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The Baseline
14 Jun 2023
Five analyst picks this week
By Suhas Reddy
  1. Star Cement: Axis Direct keeps its ‘Buy’ rating on this cement company and raises its target price to Rs 165 from Rs 145. This implies an upside of 15%. In Q4FY23, the company’s net profit rose 8.7% YoY to Rs 96.1 crore, while revenue grew by 10.1%. 

Analysts Uttam K Srimal and Shikha Doshi believe the company’s growth will be driven by higher sales volume and lower input costs. They believe the firm is well-placed to benefit from the growing demand for cement in East and North-East India, given its massive presence in the regions and its production capacity expansion initiatives. “The company is the leading producer of cement in the North-East region, which contributes 70-75% of its total revenue," they add. 

The analysts also see the management’s plan to increase the share of its premium cement products to 8% from 4% of total revenue as a key positive. Srimal and Doshi expect the company’s net profit to grow at a CAGR of 14% over FY23-25.

  1. Hindustan Unilever: Bob Capital Markets maintains its ‘Buy’ call on this FMCG company with a target price of Rs 3,069, indicating an upside of 14.7%. In FY23, the company’s revenue increased by 15.9% YoY to Rs 61,092 crore. Analyst Vikrant Kashyap says, “Despite persisting macroeconomic challenges such as tepid market growth, high commodity inflation, and geopolitical uncertainties, the company has increased its market share in more than 75% of its portfolio.”

The analyst believes that with its strong brand portfolio, Hindustan Unilever is tapping into emerging demand through new launches. According to the annual report, market development initiatives added Rs 10,000 crore to the company’s turnover in FY23. The analyst expects investments in brand building and innovation to lend further momentum to the company’s growth.

Kashyap is also optimistic about Hindustan Unilever’s strong distribution network and resilient supply chain. With 29 owned factories and 50+ manufacturing partners, the company has a strong production capacity to meet market demand.  

  1. Graphite India: ICICI Direct maintains its ‘Buy’ call on this industrial goods company with a target price of Rs 440, indicating an upside of 13.6%. In Q4FY23, the company’s consolidated capacity utilisation was at 55%, lower than the brokerage's estimate of 60% and down from 76% in Q4FY22. During the quarter, it reported a revenue of Rs 820 crore (down 10.4% YoY), as against the brokerage’s estimate of Rs 729 crore. Graphite India’s price rose 106.1% in the past three years, as against the Nifty 50’s 87.7%.
    Analyst Dewang Sanghav says, “The World Steel Association forecasts that steel demand will see a 2.3% rebound to reach 1,822 million tonnes (MT) during 2023, and a further 1.7% growth to reach 1,854 MT by 2024.” He believes that this bodes well for graphite electrodes demand. 

Sanghav is also optimistic about the shift of steel manufacturer’s towards the Electric Arc Furnace (EAF) process. He expects this transition to drive sustainable demand for graphite electrodes in the long term. The analyst emphasises that this environmental-friendly process will attract companies looking to reduce their carbon footprint. 

  1. Angel One: ICICI Securities maintains its 'Buy' rating on this capital markets company, setting a target price of Rs 1,590. This implies a potential upside of 6.5%. In Q4FY23, the company delivered a YoY growth of 30.4% amounting to Rs 266.9 crore as net profit, accompanied by a 23% increase in revenue. For Q1FY24, they forecast a net profit of Rs 230 crore, taking into account the company's strong performance in May 2023.

Analysts Ansuman Deb and Ravin Kurwa maintain a positive outlook on the company due to its digital business model, which allows it to sustain higher revenue from clients in the post-acquisition years. Moreover, the company has established a strong track record in terms of order volume, experiencing a growth of 2.3 times over the past two years. As of May 2023, it holds a retail volume share of 24%.

Deb and Kurwa believe that Angle One's super-app will be instrumental in achieving market leadership and enhancing customer lifecycle value. They forecast an earnings CAGR of 16% over FY23-25, with an expected profit after tax of Rs 1,150 crore in FY25.

  1. Trent: Motilal Oswal maintains its ‘Buy’ rating on this retail company with a target price of Rs 1,835. This implies an upside of 8.9%. In Q4FY23, the firm’s net profit jumped 337.5X YoY to Rs 54.2 crore and revenue surged by 64.3%.

Analysts Aliasgar Shakir, Harsh Gokalgandhi and Tanmay Gupta note that despite muted discretionary demand, Trent has outperformed its peers. They also see the firm’s ability to manage its balance sheet effectively, even with aggressive store additions, as a key positive. The analysts add, “There are near-term growth headwinds given the high pent-up base and demand weakness, but Trent continues to outperform its peers and offers a huge runway for growth over the next three-to-five years.”

Shakir, Gokalgandhi and Gupta expect the company’s gross margins to improve in the coming quarters on the back of falling raw material costs. Overall, they believe Trent will maintain its growth trajectory, supported by strong same-store-sales growth, productivity, healthy footprint additions, and Zudio’s strong brand value. The analysts expect the firm’s revenue to grow at a CAGR of 28.9% over FY23-25. 

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

(You can find all analyst picks here)

 
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The Baseline
13 Jun 2023
By Abdullah Shah

2022 was a year of upheaval for global trade, as Putin’s war turned major western powers against Russia, and the US imposed sanctions against China, a major trading partner. Higher inflation and rising interest rates also caused pain and shifted buying patterns. This caused global trade to grow at  12.3% to $32 trillion in CY22 -  slower than the previous two years.

Key economies may also be facing recessions in FY24 – Germany, for instance, entered a technical recession in May 2023 as its GDP fell for two consecutive quarters in Q4FY23. This could put further pressure on trade growth. 

In this edition of the Chart of the Week, we take a look at the trends in trade for major economies and assess their performance in exports and imports. Countries like the US and China have witnessed sharp changes in their trade balances in April and May 2023. 

China is the world’s biggest exporter, leading the number 2 country, the US, by a wide margin. But it has struggled with demand in recent months. China’s trade surplus in May dropped 27% MoM to $65.8 billion, its lowest level since April 2022. Despite lifting its Covid lockdown restrictions in January 2023, lower demand for Chinese manufactured goods caused a 7.5% YoY fall in exports, much worse than the decline expected by Reuters (-0.4%). Imports also fell by 8% YoY. 

On the other side of the world, the US saw its trade deficit widen by 23% MoM to its highest level in the past six months, at $74.6 billion in April 2023. The US Commerce Department claims that this was the biggest MoM worsening in the trade deficit since April 2015. The increase in imports due to high demand for imported manufactured goods, coupled with a decline in exports of energy products, has contributed to this deficit. 

As China and US trade balances moved in the negative direction, India’s trade deficit contracted to its lowest level in the past 20 months at $15.2 billion in April 2023. But this is not necessarily a sign of rising exports. 

India actually saw a 12.7% YoY decline in exports due to weak global demand. But it also witnessed a 14% YoY decrease in imports on the back of reduced commodity prices like petroleum. With imports falling faster than exports, India’s trade deficit narrowed. 

Germany, on the other hand, provided a silver lining as its April trade surplus reached its highest level since January 2021 at $20.3 billion. Exports rose 1.2% MoM, driven by increased demand for German manufactured goods from the US, UK and China. At the same time, imports declined by 1.7% MoM, reflecting the country’s economic slowdown.

Vietnam has emerged as a new success story in global trade, with the small country making outsized progress in textile, chemicals and other exports. The country has turned a trade deficit into a surplus over the past year. However, Vietnam’s May trade surplus fell by 12.5% MoM to $2.2 billion. In April, the country’s exports had fallen by 17.1% YoY, while imports declined 20.5% YoY, aiding causing a net trade surplus that month. 

 
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Trendlyne Marketwatch
13 Jun 2023
Market closes higher, JSW Steel's monthly crude steel production rises to 21.8 lakh tonnes

Trendlyne Analysis

Nifty 50 closed at 18,716.15 (114.7, 0.6%), BSE Sensex closed at 63,143.16 (418.5, 0.7%) while the broader Nifty 500 closed at 16,048.20 (119.1, 0.8%). Of the 1,988 stocks traded today, 1,146 were on the uptrend, and 793 went down.

Indian indices maintain gains from the afternoon session and close in the green, with the Nifty 50 hovering above the 18,700 mark. The volatility index, Nifty VIX, drops below 12 at the close. India’s passenger vehicle sales increased by 13.5% in May to 3,34,247 units.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Media and Nifty Realty closed sharply higher than Monday’s closing levels. Nifty Auto closes flat. All other major sectoral indices closed higher. According to Trendlyne’s sector dashboard, realty emerged as the top-performing sector of the day with a rise of over 2.9%.

Most European indices trade higher. The data released by the UK labor department indicated the unemployment rate at 3.8% in April against 3.9% in March. US indices futures trade in the green as investors await the release of CPI data for May as the Fed starts its interest rate policy meet. The US Fed is expected to maintain the interest rates status quo.

