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

Trendlyne Analysis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Riding High:

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

Downers:

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

Volume Rockets

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

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

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

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

BSE 500: highs, lows and moving averages

9 stocks made 52 week highs,

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

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

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

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

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

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

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

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

You can find some popular screenershere

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

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

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

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

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

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

In this week’s Analyticks:

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

Let’s get into it.

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

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

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

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

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

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

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

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

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

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

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

Where does India hold an edge over China?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You can find some popular screenershere.

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

Trendlyne Analysis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Riding High:

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

Downers:

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

Crowd Puller Stocks

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

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

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

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

BSE 500: highs, lows and moving averages

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

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

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

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

 
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Trendlyne Marketwatch
11 Apr 2023
Market closes higher, IMD expects normal monsoon for India this year

Trendlyne Analysis

Nifty 50 closed at 17,722.30 (98.3, 0.6%), BSE Sensex closed at 60,157.72 (311.2, 0.5%) while the broader Nifty 500 closed at 14,867.25 (76.7, 0.5%). Of the 1,959 stocks traded today, 1,187 were on the uptrend, and 730 went down.

Indian indices extended their gains and closed in the green, with the Nifty 50 rising over the 17,700 mark. India’s volatility index, India VIX, fell below 11 at the close. India’s consumer price index data for March is due to be released tomorrow. Economists expect the CPI to be below 6%, well within the RBI’s upper tolerance limit.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Bank closed sharply higher than Monday’s levels. Nifty IT closed sharply lower despite tech-heavy Nasdaq 100 closing flat on Monday. SBI plans to raise USD 2 billion by overseas bond sales in FY24.

Most European indices extend their gains and trade in the green. Major Asian indices closed higher than Monday’s level as Japanese and South Korean central banks maintain a dovish stance on interest rate hikes. US indices futures trade lower indicating a negative start for the day.

  • Relative strength index (RSI) indicates that stocks like Aurobindo Pharma, Rossari Biotech, Dr. Reddy's Laboratories and JBM Auto are in the overbought zone.

  • Trident rises more than 6% in trade today. The stock ranks high in Trendlyne's checklist with a score of 56.5%. The company also sees a 12% MoM rise in chemical production, while yarn production grows by 15% in March.

  • LTIMindtree sees three broker target price upgrades and one recommendation upgrade in the past month. GAIL (India), InterGlobe Aviation, Varun Beverages and Equitas Small Finance Bank see two broker target price upgrades over the same time period.

  • Following Skymet's forecast of below-normal rainfall, with precipitation expected to reach 94% of LPA (Long Period Average), the Indian Meteorological Department (IMD) has issued a statement saying that the country can expect a normal monsoon this year. IMD predicts rainfall levels to be at 96% of LPA for this year.

  • Nirmal Bang expects Colgate-Palmolive (India) to report a YoY increase of 14.4% in net profit and a 6.4% rise in net sales for Q4FY23. The stock has gained 13% in the past three years and shows up in a screener with improving RoA over the past two years.

  • Bajaj Auto rises over 2% and touches a 52-week high of Rs 4174.1 following reports that Morgan Stanley has raised the stock's target price to Rs 4,486. This upgrade comes after Triumph Motorcycles agreed to transfer its distribution operations to Bajaj.

  • Indus Towers, JSW Energy, Graphite India and Quess Corp are trading below their second support or S2 level.

  • Realty, utilities and cement & construction sectors rise by more than 4.7% over the past month.

  • Bank of Baroda is rising after reporting a 17% YoY increase in its total business in Q4FY23. Motilal Oswal maintains a ‘Buy’ rating on the stock, expecting positive margins and lower cost of funds. JP Morgan projects the bank’s RoE to be at 17% in Q4, in line with private banks.

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

  • Ahead of the March CPI inflation data to be released tomorrow, a survey of economists suggests that India’s CPI inflation will likely fall to 5.7% in March, from 6.44% in February.

  • Godrej Properties, Prestige Estate Projects and Indiabulls Real Estate outperform the Nifty 50 index by 15.8%, 12.4% and 13.3% respectively in the past week.

