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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.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
06 Jan 2023
Market closes lower, ICICI Direct initiates coverage on Nitin Spinners, rates ‘Buy’

Trendlyne Analysis

Indian indices closed in the red for a third straight session on a volatile day of trade. However, other Asian indices closed in the green except for Hang Seng, which fell 0.21%. European indices traded higher than Thursday's levels with DAX being the only exception. US indices closed in the red on Thursday. US stocks fell as hiring numbers beat the estimates indicating strength in the labor market. This fueled speculations that the US Fed has room to keep raising federal fund rates. The tech-heavy Nasdaq 100 fell 1.6% and the Dow Jones closed over 1% lower. Brent crude oil futures traded higher after rising over 1% on Thursday. However, crude oil prices are down around 7% this week.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. All major sectoral indices closed lower than Thursday’s level following the broader Nifty 50index. Nifty IT closed deep in the red, following the Nasdaq 100, which closed lower on Thursday.

Nifty 50closed at 17,859.45 (-132.7, -0.7%), BSE Sensexclosed at 59,900.37 (-452.9, -0.8%) while the broader Nifty 500closed at 15,272.00 (-114.2, -0.7%)

Market breadth is overwhelmingly negative. Of the 1,965 stocks traded today, 605 were on the uptick, and 1,300 were down.

  • Bajaj Financesees a short buildup in its January 25 future series as its open interest rises 6.1% with a put-call ratio of 0.44.

  • According to reports, LKP Securities initiates coverage on CSB Bankwith a ‘Buy’ rating and a target price of Rs 313, indicating an upside of 25%. The brokerage is optimistic about the bank’s growth prospects, given its robust loan growth, improving asset quality and low credit costs. It expects the bank’s net interest income to grow at a CAGR of 17.7% over FY22-24.

  • Storage media & peripherals, aerospace, and advertising & mediaindustriesrise more than 12% in the past week.

  • Sigachi Industries surges as its board considers a proposal to raise funds by way of issuing equity or convertible warrants on a preferential basis to promoters and non-promoters. The stock shows up in a screener for companies with net profits rising sequentially over the past three quarters.

  • Dabur India says that demand in Q3FY23 remains weak as rural markets do not show significant improvement. Its revenue growth will be between low to mid-single digit in Q3. It expects international business to clock decent growth in constant currency. The company is trading below its second support or S2 level.

  • JP Morgan says that China’s reopening could be a driving force for Indian metal companies. The brokerage prefers the steel segment over base metals and coal. Tata Steel and Steel Authority of India are its preferred picks in the steel segment.

  • Foreign institutional investors pull out Rs 4,615.9 crore from the equity market over the past week, according to Trendlyne's FII dashboard. However, index options receive the highest inflow of Rs 25,847.7 crore from foreign investors. Mutual funds invest Rs 1,048.1 crore in the equity market.

  • ICICI Direct initiates coverage on Nitin Spinners with a ‘Buy’ rating and a fair price of Rs 290, indicating an upside of 41.4%. The brokerage believes the firm’s vertically integrated business model, rising exports and capacity expansion will drive revenue growth in the coming quarters. It expects the company’s revenue to grow at a CAGR of 17.9% over FY23-25.

  • Sobha is rising as it achieves its highest-ever sales value of Rs 1,425 crore, a 36% YoY growth. Its average price realisation grows by 21.9% YoY to Rs 9,650 per square foot. It shows up on a screener for stocks with strong cash-generating ability from core business.

  • Zydus Lifesciences’ arm Zydus Pharmaceuticals launches topiramate extended-release capsules in the United States. It will be used to treat epilepsy in patients older than six years. As of November 2022, its annual sales stand at $488 million in the United States.

  • Textile company Welspun India is falling in trade as reports suggest that Bed, Bath & Beyond, one of its biggest customers, is considering filing for bankruptcy. Other textile stocks like KPR Mill, Trident, Raymond and Vardhman Textiles are also trading in the red.

  • Macrotech Developers’ Q2FY23 bookings rise 57% YoY to Rs 3,148 crore and collections grow by 24% YoY on the back of robust demand. The company has added Rs 17,800 crore of gross development value (GDV) in FY23, exceeding its guidance of Rs 15,000 crore. The company features in a screener of stocks with improving net cash flow for the past two years.

  • Pranjul Bhandari, Chief India and Indonesia Economist at HSBC Securities and Capital Markets (India), expects India’s GDP growth to fall to 5.5% in FY24 as the country’s growth momentum is gradually slowing down. The Indian economy is expected to grow by 6.8% in FY23.

  • Media stocks like Dish TV India, PVR, Inox Leisure, Network 18 Media & Investments and TV18 Broadcast are falling in trade. All constituents of the broader sectoral index Nifty Media are also trading in the red.

  • Mukand is rising after completing the sale of 45.94 acres of its land in Thane, Maharashtra, to AGP DC Infra Two for Rs 796.5 crore. The stock shows up in a screener for companies with revenue increasing sequentially over the past four quarters.

  • RHI Magnesita India announces the acquisition of Dalmia OCL, an Indian refractory business of Dalmia Bharat Refractories, via a share swap agreement. The share consideration has a value of approx Rs 1,708 crore.

  • Ittira Davis, Managing Director of Ujjivan Small Finance Bank, says the bank’s outstanding loans has grown 33% YoY in Q3FY23. He expects strong growth in loans and deposits moving forward.

  • Ashish Kacholia adds Raghav Productivity Enhancers to the portfolio in Q3FY23, buys a 2.1% stake worth Rs 21.3 crore.

  • Tata Consultancy Services, ICICI Prudential Life Insurance and MphasiS see a positive shift in their share price ahead of their Q3FY23 results.

  • Vodafone Idea plans to raise loans worth Rs 7,000 crore from State Bank of India, HDFC Bank, and others, according to reports. The banks are, however, waiting for a clarification on the stake that will be held by the Centre in the company before they give out loans. This is in relation to Vodafone Idea’s pending dues with Indus Towers, worth Rs 7,500 crore.

  • Rail Vikas Nigam receives an order worth Rs 166.3 crore from the Gujarat Metro Rail Corp. The order involves the construction of a ballastless steel track from Sarthana to Dream City under the Surat Metro Rail Project. The stock shows up in a screener for companies with improving cash flow and a high durability score.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (59.00, 7.76%), Supreme Industries Ltd. (2,450.15, 2.69%) and Astral Ltd. (2,060.25, 2.50%).

Downers:

Largecap and midcap losers today include General Insurance Corporation of India (180.75, -7.45%), LIC Housing Finance Ltd. (404.95, -3.69%) and Dabur India Ltd. (552.85, -3.47%).

