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Trendlyne Marketwatch
Trendlyne Marketwatch
27 Jan 2023
Market closes lower, Sterlite Technologies' Q3FY23 net profit grows 17% QoQ to Rs 77 crore

Trendlyne Analysis

Indian indices closed in the red, with the volatility index, India VIX, soaring above 17%. Nifty 50 fell over 280 points and closed just above the 17,600 mark. European stocks traded higher than Thursday’s levels. Australia’s ASX All Ordinaries and Japan’s Nikkei 225 indices closed in the green, taking cues from the US indices, which closed in the green on Thursday.

The US economy grew at an annual rate of 2.9% in the fourth quarter beating analysts’ expectations by 30 basis points. The tech-heavy Nasdaq 100 rose 2% led by heavyweight Tesla, which rose over 10% after the company released its quarterly results. S&P 500 closed 1.1% higher while the Dow Jones increased by 0.6% on Thursday. Brent crude oil futures have remained flat this week after rising over 10% in the previous two weeks before the current week as China's reopening continues to better the crude oil demand.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Energy and Nifty Metal closed over 4% lower than Wednesday’s levels. Adani group stocks plunge, extending a sell-off triggered by fraud allegations from Hindenburg Research on Wednesday. Nifty IT trade flat, taking cues from the tech-heavy Nasdaq 100 index, which rose 2% on Thursday.

Nifty 50 closed at 17,604.35 (-287.6, -1.6%) , BSE Sensex closed at 59,330.90 (-874.2, -1.5%) while the broader Nifty 500 closed at 14,874.75 (-297.2, -2.0%)

Market breadth is highly negative. Of the 1,954 stocks traded today, 265 were gainers and 1,666 were losers.

  • Adani Ports, Ambuja Cements and Adani Enterprises plunge 15.2%, 12.3% and 18.3% in trade today. Adani Enterprises' follow-on public offer (FPO) opened today.

  • Money flow index (MFI) indicates that stocks like Max Financial Services, NHPC, Sonata Software, Jindal Stainless and Persistent Systems are in the overbought zone.

  • Sterlite Technologies' net profit grows 17% QoQ to Rs 77 crore in Q3FY23 as revenue rises 12% QoQ. However, EBITDA margin falls 50 bps QoQ. Ankit Agarwal, Managing Director of the company, says, “Our performance this quarter has been strong. Sharp focus on cash and profitability, and calibrated exits from sub-scale businesses have poised us for long-term growth."

  • RBI Governor Shantikanta Das says that India's core inflation remains elevated but is seeing a gradual decline. He iterates that India's financial system continues to remain robust and stable.

  • Oil & Gas stocks like Adani Total Gas, Hindustan Petroleum Corp and Bharat Petroleum Corp fall more than 3% in trade. The broader Nifty Oil & Gas index also falls 6%.

  • Adani Power falls more than 5%, hitting a lower circuit in trade today. This comes after a foreign financial forensic firm Hindenburg raised concerns over the company’s financials and debt positions. The stock has a low momentum score and shows up in a screener for the highest increase in pledges by promoters.

  • Metal stocks like Hindalco Industries, Steel Authority of India and Vedanta fall more than 2.5% in trade. The broader Nifty Metal index falls more than 3% and is trading in the red.

  • Foreign institutional investors pull out Rs 943 crore from the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options receive the highest inflow of Rs 69,022.6 crore from foreign investors.

  • Samvardhana Motherson International’s board approves the acquisition of a 51% stake in Saddles International Automotive and Aviation Interiors for Rs 207 crore. Saddles is into manufacturing premium upholstery like seat covers for passenger vehicles, and gear knob covers, among others. It shows up in a screener of stocks with upcoming results and previous quarter net profit growth greater than 10% YoY and QoQ.

  • Vodafone Idea, Suzlon Energy and Indian Overseas Bank trade below their second support or S2 levels in a weak market.

  • HDFC Securities maintains its ‘Buy’ rating on SBI Cards and Payment Services but lowers the target price to Rs 1,020 from Rs 1,196. The revised target price implies an upside of 44.8%. The brokerage cites a lower share of revolving loans and a sharp fall in NIM for the revision. However, it remains positive on the firm given its industry-leading pace of credit card issuances, sustained traction in unit spending and market share gains.

  • Christopher Wood, Global Head of Equity Strategy at Jefferies, says that India is at risk due to increased positions in China but remains the best long-term investment option in Asia.

  • Coforge, Sona BLW Precision Forgings and Bajaj Auto outperform their industry by 10.16%, 13.4% and 4.9%, respectively, in the past month.

  • Happiest Minds acquires a 100% stake in Sri Mookambika Infosolutions for a cash consideration of Rs 111 crore. Sri Mookambika Infosolutions is a Madurai-based IT services company. It believes this acquisition will strengthen its offerings in the healthcare vertical, with delivery capabilities in tier-two cities like Madurai and Coimbatore.

  • KPIT Technologies, UPL and Sun Pharmaceuticals rise 2.6%, 2.9% and 0.5% respectively over the past week, ahead of their Q3FY23 results on January 31.

  • Dr. Reddy’s Labs is rising after reporting a surge in net profit by 77% YoY to Rs 1,247 crore. Revenue rises 27%, fueled by the sale of ‘Revlimid’ drug. Meanwhile, Torrent Pharma is falling even though its Q3 net profit rises 14% YoY to Rs 283 crore, with India revenue growing 17%. The company declares an interim dividend of Rs 14 per share for FY23.

  • Morgan Stanley gives Tata Elxsi an 'Underweight' rating with a target price of Rs 5,800. This implies a potential downside of 12.1%, as its embedded product design (EPD) business declines for the fifth quarter due to layoffs and project deferments.

  • Ceat posts a net profit of Rs 34.8 crore against a loss of Rs 20 crore in Q3FY22. Its revenue increases 13% YoY in a seasonally weak quarter because of price hikes taken earlier and a reduction in raw material costs QoQ. Gross margin improves by 203 bps QoQ in Q3. However, exports take a hit because of global headwinds.

  • DLF is rising as its Q3FY23 net profit is up 36.8% YoY to Rs 519 crore. But revenue falls 3.5% on the back of increasing expenses. The residential business sees improvement with an increase in new sales bookings by 24% YoY. The company shows up in a screener of stocks with improving RoA for the past two years.

  • Tata Motors is back in the black after seven quarters of loss, with a net profit of Rs 2,957.7 crore in Q3FY23. Profitability drastically improves due to higher realisations, softening commodity prices and better pricing. Revenue rises 22.5% YoY to Rs 88,488.6 crore on the back of robust demand, higher sales volumes and an improving supply of semiconductors. The stock shows up in a screener for companies with growth in net profit and increasing profit margin YoY.

Riding High:

Largecap and midcap gainers today include Tata Motors Ltd. (445.60, 6.34%), Bajaj Auto Ltd. (3,936.75, 5.90%) and Supreme Industries Ltd. (2,538.95, 5.18%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (2,928.00, -20.00%), Adani Transmission Ltd. (2,014.20, -20.00%) and Adani Green Energy Ltd. (1,486.25, -20.00%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Tata Motors Ltd. (445.60, 6.34%), Bajaj Auto Ltd. (3,936.75, 5.90%) and Supreme Industries Ltd. (2,538.95, 5.18%).

Top high volume losers on BSE were Adani Transmission Ltd. (2,014.20, -20.00%), Adani Green Energy Ltd. (1,486.25, -20.00%) and Dixon Technologies (India) Ltd. (2,721.80, -19.09%).

