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Trendlyne Marketwatch
Trendlyne Marketwatch
13 Jan 2023
Market closes higher, Prabhudas Lilladher maintains ‘Buy’ on Bank of Baroda

Trendlyne Analysis

Nifty 50 recovered over 180 points from the day's low and closed in the green on a volatile day of trade. CPI data released post-market hours on Thursday indicated inflation in India fell to a year low of 5.72%. The Index of Industrial Production or IIP rose 7.1% in November after contracting 4.2% in October. European Indices traded in the green as UK's GDP data showed a better-than-expected growth of 0.1% in November from October.

Major Asian Indices closed in the green, except for Japan’s Nikkei, which closed 1.25% lower than Thursday’s level. The S&P 500 rose 0.34% while the Dow Jones closed 0.64% higher at the closing bell on Thursday. US CPI inflation numbers released on Thursday indicated CPI inflation fell 6.5% YoY in December from 7.1% seen in November 2022. Core inflation, which strips out food and energy slowed in line with forecasts amid stubborn service inflation. Crude oil prices traded lower but are set to close the week 6% higher. The gains were in line with the improvement in China’s demand outlook and less aggressive interest rate hikes in the US.

Nifty Smallcap 100 closed in the green and the Nifty Midcap 100 closed flat. Nifty Metal and Nifty PSU Bank closed higher than Thursday’s levels. Nifty IT closed in the green taking cues from Nasdaq 100 which closed higher on Thursday.

Nifty 50 closed at 17,956.60 (98.4, 0.6%), BSE Sensexclosed at 60,261.18 (303.2, 0.5%) while the broader Nifty 500closed at 15,346.10 (66.5, 0.4%)

Market breadth is in the green. Of the 1,950 stocks traded today, 1,057 showed gains, and 823 showed losses.

  • Tata Consultancy ServicesbeatsInfosysin QoQ revenue growth, quarterly price change, annual RoE and broker average rating. But lags in YoY revenue and profit growth, QoQ profit growth, PE ratio, MF holdings and average broker target upside percentage.

  • Bloomberg’s consensus estimates suggest that HDFC Bank’s net profit might grow 14% YoY and net interest income by 16% YoY in Q3FY23. Nomura expects its net interest margin to increase QoQ in Q3 as lending rates hike. The bank shows up in a screener with decreasing provisions in the last quarter.

  • Anish Shah, Managing Director and CEO of Mahindra & Mahindra (M&M), says that the company is on track to achieve an RoA of 18% soon. He adds that M&M will drive growth across all businesses.

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

  • Pankaj Tibrewal, Senior Equity Fund Manager at Kotak Mutual Fund, expects Indian markets to give muted returns in 2023. He also expects large-cap companies to perform better during the year.

  • Mahindra CIE Automotive touches an all-time high of Rs 386.7 in a volatile market. The stock is trading below its historic levels and is in the PE Buy Zone. It shows up in a screener of stocks gaining more than 20% in one month.

  • Prabhudas Lilladher maintains its ‘Buy’ rating on Bank of Baroda with a target price of Rs 220, indicating an upside of 20%. The brokerage believes the bank will benefit from the rising demand for corporate debt, given its sizable market share and improving asset quality. The brokerage expects the company’s net profit to grow at a CAGR of 28.9% over FY22-25.

  • Larsen & Toubro signs an MoU with Norway-based H2Carrier to develop floating green ammonia projects for industrial-scale applications. H2Carrier plans to build the P2XFloater hull at yards in Asia, and L&T will design and fabricate the topside process and utility modules to produce green hydrogen & green ammonia, including electrolysers, nitrogen generation plant, and ammonia synthesis unit.

  • Kolte-Patil Developers is rising as its pre-sales value grows 28% YoY to Rs 716 crore in Q3FY23 and collections by 3% YoY to Rs 435 crore. Rahul Talele, Chief Executive Officer of the company, says, "Our performance in Q3 was marked by a significant contribution from new launches and continued momentum of customer traction in our existing, sustenance phase projects."

  • Foreign institutional investors pull out Rs 7,849 crore from the equity market over the past week, according to Trendlyne's FII dashboard. However, index options receive the highest inflow of Rs 27,857 crore from foreign investors.

  • Metal stocks like Jindal Stainless, Tata Steel, MOIL, Vedanta and National Aluminium Co are rising in trade. All constituents of the broader sectoral index Nifty Metal are also trading in the green.

  • India’s Index of Industrial Production (IIP) grows 7.1% in November 2022, after a contraction of 4.2% in October, and manufacturing sector output increases 6.1%.

  • Asian Paints incorporates a subsidiary, Asian Paints (Polymers), to set up a manufacturing facility for vinyl acetate-ethylene emulsion (VAE) and vinyl acetate monomer (VAM) in India. The company authorises a share capital of Rs 100 crore for the subsidiary.

  • Rail Vikas Nigam rises as it bags an order worth Rs 38.9 crore. The order pertains to the provisioning of automatic block signalling in the Taduku-Renigunta section and replacing interlocking systems at certain railway stations in the Chennai Division.

  • India’s CPI inflation eases to 5.72% in December 2022, compared to 5.88% in November. This is because of a decline in food prices on the back of easing food inflation (4.19%).

  • Ashish Kacholia sells a 1.3% stake in Hindware Home Innovation in Q3FY23 and now holds 1.3% in the company. Sunil Singhania cuts a 0.1% stake in the company and takes it to 4.9%.

  • Radhakishan Damani sells a 1.6% stake in VST Industries in Q3FY23, now holds a 30.7% in the company.

  • V-Guard Industries rises as it completes the acquisition of Sunflame Enterprises. It buys 100% stake in the company for Rs 680.3 crore. The stock gains 42% from its 52-week low.

  • HCL Technologies’ Q3FY23 net profit rises 17.4% QoQ to Rs 4,096 crore and revenue increases by 8.2% QoQ. EBIT margin expands by 170 bps QoQ to 19.6% as employee costs and sub-contractor costs as a percentage of revenue fall. The stock shows up in a screener for companies with net profits rising sequentially for the past two quarters.

  • Larsen & Toubro’s (L&T) subsidiary L&T Technology Services (LTTS) announces the agreement to acquire L&T’s Smart World and Communication Business dealing with projects of smart cities, utilities and digital infrastructure. The cost of acquisition is Rs 800 crore and the transaction is likely to be completed by March.

  • Infosys’ Q3FY23 net profit rises 9.4% QoQ to Rs 6,586 crore as attrition rates and sub-contractor costs fall. Revenue grows 4.9% QoQ, driven by broad-based growth across all business verticals. However, its EBIT margin remains flat QoQ at 21.5%. The stock shows up in a screener for companies with revenue increasing sequentially for the past eight quarters.

Riding High:

Largecap and midcap gainers today include CG Power and Industrial Solutions Ltd. (308.55, 4.56%), Cholamandalam Investment & Finance Company Ltd. (711.70, 3.81%) and Indian Railway Finance Corporation Ltd. (33.95, 3.66%).

Downers:

Largecap and midcap losers today include L&T Technology Services Ltd. (3,448.75, -5.33%), Varun Beverages Ltd. (1,135.75, -4.33%) and Gujarat Gas Ltd. (450.30, -3.53%).

Volume Rockets

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

Top high volume gainers on BSE included Rallis India Ltd. (257.65, 6.69%), Multi Commodity Exchange of India Ltd. (1,604.70, 6.37%) and Mahindra CIE Automotive Ltd. (377.25, 5.72%).

