s Taiwanese and Chinese suppliers to set up their presence in India.

Poor production yields, lack of product designers, and lower flexibility among Indian manufacturers are other gaps Apple is working to resolve. In addition, there is the attitude issue. A former Apple employee interviewed by the Financial Times said that “there just isn’t a sense of urgency” in India. 

Jamshyd Godrej, Chairman of Godrej & Boyce, highlighted that it’s the ease of doing business which caused Vietnam to jump to the front, ahead of India. He said, “In Vietnam, when you have an industrial park, the park authorities take care of every type of clearance. It is literally a one-stop shop.” 

India also faces issues such as poor port infrastructure, policy inconsistency, socialist-era labour regulations, and poor learning levels among its students, which must be addressed in order to improve the country's competitiveness in the global manufacturing landscape.

What can be done to ensure that India doesn’t miss the bus again? Sunil Vachani, chairman at Dixon Technologies, lists three key things that should be prioritized – “We need to achieve large scale in manufacturing to be globally competitive. The time has come for mega factories. We also need a vibrant component ecosystem. And we need to design in India”.

Fate has smiled upon India owing to China’s missteps. But this time, it is competing with other Asian nations for a larger share in the global manufacturing pie. India will need to think big and act fast to win this race.

Screener: Nifty 500 companies that will gain from shifting global supply chains

This week, we take a look at stocks that stand to gain from the China+1 strategy. This screener reflects companies that have a global presence and are likely to see QoQ revenue growth of over 5% in Q4FY23 and revenue growth of over 10% YoY in FY23.

Industries like electrical equipment, pharmaceuticals and consumer electronics feature in the screener. Major stocks in the screener are Larsen & Toubro, Varun Beverages, Havells India, Voltas, Natco Pharma and Amber Enterprises.

Natco Pharma may see the highest revenue growth of 70% QoQ in Q4FY23, according to Trendlyne’s forecaster. ICICI Direct reports that the company plans to expand its presence in other geographies and in the crop protection segment in Brazil, Canada and China. This move is likely to contribute significantly to revenue growth in the medium to long-term.

Forecaster estimates Varun Beverages’ quarterly revenue to increase by 62.1% QoQ in Q4FY23, with an 18.7% YoY growth in revenue for FY23. The  company is set to increase its capacity by 20%, which will be operational before the summer, according to Motilal Oswal.

Amber Enterprises may clock an estimated revenue growth of 42% QoQ in Q4FY23 and 43.3% YoY in FY23. ICICI Securities sees strong growth from the refrigeration and air conditioning, and electronic component segments, which are focused on exports. 

You can find some popular screenershere.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Apr 2023
Market closes higher, Citi reiterates ‘Buy’ rating on Jubilant Foodworks

Trendlyne Analysis

Nifty 50 closed at 17,812.40 (90.1, 0.5%), BSE Sensex closed at 60,392.77 (235.1, 0.4%) while the broader Nifty 500 closed at 14,941.55 (74.3, 0.5%). Of the 1,952 stocks traded today, 1,119 were in the positive territory and 797 were negative.

Indian indices extended their gains and closed in the green, with the Nifty 50 rising over the 17,800 mark. The volatility index, India VIX, rose above 12 at the close. India’s consumer price index data for March is due to be released later today. Economists expect the CPI to be in the range of 5.6-5.8%.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Healthcare and Nifty Auto closed sharply higher than Tuesday’s levels. Nifty IT also closed higher despite tech-heavy Nasdaq 100 closing lower on Tuesday. HDFC plans to raise USD 6 billion through bond sales in FY24.

Most European indices trade in the green, tailing Asian indices, which closed higher today. US indices futures trade flat as investors wait for March CPI data to be released later today. Economists expect the US CPI for March to be lower at 5.2% from the earlier 6% in February.

  • Money flow index (MFI) indicates that stocks like Dr. Reddy's Laboratories, JBM Auto, Housing Development Finance Corp and Data Patterns (India) are in the overbought zone

  • Network 18 Media & Investments, Tamilnad Mercantile Bank and Nestle India fall 1.5%, 1% and 1.4% respectively over the past week, ahead of their Q4FY23 results in April.

  • Citi reiterates its ‘Buy’ rating on Jubilant Foodworks with a target price of Rs 619. The brokerage expects store expansion and digital investments to aid the company's growth. The stock is, however, trading near its 52-week low.

  • Puravankara is rising as its annual sales increase 29% YoY to a record high of Rs 3,107 crore in FY23. The company’s customer collections surge 57% YoY, while the average price realisation per square foot grows by 14% YoY. In Q4FY23, its quarterly sales value has gone up 21% YoY.

  • Data Patterns (India) and KSB reach their all-time highs of Rs 1,674.85 and Rs 2,276.95 per share respectively after a 22.3% and 7.7% increase in the past month.

  • Max Healthcare Institute rises as reports suggest that 1.8 crore shares (1.85% equity) of the company, amounting to Rs 807.1 crore, change hands.

  • IT stocks like Coforge, Infosys, Mphasis, Persistent Systems and Tech Mahindra are rising in trade. All constituents of the broader sectoral index Nifty IT is also trading in the green.

  • Adani Transmission, in its business update, has declared surplus cash of Rs 300 crore as of March 31, 2022. According to the filing, the company funded its capex of Rs 1,310 crore for FY23 through internal accruals.

  • Crisil, ICICI Bank and IDFC First Bank's weekly average delivery volumes rise ahead of their Q4FY23 results in April.

  • Suzlon Energy wins an order for the development of a 50.4 MW wind power project for Sembcorp’s renewables arm Green Infra Wind Energy. The company will execute the project and provide comprehensive operation and maintenance services post commissioning.