Volume Rockets

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

Top high volume gainers on BSE included IDBI Bank Ltd. (59.00, 7.76%), Radico Khaitan Ltd. (1,072.25, 5.79%) and KPIT Technologies Ltd. (716.65, 4.97%).

Top high volume losers on BSE were Birla Corporation Ltd. (950.55, -3.87%), AIA Engineering Ltd. (2,510.30, -3.28%) and Cholamandalam Investment & Finance Company Ltd. (667.90, -2.25%).

Aether Industries Ltd. (844.30, -0.49%) was trading at 19.2 times of weekly average. Medplus Health Services Ltd. (603.95, -0.95%) and Symphony Ltd. (967.15, 3.09%) were trading with volumes 9.9 and 7.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks took off, crossing 52-week highs, while 4 stocks hit their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (22,328.05, 1.01%), Apollo Tyres Ltd. (327.75, -3.10%) and Power Finance Corporation Ltd. (157.15, 0.16%).

Stocks making new 52 weeks lows included - Biocon Ltd. (256.35, -1.48%) and Thyrocare Technologies Ltd. (588.80, -2.74%).

8 stocks climbed above their 200 day SMA including Godrej Industries Ltd. (451.30, 4.93%) and GMM Pfaudler Ltd. (1,632.55, 3.42%). 23 stocks slipped below their 200 SMA including Birla Corporation Ltd. (950.55, -3.87%) and Welspun Corp Ltd. (218.75, -3.38%).

 
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The Baseline
05 Jan 2023
The top analyst picks of 2022: how did they perform?
By Suhas Reddy

As the year comes to an end, we take a look at how brokerage analysts expected sectors and stocks to perform in 2022, and how they actually did. Hit by turbulence, Indian financial markets were very volatile in 2022. The war in Europe, supply chain disruptions, high inflation, economic slowdown and Covid-19 made for a bumpy ride.

These external shocks …

PremiumThis is a premium article. Click here to read.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
05 Jan 2023
Market closes lower, private banks are falling in trade

Trendlyne Analysis

Indian indices close in the red, with the Nifty 50 falling below the key 18,000 mark. However, other Asian indices closed higher, in line with the US indices. European stocks opened lower than Wednesday's levels except for FTSE100 trading in green. US stocks settled in the green on Wednesday after gyrating between losses and gains on a volatile day of trade. Investors assessed the minutes from the US Fed’s December meeting, which showed Fed officials remained determined to keep rates high to bring inflation down.
The tech-heavy Nasdaq 100 rose 0.5% while the Dow Jones closed 0.4% higher. Brent crude oil futures trade marginally higher after falling nearly 10% in the last two trading sessions.

Nifty Smallcap 100 closed flat after a volatile day of trade and Nifty Midcap 100 closed in green. Nifty Metal and Nifty Media closed higher in final session of closing trades. Nifty Auto and Nifty Pharma closed in green maintaining the gains made in early trading session in the morning. Nifty IT closed in red even though tech-heavy Nasdaq 100, which closed in the green on Wednesday.

Nifty 50closed at 17,992.15 (-50.8, -0.3%), BSE Sensexclosed at 60,353.27 (-304.2, -0.5%) while the broader Nifty 500closed at 15,386.20 (-6.8, 0.0%)

Market breadth is in the red. Of the 1,956 stocks traded today, 853 were gainers and 1,051 were losers.

  • Relative strength index(RSI) indicates that stocks like The Fertilisers and Chemicals Travancore, Swan Energyand Abbott Indiaare in the overbought zone.

  • Chola Wealth Direct assigns a ‘Buy’ rating on Muthoot Finance with a target price of Rs 1,550. This indicates an upside of 42.8%. The brokerage believes the firm will continue to dominate the gold financing market given its lean cost structure, operational efficiencies and high standards of collection. It expects the company’s net profit to grow at a CAGR of 11.9% over FY22-24.

  • Ujjivan Small Finance Bank’s advances in Q3FY23 surge 33% YoY to Rs 21,895 crore and deposits jump 49% YoY, led by strong momentum in retail deposits. RBL Bank’s advances also rise 14% YoY to Rs 68,371 crore and deposits by 11% during the same period.

  • Godrej Consumer Products sees QoQ rise in volumes led by Home Care and Personal Care segments in Q3FY23. The company’s Indonesian business is recovering in constant currency terms. Management says that the company’s profit and gross margins should improve, leading to better EBITDA growth in Q3.

  • Reports suggest that around 16 lakh shares (0.25% equity) of Havells India, amounting to Rs 184.4 crore, change hands.

  • Abbott India rises for four consecutive sessions and touches its 52-week high of Rs 22,200 today. The stock ranks high on Trendlyne’s checklist with a score of 77.3%. It also features in a screener of companies with RoCE improving over the past two years.

  • Likhitha Infrastructure is rising after it announced that it received multiple orders worth Rs 457.4 crore from various oil & gas distribution companies between October and December 2022. The stock shows up in a screener for companies with revenue increasing sequentially for the past four quarters.

  • Bank stocks like ICICI Bank, Axis Bank, Bandhan Bank and Au Small Finance Bank are falling in trade. The broader sectoral index Nifty Bank is also trading in the red.

  • Tyre stocks like MRF, Apollo Tyres and Ceat are rising in trade. The broader auto tyres & rubber products industry is trading above 3%. These feature in a screener of stocks benefitting from lower crude oil prices as Brent crude prices fall 6% over the past week.

  • Sandeep Sangwan, Managing Director of Castrol India, says that the company is considering to expand its footprint in the EV segment, and working with global and Indian OEMs for the supply of EV fluids.

  • Nifty 50was trading at 17,900.45 (-142.5, -0.8%), BSE Sensexwas trading at 60,092.14 (-565.3, -0.9%) while the broader Nifty 500was trading at 15,291.80 (-101.2, -0.7%).

  • Market breadth is in the red. Of the 1,939 stocks traded today, 639 showed gains, and 1,243 showed losses.

  • ICICI Securities maintains ‘Buy’ rating on Nuvoco Vistas Corp and increases the target price to Rs 490 from Rs 465. This implies an upside of 33.2%. The brokerage believes the company will benefit from the expected high demand in East India over the next couple of years, given its sizable market share in the region. It expects the firm’s margins to improve due to better pricing and debt reduction.

  • GR Infraprojects' arm GR Bhimasar Bhuj Highway receives a letter from the National Highways Authority of India declaring the appointed date for a Rs 1,085 crore project to upgrade the road from Bhimasar to the airport in Gujarat to a four-lane with paved shoulder on a hybrid annuity mode.

  • BofA upgrades its rating on Voltas and Havells India to ‘Buy’ from ‘Underperform’ with a target price of Rs 899 and Rs 1,290 respectively. The brokerage says that localisation of the AC value chain will benefit both companies.