  • Shree Cements beats Ambuja Cements in QoQ revenue & profit growth, YoY revenue growth and FII & MF holdings. But it lags in PE ratio, 3-month price change and broker average rating.

  • Zydus Lifesciences is rising after receiving final approval from the US FDA to produce and sell varenicline tablets for smoking addiction treatment. IQVIA estimates the drug's sales at $501 million in FY23. The tablets will be manufactured at the company's Ahmedabad facility.

  • Paint stocks like Asian Paints, Berger Paints, Kansai Nerolac Paints and Indigo Paints are rising in trade. The broader furnishing paints industry also trades in the green.

  • Sanofi India's annual return on equity (RoE) stands at 48.6% in FY23, rises 32.5 percentage points over the past five years.

  • Tube Investments of India, Adani Total Gas and State Bank of India are trading below their second support or S2 level.

  • Infibeam Avenues rises more than 3% and ranks high on Trendlyne's checklist with a score of 65.2%. The stock is in the 'Strong Buy' zone and appears in a screener of stocks with strong annual EPS growth.

  • Ahluwalia Contracts reaches its 52-week high after bagging a construction project in Aerocity, New Delhi, valued at Rs 426.6 crore. With this order, the company's total order inflow for FY24 reaches Rs 4,177.8 crore. The company shows up in a screener for stocks that have consistently delivered high returns over the past five years.

  • Media stocks like Dish TV India, Nazara Technologies, TV18 Broadcast, Network 18 Media & Investments and New Delhi Television are rising in trade. Barring Zee Entertainment Enterprises, all constituents of the broader sectoral index, Nifty Media, are also trading in the green.

  • Ashwath Ram, Managing Director of Cummins India, expects mid-single-digit growth in the company’s exports in FY24. He adds that Cummins targets to improve its margins by 100 bps.

  • Larsen & Toubro's hydrocarbon business wins an offshore project worth Rs 1,000-2,500 crore from a prestigious overseas client for engineering, procurement, construction and installation of new offshore structures.

  • Axis Direct maintains its ‘Buy’ rating on Ujjivan Small Finance Bank and raises the target price to Rs 45 from Rs 37. This implies an upside of 13.6%. The brokerage remains positive on the bank's prospects, given its improving asset quality and robust business growth, and believes there is further room for the stock to grow despite the recent rally.

  • SJVN is rising as its arm, SJVN Green Energy, bags an order worth Rs 1,400 crore to set up a 200 MW wind power project. The company shows up in a screener for stocks with high TTM EPS growth.

  • Tata Consultancy Services, HDFC Bank, Hindustan Unilever and ITC's TTM price-to-earnings ratios trade above those of their respective industries.                                                                                                                                                     

  • Healthcare stocks like Laurus Labs, Alkem Laboratories, Dr. Lal Path Labs, Cipla and Max Healthcare Institute are rising in trade. All constituents of the Nifty Healthcare index are also trading in the green.                                                              

  • The Society of Indian Automobile Manufacturers (SIAM) reports a 17.6% YoY increase in two-wheeler sales to 14.7 lakh units in May, while passenger vehicle sales reach 3.3 lakh units.

  • Granules India rises as the US FDA approves its abbreviated new drug application (ANDA) for metoprolol succinate extended-release tablets. The tablet is equivalent to Toprol Acquisition's reference listed drug (RLD), Toprol-XL tablets, used for treating hypertension. IQVIA estimates the drug's sales at $321 million for FY23.         

  • Inox Wind Energy surges to an all-time high of Rs 2,148 per share as its board of directors approves the merger scheme with Inox Wind. Under the scheme, shareholders of Inox Wind Energy will receive 158 equity shares of Inox Wind for every 10 equity shares they hold in the company, with a face value of Rs 10 per share.     

  • JSW Steelrises as its monthly crude steel production increases by 7% YoY to 21.8 lakh tonnes. Its combined production grows by 8% YoY, driven by strong performance in India and USA operations. The company secures preferred bidder status for a mining lease of iron ore minerals (9.8 MMT block VI and 65.7 MMT block IX) from the Directorate of Mines and Geology, Goa.                                     

  • JP Morgan initiates coverage on Mankind Pharma with an 'Overweight' rating and a target price of Rs 1,730. The brokerage highlights the company's strong volume growth and positions it as one of the fastest-growing pharma companies. It expects Mankind Pharma to further expand its market share.

  • Go Fashion is rising as ICICI Prudential Life Insurance Company, Societe Generale, Kuwait Investment Authority Fund and BNP Paribas Arbitrage purchase a 4.5% equity stake (24,44,836 shares) in the company. The deal has been executed through an open market transaction at an average price of Rs 1135 per share.

  • FMCG stocks like Colgate-Palmolive (India), Godrej Consumer Products, Hindustan Unilever and Nestle India are rising in trade. The broader sectoral indices, Nifty FMCG and BSE FMCG, are also trading in the green.

  • Societe Generale sells a 0.5% stake in Balrampur Chini Mills in a bulk deal for approx Rs 44.1 crore on Monday.

  • India’s CPI inflation eases to a 25-month low of 4.25% in May, down from 4.7%% in April. This decline is due to softening food and fuel prices. Meanwhile, the index of industrial production (IIP) has risen by 4.2% in April compared to 1.1% in March.

  • HFCL is rising as it bags an order worth Rs 80.9 crore from the Delhi Metro Rail Corp to supply, install and commission a fibre optic transmission system for three priority corridors of Phase IV of the Delhi Metro Rail project. The stock shows up in a screener for companies with low debt.

  • Engineers India rises as it receives orders worth Rs 472.7 crore from Oil & Natural Gas Corporation (ONGC) for the replacement of three channel service unit (CSU) off-gas compressors and six regeneration gas compressors at the Uran plant in Maharashtra.

  • SEBI bans Zee Entertainment Enterprises’ CEO Punit Goenka and Essel Group Chairman Subhash Chandra from holding key managerial positions in listed companies or their subsidiaries until further notice. The move comes as SEBI finds that Chandra and Goenka abused their powers and diverted funds from Zee Entertainment for personal gain.

Riding High:

Largecap and midcap gainers today include Macrotech Developers Ltd. (679.60, 10.73%), Tata Communications Ltd. (1,598.40, 8.11%) and Trent Ltd. (1,685.65, 5.66%).

Downers:

Largecap and midcap losers today include InterGlobe Aviation Ltd. (2,340.00, -2.94%), Schaeffler India Ltd. (3,100.35, -2.07%) and Torrent Power Ltd. (670.25, -1.89%).

Movers and Shakers

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

Top high volume gainers on BSE included Tanla Platforms Ltd. (963.45, 16.52%), Bombay Burmah Trading Corporation Ltd. (1,055.10, 11.00%) and Devyani International Ltd. (192.85, 8.16%).

Top high volume losers on BSE were InterGlobe Aviation Ltd. (2,340.00, -2.94%), Container Corporation of India Ltd. (651.05, -1.86%) and Zee Entertainment Enterprises Ltd. (193.95, -0.46%).

Bayer Cropscience Ltd. (4,236.65, -0.09%) was trading at 12.1 times of weekly average. Oracle Financial Services Software Ltd. (3,797.50, 5.61%) and Supreme Industries Ltd. (3,004.30, 3.61%) were trading with volumes 9.0 and 7.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

41 stocks overperformed with 52-week highs, while 1 stock hit its 52-week lows.

Stocks touching their year highs included - AIA Engineering Ltd. (3,251.00, -0.50%), Apollo Tyres Ltd. (408.00, 0.29%) and Aurobindo Pharma Ltd. (681.60, 2.70%).

Stock making new 52 weeks lows included - V-Mart Retail Ltd. (1,985.00, 0.54%).

19 stocks climbed above their 200 day SMA including Sundaram Clayton Ltd. (4,726.00, 3.71%) and Vodafone Idea Ltd. (7.70, 2.67%). 2 stocks slipped below their 200 SMA including SRF Ltd. (2,344.85, 0.30%) and Vedant Fashions Ltd. (1,306.00, 1.00%).

 
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Trendlyne Marketwatch
12 Jun 2023
Market closes higher, Nomura maintains its ‘Buy’ rating on KEC International

Trendlyne Analysis

Nifty 50 closed at 18,601.50 (38.1, 0.2%), BSE Sensex closed at 62,724.71 (99.1, 0.2%) while the broader Nifty 500 closed at 15,929.10 (51.7, 0.3%). Of the 2,006 stocks traded today, 1,139 were on the uptick, and 792 were down.

Indian indices closed in the green, with the Nifty 50 closing just above the 18,600 mark. The Indian volatility index, Nifty VIX, rose by 1.2% and settled above the 11% level. Allcargo Logistics fell nearly 3% after acquiring a 30% stake in Gati-Kintetsu Express (GKEPL) for Rs 406.7 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty IT and Nifty Media closed sharply higher than Friday’s close. According to Trendlyne’s sector dashboard, Forest Materials was the top-performing sector of the day.