Top high volume losers on BSE were L&T Technology Services Ltd. (3,448.75, -5.33%), Gujarat Gas Ltd. (450.30, -3.53%) and Bata India Ltd. (1,578.90, -3.53%).

ITI Ltd. (109.35, 5.50%) was trading at 53.9 times of weekly average. Sundaram Clayton Ltd. (4,987.80, -0.78%) and KIOCL Ltd. (221.60, 4.80%) were trading with volumes 14.3 and 8.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

5 stocks overperformed with 52-week highs, while 6 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Jindal Steel & Power Ltd. (610.00, 1.22%), PNB Housing Finance Ltd. (580.25, -1.29%) and Mahindra CIE Automotive Ltd. (377.25, 5.72%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,698.90, 0.31%) and Bata India Ltd. (1,578.90, -3.53%).

10 stocks climbed above their 200 day SMA including ITI Ltd. (109.35, 5.50%) and Eicher Motors Ltd. (3,162.05, 1.89%). 6 stocks slipped below their 200 SMA including Titan Company Ltd. (2,417.20, -1.20%) and Hitachi Energy India Ltd. (3,269.05, -1.08%).

 
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The Baseline
13 Jan 2023
Chart of the Week: FPIs exited Indian equities in the first half of 2022, but end on a high note
By Abdullah Shah

The Indian equity market saw an exodus of foreign portfolio investment (FPI) for seven of the 12 months in 2022. The first half of the year was particularly painful as global inflation rose with the Russia-Ukraine conflict, causing markets to fall worldwide. A rising dollar added to the pain for global markets, prompting investor wariness around equities.

FPIs withdrew Rs 33,303 crore from the equity market in January, while mutual funds invested Rs 16,488 crore amid fears of interest rate hikes by the US Fed. The conflict between Russia and Ukraine resulted in foreign investors withdrawing Rs 35,592 crore more from the market in February. 

March saw the rupee fall by 1% against the US dollar, crossing the Rs 77 mark. The first of many interest rate hikes by the US Fed triggered Rs 41,123 crore of share sales by foreign investors in the Indian market. The rate hike attracted investors to the US bond market, a less risky option compared to equities. April was comparatively better for the Indian market as FPI withdrawals eased to Rs 17,144 crore. 

FPIs outflow was at Rs 50,203 crore in June, the most in 2022, as a result of another interest rate hike (75 bps) by the US Fed. July and August brought relief – Rs 4,898 crore was invested in July amid optimism of the US Fed easing interest rates and India's consumer price index (CPI) falling more than expected to 7.01% from 7.04%. This was followed by an investment of Rs 51,204 crore more in August. 

Indian markets ended the year on a high note as FPIs invested Rs 11,119 crore in December. FMCG, consumer services and realty sectors saw the highest investments of Rs 4,019 crore, Rs 3,650 crore and Rs 3,248 crore respectively. FPIs are currently picking domestic-facing sectors like FMCG and banks, which are more immune to global upheaval. They withdrew Rs 2,784 crore and Rs 3,579 crore from oil & gas and information technology respectively.  

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Jan 2023
Market closes lower, Cyient's Q3 net profit surges 97.2% QoQ

Trendlyne Analysis

Indian indices recovered from their day's low but still closed in the red on a volatile day of trade. European indices traded higher than Wednesday’s levels. Major Asian Indices closed flat except for the Australian index, ASX ALL Ordinaries, which closed in the green. US indices closed sharply higher on Wednesday. The S&P 500 rose 1.28% while the Dow Jones closed 0.80% higher at the closing bell on Wednesday. Wall Street is expecting an easing of US CPI inflation, which is scheduled to be released later today. The tech-heavy NASDAQ 100 rose 1.76%. Crude oil prices rise as China’s demand outlook improves and concerns rise over the impact of sanctions on Russian supply.

Nifty Smallcap 100 closed flat in a volatile trading session and Nifty Midcap 100 closed in the red. Nifty Autoand Nifty Realtyclosed in the green. Nifty IT closed higher, taking cues from the Nasdaq 100 which closed higher on Wednesday. All other major sectoral indices closed lower than Wednesday’s levels.

Nifty 50closed at 17,858.20 (-37.5, -0.2%), BSE Sensexclosed at 59,958.03 (-187.5, -0.3%) while the broader Nifty 500closed at 15,279.60 (-21.8, -0.1%)

Market breadth is in the red. Of the 1,953 stocks traded today, 776 were on the uptrend, and 1,105 went down.

  • Relative strength index (RSI) indicates that stocks like Max Financial Services, Symphony, Indian Oil Corpand Zydus Lifesciencesare in the overbought zone.

  • Cyient rises as its Q3FY23 net profit surges 97.2% QoQ to Rs 156 crore. Its employee costs as a percentage of revenue also decline. Revenue grows 15.9% QoQ on the back of services and design-led manufacturing segments rising 14.3% QoQ and 25.8% QoQ respectively.

  • PB Fintech's subsidiary, PB Financial Account Aggregators, receives in-principle approval from the Reserve Bank of India to set up an account aggregator business.

  • Rail Vikas Nigam rises nearly 5% in trade today. The stock ranks high on Trendlyne’s checklist, scoring 78.3%. It also features in a screener for companies with high TTM EPS growth.

  • Credit rating agency Fitch Ratings says that Tata Consultancy Services' (TCS) revenue growth may decline in FY24 due to the global economic slowdown.

  • Navin Fluorine is one of the high-volume, high-gainer stocks in a volatile market today. The stock ranks medium on the Trendlyne Checklist score. It shows up in a screener of stocks with high promoter pledges.

  • Zydus Lifesciences' subsidiary, Zydus Worldwide DMCC, gets final approval from the US FDA to market brexpiprazole tablets, an antipsychotic drug used as an antidepressant for the treatment of major depressive disorder (MDD) in adults. It will be manufactured in the company's formulation facility at Ahmedabad SEZ. According to IQVIA, the drug's annual sales in the US as of September 2022 have been $1,548 million.

  • G.M Breweries’ Q3FY23 net profit rises 31% YoY to Rs 25.9 crore and revenue increases 18.5% YoY to Rs 609.2 crore. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • One97 Communications (Paytm) falls over 6% in trade as 2 crore shares (3.1% equity) amounting to Rs 1,126 crore change hands, according to reports.

  • TVS Motor plans to invest in two- and three-wheeler expansion in electric and internal combustion engine (ICE) vehicles in Madhya Pradesh. The company estimates an investment of over Rs 1,000 crore for this and expects to provide over 2,000 jobs.

  • Oil & Gas stocks like Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, Reliance Industries and Petronet LNG are falling in trade. All constituents of the broader sectoral index BSE Oil & Gas are also trading in the red.

  • ICICI Securities maintains its ‘Buy’ rating on Mahindra CIE Automotive and raises its target price to Rs 466 from Rs 374, implying an upside of 30.2%. The brokerage cites robust demand and an improving cash flow outlook for revising its target price. It expects the company’s revenue to grow at a CAGR of 11.7% over CY22-24.

  • Crude oil prices rise as the dollar index falls and China’s demand outlook improves. Commodities like copper, iron ore and gold trade near their 7-8 month high. Sugar prices hit a six-year high.

  • Rekha Jhunjhunwala, Rakesh Jhunjhunwala's wife, sells a 2.87% stake in Bilcare in a bulk deal on Wednesday, in addition to a 3.37% stake sold on Tuesday.