  • ICICI Direct upgrades its rating on Coal India to ‘Buy’ from ‘Hold’ with a target price of Rs 260, implying an upside of 16.8%. The brokerage turns positive on the company’s prospects on the back of healthy growth in production volumes. This growth enables the firm to beat its production guidance of 700 MT for FY23. The brokerage expects the robust traction in production volumes to continue in the coming quarters.

  • Kotak Mahindra Bank rises over 4% in trade today as it is expected to see a higher weightage in the MSCI standard index during the May’23 review.

  • Schaeffler India and Cyient's weekly average delivery volumes rise ahead of their Q4FY23 results in April.

  • Shipping Corp of India is rising as reports suggest that the Centre is set to invite financial bids for the privatization of the company next month. This move is a part of the Indian Government's plans to sell its stake in the shipping company, which were first announced in 2019.

  • JSW Steel is rising as its crude steel production increases 13% YoY to 6.6 million tonnes in Q4FY23. This growth is aided by a capacity utilization rate of 96% in the quarter. The company shows up in a screener of stocks with high momentum scores.

  • Nouriel Roubini, CEO of Roubini Macro Associates, says that the US Federal Reserve will hike interest rates further to achieve its inflation target of 2%. He also warns that additional rate hikes will increase the likelihood of a recession and financial instability in the US.

  • Shilpa Medicare surges as it receives US FDA approval for its apremilast tablets, which are used in treating adult patients with active psoriatic arthritis. The US market for apremilast tablets is approximately $3.55 billion.

  • Star Health and Allied Insurance Co is rising after reporting a 13% YoY increase in gross direct premium in FY23. The health-retail and accident segments have grown 18% and 15%, respectively. However, the health-group segment’s gross premiums fall 31%. The stock is trading above its first resistance or R1 level.

  • Delhivery is rising as reports suggest that 1.2 crore shares (1.62% equity) of the company, amounting to Rs 388.15 crore, change hands in a large trade.

  • PSU bank stocks like Punjab & Sind Bank, Bank of Baroda, Union Bank of India and UCO Bank are rising in trade. The broader sectoral index Nifty PSU Bank is also trading in the green.

  • ICICI Bank, Poonawalla Fincorp and Axis Bank fall 1.2%, 0.8% and 1.8% respectively over the past week, ahead of their Q4FY23 results in April.

  • Morgan Stanley maintains its ‘Overweight’ rating on InterGlobe Aviation (Indigo) with a target price of Rs 2,925. The brokerage expects Indigo’s capacity to grow 45% YoY in Q4FY23.

  • Dolly Khanna sells a 0.2% stake in KCP during Q4FY23. She now holds a 2.3% stake in the company.

  • Cipla signs a licensing agreement with Novartis Pharma AG to market diabetes drug Galvus in India, starting from January 1, 2026. Galvus has registered sales worth Rs 268 crore as per IQVIA's report for the year ending February 2023. The company shows up in a screener of stocks with upgraded recommendations or target prices from brokers.

  • Kalpataru Power Transmission is rising as the company and its subsidiaries bag new orders worth Rs 3,079 crore in the past month. The majority of its order book is constituted by civil work orders worth Rs 1,234 crore, while EPC and water supply projects are each above Rs 700 crore.

  • Bank of Baroda's total advances rise by 19% YoY to Rs 9.7 lakh crore as of March 31, 2023, with domestic advances growing by 16.9% YoY. Total deposits also increase by 15.1% YoY to Rs 12 lakh crore. The stock shows up in a screener for companies with improving cash flows and high durability scores.

Riding High:

Largecap and midcap gainers today include Adani Total Gas Ltd. (951.45, 5.00%), Adani Green Energy Ltd. (944.10, 5.00%) and Adani Transmission Ltd. (1,050.85, 5.00%).

Downers:

Largecap and midcap losers today include Berger Paints (India) Ltd. (574.00, -3.57%), ABB India Ltd. (3,277.45, -3.54%) and Macrotech Developers Ltd. (913.20, -3.14%).

Volume Rockets

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

Top high volume gainers on BSE included Shilpa Medicare Ltd. (267.35, 14.57%), Trident Ltd. (32.00, 7.38%) and KPR Mill Ltd. (616.90, 6.44%).

Top high volume losers on BSE were Rossari Biotech Ltd. (680.35, -8.18%), Esab India Ltd. (3,331.15, -3.88%) and Radico Khaitan Ltd. (1,079.35, -2.86%).