  • Pharmaceutical companies like Laurus Labs, Divi’s Laboratories, Biocon, Granules India and Pfizer are rising in trade. The broader sectoral index Nifty Pharma is also trading in the green.

  • Brokerage Prabhudas Lilladher releases Q4 estimates for private banks. It expects Axis Bank’s profit to increase 43%, while Kotak Mahindra Bank is projected to record net profit growth of 3.4% YoY in Q4FY23. HDFC Bank and ICICI Bank's profits may rise more than 21% YoY in Q4.

  • JP Morgan believes further price hikes for steel in the domestic market are not likely. The brokerage says coking coal prices, which constitute 40-45% of the total raw material cost, have dropped by around 25% from the peak in February and are likely to decline further.

  • Sugar stocks like Shree Renuka Sugars, EID Parry (India), Triveni Engineering & Industries, and Dalmia Bharat Sugar and Industries are rising in trade. The broader industry of sugar is also trading in the green.

  • Motilal Oswal maintains its ‘Buy’ rating on Maruti Suzuki with a target price of Rs 10,400. This implies an upside of 19.7%. The brokerage expects the company to gain market share and expand its margins in FY24, led by new product launches, a better product lifecycle and product mix, and improved supplies. It estimates the firm’s net profit to grow at a CAGR of 22.6% over FY23-25.

  • PSU bank stocks like Punjab & Sind Bank, Central Bank of India, UCO Bank and Canara Bank are falling in trade. The broader sectoral index Nifty PSU Bank is also trading in the red.

  • Sula Vineyards is rising as its own brand sales rise 15% YoY to Rs 104.3 crore and revenue from wine tourism grows 18% YoY in Q4FY23. Own brand sales volume crosses 1 million cases in FY23, with elite & premium wine sales volume crossing the 5-lakh mark.

  • Credit rating agency Moody’s Investors Service says India’s electric vehicle penetration is 1% at present. However, government initiatives like consumer incentives, state-level subsidies and GST rate cuts will help in increasing EV penetration, the agency adds.

  • HDFC Bank, Just Dial and Crisil rise 5.7%, 4.2% and 3.8% respectively in the past month, ahead of their Q4FY23 results next week.

  • HFCL receives purchase orders worth Rs 123.8 crore from Reliance Projects & Property Management Services for the supply of optical fibre cables. It shows up in a screener of stocks with consistent high returns in the past five years.

  • Time Technoplast is rising as it receives an order worth Rs 54 crore from Indraprastha Gas to supply CNG cascades made from composite cylinders. It shows up in a screener for stocks with decreasing promoter pledges.

  • Reports suggest that 12.56 lakh shares (0.16% equity) of Cipla, amounting to Rs 114.96 crore, change hands in a large trade.

  • Internet Fund III sells a 1.6% stake (1.2 crore shares) worth Rs 387.8 crore in Delhivery in a bulk deal on Tuesday.

  • The International Monetary Fund (IMF) lowers its forecast for India’s GDP growth in FY24 to 5.9%, from the earlier projection of 6.1%.

  • Dolly Khanna buys a 1.3% stake in Som Distilleries & Breweries in Q4FY23, adding the company to her portfolio.

  • Ashish Kacholia buys a 1.97% stake in Venus Pipes & Tubes for approx Rs 30 crore in a bulk deal on Tuesday.

  • A consortium led by Bharat Heavy Electricals (BHEL) bags orders worth Rs 9,600 crore to supply 80 Vande Bharat sleeper trains. Titagarh Wagons, another company in the consortium, touches an all-time high of Rs 303.6 in trade today after winning the order from the Railway ministry.

  • Delta Corp’s Q4FY23 net profit rises 6% YoY to Rs 51.2 crore and revenue grows by 4% YoY driven by the gaming operations and online skill gaming segments. The stock shows up in a screener for companies with high TTM EPS growth.

Riding High:

Largecap and midcap gainers today include Divi's Laboratories Ltd. (3,212.10, 9.73%), Laurus Labs Ltd. (323.10, 6.97%) and Max Healthcare Institute Ltd. (479.00, 6.23%).

Downers:

Largecap and midcap losers today include Cholamandalam Investment & Finance Company Ltd. (820.25, -2.45%), ABB India Ltd. (3,203.55, -2.25%) and Power Finance Corporation Ltd. (165.90, -1.95%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Divi's Laboratories Ltd. (3,212.10, 9.73%), IFB Industries Ltd. (828.90, 8.64%) and SIS Ltd. (373.45, 8.17%).

Top high volume losers on BSE were KNR Constructions Ltd. (243.30, -2.72%), Adani Total Gas Ltd. (938.85, -1.32%) and Shoppers Stop Ltd. (604.65, -0.62%).

Prince Pipes & Fittings Ltd. (588.40, 0.24%) was trading at 14.5 times of weekly average. Laurus Labs Ltd. (323.10, 6.97%) and Rashtriya Chemicals & Fertilizers Ltd. (107.20, 6.83%) were trading with volumes 11.9 and 11.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

12 stocks took off, crossing 52-week highs, while 1 stock was an underachiever and hit its 52-week low.

Stocks touching their year highs included - Bajaj Auto Ltd. (4286.00, 2.60%), Zydus Lifesciences Ltd. (504.60, 0.72%) and Cyient Ltd. (1,095.50, 1.28%).

Stock making new 52 weeks lows included - Orient Electric Ltd. (226.85, -0.87%).

11 stocks climbed above their 200 day SMA including Rashtriya Chemicals & Fertilizers Ltd. (107.20, 6.83%) and Medplus Health Services Ltd. (731.15, 5.66%). 6 stocks slipped below their 200 SMA including KNR Constructions Ltd. (243.30, -2.72%) and AstraZeneca Pharma India Ltd. (3,198.75, -1.88%).