TTK Prestige Ltd. (802.80, 2.80%) was trading at 16.7 times of weekly average. Nuvoco Vistas Corporation Ltd. (353.50, -2.31%) and SIS Ltd. (370.75, -1.84%) were trading with volumes 15.2 and 11.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

42 stocks hit their 52 week lows.

Stocks making new 52 weeks lows included - ACC Ltd. (1,879.75, -13.20%) and Adani Ports & Special Economic Zone Ltd. (596.95, -16.29%).

9 stocks climbed above their 200 day SMA including Tata Motors Ltd. (445.60, 6.34%) and Bajaj Auto Ltd. (3,936.75, 5.90%). 50 stocks slipped below their 200 SMA including Adani Total Gas Ltd. (2,928.00, -20.00%) and Adani Enterprises Ltd. (2,761.45, -18.52%).

 
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The Baseline
26 Jan 2023
Screener of the week: PLI beneficiary companies that are rising ahead of the Union Budget
By Abdullah Shah

Just days ahead of the Union Budget, we take a look at companies that are benefitting from the government’s PLI scheme. This screener reflects stocks that have risen over the past month ahead of the budget, which are beneficiaries of PLI schemes.

Textile stocks like SVP Global Textiles, Donear Industries and Rajesh Exports are three of the 61 applicants approved under the PLI scheme and have risen the highest over the past month. The government has proposed an expected investment of Rs 19,077 crore from the applicants, with a projected turnover of Rs 1.8 lakh crore and proposed employment of 2.4 lakh. 

In Metals & mining, Sunflag Iron & Steel and Lloyds Metal & Energy have been approved. While Sunflag Iron & Steel rose 40.3% over the past month, outperforming the sector by 27 percentage points, Lloyds Metal & Energy went up 39.4%, outperforming the sector by 26.1 percentage points.

Surya Roshni from the general industrials sector has committed an investment of Rs 25.4 crore towards the PLI scheme. The stock has risen 37.1% over the past month, outperforming the sector by 30.7 percentage points. 

You can find more screeners here.

 
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The Baseline
25 Jan 2023
Chart of the week: India’s ten highest-paid CEOs
By Abdullah Shah

Chief Executive Officer (CEO) salaries are a hot topic and closely followed by both investors and analysts. An extremely generous pay package can be routine for an industry, or a red flag for a low-performing company, suggesting corporate governance norms in the business are weak. 

In this edition of chart of the week, we look at India’s 10 highest-paid CEOs and their remuneration as a percentage of the company’s net profit, according to Trendlyne’s new CEO Salary dashboard. 

This interactive dashboard on Trendlyne looks at the total remuneration of senior employees (including CEOs and directors) in the industry. The remuneration is inclusive of benefits like ESOPs.

The IT sector is known for highly paid CEOs and it is reflected in the chart as well. Six of the 10 highest-paid CEOs are from the IT sector. Yashish Dahiya, Chairman, Executive Director and CEO of loss-making PB Fintech (PolicyBazaar), tops the list with a remuneration of Rs 613.8 crore. It constituted 39.6% of the company’s annual revenue in FY22 (keep in mind ESOPs are a big part of remuneration for listed startups, and the value of shares is tied to company performance). The company posted losses during the same period. As per the company’s FY22 annual report, in the scenario of the company incurring losses, Yashish Dahiya is subject to receive ESOP 2020 and 2021 as minimum remuneration. 

Vinay Vinod Sanghi, Chief Managing Director and CEO of CarTrade Tech, received a remuneration of Rs 176.6 crore, which comes to almost half of the company’s annual revenue in FY22.

Thierry Delaporte, Managing Director and CEO of Wipro, got Rs 79.8 crore after an increment of 24% in 2022. Salil S Parekh, Managing Director and CEO of Infosys, got a remuneration of Rs 71 crore after four consecutive increments of 327.9%, 1.2%, 188.3% and 43% in 2019, 2020, 2021 and 2022 respectively. Infosys used to be known in the industry for its lower pay scale for management, with the founders arguing that the CEO salary relative to the median employee shouldn’t be too high. That has clearly changed - Parekh is one of the highest paid CEOs in India.

CP Gurnani, Managing Director and CEO of Tech Mahindra, received Rs 62.7 crore, which constituted 1.1% of the company’s net profit in FY22. He received two increments of 304.5% in 2021 and 335.4% in 2022. Sandeep Kalra, Executive Director and CEO of Persistent Systems, earned Rs 46.9 crore, which was 6.8% of the company’s net profit. 

Two CEOs from the 2-3 wheeler industry also feature in the top 10 list. Pawan Munjal, Chairman and CEO of Hero MotoCorp, earned a remuneration of Rs 84.4 crore, constituting 3.6% of the company’s profit. Managing Director and CEO of Bajaj Auto, Rajiv Bajaj, received Rs 45.6 crore constituting 0.74% of the company's profit.

Another notable name in the list is Punit Goenka, Managing Director and CEO of Zee Entertainment Enterprises. He received a remuneration of Rs 41.1 crore, making up 4.3% of the company’s net profit. After taking a pay cut during the Covid pandemic in 2020, he received two increments of 46% in 2021 and 212.2% in 2022.

You can find more details on the remuneration of CEOs and directors on Tredlyne’s newly launched Salary Dashboard. 

 
Trendlyne Marketwatch
Trendlyne Marketwatch
25 Jan 2023
Market closes lower, Cipla's Q3FY23 net profit rises 9.3% YoY to Rs 801 crore

Trendlyne Analysis

Nifty 50 closed in the red, falling below the 17,900 mark. Australia’s ASX All Ordinaries closed lower than Tuesday’s levels and Japan’s Nikkei 225 indices closed in the green. Many other Asian markets remain closed for Lunar New Year celebrations. European indices trade in the green. US indices bounced back from losses in the early session and closed flat on Tuesday. Investors look ahead to Q3FY23 earnings from major companies this week. Brent crude oil futures trade in the green and are heading into a third straight weekly gain.

Nifty Smallcap 100 and Nifty Midcap 100 close in the red and are down more than 1%, following the benchmark index. All other major sectoral indices close lower than Tuesday’s closing levels. Nifty IT closes in the red, taking cues from the tech-heavy Nasdaq 100, which closed 0.22% lower on Tuesday.

Nifty 50 closed at 17,891.95 (-226.4, -1.3%) , BSE Sensex closed at 60,205.06 (-773.7, -1.3%) while the broader Nifty 500 closed at 15,171.95 (-216.6, -1.4%)

Market breadth is overwhelmingly negative. Of the 1,955 stocks traded today, 473 were on the uptick, and 1,426 were down.

  • ICICI Bank beats HDFC Bank in YoY and QoQ net profit growth, PE ratio, MF holdings and broker average target upside. But it lags in YoY and QoQ revenue growth, annual RoE, one-year price change and broker average rating.

  • Aurobindo Pharma touches its one-year low of Rs 416.65 today. The stock has a medium ranking on Trendyne’s checklist, with a score of 39.13%. The stock shows up in a screener for companies with net profits declining sequentially for the past four quarters.

  • Pidilite Industries, Godrej Consumer Products and Ambuja Cements are trading below their third support or S3 level as the market trades lower.

  • Cipla is falling despite its Q3FY23 net profit rising 9.3% YoY to Rs 801 crore on the back of a 14.8% YoY decline in the cost of materials consumed. Revenue grows 6% YoY as its pharmaceuticals segment rises 3.9% YoY. The stock shows up in a screener for companies with declining net cash flows.