Zydus Wellness Ltd. (1,514.25, 0.32%) was trading at 16.9 times of weekly average. Eureka Forbes Ltd. (414.95, -2.05%) and Pfizer Ltd. (3,634.90, 0.79%) were trading with volumes 14.4 and 7.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

13 stocks overperformed with 52-week highs, while 2 stocks hit their 52-week lows.

Stocks touching their year highs included - Bajaj Auto Ltd. (4,177.40, 2.85%), Zydus Lifesciences Ltd. (501.00, 0.91%) and Cyient Ltd. (1,081.70, 0.66%).

Stocks making new 52 weeks lows included - United Breweries Ltd. (1,371.25, -1.91%) and TeamLease Services Ltd. (2,166.90, -1.19%).

14 stocks climbed above their 200 day SMA including Kotak Mahindra Bank Ltd. (1,846.50, 4.96%) and Prince Pipes & Fittings Ltd. (587.00, 4.39%). 10 stocks slipped below their 200 SMA including Brigade Enterprises Ltd. (482.00, -1.83%) and VST Industries Ltd. (3,258.65, -1.55%).

 
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The Baseline
11 Apr 2023
Five analyst picks this week
By Suhas Reddy
  1. Motilal Oswal Financial Services: ICICI Securities reiterates its ‘Buy’ call on this financial services company with a target price of Rs 620. This indicates an upside of 39%. Analysts Ansuman Deb, Ravin Kurwa and Vishal Singh say, “Motilal Oswal’s valuations have become attractive considering it is trading at five times FY24 core P/E multiple, which excludes investment income and the investment book.” 

According to the analysts, Motilal Oswal has seen consistent growth and market share gain in futures and options volumes, and active clients during the past three quarters. The company is also expanding its sales team to drive growth in the housing finance segment, which the analysts believe would yield results in FY24/FY25.

The analysts add that the company’s efforts to improve its broking volume share and AMC performance, increase wealth management AUM, and grow the housing finance portfolio could benefit earnings. 

  1. Star Health and Allied Insurance: HDFC Securities maintains its ‘Buy’ rating on this insurance company with a target price of Rs 795, indicating an upside of 34.8%. Analysts Sahej Mittal and Krishnan ASV see the recent price hike in the company’s flagship product (STARHEAL) as a key positive, believing it will increase profitability in the coming quarters. They add, “We like STARHEAL for its strong moats, including a dominant agency-led distribution network, retail business mix, and best-in-class operating expense ratios.”

Despite their optimism about the price hike, the analysts expect it to hit sales in the short term. However, given a favourable base, along with the price hike in the flagship product, they expect the company’s net premium to grow over FY24 by more than 20% YoY. Mittal and Krishnan estimate the firm’s net profit to grow at a CAGR of 26.1% over FY23-25.  

  1. Tata Motors: Motilal Oswal maintains its ‘Buy’ rating on this automobile maker with a target price of Rs 525, implying an upside of 14.6%. Analysts Jinesh Gandhi, Amber Shukla and Aniket Desai are upbeat about the company’s prospects due to JLR’s (Jaguar-Land Rover) wholesales exceeding estimates in Q4FY23. Wholesale volumes have risen 24% YoY to 94,600 units (the brokerage estimate was 84,500 units), driven by a 34% YoY increase in Land Rover’s wholesales. Meanwhile, Jaguar’s wholesales fell 27% YoY. 

They also find the 30% YoY growth in JLR’s retail sales in Q4 to be encouraging. They add,” Retails were higher in all the markets, with strong growth in EU (+46% YoY), UK (+42% YoY), rest of the world (+30% YoY), China (+29% YoY) and the US (+12% YoY).” 

Overall, the analysts believe that all of the company’s business segments are in the midst of recovery, but expect supply-side constraints to impact its pace. They see the firm’s domestic, commercial and passenger vehicle businesses driving growth in the medium term. Gandhi, Shukla and Desai expect the company’s revenue to grow at a CAGR of 13.8% over FY23-25. 

