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Trendlyne Marketwatch
09 Feb 2023
Market trades higher, IRCTC's net profit rises 22.4% YoY to Rs 255.5 crore

Trendlyne Analysis

Nifty 50, BSE Sensexand the broader Nifty 500closed at 17,893.45 (21.8, 0.1%), 60,806.22 (142.4, 0.2%) and 15,030.10 (1.8, 0.0%) respectively, while the market breadth remained horizontal. Of the 1,947 stocks traded today, 895 were gainers and 983 losers. 

The Adani group will prepay a USD 500 million loan due next month, as several banks steered clear of the refinancing option. Adani group stocks closed in deep red, following the MSCI announcement that it will be making changes to the status of the group's stocks in the index. Meanwhile, France’s Total Energies put its USD 50 billion deal with the Adani group on hold.

Nifty Smallcap 100 and Nifty Midcap 100 closed flat, following the benchmark index. The Nifty Metal closed lower as heavyweight Adani Enterprises fell on the back of the MSCI inquiry. Nifty IT closed in the green, backed by gains in Infosys shares. 

In international markets, major Asian indices closed mixed. US indices futures traded lower as investors expect more rate hikes from the Fed to achieve the desired target of 2% inflation. Tech-heavy Nasdaq 100 closed 1.83% lower on Wednesday. European markets traded in the green as German consumer prices rose to 9.2% in January from a year ago, less than the anticipated 10%. This eased pressure on the European Central Bank to keep raising rates. UK is set to release GDP numbers on Friday, and they are expected to show that the economy flatlined in the fourth quarter, narrowly avoiding recession.

  • Money flow index (MFI) indicates that stocks like Symphony, Blue Star, Procter & Gamble Health and KPIT Technologies are in the overbought zone.

  • French company Total Energies puts its partnership with Adani group’s hydrogen venture on hold after the allegations raised by Hindenburg Research. The partnership was announced in June 2022 and Total Energies was set to have a 25% stake in the project.

  • Commodity Printing/Stationary, IT Training Services, Advertising & Media industries gain over 3% in trade today.

  • Escorts Kubota, Graphite India andAstral’s Q3FY23 net profits fall 6.9%, 59.8% and 26.9% YoY respectively.

  • Trent, Cummins India, Schaeffler India and NHPC are trading above their second resistance or R2 level.

  • HSBC maintains its ‘Buy’ rating on Bharti Airtel with a target price of Rs 970. It expects the company’s return on invested capital (RoIC) to expand on the back of a rise in average revenue per user (ARPU). It adds that the growth outlook is strong due to the 5G rollout.

  • India Railway Catering & Tourism Corp (IRCTC) is rising as its Q3FY23 net profit increases 22.4% YoY to Rs 255.5 crore. Revenue surges 69.9% YoY led by multi-fold growth in the catering segment. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Hindalco’s Q3FY23 net profit falls 62.9% YoY to Rs 1,362 crore as EBITDA across Novelis (a subsidiary of Hindalco) and the upstream segment dips. However, revenue increases by 5.7% YoY. The stock ranks high on the Trendlyne Checklist score.

  • MRF is falling despite its Q3FY23 net profit rising 17% YoY to Rs 174.8 crore and revenue increasing by 14.7% YoY. The company’s profitability improves amid a significant surge in the cost of materials. The stock shows up in a screener for companies with revenues increasing sequentially for the past four quarters.

  • Analysts expect the RBI to raise interest rates by another 25 bps in April after it expressed concern over the stickiness of core inflation. The RBI also maintained the policy stance at ‘withdrawal of accommodation’.

  • SFK India's net profit rises 31.4% YoY to Rs 116.7 crore in Q3FY23. Growth in revenue and declining employee benefits expenses aid the EBITDA margin to rise by 430 bps YoY. It features in a screener of stocks with improving net profit and profit margin (YoY).

  • One97 Communications (Paytm), CG Power and Industrial Solutions and Mahindra CIE Automotive outperform their sectors in the past month.

