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Trendlyne Marketwatch
Trendlyne Marketwatch
22 Mar 2023
Market closes higher, Sharekhan keeps 'Buy' rating on Thermax

Trendlyne Analysis

Nifty 50 closed at 17,151.90 (44.4, 0.3%), BSE Sensexclosed at 58,214.59 (139.9, 0.2%) while the broader Nifty 500 closed at 14,460.00 (48.7, 0.3%). Of the 1,954 stocks traded today, 1,138 showed gains, and 737 showed losses.

Indian indices closed in the green, with the volatility index, India VIX, falling below 15. Nifty 50 rose nearly 35 points and closed above the 17,100 mark. Indian Oil Corp's board has given in-principle approval to prepare a feasibility report to set up a petrochemical complex at Paradip, Odisha, at an estimated cost of Rs 61,077 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher than Tuesday’s level, following the benchmark index. Nifty Media closed over 0.52% lower than Tuesday's closing levels. Nifty IT closed higher, tailing the Nasdaq 100 futures trading in the green.

Major Asian indices closed in the green. European stocks trade mixed with England’s FTSE 100 and Switzerland’s SMI trading lower than Tuesday’s level. US indices futures trade higher than Tuesday’s levels, indicating a positive start for the day. US Federal Reserve is expected to hike interest rates by 25 bps later today. However, investors are awaiting the commentary by US Fed on the banking crisis.

  • Money flow index (MFI) indicates that stocks like Anupam Rasayan India, Bharat Petroleum Corp, NCC and Sudarshan Chemical Industries are in the overbought zone.

  • GAIL is rising as the Petroleum and Natural Gas Regulatory Board (PNGRB) raises its tariff by 45% to Rs 58.6 per MMBtu.

  • Gensol Engineering is rising as it is set to acquire a 100% stake in Scorpius Trackers, a solar tracker solutions company, for Rs 135 crore. The stock shows up in a screener for companies with strong annual EPS growth.

  • NBCC bags a project worth Rs 50 crore from the National Film Development Corp (NFDC) to repair and renovate the Film Division at Peddar Road, Mumbai. Its arm, HSCC, also wins two contracts involving the construction of a 150-bed critical care block in Chandigarh for Rs 130 crore and a hospital in Nashik, Maharashtra, for Rs 348.4 crore.

  • GR Infraprojects and Motilal Oswal Financial Services reach their 52-week lows of Rs 962.6 and Rs 567.1 per share respectively. GR Infra falls 14.8% and the other 13.5% over the past month.

  • IFC invests Rs 240 crore in JK Tyre & Industries to expand manufacturing capacity and integrate advanced, resource-efficient technologies in the production of tyres.

  • Reports suggest that 15 lakh shares (0.94% equity) of Kajaria Ceramics, amounting to Rs 156.52 crore, change hands in a large trade.

  • Sharekhan maintains its ‘Buy’ rating on Thermax with a target price of Rs 2,790, implying an upside of 20.9%. The brokerage remains positive about the company due to its robust order book, strong execution & technological capabilities in green energy and healthy balance sheet. It expects the firm’s revenue to grow at a CAGR of 21.8% over FY22-25.

  • Tata Motors rises as it announces price hikes across its commercial vehicles segment. The price changes, effective from April 1, will comply with the BS6 Phase 2 emission norms, says the management.

  • Reports suggest that 6.65 lakh shares (0.13% equity) of Pidilite, amounting to Rs 158.50 crore, change hands in a large trade.

  • Larsen & Toubro's arm L&T Construction wins orders worth Rs 1,000-2,500 crore from the drinking water and sanitation department of the Government of Jharkhand to execute a raw water transport system.

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

  • Sula Vineyards rises over 10% in two sessions after CLSA initiates coverage on the stock with a ‘Buy’ and a target price of Rs 475. The brokerage says the company can leverage the change in consumer demand towards the low-alcoholic beverage segment. IIFL Securities also initiates a ‘Buy’, expecting sales growth of 18.7% over FY22-25E.

  • Aarti Drugs, KPIT Technologies and Anupam Rasayan India outperform the Nifty 50 index by 16%, 15.4% and 13.5% respectively in the past week.

  • Patel Engineering is rising as it bags a contract worth Rs 551 crore from Visvesvaraya Jala Nigam, in partnership with its joint venture. The contract is for the survey, design, installation and testing of a micro-irrigation project in the Tumkur Branch Canal.

  • Sobha is down as the Income Tax Department conducts a search at its registered office and other premises. The stock is trading near its 52-week low.

  • Sonata Software is rising as it signs its largest-ever deal with a total contract value of $160 million for 10 years with a US-based consumer retailer. The company will manage the end-to-end IT modernisation and transformation for its client. The company ranks high on Trendlyne’s checklist with a score of 69.57%.

  • Lupin is rising as the company receives approval from the US FDA for its abbreviated new drug application (ANDA) for Brexpiprazole tablets. The tablets are used for the treatment of schizophrenia and depression. According to IQVIA, the drug had an estimated annual sales of $1,575 million in CY22 in the US.

  • Keshav Bhajanka, Executive Director at Century Plyboards, says medium-density fiberboard (MDF) will boost growth for the company. He adds that the company has taken a price hike of 2% in plywood on the back of high timber prices.

  • Ashiana Housing is rising as its annual bookings beat its guidance of Rs 1,100 crore for FY23. The total booking value up to March 20 stands at Rs 1,278.8 crore. The stock shows up in a screener for companies with low debt.

  • Zydus Lifesciences receives US FDA approval for Tofacitinib tablets used to treat moderate to severe rheumatoid arthritis and active psoriatic arthritis in adult patients. Tofacitinib tablets have annual sales of $900 million in the United States.

  • Emami rises more than 5% in trade as its board is set to meet on Friday to consider a buyback proposal. The details of the buyback are yet to be disclosed. The stock touches a 52-week low in the past week.

  • Citigroup maintains its ‘Sell’ rating on Hindustan Zinc with a target price of Rs 260. According to the brokerage, the company announced 4th interim dividend of Rs 26 per share yesterday, taking the total dividend for FY23 to Rs 75.5 per share.

  • Indian Oil Corp's board has given an in-principle approval to prepare a feasibility report to set up a petrochemical complex at Paradip, Odisha, at an estimated cost of Rs 61,077 crore. This project will improve the company’s petrochemical intensity index, de-risk its fossil fuel business and report import dependency.

  • HG Infra Engineering is rising as it emerges as the lowest bidder for a North Central Railway project. The Rs 655 crore project involves the redevelopment of Kanpur Central Railway Station. The stock has touched a 52-week high in the past week.

  • Bandhan Bank’s board approves the proposal to transfer loans originating from banking units (BU) & written-off portfolio worth Rs 2,614 crore and NPAs worth Rs 2,316.3 crore to Asset Reconstruction Co. The bank receives binding bids of Rs 369.2 crore for the written-off portfolio and Rs 370.6 crore for the NPA portfolio on a consideration basis.