Major Asian indices closed in the green, except for China’s Shanghai SE Composite Index, which closed marginally lower. European stocks traded in the green, following the US indices futures, which also traded higher.

Brent crude oil futures extended losses from Friday and traded deep in the red. Goldman Sachs lowered its forecast on Brent crude oil price for December 2023 to $86 per barrel from the earlier estimate of $95 due to rising global supplies and declining demand.

  • Relative strength index (RSI) indicates that stocks like Astral, Hindustan Aeronautics, Zomato and Home First Finance are in the overbought zone.

  • Logistics companies like Delhivery, Blue Dart Express, Allcargo Logistics, TCI Express andVRL Logistics are rising in trade. The broader transportation-logistics industry is also trading in the green.

  • Tanla Platforms plans to acquire 100% stake in ValueFirst Digital Media (Twilio) by July 2023 for an all-cash consideration of up to $42 million. The company will also acquire 100% stake in ValueFirst Middle East FZC by September 2023 for Rs 20 crore.

  • Deepak Nitrite, Lloyds Metals & Energy, Capri Global Capital, Tata Teleservices and Alkyl Amines Chemicals outperform the Nifty 500 index over a 5-year period.

  • Goldman Sachs lowers its forecast on Brent crude oil price for December to $86 per barrel from the earlier estimate of $95 due to rising global supplies and declining demand. This is the brokerage's third downward revision in the past six months.

  • General industrials, forest materials and realty sectors rise by more than 12% over the past month.

  • Nazara Technologies rises more than 4.5% and ranks high on Trendlyne's checklist with a score of 61.9%. The stock is in the 'Buy' zone and has seven buy ratings out of nine from brokerage firms. It appears in a screener of stocks with low debt.

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

  • Narayana Hrudayalaya and Global Health touch their all-time highs of Rs 960 and Rs 627.4 per share respectively. The former has risen 25.8% over the past month, while the latter grew 20.6%.

  • Foreign institutional investors invest Rs 29.922.9 crore in the equity market over the past month, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest outflow of Rs 26.936.5 crore from foreign investors, while mutual funds invest Rs 6,750.1 crore in the same period.

  • Nomura maintains its ‘Buy’ rating on KEC International with a target price of Rs 598. The brokerage says the company is focused on improving its EBITDA margin and cash flows. It expects the company’s margins to normalise by the end of FY24.

  • ICICI Securities maintains a 'Buy' rating on Infosys with a target price of Rs 1,641, implying an upside of 27.2%. The brokerage cites attractive valuation, favourable risk-reward ratio, and potential mega-deal wins as drivers for stock growth. It expects a steady net profit CAGR of 11.2% over FY23-26.

  • Allcargo Logistics falls despite acquiring a 30% stake (1.50 lakh shares) in Gati-Kintetsu Express (GKEPL) for Rs 406.7 crore. The company, along with its subsidiary Gati, holds a 100% stake in GKEPL. This acquisition aligns with the company's strategy to focus on high-growth opportunities in the express and contract logistics business in India. It appears in a screener for stocks benefiting from lower crude oil prices.

  • IT stocks like Tata Consultancy Services, Infosys, HCL Technologies, LTIMindtree and Tech Mahindra are rising in trade. All constituents of the Nifty IT index are also trading in the green.

  • InterGlobe Aviation is falling as reports suggest that the Gangwal family (promoters) is looking to sell a stake of approximately 5-8%, valued at Rs 7,500 crore, in the firm.

  • CLSA says cooling LNG prices will lead to increased gas consumption. The brokerage expects high gas demand and rise in CNG car sales to boost volumes of oil & gas companies. Indraprastha Gas, Mahanagar Gas and GAIL are its preferred picks in the oil & gas space.

  • Maharashtra Seamless is rising as it completes the prepayment of long-term debt worth Rs 234 crore through internal accruals. This prepayment, supported by a strong order book and high liquidity, marks the second such instance in the past eight months for the company. As a result, the company appears in a screener of stocks with low debt.

  • Birla Corporation rises as Societe Generale acquires a 0.5% equity stake (3,99,321 shares) at an average price of Rs 1,188.51 per share. It appears in a screener of stocks near their 52-week high.

  • TVS Motor company touches a new 52 week high today as its subsidiary, TVS Motor (Singapore), acquires 25% stake in Swiss E-Mobility Group (Holding) AG (SEMG), Switzerland, by purchasing shares form existing shareholders. It appears in a screener for stocks with strong annual EPS growth.

  • Canada Pension Plan Investment Board sells a 1.66% stake in Kotak Mahindra Bank for approx Rs 6,123.6 crore in a bulk deal on Friday.

  • Credit rating agency Moody’s Investors Service expects India's GDP to grow at a rate of 6-6.3% in Q1FY24, which is lower than the RBI's estimate of 8%. The rating agency has highlighted the risks of fiscal slippage.

  • Vedanta rises as it becomes the preferred bidder for the electronic auction of Block VII - Cudnem mineral block, securing the highest final price offer of 93.15%. The auction was conducted by the government of Goa to grant them the mining lease for iron ore.

  • Zydus Family Trust, promoter of Zydus Wellness, buys a 0.16% stake in the company on Wednesday. It now holds a 9.1% stake.

  • Go Fashion falls after the sale of 11.5% of equity shares (62,00,000 shares) worth Rs 705.5 crore through a block deal. The transaction has been executed at an average price of Rs 1136 per share, as reported by CNBC-TV18.

  • Cochin Shipyard bags a contract worth Rs 300 crore from the Ministry of Defence for upgrading an Indian naval ship. The project is estimated to be completed in 24 months.

Riding High:

Largecap and midcap gainers today include Delhivery Ltd. (382.70, 9.42%), Hindustan Petroleum Corporation Ltd. (273.45, 4.29%) and Indus Towers Ltd. (163.35, 3.88%).

Downers:

Largecap and midcap losers today include SRF Ltd. (2,337.85, -3.78%), InterGlobe Aviation Ltd. (2,410.95, -2.10%) and Emami Ltd. (375.25, -1.96%).

Volume Rockets

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

Top high volume gainers on BSE included Sheela Foam Ltd. (1,154.50, 13.59%), Delhivery Ltd. (382.70, 9.42%) and KEC International Ltd. (568.00, 5.82%).

Top high volume losers on BSE were SRF Ltd. (2,337.85, -3.78%), Ratnamani Metals & Tubes Ltd. (2,299.95, -2.52%) and Navin Fluorine International Ltd. (4,409.15, -1.11%).

FDC Ltd. (300.95, 1.01%) was trading at 25.1 times of weekly average. Linde India Ltd. (4,196.25, 5.20%) and Century Plyboards (India) Ltd. (608.00, 5.00%) were trading with volumes 15.2 and 8.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - AIA Engineering Ltd. (3,278.50, 1.72%), Apollo Tyres Ltd. (406.80, 0.37%) and Astral Ltd. (1,967.35, -1.03%).

Stock making new 52 weeks lows included - Aavas Financiers Ltd. (1,336.90, -1.26%).

8 stocks climbed above their 200 day SMA including Delhivery Ltd. (382.70, 9.42%) and Eris Lifesciences Ltd. (659.90, 2.24%). 9 stocks slipped below their 200 SMA including SRF Ltd. (2,337.85, -3.78%) and Mas Financial Services Ltd. (758.00, -1.88%).

 
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The Baseline
09 Jun 2023
Five Interesting Stocks Today
  1. Hindustan Aeronautics (HAL): This defence company has risen 21.5% over the past week till Friday, marking an uptrend for six consecutive sessions. The company also shows up in a screener for stocks with strong momentum. This follows reports of an upcoming agreement between HAL and General Electric to co-produce the new F414-INS6 jet engine in India, which will be used in the Tejas Mark-2 fighter jet. 

According to reports, a similar deal was proposed between the two companies in 2012, but it failed to materialise as the Indian government was not satisfied with the level of transfer of technology (ToT) being offered. However, this time, the ToT and the use of local components are expected to cross 60%, as per ICICI Securities.

In Q4FY23, HAL’s standalone revenue grew 8.1% YoY, while its net profit fell by 8.4% YoY to Rs 2,841.3 crore. However, it beat Trendlyne Forecaster’s revenue and net profit estimates by 3.5% and 32% respectively.  

The company’s order book at the end of FY23 stood at Rs 81,800 crore, including manufacturing orders worth Rs 60,500 crore. For FY24, the management maintains its revenue guidance of 8-9%, while Forecaster estimates the firm’s standalone revenue to grow by 6.8%. The management expects double-digit revenue growth in FY25, driven by its manufacturing segment and the execution of aircraft and fighter jet orders. 