  • KRChoksey upgrades its rating on Alembic Pharmaceuticals to ‘Buy’ from ‘Add’ and raises the target price to Rs 704 from Rs 694. This implies an upside of 34.3%. The brokerage believes robust demand in the Indian market and new product launches will offset the price erosion concerns in the US market.

  • Mutual Funds' net inflow grows 2.5X MoM to Rs 11,373 crore in January from Rs 4,491 crore in December 2022, according to data released by the Association of Mutual Funds in India (AMFI).

  • Lupin is rising as it receives US FDA approval for its abbreviated new drug application (ANDA) for glycopyrrolate injection. It is the first approval for the drug manufacturer's new injectable facility in Nagpur. According to IQVIA, the injection had an estimated annual sales of $39 million in the US during CY22.

  • UNO Minda is rising as its Q3FY23 net profit surges 59.9% YoY to Rs 162 crore and revenue rises 33.7% YoY. The growth comes on the back of increasing content per vehicle, a diversified product portfolio and new launches. The stock shows up in a screener for companies with low debt.

  • Trent is rising in trade after reporting a 19.5% YoY increase in net profit to Rs 167 crore. Revenue grows 53.7% on the back of improving customer traction and sales from brands like Westside and Zudio, among others. The company shows up in a screener of stocks with strong annual EPS growth.

  • Indian rupee depreciates to 82.58 from the previous close of 82.49 against the US dollar in early trade today amid continued foreign fund outflows and muted trend of domestic equities.

  • Oberoi Realty's Q3FY23 net profit rises 50.3% YoY to Rs 702.6 crore, while its revenue increases 95.9% YoY. The positive performance is the result of robust sales upon the launch of Tower G in project Sky City. It shows up in a screener for stocks with improving cash flow and good durability.

  • Britannia Industries, Cholamandalam Investment Finance Co and ACC outperform the Nifty 50 index over the week post their Q3FY23 results.

  • Cummins India is rising after reporting an increase in net profit by 66% YoY to Rs 413.8 crore for Q3FY23. Revenue is up 26% YoY, aided by growth in domestic sales and exports. It shows up in a screener for stocks with growth in quarterly net profit and margin YoY.

  • Samvardhana Motherson International’s Q3FY23 net profit surges 85.2% YoY to Rs 453.9 crore as demand recovers in Europe and India. Revenue rises 25.5% YoY, aided by growth in revenue across segments like wiring harnesses, modules and polymer products, among others. It shows up in a screener of stocks with high momentum scores.

Riding High:

Largecap and midcap gainers today include Trent Ltd. (1,341.90, 8.56%), Cummins India Ltd. (1,578.35, 7.06%) and PB Fintech Ltd. (510.30, 5.93%).

Downers:

Largecap and midcap losers today include Adani Enterprises Ltd. (1,925.70, -11.02%), Ambuja Cements Ltd. (357.80, -6.98%) and Adani Power Ltd. (172.80, -5.00%).

Volume Shockers

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

Top high volume gainers on BSE included Trent Ltd. (1,341.90, 8.56%), Cummins India Ltd. (1,578.35, 7.06%) and Gujarat Pipavav Port Ltd. (98.45, 6.49%).

Top high volume losers on BSE were Restaurant Brands Asia Ltd. (99.50, -6.57%), Ircon International Ltd. (55.40, -4.07%) and MRF Ltd. (88,813.05, -3.75%).

Kansai Nerolac Paints Ltd. (417.90, 0.84%) was trading at 9.4 times of weekly average. Godrej Agrovet Ltd. (460.80, 2.45%) and Honeywell Automation India Ltd. (37,910.00, -2.96%) were trading with volumes 8.5 and 7.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

7 stocks took off, crossing 52-week highs, while 5 stocks hit their 52-week lows.