  • Axis Bank, ICICI Bank and IDBI Bank’s operating profit margin and growth rise QoQ and YoY in Q3FY23.

  • Tarun Sawhney, Vice-Chairman and Managing Director of Triveni Engineering, says there is margin expansion for all segments except sugar. He adds that sugar prices will rise in Q4FY23 and aid margin expansion in the segment. The profitability of the company’s sugar business is lower in Q3.

  • ICICI Securities upgrades its rating on Shoppers Stop to ‘Buy’ from ‘Add’ with a target price of Rs 850. This indicates an upside of 29.7%. The brokerage believes the company presents a turnaround opportunity. It cites the firm’s increased focus on private-label brands, growth in its beauty segment and category extensions for revising its rating.

  • Indus Towers, Motilal Oswal Finance and Colgate-Palmolive India's Q3FY23 net profit falls QoQ and YoY

  • Rail Vikas Nigam bags an order worth Rs 38.4 crore for the provision of automatic block signalling in the Arakkonam junction-Nagari section of the Chennai division in Southern Railway. The company ranks high on the Trendlyne checklist with a score of 69.57%.

  • Power stocks like CG Power and Industrial Solutions, NTPC, Power Grid Corp of India, NHPC and JSW Energy are falling in trade. The broader sectoral index BSE Power is also trading in the red.

  • India's FII flows stand net negative at $1,850 million in the first half of January. The financial services sector sees the largest outflow of $823 million, while the materials sector has the largest inflow of $287 million.

  • PSU banks like Bank of Baroda, Bank of India and Canara Bank fall more than 5% in trade. The broader Nifty PSU Bank index falls 4.4% in trade.

  • United Spirits is plunging as its Q3FY23 net profit falls 27.4% YoY to Rs 214.2 crore. Revenue dips 25.9% YoY, causing the EBITDA margin to decline by 20 bps YoY. The company shows up in a screener of stocks with declining quarterly net profit and profit margin (YoY).

  • Nazara Technologies is rising as its Q3FY23 net profit surges 77.5% QoQ to Rs 18.1 crore. Revenue rises 19.3% QoQ, driven by the esports and gamified early learning segments. The stock shows up in a screener for companies with improving cash flows and high durability scores.

  • Tata Steel is rising as 84.3 lakh shares (0.7% equity) amounting to Rs 101.8 crore change hands in a large trade.

  • Max Financial Services, Coal India and C.E. Infosystems rise 5.8%, 5.4% and 5.3% respectively over the past week, ahead of their Q3FY23 results on January 31.

  • Macrotech Developers’ (Lodha) Q3FY23 net profit surges 41.7% YoY to Rs 404.5 crore as expenses see a dip of 14%. The realty company’s revenue falls 13.9% YoY but pre-sales continue to rise by 16% YoY. Abhishek Lodha, MD & CEO, says, "Demand for quality housing continues to remain strong despite the increase in mortgage rates. The housing upcycle is long-term in nature on the back of strong affordability, job creation and income growth."

  • Indian rupee appreciates to 81.61 from the previous close of 81.72 against the US dollar in early trade today.

  • Sonata Software redesignates Samir Dhir as the Managing Director & CEO of the company from Whole-time Director & CEO. The stock is trading flat and has a high Trendlyne Checklist score.

  • Indus Towers posts a net loss of Rs 708 crore in Q3FY23 against a profit of Rs 1,570.8 crore in Q3FY22. This comes after the company made provisions worth Rs 2,298.1 crore for doubtful recovery of debt from Vodafone Idea. Revenue also dips 2% YoY in Q3 as collections fall short. It shows up in a screener of stocks with decreased mutual fund holdings in the past quarter.

  • TVS Motor’s consolidated Q3FY23 net profit rises 21.4% YoY to Rs 300.8 crore, with revenue increasing 22.3% on the back of price hikes carried out by the company in the past quarter. Its operating margin falls to 9.1% in Q3 due to increase in expenses on raw materials and the purchase of stock-in-trade. It shows up in a screener of stocks with increasing profit over the past four quarters.

Riding High:

Largecap and midcap gainers today include TVS Motor Company Ltd. (1,037.90, 5.49%), Sona BLW Precision Forgings Ltd. (455.00, 5.18%) and Relaxo Footwears Ltd. (835.90, 2.26%).

Downers:

Largecap and midcap losers today include Adani Transmission Ltd. (2,517.75, -8.85%), Zomato Ltd. (47.75, -8.35%) and Ambuja Cements Ltd. (460.20, -7.77%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Saregama India Ltd. (356.45, 7.58%), KIOCL Ltd. (219.65, 5.52%) and TVS Motor Company Ltd. (1,037.90, 5.49%).

Top high volume losers on BSE were Zomato Ltd. (47.75, -8.35%), Ambuja Cements Ltd. (460.20, -7.77%) and Indus Towers Ltd. (157.90, -7.36%).

Home First Finance Company India Ltd. (794.00, 5.12%) was trading at 15.4 times of weekly average. Sundaram Clayton Ltd. (4,775.00, 0.25%) and Esab India Ltd. (4,050.00, 4.86%) were trading with volumes 12.3 and 8.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

21 stocks tanked below their 52 week lows.

Stocks making new 52 weeks lows included - Atul Ltd. (6,993.20, -2.21%) and Aurobindo Pharma Ltd. (417.75, -4.68%).

6 stocks climbed above their 200 day SMA including Home First Finance Company India Ltd. (794.00, 5.12%) and Lemon Tree Hotels Ltd. (75.05, 1.76%). 27 stocks slipped below their 200 SMA including ACC Ltd. (2,165.70, -7.28%) and Container Corporation of India Ltd. (649.60, -4.52%).

 
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The Baseline
24 Jan 2023
Five analyst picks this week in the tech sector
By Abhiraj Panchal
  2. Cyient: IDBI Capital maintains its ‘Buy’ rating on this IT Consulting & Software company with a target price of Rs 1,045. This implies an upside of 19.6%. In Q3FY23, the firm’s net profit surged 97.2% QoQ to Rs 156 crore and revenue grew 15.9% QoQ.

Analysts Devang Bhatt and Dhawal Doshi expect the services segment’s revenue to grow 25% YoY in FY23 on the back of organic and inorganic levers. They anticipate “it to be driven by double-digit growth in aerospace, communication, medical, mining, automotive and healthcare business verticals”. The analysts also expect the firm’s cost realisation initiatives to expand margins further in the coming quarters.

However, Bhatt and Doshi believe Cyient’s margin in FY23 will be impacted by the one-offs in litigation and acquisition-related charges. But they expect the margins in FY24 and FY25 to improve due to the absence of one-off costs and easing of supply-side challenges. The analysts anticipate the IT firm’s revenue to grow at a CAGR of 19.9% over FY22-25.

  1. Wipro: ICICI Direct upgrades its rating to a ‘Buy’ from ‘Hold on this software services company with a target price of Rs 455. This indicates an upside of 12.9%. In Q3FY23, the company reported a 14.8% QoQ growth in net profit to Rs 3,052.9 crore, while its revenue grew by 3.6% QoQ to Rs 23,867.3 crore. According to analysts Sameer Pardikar and Sujay Chavan, “Wipro reported weak Q3 results on the revenue front.”

The total contract value for the quarter was $4.3 billion. The analysts think that sustainability of the same in the subsequent quarters will likely provide revenue visibility for FY24. They also believe that Wipro’s decision to change leadership in areas of America, West Asia, Japan and Australia will provide a stimulus to revenue growth in the regions. Pardikar and Chavan remain optimistic about the stock on the back of higher penetration in Europe, client mining and acquisition of new logos.