  1. Hindalco Industries: ICICI Direct maintains its ‘Buy’ call on this aluminium company but reduces its target price to Rs 465, indicating an upside of 12.3%. According to analyst Dewang Sanghav, who attended Hindalco’s Investor Day events, “Novelis (an arm of Hindalco) aims to achieve long-term sustainable EBITDA/tonne of $525/tonne by Q4FY24.” He also mentions that the company has indicated reduced spending on growth capex for Novelis and Indian operations. Of the $8 billion capex announced a year ago, the company prioritises $4.4 billion capex for projects that are already under construction. The rest of the projects have been deferred but not cancelled.

Sanghav assumes that Novelis will report an EBITDA of $475/tonne for FY23 and FY24 each. For FY24, he has revised Novelis’s EBITDA/tonne estimate downward to $475/tonne. Going forward, he expects Hindalco to report a consolidated EBITDA margin of 11.3% for FY23 and 11.2% for FY24. 

  1. Godrej Consumer Products: Sharekhan maintains its ‘Buy’ rating on this FMCG company with a target price of Rs 1,100. This implies an upside of 14.8%. Analysts remain optimistic about the company’s growth prospects after reviewing its Q4FY23 pre-quarter update. They are upbeat about the firm’s improved performance and expect its revenue to grow by double digits. They add, “Q4FY23 will be the first quarter of double-digit revenue growth (with volume growth of 4-5%) after six quarters of single-digit growth.” The analysts attribute this growth to healthy domestic business and recovery in its Indonesia business. They expect the firm’s operating and gross margins to improve YoY due to lower input costs.

The analysts at Sharekhan also note the management’s efforts to improve margins through operational efficiencies and premiumisation. They expect the firm’s revenue to grow at a CAGR of 11.1% over FY22-25. 

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

(You can find all analyst picks here)

 
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Trendlyne Marketwatch
10 Apr 2023
Market closes flat, Yes Securities upgrades Paytm's target price to Rs 700

Trendlyne Analysis

Nifty 50 closed at 17,624.05 (24.9, 0.1%), BSE Sensex closed at 59,846.51 (13.5, 0.0%) while the broader Nifty 500 closed at 14,790.55 (31.4, 0.2%). Of the 1,978 stocks traded today, 1,001 showed gains, and 938 showed losses.

Indian indices pared the gains made in the morning session and closed flat. The Nifty 50 closed above the 17,600 mark. India volatility index, India VIX, rose above 12. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Auto and Nifty Realty closed sharply higher than Thursday’s levels. Nifty IT also closed sharply higher, tailing tech-heavy Nasdaq 100, which closed 0.74% higher on Friday. Larsen & Toubro's arm L&T Energy Hydrocarbon won an order worth Rs 1,000-2,500 crore from Chambal Fertilisers and Chemicals. 

European stocks traded higher, in line with most major Asian indices closing in the green. US indices futures also traded higher after closing in the green on Friday. Brent crude oil futures traded marginally higher, as tighter supplies are expected from OPEC+ oil producers starting in May.

  • Tata Motors sees a Long buildup in its April 27 future series as its open interest rises 14.7% with a put-call ratio of 0.72.

  • FMCG stocks like Tata Consumer Products, Zydus Wellness, Hindustan Unilever and Nestle India are falling in trade as the Indian weather forecasting services company Skymet predicts below-normal monsoon in 2023.

  • Reports suggest that Torrent Power has emerged as the lowest bidder for a contract to supply 1,100 MW of gas-based power. The company quoted Rs 13.7 per unit for the supply of 770 MW each for 45 days in April and May from two of its gas-based projects in Gujarat.

  • Yes Securities upgrades One97 Communications’ (Paytm) target price to Rs 700 from Rs 600, while maintaining its ‘Neutral’ stance on the stock. The decision comes after the company’s Q4 updates revealed an increase in loan disbursements and new merchant device additions. The brokerage expects revenue to grow by 18% QoQ, an upward revision of 12% from previous estimates.

  • EID Parry (India)'s board approves the payment of the second interim dividend for FY23 at Rs 4 per share. The record date for the payment is set as April 21, 2023. The stock shows up in a screener for companies with ROA improving over the past two years.

  • One97 Communications (Paytm) is rising as reports suggest that 20.46 lakh shares (0.34% equity) of the company, amounting to Rs 133.92 crore, change hands.