  • Adani Ports & Special Economic Zone’s December 2022 cargo volumes rise 8% YoY to 25.1 million metric tonnes (MMT). During April-December 2022, its cargo volumes increased by 8% YoY to 253 MMT. The stock shows up in a screener for companies with improving cash flow from operations over the past two years.

  • NTPC and Hindustan Petroleum Corp are rising as NTPC's subsidiary, NTPC Green Energy, signs a memorandum of understanding (MoU) with HPCL. The MoU is to develop renewable energy-based power projects and supply 400 MW of renewable power to HPCL's facilities.

  • SJVN is rising after announcing an investment of Rs 2,615 crore in the hydroelectric project in Himachal Pradesh. The project will be completed in the next five years with SJVN earning a 16.5% RoE.

  • Retail sales for the automotive industry fall 5.4% YoY to 16.2 lakh units in December 2022, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales decline 11.2% YoY, while cars go up 8.2%% YoY.

  • Dolly Khanna sells her shares in NCL Industries in Q3FY23 and now holds a stake below 1% in the company.

  • The Reserve Bank of India (RBI) lifts the order restricting Mahindra & Mahindra Financial Services from appointing third-party agents for its recovery actions. RBI had asked the company to cease recovery or repossession activities on September 22, 2022. The stock is up 1.5% in trade today.

  • Bajaj Finance’s AUM grows 27% YoY to Rs 2.3 lakh crore in Q3FY23 with new loans booked rising 5.4% YoY. Customer franchise increases 19% to 6.6 crore for the NBFC. It shows up in a screener with improving cash flow YoY and durability.

  • Marico’s India business grows in mid-single digits in Q3FY23 as cooking oil volumes increase. International business sees steady growth despite currency depreciation and high inflation. The management says that fall in input costs and better consumer prices will help improve gross and operating margins on a QoQ and YoY basis in Q3.

Riding High:

Largecap and midcap gainers today include Adani Total Gas Ltd. (3,633.70, 4.50%), ABB India Ltd. (2,806.00, 3.73%) and MRF Ltd. (91,275.80, 3.71%).

Downers:

Largecap and midcap losers today include Bajaj Finance Ltd. (6,100.05, -7.17%), Bajaj Finserv Ltd. (1,468.85, -5.10%) and Cholamandalam Investment & Finance Company Ltd. (683.25, -4.91%).

Movers and Shakers

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

Top high volume gainers on BSE included Engineers India Ltd. (84.80, 7.48%), Apollo Tyres Ltd. (338.25, 5.69%) and Minda Corporation Ltd. (218.90, 4.99%).

Top high volume losers on BSE were Bajaj Finance Ltd. (6,100.05, -7.17%), Bajaj Finserv Ltd. (1,468.85, -5.10%) and Devyani International Ltd. (173.60, -2.20%).

Godrej Industries Ltd. (430.10, -0.16%) was trading at 27.6 times of weekly average. Sundram Fasteners Ltd. (1,004.60, 4.40%) and Ceat Ltd. (1,666.90, 3.48%) were trading with volumes 22.9 and 11.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks made 52-week highs, while 5 stocks hit their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (22,105.15, 0.77%), Apollo Tyres Ltd. (338.25, 5.69%) and Power Finance Corporation Ltd. (156.90, 1.55%).

Stocks making new 52 weeks lows included - Relaxo Footwears Ltd. (889.05, -0.31%) and Galaxy Surfactants Ltd. (2,430.75, -0.57%).

15 stocks climbed above their 200 day SMA including Minda Corporation Ltd. (218.90, 4.99%) and Hindustan Petroleum Corporation Ltd. (245.95, 2.05%). 21 stocks slipped below their 200 SMA including Bajaj Finserv Ltd. (1,468.85, -5.10%) and Cholamandalam Investment & Finance Company Ltd. (683.25, -4.91%).

 
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The Baseline
05 Jan 2023
Screener of the week: Stocks delivering consistent returns and growth since the past three years
By Deeksha Janiani

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.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
04 Jan 2023
Market closes lower, Motilal Oswal maintains ‘Buy’ rating on Prestige Estates Projects

Trendlyne Analysis

Nifty 50 fell nearly 190 points and closed in the red on a volatile day of trade. However, European stocks traded higher than Tuesday’s levels. India’s December Services PMI rose to a 6-month high of 58.5 compared to 56.4 in November. Asian indices closed mixed, despite the US indices closing in the red on Tuesday. US stocks fell and closed in the red on the first trading session of 2023 as investors looked ahead to Fed’s minutes release later today.

The tech-heavy Nasdaq 100 index closed in the red led by heavyweights Apple and Tesla. Tesla fell over 12% on Tuesday as it missed delivery estimates in Q4CY22. S&P 500 fell 0.4% while the Dow Jones closed flat on a volatile day of trade. Brent crude oil futures extended losses and traded deep in the red after falling over 4.2% on Tuesday as investors awaited cues on the US Monetary policy from the minutes of the Federal Reserve’s December meeting.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Media and Nifty FMCG closed lower than Tuesday’s levels. Nifty IT also closed in the red, taking cues from the Nasdaq 100, which fell 0.7% on Tuesday.

Nifty 50 closed at 18,042.95 (-189.6, -1.0%) , BSE Sensex closed at 60,657.45 (-636.8, -1.0%) while the broader Nifty 500 closed at 15,393.00 (-164.8, -1.1%)

Market breadth is sharply down. Of the 1,960 stocks traded today, 548 were gainers and 1,360 were losers.

  • Coromandel International beats The Fertilisers & Chemicals Travancore in QoQ revenue & net profit growth, PE ratio, and price-to-book ratio. But it lags in YoY revenue & net profit growth, annual RoE, and one-year price change.

  • Sonata Software, Suven Pharmaceuticals and Abbott Indiaoutperform their respective industries in terms of return on capital employed (RoCE).

  • The Fertilisers & Chemicals Travancore rises 5% in trade today. The stock has risen 142% over the past month. It ranks high in Trendlyne's checklist with a score of 62%.

  • Media stocks like Nazara Technologies, Dish TV India, TV18 Broadcast, Sun TV Network and Hathway Cable & Datacom are falling in trade. All constituents of the broader sectoral index Nifty Media are also trading in the red.

  • RBL Bank falls more than 4% in trade today. It ranks high on Trendlyne’s valuation and momentum scores but medium on the checklist score.

  • Vijay Kumar, Head and VP (Finance) of NCC, says that the company has bagged orders worth Rs 5,000 crore during Q3FY23. He adds that order inflows are strong and could likely be around Rs 16,000 crore in FY23.

