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The Baseline
09 May 2023
Five analyst picks that outperformed Nifty 50 over the month
By Abhiraj Panchal

This week in analyst picks we look at companies that relatively outperformed the Nifty 50 over the past month:

  1. Supreme Industries: Geojit BNP Paribas upgrades its rating on this plastic products company to ‘Buy’ from ‘Hold’ and raises the target price to Rs 3,223 from Rs 2,703. This implies an upside of 15.7%. The firm has outperformed the Nifty 50 index by 3.6% over the past month. In Q4FY23, its net profit increased by 11% YoY to Rs 359.4 crore and revenue grew 1.6% YoY. 

Analyst Anil R is optimistic about this stock, as its Q4 performance has exceeded expectations on the back of a 15% YoY increase in volumes. He sees this volume growth as driven by strong demand in the housing and agricultural sectors. The expansion of the firm’s EBITDA margin by 320 bps YoY to 18.5%, led by stable raw material prices, he notes, is a key positive. 

Given the softening of raw material costs, the analyst anticipates healthy margin and profit growth in the coming quarters. “Stable demand from the housing & agriculture sectors will continue to drive volume & revenue going ahead,” Anil adds. He expects the company’s revenue to grow at a CAGR of 11.4% over FY23-25. 

  1. IDFC First Bank: ICICI Direct retains its ‘Buy’ call on this bank as valuations look reasonable, and gives it a target price of Rs 75. This indicates an upside of 15.5%. The bank has outperformed the Nifty 50 index by 13.7% in the past month. In Q4FY23, its profit increased by 131.7% YoY to Rs 816.1 crore, while its revenue grew 45.3% YoY. 

IDFC First’s share price rose by 60% in the past year. Customer deposits grew by 46.8% YoY to Rs 1.36 lakh crore, which according to analysts Kajal Gandhi, Vishal Narnolia and Pravin Mule was led by a 41% YoY rise in CASA. The analysts say, “Credit growth continued to remain strong and ahead of industry growth, coupled with a gradual improvement in cost to income.” They also believe that the bank has steady asset quality – Return on Assets reached 1.1% in FY23, and the analysts expect it to improve to 1.3% in FY24.

  1. Godrej Properties: Motilal Oswal reiterates its ‘Buy’ call on this realty company with a target price of Rs 1,575, indicating an upside of 15.1%. The company has outperformed the Nifty 50 index by 22.4% in the past month. In Q4FY23, Godrej Properties posted a net profit growth of 58.2% YoY to Rs 412.1 crore, while its revenue increased by 20.8% YoY. According to analysts Pritesh Sheth and Sourabh Gilda, the revenue was driven by strong completion and they expect the company to sustain its improved profitability level

The realty company reported pre-sales of Rs 4,000 crore in Q4 (up 25% YoY and 12% above the brokerage's estimates). For FY23, the bookings surpassed its full-year guidance by Rs 2,200 crore, say the analysts. They add, “The company continues to provide strong visibility on pre-sales growth with sustained aggression in business development activity as it is targeting to add Rs 15,000 crore worth of new projects in FY24.” 

  1. Mold-Tek Packaging: IDBI Capital upgrades its rating on this containers and packaging company to a ‘Buy’ with a target price of Rs 1,252. This indicates an upside of 26.8%. It has outperformed the Nifty 50 index by 1.3% in the past month. In Q4FY23, the company’s profit increased 23% YoY to Rs 23 crore and its revenue grew marginally by 3.7% YoY. The results were in line with the brokerage's estimates on key parameters, says Archana Gude. According to her, the Q4 sales volume off-take was impressive due to weak demand in Q3 and low-base sales. The management has also guided sales volume to be in the range of 15%-20% in the near term. 

Gude says, “Mold-Tek Packaging’s strategy of timely capacity expansion and entry into high-value products have been key drivers of sustainable earnings growth of the company.” She believes that expansion into the northern markets will pave the way for further improved earnings. She expects this expansion, along with healthy earnings growth, will lead to decent returns for the stock.

  1. Kotak Mahindra Bank: KRChoksey keeps its ‘Buy’ rating on this bank with a target price of Rs 2,330,  indicating an upside of 7.5%. The company has outperformed the Nifty 50 index by 6.6% over the past month. In Q4FY23, the firm’s net profit rose by 26.3% YoY to Rs 3,495.6 crore and revenue grew by 39% YoY. 

Analyst Abhishek Agarwal believes that the bank’s healthy performance in Q4 has been driven by robust growth in net interest income, lower expenses and improved asset quality. This led to lower provisions and further strengthened the balance sheet. He adds that the bank continues to be a market leader in terms of the CASA ratio. 

Agarwal says, “Overall, on the credit side, the bank is optimistic about the demand trajectory in the upcoming quarters, with improved contributions from high-margin segments.” For the coming quarters, Kotak Mahindra will continue to invest in digital capabilities and expand its branches, according to the analyst. He expects the company’s net profit to grow at a CAGR of 12.7% 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
08 May 2023
Chart of the week: Auto companies see a jump in net profit and operating margins in Q4, cement struggles
By Abdullah Shah

As we head into the thick of the Q4 results season, let’s take a look at Trendlyne’s industry results dashboard to see which industries are up, and which are down. This edition of chart of the week looks at industries where major companies have released Q4FY23 results. We check the performance in terms of YoY growth in net profit and operating profit margin. 

Industries with clear emerging trends include finance (including NBFCs), automobile & auto components, FMCG, IT consulting & software, banks and cement & cement products.

The automobile & auto components industry registered an average net profit growth of 49.1% YoY during Q4FY23. This was helped by a 72.9% and 42.4% YoY rise in net profit for Mahindra CIE Automotive and Maruti Suzuki respectively. MRF more than doubled its net profit during the quarter. 

The industry’s operating profit margin improved by 150 bps in the same period on the back of reducing material costs. Major original equipment manufacturers (OEMs) intend to aggressively launch new products in India and make sizable investments. This is expected to intensify competition among the manufacturers, while the ever-improving affordable vehicles segment will boost sales.

The NBFC industry posted an average net profit growth of 61.8% YoY in Q4FY23, with a 9.3 percentage points improvement in operating profit margin. It was aided by a 30.5% YoY, 24.5% YoY and 67.2% YoY rise in net profits of Bajaj Finance, Cholamandalam Investment & Finance and Poonawalla Fincorp respectively. The industry’s average operating profit margin increased on the back of improvement in margins of Bajaj Finance, Mahindra & Mahindra Financial Services and Poonawalla Fincorp.

The FMCG industry witnessed an average net profit growth of 15.1% YoY in Q4FY23 while its operating profit margin declined marginally by 10 bps during the quarter. This net profit rise was aided by a rise in net profit of 12.9% YoY, 23.87% YoY and 47.1% YoY from Hindustan Unilever, Nestle India and Britannia Industries respectively. The rise in average net profit was on the back of reduction in commodity prices of Brent crude, soda ash, caustic soda and crude palm oil tea.

The cement & cement products industry, on the other hand, saw  a 25.7% YoY decline in average net profit, while its average operating profit margin decreased by 210 bps YoY in Q4FY23. ACC and Ultratech Cement witnessed their net profits decline by 40.5% YoY and 36.4% YoY respectively during the quarter, causing the industry’s average operating profit to drop. 

Meanwhile, ACC, Ambuja Cements and Dalmia Bharat saw a reduction in operating profit margin due to the surge in fuel prices YoY, leading to a fall in the industry average profit margin.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
08 May 2023
Market closes higher, UPL's Q4FY23 net profit falls 37.8% YoY to Rs 1,080 crore

Trendlyne Analysis

Nifty 50 closed at 18,264.40 (195.4, 1.1%), BSE Sensex closed at 61,764.25 (710.0, 1.2%) while the broader Nifty 500 closed at 15,427.10 (148.5, 1.0%).  Of the 1,978 stocks traded today, 1,123 were gainers and 787 were losers.

Indian indices maintained their gains from morning session and Nifty 50 closed over 1% higher, with the volatility index, India VIX, rising over 3%. India’s coal imports surge by 30% in FY23 to 162 MT.

One97 Communications (Paytm) Q4FY23 net loss declines by 77.9% YoY to Rs 168.4 crore against analyst estimates of 306 crore loss. Its revenue increases by 51.5% YoY as its value of loans distributed rises to Rs 12,554 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. However, Nifty PSU Bank index and Nifty Media closed lower than their Friday levels. All other major sectoral indices closed higher. According to Trendlyne’s sector dashboard, realty was the top-performing sector of the day.

European indices traded in the green, taking cues from the US indices futures, which also traded higher. Major Asian indices closed higher, except for Japan’s Nikkei 225 closing in the red. The US farm payroll data released on Friday indicated unemployment rate in April 2023 at 3.4% against estimates of 3.6%. The Fed needs to take a fresh look against their earlier outlook to pause interest rate hikes.

  • Relative strength index (RSI) indicates that stocks like Rail Vikas Nigam, Cholamandalam Investment & Finance, MRF and Devyani International are in the overbought zone.