Riding High:

Largecap and midcap gainers today include One97 Communications Ltd. (624.05, 6.88%), Emami Ltd. (366.30, 6.17%) and Adani Green Energy Ltd. (935.60, 5.00%).

Downers:

Largecap and midcap losers today include ABB India Ltd. (3,309.90, -3.00%), PB Fintech Ltd. (575.30, -2.34%) and Steel Authority of India (SAIL) Ltd. (85.05, -2.30%).

Volume Shockers

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

Top high volume gainers on BSE included Fine Organic Industries Ltd. (4,406.30, 8.26%), One97 Communications Ltd. (624.05, 6.88%) and Emami Ltd. (366.30, 6.17%).

Top high volume losers on BSE were Sobha Ltd. (452.55, -12.85%), Krishna Institute of Medical Sciences Ltd. (1,325.15, -0.48%) and Kajaria Ceramics Ltd. (1051.35, -0.29%).

Uflex Ltd. (367.30, 5.80%) was trading at 10.3 times of weekly average. Eureka Forbes Ltd. (459.00, 0.90%) and Trident Ltd. (27.85, 2.58%) were trading with volumes 9.3 and 6.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks hit their 52-week highs, while 12 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Siemens Ltd. (3,307.40, -0.17%) and KPIT Technologies Ltd. (894.80, 1.98%).

Stocks making new 52 weeks lows included - Avanti Feeds Ltd. (334.15, -0.04%) and Caplin Point Laboratories Ltd. (604.80, -1.57%).

16 stocks climbed above their 200 day SMA including 360 One Wam Ltd. (424.00, 5.62%) and Can Fin Homes Ltd. (547.80, 3.03%). 5 stocks slipped below their 200 SMA including Orient Electric Ltd. (268.20, -1.31%) and Just Dial Ltd. (592.55, -1.27%).

 
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The Baseline
21 Mar 2023
Five analyst picks this week
By Abhiraj Panchal
  1. Data Patterns (India): ICICI Direct upgrades its rating to ‘Buy’ from ‘Hold’ on this defence and aerospace electronics company with a target price of Rs 1,555. This indicates an upside of 10.4%. The company’s board has approved the allotment of 40.97 lakh shares through QIP, at an issue price of Rs 1,220.31 per share, aggregating to Rs 500 crore. Analysts Chirag Shah and Vijay Goel “believe that fundraising for working capital and product development will benefit the company in faster execution of existing contracts, and in bidding for more contracts”.

The analysts are optimistic as the defence player has strong order inflows with a healthy pipeline of orders worth Rs 2,000-3,000 crore in the next three years. They also expect electronic components used in Indian defence platforms to be sourced locally, instead of from foreign manufacturers, as indigenisation efforts continue.

Shah and Goel anticipate revenue and profit CAGR of 29.3% and 28.5% respectively over FY22-25.

  1. Kalpataru Power Transmissions: Sharekhan maintains a ‘Buy’ call on this electric utilities company with a target price of Rs 695, indicating an upside of 22.3%. “Our interaction with Kalpataru Power Transmission reinstates the positive stance on the company’s capability to accelerate its revenue growth and margin expansion,” say the analysts.

    They believe that the company is a leading player with a strong order book (Rs 46,642 crore, up 46% YoY) as well as fresh orders (surpassed order inflow guidance for FY23), which will lead to improved revenue visibility. 

They are also positive about the company due to its merger with JMC Projects. The merger is expected to increase the group’s geographical reach and improve its capability to bid for large-size and more complex projects. According to the analysts, the company also expects a decline in debt and improvement in the working capital cycle thanks to better operating performance and monetisation of non-core assets.

  1. PVR: Prabhudas Lilladher retains its ‘Buy’ call on this multiplex company with a target price of Rs 2,096, indicating an upside of 33.1%. Analysts Jinesh Joshi and Stuti Beria expect synergy benefits of Rs 200 crore from the PVR-Inox merger to accrue over the next two years. They expect that the merger will enhance balance sheet strength, enabling rapid expansion into new markets. 

Joshi and Beria believe that the merged entity will lend a size advantage and improve bargaining power with various stakeholders in the value chain, like film distributors, real estate developers, ad networks and ticket aggregators, resulting in material revenue/cost synergies. 

The analysts are also positive about PVR and estimate that it will open 155 screens per annum for the next two years after the merger.

  1. LTIMindtree: ICICI Securities maintains its ‘Buy’ rating on this IT consulting & software company with a target price of Rs 5,651, implying an upside of 21%. Analysts Sumit Jain and Aditi Patil are positive about the company’s prospects on the back of strong cross-selling opportunities and its ability to bag larger deals post-merger. They believe that Larsen & Toubro Infotech (LTI) and Mindtree complement each other and this allows them to scale up operations.

    According to the analysts, “Mindtree is stronger in front-end digital solutions and LTI shines in back-end ERP-related core transformation solutions.” They expect the company’s EBIT margin to improve by 260 bps over FY23-26 to 18.6%, driven by operating leverage with a higher scale of operations and integration-related synergies. 

Jain and Patil believe that, with their track record of strong management execution, the combined entity’s management is well-equipped to enable industry-leading profit growth in the coming quarters. The analysts expect the firm’s net profit to grow at a CAGR of 18.8% over FY22-25.

  1. Tata Motors: Motilal Oswal keeps its ‘Buy’ rating on this automobile manufacturer with a target price of Rs 540, indicating an upside of 31.3%. Analysts Jinesh Gandhi, Amber Shukla and Aniket Desai believe that the Jaguar Land Rover (JLR) brand is on a sustainable growth path and will be one of the key drivers of growth for the company. They add that Tata Motor’s domestic passenger and commercial vehicle business is already on a healthy growth trend. They see the prospects of JLR improving as supply-side pressures subside and demand remains healthy. “As supplies improve, JLR should reach near zero net debt levels by FY25, thanks to improved production, better margins and working capital release,” the analysts say.

Gandhi, Shukla and Desai believe JLR will firmly position itself as a luxury premium brand as it changes its branding strategy and redefines Jaguar with premium launches in the electric vehicle market in CY25. The analysts expect the company’s revenue to grow at a CAGR of 14.2% over FY23-25. 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
21 Mar 2023
Market closes higher, NTPC to form a joint venture with Indian Oil Corp

Trendlyne Analysis

Nifty 50 closed at 17,107.50 (119.1, 0.7%), BSE Sensex closed at 58,074.68 (445.7, 0.8%) while the broader Nifty 500 closed at 14,411.30 (94.2, 0.7%). Of the 1,956 stocks traded today, 1,124 were on the uptick, and 769 were down.

Indian indices closed in the green, with the volatility index, India VIX, falling by over 6%. Nifty 50 rose nearly 120 points and closed above the 17,100 mark. NTPC closed higher after its arm NTPC Green Energy inked a pact to form a joint venture with Indian Oil Corp to set up renewable energy power plants.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Bank and Nifty Media closed over 1.2% higher than Monday's closing levels. However, Nifty IT closed in the red, despite the Nasdaq 100 futures trading in the green.