  1. Infosys: HDFC Securities maintains a ‘Buy’ call on this big-4 IT company with a target price of Rs 1,815, indicating an upside of 18.9%. In Q3FY23, Infosys’ profit grew by 9.4% QoQ to Rs 6,586 crore and its revenue increased by 5.3% to Rs 39,087 crore. Analysts Apurva Prasad, Amit Chandra and Vinesh Vala said that revenue growth was ahead of consensus, supported by higher pass-through revenue, which was linked to integrated deals. The IT company has increased its revenue guidance for Q4FY23 to 16-16.5%. 

The total contract value for Q3FY23 was $3.3 billion. The analysts are also positive about the company as they expect a recovery in North America and strong traction in the energy & utilities, and manufacturing verticals. Out of the 32 large deals that Infosys won, 25 were from North America. “Acceleration in vendor consolidation and cost take-out deals has led to  growth in its core services (vs historical decline),” they added.

  1. Just Dial: ICICI Securities maintains its ‘Buy’ rating on this internet technology company with a target price of Rs 750. This indicates an upside of 14.2%. In Q3FY23, the firm’s net profit grew 44.4% QoQ to Rs 75.3 crore, and revenue rose by 7.9% QoQ.

Analysts Abhisek Banerjee and Heenal Gada believe the stock is trading at an attractive valuation after falling nearly 34% over the past year. They believe this correction in price is an overreaction and are positive on the company as it has beaten their EBIT margin estimates in Q3. Its margin expanded by 400 bps QoQ to 12.3%, beating the analysts’ estimate of 9.4%.

Banerjee and Gada believe the sustained and sequential improvement in collections indicates an improvement in demand for the firm’s services. They add, “Just Dial has ~26% revenue exposure to the B2B e-commerce segment. We believe this is likely to be the primary growth driver for the company going forward.” The analysts expect the company’s net profit to grow at a CAGR of 100.8% over FY23-25. However, the company’s Trendlyne Durability Score is 45, indicating average financial health - the company has negative net cash flow and weak ROE. 

  1. HCL Technologies: Motilal Oswal reiterates its ‘Buy’ rating on this technology company with a target price of Rs 1,270, indicating an upside of 14.6%. For Q3FY23, the company reported a profit of Rs 4,096 crore, a 17.4% QoQ increase, and revenue of Rs 26,960 crore (in line with the brokerage’s estimate), an 8.2% QoQ rise. Analysts Mukul Garg, Prakash Bhanushali and Pritesh Thakkar said, “Strong revenue growth guidance of 16-16.5% YoY in CC terms for services should address investor concerns on the company’s growth.”

“Despite seasonality and a tough demand environment, HCL maintained its growth momentum in both IT Services, and engineering research and development verticals,” the analysts added. They believe higher exposure to cloud offers a better resilience to its portfolio in the current context, with higher demand for cloud, network, security, and digital workplace services.

Remaining optimistic, analysts said, “Strong sequential growth within services, robust headcount addition, healthy deal wins, and a solid pipeline indicate an improved outlook.” 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
24 Jan 2023
Market closes flat, Maruti Suzuki's Q3FY23 net profit jumps 2.3X YoY to Rs 2,391.5 crore

Trendlyne Analysis

Indian indices fell from their day’s high and closed flat on a volatile day of trade. European stocks traded higher than Monday’s levels. Australia’s ASX All Ordinaries and Japan’s Nikkei 225 indices closed in the green, taking cues from the US indices, which closed in the green on Monday. US stocks rose as investors looked ahead to Q3FY23 earnings from major companies this week. The tech-heavy Nasdaq 100 rose 2.2% while the Dow Jones closed 0.8% higher on Monday. Several Asian markets remain closed for Lunar New Year celebrations. Brent crude oil futures traded in the green for a fourth straight trading session.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, despite the benchmark index closing in the red. Nifty Energy and Nifty Metal trade lower than Monday’s closing levels. Nifty IT trades in the green, taking cues from the tech-heavy Nasdaq 100, which closed 2.2% higher on Monday.

Nifty 50 closed at 18,118.30 (-0.3, 0%) , BSE Sensex closed at 60,978.75 (37.1, 0.1%) while the broader Nifty 500 closed at 15,388.55 (-14.7, -0.1%)

Market breadth is in the red. Of the 1,953 stocks traded today, 700 were gainers and 1,176 were losers.

  • Relative strength index (RSI) indicates that stocks like Max Financial Services, Oil India, Persistent Systems, Coforge and GAIL (India) are in the overbought zone.

  • Colgate-Palmolive’s Q3FY23 net profit falls 3.6% YoY as the cost of materials increases 9.4% YoY. The company’s total sales have grown marginally by 0.8% YoY in Q3, despite domestic sales growing 2.3% YoY. It ranks high on the Trendlyne Checklist score.

  • Maruti Suzuki is rising as its Q3FY23 net profit jumps 2.3X YoY to Rs 2,391.5 crore on the back of robust demand, softening commodity prices and cost reduction initiatives. Revenue rises 25% YoY as sales volume increases by 8.2% YoY. This stock shows up in a screener for companies with high TTM EPS growth.

  • Easy Trip Planners’ board approves the acquisition of a 55% stake in Glegoo Innovations Private, an online travel company. Glegoo will use its app to connect travellers and hoteliers in real time, helping it increase its user base. Easy Trip Planners shows up in a screener of stocks with improving RoE for the past two years.

  • Pharmaceuticals & Healthcare stocks like Syngene International, Zydus Lifesciences, Aurobindo Pharma, Gland Pharma and Alkem Laboratories are falling in trade. All constituents of the broader sectoral Nifty Healthcare Index are also trading in the red.

  • The PLI Scheme under the Centre’s 'Atmanirbhar Bharat' covers 14 sectors with an outlay of approximately Rs 1.9 lakh crore over the past six years. The beneficiary sectors include pharma, IT hardware, textiles and auto & components.

  • Asahi India Glass, Patanjali Foods and Tata Motors’ delivery volumes rise ahead of their results on January 25.

  • Nifty 50 was trading at 18,121.90 (3.4, 0.0%) , BSE Sensex was trading at 61,024.23 (82.6, 0.1%) while the broader Nifty 500 was trading at 15,399.25 (-4.0, 0.0%)

  • Market breadth is in the red. Of the 1,945 stocks traded today, 779 were on the uptick, and 1,079 were down.

  • KRChoksey maintains its ‘Buy’ rating on Happiest Minds with a target price of Rs 1,158. This implies an upside of 32.4%. The brokerage expects the company’s robust deal momentum, client-centric approach and increasing focus on its digital business to drive growth in the near term. It estimates the firm’s revenue to grow at a 14.9% CAGR over FY22-24.

  • Foreign institutional investors pull out Rs 16,437.1 crore from the equity market over the past 30 days, according to Trendlyne's FII dashboard. Meanwhile, index options receive the highest inflow of Rs 78,433.1 crore from foreign investors. Mutual funds invest Rs 757.8 crore in the equity market.

  • Puneet Chhatwal, Managing Director and CEO of Indian Hotels Co, says that the hospitality sector’s expectations from the Union Budget 2023 are based on three key themes – growth stimulation, support in infrastructure growth and boost for tourism.

  • Delhivery partners with Godrej Appliances to build and manage the supply chain of Godrej’s coolers business pan-India. Delhivery plans to deploy warehouses and a distribution network for better penetration of Godrej’s products. Delhivery is trading near its 52-week low.