  • Happiest Minds is falling despite its Q4FY23 net profit rising by 10.7% YoY to Rs 57.7 crore and revenue increasing by 25.8% YoY. However, its EBIT margin drops 70 bps YoY to 22.4% due to a sharp rise in employee costs.

  • Exide Industries is rising despite net profit declining by 95.4% YoY to Rs 181.1 crore in Q4FY23 on the back of rising raw material costs. Its revenue declined by 4.8% YoY to Rs 3,676,8 crore. The company shows up in a screener of stocks with declining net profit and profit margin (YoY). The company has also declared a final dividend of Rs 2 per share of face value of Rs 1 each.

  • Alembic Pharmaceuticals rises over 7% in trade today. The company features in a screener of stocks where brokers have upgraded their recommendations or target prices in the past month. According to Trendlyne’s Forecaster, the analyst price target on the stock is Rs 601 per share.

  • Union Bank of India, Bank of India, NCC and Petronet LNG are trading below their second support or S2 level.

  • CG Power and Industrial Solutions is rising as its Q4FY23 net profit jumps 282.4% YoY to Rs 426.1 crore and revenue increases 28.2% YoY, driven by robust growth in its industrial and power segments. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Tata Motors and Oracle Financial Services touch their 52-week highs of Rs 500 and Rs 3,722.5, respectively. Tata Motors has risen 16.8% in the past month, while the other increased by 13.2%.

  • UPL's Q4FY23 net profit falls 37.8% YoY to Rs 1,080 crore, while its revenue rises by 4.5% YoY. The decrease in profit is attributed to an increase in the cost of materials and components consumed. The company shows up in screener for stocks with improving return on equity for the past two years.

  • Tatva Chintan Pharma Chem is plunging as its net profit declines 3.2% YoY to Rs 16.9 crore in Q4FY23. However, its revenue grows by 26.4% YoY on the back of growth in the phase transfer catalysis (PTC), PASC and structured directing agents (SDA) segments. The company shows up in a screener of stocks with declining quarterly net profit and profit margin (YoY).

  • Automobile & auto component stocks like Tata Motors, Sona BLW Precision Forging, Mahindra & Mahindra, Bharat Forge and Bajaj Auto are rising in trade. The broader sectoral index Nifty Auto is also trading in the green.

  • Goldman Sachs expects brent crude oil price to increase to $95 per barrel by December. The brokerage says that global oil demand is less likely to be impacted by the US banking crisis or China’s weak industrial data.

  • Canara Bank is falling despite its Q4FY23 net profit surging by 90.5% YoY to Rs 3,174.7 crore and its interest income rising 33.9% YoY, driven by growth in the retail banking segment. The bank’s asset quality also improves as its net NPA drops 92 bps YoY to 1.73%. The company shows up in a screener for stocks in the PE Buy zone with high durability scores and rising momentum scores.

  • Equitas Small Finance Bank reaches its all-time high of Rs 78.4 as its net profit grows 59% YoY to Rs 190 crore in Q4FY23. Its revenue increases by 29% YoY on the back of increased advances and loan disbursements. The bank's asset quality has improved as its gross and net NPAs declined by 147 bps YoY and 123 bps YoY.

  • Gautam Saraogi, the Executive Director and CEO of Go Fashion (India), says the company plans to add around 130 stores in FY24. He adds that it targets a market share of 14-15% in the next few years.

  • Pennar Industries is rising as it bags orders worth Rs 682 crore across various business verticals like steel, railways, tubes, and construction. The company expects to execute these orders within the next two quarters.

  • ICICI Direct downgrades its rating on United Breweries to ‘Hold’ from ‘Buy’ and lowers its target price to Rs 1,500 from Rs 1,900. This implies an upside of 8.1% from the current market price. The brokerage expects high volatility in the firm’s operations in FY24 & FY25. It also anticipates margins to be impacted due to high input costs, supply-side constraints and subdued sales growth in the near term.

  • JSW Energy rises as its arm, JSW Renew Energy Three, inks a power purchase agreement with Solar Energy Corp of India for a 300-megawatt ISTS-connected wind power project.

  • Realty stocks like Sobha, Macrotech Developers, DLF, Mahindra Lifespace Developers and Indiabulls Real Estate are rising in trade. All constituents of the broader sectoral index Nifty Realty are also trading in the green.

  • Shyam Srinivasan, CEO of Federal Bank, says the company targets a loan growth of 18-20% for FY24. He also expects a contraction in the bank’s margins.

  • One97 Communications (Paytm) is rising as its net loss declines by 77.9% YoY to Rs 168.4 crore in Q4FY23. Its revenue increases by 51.5% YoY as its value of loans distributed rises to Rs 12,554 crore. The company shows up in a screener of stocks with improving net profits, operating profit margin, and revenues in the past quarter.

  • Bank of India is falling despite a 105.5% YoY rise in net profit to Rs 1413.9 crore, while revenue rises 44.7% YoY. Treasury and wholesale banking operations segments have contributed most to the rise in profit. The bank features in a screener for stocks with increasing revenue for four consecutive quarters.

  • Coal India is falling as its Q4FY23 net profit decreases 17.3% YoY to Rs 5,533.2 crore, despite a 17% YoY increase in revenue. The decline in profit is attributed to the rise in expenses like employee benefits, contractual expenses, and others. The company features in screener for stocks with zero promoter pledges.

  • Nomura upgrades its rating on Bharat Forge to 'Buy’ with a target price of Rs 929. The brokerage says the company’s defence revenue is expected to grow sharply during FY24-25.

  • Private bank stocks like IndusInd Bank, Kotak Mahindra Bank, RBL Bank and Bandhan Bank are rising in trade. The broader sectoral indices, Nifty Private Bank and BSE Private Bank, are also trading in the green.

  • Aditya Birla Fashion and Retail inks an agreement to acquire up to 51% stake in TCNS Clothing worth Rs 1,650 crore from public shareholders and founder promoters.

  • Marico surges as its Q4FY23 net profit rises 20.3% YoY to Rs 302 crore, driven by an increase in other income, which includes a one-time gain on the sale of land. Its revenue also grows by 5.6% YoY. It shows up in a screener for stocks with improving book value over the past two years.

  • Britannia Industries’ Q4FY23 net profit rises 47.1% YoY to Rs 558.7 crore as its revenue increases by 13.3% YoY. Varun Berry, Vice-Chairman & MD of the company, attributes the growth to significant distribution gains and expansion of its rural network. The stock shows up in a screener for companies with high TTM EPS growth.

Riding High:

Largecap and midcap gainers today include Marico Ltd. (530.70, 7.52%), Tata Motors Limited (DVR) (258.50, 4.97%) and IndusInd Bank Ltd. (1,126.35, 4.94%).

Downers:

Largecap and midcap losers today include Bank of India (81.15, -5.86%), Adani Transmission Ltd. (949.05, -5.00%) and Adani Total Gas Ltd. (872.90, -5.00%).

Movers and Shakers

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

Top high volume gainers on BSE included Marico Ltd. (530.70, 7.52%), Alembic Pharmaceuticals Ltd. (593.00, 6.90%) and Indigo Paints Ltd. (1,275.20, 5.43%).

Top high volume losers on BSE were TCNS Clothing Co. Ltd. (416.75, -19.99%), Gujarat Ambuja Exports Ltd. (259.75, -9.57%) and Indian Bank (315.30, -5.00%).

Aditya Birla Fashion and Retail Ltd. (205.95, -3.85%) was trading at 14.0 times of weekly average. Macrotech Developers Ltd. (925.75, 3.31%) and FDC Ltd. (301.00, 0.92%) were trading with volumes 10.9 and 7.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

32 stocks made 52-week highs, while 4 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,454.80, 1.92%), Apollo Tyres Ltd. (376.25, 1.99%) and Bajaj Auto Ltd. (4,549.25, 1.93%).

Stocks making new 52 weeks lows included - Blue Dart Express Ltd. (5,702.30, -1.58%) and Aditya Birla Fashion and Retail Ltd. (205.95, -3.85%).

16 stocks climbed above their 200 day SMA including Marico Ltd. (530.70, 7.52%) and Alembic Pharmaceuticals Ltd. (593.00, 6.90%). 11 stocks slipped below their 200 SMA including Gujarat Ambuja Exports Ltd. (259.75, -9.57%) and Symphony Ltd. (892.15, -5.20%).

 
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The Baseline
05 May 2023
Five Interesting Stocks Today
  1. Varun Beverages: This beverages company’s Q1CY23 net profit surged by 68.8% YoY to Rs 429.1 crore, while its revenue from operations rose 37.7% YoY. The growth has been driven by healthy demand across India, which enabled its sales volumes to increase 24% YoY, along with better realisations driven by price hikes and improved product mix. Its gross margin also expanded by 89 bps YoY to 52.4%. The management says that the rural demand has recovered and is growing faster than urban demand.  

Along with this healthy performance, this PepsiCo franchisee has seen one brokerage recommendation upgrade and 10 target price upgrades over the past three months. According to Trendlyne’s Forecaster, the consensus recommendation on the stock from 15 analysts is ‘Buy’.

The company’s board has announced a stock split in the ratio of 1:2 to enhance the liquidity of its equity shares and make the stock more attractive to small investors.  