Major Asian indices closed in the green, except for Japan’s Nikkei 225 index, which fell 1.4% and hit a one-month low. European stocks traded in the green, led by banking stocks, as investor confidence returned ahead of the two-day US Fed meeting, scheduled to start today. However, S&P Global Ratings downgraded its rating on UBS Group to negative from stable after the bank announced its acquisition of Credit Suisse Group.

  • Relative strength index (RSI) indicates that stocks like Anupam Rasayan India, Bharat Petroleum Corp and Hindustan Petroleum Corp are in the overbought zone.

  • Granules India rises 2% as the US FDA completes an audit at its step-down subsidiary, Granules Consumer Health, with zero observations. The average broker target price upside for the stock is 30.4%.

  • NTPC is rising as its arm NTPC Green Energy inks a pact to form a joint venture with Indian Oil Corp to set up renewable energy power plants to meet round-the-clock power requirements of Indian Oil refineries.

  • Reports suggest that 19.92 lakh shares (0.20% equity) of Max Healthcare Institute, amounting to Rs 92.84 crore, change hands in a large trade.

  • HSBC expects Zomato’s stock price to rise 64% to Rs 87 after it relaunched Zomato Gold and gained back the market share lost to its competitor, Swiggy. The stock has fallen more than 14% in the past six months and is now 39% down from its 52-week high.

  • Sterling and Wilson Renewable Energy, Welspun India, CreditAccess Grameen and UTI Asset Management are trading above their second resistance or R2 level.

  • CLSA upgrades its rating on Indraprastha Gas to ‘Outperform’ from ‘Buy’ and raises the target price to Rs 585 from Rs 420. Meanwhile, it maintains a ‘Buy’ on Mahanagar Gas but raises the target price to Rs 1,260. The brokerage believes that the regulatory regime will be favourable from April and pricing power will return to the companies.

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

  • ICICI Securities initiates coverage on Nazara Technologies with a ‘Buy’ rating and a target price of Rs 700, indicating an upside of 43.7%. The brokerage is positive about the company’s prospects given its healthy revenue growth visibility in the eSports business and improving profitability in its gamified early learning segment.

  • Motilal Oswal keeps its ‘Buy’ rating on Phoenix Mills with a target price upside of 31%. The company has three malls under construction and is set to expand in its 9th city soon. Also, the vacancy rate in its Grade-A malls has fallen to nearly 4%, indicating an improvement in retail consumption. The stock ranks high on the Trendlyne checklist score.

  • HCL Technologies is falling in trade today. It shows up in a screener of stocks with declining share prices over the week ahead of its Q4FY23 results. The consensus recommendation on the stock from 23 analysts is ‘Buy’, while 14 maintain ‘Hold’ and 1 recommends ‘Sell’.

  • George Alexander Muthoot, the Managing Director of Muthoot Finance, says international gold prices could rise up to $2,100 per ounce. He adds that the company’s gold AUM will grow by 5%-7% in FY23 and 15% in FY24.

  • Blue Star wins four railway electrification orders worth Rs 575 crore from West Central Railway, Central Organization for Railway Electrification and Metro Railway.

  • Ultratech Cement gains 3% in the past week ahead of its Q4FY23 results on April 28. ABB India rises 1.4% in the same period ahead of its Q4 results on May 3.

  • J Kumar Infraprojects is rising as its joint venture J Kumar – AICPL wins a contract worth Rs 182.3 crore from the Bangalore Metro Rail Corp for the construction of an airport depot. The stock shows up in a screener for companies with high TTM EPS growth.

  • Centre reduces the windfall tax on locally produced crude oil to Rs 3,500 per tonne from the earlier Rs 4,400. Export duty on diesel is up to Rs 1 per litre from Rs 0.50, while it remains nil for petrol and aviation turbine fuel (ATF).

  • Berry Creek Investment sells a 2.5% stake (24.3 lakh shares) in PVR for Rs 380.4 crore in a bulk deal on Monday. Meanwhile, GQG Partners offloads a 1.16% stake in HDFC Asset Management for Rs 396.8 crore. In another deal, SBI Mutual Fund picks up a 1.5% stake in PVR and a 2.2% stake in HDFC Asset Management.

  • PNC Infratech is rising as Haryana Rail Infrastructure Development sends a letter of intent to award a civil work project to the company. The estimated cost of the project is Rs 771.4 crore. The stock has gained 31.5% from its 52-week low.

  • Finance Ministry expects the Indian economy to grow 7% in FY23 in spite of global headwinds and moderation in retail inflation. Monthly Economics Review by the ministry also estimates a fall in India’s current account deficit in FY23 and FY24.

  • L&T Energy Hydrocarbon of Larsen & Toubro wins multiple offshore contracts worth Rs 5,000-7,000 crore from an overseas client to engineer, procure, construct and install structures and upgrade existing facilities.

  • Ceat's Managing Director (MD) and Chief Executive Officer (CEO) Anant Goenka resigns, effective from March 31, 2023. The board appoints Arnab Banerjee as MD and CEO for two years, effective from April 1, 2023, subject to members and other applicable approvals.

  • Ashish Kacholia acquires a 5.38% stake in Virtuoso Optoelectronics through preferential allotment on Friday.

  • The Reserve Bank of India slams a penalty on RBL Bank for non-compliance with provisions under the Internal Ombudsman Scheme 2018 and recovery agents engaged by the Bank during FY19-22. The fine imposed is Rs 2.27 crore.

  • Sterling and Wilson Renewable Energy bags a Rs 2,100 crore project from NTPC Renewable Energy for the operation and maintenance of a solar photovoltaic (PV) project at Khavda RE Power Park, Rann of Kutch, Gujarat, for three years.

Riding High:

Largecap and midcap gainers today include Gland Pharma Ltd. (1,224.55, 5.51%), HDFC Asset Management Company Ltd. (1,764.20, 5.01%) and Adani Green Energy Ltd. (891.05, 5.00%).

Downers:

Largecap and midcap losers today include GAIL (India) Ltd. (105.10, -4.28%), L&T Technology Services Ltd. (3,426.90, -2.87%) and UNO Minda Ltd. (451.20, -2.28%).

Volume Shockers

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

Top high volume gainers on BSE included CSB Bank Ltd. (245.55, 8.89%), Saregama India Ltd. (344.45, 7.51%) and Sterling and Wilson Renewable Energy Ltd. (319.25, 6.63%).

Top high volume losers on BSE were Devyani International Ltd. (141.85, -1.08%), Zydus Wellness Ltd. (1,460.00, -1.06%) and Mahindra Lifespace Developers Ltd. (339.50, -0.24%).