  • Porinju Veliyath adds Max India to the portfolio in Q3FY23, buys a 1.1% stake in the company.

  • FSN E-Commerce Ventures (Nykaa) is falling in trade as 1.4 crore shares (0.5% equity) amounting to Rs 217 crore change hands, according to reports.

  • Sah Polymers’ shares list at a premium of 30.8% to the issue price of Rs 65 on its debut on the bourses. The Rs 66 crore IPO is subscribed for 17.46X the total shares on offer.

  • Sunil Singhania sells a 0.5% stake in The Anup Engineering in Q3FY23, now holds a 4.2% stake in the company.

  • DB Realty rises as the company and its subsidiary Goregaon Hotel announce the settlement of past loans with Reliance Commercial Finance by March 2025. DB Realty and Goregaon Hotel will pay Rs 185.6 crore and Rs 214.4 crore respectively. DB Realty shows up in a screener of stocks with improving cash flow and durability.

  • Railtel Corp of India bags two orders from NMDC and the Government of Puducherry worth Rs 122.6 crore and Rs 170.1 crore respectively. The orders pertain to the implementation of ERP at NMDC and design and development of the Integrated Command Control Centre for Puducherry Smart City.

  • Hindustan Unilever (HUL) acquires a 51% stake in Zywie Ventures for a total consideration of Rs 264.28 crore. Zywie Ventures is now a subsidiary of HUL. The stock is trading below its second support or S2 level.

Riding High:

Largecap and midcap gainers today include Cholamandalam Investment & Finance Company Ltd. (685.60, 2.95%), General Insurance Corporation of India (187.85, 2.82%) and Cummins India Ltd. (1,480.80, 2.18%).

Downers:

Largecap and midcap losers today include One97 Communications Ltd. (543.20, -6.21%), Gland Pharma Ltd. (1,498.40, -5.89%) and FSN E-Commerce Ventures Ltd. (149.80, -3.42%).

Volume Rockets

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

Top high volume gainers on BSE included Navin Fluorine International Ltd. (4,123.65, 5.56%), Restaurant Brands Asia Ltd. (116.25, 5.44%) and Rail Vikas Nigam Ltd. (75.80, 4.99%).

Top high volume losers on BSE were One97 Communications Ltd. (543.20, -6.21%), Gland Pharma Ltd. (1,498.40, -5.89%) and FSN E-Commerce Ventures Ltd. (149.80, -3.42%).

Bayer Cropscience Ltd. (4,659.95, -0.52%) was trading at 17.9 times of weekly average. GlaxoSmithKline Pharmaceuticals Ltd. (1,315.05, 1.11%) and IIFL Wealth Management Ltd. (1,799.50, 2.34%) were trading with volumes 14.0 and 12.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

4 stocks overperformed with 52-week highs, while 6 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - PNB Housing Finance Ltd. (587.85, 3.56%), Mahindra CIE Automotive Ltd. (356.85, 1.61%) and CG Power and Industrial Solutions Ltd. (295.10, -1.37%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,669.55, -0.60%) and Biocon Ltd. (250.30, -0.50%).

8 stocks climbed above their 200 day SMA including Restaurant Brands Asia Ltd. (116.25, 5.44%) and Inox Leisure Ltd. (518.85, 3.29%). 6 stocks slipped below their 200 SMA including National Aluminium Company Ltd. (82.50, -2.60%) and Kajaria Ceramics Ltd. (1,110.25, -2.47%).

 
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The Baseline
12 Jan 2023
Screener of the week: Bullish outlook stocks, with prices rising ahead of results and high analyst estimates for Q3
By Abdullah Shah

As companies gear up for the result season, we take a look at a screener for stocks that investors and analysts are bullish on. These stocks are rising ahead of their results, with analysts estimating revenue growth for Q3FY23. It lists 21 stocks from the Nifty 500 and four stocks from the Nifty 50 index with companies from the IT consulting & software industry dominating. 

Major stocks in the screener are L&T Finance Holdings, Petronet LNG, ICICI Lombard General Insurance, Syngene International, HCL Technologies, Tata Motors and Havells India.

L&T Finance Holdings has the highest revenue growth estimate of 127.5% YoY for Q3FY23. The holding companyhas risen 1.5% over the past week ahead of its results on Friday. According to KR Choksey, non-banking financial companies are expected to witness strong growth across all segments, thanks to high demand and a customer-centric approach. 

Analysts have estimated Petronet LNG’s revenue to grow by 33% YoY in Q3FY23. The stock rose 0.9% over the past week, ahead of its results on January 20. ICICI Securities believes that the oil marketing & distribution company’s earnings have bottomed out, and that stronger volumes and lower LNG prices will drive earnings growth. 

Tata Motors has a revenue growth estimate of 13.6% YoY in Q3FY23. The stock has risen 4.5% over the past week, ahead of its results on January 25. According to the commercial vehicles manufacturer’s business update for the quarter, it has witnessed a 13% YoY rise in its global wholesales, as the passenger vehicles segment and Jaguar wholesales improved by 23% YoY and 15% YoY respectively.

You can find more screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Jan 2023
Market closes flat, ICICI Securities keeps ‘Buy’ rating on Syrma SGS Technology

Trendlyne Analysis

Indian indices closed flat after gyrating between losses and gains on a volatile day of trade. European stocks traded higher than Tuesday's levels. The World Bank cuts 2023 growth forecasts and expects global GDP growth of 1.7% in 2023, the slowest pace (Barring 2009 and 2020) in nearly three decades. Most major Asian indices trade in the green, in line with the US indices, which closed higher on Tuesday.

US stocks rose as investors looked ahead to the US CPI inflation data, scheduled to be released on Thursday. The tech-heavy NASDAQ 100 rose 0.9% while the Dow Jones closed 0.6% higher. Crude oil prices traded flat as inflation data release looms and traders will look for hints from the data and the US Fed commentary on Thursday.

Nifty Smallcap 100 closed in the flat, following the benchmark index. Nifty Energy and Nifty FMCG closed lower than Tuesday’s levels. Nifty IT closed in the green, taking cues from the Nasdaq 100, which closed higher on Tuesday.

Nifty 50closed at 17,895.70 (-18.5, -0.1%), BSE Sensexclosed at 60,105.50 (-10.0, 0.0%) while the broader Nifty 500closed at 15,301.35 (-23.9, -0.2%)

Market breadth is balanced. Of the 1,946 stocks traded today, 971 were on the uptrend, and 908 went down.

  • Max Financial Servicessees a short buildup in its January 25 future series as its open interest rises 15.7% with a put-call ratio of 0.62.

  • Galaxy Surfactants hits its 52-week low of Rs 2,350. The stock falls for three consecutive sessions.

  • Advertising & Media, Fertilizers and Storage Media & Peripherals industries rise more than 24% over the past month.

  • Tata Investment Corp rises over 4.5% in trade today. The stock ranks high on Trendlyne’s checklist, scoring 72.7%. It also features in a screener of companies with strong momentum.

  • ICICI Securities maintains its ‘Buy’ rating on Syrma SGS Technology with a target price of Rs 350, indicating an upside of 29%. The brokerage expects the company to gain market share and improve margins in the coming quarters. It believes correction in input costs and benefits from the PLI scheme will expand margins. The brokerage estimates the firm’s revenue to grow at a CAGR of 33.3% over FY22-25.

  • Oil And Natural Gas Corp, Coal India and Tata Consumer Products trade below their second support or S2 level as the market trades flat.