ICICI Direct foresees growth driven by the manufacturing and repair segments from FY25 onwards. The firm also expects to bag an order worth Rs 12,000 crore from the Indian Air Force for the production of 12 Sukhoi-30 MKI fighter jets in FY25. From FY26 onwards, HAL expects revenue growth to stabilise at 12-13%. The consensus recommendation from eight analysts on the company is ‘Buy’.  

  1. Mazagon Dock Shipbuilders: This shipping company touched its all-time high of Rs 1,079.3 per share on Thursday following the signing of a memorandum of understanding (MoU) with ThyssenKrupp Marine Systems. The MoU, valued at $5.2 billion, is for the construction of six submarines for the Indian Navy. The stock has risen 30.1% over the past month, helping it appear in a screener of stocks that have risen more than 20% during the same period. As per the MoU, ThyssenKrupp will provide engineering and design expertise, while Mazagon will undertake the construction and delivery of the submarines. 

This recent rise in stock price is also supported by its Q4FY23 net profit and revenue, which exceeded Trendlyne’s Forecaster estimates by 42.2% and 17.9% respectively. This helped the company feature in a screener of stocks with increasing revenue every quarter for the past two quarters. 

The company’s order book is also on an uptrend and stands at Rs 38,755 crore as of Q4FY23. The management expects the revenue to improve by 8-10% in FY24, and they have submitted bids for construction projects of vessels worth Rs 3,000 crore for the Indian coast guard and Rs 1,000 crore from international clients.

However, ICICI Securities has maintained a ‘Sell’ rating on the stock with an unchanged target price of Rs 600. This indicates a potential downside of 42%. The brokerage believes that the company’s lack of order visibility to offset its strong revenue growth estimates calls for an unfavourable risk-reward at the current market price. However, market sentiment for defence stocks has been positive over the past week on the back of talks between India and the US regarding the co-production of jet engines, long-range artillery, and infantry vehicles.

  1. Suzlon Energy: This heavy electric equipment company has risen 25.6% in the past week till Friday, outperforming the Nifty 500 by 24.6%. This is despite a 7% decline on Thursday after rising for three consecutive sessions. The sharp variation in price and volume has led to Suzlon being placed under the Additional Surveillance Measure (ASM Stage 1) by the BSE. 

The recent share price appreciation could be attributed to its strong Q4FY23 results and large new orders. In Q4, the company posted a net profit of Rs 279.9 crore, compared to a net loss of Rs 204.3 crore in Q4FY22. The energy provider has also reduced its net debt by 80% YoY to Rs 1,800 crore and is trying to monetize its non-core assets to further reduce the debt.

In the post-results earnings call, JP Chalasani, the Group CEO, stated that the company's cumulative orders of 1,542 MW (as on May 30, 2023) are the highest since 2019. Suzlon Energy’s robust order book is driven by its new turbine named S144, which delivers 40-43% higher energy generation compared to the earlier S120. 

The firm ranks medium on Trendlyne’s Checklist score and is in the PE Buy Zone as its current PE is lower than its historical PE ratios. 

  1. Ajanta Pharma: Thispharmaceutical firm derives 72% of its revenue from branded generics. The stockrose 9.8% last week and touched a 52-week high, backed by a turnaround in performance. The firm’sQ4FY23 earnings have shown a revenue growth of 1.9% and EBIDTA margin contraction of 681 bps YoY. The slowdown in emerging markets like Asia and Africa drove the firm's muted performance. Factors such as strikes in France, supply chain issues, lack of funds in non-profit institutions, forex losses, and higher employee costs have impacted the top line.  However, the US and India segments reported a 17% YoY increase, with the US growth being driven by stabilised prices of branded drugs and moderation in freight costs.

As raw material costs  ease, the management expects gross margins for FY24 to expand to 74-75% from the current level of 72%. They also anticipate the EBITDA to return to historical levels of 24% from the current 17%. The increase in freight costs had a significant impact of almost 200 bps in FY23. Normalization of freight costs, moderation in drug prices in the US, and lower  employee and input costs are expected to drive margin expansion in FY24. The firm is optimistic about achieving a 13-15% growth in its branded generics business. The stock shows up in a screener for stocks with prices above short, medium and long-term moving averages.

The firm has a capex outlay plan of Rs 200 crore for FY25, compared to Rs 160 crore in FY23. It also has plans to launch five products and submit 6-8 abbreviated new drug applications (ANDA) in FY24.  

Motilal Oswal says that with headwinds of FY23 easing out for Ajanta Pharma, the firm is likely to see 10.4% and 18.1% growth in revenue and profits respectively. The brokerage maintains its ‘Buy’ rating on the company.

  1. Torrent Power: This electric utility service provider has been on the rise for five consecutive days, with its  stock price increasing by 23.3% since the beginning of June. As a result, the company features in a screener for stocks that have gained more than 20% in one month. The price surge comes after the company’s impressive financial performance in Q4FY23, reporting a net profit of Rs 449.1 crore compared to a loss of Rs 488 crore in Q4FY22. Its revenue also grew by 59.7% YoY to Rs 6,133.7 crore. It shows up in a screener for stocks with growth in quarterly net profit and increasing profit margin. 

Samir Mehta, Chairman of Torrent Power, says that the company has successfully integrated five acquisitions and licensed distribution businesses in Daman & Diu and Dadra Nagar Haveli. According to the management, the rise in revenue can be attributed to consistent performance in the distribution business, achieved by reducing losses, meeting the growing electricity demand, and improved operations in the Union Territory.

Geojit Financial Services has given an ‘Accumulate’ rating to Torrent Power on the back of increased productivity in distribution businesses and its ambition to boost the top line. The brokerage expects a 28% rise in renewable capacity and projects an ROE of 16% in FY25.

Torrent Power also hit its all-time high of Rs 748.9 on Thursday. The stock price surged on Wednesday and Thursday as the company signed a memorandum of understanding with the Government of Maharashtra for the development of three pumped storage hydro projects of 5,700 MW capacity. The projects are expected to require an investment of about Rs 27,000 crore. 

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
09 Jun 2023
Market closes lower, HDFC Sec downgrades rating on Hero MotoCorp to ‘Reduce’ from ‘Buy’

Trendlyne Analysis

Nifty 50 closed at 18,563.40 (-71.2, -0.4%) , BSE Sensex closed at 62,625.63 (-223.0, -0.4%) while the broader Nifty 500 closed at 15,877.40 (-43.7, -0.3%). Of the 1,969 stocks traded today, 874 were in the positive territory and 1,031 were negative.

Indian indices extended their losses from the afternoon session and closed in the red, with the Nifty 50 closing below the 18,600 mark. However, the benchmark Nifty 50 index ended the week marginally higher and is just around 1.7% away from its all-time high. The volatility index, Nifty VIX, fell over 1% and closed just above the 11% mark.

Nifty Smallcap 100 and Nifty Midcap 100 closed flat, despite the benchmark index closing in the red. Nifty FMCG and Nifty Pharma closed lower than Thursday’s close. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment was the top-performing sector of the week.

Major Asian indices closed in the green, except for India’s BSE Sensex, which closed lower. European stocks traded mixed after opening lower, in line with US indices futures. Brent crude oil futures traded in the green after falling over 1.6% on Thursday.

  • India Cements sees a long buildup in its June 29 future series as its open interest rises 15.2% with a put-call ratio of 0.76.

  • Medplus Health Services falls more than 3% and ranks low on Trendlyne's checklist with a score of 35%. The stock is in the 'Sell' zone and appears in a screener with declining RoCE.

  • Foreign institutional investors invest Rs 2,685.7 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest outflow of Rs 13,817.8 crore from foreign investors.

  • Motilal Oswal maintains its ‘Buy’ rating on Tata Motors with a target price of Rs 650, implying an upside of 15.8%. The brokerage believes the company will benefit from the commercial vehicle upcycle, while its passenger vehicle segment will witness stable growth due to the easing of supply-side issues and falling commodity prices. It also expects a significant improvement in cash flows, which will lead to debt reduction.

  • KPR Mill and Max Healthcare Institute touch their 52-week highs of Rs 639 and Rs 577.4 respectively. KPR Mill has risen 8.8% in the past month, while the other increased by 18.5%.

  • Hardware technology & equipment, general industrials and telecommunications equipment sectors rise more than 5% in the past week.

  • HDFC Life Insurance Co, Apollo Hospitals Enterprise, Nestle India and Titan Co’s TTM price-to-earnings ratios trade above those of their respective industries.

  • Five Star Business Finance is rising as CareEdge Ratings upgrades its rating from 'A+ Stable' to 'AA- Stable', according to reports. The rating agency attributes the upgrade to the company's increased market capitalization and growth in the gross loan portfolio.