Stocks touching their year highs included - Cummins India Ltd. (1,578.35, 7.06%), Mahindra & Mahindra Financial Services Ltd. (270.40, 0.50%) and NCC Ltd. (92.90, -1.69%).

Stocks making new 52 weeks lows included - Page Industries Ltd. (37,960.15, -3.54%) and Thyrocare Technologies Ltd. (486.65, -0.36%).

18 stocks climbed above their 200 day SMA including Trent Ltd. (1,341.90, 8.56%) and PB Fintech Ltd. (510.30, 5.93%). 14 stocks slipped below their 200 SMA including Honeywell Automation India Ltd. (37,910.00, -2.96%) and Prince Pipes & Fittings Ltd. (595.25, -2.91%).

 
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The Baseline
09 Feb 2023
Screener of the week: MFs and FIIs buying infrastructure-related companies
By Abdullah Shah

We take a look at a screener with key infrastructure companies that are seeing a jump in mutual fund and foreign institutional investor holdings. The companies are from three industries that could benefit from the Union budget – construction & engineering, heavy electrical equipment and roads & highways. 

Out of seven companies, only Ashoka Buildcon is in the screener from the roads and highways industry. Construction & engineering, and heavy electrical equipment industries have three companies each (see chart above). 

TD Power Systems, a heavy electrical equipment manufacturer, rose the highest in MF holding change QoQ, rising 1.22 percentage points to 12.93%. ICICI Prudential Infrastructure Fund bought 2.7 lakh shares (or 0.2% stake) in the company in Q3FY23. 

Among the companies we discussed earlier, KEC International from the construction & engineering industry made it to the list as its FII holding increased by 1.04 percentage points, while its MF holding rose 3 basis points QoQ. Fidelity Funds-India Focus Fund bought 20.2 lakh shares (or 0.8% stake) in the company over the past quarter.

You can find more screeners here,

 
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Trendlyne Marketwatch
08 Feb 2023
Market closes higher, RBI increases its FY23 GDP growth estimate to 7%

Trendlyne Analysis

Nifty 50 closed at 17,871.70 (150.2, 0.9%), BSE Sensex closed at 60,663.79 (377.8, 0.6%) while the broader Nifty 500 closed at 15,028.30 (126.1, 0.9%). Market breadth is in the green. Of the 1,951 stocks traded today, 1,169 were on the uptrend, and 717 went down. The Reserve Bank of India (RBI) raised the key repo rate by an expected 25 bps to 6.5% during the Monetary Policy Committee (MPC) meeting. It also increased its FY23 gross domestic product (GDP) growth estimate from 6.8% to 7%.

Adani Enterprises extended its gains from Tuesday and rose over 20%. However, Adani Total Gas and Adani Green Energy continued their fall and closed at their lower circuits. Adani Wilmar hit its upper circuit post its Q3 results announcement. Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal rose over 3.8% and closed in the green while Nifty FMCG and Nifty Realty closed flat.

In international markets, major Asian indices closed mixed. US indices futures traded marginally lower as investors assess the US Fed Chairman Jerome Powell's speech. European stocks traded higher amid mixed global cues. Crude oil futures recovered from their day’s lows and traded higher due to an mproving economic outlook amid falling inflation.

  • Relative strength index(RSI) indicates that stocks like Procter & Gamble Health, ZF Commercial Vehicle Control Systems India, Persistent Systemsand Mahindra & Mahindra Financial Servicesare in the overbought zone.

  • PB Fintech (Policybazaar) is one of the high-volume top gainer stocks rising more than 6% in trade. It ranks medium on the Trendlyne Checklist score. The consensus recommendation from 10 analysts for the stock is ‘Buy’.

  • One97 Communications (Paytm) is rising as Macquarie upgrades its rating to ‘Outperform’ and raises the target price by 80% to Rs 800. The brokerage says the quality of the company’s loans (post-paid and personal loans) is improving. It adds that the firm has controlled its overall expenses and charges.