The company plans to expand the distribution of its high-margin Sting energy drink, as its sales volumes have been rising in double digits. The management believes there is still significant room for expansion in the market for the product. It believes the next key growth drivers will be juices, sports drinks and value-added dairy products, for which two production facilities are being set up and are anticipated to be commissioned in CY24.

  1. Cholamandalam Investment & Finance: This NBFC reached its all-time high of Rs 970 per share on Thursday as its net profit rose 24.5% YoY to Rs 855.2 crore in Q4FY23. Its revenue has also grown 43.6% YoY to Rs 3,741.1 crore on the back of improvements in vehicle finance, property and home loans. This has helped the company turn up in a screener of stocks with increasing revenue for the past eight quarters. 

The company’s asset quality also improved, with gross and net NPAs falling by 74 bps YoY and 65 bps YoY, respectively, thanks to improved efficiency in loan collection. The stock beat Trendlyne’s Forecaster estimates for net profit by 17.3%. 

Its vehicle finance segment, which contributes 64.2% of the revenue, grew 26% YoY over the quarter. This was supported by a well-diversified portfolio across India, which finances commercial, passenger, two-wheelers, tractors and construction equipment in both new and used vehicles. The lender is focusing on retail customers, especially in smaller towns and rural areas. 

According to Motilal Oswal, CIFC is well-positioned to capitalise on its diverse product portfolio and widespread distribution network to realise its growth potential. The broker has maintained a ‘Buy’ rating on the stock, with an upgraded target price of Rs 1,130, indicating a potential upside of 19%.  

  1. MRF: This auto tyre company is trading near its 52-week high of Rs 96,000 after reporting upbeat Q4 results. It has risen over 6% in the past two sessions. MRF recorded a standalone net profit of Rs 410.7 crore, up 161.9% YoY, beating Trendlyne’s Forecaster estimates by 57.4%.  As a result, the company features in a screener of stocks with increasing profits every quarter for the past three quarters. Its revenue also grew by 10.1% YoY to Rs 5,725.4 crore. 

The company’s strong performance during the quarter was due to softening rubber prices and higher vehicle sales, which led to increased demand for tyres. Automobile manufacturers recorded higher sales in Q4,  due to increased demand for passenger and commercial vehicles. The demand comes as consumers are expecting price increases following tighter fuel emission norms, which took effect in April.

However, Motilal Oswal maintains its ‘Sell’ rating on MRF with a target price of Rs 75,400. This is due to the dilution of pricing power in the PCR (passenger car radial) and TBR (truck, bus and radial) tyre segments. According to Trendlyne’s Forecaster, the analyst price target on MRF is Rs 74,468, implying a 22% downside. 

  1. Manappuram Finance: This NBFC stock fell 12% in trade on Wednesday after the Enforcement Directorate (ED) conducted raids at multiple locations, including its headquarters in Thrissur, Kerala, on charges of money laundering. The ED has reportedly frozen assets worth Rs 143 crore belonging to the MD & CEO, VP Nandakumar, after it discovered that the proceeds of the alleged money laundering were diverted into immovable assets under his and his family’s names.

    Reports also suggest that the company collected deposits worth Rs 150 crore in contradiction to the rules of the Reserve Bank of India, which state that NBFCs are not allowed to collect deposits for a period less than 12 months and more than 60 months. However, the company issued a clarification on Thursday saying that the deposit allegations are linked to Manappuram Agro Farms (MAGRO), a former proprietor. The company claims that it had repaid the money except for deposits amounting to Rs 9.25 lakh. 

Lately, the NBFC has been moving its AUM portfolio towards non-gold loans. Its gold loan portfolio dropped from 67% in Q1FY23 to 58% in Q3FY23. This is because banks, with their cheaper cost of funds, are aggressively expanding in the gold loan space, and Manappuram Finance is unable to compete with their lower rates. Its non-gold portfolio in AUM terms is 42% in Q3. Manappuram diversifying away from high-yielding gold loans may lead to margin contraction. 

The company’s track record in maintaining asset quality in the non-gold portfolio isn’t up to the mark. Its investor presentation shows that GNPAs in the non-gold portfolio for its subsidiary Asirvad Microfinance and housing finance stands at 6.7% and 5.4%, respectively, in Q3. The company's overall GNPA stands at 3%. 

Trendlyne’s Forecaster expects Manappuram’s revenue to fall by 15% in Q4FY23. The stock has fallen nearly 10% in the past month. However, the consensus recommendation on the stock from 12 analysts remains ‘Buy’. 

  1. Bharat Heavy Electricals (BHEL): This heavy electrical equipment manufacturer has been rising for the past month and is trading near its 52-week high. The rise can be attributed to recent order wins and its efforts to diversify into other segments. As a result, the company shows up in a screener for stocks that have gained more than 20% in the past month. 

In April 2023, BHEL won a Rs 3,700 crore order for the supply of strategic equipment for the defence sector, and a railway tender for the supply and maintenance of 80 Vande Bharat train sets worth Rs 23,000 crore. As of Q3FY23, the company’s total orderbook amounted to Rs 1,03,700 crore, with 83% concentrated in the power segment and 13% in the industrial segment. The company also signed a pact with the Nuclear Power Corp of India to jointly pursue business opportunities in the area of nuclear power.

According to ICICI Securities, BHEL is making conscious efforts to diversify its industrial segment offerings in railway, defence and nuclear segments. Even though Q3 executions were muted, the brokerage expects the industrial segment’s execution to be at a higher pace. 

Despite a marginal increase in revenue during Q3FY23, BHEL’s profit grew by 56.5% YoY to Rs 42.3 crore. The electrical equipment manufacturer also features in a screener of stocks with rising profit and revenue for the past two quarters. According to Trendlyne’s Forecaster, the company is expected to post a net profit of Rs 531.9 crore in Q4FY23. 

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
05 May 2023
Market closes lower, Federal Bank's Q4 net profit surges 67% YoY to Rs 902.6 crore

Trendlyne Analysis

Nifty 50 closed at 18,069.00 (-186.8, -1.0%), BSE Sensex closed at 61,054.29 (-695.0, -1.1%) while the broader Nifty 500 closed at 15,278.60 (-126.9, -0.8%). Of the 1,943 stocks traded today, 657 showed gains, and 1,223 showed losses.

Indian indices extended their losses and closed over 1% lower, with the volatility index, India VIX, rising by over 5%. However, the benchmark Nifty 50 index rose 0.8% in the past week. United Breweries fell over 2% after its Q4 net profit fell 94% YoY to Rs 981 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. However, Nifty Auto and Nifty FMCG closed higher than their Thursday levels. According to Trendlyne’s sector dashboard, telecommunications equipment was the top-performing sector of the day and also the week.

European indices traded in the green, taking cues from the US indices futures, which also traded higher. Major Asian indices closed higher, except for India’s BSE Sensex and China’s Shanghai SE Composite Index, which closed in the red. Brent crude oil futures traded over 1.5% higher but crude oil prices are still down 8% in the past week.

  • Federal Bank sees a short buildup in its May 25 future series as its open interest rises 61.2% with a put-call ratio of 0.44.

  • Mahindra & Mahindra Financial Services touches its 52-week high of Rs 289.2 today. It has risen over 20% in the past month. The company features in a screener of stocks where brokers have upgraded their recommendations or target prices in the past three months.

  • Symphony is falling as its Q4FY23 net profit plunges by 74.6% YoY to Rs 16 crore and its revenue drops by 19.8% YoY due to a 22% YoY decline in the air-cooling segment. The stock shows up in a screener for companies with decreasing cash flows from operations over the past two years.

  • Cholamandalam Financial Holdings and Sapphire Foods India rise 20.7% and 10.1% over the past week, ahead of their results on May 12.

  • KFIN Technologies is plunging as its revenue declines by 2.7% QoQ to Rs 183.1 crore in Q4FY23. However, its EBIDTA margin improves by 290 bps QoQ, aiding the net profit to grow 6.8% QoQ. The company shows up in a screener of stocks with increasing net profit and profit margin (YoY).

  • Telecommunications equipment, hotels, restaurants & tourism, forest materials and commercial services & supplies sectors rise more than 4% in the past week.

  • Federal Bank is plunging despite its net profit growing by 67% YoY to Rs 902.6 crore in Q4FY23. Its asset quality improves as gross and net NPAs decline by 44 bps YoY and 27 bps YoY. However, the bank witnesses a 55% YoY increase in provisions.

  • NMDC, HDFC Bank, Dabur India, IndusInd Bank and United Breweries are trading below their third support or S3 level.

  • Bharat Forge is falling as its Q4FY23 net profit declines 42.5% YoY due to higher raw material costs, finance costs and other expenses. Its revenue marginally rises by 1.6% YoY. The stock shows up in a screener for companies with declining cash flows from operations over the past two years.

  • According to reports, one of Spicejet’s lessors, Aircastle, files a case at the National Company Law Tribunal (NCLT) to initiate an insolvency process against the airline for non-payment of dues. The first hearing of this case is set to take place on Monday at the Delhi bench of NCLT.