  • Motilal Oswal maintains its ‘Buy’ rating on Prestige Estates Projects with a target price of Rs 675, indicating an upside of 44%. The brokerage expects the company’s launch pipeline to help it sustain robust pre-sales momentum in CY23 and get better cash flow visibility and debt reduction. It sees the firm’s revenue growing at a CAGR of 11% over FY22-25.

  • Allcargo Logistics buys a 100% stake in Asiapac Equity Investment, a company dealing with ocean freight logistics, for Rs 41.35 crore. The stock shows up in a screener with improving cash flow from operations for the past two years.

  • Crude oil prices fall by over 4% on Tuesday as investors wait for the US Federal Reserve’s monetary policy meeting to conclude. Fears of recession also play a role in the fall. While natural gas and aluminium prices continue to decline, gold prices are at their 7-month high levels.

    Reliance Industries’ wholly owned subsidiary Reliance Consumer Products is set to acquire a 50% equity stake in beverages company Sosyo. The acquisition will enable Reliance Consumer to enhance its beverage portfolio.

  • HDFC Bank’s net advances rise 19.5% YoY to Rs 15.1 lakh crore and deposits grow 19.9% YoY as of December 31, 2022. The bank’s CASA (current account savings account) deposits increase 12% YoY to Rs 7.6 lakh crore. The stock shows up in a screener for companies with high TTM EPS growth.

  • Norges Bank – Govt Pension Global buys a 0.66% stake (3.3 lakh shares) in Multi Commodity Exchange of India for Rs 50.1 crore in a bulk deal yesterday.

  • Metal stocks like Hindalco Industries, Vedanta and Jindal Stainless fall more than 2% in trade. The broader Nifty Metal index is also trading in the red.

  • Realty stocks like Godrej Properties, Brigade Enterprises and Oberoi Realty are falling in trade. All constituents of the broader Nifty Realty index are trading in the red.

  • India’s December Services PMI rises to a 6-month high of 58.5 compared to 56.4 in November on the back of robust demand.

  • Avenue Supermart's revenue from operations rises 24.7% YoY to Rs 11,304.6 crore in Q3FY23. The retailer adds four stores during the quarter, taking the total number to 306. It features in a screener of stocks with growth in quarterly net profit and increasing net profit (YoY).

  • Jefferies initiates coverage on Allcargo Logistics with a ‘Buy’ rating and target price of Rs 500. The brokerage says that the company is a good player in global trade and expects normalization of FY21-22 gains in FY23-24E.

  • Radiant Cash Management’s shares list at a premium of 9.6% to the issue price of Rs 94 on its debut on the bourses. The Rs 250 crore IPO was subscribed for 53% of the total shares on offer.

  • IndusInd Bank’s net advances rise 19% YoY to Rs 2.7 lakh crore, and deposits grow 14% YoY as on December 31, 2022. Punjab & Sind Bank’s gross advances also see a 17% YoY increase. Punjab & Sind Bank ranks high in the Trendlyne checklist score and is rising in a weak market.

  • Railtel Corp of India rises as it receives a work order from South Eastern Coalfields for providing VPN services at several locations under the SECL Command Area for a period of five years. The order value is Rs 186.19 crore.

  • Vedanta’s Q3FY23 total aluminium production falls 2% YoY to 566 KT (kilo tonnes), and steel declines 13% YoY due to maintenance activities. The firm’s power sales rise by 5% YoY to 3,616 million units. It shows up in a screener for stocks in the PE Buy zone with high durability and rising momentum scores.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (201.05, 2.42%), UNO Minda Ltd. (538.55, 2.21%) and 3M India Ltd. (22,029.95, 1.98%).

Downers:

Largecap and midcap losers today include Zomato Ltd. (56.35, -4.41%), JSW Steel Ltd. (736.30, -4.12%) and Aditya Birla Capital Ltd. (148.25, -3.95%).

Volume Shockers

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

Top high volume gainers on BSE included Prism Johnson Ltd. (111.50, 7.78%), Carborundum Universal Ltd. (930.30, 4.73%) and Caplin Point Laboratories Ltd. (745.75, 2.93%).

Top high volume losers on BSE were Avenue Supermarts Ltd. (3,924.20, -3.37%), Delhivery Ltd. (327.00, -3.10%) and IndusInd Bank Ltd. (1,223.10, -1.44%).

Equitas Small Finance Bank Ltd. (59.65, 0.51%) was trading at 7.4 times of weekly average. Havells India Ltd. (1,148.75, 1.84%) and Heidelberg Cement India Ltd. (189.00, 0.00%) were trading with volumes 4.5 and 3.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Axis Bank Ltd. (957.45, -0.50%), General Insurance Corporation of India (201.05, 2.42%) and Equitas Small Finance Bank Ltd. (59.65, 0.51%).

Stocks making new 52 weeks lows included - Galaxy Surfactants Ltd. (2,448.00, -0.78%) and Aavas Financiers Ltd. (1,765.40, -1.82%).

10 stocks climbed above their 200 day SMA including Caplin Point Laboratories Ltd. (745.75, 2.93%) and 3M India Ltd. (22,029.95, 1.98%). 18 stocks slipped below their 200 SMA including Balrampur Chini Mills Ltd. (386.75, -3.87%) and Avenue Supermarts Ltd. (3,924.20, -3.37%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
03 Jan 2023
Market closes higher, ICICI Securities keeps ‘Buy’ rating on Jindal Steel & Power

Trendlyne Analysis

Indian indices closed in the green with the Nifty 50 rising above the 18,200 mark. The Centre raised windfall tax on petroleum, crude oil and aviation turbine fuel, as per a government order dated January 2. European stocks traded higher than Monday’s levels. Asian markets closed higher, in line with the US indices futures, which were trading higher. US markets were closed on Monday in observance of the New year. However, US indices futures ticked marginally higher as investors looked ahead to a busy week of economic data and Fed minutes release. Brent crude oil futures traded marginally lower after rising over 2.7% in the previous trading session as traders weigh slowing global economic growth against China lifting its Covid lockdowns.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, despite the benchmark index trading flat. Nifty Bank and Nifty Pharma closed higher than Monday levels.Nifty IT closed higher, following the tech-heavy Nasdaq 100 futures, which are trading higher.

Nifty 50closed at 18,232.55 (35.1, 0.2%), BSE Sensexclosed at 61,294.20 (126.4, 0.2%) while the broader Nifty 500closed at 15,557.80 (34.2, 0.2%)

Market breadth is in the green. Of the 1,960 stocks traded today, 1,055 were gainers and 844 were losers.

  • Relative strength index(RSI) indicates that stocks like The Fertilisers and Chemicals Travancore, RBL Bankand Solar Industries Indiaare in the overbought zone.