  • HDFC Securities downgrades its rating on Hero MotoCorp to ‘Reduce’ from ‘Buy’ and lowers the target price to Rs 2,512 from Rs 2,959. This implies a downside of 14.2%. The brokerage believes the shift in motorcycle demand towards 125cc from the 100cc segment will hurt the company, given that the 100cc segment contributes 78% of its volumes. It also adds that the firm’s significant loss of market share in the 125cc segment makes matters worse.

  • Biocon rises as its Bengaluru-based active pharmaceutical ingredient (API) factory receives good manufacturing practice (GMP) compliance approval from the competent authority of Germany after inspections. The stock appears in a screener for stocks with upgraded broker recommendations.

  • Bank of Maharashtra, HDFC Life Insurance Company, Voltas and ICICI Lombard General Insurance Company are trading below their third support or S3 levels.

  • Mutual Funds' net inflow declines 52.5% MoM to Rs 57,420 crore in May from Rs 1.21 lakh crore in April, according to data released by the Association of Mutual Funds in India (AMFI).

  • Aether Industries touches a new 52-week high today after signing a licensing deal with Saudi Aramco Industries for the commercialization of Converge polyols technology. The company is targeting a market of 850,000 MT per year with a CAGR of 5% for these novel polyols. It appears in a screener for stocks with strong quarterly growth in recent results.

  • PSU banks like Bank of Maharashtra, Punjab & Sind Bank, UCO Bank, State Bank of India and Bank of Barodaare falling in trade. Barring Indian Bank, all constituents of the broader sectoral index, Nifty PSU Bank, are also trading in the red.

  • Visa restrictions and investment clearance issues for Chinese nationals and firms are affecting Indian businesses. Dixon Technologies' proposed Rs 400 crore refrigerator manufacturing unit has also been impacted. Atul Lall, the company's MD, emphasizes the need for government support in clearing visas for Chinese engineers, particularly for production-linked incentive (PLI) holders.

  • Avenue Supermarts is rising as Motilal Oswal Securities upgrades its rating on the stock to a ‘Buy’ from ‘Neutral’ earlier and increases the target price to Rs 4,200. The brokerage expects a recovery in the company’s same-store sales growth (SSSG) due to easing inflation. It says robust store additions and a reduction in raw material costs could aid SSSG.

  • Sugar stocks like Shree Renuka Sugars, EID Parry (India), Balrampur Chini Mills, Bannari Amman Sugars and Dalmia Bharat Sugar and Industries are rising in trade. The broader sugar industry is also trading in the green.

  • Indian Energy Exchange (IEX) is falling as the Power Ministry reportedly orders the Central Electricity Regulatory Commission (CERC) to implement ‘market coupling’ for spot power trading. This could reduce IEX's trading volumes, impacting its market share. SN Goel, Chairman and MD of IEX, says CERC will initiate a stakeholder consultation before the implementation process.

  • Macquarie downgrades its rating on HDFC Life, ICICI Prudential Life and SBI Life to 'Neutral' from 'Outperform' and also cuts the target price over concerns regarding long-term growth prospects and emerging regulatory risks.

  • HAL touches a new 52-week high today following reports of an upcoming board meeting on June 27 to discuss and approve a proposal for the sub-division of equity shares of the company. It appears in a screener for stocks with strong momentum.

  • GAILis rising as it emerges as the successful bidder in the resolution process of JBF Petrochemicals, investing a total of Rs 2,101 crore. This acquisition adds purified terephthalic acid to its existing petrochemical portfolio. The stock appears in a screener for companies with low debt.

  • Canada Pension Fund sells 1.7% equity (3.4 crore shares) amounting to Rs 6,336 crore in Kotak Mahindra Bank in a large trade today, according to reports.

  • IRB Infrastructure rises as its monthly toll collection increases 19.7% YoY to Rs 411 crore. The increase in toll revenue is driven by IRB's Madhya Pradesh expressway and Kishangarh Gulabpura tollways. It appears in a screener of stocks with growing quarterly revenue.

  • Ashish Kacholia sells a 0.78% stake in United Drilling Tools for approx Rs 3 crore in a bulk deal on Thursday.

  • Greenlam Industries rises as its subsidiary, HG Industries, begins commercial production at one of its greenfield projects. The project has the potential to generate an annual revenue of Rs 400 crore when operating at full capacity. The estimated capex for the project amounts to Rs 130 crore.

  • Tata Power’s arm, TP Vardhaman Surya, inks a pact with Tata Steel to set up a 966 MW hybrid renewable power project. The project will include 379 MW of solar power and 587 MW of wind power. It is expected to be commissioned by June 1, 2025. The company shows up in a screener for stocks with book value per share improving over the past two years.

Riding High:

Largecap and midcap gainers today include Hindustan Aeronautics Ltd. (3,732.90, 5.83%), One97 Communications Ltd. (814.30, 5.48%) and Tata Communications Ltd. (1,469.75, 3.92%).

Downers:

Largecap and midcap losers today include ICICI Prudential Life Insurance Company Ltd. (495.05, -3.46%), Voltas Ltd. (777.95, -3.35%) and SRF Ltd. (2,429.70, -3.35%).

Volume Shockers

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

Top high volume gainers on BSE included India Cements Ltd. (230.35, 6.97%), Sonata Software Ltd. (1,032.85, 3.85%) and Just Dial Ltd. (751.00, 3.77%).

Top high volume losers on BSE were Indian Energy Exchange Ltd. (122.60, -10.15%), Bank of Maharashtra (28.35, -6.59%) and Clean Science & Technology Ltd. (1,377.15, -2.07%).

Five-Star Business Finance Ltd. (593.40, 1.79%) was trading at 6.9 times of weekly average. Poly Medicure Ltd. (986.90, -0.62%) and Balrampur Chini Mills Ltd. (404.70, 2.31%) were trading with volumes 5.4 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

30 stocks made 52 week highs, while 3 stocks hit their 52 week lows.

Stocks touching their year highs included - AIA Engineering Ltd. (3,223.20, 3.21%), Apollo Tyres Ltd. (405.30, 2.30%) and Astral Ltd. (1987.85, 1.84%).

Stocks making new 52 weeks lows included - V-Mart Retail Ltd. (1,990.00, -0.94%) and Indian Energy Exchange Ltd. (122.60, -10.15%).

9 stocks climbed above their 200 day SMA including India Cements Ltd. (230.35, 6.97%) and HFCL Ltd. (70.15, 1.89%). 14 stocks slipped below their 200 SMA including Indian Energy Exchange Ltd. (122.60, -10.15%) and HDFC Asset Management Company Ltd. (1,934.25, -2.98%).

 
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Trendlyne Marketwatch
08 Jun 2023
Market closes lower, IKIO Lighting’s IPO gets bids for 66.3X the available shares on offer

Trendlyne Analysis

Nifty 50 closed at 18,634.55 (-91.9, -0.5%), BSE Sensex closed at 62,848.64 (-294.3, -0.5%) while the broader Nifty 500 closed at 15,921.05 (-85.7, -0.5%). Of the 1,982 stocks traded today, 677 were on the uptrend, and 1,264 went down.

Indian indices extend the losses from afternoon session and close in the red, with Nifty 50 hovering below 18,700 mark. The volatility index, Nifty VIX, drops below 12 at the close. RBI in its policy meet has kept the interest rate unchanged. RBI guided CPI inflation at 5.1% and GDP growth at 6.5% for FY24.  

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Metal and Nifty Energy closed higher than Wednesday’s closing levels. All other major sectoral indices closed lower. According to Trendlyne’s sector dashboard, metals and mining emerged as the top-performing sector of the day with a rise of over 0.2%. 

Most European indices trade higher except for UK’s FTSE 100 trading in the red. US indices futures trade flat as investors are gauging the impact of the Bank of Canada’s rate hike decision on the US Fed policy meeting.

  • Relative strength index (RSI) indicates that stocks like Birla Corp, IDFC, Suzlon Energy and Torrent Powerare in the overbought zone.

  • Supreme Industries and Cholamandalam Investment & Finance touch their all-time highs of Rs 2,890 and Rs 1,081.7 per share, respectively. The former has risen 2.8% over the past month, while the latter grew by 7.2% over the same period.

  • One97 Communications (Paytm) rises over 6% in trade as BofA Securities upgrades its rating on the company to 'Buy' and revises the target price to Rs 885. The brokerage is optimistic about the company's potential for positive operational leverage. It adds that Paytm enjoys a favourable position due to limited competition.

  • Housing and Urban Development Corporation falls more than 3% and ranks low on Trendlyne's checklist with a score of 35%. The stock is in the 'Strong Sell' zone and appears in a screener with low Piotroski score.

  • Zydus Lifesciences receives the final approval from the US Food and Drug Administration for the oral suspension of esomeprazole magnesium, which is used to treat acid reflux and ulcers. The company will manufacture the product at its facility in Ahmedabad, Gujarat. As of April 2023, the drug has recorded annual sales of $42 million.