  • Securities and Exchange Board of India (SEBI) plans to issue directives to brokers and mutual funds to limit the use of financial influencers in their advertising and marketing campaigns, according to reports. SEBI is worried about the rise in influencers sharing financial advice on social media, which could mislead retail investors.

  • Mohit Malhotra, CEO of Dabur India, says the company aims to achieve an EBITDA margin of around 19-19.5% in FY24. He adds that Dabur's revenue growth could be in the low double-digit.

  • Manappuram Finance's Managing Director VP Nandakumar, in a statement today, clarifies that the ED probe is not related to the company but a now non-existent private entity called Manappuram Agro Farms. The enforcement actions are against the promoter and not the company, he adds.

  • KRChoksey maintains its ‘Buy’ rating on Kotak Mahindra Bank with a target price of Rs 2,330. This implies an upside of 19%. The brokerage remains positive about the bank’s prospects due to its improving asset quality, strong brand value, healthy credit growth and rising market share. It expects the company’s net profit to grow at a CAGR of 12.7% over FY23-25.

  • United Breweries is falling as its net profit declines 94% YoY to Rs 981 crore in Q4FY23. The rise in employee benefits expense, cost of raw materials and other expenses has caused the EBITDA margin to plunge by 5.9 percentage points YoY to 1.6%. The company features in a screener of stocks with declining profits for the past three quarters.

  • Media stocks like Zee Entertainment Enterprises, Sun TV Network, PVR and Network 18 Media & Investment are falling in trade. The broader sectoral index Nifty Media is also trading in the red.

  • R Dilip Kumar, CFO of Sundram Fasteners, says the company targets to improve its margin to 17% in FY24. He adds that it expects to generate 15% revenue from the EV segment.

  • Jammu & Kashmir Bank's Q4FY23 profit rises 297.7% YoY to Rs 472.6 crore, aided by good recoveries. Its revenue also increases by 21.2% YoY. The bank shows up on a screener of stocks with low debt.

  • Blue Star is rising as its Q4FY23 net profit nearly triples YoY to Rs 225.3 crore, aided by realising a gain of Rs 170.8 crore from the sale of land. Revenue also increases by 16.7% YoY, driven by growth across all its business segments. The company’s board has approved the issue of bonus equity shares in the ratio of 1:1.

  • Apollo Tyres, Castrol India and Westlife Foodworld's weekly average delivery volumes rise ahead of their Q4FY23 results on Tuesday

  • Tech Mahindra acquires an additional 29% stake in Tech Mahindra Arabia, its joint venture with Midad, for a cash consideration of $11.1 million ( approximately Rs 90.7 crore). TechM now holds an 80% stake in TechM Arabia, while Midad holds 20%.

  • Anant Goenka, Vice Chairman of Ceat, says the company targets to generate 25-30% of revenue from the international market in the near term. He adds that Ceat plans to improve growth in the two-wheeler and PV segments.

  • Manappuram Finance falls as the Directorate of Enforcement freezes assets worth Rs 143 crore of its Managing Director VP Nandakumar under the Prevention of Money Laundering Act, 2002. The assets include 19 crore equity shares in the company.

  • Adani Enterprises' Q4FY23 profit rises 137.4% YoY to Rs 722.5 crore. Its revenue also grows 26.2% YoY on the back of positive performance by the integrated resources management and airports business segments. The company shows up in a screener for stocks with consistently high returns over five years.

  • Hero MotoCorp is rising as its net profit improves by 37% YoY to Rs 859 crore in Q4FY23. Its revenue also grows by 12% YoY on the back of improvement in volume sold during the quarter. The company shows up in a screener of stocks with increasing profit for the past three years.

  • Macquarie maintains its ‘Outperform’ rating on TVS Motor with a target price of Rs 1,354. The brokerage says the company is its top pick in the two-wheeler space. It also raises PAT estimates for FY24E to 5%.

  • TVS Motor Co is rising as its consolidated Q4FY23 net profit increases 21.1% YoY to Rs 336.1 crore, and its revenue grows by 22% YoY. The healthy performance is driven by a premium product mix, falling commodity prices, and easing semiconductor supply constraints. The stock shows up in a screener for companies with consistently high returns over the past five years.

  • Tata Power’s Q4FY23 net profit rises 54.6% YoY to Rs 777.7 crore, aided by higher other income. Its revenue improves 4.1% YoY, with the transmission & distribution segment growing by 16.4% YoY. The stock shows up in a screener for companies with high TTM EPS growth.

  • Indian markets slumped today. Nifty 50 was trading at 18,153.35 (-102.5, -0.6%) , BSE Sensex was trading at 61,163.10 (-586.2, -1.0%) while the broader Nifty 500 was trading at 15,359.60 (-45.9, -0.3%)

  • Market breadth is highly positive. Of the 1,699 stocks traded today, 1,133 were in the positive territory and 475 were negative.

Riding High:

Largecap and midcap gainers today include Cholamandalam Investment & Finance Company Ltd. (991.85, 4.38%), TVS Motor Company Ltd. (1,214.95, 3.93%) and MRF Ltd. (9,8614.05, 3.68%).

Downers:

Largecap and midcap losers today include Federal Bank Ltd. (127.75, -8.36%), HDFC Bank Ltd. (1,625.65, -5.91%) and Housing Development Finance Corporation Ltd. (2,702.30, -5.58%).

Volume Shockers

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

Top high volume gainers on BSE included Restaurant Brands Asia Ltd. (107.95, 9.32%), ITI Ltd. (105.60, 8.64%) and Hitachi Energy India Ltd. (3,729.80, 7.60%).

Top high volume losers on BSE were Manappuram Finance Ltd. (105.55, -11.49%), Federal Bank Ltd. (127.75, -8.36%) and IndusInd Bank Ltd. (1,073.30, -5.40%).

HLE Glasscoat Ltd. (623.85, 4.49%) was trading at 18.1 times of weekly average. Happiest Minds Technologies Ltd. (871.45, 5.13%) and Symphony Ltd. (941.10, -5.27%) were trading with volumes 12.6 and 10.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

21 stocks overperformed with 52-week highs, while 3 stocks hit their 52-week lows.

Stocks touching their year highs included - Apollo Tyres Ltd. (368.90, 2.54%), Bharat Petroleum Corporation Ltd. (365.45, -0.79%) and Carborundum Universal Ltd. (1,100.25, -2.06%).

Stocks making new 52 weeks lows included - V-Mart Retail Ltd. (2,067.45, -1.26%) and TeamLease Services Ltd. (2,028.50, -2.79%).

14 stocks climbed above their 200 day SMA including ITI Ltd. (105.60, 8.64%) and HLE Glasscoat Ltd. (623.85, 4.49%). 15 stocks slipped below their 200 SMA including Manappuram Finance Ltd. (105.55, -11.49%) and IndusInd Bank Ltd. (1,073.30, -5.40%).

 
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The Baseline
04 May 2023
India emerges a winner in the global oil war | Stocks beating analyst estimates in Q4
By Shreesh Biradar

Over the past few decades, major geopolitical events led to sharp fluctuations in oil prices – the US invasion of Iraq (which triggered a 49% jump in oil prices from March 2003 to March 2004), the Afghanistan crisis (58% up from September 2001 to September 2002), and sanctions on Iran (43% up from September 2010 to September 2011).

Each of these events disrupted the crude oil supply chain. The usual pattern is this: Developed nations impose sanctions on an oil producer, and developing economies struggle with high oil prices, and rising fiscal deficits.

The ongoing Russia-Ukraine conflict is the latest example, where many analysts expected $100 oil after the US and Europe stopped energy purchases from Russia.

But unlike the previous blanket bans, this time the G7 countries took a softer stand by capping the Russian oil price at USD 60 per barrel. The sanctions are meant to ensure a revenue cap for Russia, without hampering the oil supply chain.

Many countries are not complying with the price cap:

The impact this time is different – by continuing to buy Russian oil despite EU and US boycotts, India and China have become major refined oil exporters.

In this week’s Analyticks:

  • Oil politics: India is on the winning side of oil politics, for a change
  • Screener: Stocks that beat analyst estimates for revenue and net profit in Q4FY23

Let’s get into it.

India's deep thirst for cheap Russian oil

The price cap on Russian oil has caused its Ural crude to trade at 40% below the international benchmark, Brent crude. In the first quarter of 2023, Russian Ural oil averaged USD 51.05 per barrel, while Brent crude oil was priced around USD 81.91.

India's economy is highly susceptible to oil price fluctuations. A report by Edelweiss suggests that a 10 dollar increase in oil prices causes a current account deficit of 0.5% of India's GDP. If India were to replace its entire import crude basket with Russian Ural, its current account deficit could contract by 1.6%-1.7% of GDP.

The landing cost (including freight and insurance) of Russian Ural for India was roughly USD 70 in March. India and China are snapping up cheap Russian crude in large quantities - Russia currently accounts for nearly 40% of India’s crude imports, while China has increased its Russian oil imports by 22%. 

The Middle East’s oil producers have been at the receiving end of this, and saw their share of Indian oil imports drop sharply.

Sooner or later, Middle Eastern refiners may need to revise their official selling price to compete with Russia.