  • Indian Energy Exchange’s total electricity production volumes rise 4% YoY to 7,964 million units. According to National Load Dispatch Center’s data, energy consumption is up 10% YoY to 121 billion units. It shows up in a screener of bearish stocks with low to medium Trendlyne scores.

  • PSU banks like UCO Bank, Bank of Maharashtra, Bank of India, Indian Overseas Bankand Central Bank of Indiaare rising. All constituents of the broader sectoral index Nifty PSU Bank are also trading in the green.

  • ICICI Securities maintains its ‘Buy’ rating on Jindal Steel & Power and increases the target price to Rs 750, an upside of 24.1%. The brokerage sees the firm’s margins grow as cost efficiencies improve due to ramp-up in captive coal production. It believes the company’s logistical advantages and capacity expansion will drive revenue growth in the coming quarters.

  • Sah Polymers’ Rs 66.3 crore IPO gets bids for 5.4X the available 56.1 lakh shares on offer on the last day of bidding. The retail investor quota gets bids for 16.5X the available 10.2 lakh shares on offer.

  • Kotak Institutional Securities initiates coverage on Life Insurance Corp of India with a ‘Buy’ rating and target price of Rs 1,000. The brokerage says shifting the product mix by its agency channel will expand LIC’s margin.

  • Larsen & Toubro’s arm L&T Construction bags orders worth Rs 5,000-7,000 crore from the government of Madhya Pradesh. The orders involve the execution of two lift irrigation projects in Dewar & Dhar of Madhya Pradesh.

  • Welspun India prepays term loans of Rs 45.8 crore at the end of 2022, along with other due instalments. The outstanding term loan, as of December 31, 2022, stands at Rs 129.72 crore against Rs 259.64 crore on March 31, 2022.

  • IT stocks like Mphasis, Coforge, Tata Consultancy Services and Tech Mahindra are rising in trade. The broader sectoral index Nifty IT is also trading in the green.

  • Federal Bank reaches an all-time high of Rs 142.2 per share as its Q3FY23 total deposits rise 14.8% YoY to Rs 2 lakh crore and gross advances rise 19.1% YoY to Rs 1.7 lakh crore. The bank shows up on the screener of stocks with good momentum and return on equity (RoE).

  • Advertising & Media, Fertilizers and Shipping industries rise more than 40% in the past 90 days.

  • Pranjul Bhandari, Managing Director and Chief India Economist at HSBC (India), expects India’s nominal GDP to fall to 9.5% from 15%, leading to slow tax growth.

  • Hindustan Zinc’s Q3FY23 mined metal production rises 1% YoY to 254 KT (kilo tonnes), while its integrated saleable metal production falls 2% due to lower availability and the planned shutdown of one of its lead plants in Q3. The stock shows up in a screener for companies with high TTM EPS growth.

  • Bank of Maharashtra rises more than 3% in trade after reporting a 15.8% YoY increase in total business to Rs 3.6 lakh crore in December 2022. Its gross advances grow 21.8% YoY. The bank ranks high in the Trendlyne checklist score and shows up in a screener of stocks with declining RoCE in the past two years.

  • The Centre raises the windfall tax on locally produced crude oil to Rs 2,100 per tonne from Rs 1,700 earlier and export tax on diesel to Rs 7.5 per litre from Rs 5. The windfall tax on aviation turbine fuel (ATF) rises to Rs 4.5 per litre from Rs 1.5 earlier. 

  • RateGain Travel Technologies is rising as it enters a definitive agreement to acquire Adara Inc through an asset purchase. RateGain's founder and chairman Bhanu Chopra says, "Adara’s key differentiator is its access to permissioned travel-intent data from the world’s top travel and hospitality players as well as destination marketing organizations and relying less on traditional methods of tracking consumer intent."

  • Granules India is rising as it inks a pact with Greenko ZeroC for the application of Green Molecule Solutions in the pharmaceutical industry. Granules India will build a green field facility for the manufacture of APIs, intermediates and fermentation-based products. The project costs Rs 2,000 crore and will be built over five years.

  • Zomato is falling as its co-founder and Chief Technology Officer (CTO) Gunjan Patidar tenders his resignation on Monday after the market close.

  • Jefferies initiates coverage on Piramal Pharma with a ‘Buy’ rating and target price of Rs 150. The brokerage expects a turnaround in the company’s consumer health business in FY24. It estimates an EBITDA CAGR of 21% during FY22-25E.

  • HFCL bags purchase orders worth Rs 95.38 crore from Reliance Projects & Property Management Services for the supply of optical fibre cables. The company shows up in a screener of stocks with consistent high returns over the past five years.

  • Mahindra & Mahindra Financial Services' December 2022 disbursements grow 67% YoY to Rs 4,650 crore. Total disbursements for Q3FY23 stand at Rs 14,450 crore. Gross NPAs are higher than Stage 3 assets, however, the NBFC maintains that extra provisioning may not be required for FY23.

  • PSP Projects emerges as the lowest bidder for the construction of a high-rise office building in Surat, Gujarat, for the Surat Municipal Corporation. The project is worth Rs 1,364.5 crore. The stock shows up in a screener for companies with improving cash flow from operations over the past two years.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (196.30, 4.53%), HDFC Life Insurance Company Ltd. (595.60, 4.44%) and Power Finance Corporation Ltd. (156.00, 4.21%).

Downers:

Largecap and midcap losers today include TVS Motor Company Ltd. (1,041.55, -2.94%), Mahindra & Mahindra Financial Services Ltd. (234.25, -2.82%) and Shriram Finance Ltd. (1,349.65, -2.61%).

Volume Shockers

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

Top high volume gainers on BSE included Swan Energy Ltd. (329.65, 6.08%), HDFC Life Insurance Company Ltd. (595.60, 4.44%) and Power Finance Corporation Ltd. (156.00, 4.21%).

Top high volume losers on BSE were Mahindra & Mahindra Financial Services Ltd. (234.25, -2.82%), Zydus Wellness Ltd. (1,511.00, -1.25%) and Oracle Financial Services Software Ltd. (2,999.55, -0.81%).

CSB Bank Ltd. (251.20, 3.20%) was trading at 16.1 times of weekly average. Motilal Oswal Financial Services Ltd. (711.05, 2.35%) and TeamLease Services Ltd. (2,512.00, -0.54%) were trading with volumes 9.5 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

16 stocks made 52-week highs, while 1 stock was an underachiever and hit a 52-week low.

Stocks touching their year highs included - Apollo Tyres Ltd. (325.40, -0.87%), Axis Bank Ltd. (962.30, 2.20%) and Canara Bank (336.80, 0.19%).