Aarti Drugs Ltd. (382.80, 3.95%) was trading at 10.0 times of weekly average. IndiaMART InterMESH Ltd. (5,102.30, 4.04%) and UTI Asset Management Company Ltd. (675.00, 5.94%) were trading with volumes 5.3 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks overperformed with 52-week highs, while 17 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Godrej Consumer Products Ltd. (943.60, -1.71%), Siemens Ltd. (3,313.15, 0.63%) and KPIT Technologies Ltd. (877.40, -1.37%).

Stocks making new 52 weeks lows included - Biocon Ltd. (201.10, -0.32%) and IFB Industries Ltd. (789.55, -2.43%).

9 stocks climbed above their 200 day SMA including Procter & Gamble Hygiene & Healthcare Ltd. (13,950.50, 2.81%) and Jyothy Labs Ltd. (187.35, 1.93%). 17 stocks slipped below their 200 SMA including L&T Technology Services Ltd. (3,426.90, -2.87%) and Hitachi Energy India Ltd. (3,236.25, -2.50%).

 
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The Baseline created a screener Significant Jump in Momentum …
20 Mar 2023
Stocks whose momentum score has risen sharply compared to the previous month and week, and whose score is above 50
 
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The Baseline
20 Mar 2023
Sovereign Gold Bonds shine brighter than other gold investments
By Shreesh Biradar

Most Indians are familiar with the box of gold jewellery, carefully stored in the Godrej almirah or bank locker. Buying gold is not new for Indian investors –  it is a traditional way to save and provide inheritance. And it is easy to resell - as the writer Ken Alstad noted, “Second hand gold is as good as new.” 

Over the past 10 years, gold prices increased by a CAGR of 6.49., In just the past six months, it jumped by 9.54%. The recent uncertainty in the financial world and stock markets have increased investments in gold. 

Gold also acts as an effective hedge against inflation. Central banks tend to buy gold as a protection against high inflation. In CY22, central banks across the globe purchased 673 tonnes of gold – the highest in thepast 55 years. Besides central banks, broader investors are also buying gold, which pushed gold prices to an all-time high in Feb-2023.

Gold has not disappointed retail investors in terms of returns as its prices have gone up by a CAGR of 12.56% in the past 15 years.

Five-year rolling returns of physical gold have declined between 2014 and 2019. As investors move towards paper gold like Gold Bees (Started by Reliance Nippon in 2007) and Sovereign Gold Bonds (SGB), the demand for physical gold has decreased over the years. 

Physical gold performs better than Gold Bees

Gold Bees are similar to physical gold and are exchange-traded funds. It was first launched in India by Reliance Nippon in April 2007. Gold Bees are backed by physical gold. For every investment made in Gold Bees, ETFs buy a proportionate amount of gold.

If we compare the price changes of physical gold to net asset value (NAV) of Gold Bees, the former fares better in the longer run. Since the launch of Gold Bees in April 2007, it has given returns of 11.51% CAGR, while physical gold gave 12.56% in the same time period.

The differential of 1.05% is on account of the expense ratio of ETFs. The churn coupled with storage charges eats away at the returns. Currently, Nippon India ETF Gold Bees have an expense ratio of 0.82%. Their lower returns and inability to be used as collateral limit the value proposition. Hence, Gold Bees are preferred for short-term investments only. 

Indian retail investors are the driving force behind gold prices – India consumes 25% of the world’s gold production, coming in second after China. India’s gold consumption in CY22 stood at 774 tonnes and it was 1,002 tonnes in China. While lower than the previous year, rising gold prices have limited retail consumption. 

Higher consumption of gold is an economic concern for India. India is a net importer of gold, India has a greater trade deficit, which shoots up dollar prices. To fill the fiscal deficit caused by the stronger dollar, the government has to borrow more. To combat this problem and limit gold imports, the government introduced a 12% import duty on gold in 2013. The government also introduced sovereign gold bonds (SGBs) to lure away retail investors from physical gold. 

What are Sovereign Gold Bonds?

Sovereign Gold Bonds are designed to imitate actual gold in terms of monetary benefits. It moves in accordance with price changes in physical gold. On top of this, the government pays a coupon interest rate of 2.5% per annum (paid semi-annually) on the nominal value of the bond. SGB has a lock-in period of five years and a redemption tenure of eight years. After the lock-in period, investors can sell the bond in the secondary market. SGB is as good as gold but in paper form. It’s like buying gold and earning an extra 2.5% interest on top of it.

SGBs aim to wean investors off physical gold and reduce the import burden on the Indian economy. It also lets the government borrow at a cheaper rate of 2.5%, which is much lower than the standard rate of 5%-6%. It’s a win-win situation for retail investors and the government.

Features of Sovereign Gold Bonds over physical gold.

·SGBs pay a coupon interest rate of 2.5% (paid semi-annually) per annum on the nominal value.

·There are no safety/storage concerns associated with SGBs as it is available in demat and paper forms. 

·Its redemption price is based on the average closing price of 999 gold over the previous three business days. The prices published by the India Bullion & Jewellers Association (IBJA) are considered for this. This system ensures the purity of gold and eliminates worries over wastage. 

·Chances of default are minimal as the bond is backed by the government. 

·The bond is issued in multiples of 1 gram and can be traded on the NSE.

·The minimum investment prescribed for individuals and Hindu undivided families (HUF) is 1 gram and the maximum is 4 kg. For trusts and charitable institutions, the limit is 20 kg.

·Even though the maturity period is eight years, SGBs are redeemable after five years, on every interest payment date.

·Capital gains from redemptions are tax-exempted. Gains from the sale of bonds are considered long/short-term capital gains and interest earned is considered under income tax laws.

·SGBs can be used as collateral for loans. The loan-to-value will be in line with a normal gold loan. You are not required to pay valuation charges for SGB-backed loans.

SGBs give better returns than Gold Bees and physical gold

Indian retail investors find comfort in owning physical gold but SGBs beat it in value proportion. Returns from SGBs have been superior to physical gold and Gold Bees. This is besides the added advantage of zero storage/safety costs and 2.5% interest rate from the government. 

The chart below compares five-year rolling returns from physical gold, Nippon Gold Bees and SGBs over the past 10 years. Since SGB was only introduced in 2015, we have taken SGB at the same price as gold since April 2007 and added a CAGR of 2.5% YoY. Based on this calculation, the 5-year returns of SGB would have been always higher by 13.14%.

SGBs have outperformed other gold products over the years and are suitable for long-term investments. Even though Gold Bees have underperformed consistently since its launch, it does not take away its short-term benefits. 

SGBs, even with their superior returns, have not been able to tame India’s gold consumption. If an investor is looking to ride gold prices along with bank-like interest rates, SGBs clearly stand out. Even parents planning for their children’s marriage could opt for SGBs in the long term as it could be redeemed and bought in physical gold. Or the SGBs can be retained for future growth. 