The increased demand for cheaper Russian Ural has pushed its prices past the $60/barrel cap imposed by the G7, and the price differential between Russian Ural and Brent had narrowed to 20% by the end of April 2023. Finance Minister Nirmala Sitharaman has saidthat India is going to keep buying Russian oil past the price cap, as long as it remains cheaper than Brent crude.

Can India increase Russian oil imports?

India increased its Russian imports from 67,500 barrels/day in January 2022 to 2.1 million barrels/day by the end of April 2023. Russia is now India’s single major source of oil supply. Whether India can increase its Russian oil imports further is a complex question. 


India has struggled to find an alternative currency to the US dollar for purchasing Russian crude oil. Russia's removal from the international SWIFT payment system has made dollar transactions difficult, and exposes India to potential sanctions. Trading in INR is impractical, as Russia is a net exporter to India; receiving rupee payments would leave Russia with an excess of rupees and no way to spend them.

For now, Russia and India are trading in UAE Dirhams, which helps to a certain extent as it is pegged to the dollar. But this does not completely solve the INR depreciation issue. UAE is a net exporter to India, so India buying more Dirhams for Russian trade will cause the INR to depreciate against the Dirham. 

India also cannot stockpile much Ural oil due to its limited strategic petroleum reserve of 5.33 MMT, which covers only about 9.5 days of national demand. In contrast, countries like China have significant reserves that can meet nearly 50 days of their national demand.

A potential solution for India is to rapidly refine and export more Russian oil. But Indian oil refineries are operating at full capacity, with overall capacity utilization exceeding 100% since May 2022. In January 2023, capacity utilization reached 106.9%, and state-run firms like Indian Oil Corporation reported even higher figures at 110%. India cannot increase oil exports without investing in additional capacity expansion projects.

Russian oil wears an Indian disguise, as India becomes the top fuel exporter to Europe

The European Union banned seaborne crude imports from Russia starting from February 2023. At the time, Russia accounted for nearly 30%of European crude imports.

While the US has increased its crude oil exports to Europe by morethan 70%, it is unable to meet all of Europe’s needs. So Moscow is rerouting Russian oil to Europe via refineries in India, China, Africa and the Middle East. India has become the hub for sending Russian Ural to Europe as refined oil. 

India’s oil refineries are processing and exporting Russian crude as a clean fuel. India supplied roughly 3,65,000 barrels per day to Europe in April 2023, an increase of 187% since the start of the Russia-Ukraine war in February 2022. 

Data Source: Kpler and Bloomberg

However, India cannot completely substitute Russian oil exports to Europe, which averaged around 1.1 million barrels per day before the start of the conflict. India is limited here by its refining infrastructure.

The idea behind the sanctions was to cripple Russia's revenue source without completely cutting off the global oil supply. The plan has worked, but it's not been foolproof. Russia is still making money, just not as much. Oil supply to Europe has continued, but routed through India and China. For the first time, countries like India and China, which used to be victims of international oil politics, are gaining from this oil war.

Screener: Stocks that beat analyst estimates for revenue and net profit in Q4FY23

With the Q4FY23 result season in full swing, we take a look at the stocks that have beat analyst estimates for revenue and net profit on Trendlyne’s Forecaster. This screenerfeatures stocks with the highest positive surprises in estimates for revenue and profit in Q4FY23.

Stocks from the banking, NBFC, pharmaceuticals and IT consulting & software industries dominate the screener. Stocks that stand out are Machrotech Developers, ICICI Lombard General Insurance, Syngene International, IDFC First Bank, Supreme Industries and Welspun India.

Macrotech Developers recorded the highest positive surprise in Forecaster estimates, beating revenue estimates by 15.1% in Q4FY23. However, the realty company’s revenue fell 5.5% YoY in the quarter to Rs 3,255.4 crore. It also beat Forecaster estimates for net profit by 47.5% as it grew by 39% YoY to Rs 744.4 crore.

ICICI Lombard General Insurance surpassed Trendlyne’s Forecaster estimates for revenue by 14.3% as it posted a 12.3% YoY growth in premiums earned in Q4FY23. The rise in premium earned from the retail health, corporate health and motor insurance segments aided the growth in net premium earned. A net profit growth of 39.8% YoY to Rs 436.9 crore helped the general insurer beat the Forecaster estimates by 12.1%.

You can find some popular screenershere.

Signing off this week,

The Trendlyne Team

 
Trendlyne Marketwatch
Trendlyne Marketwatch
04 May 2023
Market closes higher, HDFC's Q4FY23 net profit rises 19.6% YoY to Rs 4,425.5 crore

Trendlyne Analysis

Nifty 50 closed at 18,255.80 (166.0, 0.9%), BSE Sensex closed at 61,749.25 (556.0, 0.9%) while the broader Nifty 500 closed at 15,405.50 (129.1, 0.9%). Of the 1,942 stocks traded today, 1,271 were in the positive territory and 621 were negative.

Indian indices closed in the green after opening flat on a volatile day of trade. The benchmark Nifty 50 index rose over 165 points and closed over the 18,250 mark. Data from the Federation of Automotive Dealers' Association showed retail sales for the automotive industry fell 4% YoY to 17.2 lakh units in April. Two-wheeler retail sales decreased by 7.3% YoY, while car sales fell 1.3% YoY.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty PSU Bank closed higher than Wednesday’s levels. Nifty IT closed 0.5% higher, despite the tech-heavy Nasdaq 100 index closing in the red on Wednesday. According to Trendlyne’s sector dashboard, commercial services & supplies was the top-performing sector of the day.

European indices traded in the red, despite major Asian indices closing in the green. European stocks traded lower as investors look ahead to the European Central Bank’s latest monetary policy decision, to be announced later today. US indices futures traded flat after closing in the red on Wednesday, as investors assessed the impact of a 25 bps rate hike by the US Fed on the economy.

  • Godrej Properties beats Macrotech Developers in YoY and QoQ net profit growth, PE ratio and FII holdings. But it lags in price-to-book ratio, broker average rating and Trendlyne valuation score.

  • IndiaMART InterMESH rises over 14% in the past week. The company features in a screener of stocks where brokers have upgraded recommendation or target price in the past three months. It also ranks high on Trendlyne’s Checklist.

  • Housing Development Finance Corp is rising as its net profit improves by 19.6% YoY to Rs 4,425.5 crore in Q4FY23. Revenue also increases by 35.6% YoY to Rs 16,679.4 crore on the back of growth in interest income. The company shows up in a screener of stocks with improving net profit over the past two quarters.

  • Dabur India’s Q4FY23 net profit rises 2.2% YoY to Rs 300.8 crore and revenue grows by 6.4% YoY. The company’s largest business segment, the consumer care business, remains flat YoY. Growth in Q4 is being led by the food business growing by 44.8% YoY. The stock shows up in a screener for companies with declining cash flows.

  • Medical equipment, fertilizers and educationindustries rise more than 20% in the past month.

  • KEC International is rising despite seeing a 35.6% YoY decline in Q4FY23 net profit due to a write-off of Rs 44 crore the company received in Q4FY22. Its revenue has grown by 29.2% YoY to Rs 5,525 crore. The stock is currently trading near its 52-week high of Rs 525.9 per share.

  • Jefferies maintains its ‘Buy’ rating on KEI Industries with a target price of Rs 2,305. The brokerage says the company’s revenues have been high but offset by low margins in Q4.

  • Equitas Small Finance Bank, Piramal Enterprises and Britannia Industries rise 6.5%, 5.1% and 3.8% respectively over the past week, ahead of their Q4FY23 results tomorrow.

  • ABB India and Cholamandalam Investment & Finance reach their all-time highs of Rs 3,662.7 and Rs 970 per share respectively. The former has risen 8.2% over the past month, while the latter grew 21.7%.

  • SJVN bags an order worth Rs 1,200 crore for setting up a 200 MW grid-connected solar power project in Khavda Solar Park by Gujarat Urja Vikas Nigam. The stock has gained 6% in the past week.

  • Adani Ports & Special Economic Zone inks a share purchase agreement with Solar Energy to divest its 100% equity stake in Coastal International Terminals for $30 million.

  • Cholamandalam Investment & Finance Co is rising as its Q4FY23 net profit increases 23.7% YoY to Rs 852.8 crore, while its interest income grows by 43.5% YoY as disbursements surge by 65% YoY. The management says that the firm has gained market share across product segments in Q4. The stock shows up in a screener for companies with improving cash flows and high durability scores.

  • Patel Engineering, along with its joint venture partner, wins two projects worth a total of Rs 1,309.9 crore. The Tumkur branch canal micro-irrigation project is awarded by Visvesvaraya Jala Nigama, while the Sher micro-irrigation project is from the Water Resources Department of Madhya Pradesh. The company's share in these projects is Rs 508.2 crore.

  • Anil Rai Gupta, Chairman and Managing Director of Havells India, says the company’s margins are expected to improve to 13-15% in FY24 on the back of cooling input costs. He adds that it will not take further price hikes in the fan segment.