  • Toshihiro Suzuki, President of Suzuki Motor Corp, says India could be a leader in manufacturing automobiles. He adds that the delay in launching SUVs caused Maruti's market share to fall.

  • Power Grid Corp trades flat in a volatile market. It ranks medium on the Trendlyne Checklist score. According to reports, HDFC Securities expects the company’s Q3FY23 net profit to rise 10.5% YoY, with net sales increasing by 7.5%. It shows up in a screener for stocks with increasing revenue for the past four quarters.

  • World Bank lowers its forecast for India’s GDP growth in FY24 to 6.6% from 6.9% in FY23 amid a slowdown in the global economy affecting exports and investments.

  • Rail Vikas Nigam rises as it receives an order worth Rs 1,134.1 crore for the construction of a viaduct and nine elevated metro stations in Chennai.

  • US FDA issues Form 483 to Piramal Pharma with six observations after conducting a pre-approval inspection (PAI) and goods manufacturing practices (GMP) inspection at the Lexington facility in the USA. The stock is trading near its 52-week low.

  • IT stocks like MphasiS, L&T Technology Services, Persistent Systems and Tata Consultancy Services are rising in trade. The broader sectoral index Nifty IT is also trading in the green.

  • JP Morgan downgrades its rating on Bharti Airtel to ‘Underweight’ and maintains its ‘Underweight’ rating on Vodafone Idea. The brokerage expects hesitance from companies toward tariff hikes, which may delay their growth.

  • Tata Motors, Cyient and IIFL Wealth Management see a positive shift in their share prices ahead of Q3FY23 results in January.

  • Sun Pharmaceuticals is rising after announcing the release of Palbociclib, an anti-cancer drug, for the Indian markets. The drug is designed for patients with advanced breast cancer. The stock is trading near its 52-week high.

  • Tata Motors rises as it completes the acquisition of Ford’s Sanand manufacturing plant. Tata Motors’ subsidiary Tata Passenger Electric Mobility announced the acquisition in August 2022 for Rs 725.7 crore. It shows up in a screener of stocks with low PE (PE<=10).

  • Jefferies downgrades its rating on pharma companies like Biocon, Laurus Labs and Cipla to ‘Hold’ from ‘Buy’. The brokerage is sceptical if outsourcing as an opportunity will continue in India.

  • Rakesh Jhunjhunwala's portfolio buys a 0.8% stake in Geojit Financial Services in Q3FY23, now holds 8.4% stake in the company.

  • Ashish Kacholia buys a 1.3% stake in Agarwal Industrial Corp in Q3FY23, now holds a 3.8% stake in the company.

  • PC Jeweller falls even as it reports a 38% YoY increase in domestic turnover to Rs 829.1 crore in Q3FY23. The company shows up in a screener of stocks with declining RoA for the past two years.

  • Adani Wilmarsees volume growth in the high teens YoY and value in the low-single digits YoY in Q3FY23. Its food & FMCG business drives volume growth on the back of increasing penetration and a widespread distribution network. The company’s edible oil segment makes market share gains despite volatile prices.

Riding High:

Largecap and midcap gainers today include Tata Communications Ltd. (1,417.25, 4.20%), Oil India Ltd. (222.85, 4.16%) and Max Financial Services Ltd. (798.55, 3.68%).

Downers:

Largecap and midcap losers today include Varun Beverages Ltd. (1,225.05, -4.84%), Sona BLW Precision Forgings Ltd. (427.20, -4.53%) and Bharti Airtel Ltd. (765.55, -3.44%).

Movers and Shakers

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

Top high volume gainers on BSE included Greaves Cotton Ltd. (142.80, 7.53%), Edelweiss Financial Services Ltd. (67.70, 5.21%) and Tata Investment Corporation Ltd. (2,287.85, 4.93%).

Top high volume losers on BSE were Bharti Airtel Ltd. (765.55, -3.44%), Akzo Nobel India Ltd. (2,125.75, -1.21%) and Sun TV Network Ltd. (469.00, -0.98%).

eClerx Services Ltd. (1,399.00, 4.54%) was trading at 7.9 times of weekly average. Mangalore Refinery And Petrochemicals Ltd. (58.85, 4.07%) and Sterlite Technologies Ltd. (170.35, 1.49%) were trading with volumes 7.7 and 6.9 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 6 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Zydus Lifesciences Ltd. (452.35, -1.09%), Jindal Steel & Power Ltd. (604.40, 0.90%) and CG Power and Industrial Solutions Ltd. (299.20, 3.24%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,715.75, 0.24%) and Biocon Ltd. (251.55, -2.46%).

16 stocks climbed above their 200 day SMA including Infibeam Avenues Ltd. (16.90, 4.00%) and Max Financial Services Ltd. (798.55, 3.68%). 12 stocks slipped below their 200 SMA including Vinati Organics Ltd. (2,002.10, -2.86%) and Pidilite Industries Ltd. (2,479.50, -1.97%).

 
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The Baseline
10 Jan 2023
Five analyst picks this week
By Abhiraj Panchal

  1. InterGlobe Aviation: ICICI Securities maintains its ‘Buy’ rating on this airlines stock with a target price of Rs 2,360. This indicates an upside of 14.4%. Analysts Ansuman Deb and Ravin Kurwa expect the company to post a profit in Q3FY23 on the back of rising daily passengers and a fall in aviation turbine fuel (ATF) prices. They expect an 18% QoQ growth in the number of passengers carried (PAX) by Indian airlines in Q3. “Accordingly, IndiGo could report total PAX of 22.5mn in Q3FY23, up 14% QoQ, based on market share assumption of 56% in December 2022,” they added.

The analysts believe the company’s domestic passenger load factor (PLF) will maintain traction in Q3, in line with rising demand. They estimate its PLF to come in at 85% in Q3FY23. ATF prices are also likely to fall 8% QoQ, which will reduce margin pressure on the company. Deb and Kurwa expect Indigo’s revenue to grow at a CAGR of 59.1% over FY22-24. 

  1. Prestige Estates Projects: Motilal Oswal maintains its ‘Buy’ rating on this realty company with a target price of Rs 675. This indicates an upside of 45.2%. Pritesh Sheth and Sourabh Gilda expect “CY23 to be a defining year for the company as it looks to grow its pre-sales on a strong base, provide growth visibility”, and allay concerns about high debt levels. The analysts believe the firm’s launch pipeline and robust pre-sales bookings will improve cash flow generation. Given stronger cash flows, they expect a large part of the firm’s capex to be funded through internal accruals, thus capping net debt. 

Sheth and Gilda anticipate the firm’s pre-sales to rise further in FY24 on the back of higher-than-expected launches in the next 12 months. They believe its commercial portfolio will generate a rental income of Rs 3,200 crore in the next five-six years. The analysts estimate the company’s revenue to grow at a CAGR of 11% over FY22-25.     

  1. UNO Minda: Axis Securities recommends a ‘Buy’ call on this auto components manufacturer with a target price of Rs 571. This indicates an upside of 6.7%. Analyst Neeraj Chadawar says, “The company is well-diversified with an ICE-EV agnostic product portfolio and is constantly increasing kit value, leading to higher wallet share with existing and potential clients.” According to him, the company’s divisions are operating at optimum capacity and it has announced a critical capex growth pipeline to meet incremental demand. 

Chadawar says that announcements made in Q2FY23—expansion of lighting (capex of Rs 400 crore) and alloy wheels (Rs 190 crore) capacity, total capex pipeline of Rs 1,664 crore, and joint venture with Buehler and Tachi-S—will further boost the company’s long-term growth drivers. With strong growth drivers and a strong order book, the analyst expects revenue and profit CAGR of 22% and 42% respectively over FY22-25.