  • Schaeffler India and ICICI Securities rise 9.5% and 9.3% respectively over the past week, ahead of their results on April 18 and April 19.

  • GAIL India is rising as it reduces the price of LNG by Rs 7 per standard cubic meter (SCM) in Bengaluru and Dakshin Kannada and Rs 6 per SCM in other areas. It has also slashed CNG prices by Rs 7 per kg in Karnataka and Rs 6 per kg in other areas.

  • Venugopal Garre, Managing Director and Senior Analyst at Sanford C Bernstein, says India is currently facing a bear market rally. He adds that emerging markets have been underperforming so far.

  • Future Retail is rising as the company receives expressions of interest from 49 companies. Reliance Retail, WH Smith, JC Flowers and Jindal Power are among the companies that have expressed interest in buying the firm.

  • Larsen & Toubro's arm L&T Energy Hydrocarbon wins an order worth Rs 1,000-2,500 crore from Chambal Fertilisers and Chemicals for the license plus engineering, procurement and construction of a technical ammonium nitrate plant and weak nitric acid plant at Gadepan, Kota, Rajasthan.

  • Motilal Oswal initiates coverage on Max Healthcare Institute with a ‘Buy’ rating and a target price of Rs 530, implying an upside of 18.3%. The brokerage believes that the company is well-placed to benefit from demand tailwinds in the diagnostics industry, given its strategic locations in metro cities and strong execution capabilities.

  • Goldman Sachs upgrades Bandhan Bank’s rating to ‘Buy’ from ‘Neutral’ as it finds the stock's valuations attractive. The brokerage expects RoA and RoE to increase over FY24-25 as its microfinance portfolio sees an improvement in collections. The stock rises 10% over the past week.

  • Sobha is rising as its sales in Q4FY23 rise 25.7% YoY to Rs 1,463.4 crore, its highest ever. Its average price realisation per square foot also grows 13.7% YoY to Rs 9,898. The company achieves its highest annual sales in FY23, with a 34.3% YoY increase. The stock shows up in a screener for companies with improving cash flow from operations over the past two years.

  • Akshay D’Souza, Chief of Growth & Insights at Bizom, expects strong growth for FMCG companies in Q4FY23. He adds that the heat wave in February has led to improved sales of summer products.

  • Mahindra & Mahindra Financial Services is declining as RBI imposes a fine of Rs 6.77 crore on the firm for non-compliance with its directions relating to annualised interest rates. The company charged a higher interest rate than what was communicated to its borrowers during FY19, FY20, and FY21, and also failed to give notice of change in terms to its borrowers.

  • Godrej Properties rises as its booking value goes up 56% YoY to Rs 12,232 crore in FY23. Its cash collections have also grown 52% YoY in Q4. It shows up in a screener of stocks with improving book value over the past two years.

  • Birla Estates, an arm of Aditya Birla Group and housed under Century Textiles and Industries, enters the Pune residential market by acquiring a 5.76-acre land parcel from Sudarshan Chemical Industries. The land has a revenue potential of Rs 2,500 crore.

  • Indian rupee appreciates 24 paise to 81.78 against the US dollar in early trade today. The rise is on the back of a positive trend in domestic equities and foreign fund inflows.

  • Realty stocks like Godrej Properties, Prestige Estates Projects, Sobha and DLF are rising in trade. Broader sectoral indices Nifty Realty and BSE Realty are also trading in the green.

  • Goldman Sachs downgrades its rating on Maruti Suzuki India to ‘Neutral’ and lowers the target price to Rs 8,800. The brokerage says the slowdown in the small car market will likely offset any potential market share gains for Maruti in FY24.

  • Dolly Khanna cuts her stake in Rama Phosphates in Q4FY23. She now holds below 1%, down from her 1.5% stake in Q3FY23.

  • Vijay Kedia buys a 0.1% stake in Heritage Foods in Q4FY23. He now holds a 1.2% stake in the company.

  • Rail Vikas Nigam (RVNL), in partnership with Siemens India, secures a contract worth Rs 378 crore for the turnkey solution of the Mumbai Metro Line 2B project. Siemens India will be the lead partner with a 60% share, while RVNL will hold 40%.