  • KRChoksey upgrades its rating on ACC to ‘Buy’ from ‘Accumulate’ but lowers its target price to Rs 2,166 from Rs 2,342. This implies an upside of 23.2%. The brokerage expects the company to benefit from the Centre’s focus on infrastructure and affordable housing due to its pan-India presence. It also expects margin pressure to ease in the coming quarters due to declining prices of crude, coal, and pet coke.

  • Telecom stocks like GTL Infrastructure, HFCL, Tata Teleservices (Maharashtra) and Mahanagar Telephone Nigam are rising in trade. All constituents of the broader sectoral index S&P BSE Telecom are trading in the green.

  • Retail sales for the automotive industry fall 4% YoY to 17.2 lakh units in April, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are down 7.3% YoY, while cars fall 1.3% YoY.

  • Adani Ports & Special Economic Zone’s April 2023 cargo volumes rise 12.8% YoY to 32.3 million metric tonnes (MMT). This growth is driven by rising volumes of dry cargo and containers. The stock shows up in a screener for companies with improving book value per share over the past two years.

  • HG Infra Engineering announces plans to sell its entire stake in its wholly owned subsidiaries like Gurgaon Sohna Highway, HG Rewari Ateli Highway, HG Ateli Narnaul Highway and HG Rewari Bypass to Highway Infrastructure Trust for an equity value of Rs 531 crore. The stock has touched a 52-week high in the past week.

  • G R Infraprojects wins an order worth Rs 737.2 crore from the Ministry of Road Transport and Highway for the construction of a four-lane highway with paved shoulders in the state of Uttar Pradesh.

  • Indian rupee appreciates to 81.82 from the previous close of 81.67 against the US dollar in early trade today.

  • Khurshed Yazdi Daruvala, promoter of Sterling and Wilson Renewable Energy, sells a 0.5% stake in the company on Wednesday.

  • Tata Chemicals is falling despite reporting an increase in net profit by 53.6% YoY to Rs 711 crore in Q4FY23. Although its input costs have fallen, power and fuel costs rose 13% YoY. However, revenue has increased by 27% because of the growth in demand for soda ash, bicarbonate and salt. The company reports a decrease in net debt by 8% to Rs 3,898 crore.

  • Sona BLW Precision Forgings is rising after its net profit increased 14.5% YoY to Rs 119.8 crore in Q4FY23. Revenue has surged 35.5% with sales of battery electric vehicles. The company's net order book for FY23 stands at Rs 21,500 crore, an increase of 15.6% YoY.

  • Titan’s Q4FY23 net profit rises 50% YoY to Rs 734 crore despite an increase in expenses by 33%. Advertising and finance costs surge by more than 20% YoY in Q4. Revenue has also increased across all segments like watches and wearables, jewellery and eyecare, among others. It shows up in a screener of stocks with consistent returns over the past five years.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (184.70, 19.47%), Cholamandalam Investment & Finance Company Ltd. (950.20, 7.17%) and Mahindra & Mahindra Financial Services Ltd. (288.35, 6.21%).

Downers:

Largecap and midcap losers today include Petronet LNG Ltd. (226.80, -4.18%), Indian Railway Finance Corporation Ltd. (34.20, -3.53%) and Endurance Technologies Ltd. (1,335.40, -2.03%).

Volume Rockets

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

Top high volume gainers on BSE included General Insurance Corporation of India (184.70, 19.47%), The New India Assurance Company Ltd. (126.65, 15.19%) and Tata Teleservices (Maharashtra) Ltd. (67.45, 9.94%).

Top high volume losers on BSE were TTK Prestige Ltd. (702.05, -2.51%), Firstsource Solutions Ltd. (116.45, -1.27%) and Tata Chemicals Ltd. (982.25, -1.09%).

Chemplast Sanmar Ltd. (437.15, 1.50%) was trading at 7.8 times of weekly average. Kajaria Ceramics Ltd. (1,127.70, 3.61%) and Cholamandalam Investment & Finance Company Ltd. (950.20, 7.17%) were trading with volumes 7.6 and 6.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

22 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 - Apollo Tyres Ltd. (359.75, 1.24%), Cholamandalam Investment & Finance Company Ltd. (950.20, 7.17%) and Dr. Reddy's Laboratories Ltd. (4,968.00, 0.32%).

Stock making new 52 weeks lows included - V-Mart Retail Ltd. (2,095.00, -0.88%).

19 stocks climbed above their 200 day SMA including Suzlon Energy Ltd. (8.60, 6.17%) and Birla Corporation Ltd. (973.65, 4.72%). 7 stocks slipped below their 200 SMA including Mishra Dhatu Nigam Ltd. (207.45, -1.36%) and Indiabulls Real Estate Ltd. (71.75, -0.21%).

 
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The Baseline
03 May 2023
Five analyst picks with high profit and revenue growth in Q4
By Suhas Reddy

This week in analyst picks we take a look at companies with revenue and profit growth above 10% YoY in their Q4 results.

  1. Maruti Suzuki India: ICICI Securities maintains its 'Buy' rating on this automobile company with a target price of Rs 10,091, implying a 15% upside. In Q4FY23, the company reported a 20.5% YoY growth in revenue to Rs 32,791 crore and a 42.7% YoY increase in net profit to Rs 2,624 crore. According to Trendlyne’s Forecaster estimates, the company has fallen 0.8% short of revenue expectations, but marginally surpassed profit estimates by 0.1% during the quarter.

Analysts Basudeb Banerjee and Vishakha Maliwal note that Maruti Suzuki's Q4FY23 EBITDA margin of 10.5% is in line with their estimate of 10.6%. The analysts add that even though the volumes have increased by 11% QoQ, a higher revenue-sharing mix with Toyota and SMG impacted the gross margin by 60 bps QoQ. The analysts believe that the car manufacturer had to balance market share and profitability by prioritizing the allocation of available semiconductor supply for vehicle production, leading to a lower focus on the average selling price.

  1. ICICI Bank: Axis Securities maintains its ‘Buy’ rating on this bank with a target price of Rs 1,150, implying an upside of 24.7%. In Q4FY23, the bank’s standalone net profit rose 30% YoY to Rs 9,121.9 crore and revenue was up by 36.8% YoY. It has beaten Trendlyne’s Forecaster profit estimates by 1.2%. 

Analysts Dnyanada Vaidya, Prathamesh Sawant and CA Bhavya Shah believe that the company has delivered a stellar performance in Q4, driven by robust credit growth across segments and improving asset quality. They remain optimistic about the stock’s prospects given its strong retail-focused liability franchise, stable asset quality, healthy provision coverage and capitalization. 

The analysts believe that the firm’s margins have peaked and will witness moderation as the cost of funds catches up. “However”, they write, “backed by pristine asset quality, thereby keeping credit costs benign, we remain confident in ICICI Bank’s ability to deliver RoA of 2%+ over the medium term”. They expect the company’s net profit to grow at a CAGR of 14.2% over FY23-25.  

  1. Persistent Systems: HDFC Securities maintains its ‘Buy’ rating on this IT consulting & software company and raises its target price to Rs 5,880 from Rs 5,820. This implies an upside of 23.8%. In Q4FY23, its net profit rose 25.1% YoY to Rs 251.5 crore and revenue grew by 37.7% YoY. According to Trendlyne’s Forecaster, it has beaten revenue estimates by 0.1% but missed net profit estimates by 6.2%. 

Analysts Apurva Prasad, Amit Chandra and Vinesh Vala state that Persistent Systems is their top pick among mid-tier IT companies. They are bullish about its growth prospects due to its strong order book, consistency in large deal wins, improved client-mining and operational efficiencies. They add, “Attrition continued to trend lower and the company’s headcount increased by 291 in Q4, with plans of adding 850-1,000 freshers in FY24 and wage hike plans in Q2FY24.”

The analysts believe that the firm bagging its highest number of new deals in Q4 is a key positive, as a higher volume of large deals provides revenue growth visibility. They expect the IT firm’s revenue to grow at a CAGR of 16.1% over FY23-25. 

  1. Tata Consumer Products: ICICI Direct maintains its ‘Buy’ call on this packaged food  company with a target price of Rs 980, indicating an upside of 25.7%. In Q4FY23, the company’s net profit grew by 23.5% YoY to Rs 268.6 crore while its revenue increased by 14% YoY. Its revenue has surpassed Trendlyne’s forecaster estimates by 3.3% but profit missed estimates by 12.7%. 

Analyst Sanjay Manyal remains optimistic about the company due to its new product portfolio, which he believes has a large opportunity size that will drive volumes. He says, “A strong innovation and premiumisation strategy in salt and tea are expected to drive margins in established brands.” He also believes that margins will be aided by the softening of commodity prices along with price hikes. Manyal is positive about the company's long-term growth prospects, as Tata Starbucks crossed sales of Rs 1,000 crore, and with aggressive store addition, profits should grow at a faster pace. 

  1. Bajaj Auto: Sharekhan maintains its ‘Buy’ call on this automobile manufacturer with a target price of Rs 4,782. This indicates an upside of 6.3%. In Q4FY23, the company reported a profit of Rs 1,704.7 crore (up 11.7% YoY), while its revenue grew by 11.2% YoY. The auto company has surpassed Trendlyne’s Forecaster estimates of revenue and profit by 5.3% and 2.3%, respectively. The analysts say, “Despite pressure on volumes, Bajaj Auto reported better-than-expected results on account of a richer product mix.” Revenue exceeded their estimates by  7.1%. 