  • Metal stocks like Adani Enterprises, Jindal Steel & Power, JSW Steel and Hindustan Copper are rising in trade. The broader sectoral index Nifty Metal is also trading in the green.

  • Astral's board recommends a bonus issue of equity shares in the ratio of 1:3 and fixes March 14 as the record date, subject to approval from members of the company.

  • Shree Cements is falling as its Q3FY23 net profit declines 41.5% YoY to Rs 282.1 crore due to higher expenses. However, revenue grows 19.4% YoY as volume sees healthy growth on a YoY basis. The stock shows up in a screener for companies with declining net cash flow.

  • Godrej Consumer Products, Blue Star and Bajaj Finserv outperform the Nifty 50 index over the week post their Q3FY23 results.

  • Talking about the banking sector’s exposure to Adani Group companies, RBI Governor Shaktikanta Das says that Indian banks are strong and resilient and won't be affected by a case like this. Deputy Governor MK Jain adds that domestic banks' exposure to Adani Group is “insignificant”.

  • ICICI Direct upgrades the rating on Elgi Equipments to ‘Buy’ from ‘Hold’ with a target price of Rs 500, implying an upside of 18.1%. The brokerage is positive about the firm’s prospects given an increase in high-margin orders, customer additions and a robust balance sheet. It expects the company’s net profit to grow at a CAGR of 26.1% over FY23-25.

  • Bajaj Finance, LTIMindtree and AstraZeneca Pharma trade above their second resistance or R2 level.

  • Ambuja Cements is rising as its Q3FY23 net profit surges 49.5% YoY to Rs 434.4 crore. Revenue also increases 3.7% YoY with growth in sales volumes and realizations. Raw material and power & fuel costs fall on a QoQ basis. The stock shows up in a screener with improving RoCE for the past two years.

  • RBI’s Monetary Policy Committee projects India’s GDP to grow 5.8% during Jan-March and 6.4% in FY24.

  • Coal and Telecom Services sectors are falling in trade. Meanwhile, Commercial Services & Supplies, Transportation and Hardware Technology & Equipment sectors rise more than 3% today.

  • IT stocks like Coforge, Mphasis, Infosys, LTIMindtree and Tata Consultancy Services are rising in trade. All constituents of the broader sectoral index Nifty IT are also trading in the green.

  • The Reserve Bank of India (RBI) forecasts India’s CPI inflation or retail inflation to be at 6.5% and 5.3% for FY23 and FY24 respectively.

  • Tata Consultancy Services is rising as it bags a contract worth 600 million pounds (Rs 53,227 crore) from the UK-based Phoenix Group. The contract pertains to digitally transforming the life insurance business of ReAssure, a subsidiary of the group.

  • NHPC's Q3FY23 net profit falls 14.2% YoY to Rs 692.7 crore as deferred tax expense rises. Revenue also improves 19.8% YoY. The stock shows up in a screener for companies with increasing profits every quarter for the past two years.

  • Fine Organic Industries, Life Insurance Corp and Alkyl Amines Chemicals weekly average delivery volumes rise ahead of their Q3FY23 results tomorrow.

  • The Reserve Bank of India (RBI) raises repo rate by 25 bps to 6.5% during the Monetary Policy Committee (MPC) meeting.

  • Deepak Nitrite is falling as its Q3FY23 net profit declines 13.8% YoY to Rs 209.1 crore due to higher raw material costs, employee expenses and power & fuel expenses. Revenue rises by 15.6% YoY led by healthy growth in its advanced intermediates segment. The stock shows up in a screener for companies with declining net profits for the past two quarters.

  • Hero MotoCorp is falling despite reporting a net profit rise of 3.2% YoY to Rs 726 crore in Q3FY23. Net profit rises despite a weak demand scenario, especially from rural areas. CFO Niranjan Gupta says that the company’s cost-cutting programmes should improve profitability. The stock ranks medium on the Trendlyne Checklist score.