  • IKIO Lighting’s Rs 607 crore IPO gets bids for 66.3X the available 1.5 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 13.9X of the available 76.9 lakh shares on offer.

  • Realty stocks like DLF, Macrotech Developers, Brigade Enterprises and Oberoi Realty are falling in trade. The broader sectoral indices, Nifty Realty and BSE Realty, are also trading in the red.

  • Mazagon Dock Shipbuilders touches its all-time high of Rs 1,079.3 per share as it signs a memorandum of understanding (MoU) with ThyssenKrupp Marine Systems for the construction of submarines. Under the MoU, ThyssenKrupp will provide engineering and design expertise, while Mazagon will undertake the construction and delivery of the submarines.

  • Hatsun Agro Products is rising as its board schedules a meeting on July 5 to discuss the sale of the company's windmill division. The proposed sale will involve the transfer of all assets and liabilities through a slump sale arrangement. It appears in a screener of stocks with zero promoter pledges.

  • Nomura maintains its ‘Buy’ rating on Tata Motors with a target price of Rs 610. The brokerage believes the company can gain market share in the passenger vehicles (PV) segment on the back of new launches.

  • Realty stocks like DLF, Macrotech Developers, Brigade Enterprises and Oberoi Realty are falling in trade. The broader sectoral indices Nifty Realty and BSE Realty are also trading in the red.

  • Inox Wind rises as it receives a turnkey order for a 100 MW wind energy plant from ABEnergia Renewables. The order includes the supply and installation of 3.3 MW turbines and is scheduled to be completed by 2024 at the Dayapar site in Kutch, Gujarat.

  • Aether Industries is rising as it signs a Letter of Intent with a US-based oil field services company to establish a strategic supplier and contract manufacturing partnership. Aether will supply four key products to the US-based company's global energy and oil & gas locations, including a significant supply within India. It appears in a screener of stocks with no debt.

  • Motilal Oswal maintains its ‘Buy’ rating on Trent with a target price of Rs 1,835, implying an upside of 15.4%. The brokerage believes the company is poised for healthy growth given its aggressive store additions, strong productivity and Zudio’s strong brand value. It expects the firm’s revenue to grow at a CAGR of 28.9% over FY23-25.

  • The Organization for Economic Co-operation and Development (OECD) marginally raises its FY24 GDP growth forecast for India to 6% from the earlier estimate of 5.9%. OECD believes that moderating inflation and easing monetary policy in H2FY24 could lead to an improvement in discretionary household spending.

  • IT stocks like Persistent Systems, LTIMindtree and L&T Technology Services are falling in trade. All constituents of the broader Nifty IT index are also trading in the red.

  • Lakshmi Machine Works, Cera Sanitaryware, Tata Elxsi, One97 Communications and Aether Industries are trading above their third resistance or R3 levels.

  • Utilities stocks like KPI Green Energy, Torrent Power, NTPC, RattanIndia Power and Reliance Infrastructure are rising in trade. The broader sectoral index of S&P BSE Utilities is also trading in the green.

  • RBI projects India's GDP to grow at a rate of 6.5% in FY24. It also revises the CPI inflation estimate for FY24 to 5.1%, from the earlier 5.2%.

  • Promoters of MTAR Technologies, including D Anitha Reddy, Usha Reddy Chigarapalli, Kavitha Reddy Gangapatnam and K Vamshidhar Reddy, sell a total of 5.32% stake in the company on Monday.

  • Tata Elxsi rises as it partners with the Indian Space Research Organization (ISRO) for the Gaganyaan Mission. The company has designed and developed the crew module recovery models (CMRM) for space mission training. It appears in a screener for stocks with strong quarterly growth.

  • Ashish Kacholia sells a 0.55% stake in D-Link (India) for approx Rs 4.5 crore in a bulk deal on Wednesday.

  • The Reserve Bank of India (RBI) decides to keep the policy repo rate unchanged at 6.5% during the Monetary Policy Committee (MPC) meeting.

  • Zen Technologies rises as it receives an order worth Rs 202 crore from the Ministry of Defence. The company provides military training and anti-drone solutions.

  • Gati rises more than 6% as its volume for surface and air express improves marginally by 1% YoY to 98 kt (thousand tonnes) over the month. The company experiences robust growth in the west zone, driven by the recent opening of a superhub in Bhiwandi.

  • Tech Mahindra is rising as Life Insurance of Indiaincreases its stake in the company by 2% from November 2022 to May 2023, acquiring shares at Rs 1,050.7 per share. The insurance company now holds an 8.9% stake in the IT company.

Riding High:

Largecap and midcap gainers today include One97 Communications Ltd. (772.00, 6.19%), YES Bank Ltd. (16.75, 3.72%) and Dixon Technologies (India) Ltd. (4,067.40, 3.69%).

Downers:

Largecap and midcap losers today include Varun Beverages Ltd. (1,581.85, -3.99%), Vodafone Idea Ltd. (7.35, -3.92%) and Hindustan Petroleum Corporation Ltd. (265.90, -3.89%).

Volume Rockets

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

Top high volume gainers on BSE included Tata Teleservices (Maharashtra) Ltd. (78.40, 14.70%), One97 Communications Ltd. (772.00, 6.19%) and Alembic Pharmaceuticals Ltd. (590.95, 5.94%).

Top high volume losers on BSE were Indian Energy Exchange Ltd. (136.45, -8.24%), Torrent Power Ltd. (667.70, -2.92%) and Tata Communications Ltd. (1,414.25, -2.21%).

Hatsun Agro Products Ltd. (932.75, 5.44%) was trading at 25.0 times of weekly average. Alok Industries Ltd. (14.40, 5.11%) and Cera Sanitaryware Ltd. (7,977.50, 3.04%) were trading with volumes 7.8 and 6.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

41 stocks took off, crossing 52-week highs,

Stocks touching their year highs included - Ajanta Pharma Ltd. (1,470.00, 1.39%), Apollo Tyres Ltd. (396.20, 0.49%) and Aurobindo Pharma Ltd. (668.50, -0.52%).

18 stocks climbed above their 200 day SMA including Alembic Pharmaceuticals Ltd. (590.95, 5.94%) and Hatsun Agro Products Ltd. (932.75, 5.44%). 9 stocks slipped below their 200 SMA including Indian Energy Exchange Ltd. (136.45, -8.24%) and Nippon Life India Asset Management Ltd. (250.15, -2.49%).

 
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The Baseline
08 Jun 2023
Indian equities a bright spot for global investors | Stocks FIIs are buying and selling
By Shreesh Biradar

When the bulls arrive, it sometimes becomes a stampede. And this time India is at the center. The Nifty 50 benchmark index closed on Wednesday above the 18,700 mark, less than 1% away from its all-time high of 18,887.6. Morgan Stanley predicts that the Sensex will hit 68,500 by December, 10% higher than where it is now.

So 2023 is turning out to be an interesting year for the India story. The country is building closer ties with the US and Europe, and PM Modi is meeting Joe Biden in Washington on June 21 to finalize a defense partnership. The writer Fareed Zakaria put it well when he said last week, "India is becoming a master of its own destiny for the first time in a very long while."

How has this happened? India is coming to the forefront as the global economy battles a slowdown. India is the only large Asian economy that is growing at a fast pace, and analysts give it a 'zero chance' of recession.

In FY23, India achieved a GDP growth rate of7.2%, surpassing China's 3% in 2022. India’s CPI inflation dropped to 4.7% in April, one of the lowest among emerging markets, trailing behind only Brazil (4.18%) and China (0.1%).

For many years, China has been the brightest star in Asia's sky, outshining the rest. But its slowing economy and abrupt policy changes under Xi Jinping have hurt investor sentiment. South Korea, Japan and India are emerging as new investment hotspots. India in particular, has become a promising alternative to China, and the world is counting on it to drive global growth.

In this week’s Analyticks:

  • India: A bright spot in global equity markets?
  • Screener: Big changes up or down in FII holding

Let’s get into it.

Taming inflation is key to economic growth

The flow of money into and out of equity markets is typically decided by inflation and interest rates. These two numbers have not been very pretty for the EU and the US.

The Eurozone CPI for April was at 7%, while the US recorded 5%. India's inflation, on the other hand, stood at 4.7% during the same month, and has been falling at a faster pace.

Developed economies have also increased interest rates by more than 4% over the past 12 months, while the Reserve Bank of India (RBI) raised rates only by 2.5%.

Not so cool anymore: the declining appeal of China

According to the IMF, India and China have accounted for half of global growth in 2023. However, China’s growth rate isprojected to slow to 5.2% over the year, and 4.5% in 2024, marking a significant deceleration compared to its impressive 9% CAGR growth from 1989 to 2022.New changes to China’s counter-espionage law, granting extra powers to state agencies to investigate foreign businesses, have also raised concerns among foreign investors. 