Stock making new 52 weeks lows included - Aavas Financiers Ltd. (1,798.05, -0.56%).

15 stocks climbed above their 200 day SMA including V-Mart Retail Ltd. (2,987.00, 5.55%) and Chemplast Sanmar Ltd. (463.80, 3.98%). 5 stocks slipped below their 200 SMA including Procter & Gamble Hygiene & Healthcare Ltd. (13,933.05, -2.38%) and BASF India Ltd. (2,775.05, -1.08%).

 
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The Baseline
02 Jan 2023
Five Analyst Picks with High Upsides
By Suhas Reddy
  1. Gujarat Fluorochemicals: ICICI Securities maintains its ‘Buy’ rating on this specialty chemicals company with a target price of Rs 4,270. This indicates an upside of 36.6%. Analysts Sanjay Jain and Akash Kumar are positive about the firm’s prospects given its capacity expansion in the fluoropolymers segment. They believe this will expand its presence in new-age industries such as batteries, solar panels and green hydrogen. The analysts also believe the stock is trading at an attractive valuation after a 25% fall “over the past three months, while fundamentals remain robust with opportunities expanding”. They say it is “the most affordable Indian fluorine player by valuations”. 

Jain and Kumar expect the firm’s fluoropolymers export market to grow exponentially in the coming quarters and margins to improve, given the cheaper cost of production compared to its western peers. The analysts estimate the company’s net profit to grow at a CAGR of 40.5% over FY22-24.  

  1. Chalet Hotels: Prabhudas Lilladher initiates coverage on this hotel chain with a ‘Buy’ rating and a target price of Rs 455. This indicates an upside of 26.9%. Analysts Jinesh Joshi and Stuti Beria believe that the company will be a key benefactor of the “expected recovery in business travel, complemented by an exposure to annuity business that acts as a hedge to the deeply cyclical hospitality industry.”

The analysts add that the firm’s hotel portfolio is situated in strategic locations of major cities, where threat of new room supply is low and entry barriers are high. Also, its affiliation with global brands like Marriott and Novotel gives it strong pricing power. They believe these advantages will enable the firm to perform well during the upcycle.

Joshi and Beria see robust room inventory addition in Pune and Hyderabad and a 2.6X increase in the commercial leasable area driving growth in the coming quarters. They expect Chalet Hotels’ net profit to grow at a CAGR of 68% over FY23-25. 

  1. Indraprastha Gas: BOB Capital Markets assumes coverage of this City Gas Distribution firm with a ‘Buy’ rating and target price of Rs 520, which indicates an upside of 24.1%. Analyst Kirtan Mehta is optimistic about the company’s growth prospects on the back of healthy sales volume growth. He believes this growth will be led by stable demand from Delhi and rising demand from new geographic areas. He wrote, “CNG demand is seeing annual growth of 10% in Delhi, 11-12% in Noida, 15% in Ghaziabad, 20% in Muzaffarnagar, 44% in Kanpur, 48% in Rewari, 29% in Karnal, and 24% in Kaithal as per H1FY23 data.” Most new geographical areas are clocking in more than 20% growth on a low base. 

Mehta also sees margins stabilising on the back of favourable government policies and higher sales volume. He sees the company’s margins returning to historical average levels on the back of the normalisation of gas purchase costs. The analyst expects the firm’s revenue to grow at a CAGR of 37.7% over FY22-24. 

  1. Axis Bank: Motilal Oswal gives a ‘Buy’ call to this bank with a target price of Rs 1,130, indicating an upside of 19.6%. Analysts Nitin Aggarwal and Yash Agarwal say, “Axis Bank has progressed well over the past few years and has strengthened its balance sheet by making it granular, increasing the mix of retail loans and improving its provisioning coverage ratio.” As a result, the analysts believe the bank’s key metrics, such as loan growth, margins and profitability, have improved. 

They believe that loan growth has witnessed a healthy recovery with 14-18% growth over the past year and expect sustainable loan growth over the medium term on the back of the bank’s focus on rural and semi-urban markets. They say slippages and credit costs should be under control as asset quality issues are now resolved.  They added, “Axis Bank remains focused on building a stronger, consistent, and sustainable franchise.” 

  1. JK Cement: Axis Direct maintains a ‘Buy’ call on this cement manufacturer with a target price of Rs 3,350. This indicates an upside of 13.5%. The cement company’s arm JK Paints and Coatings is set to acquire a 60% controlling stake in Acro Paints for Rs 153 crore. The remaining 40% will be acquired over 12 months. 

According to analysts Uttam Kumar Srimal and Shikha Doshi, Acro Paints has a wide product portfolio. They believe that the acquisition will provide an opportunity to foray into construction chemicals and waterproofing products, which have a current market size of Rs 5,000+ crore.

The company aims to achieve a turnover of Rs 400 crore in the next four years and will incur further capex to augment the paint business. Srimal and Doshi expect the paint business to complement and support the growth of the wall putty business as both wall putty and paint businesses have common attributes and influential networks. The analysts view JK Cement as a long-term prospect.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
02 Jan 2023
Market closes higher, metal stocks are rising in trade

Trendlyne Analysis

Indian indices closed in the green, with the Nifty 50 closing just below the 18,200 mark. European indices traded higher than Friday’s levels. Goods and Services Tax (GST) collections grew 15% to over Rs 1.49 lakh crore in December 2022, indicating improved manufacturing output and consumer demand, along with better compliance. India’s manufacturing PMI rose the most in two years to 57.8 in December 2022 compared to 55.7 in November 2022 due to new orders and output growth.

US stocks closed marginally lower on Friday, the last trading session of 2022. The tech-heavy Nasdaq 100 closed 0.1% lower while the Dow Jones fell 0.2%. US indices recorded their worst yearly fall since 2008 amid high inflation and the possibility of a recession induced by high Fed rate hikes. S&P 500 lost around 20% of its value in 2022 while the Nasdaq 100 fell around 30%. Crude oil prices rise over 2.7% on Friday after falling for two consecutive trading sessions.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Energy closed higher than Friday’s levels. Nifty IT closed higher, despite the tech-heavy Nasdaq 100 index closing flat on Friday.

Nifty 50closed at 18,197.45 (92.2, 0.5%), BSE Sensexclosed at 61,167.79 (327.1, 0.5%) while the broader Nifty 500closed at 15,523.65 (74.8, 0.5%)

Market breadth is highly positive. Of the 1,977 stocks traded today, 1,294 showed gains, and 625 showed losses.

  • Tata Steel sees a long buildup in its January 25 future series as its open interest rises 16.0% with a put-call ratio of 0.86.