The analysts add that the company has been recovering faster in the three-wheeler and premium two-wheeler segments. They expect it to continue to increase its market share in both domestic and export markets on the back of a strong portfolio of premium brands and cost-effective entry-level products. They remain optimistic due to the auto manufacturer's diverse geography mix and strong presence in the domestic premium motorcycle segment, which they believe will drive operating performance even in a weak business scenario.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
03 May 2023
Market closes lower, Godrej Properties' Q4 net profit rises 58.2% YoY to Rs 412.1 crore

Trendlyne Analysis

Nifty 50 closed at 18,089.85 (-57.8, -0.3%), BSE Sensex closed at 61,193.30 (-161.4, -0.3%) while the broader Nifty 500 closed at 15,276.40 (-24.4, -0.2%). Of the 1,940 stocks traded today, 924 showed gains, and 966 showed losses.

Indian indices snapped their six-day gaining streak and closed in the red. Nifty 50 fell around 65 points and closed below the 18,100 mark. MRF rose over 5.5% as its Q4FY23 net profit surged 86% YoY to Rs 313.5 crore while its revenue increased by 10%.

Nifty Midcap 100 closed in the green, despite the benchmark index closing in the red. Nifty Energy and Nifty Infra closed lower than Tuesday’s levels. Nifty IT closed in the red, in line with the tech-heavy Nasdaq 100, which fell 0.9% on Tuesday. According to Trendlyne’s sector dashboard, hotels, restaurants & tourism was the top-performing sector of the day for a second straight trading session.

European stocks traded in the green. However, major Asian indices closed lower. European stocks rose, led by banking stocks ahead of the interest rate decision by the US Fed later today. Eurozone unemployment hit a record low of 6.5% in March, the lowest since the EU's statistics agency started compiling jobless figures in April 1998. Brent crude oil futures extended losses and traded sharply lower after falling over 5.2% on Tuesday.

  • Relative strength index (RSI) indicates that stocks like Rail Vikas Nigam, Welspun India, Syngene International and Oracle Financial Services Software are in the overbought zone.

  • Havells India’s Q4FY23 net profit rises 1.6% YoY to Rs 358 crore and revenue grows by 9.8% YoY driven by its switchgear and cables segments. The stock shows up in a screener for companies with improving net cash flow over the past two years.

  • MRF, 3M India and Hindustan Aeronautics are trading above their second resistance or R2 level despite markets trading lower.

  • Bharat Heavy Electricalsrises over 6% in trade today. The stock ranks high on Trendlyne’s Checklist, scoring 72.7%. It also features in a screener of companies with strong momentum.

  • Godrej Properties is rising as its Q4FY23 net profit surges 58.2% YoY to Rs 412.1 crore and revenue grows by 23.7% YoY. The firm’s booking value and customer collections increase by 25% and 52% YoY in Q4. The stock shows up in a screener for companies with high TTM EPS growth.

  • MRF is rising as its Q4FY23 net profit surges 86% YoY to Rs 313.5 crore and revenue increases 10%. Net profit margin has improved 268 bps YoY to 5.76% in Q4. The company has declared a dividend of Rs 10 per share in FY23. The stock is trading near its 52-week high.

  • Transportation, fertilizers and healthcare equipment & supplies sectors rise more than 12% over the past 90 days.

  • Dr. Reddy’s Laboratories and Anupam Rasayan India touch their 52-week highs of Rs 4,960 and Rs 1,224.2, respectively. Dr. Reddy’s has risen 6.5% in the past month, while the other increased by 40.3%.

  • Virender Jeet, CEO of Newgen Software Technologies, says the company will grow over 20% in FY24. He adds that its margin will increase by 22%.

  • Sun TV Network’s annual RoCE stands at 27.2%, outperforming the broadcasting and cable TV industry by 9.2 percentage points.

  • Macrotech Developers, Dalmia Bharat and Persistent Systems underperform the Nifty 50 index over the month post their Q4FY23 results.

  • Adani Wilmar is falling as its Q4FY23 profit drops 60% YoY to Rs 93.61 crore, while its revenue declines 7%. The profit for FY23 also dips 27.6% to Rs 582.12 crore. The stock shows up in a screener for companies with low debt.

  • IT stocks like L&T Technology Services, LTIMindtree, Mphasis, Tata Consultancy Services and Coforge are falling in trade. All the constituents of the broader sectoral index Nifty IT are also trading in the red.

  • Aviation stocks like InterGlobe Aviation (Indigo), SpiceJet and Jet Airways are rising in trade after Go First filed for voluntary insolvency proceedings with the NCLT (National Company Law Tribunal).

  • Blue Star, Ceat and Hero MotoCorp's weekly average delivery volumes rise ahead of their Q4FY23 results tomorrow.

  • ICICI Direct maintains its ‘Buy’ rating on Ultratech Cement with a target price of Rs 9000, implying an upside of 19.7%. The brokerage remains positive about the company’s growth prospects given its market leadership, strong brand value, expansive retail presence and robust balance sheet. It expects the firm’s revenue to grow at a CAGR of 12% over FY23-25.

  • Ahluwalia Contracts (India) wins an order worth Rs 744.7 from DLF Home Developers for the construction of civil structures and waterproofing work for the Arbour project located at Gurugram.

  • Indostar Capital Finance will open an offer for sale (OFS) today in which promoter group firms Everstone Capital Partners II and Indostar Capital will offload a 14.2% stake (1.9 crore shares) in the company. After the OFS, Indostar Capital will hold a 17% stake, while the promoter group will own 75%.

  • India’s services PMI surges to the highest level since June 2010, reaching 62 in April from 57.8 in March.

  • PSU bank stocks like Central Bank of India, Punjab & Sind Bank, UCO Bank and Bank of Baroda are falling in trade. All constituents of the broader index, Nifty PSU Bank, are also trading in the red.

  • Hulst BV, promoter of Coforge, sells a 3.5% stake in the company for approx Rs 887 crore in a bulk deal on Tuesday.

  • Crude prices fall sharply to around $75 per barrel. The decline is due to concerns about more rate hikes by the US Federal Reserve and a decline in manufacturing activity in China, among other factors.

  • DCM Shriram is falling as its Q4FY23 net profit dips 53.5% YoY to Rs 186.7 crore and revenue declines by 2.7% YoY. The company’s profitability has been impacted by rising raw material and power & fuel costs, while its revenue is hit by weakness in its chloro-vinyl and farm solutions segments.

  • KEI Industries is rising as its Q4FY23 net profit increases by 19% YoY to Rs 138.1 crore. Revenue also rises 9% YoY, led by growth in cables & wires and stainless-steel wires segments. The company's profit margin improves by 60 bps YoY to 7.07% in Q4. The stock has touched its 52-week high in the past week.

  • Ambuja Cements is rising after reporting an increase in standalone net profit by 1.6% YoY to Rs 502.4 crore and an 8.4% rise in revenue. Expenses has grown 12% on high raw material costs in Q4. The company recommends a final dividend of Rs 2.5 per share for FY23. It shows up in a screener of stocks with growth in profit margin (QoQ).

  • Tata Steel’s Q4FY23 net profit plunges by 82.5% YoY to Rs 1,704.9 crore and its revenue falls by 9.2% YoY due to declining steel prices and weakness in its European business. The stock shows up in a screener for companies with weak Piotroski scores.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (35.45, 5.66%), MRF Ltd. (93,559.80, 5.60%) and InterGlobe Aviation Ltd. (2,164.10, 4.68%).

Downers:

Largecap and midcap losers today include Adani Wilmar Ltd. (397.45, -4.33%), Adani Enterprises Ltd. (1,839.00, -4.21%) and Adani Total Gas Ltd. (922.95, -3.76%).

Movers and Shakers

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

Top high volume gainers on BSE included Engineers India Ltd. (94.85, 14.90%), Ceat Ltd. (1,638.30, 7.68%) and Bharat Heavy Electricals Ltd. (86.95, 6.56%).

Top high volume losers on BSE were Manappuram Finance Ltd. (113.95, -12.14%), Bombay Burmah Trading Corporation Ltd. (979.40, -5.84%) and DCM Shriram Ltd. (804.40, -1.82%).

Jamna Auto Industries Ltd. (104.20, -0.53%) was trading at 10.2 times of weekly average. Jyothy Labs Ltd. (193.75, 0.78%) and MRF Ltd. (93,559.80, 5.60%) were trading with volumes 10.0 and 9.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

26 stocks overperformed with 52-week highs, while 1 stock was an underachiever and hit its 52-week low.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,422.00, 0.51%), Apollo Tyres Ltd. (355.35, 2.64%) and Carborundum Universal Ltd. (1,104.70, -1.03%).

Stock making new 52 weeks lows included - GlaxoSmithKline Pharmaceuticals Ltd. (1,248.15, 1.43%).