 
Trendlyne Marketwatch
Trendlyne Marketwatch
20 Mar 2023
Market closes lower, Ahluwalia Contracts secures order worth Rs 723.3 crore

Trendlyne Analysis

Nifty 50 closed at 16,988.40 (-111.7, -0.7%), BSE Sensex closed at 57,628.95 (-361.0, -0.6%) while the broader Nifty 500 closed at 14,317.10 (-103.8, -0.7%). Of the 1,982 stocks traded today, 489 were on the uptrend, and 1,448 went down.

Indian indices closed in the red after recouping the losses made in the morning session. Nifty 50 fell nearly 111 points and closed below the 17,000 mark. Gold prices hit an all-time high in India, surpassing the Rs 60,000 per 10-gram mark.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty FMCG and Nifty Media closed in the green. All other major sectoral indices closed in the red.

Nifty Bank closed 0.6% lower, taking cues from the Dow Jones US Bank index which closed 4.67% lower on Friday. Cochin Shipyard bagged orders worth Rs 550 crores from Lysaker, Norway.

European indices trade in the red, reacting negatively to UBS Bank's deal with Credit Suisse. US indices futures trade in the red, indicating a negative start.

Brent crude price falls to a 15-month low and trades at USD 71 per barrel. Goldman has cut Brent crude price to USD 94 per barrel in 2023, from an earlier target of USD 100.

  • Cummins India beats 3M India in QoQ revenue & profit growth, PE ratio and MF holdings. But it lags in YoY profit growth, Piotroski score and broker average rating.

  • SpiceJet is up more than 3% despite the market trading in the red. The company’s CEO, Ajay Singh, says that the airline is restructuring its balance sheet and has robust plans for fleet expansion. The airline will also maintain its cargo fleet as the cargo business has helped the airline pay off its liabilities.

  • HCL Technologies's net cash flow grows 43.5% YoY and operating cash flow over three years rises 88.4%. It has a durability score of 90. The company shows up in a screener for stocks with improving cash flow and a good durability score

  • KPIT Technologies and Narayana Hrudayalayareach their all-time highs of Rs 894.7 and Rs 821.6 per share respectively. KPIT has risen 3.3% over the past month, while Narayana Hrudayalaya rose 9.1% in the same period.

  • Domestic air traffic grows 51.3% YoY but falls 3.3% MoM in February. Domestic airlines flew 120 lakh passengers according to the data released by DGCA. Air India, Vistara and SpiceJet lose market share MoM, while Indigo gains.

  • Realty stocks like Macrotech Developers, Indiabulls Real Estate, Godrej Properties, DLF and Sobha are falling in trade. The broader sectoral index BSE Realty is also trading in the red.

  • Ahluwalia Contracts secures an order worth Rs 723.3 crore to construct a cancer hospital for Tata Memorial Centre in Mumbai. This takes the company's order book to Rs 5,056.9 crore in FY23.

  • Crompton Greaves Consumer Electricals falls over 2% in trade today. Reports suggest that 23.8 lakh shares (0.4%) of the company, amounting to Rs 66.9 crore, change hands.

  • PB Fintech ranks medium on the Trendlyne checklist score. Morgan Stanley reiterates its ‘Overweight’ rating on the stock, maintaining a target price of Rs 705. According to the management, improving the quality of business through its agency channel is the key differentiator.

  • SJVN is rising as its wholly owned subsidiary SJVN Green Energy wins an order from Maharashtra State Electricity Distribution to develop a 200 MW solar power plant for Rs 1,000 crore.

  • Krsnaa Diagnostics is rising as it bags a project worth Rs 450 crore in a consortium with Telecommunications Consultants India. The project will provide lab services under the free diagnostics initiative of the National Health Mission.

  • PSU banks like Bank of Maharashtra, Bank of India, UCO Bank, Indian Overseas Bank and Punjab National Bank are falling in trade. The broader sectoral index Nifty PSU Bank is also trading in the red.

  • ICICI Securities maintains its ‘Buy’ rating on Century Plyboard with a target price of Rs 758, implying an upside of 60.6%. The brokerage expects the firm to benefit from the higher spending on home improvements and the uptick in housing demand after the pandemic. It estimates the firm’s profit to grow at a CAGR of 16.1% over FY22-25.

  • Glenmark Pharmaceuticals receives the final approval from the US FDA for Prochlorperazine Maleate tablets, the generic version of Compazine tablets. According to IQVIA, Compazine has achieved sales worth $26.9 million for the 12-month period ending January 2023.

  • Reports suggest that 50.76 lakh shares (2.4% equity) of HDFC Asset Management Co, amounting to Rs 812.5 crore, change hands in a large trade.

  • Foreign Portfolio Investor Ahan-I sells a 1.58% stake (1.8 crore shares) in Biocon for Rs 379.9 crore in a bulk deal. In another deal, Integrated Core Strategies sells 0.54% and 0.72% stakes in Delhivery and Jindal Stainless respectively for more than Rs 100 crore each.

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

  • Abhijit Roy, Managing Director and CEO of Berger Paints, says the company’s margin will improve to around 16-17% and the gross margin will return to the 27-28% mark in Q4. He adds that the company aims to achieve double-digit growth in FY24.

  • Bharat Petroleum Corp rises as it appoints G Krishnakumar as Managing Director and Chairman on Friday.

  • Cochin Shipyard rises as it wins an order worth Rs 550 crore from Samskip group to design and construct two zero-emission feeder container vessels, with an option for two more vessels.

  • AS Mehta, President & Director of JK Paper, believes the company could maintain the revenue guidance of Rs 6,500 crore for FY23. He adds that writing and printing paper prices are improving but expects revenue from the packaging board segment to be lower in Q4.

  • Torrent Pharmaceuticals is falling as the US FDA issues Form 483 with one observation after conducting a pre-approval inspection at its Gujarat facility. The stock ranks medium on the Trendlyne checklist score.

  • Vijay Kedia convertsAtul Auto's 7.05% warrants into equity shares on March 15. He now holds an 8.43% stake in the company.

  • Tata Consumer Products stops negotiations regarding the acquisition of Bisleri. According to reports, Jayanti Chauhan, daughter of Bisleri International’s chairman Ramesh Chauhan, will head the company.

  • Navin Fluorine is rising as its wholly owned subsidiary Navin Fluorine Advanced Sciences sets up a Rs 450 crore hydrofluoric acid plant with a capacity of 40,000 tonnes per annum at Dahej, Gujarat. It shows up in a screener of stocks with low debt.

  • Rail Vikas Nigam emerges as the lowest bidder in a composite contract for designing and building a new broad gauge railway line for Haryana Orbital Rail Corp. The project is to build twin tunnels and ballastless tracks at an estimated cost of Rs 1,088.49 crore.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (848.65, 3.97%), Hindustan Unilever Ltd. (2,511.20, 2.61%) and Bharat Petroleum Corporation Ltd. (359.65, 2.35%).

Downers:

Largecap and midcap losers today include Hindustan Aeronautics Ltd. (2,644.85, -5.51%), Adani Total Gas Ltd. (852.90, -5.00%) and Adani Power Ltd. (190.20, -4.88%).