  • CreditAccess Grameen Bank is up more than 6% in trade after reporting a 27% YoY growth in assets under management to Rs 21,032 crore in Q4FY23. The bank also reports an 80% YoY increase in customer additions during the same period. The stock ranks medium on the Trendlyne checklist score.

  • Titan is rising as its revenue increases 25% YoY in Q4FY23 aided by the watches & wearables segment and emerging businesses. Its Indian dress-wear brand, Taneira, has also achieved sales growth of 208% YoY. Additionally, Titan's jewellery segment has seen revenue growth of 23% YoY. It shows up in a screener of stocks with increasing profits in the past three quarters.

  • Tata Motors reports 8% YoY rise in global wholesales to 3.6 lakh units in Q4FY23 despite increased interest rates and reduced purchasing power due to high inflation. Jaguar Land-rover, its subsidiary, has contributed nearly one-third to the global wholesales. Global passenger vehicle and electric vehicle wholesales also rise 10% YoY in Q4.

Riding High:

Largecap and midcap gainers today include Godrej Properties Ltd. (1,228.35, 9.15%), DLF Ltd. (405.50, 5.90%) and Power Finance Corporation Ltd. (166.40, 5.75%).

Downers:

Largecap and midcap losers today include Petronet LNG Ltd. (228.50, -3.10%), 3M India Ltd. (22,780.45, -2.35%) and Havells India Ltd. (1,169.75, -2.08%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Rossari Biotech Ltd. (740.95, 18.39%), Godrej Properties Ltd. (1,228.35, 9.15%) and Chemplast Sanmar Ltd. (403.05, 7.34%).

Top high volume losers on BSE were Tata Teleservices (Maharashtra) Ltd. (60.95, -4.99%), Sapphire Foods India Ltd. (1,194.45, -1.69%) and Galaxy Surfactants Ltd. (2,377.00, -1.62%).

Torrent Power Ltd. (520.00, -0.26%) was trading at 19.2 times of weekly average. Godrej Industries Ltd. (442.35, 4.34%) and Tata Motors Ltd. (461.30, 5.40%) were trading with volumes 7.9 and 5.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Abbott India Ltd. (22,880.00, -0.00%), Zydus Lifesciences Ltd. (496.50, 0.48%) and Cholamandalam Investment & Finance Company Ltd. (829.20, -1.45%).

Stocks making new 52 weeks lows included - United Breweries Ltd. (1,398.00, -0.64%) and V-Mart Retail Ltd. (2,098.00, -0.60%).

13 stocks climbed above their 200 day SMA including Prestige Estates Projects Ltd. (445.75, 6.27%) and DLF Ltd. (405.50, 5.90%). 7 stocks slipped below their 200 SMA including 3M India Ltd. (22,780.45, -2.35%) and 360 One Wam Ltd. (432.20, -1.73%).

 
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The Baseline
10 Apr 2023
Chart of the week: India’s Manufacturing PMI on the rise as other economies slow down
By Abdullah Shah

The Manufacturing Purchasing Managers' Index (PMI) is a key economic indicator, which measures the health of the country’s manufacturing sector. PMI readings above 50 signal expansion (growth), while those below 50 indicate contraction. In this edition of chart of the week, we will compare the Manufacturing PMI for India to that of  other industrially prominent countries around the world.

India's manufacturing PMI was strong a year ago in March 2022 with a reading of 54, and remained steady for Q1FY23, clocking in at 53.9 in June 2022. More recently, the PMI has been rising and reached a three-month high of 56.4 in March 2023. The increase was fueled by a capex push from the government in the FY24 budget, as well as the need to achieve the FY23 budget capex goal. 

In the past two months, China's manufacturing PMI has been around the 50 mark, scoring 51.6 and 50 in February and March 2023, respectively. This indicates a marginal expansion in the sector after the easing of lockdown measures. China’s index had a steep rise at the beginning of FY23 but started a downward slope from July 2022 as lockdown restrictions hit the manufacturing sector. 

The US PMI was the highest among the five countries a year ago, at 57.1 in March 2022, indicating strong manufacturing activity. However, the index has been on a steady decline since then as the US Fed raised interest rates, and fell below the 50 mark to 46.3 in March 2023. A survey conducted by the Institute for Supply Management (ISM) revealed that all the components of the US PMI were below the 50 mark for the first time since 2008. Analysts suggest that the PMI will continue to fall due to the ever-rising repo rates.