  • TVS Motor Co is falling as its December 2022 wholesales decline 3.6% YoY due to a fall in motorcycle wholesales. Hero MotoCorp’s December 2022 wholesales also fall marginally by 0.1% YoY due to a 5.3% YoY fall in motorcycle wholesales. Both companies see a rise in scooter wholesales by 14% and 109% YoY respectively.

  • JMC Projects (India)rises and Kalpataru Power Transmissionhits an all-time highof Rs 592.5 per share as the companies fix January 11 as the record date to determine the shareholders to whom the shares of KPTL would be allotted.

  • The volume of transactions on India's digital payments platform, Unified Payments Interface (UPI), increases 71% YoY to 782 crore in December 2022. The value of transactions is up 55% YoY to Rs 12.8 lakh crore.

  • Sah Polymers’ Rs 66.3 crore IPO gets bids for 1.59X the available 56.1 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 5.3X the available 10.2 lakh shares on offer.

  • Blue Dart Express, Cera Sanitaryware, Persistent Systems and AstraZeneca Pharma India trade above their second resistance or R2 level as the markets trade higher.

  • Satia Industries is rising as it bags three orders to supply 17,000 tonnes of paper for Rs 200 crore. The contracts pertain to supplying paper for printing textbooks. The stock shows up in a screener for comapnies with increasing net profit sequentially for the past four quarters.

  • Bharat Forge is rising as its subsidiary, JS Auto Cast Foundry India, acquires a special economic zone (SEZ) unit in Erode from Indo Shell Mould. The SEZ unit has a capacity of 42,000 MTPA and supplies fully machined critical castings to customers in the automotive industry. This takes the company's total capacity to 1.4 lakh MTPA.

  • ICICI Securities downgrades its rating on Multi Commodity Exchange of India (MCX) to ‘Add’ from ‘Buy’ and reduces its target price to Rs 1,669 from Rs 1,795. This indicates an upside of 13.5%. The brokerage cites higher software costs and expensive valuations for revising its rating. However, it remains optimistic about the firm’s growth prospects due to MCX’s robust traction in options and dominant market share.

  • Capacit'e Infraprojects is rising as it receives an order worth Rs 203 crore from Ashar Ventures to construct a 60-storied tower in Thane. It features in a screener of stocks with improving cash flow and good durability.

  • Mahindra & Mahindra is rising as its December 2022 wholesales grow 45% YoY to 56,677 units, driven by a 62% YoY growth in sports utility vehicle wholesales. Maruti Suzuki’s December 2022 total wholesales fall 9% YoY to 1.39 lakh units due to a 21.2% YoY decline in mini & compact segment passenger vehicle wholesales.

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

  • Jefferies upgrades its rating on Tata Steel and Hindalco to a ‘Buy’ from ‘Hold’ and raises target prices to Rs 150 and Rs 600 respectively. The brokerage is positive on the Indian metal companies as Covid policies in China ease. This would increase the demand for metals globally. Meanwhile, it maintains its ‘Hold’ rating on Coal India and ‘Underperform’ on JSW Steel.

  • Indian Overseas Bank appoints Sanjay Vinayak Mudaliyar as Executive Director for a period of three years with effect from January 1.

  • Canara Bank's Managing Director and Chief Executive Officer LV Prabhakar retires from the post with effect from December 31, 2022.

  • India’s manufacturing PMI rises to 57.8 in December 2022, the highest in two years, due to growth in new orders and output. The PMI was 55.7 in November 2022.

  • Religare Enterprises is rising as its subsidiary, Religare Finvest, signs a settlement agreement with 16 of its outstanding lenders in accordance with the sanction letters received. The subsidiary will seek to exit from the corrective action plan (CAP) imposed by the Reserve Bank of India (RBI) and restart its lending business.

  • NCC is surging as it bags multiple orders worth Rs 3,601 crore from state government agencies in December 2022. The company wins two orders in the water and electrical segment and one in the irrigation division. It features in a screener of stocks with negative to positive growth in sales and profit with strong price momentum.

  • Investment Advisor Sandip Sabharwal expects domestically linked stocks in India to perform well during the first phase of 2023. He adds that capital expenditure continues to be the prominent theme for the year.

  • HG Infra Engineering wins a project from the Delhi Metro Rail Corp for the design and construction of elevated viaducts and stations for Rs 398.6 crore. The estimated time to complete the project is 24 months. The stock is trading near its 52-week high.

  • Adani Power extends the timeline to acquire thermal assets worth Rs 7,017 crore from DB Power till January 15.

  • Bandhan Bank transfers its group and technical write-off loans worth Rs 8,897 crore to an asset reconstruction company for a consideration amount of Rs 801 crore. The bank shows up in a screener of bearish stocks having medium to low Trendlyne scores.

Riding High:

Largecap and midcap gainers today include Steel Authority of India (SAIL) Ltd. (88.95, 7.62%), Power Finance Corporation Ltd. (149.70, 6.06%) and Tata Steel Ltd. (119.25, 5.86%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (3,550.60, -3.85%), Dr. Lal Pathlabs Ltd. (2,200.15, -2.67%) and Bajaj Holdings & Investment Ltd. (5,607.15, -2.34%).

Volume Rockets

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

Top high volume gainers on BSE included NCC Ltd. (91.70, 9.30%), IRB Infrastructure Developers Ltd. (314.00, 7.96%) and Steel Authority of India (SAIL) Ltd. (88.95, 7.62%).

Top high volume losers on BSE were Multi Commodity Exchange of India Ltd. (1,457.70, -6.21%), 3M India Ltd. (21,535.00, -1.86%) and ICICI Securities Ltd. (494.75, -0.52%).

IFB Industries Ltd. (932.00, 3.36%) was trading at 33.9 times of weekly average. Bombay Burmah Trading Corporation Ltd. (935.00, 3.08%) and PNB Housing Finance Ltd. (573.15, 7.42%) were trading with volumes 4.7 and 4.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

12 stocks overperformed with 52-week highs, while 4 stocks hit their 52-week lows.

Stocks touching their year highs included - Canara Bank (336.15, 0.86%), Jindal Steel & Power Ltd. (594.65, 2.42%) and Power Finance Corporation Ltd. (149.70, 6.06%).

Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (434.80, -0.80%) and Ipca Laboratories Ltd. (836.70, -0.76%).

19 stocks climbed above their 200 day SMA including Rain Industries Ltd. (178.85, 4.77%) and Shyam Metalics and Energy Ltd. (326.45, 4.10%). 6 stocks slipped below their 200 SMA including Bajaj Holdings & Investment Ltd. (5,607.15, -2.34%) and 3M India Ltd. (21,535.00, -1.86%).