  1. Can Fin Homes: ICICI Direct initiates coverage with a ‘Buy’ call on this housing finance company and a target price of Rs 625. This indicates an upside of 14%. Analysts Kajal Gandhi, Vishal Narnolia and Pravin Mule say,  “Can Fin Homes continues to focus on tier-2 and tier-3 cities where there is less competition from banks and it can benefit from pricing power with an increased focus on branch expansion.” With the government’s focus on affordable housing, the analysts think the company is poised to benefit in terms of an improved growth trajectory. They expect the loan book to grow at 17% CAGR in FY22-25. 

Gandhi, Narnolia and Mule say, “Can Fin Homes has been a best-in-class housing finance player with a robust business model and underwriting practices.” The analysts are optimistic about the housing finance provider as it will have consistent growth with a focus on efficient operations, coupled with relatively lower cost and strong underwriting, which will in turn, benefit earnings and return ratios.

  1. KPIT Technologies: Ashika Research gives a ‘Buy’ call to this IT consulting and software company with a target price of Rs 800, indicating an upside of 11.5%. According to the analysts, “KPIT stands to benefit from the recent acquisition of four Technica Group Companies, as it will help it  create a unique one-stop shop for the automotive industry in its transformation towards Software Defined Vehicles.” They added that the acquisition will enable KPIT to retain clients, engage much earlier in client development programmes, be part of complex architecture, etc.

According to the analysts, the company is a strong player in a high entry barrier segment as it operates in an area which is extremely complex and disruptive. Therefore, entry into such a segment is extremely difficult for new players. The analysts are positive on the back of soaring deal size, healthy balance sheet status, strategic end-to-end engagement model and strong demand. “All key growth levers in cumulation affirm the continuance of positive earnings growth trajectory,” they concluded.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Jan 2023
Market closes lower, Motilal Oswal maintains ‘Buy’ on APL Apollo Tubes

Trendlyne Analysis

Indian indices closed in the red, with the Nifty 50 falling below the key 18,000 mark. European indices followed the global trend and traded lower than Monday’s levels. Most major Asian indices closed in the red, as the US indices closed mixed on Monday. US stocks gave up their gains during the second half of the trading session after two Fed officials said that the Central bank will likely need to raise interest rates above 5% before pausing and holding for some time. The tech-heavy Nasdaq 100, which was up over 2% fell from the day’s high but still closed 0.6% higher. The Dow Jones closed 0.3% lower while the S&P 500 settled flat. Brent crude oil futures traded flat after rising over 1.5% on Monday as traders look ahead to the US CPI inflation data release later this week.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Bank and Nifty Realty closed lower than Monday’s levels. Nifty IT closed in the red as investors assessed TCS’ Q3FY23 result, which was announced post-market hours on Monday.

Nifty 50closed at 17,914.15 (-187.1, -1.0%), BSE Sensexclosed at 60,115.48 (-631.8, -1.0%) while the broader Nifty 500closed at 15,325.25 (-124.9, -0.8%)

Market breadth is in the red. Of the 1,955 stocks traded today, 673 were in the positive territory and 1,223 were negative.

  • AtulbeatsVinati Organicsin PE ratio, FII & MF holdings, and broker average target upside but lags in annual RoE, 3-year price change, promoter holding and annual RoCE.

  • PSP Projects receives a government project worth Rs 1,344 crore for the construction of a high-rise office building at Surat, Gujarat, for the Surat Municipal Corp.

  • SBI Life Insurance, Havells India and Syngene International see a positive shift in their share prices ahead of Q3FY23 results in January.

  • IT stocks like LTI Mindtree, Tata Consultancy Services and Tech Mahindra are falling in trade. All constituents of the broader Nifty IT index are also falling.

  • Eicher Motors, Shree Cements and Canara Bank trade below their second support or S2 levels as the market trades lower.

  • Bosch rises and nears 52-week high in a weak market. The stock ranks medium on the Trendlyne Checklist score. It shows up in a screener of stocks where FII/FPIs increased their shareholding QoQ.

  • Kansai Nerolac Paints is rising as around 10.1 lakh shares (0.19% equity) amounting to Rs 41.2 crore change hands, according to reports.

  • Glenmark Pharmaceuticals rises as it launches Bumetanide Injection USP, a lower-cost generic version of Bumex injection. Bumex injections have achieved annual sales worth $16.5 million over the 12 months ending November 2022.

  • Lupin rises as the Spanish Ministry of Health approves the reimbursement of NaMuscla (mexiletine), a drug used for the treatment of myotonia in adults with non-dystrophic myotonic disorders.

  • Motilal Oswal maintains its ‘Buy’ rating on APL Apollo Tubes with a target price of Rs 1,400. This indicates an upside of 28.8%. The brokerage believes the company’s rapid capacity expansion and market share leadership amid growing demand will lead to robust sales volumes. It expects the firm’s net profit to grow at a CAGR of 31% over FY22-25.

  • Mutual Funds' net inflow grows 3.3X MoM to Rs 7,280.4 crore in December 2022 from Rs 2,224 crore in November 2022, according to data released by the Association of Mutual Funds in India (AMFI).

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

  • Tata Motors is surging as its Q3FY23 global wholesales rise 13% YoY to 3.2 lakh units. Passenger vehicle global wholesales increase 23% YoY and Jaguar wholesales grow 15% YoY. The company features in a screener of stocks with upcoming results and net profit growth for the previous quarter greater than 10% YoY and QoQ.

  • Foreign brokerage Citi expects weak volumes of Indian automobile companies to offset the expansion of gross margins in Q3FY23.

  • IRB Infrastructure reports a 32% YoY increase in toll collection to Rs 388 crore in December 2022. This is significant growth compared to a 6% MoM rise as December 2021 toll collection was affected by farmers' protests. It shows up in a screener of stocks nearing 52-week high with significant volumes.

  • Sona BLW Precision Forgings rises more than 4.5% in a weak market after it inks a pact to buy a 54% stake in NOVELIC. NOVELIC is a Serbia-based company providing sensors, perception solutions and embedded systems in the automotive industry. The cost of acquisition will be 40.5 million euros.

  • Indian rupee appreciates to 82.27 from the previous close of 82.36 against the US dollar in early trade today.

  • Dolly Khanna trims her stake in Sharda Cropchem to below 1% in Q3FY23, against 1% in Q2FY23.

  • Rakesh Jhunjhunwala's portfolio sells a 0.58% stake in Bilcare for approx Rs 56.8 lakh in a bulk deal on Monday.

  • Star Allied Health Insurance’s total gross premium rises 13% YoY to Rs 8,752 crore as on December 2022. Retail insurance and personal accident segment see growth in gross premium, however, group insurance falls 38% YoY. It shows up in a screener of stocks with increasing revenue for the past four quarters.

  • Tata Consultancy Services’ Q3FY23 net profit rises 4% QoQ to Rs 10,846 crore and revenue grows 5.3% QoQ on the back of robust growth in the markets of North America and the United Kingdom. The firm’s EBIT margin rises 50 bps QoQ to 24.5% as employee costs and attrition fall.

Riding High:

Largecap and midcap gainers today include Tata Motors Ltd. (412.90, 6.02%), Sona BLW Precision Forgings Ltd. (447.45, 5.91%) and Max Financial Services Ltd. (770.20, 4.07%).