  • Bharti Airtel’s Q3FY23 net profit falls 26% QoQ to Rs 1,588.2 crore, due to higher operating expenses and license fee-related provisions. However, revenue grows by 19.9% QoQ on ARPU growth. 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 Adani Enterprises Ltd. (2,164.25, 20.04%), One97 Communications Ltd. (675.95, 14.84%) and Zomato Ltd. (54.30, 10.03%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (1,391.00, -5.00%), Adani Green Energy Ltd. (802.45, -5.00%) and Power Grid Corporation of India Ltd. (212.00, -2.24%).

Movers and Shakers

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

Top high volume gainers on BSE included One97 Communications Ltd. (675.95, 14.84%), Zomato Ltd. (54.30, 10.03%) and Symphony Ltd. (1,047.85, 8.56%).

Top high volume losers on BSE were Navin Fluorine International Ltd. (4,185.05, -2.25%) and Privi Speciality Chemicals Ltd. (875.95, -1.00%).

Thermax Ltd. (2,090.50, 4.55%) was trading at 23.8 times of weekly average. 3M India Ltd. (2,2950.00, 0.22%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,279.00, 3.13%) were trading with volumes 11.3 and 7.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

4 stocks hit their 52-week highs, while 10 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Zydus Lifesciences Ltd. (474.00, -1.14%), Mahindra & Mahindra Financial Services Ltd. (269.05, 0.60%) and Jindal Stainless (Hisar) Ltd. (483.05, 0.68%).

Stocks making new 52 weeks lows included - IFB Industries Ltd. (835.00, 3.78%) and Sanofi India Ltd. (5,270.00, -1.11%).

23 stocks climbed above their 200 day SMA including One97 Communications Ltd. (675.95, 14.84%) and CreditAccess Grameen Ltd. (956.60, 6.13%). 6 stocks slipped below their 200 SMA including Bharat Dynamics Ltd. (850.45, -4.33%) and Tejas Networks Ltd. (544.80, -1.74%).

 
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The Baseline
07 Feb 2023
Five analyst picks this week post results
By Abhiraj Panchal

This week in analyst picks we take a look at stocks with YoY revenue and profit growth above 10% in Q3. We also look at forward PE ratio estimates for these stocks one year from now. 

The forward PE estimate is the expected value of earnings to the share price one year ahead. To calculate the FY24 forward PE ratio, we use the Forecaster's target price estimates and annual one-year forward forecaster EPS estimate.

  1. Larsen & Toubro: BOB Capital Markets maintains its ‘Buy’ rating on this construction and engineering company, and raises its target price to Rs 2,440 from Rs 2,390. This indicates an upside of 12.7%. In Q3FY23, the company’s net profit grew 24.3% YoY to Rs 2,552.9 crore and revenue rose 17.3% YoY to 46,389.7 crore. 

Analysts Vinod Chari, Tanay Rasal and Nilesh Patil write that the firm remains “the best play on India’s capex story, and is our preferred capital goods pick.” They believe the company is well-positioned to benefit from the Centre’s push toward infrastructure given its robust tendering pipeline and order win rate of 15–20%. The analysts also see increasing private sector orders as a positive for the company. In Q3FY23, private sector orders accounted for 39% of L&T’s total order inflows, up from 18% a year ago.

Given the robust order pipeline, the analysts anticipate healthy growth in order inflows in the coming quarters. Chari, Rasal and Patil expect the company’s revenue to grow at a CAGR of 16.9% over FY22-24. Larsen & Toubro’s FY24 forward PE estimate is 31.7, higher than the current PE TTM of 30.

  1. Coal India: ICICI Securities maintains its ‘Buy’ rating on this coal mining company and revises its target price to Rs 282 from Rs 294. This implies an upside of 28.6%. In Q3FY23, the firm’s net profit surged by 70.1% YoY to Rs 7,755.6 crore and revenue grew by 23.7% YoY to Rs 35,169.3 crore. 