  • Torrent Pharmaceuticals gets an intimation from the US FDA classifying its inspection as Official Action Indicated (OAI) for its manufacturing facility in Gujarat. The facility had previously received Form 483 with three observations from the agency.

  • Jammu & Kashmir Bank is rising as its Q3FY23 net profit grows 79% YoY to Rs 311.6 crore and net interest income rises 27% YoY. Meanwhile, Karur Vysya Bank falls as its provisions surge more than 2X YoY despite its net profit growing 56% YoY to Rs 289.3 crore.

  • Gland Pharma touches an all-time low of Rs 1,308.3 as it reports a fall in Q3FY23 net profit by 15% YoY to Rs 231.9 crore. Revenue also declines 12% YoY due to an increase in lead time of processing and low off-take of key products in the US in Q1FY23. It shows up in a screener of stocks with the highest fall from their 52-week highs.

  • FSN E-Commerce (Nykaa) is rising as 53.6 lakh shares (0.2% equity) amounting to Rs 68 crore change hands in a large trade.

  • Welspun Corp is rising as its associate company, East Pipes Integrated Co, bags contracts worth 569 million Saudi riyals (Rs 1,234 crore) in Saudi Arabia. The contracts pertain to the supply of steel pipes for water transmission. The stock shows up in a screener for companies with low debt.

  • Dilip Buildcon’s wholly-owned subsidiary Dilip Buildcon – Skyway Infraprojects emerges as the lowest bidder for the Madhya Pradesh Jal Nigam tender. The subsidiary bags an order for the engineering, procurement, construction, testing and trial run of Rewa Bansagar. The project cost is estimated at Rs 1,947.1 crore.

  • NBCC is rising as it reports its monthly business update for December 2022. The company acquires a total business of Rs 309.1 crore. The stock is trading above its first resistance or R1 level.

  • K Satyanarayana Raju, Executive Director of Canara Bank, says the bank’s credit cost is at 1.2% for FY23 and will be 1.2-1.25% for FY24. He adds that the net interest margin for FY24 will be 3%. The bank reports a net profit of Rs 2,881.5 crore in Q3FY23.

  • Tata Communication is falling as its Q3FY23 net profit marginally declines by 0.3% YoY to Rs 393.9 crore due to higher network & transmission and employee benefits expenses. Revenue rises 8.2% YoY, led by robust growth in the data services business segment.

  • KEI Industries is rising as its Q3FY23 net profit increases 27% YoY to Rs 128.6 crore. Revenue is up 14% on the back of rise in revenue in the cables segment. However, other segments like stainless steel wire and EPC projects see a fall in revenue by more than 8% YoY in Q3. The stock ranks high on the Trendlyne Checklist score.

  • Axis Bank’s Q3FY23 net profit surges 61.9% YoY to Rs 5,853.1 crore as net interest income rises 32% YoY. Its net interest margin expands by 73 bps YoY, and revenue grows by 28.8% YoY on the back of market share gains made in the rural and small & medium enterprises segments. 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 FSN E-Commerce Ventures Ltd. (134.35, 7.70%), Adani Wilmar Ltd. (572.65, 4.90%) and General Insurance Corporation of India (184.20, 4.36%).

Downers:

Largecap and midcap losers today include Tata Communications Ltd. (1,324.60, -4.27%), Syngene International Ltd. (581.05, -3.99%) and Delhivery Ltd. (312.35, -3.82%).

Movers and Shakers

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

Top high volume gainers on BSE included Route Mobile Ltd. (1,229.75, 7.67%), Happiest Minds Technologies Ltd. (876.70, 6.22%) and Sonata Software Ltd. (624.20, 5.24%).

Top high volume losers on BSE were SBI Cards and Payment Services Ltd. (745.00, -2.89%), Medplus Health Services Ltd. (616.00, -2.43%) and Axis Bank Ltd. (910.20, -2.41%).

Chalet Hotels Ltd. (357.10, 4.42%) was trading at 13.2 times of weekly average. Zensar Technologies Ltd. (228.00, 2.98%) and Eureka Forbes Ltd. (519.05, 0.21%) were trading with volumes 9.1 and 6.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks hit their 52 week highs, while 13 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - 360 One Wam Ltd. (1,947.85, -0.12%) and Lloyds Metals & Energy Ltd. (282.95, -2.40%).

Stocks making new 52 weeks lows included - Indus Towers Ltd. (170.45, -1.42%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,271.25, -0.50%).

9 stocks climbed above their 200 day SMA including Maruti Suzuki India Ltd. (8,698.80, 3.35%) and Tata Motors Limited (DVR) (217.35, 2.57%). 18 stocks slipped below their 200 SMA including Syngene International Ltd. (581.05, -3.99%) and Balrampur Chini Mills Ltd. (373.60, -3.38%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
23 Jan 2023
Market closes higher, Edelweiss maintains ‘Buy’ rating on ICICI Bank

Trendlyne Analysis

Nifty 50 closed in the green, rising above the 18,100 level. European indices traded in the green amid positive global cues. Chinese and Taiwanese markets are closed on account of the Lunar new year for the current week. Other major Asian indices closed higher, in line with US indices, which closed in the green on Friday. The S&P 500 rose 1.9%, while the Dow Jones closed 1% higher on Friday. The rally was backed by Fed Governor Christopher Waller’s comment stating central banks' rates are pretty close to sufficiently restricting inflation. The tech-heavy Nasdaq 100 index rose 2.7% backed by gains in Netflix and Alphabet. Crude oil prices traded higher after posting a second straight weekly advance last week as China's outlook brightens amid the reopening of its economy.

Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Media and Nifty Bank closed higher than Friday’s levels. Nifty IT closed higher, taking cues from the tech-heavy Nasdaq 100, which closed in the green on Friday.

Nifty 50 closed at 18,118.55 (90.9, 0.5%) , BSE Sensex closed at 60,941.67 (319.9, 0.5%) while the broader Nifty 500 closed at 15,403.20 (55.3, 0.4%)

Market breadth is in the red. Of the 1,993 stocks traded today, 801 were on the uptrend, and 1,126 went down.

  • Money flow index (MFI) indicates that stocks like CG Power and Industrial Solutions, Hindustan Copper, Max Financial Services and Oil India are in the overbought zone.

  • Indian market trades in the red, underperforming global indices like Dow Jones, S&P 500 and Nasdaq in January.

  • Torrent Power rises over 6% in trade and is one of the high-volume, high-gainer stocks today. The stock ranks high on Trendlyne’s checklist, scoring 56.52%. It features in a screener of companies with improving net cash flow over the past two years.

  • Latent View Analytics, UCO Bank and Sonata Software rise 4.4%, 1.3% and 1.2% respectively over the past week, ahead of their Q3FY23 results tomorrow.

  • IDFC First Bank is rising as its Q3FY23 net profit surges more than 2X YoY to Rs 604.6 crore and net interest income rises 27% YoY. Meanwhile, YES Bank falls as its Q3FY23 net profit declines 80.7% YoY to Rs 51.5 crore and provisions surge more than 2X YoY.

  • Seshsagiri Rao, Joint Managing Director and Group CFO of JSW Steel, says domestic steel prices could increase further. He expects an improvement in export volumes in Q4FY23. The company announced its Q3 results on Friday.