China’s worsening relationship with developed nations is putting pressure on its growth story. The US has stepped up restrictions on a long list of Chinese companies, including gaming and entertainment apps, server makers, and chip manufacturers.  Europe is reviewing products from Chinese giants like Huawei and ZTE. As a result, investments into China have slowed down, with a 40% decline inFDI from the USbetween 2020 and 2022. In the same period, FDI inflows from Europe to China dipped by 19.7%. 

India's equity markets stand out in an uncertain global economy

India has shown remarkable resilience in the face of global uncertainties by shielding its economy from inflation, banking crises and crude oil shocks (through Russian oil imports). The IMF predicts a GDP growth rate of 5.9% for India in FY24, while the RBI puts it at 6.4%. 

In May, India's manufacturing PMI reached a 31-month high of 58.7, while China, the largest manufacturing hub, recorded 50.9. 

Note: A value above 50 indicates growth

India’s strong economic indicators have pushed its stock market to new highs, reclaiming its position as the fifth largest stock market with a market cap of $3.3 trillion. The Nifty PSU Bank index touched a decadal high after gaining 56% in the past year. Midcaps, which offer a blend of value and growth, have seen significant gains in market cap. The Nifty Midcap 100 saw gains of 22% in the past year, against Nifty Smallcap 100’s 14%.

Among sectoral indices, Nifty PSU Bank (59%) led the way, followed by Nifty FMCG (36%) and Nifty Auto (27%). 

The FMCG segment saw growth on account of rising rural penetration. In Q4FY23, the FMCG market grew 14.1%, with rural markets growing at 16.8% vs urban at 7.9%. The auto segment, which contributes to 49% of India’s manufacturing GDP, was driven by growth in passenger vehicles (26.7% YoY).

As of May 2023, foreign portfolio investors (FPIs) have investments to the tune of Rs 48,79,628 crore in Indian markets. Major sectors holding FPI investments are Financial Services (Rs 16,46,306 crore), Oil, Gas & Consumables (Rs 4,76,503 crore) and Information Technology (Rs 4,87,869 crore)

Japan, South Korea and India are drawing foreign investors 

Asia, excluding China and Japan, has seen a significant influx of foreign investment totaling $23 billion in 2023. Japan’s Nikkei index has gained 25.28%, while South Korea’s Kospi index rose 17.51% since the start of 2023. India has experienced more modest growth with a 2.33% gain. These three nations have outperformed China by huge margins in 2023.

Japan's economy has got a boost from positive changes in corporate governance and the Bank of Japan's move towards tighter monetary policies. Foreign inflows into Japan reached nearly $30 billion in CY23, propelling the Nikkei index to a 33-year high.

In South Korea, FII inflows have amounted to $9 billion. The boom in artificial intelligence has driven up Korea's chip manufacturing stocks, while restrictions on Chinese chip manufacturers have improved prospects for South Korean players. Korean automotive stocks have also contributed to its economic resilience through robust export performance.

Between 1990 and 2019, the annual income for an average Chinese person jumped 32 times, from $318 to $10,276. That's a tough act to follow, but as Zakaria pointed out, it is India's game to win or lose.

Screener: Big changes up or down in FII holding


As foreign institutional investors turn net buyers of equities in the Indian market, we take a look at stocks which have seen the highest change in FII holdings over the past quarter. This screener highlights stocks with big shifts (> 2% or -2%) in FII shareholdings on a QoQ basis in the most recent quarter.

It features stocks from the automobile & auto components, banking & finance and software & services sectors. Major stocks that appear in the screener are Equitas Small Finance Bank, Sona BLW Precision Forgings, Go Fashion (India), Jindal Stainless, PVR Inox, Dixon Technologies, HDFC Asset Management and RBL Bank.

Equitas Small Finance Bank witnessed its FII holding increase by 18.6 percentage points over the past quarter to 22.7%. Ellipsis Partners was the largest buyer, acquiring a 2.7% stake in the company, followed by Massachusetts Institute of Technologyand Rimco India as they bought a 2.5% and 2.1% stake, respectively, over the same period. 

Sona BLW Precision Forgings’ FII holding grew by 13.4 percentage points to 24.7% over the past quarter. This rise was aided by the Government of Singapore buying a 4.1% stake in the company. Fidelity Funds and BNP Paribas Arbitragealso bought a 1.3% stake each in the company.

On the other hand, PVR Inox witnessed the steepest fall of 10.8 percentage points in FII holdings over the past quarter. Its FII holding currently stands at 31.2%. The biggest contributors to this decline were SBI Magnum Children's Benefit Fund and Nippon Life India Trustee, as they sold a 1.2% and 1.3% stake, respectively, in the company.

You can find more popular screenershere.

 
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The Baseline
07 Jun 2023
Five analyst picks with high upside post Q4 results
By Abhiraj Panchal

This week we take a look at analyst picks with high upside, that have performed positively in Q4FY23.

  1. Mahindra & Mahindra: BOB Capital Markets maintains its ‘Buy’ rating on this cars & utility vehicles manufacturer and raises the target price to Rs 1,665 from Rs 1,496. This implies an upside of 18.4%. In Q4FY23, the company’s net profit rose 17.9% YoY to Rs 2,636.7 crore, and revenue increased by 24.8% YoY. 

Analysts Milind Raginwar and Yash Thakur attribute the healthy Q4 performance to volume growth, price hikes, a better product mix and higher realisations. They add that falling raw material prices helped increase gross margins and profitability. Overall volume growth was driven by rising passenger vehicle sales, but its farm equipment segment’s volumes were subdued. 

Raginwar and Thakur remain optimistic about the firm’s prospects on the back of increasing production capacity and new launches. They say, “New capacity and high-end launches are likely to boost M&M’s revenue even as moderating cost, a good product mix and improving realisations support margin gains and mitigate supply chain issues.” The analysts expect the company’s net profit to grow at a CAGR of 21.9% over FY23-25. 

  1. Tata Consumer Products: KRChoksey maintains its ‘Buy’ rating on this packaged foods manufacturer with a target price of Rs 964. This implies an upside of 22.7%. In Q4FY23, the company’s net profit grew 23.5% YoY to Rs 268.6 crore, while its revenue rose 14% YoY.

Analyst Abhishek Agarwal believes that the company successfully offset volume pressures in  Q4 through stronger distribution, new product launches, and cost efficiencies. He adds that modern trade and e-commerce have also contributed to growth. The analyst sees the company’s focus on improving distribution as a key positive, as it will drive future growth. He says, “During FY23, the firm increased its direct distribution by 15%, allowing it to take its portfolio to a larger outlet universe with more impact.”

The company is also increasing its expenditure on research and development, with a focus on innovation and new products. The analyst expects the firm’s net profit to grow at a CAGR of 17.5% over FY23-25.  

  1. TCI Express: Sharekhan retains its ‘Buy’ call on this logistics services provider with a target price of Rs 2,070, indicating an upside of 27.2%. The company’s profit in Q4FY23  grew by 7% YoY to Rs 38.5 crore, while its revenue increased by 9.2% YoY.  Analysts at Sharekhan believe that profits have been better than expected, led by higher utilisation and demand from corporate and SME customers.

The analysts say, “TCI Express has been affected by a sluggish macro environment during H2FY23, although it performed well vis-à-vis industry peers.” They expect the company to continue its revenue growth and margin expansion over the next two years as the domestic economy revives. They believe that expansion in terms of new centres, automation of existing centres, addition of new branches and scale-up of new businesses will contribute to a net earnings growth of over 20% CAGR in FY24-25.

The analysts also remain positive on the back of TCI’s strong balance sheet, healthy cash flows and high return ratios. 

  1. KNR Constructions: HDFC Securities maintains its 'Buy' rating on this construction and engineering company with a target price of Rs 318, indicating an upside of 30.8%. In Q4FY23, the company's net profit increased by 5.8% YoY to Rs 147.3 crore, and revenue increased by 13% YoY. Analysts at HDFC Securities believe that the company’s growth exceeded expectations across all areas. 

The analysts expect the revenue/EBITDA for the previous fiscal to guide the company towards achieving revenue of Rs 40+ billion in FY24. KNR Constructions’ order book as of March 2023 stands at Rs 88.7 billion, which is 2.3 times its revenue. They believe that the company is effectively tackling tough competition by expanding into different segments such as state highways, metro, railways, and irrigation.

The analysts further emphasise that the company maintains a strong net cash position with zero gross debt. The management has partly offset the impact of higher input costs and raw material prices by reducing employee expenses and improving overhead utilisation.

  1. Praj Industries: Axis Direct maintains its ‘Buy’ call on this construction and engineering company with a target price of Rs 500. This indicates an upside of 29.2%. In Q4FY23, the company reported a 52.8% YoY rise in net profit to Rs 88.1 crore, while its revenue increased by 21.9% YoY. According to analyst Prathamesh Sawant, the company beat analyst estimates on all fronts. 