The United Kingdom's manufacturing PMI was recorded at 55.2 in March 2022 but dropped to 52.8 in June 2022. Although the index rose  for two consecutive months at the beginning of 2023, it declined to 47.9 in March 2023 on the back of reduced demand and manufacturers’ tendency to maintain lower inventory levels.

Finally, Germany's manufacturing PMI was strong in March 2022 with a reading of 56.9, but it slightly dipped to 54.6 in April. However, the index has continued to fall and hit its lowest level of 44.7 in March 2023.

The PMI is a crucial instrument to assess the health of the manufacturing sector, and India's manufacturing PMI has been steadily rising in recent months. China's manufacturing PMI also expanded after the lifting of lockdown restrictions, while the US and UK saw declines. Germany's PMI has continued its worrying decline, indicating a sharp slowdown in the country's manufacturing sector. Overall, PMI readings for these countries are a useful recession signal and offer valuable insights into the condition of their economies.

It remains to be seen how these trends will unfold over the coming months. For now, India is in a relatively strong position.

 
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The Baseline
06 Apr 2023
Five Interesting Stocks Today
  1. Mahindra & Mahindra Financial Services: This NBFC has risen 5.7% over the past week after posting strong numbers in its business update for Q4FY23 and FY23. This helped the company show up in a screener of stocks with high volume and high gain.

In Q4FY23, the company’s loan disbursements rose by 50% YoY to Rs 13,750 crore, while FY23 overall saw a jump of 80% YoY Trendlyne’s forecaster estimates the company’s revenue and EPS to grow by 9.6% and 46.5% respectively in FY23.

The firm’s continued momentum in loan disbursements, improving asset quality and strong collection efficiency are the key drivers for its growth. According to Motilal Oswal, various strategic initiatives like changes in top-level management and improving loan recollection processes have the potential to yield a strong operational performance if executed well. The brokerage maintains its ‘Buy’ rating on the stock, with a target price of Rs 285 per share, indicating a potential upside of 22.8%. It also estimates the lender’s assets under management (AUM) to grow at a CAGR of 18% over FY23-25.

Recently, the company reached a 52-week high of Rs 272 on February 10, putting it in a screener of stocks with high momentum scores. The stock is currently trading 49.1% higher than its 52-week low of Rs 160.6 per share.

  1. Bajaj Auto: This auto stock's two-wheeler domestic wholesales have risen 42% YoY to 1.5 lakh units in March, while commercial vehicles (CV) saw a surge in domestic wholesales by 74%. However, exports in both segments fell by more than 30%, resulting in a 2% YoY decline in total wholesales (both two-wheeler and CV).
    Recently Bajaj Auto also announced production cuts due to a weak export market, with expectations of a recovery only by Q2FY24. Despite this, the stock has gone up by nearly 12% in the past three months.

According to ICRA, the commercial vehicles segment is likely to see a growth of 7-10% in FY24. The demand in segments like passenger vehicles, commercial vehicles and tractors will remain healthy and intact, which bodes well for Bajaj Auto, despite a decline in exports.

On a positive note, Bajaj Auto is set to enter the electric vehicles segment in both the cargo and passenger vehicle markets. In fact, the company is preparing to launch its three-wheeler electric vehicle in April. With a 76% market share in three-wheelers, Bajaj Auto would compete with Mahindra & Mahindra, which currently leads the market in the three-wheeler electric segment.

In the past week, the stock has risen 5.6% and is currently trading near its 52-week high. It shows up in a screener of stocks with high momentum scores. According to Trendlyne’s Forecaster, the consensus for the stock from 23 analysts is ‘Buy’. The company is set to announce its Q4FY23 results on April 25.

  1. Maruti Suzuki: This automobile manufacturer rose 2.5% on Monday despite reporting a marginal decline of 0.2% YoY in its total domestic sales to 1.7 lakh units in March. The rise in share price is possibly due to the company hiking prices for all its models for a second time in 2023, to partially offset the impact of inflationary pressures and regulatory requirements.