  • Adani Green Energy's operational capacity increases by 35% YoY to 7,324 MW in 9MFY23. Its sale of energy grows by 59% YoY to 10,235 million units as the company adds new solar and wind power plants in Rajasthan and Madhya Pradesh. The company features in a screener of stocks with increasing annual net profit for the past two years.

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

  • Edelweiss maintains its ‘Buy’ rating on ICICI Bank with a target price of Rs 1,135. This implies an upside of 30.1%. The brokerage remains positive about the bank’s prospects on the back of its sustained growth outperformance, digital push, risk management and strong balance sheet. It expects the company’s revenue to grow at a CAGR of 17.1% over FY22-25.

  • Cement stocks like UltraTech Cement, Grasim Industries, Ambuja Cements, Shree Cements and ACC are trading in the red. The broader cement & cement products industry falls over 2.5% today.

  • Meghamani Organics is falling as it reports a decrease in net profit by 74% YoY in Q3FY23. The company’s revenue and EBITDA decline 13% and 21% respectively. In addition, it announces the commissioning of Phase 1 of the Titanium Dioxide (TiO2) plant at Dahej, Gujarat, with an installed capacity of 16,500 MTPA.

  • Ultratech Cement is falling as its Q3FY23 net profit declines 38% YoY to Rs 1,058.2 crore. EBITDA margin falls 400 bps YoY to 15% due to a rise in the cost of raw materials, fuel and freight expenses. The company features in a screener of stocks with declining revenue for the past two consecutive quarters.

  • JSW Steel turns profitable with a net profit of Rs 474 crore in Q3FY23, after posting a loss in Q2FY23. A 98.8% QoQ drop in cost of raw materials aids the EBIDTA margin to improve 7.4 percentage points QoQ to 11.6%. The company features in a screener of stocks with growth in net profit and profit margin (QoQ).

  • Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank, expects loan growth CAGR of 22-25% over the next few years. He adds that the pandemic has impacted the bank’s NIM (net interest margin) and it will normalise at 7.5% and above.

  • Radhakishan Damani cuts his stake in Metropolis Healthcare in Q3FY23 and now holds a stake below 1%.

  • Sunil Singhania buys a 0.3% stake in Mastek in Q3FY23, now holds 3.1% in the company.

  • SBI Life Insurance’s Q3FY23 net profit falls 16.4% YoY to Rs 364.06 crore. Even though net premium income rises 6.35% YoY, it falls for products across the participating segment. The non-participating segment sees an increase in net premium, with individual life growing more than 50%. The company ranks medium on the Trendlyne Checklist score.

  • Indian rupee appreciates to 80.94 from Friday’s close of 81.12 against the US dollar in early trade today.

  • Tanla Platforms falls more than 3% in trade today. The company ranks low in the Trendlyne Checklist score. It shows up in a screener of stocks with no debt.

  • Reliance Industries is falling as its Q3FY23 net profit dips 14.9% YoY to Rs 15,792 crore because of an increase in the cost of materials by 8.1% YoY. However, revenue rises 15.3% YoY in Q3, with growth in revenue across all segments like oil to chemicals, oil & gas, retail and digital services. The company shows up in a screener of stocks with declining quarterly profit margin YoY.

  • ICICI Bank’s Q3FY23 net profit rises 34% YoY to Rs 8,311.8 crore with net interest income increasing 34.6% YoY. However, the bank’s net provisions grow 12.5% YoY, as it adopts a more conservative approach for future contingencies. The bank also sees growth in retail, business banking and SME loans by more than 20% YoY in Q3.

Riding High:

Largecap and midcap gainers today include Torrent Power Ltd. (491.00, 6.74%), Coforge Ltd. (4,358.90, 6.26%) and Persistent Systems Ltd. (4,593.15, 6.24%).

Downers:

Largecap and midcap losers today include YES Bank Ltd. (18.15, -8.10%), JSW Energy Ltd. (246.85, -5.91%) and Shree Cements Ltd. (23,037.05, -5.67%).

Volume Shockers

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

Top high volume gainers on BSE included Torrent Power Ltd. (491.00, 6.74%), Can Fin Homes Ltd. (551.85, 5.90%) and Bandhan Bank Ltd. (247.95, 4.55%).

Top high volume losers on BSE were YES Bank Ltd. (18.15, -8.10%), Infibeam Avenues Ltd. (17.10, -7.82%) and Saregama India Ltd. (331.75, -7.68%).

Route Mobile Ltd. (1,142.20, -2.90%) was trading at 9.0 times of weekly average. Krishna Institute of Medical Sciences Ltd. (1,435.75, -3.37%) and Chalet Hotels Ltd. (342.00, 0.54%) were trading with volumes 7.7 and 7.4 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 16 stocks tanked below their 52 week lows.

Stocks touching their year highs included - IDFC Ltd. (87.00, -0.23%), Swan Energy Ltd. (346.75, -4.23%) and Engineers India Ltd. (88.90, 1.14%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,139.95, -3.92%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,277.65, -0.90%).

9 stocks climbed above their 200 day SMA including Can Fin Homes Ltd. (551.85, 5.90%) and Au Small Finance Bank Ltd. (640.90, 3.98%). 14 stocks slipped below their 200 SMA including India Cements Ltd. (207.85, -3.44%) and The Ramco Cements Ltd. (689.90, -2.11%).

 
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The Baseline
21 Jan 2023
Chart of the week: Stocks that saw promoters raise their stake: Did they beat the index?
By Abdullah Shah

Investors track promoter holding changes in companies closely. An increase in promoter holding, they argue, reflects the promoter’s confidence in the company, and share purchases by promoters often trigger follow-on buying by retail investors and traders. 

This week, we look at stocks that have seen the highest increases in promoter holding over the past two years. These companies' promoter holdings also increased QoQ in the past quarter. Out of the 13 Nifty 500 stocks, seven have risen over the same time period while six have beaten the Nifty 50 index. 

Godrej Agrovet witnessed its promoter holding rise the most among Nifty 500 companies in the past two years. The other agricultural products company’s promoters increased their holding by 4 percentage points to 74.1% over. However, the stock has fallen 16.3% in the same period. Godrej Industries bought 1.1 crore shares ( or 5.6% stake) in the company, taking its holding to 64.9%. 

Over the past two years, promoters of ACC have increased their holding by 2.2 percentage points to 56.6%. Endeavour Trade And Investment bought 2.2% stake (or 40.6 lakh shares) in the cement & cement products company during. The stock rose 34.3%, beating the Nifty 50 index by 8.7 percentage points.  

Balrampur Chini Mills saw its promoters increase their holding by 1.2 percentage points to 42.4% over the same period. The sugar stock has risen 123.7%, beating the Nifty 50 by 98.1 percentage points. Vardhman Textiles’s promoter holding also rose 100 bps to 63.9%. Vardhman Holdings bought a 1.1% stake (6.7 crore shares) in the textiles company. The stock has risen 48.3% over the period, beating the Nifty 50 by 22.8 percentage points.

A few other notable stocks in the screener and chart are Chambal Fertilisers Chemicals, JM Financial, Bajaj Holdings and Investment and Bajaj Auto. A Clearly the companies with the largest increase in promoter holding have not necessarily beaten the Nifty 50 index over the past two years. Promoters generally only increase their holding after being sure that the company will have a strong fundamental performance, but industry dynamics can change (as was the case for two-wheeler company Bajaj Auto) hitting share prices.  