Volume Rockets

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

Top high volume gainers on BSE included Aarti Drugs Ltd. (368.25, 16.13%), Network 18 Media & Investments Ltd. (59.20, 12.65%) and Rallis India Ltd. (204.00, 5.45%).

Top high volume losers on BSE were Balrampur Chini Mills Ltd. (361.70, -6.56%), Esab India Ltd. (3,565.10, -4.06%) and Crompton Greaves Consumer Electricals Ltd. (280.70, -2.25%).

Caplin Point Laboratories Ltd. (631.50, 3.42%) was trading at 22.1 times of weekly average. UTI Asset Management Company Ltd. (637.15, -1.78%) and Cochin Shipyard Ltd. (460.20, 3.65%) were trading with volumes 13.1 and 11.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

5 stocks made 52-week highs, while 44 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Blue Star Ltd. (1,446.55, 0.49%), Godrej Consumer Products Ltd. (960.00, 1.32%) and Gujarat Pipavav Port Ltd. (111.00, -1.55%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (480.95, 0.30%) and Avanti Feeds Ltd. (340.35, -0.76%).

8 stocks climbed above their 200 day SMA including Route Mobile Ltd. (1,346.85, 4.82%) and Cochin Shipyard Ltd. (460.20, 3.65%). 24 stocks slipped below their 200 SMA including Balrampur Chini Mills Ltd. (361.70, -6.56%) and IRB Infrastructure Developers Ltd. (25.45, -4.32%).

 
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The Baseline
17 Mar 2023
Five Interesting Stocks Today
  1. PNC Infratech: This roads and highways company rose 1.5% on Wednesday as it bagged a contract worth Rs 1,260 crore from the National Highways Authority of India (NHAI) for the construction of the Varanasi-Ranchi-Kolkata highway. The contract is for two years of construction and 15 years of highway operation. However, the stock has fallen 14.3% over the past month despite winning three orders worth Rs 3,264.4 crore in March, as its revenue and net profit missed Trendlyne’s forecaster estimates by 4.1% and 5.5% respectively in Q3FY23. 

Sharekhan retains its ‘Buy’ rating on the stock with a target price of Rs 390, indicating a potential upside of 34.5%. The brokerage believes that the receipt of appointed dates for hybrid annuity model (HAM) projects from NHAI and expected order wins in the near term will lead to higher revenue growth during FY24-25. 

The company also stands to benefit from the 36% (Rs 2.7 lakh crore) increase in budget allocation for the road and highways segment. The company shows up in a screener of stocks where brokers have upgraded recommendation or target price in the past three months. 

  1. Sona BLW Precision Forgings: This auto parts & equipment company’s stock fell over 6% on Monday as Blackstone offloaded its 20.5% stake (11.9 crore shares) worth Rs 4,917.4 crore in a bulk deal. The shares have been picked up by the Government of Singapore, Societe Generale and HDFC Mutual Fund, among others. In the past week, the stock has fallen 8.6%, underperforming the Nifty 50 index by 4.3% and currently trades near its 52-week low. 

However, brokerages remain bullish on the stock after the bulk deal, with some expecting a 35%+ upside. On Wednesday, Jefferies initiated coverage on Sona BLW Precision Forgings with a ‘Buy’ rating and a target price of Rs 575. The brokerage believes the company can grow its differential business with a focus on R&D and the Indian cost advantage. It likes Sona's strategy to expand its component portfolio in order to meet the electrification and autonomous trends in the global auto sector. Overseas markets contributed to around 70% of Sona BLW’s total revenue in Q3FY23, with the North American market being a major revenue contributor (45%).

Another brokerage, CLSA, also maintains its ‘Buy’ rating on the stock but cuts target price to Rs 529 from Rs 599. The brokerage believes that the impact of Blackstone's exit on the company’s future growth will be limited as it maintains a strong order book. In Q3FY23, Sona’s order book has risen 16.1% QoQ to 23,800 crore. 

  1. KPIT Technologies: This IT consulting & software company rose by 8.8% on Wednesday amid high volatility in the market. This positive price movement has helped the company show up in a screener for stocks near their 52-week high with high volumes.

    This uptrend in stock price comes on the back of the company announcing a new deal to expand its partnership with Honda and accelerate its software-defined mobility (SDM) technology. The management says the partnership will have over 2,000 of KPIT’s software & vehicle systems professionals working on Honda’s SDM technology until 2030 and beyond. According to reports, Kishor Patil, the firm’s CEO, says that the deal with Honda is larger than its previous deal with Renault. He adds that the company will be involved in all aspects of future mobility with Honda. 

In addition to this massive deal win, the company has also posted healthy results in Q3FY23. Its net profit grew 20.4% QoQ and beat Trendlyne’s Forecaster estimates by 5%. The stock also ranks high on Trendlyne’s checklist with a score of 69.57%.

Despite the economic downturn in the US and European markets, the management states that the company has not seen any budget cuts from its clients. It won orders with a total contract value of $272 million in Q3FY23. Going forward, KPIT plans to focus on improving the quality of hiring as it expects to win more complex projects in the coming quarters. 

  1. GAIL: Thisutility firm has been bogged down by the erratic supply of LNG since the start of the Russia and Ukraine war. GAIL hadsigned a contract with Russia-backed Gazprom’s subsidiary GMTS Germany to supply 2.5 million tonnes of LNG per year until 2039. However, due to sanctions imposed on Russia, GMTS Germany was acquired by Sefe. Sefe stopped the supply of LNG to GAIL after the war, as it was unable to fulfill the demand in Europe and there was not enough inventory for export. 

This forced GAIL to purchase LNG from other sources for a higher price. The recent drop in spot LNG prices has caused GAIL to incur Rs 1,100 crore loss on its inventory. Now GAIL is set to receive two shipments from Sefe for the first time since the supply was halted, as the German company has decided to resume supply from its Non-Russia portfolio. 

GAIL’s top line increased by 37.2% YoY in Q3FY23 but EBITDA declined 93.8%. The EBITDA decline was on account of inventory losses and lower price realisations in hydrocarbons and petrochemicals. GAIL’s investment in capex augurs well with its growth trajectory. GAIL has a planned capex of Rs 6,300 crore in FY23 and Rs 9,500 crore in FY24. The company expects its Urja Ganga pipeline to be completed in Q1FY24. The stock shows up in a screener with increased mutual fund shareholding in the past month.

ICICI Securities says pickup in gas transmission and petchem volume will drive revenue for the company. Gas trading is also expected to improve with new contracts. The brokerage has revised its ‘Buy’ rating to ‘Hold’.

  1. Mahindra & Mahindra: This automobile stock fell 2.7% in trade on Monday after it sold a 6.1% stake (2.3 crore shares) in Mahindra CIE Automotive, where Mahindra & Mahindra (M&M) is a promoter. The transaction was worth Rs 823 crore. M&M has been gradually exiting Mahindra CIE Automotive, in line with its earlier plans of exiting non-core asset businesses. Analysts at Sharekhan believe this move to be good for M&M as these funds can be allocated to other structural areas which will determine long-term growth for the company. In the past week, the stock has fallen 9.5%.