16 stocks climbed above their 200 day SMA including RHI Magnesita India Ltd. (684.00, 6.30%) and PNB Housing Finance Ltd. (485.25, 5.92%). 8 stocks slipped below their 200 SMA including Indiabulls Real Estate Ltd. (71.90, -1.84%) and V-Guard Industries Ltd. (246.20, -1.64%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
02 May 2023
Market closes higher, Coal India's monthly production grows 7.7% YoY to 57.6 MT in April

Trendlyne Analysis

Nifty 50 closed at 18,147.65 (82.7, 0.5%), BSE Sensex closed at 61,354.71 (242.3, 0.4%) while the broader Nifty 500 closed at 15,300.75 (81.2, 0.5%). Of the 1,994 stocks traded today, 1,130 showed gains, and 790 showed losses.

Indian indices pared gains towards the end of the trading day and closed in the green. The Nifty 50 rose nearly 70 points and closed above the key 18,100 mark. According to the data released by the Centre for Monitoring Indian Economy (CMIE), the joblessness rate of India rose to 8.1% in April from 7.8% in March. Rural unemployment fell marginally by 13 bps MoM to 7.3%.

Nifty Midcap 100 and Nifty Smallcap 100 closed outperformed the benchmark index and closed in the green. Nifty Pharma and Nifty Realty closed lower than Friday’s closing levels. Nifty IT closed sharply higher, despite the tech-heavy Nasdaq 100 closing flat on Monday. According to Trendlyne’s sector dashboard, Hotels, Restaurants & Tourism was the top-performing sector of the day as it rose over 2%.

Most European indices traded in the red except for Switzerland’s SMI trading in the green. European stocks traded lower as the Eurozone GDP grew by 1.3%YoY in Q1CY22 against the economist’s estimate of 1.4%. US indices futures trade lower indicating a negative start.

  • REC sees a long buildup in its May 25 future series as its open interest rises 4.7% with a put-call ratio of 0.84.

  • Rail Vikas Nigam is rising as it bags an order worth Rs 2,249 crore through its joint venture with SCC, in which the company has a 51% share. The project involves the construction and design of an irrigation distribution network in Banswara, Rajasthan. The project is expected to be completed in 42 months.

  • Alkem Laboratories and Indian Bank touch their 52-week highs of Rs 3,544.1 and Rs 330.7, respectively. Alkem Labs has risen 8.6% in the past month, while the other increased by 17.6%.

  • Coforge is falling in trade as 21.55 lakh shares (3.5% equity) of the company, amounting to Rs 891.8 crore, change hands, according to reports.

  • Coal India is rising as its production grows 7.7% YoY to 57.6 MT in April. The company's over burden removal (OBR) has improved by 31% YoY, which will help in stepping up coal production during monsoon.

  • Hitachi Energy India, Maruti Suzuki India, Bosch and Eicher Motors are trading above their third resistance or R3 level.

  • Tejas Networks, IndusInd Bank and Bank of Maharashtra outperform the Nifty 50 index over the month post their Q4FY23 results.

  • Reports suggest that 19.4 crore shares (0.94% equity) of Rail Vikas Nigam, amounting to Rs 229.7 crore, change hands in a large trade.

  • According to reports, brokerage CLSA downgrades Kotak Mahindra Bank to ‘Buy’ from ‘Outperform’ as it believes that the stock’s upside is limited, given the recent run-up in share price. Macquarie maintains its ‘Neutral’ rating on the bank, stating that the firm’s profitability is strong but growth is below expectations.

  • Energy stocks like Adani Green Energy, Oil and Natural Gas Corp and NTPC are rising in trade. All constituents of the broader Nifty Energy index are also trading in the green.

  • Varun Beverages is rising as its Q1CY23 net profit surges 68.8% YoY to Rs 429.1 crore and revenue rises 37.8% YoY. This robust performance is driven by the total sales volume increasing by 24.7% YoY on account of healthy demand across India. The stock shows up in a screener for companies with improving cash flow from operations over the past two years.

  • V Vaidyanathan, Managing Director and CEO of IDFC First Bank, says the bank’s deposits will grow 40-45% in FY24. He expects the bank’s credit card business to be profitable by FY25.

  • IndiaMART InterMESH is falling as its net profit falls 2.8% YoY to Rs 55.8 crore in Q4FY23. However, revenue grows 33.5% YoY to Rs 268.8 crore on the back of growth in web & related services and accounting software services segments. It shows up in a screener of stocks with increasing revenue for the past eight quarters.

  • HDFC Securities downgrades Voltas to ‘Reduce’ from ‘Accumulate’ and lowers the target price to Rs 750 from Rs 925. This implies a downside of 6.5% from the current market price. The brokerage cites Voltas' loss in market share in key business segments as the reason for the downgrade and expects revenue to grow at a CAGR of 13.2% over FY23-25.

  • RBL Bank's net profit rises 37% YoY to Rs 271 crore in Q4FY23. Interest income also grows 17.1% YoY led by the retail and corporate banking segments. The bank's asset quality improves as its gross and net NPAs decline by 103 bps and 24 bps YoY respectively. It shows up in a screener of undervalued growth stocks.

  • According to reports, oil marketing companies (OMCs) like Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp may see a stake increase by the Centre, as they submit their capital investment plans. Instead of subsidies, the Rs 30,000 crore capital announced in the budget may be used for equity infusion in these OMCs.

  • NBCC India is rising as it bags an order worth Rs 749.3 crore to redevelop and modernize presses belonging to the Indian government in Mayapuri, Delhi, Nashik and Kolkata. The stock shows up in a screener for companies with no debt.

  • R Subramaniakumar, Managing Director and CEO of RBL Bank, says the bank's retail segment will grow by 24-25% in FY24. He adds that NIM (net interest margin) will be above 5%, while credit cost will be around 1.5-2%.

  • Mahindra & Mahindra's total wholesales for April 2023 rise 36.5% YoY to 62,294 units. Its total passenger vehicle wholesales also increase 54% YoY but total exports fall 32.9% YoY.

  • Metal stocks like Hindalco Industries, JSW Steel, APL Apollo Tubes and Tata Steel are rising in trade. The broader sectoral index BSE Metal is also trading in the green.

  • Centre reduces the windfall tax on locally produced crude oil to Rs 4,100 per tonne from the earlier Rs 6,400. Meanwhile, excise duty on petrol, diesel and ATF (aviation turbine fuel) remains nil.

  • Bajaj Auto's total wholesales rise 6.6% YoY to 3.3 lakh units in April 2023. Its total domestic wholesales also increase 108.6% YoY but exports drop 43.3% YoY.

  • NCC is rising as it bags six new orders worth Rs 3,344 crore in April from state and central government agencies for its buildings, electrical, and water divisions. The stock has touched a 52-week high today.

  • Ultratech Cement is falling as its Q4FY23 net profit declines 32% YoY to Rs 1,665.95 crore on higher costs. Power and fuel costs rise 34% YoY and freight expenses surge 20%. However, revenue increases 18% due to rising domestic sales. It shows up in a screener of stocks where brokers have upgraded recommendations or target prices in the past three months.

  • Kotak Mahindra Bank’s Q4FY23 net profit rises 26% YoY to Rs 3,495.59 crore with net interest income increasing 35%. The bank’s margins also improve 97 bps YoY to 5.75%. The bank has declared a dividend of Rs 1.5 per share for FY23. The stock is trading near its 52-week high.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (33.55, 5.67%), Adani Power Ltd. (235.95, 4.94%) and IDFC First Bank Ltd. (63.85, 3.91%).

Downers:

Largecap and midcap losers today include Atul Ltd. (6591.55, -4.08%), Delhivery Ltd. (364.60, -2.62%) and Hero MotoCorp Ltd. (2,495.90, -2.45%).

Movers and Shakers

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

Top high volume gainers on BSE included Welspun India Ltd. (101.05, 15.35%), Alkyl Amines Chemicals Ltd. (2,583.85, 9.30%) and Aarti Drugs Ltd. (457.80, 8.78%).

Top high volume losers on BSE were Atul Ltd. (6,591.55, -4.08%), Timken India Ltd. (2,915.15, -2.29%) and V-Guard Industries Ltd. (250.30, -1.77%).

TCNS Clothing Co. Ltd. (502.75, 2.02%) was trading at 20.9 times of weekly average. Hatsun Agro Products Ltd. (882.00, 4.01%) and Sapphire Foods India Ltd. (1,242.90, 3.93%) were trading with volumes 15.8 and 13.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

37 stocks hit their 52-week highs, while 4 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,411.10, 3.72%), Bajaj Auto Ltd. (4,498.00, 1.49%) and Bombay Burmah Trading Corporation Ltd. (1,040.10, 0.29%).

Stocks making new 52 weeks lows included - Atul Ltd. (6,591.55, -4.08%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,230.60, -0.91%).

29 stocks climbed above their 200 day SMA including Aarti Drugs Ltd. (457.80, 8.78%) and Hitachi Energy India Ltd. (3,448.75, 4.24%). 2 stocks slipped below their 200 SMA including Sanofi India Ltd. (5,427.10, -2.57%) and Tube Investments of India Ltd. (2,582.35, -0.26%).