Downers:

Largecap and midcap losers today include Adani Enterprises Ltd. (3,646.90, -5.41%), IDBI Bank Ltd. (55.90, -4.93%) and Indian Overseas Bank (29.65, -3.89%).

Volume Rockets

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

Top high volume gainers on BSE included Tata Motors Ltd. (412.90, 6.02%), Sona BLW Precision Forgings Ltd. (447.45, 5.91%) and Tanla Platforms Ltd. (728.60, 3.91%).

Top high volume losers on BSE were Adani Enterprises Ltd. (3,646.90, -5.41%) and Procter & Gamble Hygiene & Healthcare Ltd. (13,923.15, -0.94%).

Tata Motors Limited (DVR) (217.45, 3.75%) was trading at 5.8 times of weekly average. Eureka Forbes Ltd. (490.00, 3.07%) and Kansai Nerolac Paints Ltd. (415.40, 2.99%) were trading with volumes 5.3 and 5.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Zydus Lifesciences Ltd. (457.35, 3.00%), Jindal Steel & Power Ltd. (599.00, -0.43%) and Mahindra CIE Automotive Ltd. (345.90, 0.26%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,690.00, -1.04%) and Vodafone Idea Ltd. (7.25, -2.68%).

14 stocks climbed above their 200 day SMA including Max Financial Services Ltd. (770.20, 4.07%) and Tata Motors Limited (DVR) (217.45, 3.75%). 17 stocks slipped below their 200 SMA including Adani Ports & Special Economic Zone Ltd. (796.40, -2.48%) and GMM Pfaudler Ltd. (1,607.65, -2.15%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Jan 2023
Market closes higher, JSW Steel's Q3FY23 combined crude steel production rises 17% YoY

Trendlyne Analysis

Indian indices closed in the green with the Nifty 50 closing above the key 18,100 mark. Other Asian indices closed higher than Friday’s levels. European Indices traded in the green except for France’s CAC 40, which traded flat. US stocks closed in the green on Friday as US December jobs data and economic activity survey showed signs of slowing inflation, signaling the intended effect of the Fed’s interest rate hike. The tech-heavy Nasdaq 100 rose 2.8% while the Dow Jones closed 2.1% higher. Brent crude oil futures traded sharply higher after falling over 8% last week due to demand concerns amid slowing economic growth.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty FMCG closed higher than Friday’s levels. Nifty IT closed in the green, taking cues from Nasdaq 100, which closed sharply higher on Friday.

Nifty 50closed at 18,101.20 (241.8, 1.4%), BSE Sensexclosed at 60,747.31 (846.9, 1.4%) while the broader Nifty 500closed at 15,450.10 (178.1, 1.2%)

Market breadth is in the green. Of the 1,981 stocks traded today, 1,112 showed gains, and 808 showed losses.

  • Relative strength index(RSI) indicates that stocks like Abbott India, Power Finance Corp, Balkrishna Industriesand RECare in the overbought zone.

  • CG Power and Industrial Solutionstouches a 52-week highof Rs 289.9 today. The stock ranks high on Trendlyne’s checklist, scoring 56.5%, and features in a screenerof companies with FII/FPI or Institutions increasing their shareholding.

  • Bajaj Holdings & Investment, Fine Organic Industries and Coforgeare trading above their third resistance or R3 levelas the market trades higher.

  • Reports suggest that 2.7 crore shares (0.4 % equity) of Power Grid Corp of India amounting to Rs 560 crore change hands.

  • PVR is rising as it opens three new multiplexes with a total of 19 screens. These include the launch of an eight-screen multiplex in Jaipur, a seven-screen multiplex in Bengaluru and a four-screen multiplex in Gurugram.

  • JSW Steel is rising as its Q3FY23 combined crude steel production rises 17% YoY to 6.24 million tonnes, led by its Indian operations’ production volumes rising 20% YoY. The company features in a screener of stocks with strong cash-generating ability from its core business.

  • One97 Communications (Paytm) is rising as its number of loan disbursals and value of loans disbursed grow 137% YoY to 1.05 crore and 357% YoY to Rs 9,958 crore respectively in Q3FY23. Merchant payment volumes also increase 38% YoY. The stock shows up in a screener for companies with revenue increasing sequentially for the past four quarters.

  • PSU Bank stocks like Bank of India, Bank of Baroda, Canara Bank and Indian Bank are rising in trade. The broader sectoral index Nifty PSU Bank is also trading in the green.

  • India's FII flows stood at $252 million in the second half of December 2022. The financial services sector saw the highest inflow of $339 million, while the software and services sector saw the largest outflow.

  • ICICI Securities maintains its ‘Buy’ rating on Macrotech Developers with a target price of Rs 1,304. This indicates an upside of 14.9%. The brokerage believes the company will exceed its FY23 sales booking guidance of Rs 11,500 crore on the back of strong demand and new launches. It also expects a decline in net debt driven by an uptick in collections.

  • Titan's overall sales in Q3FY23 rise 12% YoY with the aid of healthy customer sentiments during the festive season across all of its business segments. The overall sales growth is driven by jewellery, watches, and accessories & apparel segments rising 11%, 14% and 75% YoY respectively. The company adds 111 retail stores for the quarter.

  • Larsen & Toubro is rising as its arm L&T Heavy Engineering announces securing multiple international and domestic orders worth Rs 1,000-2,500 crore in Q3FY23. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Alkem Laboratories is rising as Nomura upgrades its rating on the stock to a ‘Buy’ with a target price of Rs 3,602. The brokerage expects steady domestic growth and improving EBITDA margin to drive the stock higher in the near term.

  • IT stocks like Coforge, Tech Mahindra, Tata Consultancy Services and Persistent Systems are rising in trade. The broader sectoral indices Nifty IT, BSE IT Sector and BSE Tech are also trading in the green.

  • Dolly Khanna trims her stake in Aries Agro to below 1% in Q3FY23, against 1.1% in Q2FY23.

  • Ashish Kacholia buys a 1.2% stake in Yasho Industries in Q3FY23, now holds a 3.8% stake in the company.

  • Hi-Tech Pipes nears a 52-week high after signing an MoU (memorandum of understanding) with the government of Uttar Pradesh to set up a manufacturing plant of steel tubes and pipes. The project cost is worth Rs 510 crore.

  • Indian rupee appreciates to 82.30 from the previous close of 82.72 against the US dollar in early trade today.

  • Ashoka Buildcon is rising after it wins two projects from Dakshinanchal Vidyut Vitran Nigam worth Rs 807.6 crore. The projects pertain to the development, design, and supply of distribution infrastructure for Aligarh-2 and Agra-1 zones. The stock ranks high on the Trendlyne checklist score.

  • Asian Paints' board approves setting up a water-based paint manufacturing facility with a capacity of 4 kilo litres per annum for Rs 2,000 crore. The facility will be built within three years of land acquisition. The stock shows up in a screener for upcoming results with rising delivery volumes.

  • Tata Steel’s crude steel production rises 4% YoY to 5 million tonnes in India but production in Europe falls 12.5% YoY in Q3FY23. Deliveries rise 7% YoY with improvement from all segments like automotive & special products, branded products & retail and industrial products.

  • Nifty 50 was trading at 17,953.00 (93.6, 0.5%), BSE Sensex was trading at 60,147.07 (246.7, 0.4%) while the broader Nifty 500 was trading at 15,361.25 (89.3, 0.6%)

  • Market breadth is highly positive. Of the 1,783 stocks traded today, 1,513 were in the positive territory and 221 were negative.