Analysts Rahul Modi and Anshuman Ashit cite cost increases - driven by higher wage provisioning and contractual expenses - for lowering the target price despite robust results. The analysts do point out that growth was driven by an increase in volumes and realisations. They expect this growth momentum to continue given the strong domestic demand for coal. The analysts expect Coal India’s production volume to touch 700 million tonnes in FY23. They added, “With 9MFY23 production/offtake already at 479 and 509 million tonnes (+15.8%/+5.4% YoY), CIL's volume is poised to reach 700 million tonnes in FY23.”

Given the strong operational performance and with domestic demand for coal remaining strong, Modi and Ashit anticipate the company’s net profit to grow at a CAGR of 11.4% over FY22-25. The forward PE estimate for Coal India stands at 5.3, higher than its current PE TTM of 4.6.

  1. Bajaj Finance: KRChoksey maintains a ‘Buy’ call on this NBFC with a target price of Rs 8,030, indicating an upside of 30.3%. In Q3FY23, the company’s net profit grew by 39.9% YoY to Rs 2,973 crore while its revenue grew by 26.4% YoY to Rs 10,786 crore. 

Abhishek Agarwal said, “Bajaj Finance continued to post strong growth in terms of business and profitability.” He added, “The NBFC has registered the highest-ever customer addition during the quarter.” The analyst is optimistic about the finance company on the back of its strong background, brand name, diversified product offerings, prudent risk management, and long-term potential for robust AUM growth. He expects Bajaj Housing Finance (a subsidiary) to be a core driver for growth in upcoming quarters, led by improving opportunities in the housing finance business. 

Agarwal expects profit and net interest income to grow at 35.1% and 25.4% CAGR respectively, and the asset quality to remain stable. The forward PE estimate for Bajaj Finance is 39.5, which is higher than the current PE TTM of 34.4.

  1. Laurus Labs: ICICI Direct retains a ‘Buy’ call on this pharmaceutical company with a target price of Rs 400. This indicates an upside of 21.2%. In Q3FY23, the company reported an increase of 32.1% YoY in net profit to Rs 203 crore. It reported revenue of Rs 1,546.2 crore (up by 49.5% YoY), which the analysts Siddhant Khandekar, Kushal Shah and Utkarsh Jain believe increased on the back of 210% YoY growth in custom synthesis. 

According to the analysts, the company is well-positioned to meet the fast-growing global demand for new chemical entity drug substances and drug products with ongoing supplies for seven commercial products. They are also positive about the pharma company due to its robust order book, product launches in anti-diabetic (FY23) and CV portfolio in the United States and Europe that have a target opportunity at $40 billion. The forward PE estimate for Laurus Labs is 27.7 as against the current PE TTM of 19.4. 

  1. Westlife Foodworld: Axis Direct maintains its ‘Buy’ call on this fast food restaurant holding company with a target price of Rs 930, indicating an upside of 32.7%. In Q3FY23, the company’s net profit increased by 72.4% YoY to Rs 36.4 crore and its revenue grew by 28.7% to Rs 619.2 crore. 

Analyst Preeyam Tolia believes that same-store sales growth stood at 20% led by increased footfalls, improved product mix and price hikes. His confidence in the restaurant chain holder comes from bright future prospects supported by the company’s strong execution track record of revenue and EBITDA growth, driven by new product launches and cost rationalisation programs. He expects Westlife Foodworld to deliver revenue EBITDA growth of 30% and 43% CAGR, respectively,  over FY22-25. Westlife Foodworld’s forward PE estimate is 104.3 as compared to the current PE TTM of 102.7.

All these stocks have a higher forward PE ratio as the average target share price of these stocks is relatively higher compared to their forward earnings per share.

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

(You can find all analyst picks here)

 
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Trendlyne Marketwatch
07 Feb 2023
Market closes lower, Adani Ports' Q3FY23 net profit falls 16% YoY to Rs 1,315.5 crore

Trendlyne Analysis

Nifty 50closed at 17,721.50 (-43.1, -0.2%), BSE Sensex closed at 60,286.04 (-220.9, -0.4%) while the broader Nifty 500 closed at 14,902.20 (-32.0, -0.2%).