In a similar move, M&M’s Bangladesh subsidiary, Mahindra Bangladesh Private (MBPL), has decided to liquidate the entire business. The stock fell nearly 3% in trade on Tuesday and traded almost flat on Wednesday. MBPL ceased to exist as M&M’s wholly owned subsidiary from March 14. Since March 31, 2022, MBPL had no income from operations and its net worth had reduced to 0.01% of M&M’s net worth. 

On a positive note, M&M’s wholesales have gained traction in the past few months. In February, M&M’s passenger vehicles and three-wheeler wholesales went up 10% YoY and 40% YoY respectively. Motilal Oswal suggests that its tractor demand has been intact in FY23 and will likely benefit from high MSP (minimum support prices) and positive agro-economic indicators. However, tractor demand may weaken in FY24, even if the country sees normal monsoons. The El Nino effect may hamper agriculture growth, dampening demand for tractors as it is highly dependent on farmers’ earnings. Despite this, the consensus recommendation from 34 analysts on the stock remains ‘Buy’, while two maintain ‘Hold’ and ‘Sell’. 

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

 
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The Baseline
17 Mar 2023
Chart of the week: Inflation in India eases a bit, but remains above 6%
By Abdullah Shah

After briefly falling below the Reserve Bank of India’s upper tolerance limit of 6% in November and December 2022, India’s consumer price index (CPI) inflation has pulled above the limit  for two straight months. Even though it fell marginally by 12 bps in February, it still hit 6.44%. 

Over the past two months, CPI has risen due to a jump in food and fuel prices. In February, CPI inflation was  propelled over 6% from rising costs in the food and beverages segment. The rise in F&B was caused by high cereal and protein prices (up 16.1% YoY). Fuel and light inflation also remained high, rising close to 10% YoY.

Fuel is a major contributor to CPI, so inflation follows the overall trend in price change of India’s crude oil basket. The Indian crude oil basket consists of sour grade (Oman & Dubai average) and sweet grade (Brent Dated) of crude oil processed in Indian refineries in a ratio of approximately 75 to 25. Though inflation in the fuel and power segment has declined by 90 bps MoM to 9.9%, the crude oil basket price price is higher than December 2022 levels. 

The marginal MoM fall in CPI in February can be attributed to the fall in vegetable prices, mainly onion, tomato and potato. However, the foods and beverages segment, which has the highest weightage (39.1%), is still facing inflation, due to a sharp jump in cereal prices. 

Other major contributors to CPI are the housing, and clothing & footwear segments. The housing segment has witnessed a 20 bps MoM rise in inflation to 4.8%, while clothing & footwear inflation continues to decline for four consecutive months.

With inflation stubbornly above the 6% upper limit, economists believe that another rate hike by the RBI is imminent in April. According to Nikhil Gupta, Chief Economist of Motilal Oswal Financial Services, “The worst of inflation is likely behind us. Headline inflation could fall below 6% in March 2023 and towards 5% in the coming months. Also, a 25 bps hike in April by the RBI is almost certain." 

US consumer price index inflation also remained high in February at 6% YoY, but fell MoM, in line with economists’ expectations. After the collapse of Silicon Valley Bank and other major banks in the past week, analysts are not expecting the US Fed to hike rates in its next meeting. Investors are now waiting for March 22 to see if the US Fed will hike interest rate. Their decision could influence the outcome of RBI’s Monetary Policy Committee meeting in April.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 Mar 2023
Market closes higher, FIIs pull out Rs 2,211.3 crore from the market over the past week

Trendlyne Analysis

Nifty 50 closed at 17,100.05 (114.5, 0.7%), BSE Sensex closed at 57,989.90 (355.1, 0.6%) while the broader Nifty 500 closed at 14,420.85 (90.5, 0.6%). Of the 1,955 stocks traded today, 1,108 were on the uptrend, and 780 went down.

Indian indices closed in the green after switching between losses and gains throughout the day. Nifty 50 rose nearly 115 points and closed at the 17,100 mark. Gold, a safe haven asset, is set for its biggest weekly gain since November 2022 due to the banking crisis in the US and Europe.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Realty closed sharply higher than Thursday’s closing levels. Nifty IT closed over 1.1% higher, taking cues from the tech-heavy Nasdaq 100 index, which closed 2.5% higher on Thursday.

European indices traded in the green amid positive global cues, led by banking stocks. US indices futures traded flat after posting strong gains on Thursday. Brent crude oil futures traded in the green but are set to post big weekly losses as investors assess the impact of banking crisis on the economy, which in turn affects crude oil demand.

  • National Aluminium sees a long buildup in its March 29 future series as its open interest rises 42.6% with a put-call ratio of 0.52.

  • Reports suggest that Malaysia-based company Petronas has offered to buy a 20% stake in NTPC's arm NTPC Green Energy for Rs 3,800 crore. NTPC is trading near its 52-week high.

  • Suzlon Energy, Tejas Networks and Lupin underperform their respective industries in terms of annual net profit growth YoY %.

  • GAIL (India) inks a memorandum of understanding with Shell Energy India to explore opportunities for infrastructure development for ethane sourcing.

  • FSN E-Commerce Ventures (Nykaa) rises over 3% in trade today. Reports suggest that 65.7 lakh shares (0.23% equity) of the company, amounting to Rs 93.2 crore, change hands in a block deal.

  • G R Infraprojects emerges as the lowest bidder for projects worth Rs 587.6 crore floated by the East Coast Railway. The projects involve the construction of tunnels and a new rail line. The stock shows up in a screener with improving book value per share over the past two years.

  • IT stocks like LTIMindtree, HCL Technologies and Persistent Systems are rising in trade. The broader Nifty IT index is also trading in the green.

  • Macquarie maintains an ‘Underperform’ rating on Jubilant Foodworks and cuts the target price to Rs 350 from Rs 380. The brokerage says the company’s margins will be affected by input cost pressures and poor demand in the coming quarters.

  • Foreign institutional investors pull out Rs 2,211.3 crore from the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest inflow of Rs 33,596.1 crore from foreign investors. Mutual Funds invest a total of Rs 648.1 crore in the Indian market.

  • Media stocks like Zee Entertainment Enterprises, Network 18 Media & Investments, TV18 Broadcast, PVR and New Delhi Television are falling in trade. The broader sectoral index Nifty Media is also trading in the red.

  • Sonal Varma, Managing Director and Chief Economist (India and Asia ex-Japan) at Nomura, says RBI will probably pause rate hikes. She expects an average inflation of 4.9% for FY24, compared to RBI’s projection of 5.3%.

  • Aster DM Healthcare's board appoints Nitish Shetty as the Chief Executive Officer of the company with effect from March 16, 2023.