Sawant says, “Praj Industries is now marching its footprints globally.” Due to its focus on the engineering business, providing solutions across segments that cater to a growing industry, Sawant remains confident in the company’s growth prospects.

The analyst has increased its FY24-25 EBITDA estimates to factor in higher margins from new projects, increased exports, and a decrease in raw material prices. He also believes that the management's focus on growth and an increase in service segment revenues will support better margins.

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

(You can find all analyst picks here)

 
T
Trendlyne Marketwatch
07 Jun 2023
Market closes higher, IKIO Lighting’s IPO gets bids for 6.83X of the available shares on offer

Trendlyne Analysis

Nifty 50 closed at 18,726.40 (127.4, 0.7%), BSE Sensex closed at 63,142.96 (350.1, 0.6%) while the broader Nifty 500 closed at 16,006.70 (128.3, 0.8%). Of the 1,983 stocks traded today, 1,263 were in the positive territory and 667 were negative.

Indian indices extended their gains in the final hour of the trading session and closed in the green. The benchmark Nifty 50 index closed above the 18,700 mark and is under 1% away from touching its all-time high of 18,887.6 points. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, taking cues from the benchmark index. Nifty Metal and Nifty FMCG closed higher than Tuesday’s close. According to Trendlyne’s sector dashboard, Telecommunications Equipment was the top-performing sector of the day.

Most Major Asian indices closed flat or higher amid mixed global cues. European stocks traded flat or lower, in line with the US indices futures. Investors look ahead to the US Federal Reserve's policy meeting, scheduled next week. Analysts expect the US Fed to pause interest rates at its June meeting.

  • Money flow index (MFI) indicates that stocks like Birla Corp, IDFC First Bank, IDFC and Mazagon Dock Shipbuilders are in the overbought zone

  • HAL touches a 52-week high today following reports of an upcoming agreement with General Electric to jointly manufacture jet engines in India. It appears in a screener of stocks with no debt.

  • Can Fin Homes, Fine Organic Industries, Apar Industries, Craftsman Automation and Mahanagar Gas outperform their industries in terms of annual growth and capital returns.

  • Varun Beverages is falling as reports suggest that 10.5 lakh shares (0.23% equity) of the company, amounting to Rs 172.6 crore, change hands in a large trade.

  • IKIO Lighting’s Rs 607 crore IPO gets bids for 6.83X the available 1.5 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 5.92X of the available 76.9 lakh shares on offer.

  • Telecommunications equipment companies like ITI, HFCL, Sterlite Technologies and GTL Infrastructure are rising in trade. The broader sector of telecommunications equipment is also trading in the green.

  • Gravita India remains flat as one of its promoters Rajat Agarwal sells a 1.9% equity stake (13,00,000 shares) in the company. The deal has been done through an open market transaction at an average price of Rs 586.04. Meanwhile, Jupiter India Fund has purchased a 1.4% stake (10,00,000 shares) at an average price of Rs 585.

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

  • Deepak Goyal, Director (Operations) and Group CFO at APL Apollo Tubes, expects the company's volumes to grow by 30% and the EBITDA per tonne to improve by 11-12% in FY24. He also highlights that the company has a strong order book under the Jal Jeevan Mission.

  • ICICI Direct maintains its 'Buy' rating on Graphite India with an upgraded target price of Rs 440 per share. This indicates a potential upside of 17%. The brokerage believes that adopting the electric arc furnace (EAF) process will help the company drive demand in the long term. It expects the company's net profit to grow at a CAGR of 93% over FY23-25.

  • Page Industries, Nestle India, Lakshmi Machine Works and Atul are trading above their second resistance or R2 levels.

  • Aster DM Healthcare rises more than 6% and ranks high on Trendlyne's checklist with a score of 63.6%. The stock has 7 buy ratings out of 9 from brokerage firms. It appears in a screener of stocks hitting a new 52-week high today.

  • ICICI Securities maintains its ‘Buy’ rating on Angel One and increases the target price to Rs 1,590 from Rs 1,575. This implies an upside of 11.2%. The brokerage remains optimistic about the company’s prospects due to its aggressive market share expansion, high retail volume share and increasing customer lifecycle value. It expects the firm’s revenue to grow at a CAGR of 15.8% over FY23-25.

  • Lakshmanan R, Senior Research Analyst at CreditSights, highlights the improved credit metrics in FY23 for several Adani companies. Adani Enterprises, Adani Power, and Adani Ports are reported to have moderate leverage levels.

  • Societe Generale buys a 0.74% stake in IFB Industries in a bulk deal for approx Rs 24 crore on Tuesday.

  • Utility stocks like RattanIndia Power, Reliance Power, Torrent Power and SJVN are rising in trade. The broader sectoral index BSE Utility is also trading in the green.

  • KPI Green Energy rises near its 52-week high as it receives a Letter of Intent from Anupam Rasayan India. The order involves the execution of a solar-wind hybrid project of 40 MW capacity (21.5 MW wind and 18.5 MW solar).

  • G R Infraprojects’ arm, GR Hasapur Badadal Highway, executes its concession agreement with the National Highways Authority of India. The agreement involves the construction of a six-lane highway worth Rs 872.2 crore in Maharashtra. The stock shows up in a screener for companies with high TTM EPS growth.

  • Jefferies maintains its 'Buy' rating on Can Fin Homes with a target price of Rs 850. The brokerage expects the company's loan growth to be around 18-20% in FY24, and EPS to grow at 18% CAGR over FY23-26.
  • Varun Beverages fixes June 15 as the record date to determine the eligible shareholders entitled to the stock split in the ratio of 1:2. The company has received approval for the split in a postal ballot on June 2, 2023.

  • Bank of Maharashtra rises in trade today as it approves the QIP issue at an issue price of Rs 28.5 per share. An aggregate of Rs 1,000 crore will be allotted to eligible institutional buyers. It appears on a screener for stocks with strong annual EPS growth.

  • The World Bank projects India's GDP to grow at 6.3% in FY24, making it the fastest-growing economy among emerging markets and developing economies.

  • Media stocks like Hathway Cable & Datacom, TV18 Broadcast, Navneet Education, Network 18 Media & Investments and Zee Entertainment Enterprises are rising in trade. All constituents of the broader sectoral index, Nifty Media, are also trading in the green.

  • R Systems International's board of directors approves the acquisition of a 100% equity stake in Pune-based IT firm Velotio Technologies for Rs 278.8 crore in cash consideration. This will strengthen the company's engineering capabilities and expertise, and expand its delivery presence in Pune, a major talent hub for product engineering in India.

  • Va Tech Wabag secures a Rs 420 crore order from CIDCO in Raigad. The order includes the design, construction and operation of a water treatment plant with a capacity of 270 million litres per day. The project aims to address the future water requirements of Navi Mumbai and is expected to be completed in 42 months.

  • Torrent Power signs an MoU with the Government of Maharashtra to develop three pumped storage hydro projects with a total capacity of 5,700 megawatts. The projects require an investment of approximately Rs 27,000 crore and will be implemented over five years. The company shows up in a screener for affordable stocks with a high RoE and momentum score.

Riding High:

Largecap and midcap gainers today include Torrent Power Ltd. (687.75, 12.34%), Vodafone Idea Ltd. (7.65, 8.51%) and Max Healthcare Institute Ltd. (559.85, 6.86%).

Downers:

Largecap and midcap losers today include Varun Beverages Ltd. (1,647.65, -2.33%), Polycab India Ltd. (3,538.05, -1.60%) and 3M India Ltd. (27,000.00, -1.54%).

Volume Shockers

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

Top high volume gainers on BSE included Suzlon Energy Ltd. (14.45, 18.44%), Torrent Power Ltd. (687.75, 12.34%) and Vodafone Idea Ltd. (7.65, 8.51%).

Top high volume losers on BSE were Wockhardt Ltd. (170.15, -3.32%), KEC International Ltd. (526.75, -1.16%) and Jamna Auto Industries Ltd. (99.90, -0.65%).

ITI Ltd. (113.55, 4.65%) was trading at 14.9 times of weekly average. Sundaram Clayton Ltd. (4,429.60, 2.46%) and Aster DM Healthcare Ltd. (284.80, 5.62%) were trading with volumes 14.1 and 9.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

57 stocks made 52-week highs,

Stocks touching their year highs included - 3M India Ltd. (27,000.00, -1.54%), AIA Engineering Ltd. (3,142.55, 0.95%) and Ajanta Pharma Ltd. (1,449.90, 2.76%).

21 stocks climbed above their 200 day SMA including Jubilant Pharmova Ltd. (352.80, 3.73%) and Manappuram Finance Ltd. (113.00, 2.82%). 5 stocks slipped below their 200 SMA including Ambuja Cements Ltd. (455.75, -0.74%) and UTI Asset Management Company Ltd. (728.50, -0.36%).