Market breadth is in the red. Of the 1,949 stocks traded today, 777 were on the uptrend, and 1,118 went down. Banking stocks recouped losses after a Fitch rating report noting that Indian banks' exposure to Adani Group would not pose a risk their credit profiles. It added that the economic and sovereign implications of the Adani Group controversy remain limited.

Adani Enterprises closes 14% higher after several days of technical weakness. Adani Wilmar closes in the upper circuit. Adani Green and Adani Power close in the lower circuit. Adani group paid back USD 1.12 billion ahead of schedule to release pledged shares in Adani Ports, Adani Green, and Adani Enterprises.

Nifty Smallcap 100 and Nifty Midcap 100 close in the red, taking cues from the benchmark index. Nifty FMCG closes in the red, led by the heavyweight ITC, as the government weighs stake sale in ITC.

Major Asian indices close in the green, except for Australian ASX All Ordinaries which closed negative. European indices trade in the red as strong US jobs data stoke rate hike fears. US indices futures are also in the red as investors wait for Fed’s commentary on rate hikes.

  • Hindalco Industries sees a short buildup in its February 23 future series as its open interest rises 11.9% with a put-call ratio of 0.32.

  • Fitch Ratings says that Indian banks' exposure to Adani Group is insufficient to risk their credit profiles. It adds that the economic and sovereign implications of the Adani Group controversy are limited.

  • Aditya Birla Fashion and Retail is falling as its Q3FY23 net profit falls 91.7% YoY to Rs 15.8 crore due to higher other expenses, raw material costs and employee expenses. However, its revenue grows by 20.1% YoY driven by its Madura Fashion & Lifestyle segment. The stock shows up in a screener for companies with declining net cash flow.

  • Oil and Natural Gas Corp will explore investing in gas assets in Argentina, according to reports. The company also signs a memorandum of understanding with Argentina’s oil company YPF for hydrocarbon projects. The stock is rising in a volatile market.

  • Canara Bank appoints Satyanarayana Raju as Managing Director and Chief Executive Officer with effect from today.

  • Brent crude oil prices trade above the $80 per barrel mark amid demand recovery in China. Copper, zinc and aluminium prices are falling over demand concerns.

  • Adani Ports & SEZ is rising despite its Q3FY23 net profit falling 16% YoY to Rs 1,315.5 crore on account of higher operating expenses, employee costs and forex losses. Revenue rises 17.5% YoY as its cargo and container volumes increase. The stock shows up in a screener for companies with high promoter stock pledges.

  • FSN E-Commerce Ventures (Nykaa) is rising as Jefferies cuts its target price to Rs 200 from Rs 275 but maintains its ‘Buy’ rating, according to reports. The brokerage says there are rising concerns over urban demand due to a high base and slow hiring in the IT segment.

  • PVR rises after announcing the record date for the transfer of shares to eligible Inox Leisure shareholders as February 17, as part of the PVR-Inox merger. It features in a screener of turnaround companies – loss to profit QoQ.

  • Hindalco is falling as its arm Novalis sees a 95% drop in net profit to $12 million due to high energy and freight costs. Revenue also declines 2.9% YoY on lower sales volumes due to beverage cans destocking by customers.

  • National Aluminium Co, Steel Authority of India and Tata Steel are trading below their second support or S2 level.

  • Economists expect the Reserve Bank of India (RBI) to slow down interest rate hikes as inflation cools. However, a 25 bps hike is expected in the ongoing monetary policy committee meeting.

  • Advertising & Media, Cigarette-Tobacco Products and Commercial Vehicles industries rise more than 8% in the past month.

  • KRChoksey keeps its ‘Buy’ rating on Housing Development Finance Corp (HDFC) and raises its target price to Rs 3,240 from Rs 2,989. This indicates an upside of 21%. The brokerage expects HDFC’s margins to remain stable on the back of improving yields. They see healthy growth in assets under management led by robust housing demand.