  • Jubilant Pharmova surges more than 10% as its international subsidiary, Jubilant HollisterStier, receives approval from the Canadian government to avail a partially repayable loan of CAD 23.8 million. It will be used for the expansion of its Montreal facility.

  • Realty stocks like DLF, Phoenix Mills and Macrotech Developers are rising in trade. All stocks in the broader Nifty Realty index are also trading in the green.

  • Lemon Tree Hotelsis rising as it signs a license agreement for a 60-room property in Rajasthan. The property is expected to be operational by July 2026 and will be managed by Carnation Hotels, its wholly owned subsidiary.

  • B Ram Reddy, Managing Director of Balaji Amines, says the fall in raw material prices will benefit the specialty chemical industry. He adds that the company’s margins will improve to around 24% in the upcoming quarters.

  • Anand Rathi maintains its ‘Buy’ rating on Hero MotoCorp with a target price of Rs 2,855. This implies an upside of 21.1%. The brokerage believes the company is on track to regain market share on the back of multiple product launches. It expects the firm’s net profit to grow at a CAGR of 20%.

  • Promoter Sumitomo Wiring Systems sells a 3.4% stake (2.3 crore shares) in Samvardhana Motherson International for Rs 1,612.3 crore in a bulk deal. Societe Generale and Copthall Mauritius Investment pick up the shares.

  • Glenmark Pharmaceuticals’ arm Glenmark Specialty receives acceptance from the US FDA for its investigational new drug application GRC 54276. The company will be allowed to proceed with phase 1/2, the first-in-human clinical study of GRC 54276 for the treatment of patients with advanced solid tumours and lymphomas.

  • Rail Vikas Nigam is rising as it bags a contract worth Rs 111.8 crore to install, test and commission 11 KV lines and associated works in Sidhi, Chhatarpur and Jabalpur, among others. The stock is trading 119.4% higher than its 52-week low.

  • Probal Sen, Energy Analyst at ICICI Securities, says the fall in crude price is due to lower demand. He adds that this fall will benefit oil marketing firms. Crude oil prices have fallen sharply below $75 per barrel.

  • Va Tech Wabag wins an order worth Rs 800 crore to design, build and operate a sewage treatment plant at Pagla, in the City of Dhaka, Bangladesh. The project is funded by the World Bank and Asian Infrastructure Investment Bank.

  • Dr. Reddy’s Laboratories and its subsidiaries sell nine non-core dermatology brands to Eris Lifesciences for Rs 275 crore. According to IQVIA data, the divested portfolio has sales of Rs 60 crore. Dr. Reddy’s is trading near its 52-week high.

  • Tata Consultancy Services' CEO and MD Rajesh Gopinathan resigns, effective from September 15, 2023. The board appoints K Krithivasan as the CEO Designate, effective from March 16, 2023. He will take over as the CEO and MD in the next financial year, subject to shareholders' approval.

  • Zee Entertainment falls more than 3% in trade even after the NCLT cancelled the insolvency plea filed against the company by the Indian Performing Rights Society (IPRS). Reports suggest that Zee is ready to pay pending dues to IndusInd Bank to resolve the insolvency issue.

  • Voltas is rising as its wholly owned subsidiary Universal MEP Projects & Engineering Services (UMPESL) bags power distribution and solar projects worth Rs 1,770 crore. The project will benefit Uttar Pradesh, West Bengal and Odisha, among others.

  • Samvardhana Motherson International approves the acquisition of the remaining 50% stake in Fritzmeier Motherson Cabin Engineering (FMCEL) from its joint venture partner, F Holdings GmbH, for Rs 110.7 crore. Post acquisition, FMCEL will become a wholly owned subsidiary of Samvardhana Motherson.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (46.70, 5.18%), Adani Green Energy Ltd. (816.25, 5.00%) and Adani Transmission Ltd. (1,022.35, 5.00%).

Downers:

Largecap and midcap losers today include Biocon Ltd. (202.30, -8.81%), Patanjali Foods Ltd. (898.40, -4.98%) and Tube Investments of India Ltd. (2,550.25, -4.40%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Jubilant Pharmova Ltd. (313.30, 12.76%), JK Paper Ltd. (384.70, 9.85%) and Kalyan Jewellers India Ltd. (119.50, 9.68%).

Top high volume losers on BSE were Biocon Ltd. (202.30, -8.81%), Jindal Stainless Ltd. (293.10, -7.58%) and Patanjali Foods Ltd. (898.40, -4.98%).

Gillette India Ltd. (4,186.20, -4.48%) was trading at 100.7 times of weekly average. Eris Lifesciences Ltd. (568.85, -2.89%) and Delhivery Ltd. (322.10, -2.79%) were trading with volumes 86.9 and 17.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks hit their 52-week highs, while 24 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Godrej Consumer Products Ltd. (947.45, 1.62%), NCC Ltd. (103.50, 1.72%) and KPIT Technologies Ltd. (869.20, 6.56%).

Stocks making new 52 weeks lows included - Avanti Feeds Ltd. (342.95, -0.58%) and Bayer Cropscience Ltd. (3,988.10, -1.07%).

16 stocks climbed above their 200 day SMA including JK Paper Ltd. (384.70, 9.85%) and Medplus Health Services Ltd. (772.45, 7.46%). 11 stocks slipped below their 200 SMA including Swan Energy Ltd. (231.20, -6.32%) and Crisil Ltd. (2,997.75, -3.22%).

 
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The Baseline
16 Mar 2023
Screener of the week: DVM strategy for Nifty500 delivered 33%+ CAGR
By Abdullah Shah

In this week’s screener, we look at the "high return, high durability" investment strategy. The screener chooses a maximum of five stocks from the Nifty 500 index each quarter with strong financial durability, reasonable valuation and good momentum. 

The screener currently has stocks like HCL Technologies, Oil India, Hindustan Aeronautics, Zydus Lifesciences and Firstsource Solutions.

We performed two backtests on the screener to check its past performance. The backtests ran with a quarterly portfolio review frequency (change stocks every quarter) against the benchmark of Nifty 500 from March 2013 to March 2023. 

The difference between the two backtests was that for one test we considered only Nifty 500 stocks, and all stocks with a market cap of over Rs. 60 crore for the other.

The backtest with Nifty 500 stocks gave cumulative returns of 1,751.2% over 10 years, with a return CAGR of 33.84%. The average stock return was 14.4%, with a total of 82 winners and 62 losers. Ceat gave the highest returns of 428.8%. The maximum drawdown of the strategy was 30.5% in the September 2022 quarter. 

The backtest with all stocks beat the Nifty 500 strategy with higher cumulative returns and CAGR. However, this strategy comes with added risks, as its maximum drawdown is higher at 55.6%. It also has a higher number of losers (76) against 86 winners. Choosing all stocks may also include stocks with low delivery volumes. So the Nifty500 universe is more realistic. 

You can find some popular screenershere