 
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The Baseline
30 Dec 2022
Five Interesting Stocks Today

  1. Poonawalla Fincorp: This NBFC stock rose 11.9% over the past week till Thursday on the back of a healthy long-term business outlook. The Chairman of the firm, Adar Poonawalla, believes the NBFC is well-capitalised to grow its assets under management (AUM) to Rs 50,000 crore in the next five years, say reports. The company also sold its housing finance arm, Poonawalla Housing Finance, for Rs 3,900 crore. The management believes this transaction will improve the company’s efficiency as it will increase resource allocation and focus on core segments like retail and small business financing. The company has been deleveraging over the past few quarters, which enabled it to show up in a screener for companies with declining debt.

Last year, the company was rocked by serious allegations of insider trading. Its Managing Director, Abhay Bhutada, resigned in September 2021 after SEBI barred him from the equity markets for alleged insider trading activities. He was reinstated in February 2022 and SEBI revoked its order in June.

After acquiring Magma Group in May 2021, the promoters rejigged its operations and management. They also reduced the number of branches to 115 from 300. This led to the company tightening its underwriting framework and write-off policy. It also focused on increasing collections to improve asset quality. According to Motilal Oswal, these changes have led to an improvement in credit rating, thus allowing the NBFC to reprice its liabilities to lower rates and access diversified sources of debt. Over the past year, the firm’s cost of borrowing has fallen 190 bps, the brokerage added.

  1. Deepak Fertilisers & Petrochemicals: This commodity chemicals company fell 22.4% during the week ending December 23 as the Securities and Exchange Board of India (SEBI) imposed a fine of Rs 45 lakh on Naresh Ramniklal Mehta and his wife Pallavi Naresh Mehta for insider trading. Because of this sharp drop in share price, the company’s promoter entity, Robust Marketing Services, pledged 5.4 lakh shares (or 0.46% stake) to top up the pledged shares to Bajaj Finance. Currently, the company’s pledged shares stand at 27.7% and it features in a screener of stocks with high promoter stock pledges.

After the sharp fall in share price, the stock rose 1% on December 15 as its board of directors approved the demerger of its mining chemicals and fertilisers businesses of Smartchem Technologies into Deepak Mining Services and Mahadhan Farm Technologies. This will be followed by the amalgamation of Smartchem Technologies with Mahadhan Farm Technologies. In reaction, the stock has risen over 10% in the past week.

Sailesh C Mehta, Chairman & Managing Director of the company, had said, “The proposed corporate restructuring shall considerably help create strong independent business platforms within the larger DFPCL brand umbrella, hence enhancing stakeholders' value over time.” The company features in a screener of stocks with improving return on capital employed (RoCE) over the past two years.

  1. Suven Pharmaceuticals: This pharma company’s share price fell over 4.7% on Monday after private equity investor Advent International agreed to acquire a 50.1% stake in it for Rs 6,313 crore from the Jasti family, the promoters of Suven Pharma. But the deal did not excite investors as the stock fell after the analyst conference call. Reports suggest lack of clarity post-acquisition as one of the reasons for the share price fall. However, the share price has been on an uptrend since October and as a result, the company features in a screener of stocks with strong momentum with their prices above short-, medium- and long-term moving averages.

Advent has made an offer for an additional 26% of Suven’s shares from public shareholders to comply with Securities and Exchange Board of India’s (SEBI) takeover rules. The promoter stake sale and open offer are priced at Rs 495 per share.

Advent International has been on an acquisition spree in the Indian pharma space for the past couple of years, starting with the acquisition of RA Chem Pharma in October 2020. After the merger completion, Advent intends to explore the merger of its portfolio company, Cohance Lifesciences, with Suven Pharma to build an end-to-end CDMO (contract development and manufacturing organisation) and merchant API player servicing the pharma and specialty chemical markets. In H1FY23, Suven Pharma derived 52% of its revenue from the CDMO space and 44% from the specialty segment.

  1. Godrej Properties: This realty stock has been in the news almost every other week for buying large land parcels for housing projects. In December, the company bought nearly 103 acres of land in Gurugram and Mumbai. However, investors were not too enthused by these acquisitions and the stock went down 1% in the past week. The stock has been trading nearly 5% down over the month and shows up in a screener of stocks trading below their first support or S1 level.

So far in FY23, the company has acquired land with a revenue potential of Rs 16,500 crore. This is over and above its guidance of Rs 15,000 crore for FY23. The company’s Executive Chairman, Pirojsha Godrej, says that he is bullish on sales bookings and new land acquisitions, and plans to add more such acquisitions to the bucket by March 2023.

However, reports suggest that the pace of new launches has been slower in comparison to its peers, and these land acquisitions need to result in better sales or they may affect the debt levels of the company. Jefferies expects Godrej’s debt to be in the range of Rs 300-700 crore for FY23-25. In Q2FY23, Godrej’s net debt stands at Rs 1,365 crore, a rise of 42.8% QoQ. Also, rising interest rates and inflation can affect housing demand in future.

On the bright side, the company’s Kandivali land acquisition on December 2 shows its improving micro-market selection. The Kandivali project has a revenue potential of Rs 7,000 crore. Trendlyne’s Forecaster also expects Godrej Properties’ operating revenue to grow 37.6% in Q3FY23 from actual operating revenue in Q2FY23. In Q2, it missed the Forecaster estimate by 38.4%.

  1. Mahindra CIE Automotive: This auto parts & equipment stock touched an all-time high of Rs 347.7 on Thursday. The stock is outperforming its sector by 17.6% according to Trendlyne’s relative returns screener. In the past month, the stock rose 18% while rising more than 45.7% in the past six months. Trendlyne scores the company with a durability score of 80 and a momentum score of 70. Durability score indicates strong financials and momentum score talks about the bullish or bearish nature of the stock.

This comes after the company announced its plans to sell its forgings business in Germany (a wholly owned subsidiary) on December 14. The subsidiary contributed 10% to its consolidated sales but was a loss-making unit. It indicated the challenges faced by its German operations were due to geopolitical conflict and higher energy prices.

Analysts from ICICI Direct and Motilal Oswal retain their stance on the stock, as the company is making changes in its functioning, and cutting down on loss-making units to improve its profitability. ICICI Direct has increased its target price by 26% to Rs 410. Motilal Oswal also maintains a ‘Buy’ on the stock as it expects new order wins and the current order book will help the stock outperform the domestic auto industry by nearly 10%. The company has a new order pipeline for making certain EV components.

The company’s current shareholding shows that Mahindra & Mahindra’s stake has reduced to 9.3% from 11.4% earlier. It is no longer a promoter of the company. CIE has a 65.7% stake and is driving the company towards better operational efficiencies. The company overall plans to direct its capex towards India business. It shows up in a screener of companies with low debt.

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