Riding High:

Largecap and midcap gainers today include CG Power and Industrial Solutions Ltd. (289.45, 7.20%), Max Healthcare Institute Ltd. (451.15, 4.11%) and Persistent Systems Ltd. (3,994.85, 3.71%).

Downers:

Largecap and midcap losers today include Vodafone Idea Ltd. (7.45, -4.49%), Kansai Nerolac Paints Ltd. (403.35, -3.83%) and Endurance Technologies Ltd. (1,362.80, -2.66%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included CG Power and Industrial Solutions Ltd. (289.45, 7.20%), Godfrey Phillips India Ltd. (2,127.65, 6.52%) and KEC International Ltd. (514.30, 5.79%).

Top high volume losers on BSE were J B Chemicals & Pharmaceuticals Ltd. (1,929.10, -1.20%), Westlife Development Ltd. (761.05, -1.06%) and Macrotech Developers Ltd. (1,053.25, -0.46%).

G R Infraprojects Ltd. (1,204.30, 3.67%) was trading at 10.2 times of weekly average. KPIT Technologies Ltd. (715.60, -0.15%) and Gland Pharma Ltd. (1,559.50, -0.36%) were trading with volumes 6.1 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

8 stocks made 52-week highs, while 4 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (22,263.10, -0.29%), IDBI Bank Ltd. (58.80, -0.34%) and Jindal Steel & Power Ltd. (601.60, 1.78%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,766.00, -0.81%) and Vodafone Idea Ltd. (7.45, -4.49%).

18 stocks climbed above their 200 day SMA including Tata Consultancy Services Ltd. (3,319.95, 3.38%) and Symphony Ltd. (990.35, 2.40%). 8 stocks slipped below their 200 SMA including Endurance Technologies Ltd. (1,362.80, -2.66%) and Bombay Burmah Trading Corporation Ltd. (938.20, -1.77%).

 
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The Baseline
08 Jan 2023
The winning themes of 2022 - Momentum superstars, Bruce Lee stocks, and top MF/promoter picks
By Deeksha Janiani

January is named after Janus – the Roman god of gates and doorways, who could see both forward and backward at the same time. And this month, we look back to understand what lies ahead of us.

Although the absolute returns for Indian markets were low in 2022, they outperformed the MSCI Emerging Markets and MSCI World indices by more than 20% over the year. Indian equities performed better than these global peers for the third year in a row, thanks to retail investors and buying by domestic funds. 

The story does not end here. According to Prashant Nair, Deputy Director at CNBC-TV18, Indian benchmark indices have now generated positive returns for the seventh consecutive year. 

However, many market analysts feel this dream run is done. Indian markets face multiple challenges in 2023, including high valuations, slowdown in key export markets, chances of fresh Covid waves and additional interest rate hikes. 

Before we draw up fresh trading strategies for 2023, let’s explore some themes that  delivered handsome returns for investors in a difficult year like 2022. These will give important cues to investors and prepare us for a volatile 2023. 

In this week’s Analyticks:

Let’s get into it.

Momentum superstars screener: Fertilizer stocks and small banks fly high

This momentum screener selects stocks with a Trendlyne Momentum score of over 70, which have generated superlative returns of more than 30% in the past year. Among these, Fertilisers and Chemicals Travancore (FACT) enjoys the highest momentum score and multiplied investors’ wealth by more than 2.5X in 2022.

Fertilizer stocks have been buzzing in trade. Higher prices of agricultural commodities due to tight supplies helped the realizations of agrochemical and fertilizer makers. Reports suggesting that the government might increase the subsidy on urea in the upcoming budget have also worked in their favour. 

FACT has enjoyed especially high buying momentum thanks to its stellar financial performance in H1FY23, and capacity expansion plans.

Another stock riding high on its near-term store expansion plans is Kalyan Jewellers. Strong demand trends in the 2022 peak festive season also lifted the spirits of this counter.

Westlife Development outperformed its larger QSR peers in 2022, owing to its superior quarterly growth and ambitious growth targets. The company hopes to triple its sales to roughly Rs 4,500 crore via healthy same-store sales growth and higher store expansions in the next five years.  

Small-cap banks are another category seeing high momentum scores, with 35% returns to investors in the past year. Most of the stocks here are public sector banks, which gained mileage due to a strong revival in credit growth, cleaner balance sheets and attractive valuations in 2022. Banks like UCO Bank, Punjab & Sind Bank and South Indian Bank more than doubled investors’ wealth in the past year.  

However, analysts like Ambit Capital and Dalal & Broacha are sceptical about the continued outperformance of PSU bank stocks in 2023. They have run up quite a bit, and valuations of some stocks are ahead of their expected growth and return ratios. 

Bruce Lee stocks: Consistent growers like Tube Investments and Varun Beverages emerge as big wealth compounders

American martial artist Bruce Lee once said that “long-term consistency trumps short-term intensity”.  The comment about martial arts holds true for stock markets as well. Consistent growth stocks have rewarded investors with higher returns time and again.

Companies like Varun Beverages and Tube Investments of India have grown their profits at a CAGR of over 30% in the past three fiscal years. They multiplied investors’ wealth at a whopping rate of over 60% between 2019 and 2022 end. 

Varun Beverages has steadily expanded its distribution reach into newer geographies, and added new products to its portfolio. The company also took advantage of the sudden jump in out-of-home consumption post the omicron wave. It more than doubled its profits on a TTM basis and also doubled investors’ money in 2022. 

Tube Investments has been diversifying its product portfolio away from the auto sector, which is cyclical in nature. The company managed to post robust growth between FY19-FY22, a period of downcycle for the auto space. It staged a successful turnaround of CG Power in FY22, which is now driving its higher growth along with its export markets. 

PI industries is another player which has benefited from the consistent growth of its export business over the past few years. It also clocked strong revenue growth in the past few quarters on robust volumes. The company was a top industry outperformer in the past year.

Emerging as the dark horse in the telecom sector, Bharti Airtel staged a smart recovery post the slowdown in FY16-FY19, and returned to the black in FY22. Healthy subscriber addition, market share gain in 4G segment and the robust rise in average revenue per user aided its financial growth. 

Smallcap capital goods stocks have also surprised investors with their consistent returns and net profit growth in the past three years. These companies benefited from strong order inflows as investments revived in railways, defence, infrastructure, metals and mining, and energy sectors. RHI Magnesita India and Timken India emerged as the fastest growers and wealth compounders within this group. 

MF and Promoter favourites: Mutual funds and promoters picked auto and bank stocks in 2022

Given the solid growth of passenger and commercial vehicle wholesales post April 2022, mutual funds and promoters picked up stakes across auto OEMs and auto ancillaries. Mutual Funds added the highest stake in Rolex Rings. This small-cap auto stock got listed in August 2021 and generated returns of over 50% in the past year. 

Promoters also picked up auto ancillaries, based on the improved outlook of the sector. A promoter entity held by the Minda family picked up over 2.5% stake in UNO Minda in the September 2022 quarter. The company has a couple of capex projects in lighting and alloy manufacturing over the medium term. 

Mahindra CIE Automotive was also among the top promoter picks in 2022 and has returned over 50% to its investors. Its Spanish promoter entity raised nearly 5% stake, while M&M cut over 2% stake in the company in 2022.

Axis Bank, Bandhan Bank and HDFC Bank have emerged as the most bought stocks by mutual funds in the past four quarters, while Axis Bank has been the top industry outperformer in terms of financial growth in Q2FY23. It has grown its net interest income the fastest among larger peers and is the top analyst pick for 2023. 