Although Maruti Suzuki saw a fall in domestic sales, its exports increased 14% YoY in March. The company has shipped over 25 lakh units overseas since it started exports. The automaker exports to nearly 100 countries, including Africa, the Middle East, Latin America and Asia. However, the company’s management has pointed out that a shortage of electronic components affected production volumes in FY23, and expects the problem to persist in FY24. Despite this, the auto giant reported its highest-ever wholesales of 19.7 lakh units, up by 19% YoY, in FY23.

Analysts have a positive outlook on the company as they believe it is focused on expanding its presence in the SUV segment to drive revenue growth. According to Trendlyne’s Forecaster, the consensus recommendation for the stock from 41 analysts is ‘Buy’. The company features in a screener of stocks where brokers have upgraded their recommendations or target prices in the past three months.

  1. Godrej Consumer Products: This FMCG company released its Q4FY23 business update on Wednesday, forecasting healthy double-digit volume growth in its India business. The firm’s volume growth in Q3 in comparison, was only 3% YoY. Domestic business contributes over 55% of the company’s consolidated revenue. The management expects broad-based growth in Q4, led by the home care and personal care segments.

The company introduced value products at lower price points across its product portfolios like household insecticides and personal care, amid a sluggish environment in the FMCG sector due to muted rural demand.  This has aided higher market penetration in India, improving the company's volumes. According to reports, the company has gained market share in the hair colour segment after introducing products starting from Rs 15.

The stock has grown 5.8% over the past 90 days till Wednesday, outperforming the FMCG sector by 8.3 percentage points. The stock shows up in a screener for companies with improving cash flows and high durability scores.

Motilal Oswal expects the company to benefit significantly from the recent decline in palm oil prices, which could result in improved profitability in the coming quarters. The management also echoes this sentiment, as it believes that the decrease in input costs will allow it to raise marketing investments in the near to midterm.

  1. HDFC Bank: This bank rose 2.6% in trade on Wednesday following the release of its business update on Monday after market hours. The company reported that its advances grew 17% YoY to 16 lakh crore in Q4FY23. The growth was led by retail, commercial & rural loans, which rose by more than 20%. Corporate and other wholesale loans grew by 12.5% in Q4.

The bank’s deposits also rose 21% YoY to Rs 18.8 lakh crore, led by a 23.5% increase in retail deposits. This is higher than the industry growth rate of 10%, according to reports. Analysts suggest that HDFC Bank’s market share in deposits at the end of FY23 would stand at 20%, up from 19% as of 9MFY23, which is positive news for the bank.

The bank also purchased loans worth Rs 9,340 crore in Q4, through a direct assignment route under the home loan arrangement with HDFC. This is a lower-cost route of obtaining funds for the bank. It remains to be seen how the bank’s low cost of funds and high advances growth will impact its margins.

The stock is up 5.5% in the past week, ahead of its Q4FY23 results on April 15. It has also outperformed its sector by 9.8% in the past 90 days. However, Trendlyne’s Forecaster estimates a 0.9% fall in net profit estimates in Q4FY23. 

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
06 Apr 2023
Screener of the week: Finance sector stocks with high momentum and positive forecaster estimates for Q4FY23
By Abdullah Shah

While brokerages are getting squeezed, the overall finance sector is a different story - with multiple stocks analysts are bullish on.

This screener shows stocks from the banking and finance sector with momentum scores greater than 50, and a strong Q4FY23 result outlook - where estimates for quarterly YoY revenue growth are higher than 10%, and estimates for quarterly net profit growth are more than the previous quarter.

The screener is dominated by stocks from the banking industry with 12 bank stocks. Major stocks in the screener are Shriram Finance, Karur Vysya Bank, Federal Bank, IDFC First Bank, ICICI Bank and Bank of Baroda.

Shriram Finance has the highest YoY revenue growth estimates of 71.3% for Q4FY23, according to Trendlyne’s forecaster. The NBFC has a Trendlyne momentum score of 52.7. Over the past quarter, the lender has fallen 4.7%, but has outperformed its industry by 320 bps.

ICICI Bank has a revenue growth estimate of 29.5% YoY from forecaster for Q4FY23. The bank has a Trendlyne momentum score of 53.4 and has outperformed the banking industry by 5.8 percentage points. 

You can find more screeners here.