 
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The Baseline
20 Jan 2023
Five Interesting Stocks Today
  1. Persistent Systems: This IT Consulting & Software company rose 7.5% in trade on Thursday after announcing its Q3FY23 results. Its net profit has improved 8.2% QoQ to Rs 238 crore on the back of falling attrition rates and margin expansion. This healthy performance helped the stock show up in a screener for companies with net profits increasing sequentially for the past four quarters. The stock has a high Trendlyne checklist score of 82.61%.

Its EBIT margin has improved 80 bps QoQ to 15.4% as its employee costs as a percentage of revenue fell by 160 bps QoQ. Also, its attrition rates falling sharply by 210 bps QoQ to 21.6% aided margin expansion. The company’s attrition rates have been consistently falling since touching 26.9% in Q3FY22, on a sequential basis. Its revenue growth of 5.9% QoQ was driven by robust deal wins and growth across all its business verticals. 

Surprisingly, growth in Europe has been robust  at 12.2% QoQ and contributed 9% to the total revenue. This is despite the region being in the midst of an energy crisis. According to reports, this is in line with other major IT companies which have reported robust growth in Europe. The company’s biggest market, North America, accounted for 77.1% of its revenue and grew by only 1.5% QoQ.    

Its total contract value (TCV) has risen 20% QoQ to $440.2 million, with new deals making up 54% of its TCV. According to reports, ICICI Securities believes the company will see growth in the coming quarters, as more than half of its TCV consists of new deals. 

  1. Federal Bank: This banking stock has outperformed theNifty Private Banks index by 3.46% in the past month and rose 5.8% in the past week. The stock reaction was in anticipation of its Q3FY23 results. The results didn’t disappoint - Federal Bank reported the highest-ever quarterly earnings for Q3FY23 and net interest income growth of 27.1% YoY and 11.0% QoQ. Its advances growth is 19% YoY and 4% QoQ. Its total deposits have crossed the Rs 2,00,000-crore milestone, reaching Rs 2,01,425 crore in Q3. This stock shows up in ascreener for companies with good quarterly growth in recent results.

In its future outlook, Federal Bank management has guided FY23 with a Return on Asset (RoA) of 1.25-1.3% and a further 10 bps improvement going into FY24. Healthy RoA delivery will be driven by steady margins in the range of 335-340 bps, backed by high-teens credit growth.

According to Axis Direct, growth in new high-yielding products remains robust. Operating expenditures will reduce going forward and margins will improve despite the increase in the cost of funding.HDFC securities says Federal Bank has benefitted from a timing difference in asset/deposit repricing, offsetting higher employee operating expenditure (provision for wage revision) and higher provisions for security receipts. HDFC securities and Axis Direct maintain a ‘Buy’ rating on the stock post-Q3FY23 results.

  1. Metro Brands: This footwear stock rose 2.3% in trade on Tuesday in reaction to the strong results it posted. The company’s net profit has grown 11% YoY to Rs 112 crore in Q3FY23, better than analyst estimates. The stock reaction has been positive and gained nearly 5% in the past week.

The company added 48 stores in this quarter, which is one of the highest-ever store additions to date. The revenue growth comes on the back of retail expansion and a better product mix. Revenue has increased 23.8% YoY in Q3. However, the EBITDA margin has gone down to 34.3% in Q3, a dip of 44 bps YoY due to an increase in staff expenses. In December, the company acquired Cravatex and analysts expect the brand to contribute 5% to the revenue in FY23. The company also shows up in a screener of stocks with improving cash flow for the past two years.

An interesting thing about the footwear industry is that, although rubber prices have fallen, footwear stocks are not attracting investors. Generally, a fall in costs means better earnings for the companies, however, the footwear industry has not been able to garner investor interest. They prefer tyre stocks as their margins are proportional to natural rubber prices, unlike footwear companies. Some reports also suggest that consumers have shifted to cheaper alternatives as inflation affected their spending patterns and the industry is losing its charm.

However, analysts from ICICI Securities maintain a ‘Buy’ on the stock and expect revenue to grow 37% CAGR over FY22-24E.  But increasing competition from regional players and lag in-store addition could be a dampener for growth for Metro Brands if the momentum does not continue in Q4FY23.

  1. ICICI Lombard General Insurance Co: This general insurance company fell 4% on Thursday after it reported its Q3FY23 earnings. Though the company’s revenue and net profit have risen YoY, both parameters missed Trendlyne’s Forecaster estimates by 10.4% and 12% respectively. In addition, ICICI Lombard’s gross direct premium income grew 16.9% in Q3, which is lower than the industry growth of 18.1%.

On the other hand, the insurer’s health segment has improved 47.9% YoY in Q3, higher than the industry growth of 34.9%. The health segment continues to be the fastest growing in the general insurance industry, says the Managing Director and CEO, Bhargav Dasgupta. For 9MFY23, the company outperformed its industry in the health insurance segment with 39% growth, he added. Consequently, the health insurance segment’s contribution to the total premium has increased to 26% from 22% YoY earlier.

Whereas the motor insurance segment, which contributes over 40% of the total premium,  grew 10.1% in 9MFY23, as against the 16% growth of the industry.

Post the earnings update, foreign brokerage Morgan Stanley has an ‘Overweight’ rating on the stock. The brokerage says that underwriting loss and investment income are lower than its estimates, but ICICI Lombard’s management has guided for continued investments in the retail health space and a gradual improvement in the return on equity (RoE) to high-teens. The company features in a screener of companies with RoE declining over the past two years.

  1. Asian Paints: This furniture, furnishing and paints company has fallen 3.1% as its Q3FY23 net profit missed Forecaster estimates by 4.4%. The company’s revenue has risen marginally by 1.3% and its net profit increased by 5.6% YoY to Rs 1,074.2 crore. Analysts had expected its profit to grow higher based on deflation in the cost of raw materials, according to reports, but the company suffered from flat demand owing to the monsoon extending into the festive season. The company shows up in a screener of stocks which benefit from lower crude oil prices.

The company’s bath fittings and kitchen businesses also fell 10.9% and 7.1% YoY respectively, while the industrial business grew 23.9% YoY. Speaking about the results, Amit Syngle, Managing Director & Chief Executive Officer (CEO) of the company said, "The domestic decorative business registered flat volume and value sales delivery for the quarter, on a very high price increase base in the previous year. The extended monsoon in October also affected retailing in the peak festival season."

Asian Paints has a medium rank in Trendlyne’s checklist with a score of 47.8% and is in the sell zone as its current PE is trading at higher levels, when compared to its historical values. 

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
20 Jan 2023
Market closes lower, HDFC Life Insurance's Q3 net profit rises 15.2% YoY to Rs 315.2 crore

Trendlyne Analysis

Indian indices closed in the red, with the Nifty 50 falling below the 18,000 mark. However, the benchmark Nifty 50 index posted a weekly gain of 0.4 %. European stocks traded higher than Thursday’s levels. Most major Asian indices also closed in the green, despite the US indices closing lower on Thursday. US stocks fell as investors continued to assess several economic data such as retail sales and industrial production. The tech-heavy Nasdaq 100 fell 1% while the Dow Jones closed 0.8% lower. However, US indices’ futures are currently trading in the green.

European Central Bank President Christine Lagarde said inflation is too high and that ECB is determined to bring it back to 2% at the ongoing five-day World Economic Forum's annual meeting. Investors continue to assess the impact of high inflation on company financials as the result season is in full swing. Crude oil prices are set to post a second straight weekly advance as China's outlook brightens amid the reopening of its economy.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Realty and Nifty FMCG closed lower than Thursday’s closing levels. Nifty IT also closed lower, following the tech-heavy Nasdaq 100, which closed in the red on Thursday.