Even though the IT sector was battered in 2022, mid-tier IT company Coforge came out as the top pick by mutual funds. The company has maintained a robust QoQ revenue growth trajectory and also sustained its margins at 17% levels in a difficult period. 

Thomas Cook (India) was among the most bought small-cap stocks by promoters in 2022. Healthy surge in travel demand to both domestic and international destinations may have prompted promoters to raise more than 6.5% stake in the company.  

You can find some popular screeners here.

 
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The Baseline
06 Jan 2023
Five Interesting Stocks Today
  1. Marico: This FMCG company rose 1.9% on Thursday following its Q3FY23 business update. The company’s Indian business has improved marginally as it posted mid-single-digit volume growth. The Saffola franchise sales, which contribute 20% of its revenue, increased in double digits with Saffola Oils putting up volume growth in the low teens.

Premium personal care also witnessed double-digit growth in line with sectoral trends. The management expects the gross and operating margins to improve YoY and sequentially in Q3FY23 as raw material prices stabilise along with consumer pricing. According to analysts, FMCG companies are optimistic about growth in revenue with the aid of a rise in rural sales. They also expect inflation to drop and demand to rise. However, Pushan Sharma, director of research of CRISIL Market, says, “Volume growth for the sector will remain subdued owing to rising inflation and sluggish rural demand, which accounts for almost 40 per cent of overall FMCG demand.”

The company has also launched ready-to-eat snacks under the brand name of Saffola Munchiez to expand its range of packaged foods, according to reports. The stock rose 2.6% on December 9, 2022, as its subsidiary, Marico South East Asia Corp (MSEA) signed a definitive agreement to acquire 100% shares in personal care brand, Beauty X, for approximately Rs 172 crore. The company also features in a screener of stocks with improving return on equity (RoE) over the past two years.

  1. Avenue Supermarts: This retailing company’s share price fell over 3% on Wednesday after it announced its standalone (D-Mart) Q3FY23 update. Revenue from operations has risen 24.7% YoY to Rs 11,304.6 in Q3, and the company has added four new stores, taking the total count to 306. But its share price has fallen as revenue growth and store additions slowed down compared to historical levels. Top-line growth in Q3 has been the slowest since Q4FY22. As a result of the share price fall, this company features in a screener of stocks with weak momentum: prices below short, medium and long-term averages.

Brokerages like Motilal Oswal and Macquarie remain cautious about Avenue Supermarts amid slowing top-line growth, according to reports. Macquarie has an 'underperform' rating on Avenue Supermarts due to the company's worse-than-expected commentary on outlook and slow store additions in Q3. For reference, the company added 18 and 50 new stores in H1FY23 and FY22 respectively. However, mutual funds are positive about the company as they increased their shareholding in Avenue Supermarts last month.

In its Q2FY23 earnings call, the management said that sales of discretionary items in the non-FMCG segment were recovering, but yet to match pre-pandemic levels. However, overall standalone revenue has risen 67% YoY in Q3FY23, when compared to pre-Covid levels or Q3FY20. Avenue Supermarts is yet to announce a date for its Q3FY23 results. According to Trendlyne’s forecaster estimates, both Q3FY23 and FY23 revenue are expected to rise nearly 30% YoY.

  1. NCC: This mid-cap construction & engineering company recently announced five order wins worth Rs 3,601 crore from state government agencies. The stock zoomed 9% in trade on Tuesday after it released the filing. Of the five orders, two pertain to the water and electrical division and are worth Rs 1,871 crore and Rs 993 crore respectively. Another order is from the irrigation division, costing Rs 738 crore. In the past six months, the stock has risen 71%, and 31% in one year. It is also trading near its 52-week high and rose 2.5% on Thursday in a weak market.

NCC’s total order book stands at Rs 40,020 crore as of Q2FY23. ICICI Direct and Geojit BNP Paribas have raised their target price by 22% and 21% respectively. The brokerages expect the order book to improve with a 16% CAGR growth over FY22-25E. However, Geojit BNP Paribas has reduced its EBITDA margin guidance by 50 bps to factor in commodity prices.

Vijay Kumar, Head & VP of Finance of NCC, says that the order book has been robust and H1FY23 saw an order inflow of Rs 6,800 crore. He adds, “We are one of the front runners in Jal Jeevan Mission and have orders from Uttar Pradesh, Karnataka and other states. Going forward, these segments are going to contribute a good chunk of revenue to the top line of the company.” NCC has given a guidance of 30% revenue growth and margin guidance of 9.5-10% for FY23. It also plans to reduce its gross debt from Rs 1,985 crore in H1FY23 and bring it in the range of Rs 1,500 crore in FY23 due to rising cash flows.

The stock ranks high on Trendlyne’s DVM score and shows up in a screener with negative to positive growth in sales and profit with strong price momentum.

  1. IndusInd Bank: This banking stock closed in the red on Wednesday, taking cues from the Nifty 50, despite reporting a strong business update. The lender has seen a steady increase in loans disbursed and deposits. In Q3FY23, its net advances have risen 19% YoY to Rs 2.7 lakh crore, and deposits 14% YoY to Rs 3.3 lakh crore. The bank’s advances stood at Rs 2.6 lakh crore and deposits at Rs 3.2 lakh crore in Q2FY23.

Several analysts are bullish on the bank due to the strong trend in its loan and deposit growth. Foreign brokerage CLSA believes that 2023 would be a strong year for Indian banks. It has upgraded rating on IndusInd Bank to ‘Buy’ from ‘Outperform’ and also raised the target price to Rs 1,500. As a result, the stock features in a screener of companies where brokers have upgraded recommendations or target prices in the past three months. Consensus estimates show 27 analysts recommending a ‘Strong Buy’ on the stock with seven recommending ‘Buy’ and five recommending ‘Hold’.

Meanwhile, on Thursday, IndusInd Bank announced a tie-up with two leading international airlines (Qatar Airways and British Airways) to introduce a co-branded credit card. Soumitra Sen, Head of Consumer Banking & Marketing of the bank said, “With this credit card, our aim is to shift the power of choice completely into the hands of the customers.”

The stock features in a screener of stocks near their 52-week highs with significant volumes.

  1. APL Apollo Tubes: This iron & steel products manufacturer’s sales volume has grown 50% YoY in Q3FY23, led by robust demand in its structural and coated products categories. Since announcing its Q3 sales figures on Monday, the stock has been on an uptrend. This led to it showing up in the screener for stocks with strong momentum. It grew 6.4% over the past week till Thursday, outperforming the Nifty Metal index by 4.2% over the same period.

The company’s sales volume growth has been led by the structural product segment’s volumes surging 61.9% YoY. Its structural/coated products are manufactured in its latest plant in Raipur, which has seen a 3.8X QoQ growth in sales volumes. The management expects an upswing in its sales volume in the coming quarters, as it plans to ramp up production in its new Raipur plant. According to reports, as the Centre prioritises infrastructure and construction, the company is expected to see further growth in volumes, with a surge in demand for its value-added products, which will lead to an improvement in margins. According to Trendlyne’s Forecaster, the company’s Q3 net profit is expected to surge by 77.2% YoY and the consensus recommendation from 12 analysts is ‘Buy’.

The company has a healthy new product pipeline and it aims to expand its distribution reach in the coming quarters. The company seems to be well-positioned to capitalise on the expected rise in demand for steel given that it has a 55% market share in India’s structural steel tube industry. 

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