Nifty 50closed at 18,027.65 (-80.2, -0.4%), BSE Sensexclosed at 60,621.77 (-236.7, -0.4%) while the broader Nifty 500closed at 15,347.90 (-71.8, -0.5%)

Market breadth is in the red. Of the 1,961 stocks traded today, 733 showed gains, and 1,162 showed losses.

  • Relative strength index(RSI) indicates that stocks like Max Financial Services, Hindustan Zinc, Edelweiss Financial Servicesand Swan Energyare in the overbought zone.

  • HDFC Life Insurance Co’s Q3FY23 net profit rises 15.2% YoY to Rs 315.2 crore. Its net premium income increases 18.6% YoY as its renewal premiums grow 29.7% YoY. The value of new business for 9MFY23 also rises 22% YoY. The stock shows up in a screener for companies with improving net cash flow for the past two years.

  • Laurus Labsreceives the establishment inspection report (EIR) from the US FDA for the pre-approval inspection (PAI) conducted at its manufacturing facility in Andhra Pradesh from October 24 to 28, 2022. The company features in a screenerof stocks which have a strong cash-generating ability from its core business.

  • PVR posts a net profit of Rs 15.9 crore for Q3FY23 against a net loss of Rs 10.2 crore in Q3FY22. Its revenue increases 35% YoY on the back of an increase in the average ticket price, admits and spending per head. Content releases have also contributed to the revenue increase. It shows up in a screener of turnaround companies – loss to profit QoQ.

  • Rating Agency Moody’s Investors Service retains the Baa3 rating on State Bank of India, while it upgrades ratings for Punjab National Bank, Canara Bank and Bank of Baroda to Baa3 from Ba1. The agency expects healthy asset quality for the next 12-18 months and has a stable outlook on the four banks.

  • ICICI Securities upgrades its rating on AU Small Finance Bank to ‘Add’ from ‘Hold’, with a target price of Rs 700. This indicates an upside of 13.3%. The brokerage turns optimistic toward the firm’s prospects given its robust credit growth, stable net interest margins and improving provision coverage ratio. It expects the company’s net profit to grow at a CAGR of 22.7% over FY22-25.

  • Amit Syngle, CEO of Asian Paints, says that the company’s sales have been impacted by extended monsoons. He adds that the margin will improve to 2%, aided by backward integration.

  • Jindal Stainless, Macrotech Developers and Sterlite Technologies see a positive shift in their share prices ahead of Q3FY23 results in January.

  • 360 One Wam touches an all-time high as its Q3FY23 net profit rises 16% YoY to Rs 180 crore. The rise in revenue from wealth management and asset management has aided revenue to grow 10% YoY to Rs 415 crore. The company shows up in a screener of stocks with increasing profit for the past three quarters.

  • Fertilizers, Metals & Mining, and Cement & Constructionsectors rise more than 13% in the past 90 days.

  • Anil Rai Gupta, Managing Director of Havells India, says B2C demand is weak amid inflationary pressures and expects it to continue over the next two quarters. He adds that the company will take price hikes of 3-4% due to the rate change in fans.

  • Hindustan Zinc is falling in trade after its Q3FY23 net profit dips 20% YoY to Rs 2,156 as revenue decreases 2.7% YoY and expenses rise 14% YoY. The rise in expenses is because of increase in power and fuel costs. The company shows up in a screener of stocks with high momentum scores.

  • Jubilant Foodworks plans a capex of Rs 900 crore funded through internal accruals over the next 12 to 18 months. It is likely to invest Rs 500 crore to Rs 600 crore in stores, including re-imaging and maintenance. The Bangalore commissary is expected to be operational by Q1FY24 with a planned investment of Rs 250 crore.

  • Jefferies says that Cholamandalam Investment & Finance is a top pick in the NBFC space as they expect the company's EPS to stand at 24%. The brokerage expects a loan CAGR of 22% over FY23-25E.

  • L&T Technology Services’ Q3FY23 net profit rises 7.5% QoQ to Rs 303.6 crore and EBIT margin expands 60 bps QoQ to 18.7%. The firm’s revenue increases 2.7% QoQ, driven by its transportation and industrial products segments. The stock ranks high on the Trendlyne checklist with a score of 60.9%.

  • Surya Roshni rises after it bags an order worth Rs 147.3 crore for the supply of coated and bare pipes from Indian Oil Corp. It also wins an order for power-coated GI pipes from GAIL. The company shows up in a screener of stocks with high TTM EPS growth.

  • Indian rupee appreciates to 81.26 from the previous close of 81.36 against the US dollar in early trade today.

  • Porinju Veliyath sells a 0.5% stake in Kerala Ayurveda in Q3FY23, now holds 1.9% in the company.

  • Vijay Kedia adds Siyaram Silk Mills to his portfolio in Q3FY23, buys a 1.1% stake in the company.

  • Bharat Heavy Electricals is rising as it bags an order worth Rs 300 crore from the Gujarat State Electricity Corp. The order pertains to the renovation and modernisation of steam turbines at the Ukai Thermal Power Station in Gujarat.

  • Sun Pharmaceutical Industries decides to acquire US-based Concert Pharmaceuticals for $576 million (Rs 4,674.5 crore). The company believes this will strengthen its dermatology product range in the US. The stock shows up in a screener which lists the top Indian exporters among listed companies.

  • Hindustan Unilever’s Q3FY23 net profit rises 7.7% YoY to Rs 2,474 crore and revenue grows 16.1% YoY. This comes on the back of home care and beauty & personal care segments rising 31.5% YoY and 10.6% YoY respectively. The stock shows up in a screener for companies with revenue rising sequentially for the past four quarters.

Riding High:

Largecap and midcap gainers today include One97 Communications Ltd. (550.85, 3.55%), Coforge Ltd. (4,102.00, 3.41%) and Hindustan Aeronautics Ltd. (2,509.50, 2.31%).

Downers:

Largecap and midcap losers today include Hindustan Zinc Ltd. (353.00, -6.50%), L&T Technology Services Ltd. (3,230.70, -4.90%) and TVS Motor Company Ltd. (969.90, -4.35%).

Volume Shockers

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

Top high volume gainers on BSE included Sobha Ltd. (617.30, 4.71%), Engineers India Ltd. (87.90, 4.46%) and Shyam Metalics and Energy Ltd. (326.15, 4.17%).

Top high volume losers on BSE were Hindustan Zinc Ltd. (353.00, -6.50%), Atul Ltd. (7,431.45, -4.13%) and PVR Ltd. (1,610.90, -3.99%).

DCM Shriram Ltd. (898.15, 0.33%) was trading at 9.8 times of weekly average. Coforge Ltd. (4,102.00, 3.41%) and Sterling and Wilson Renewable Energy Ltd. (272.60, 3.34%) were trading with volumes 9.7 and 8.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

7 stocks hit their 52-week highs, while 14 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Swan Energy Ltd. (361.00, 0.74%), Engineers India Ltd. (87.90, 4.46%) and APL Apollo Tubes Ltd. (1,196.70, 1.64%).

Stocks making new 52 weeks lows included - Atul Ltd. (7,431.45, -4.13%) and Indus Towers Ltd. (171.45, -2.75%).

7 stocks climbed above their 200 day SMA including Shyam Metalics and Energy Ltd. (326.15, 4.17%) and Chemplast Sanmar Ltd. (451.10, 1.42%). 13 stocks slipped below their 200 SMA including Aditya Birla Sun Life AMC Ltd. (443.40, -3.17%) and ICICI Securities Ltd. (500.00, -2.41%).