  • Vinati Saraf Mutreja, Managing Director & CEO of Vinati Organics, expects the company’s EBITDA margin to be around 30% in FY23. She says it aims for revenue growth of 20% in FY24.

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

  • Muthoot Finance is falling as its Q3FY23 net profit declines 10.8% YoY to Rs 927.7 crore and revenue dips by 4.6% YoY. However, its consolidated loan assets under management rise on a YoY basis. The stock shows up in a screener for companies with declining RoE over the past two years.

  • Indian rupee appreciates to 82.65 from the previous close of 82.73 against the US dollar in early trade today, due to a weaker greenback in the global markets.

  • LIC Housing Finance rises even as its Q3FY23 net profit falls 37.4% YoY to Rs 480.3 crore on higher finance costs. Interest income is up by 17% YoY. It shows up in a screener of stocks with high momentum scores and undervalued growth stocks.

  • Samvardhana Motherson, Shree Cements and Cummins India rise 8.1%, 7.6% and 4.3% respectively over the past week, ahead of their Q3FY23 results tomorrow.

  • SJVN’s Q3FY23 net profit rises 22% YoY to Rs 287.4 crore as its total revenue increases 16.5% YoY. Revenue from operations improves marginally but revenue from other income goes up 2.5X. The company also reports a surge in finance costs in Q3. It shows up in a screener of mutual funds decreasing shareholdings over the past quarter.

  • Tata Steel posts a net loss of Rs 2,223.8 crore in Q3FY23 compared to a net profit of Rs 9,572.7 crore in Q3FY22 on rising raw material costs and non-cash deferred tax expenses. Revenue declines 6.1% YoY on the back of a slowdown in demand and fall in global steel prices. The stock shows up in a screener for companies with high promoter pledges.

Riding High:

Largecap and midcap gainers today include Adani Enterprises Ltd. (1,802.95, 14.64%), Gland Pharma Ltd. (1,306.85, 11.44%) and Varun Beverages Ltd. (1,304.10, 6.73%).

Downers:

Largecap and midcap losers today include Tata Steel Ltd. (111.45, -5.11%), Adani Green Energy Ltd. (844.65, -5.00%) and Adani Total Gas Ltd. (1,464.20, -5.00%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Gland Pharma Ltd. (1,306.85, 11.44%), Garware Technical Fibres Ltd. (3,109.80, 5.85%) and Triveni Turbine Ltd. (278.70, 5.61%).

Top high volume losers on BSE were Balaji Amines Ltd. (2,172.40, -5.57%), Adani Green Energy Ltd. (844.65, -5.00%) and Adani Total Gas Ltd. (1,464.20, -5.00%).

Eureka Forbes Ltd. (475.00, 0.81%) was trading at 38.3 times of weekly average. Adani Power Ltd. (173.25, -4.99%) and Hitachi Energy India Ltd. (3,002.35, -3.41%) were trading with volumes 32.7 and 13.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

5 stocks took off, crossing 52-week highs, while 15 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Blue Star Ltd. (1,371.50, 0.40%), Britannia Industries Ltd. (4,606.85, -0.41%) and Zydus Lifesciences Ltd. (479.45, 1.98%).

Stocks making new 52 weeks lows included - Adani Transmission Ltd. (1,252.20, -0.34%) and Alembic Pharmaceuticals Ltd. (522.90, -1.02%).

21 stocks climbed above their 200 day SMA including Zensar Technologies Ltd. (245.30, 5.44%) and One97 Communications Ltd. (588.60, 5.43%). 9 stocks slipped below their 200 SMA including LIC Housing Finance Ltd. (376.10, -3.12%) and KIOCL Ltd. (196.80, -2.55%).

 
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The Baseline created a screener OR Parameter in example …
07 Feb 2023
Shows how the OR parameter behaves in a filter without brackets. Without brackets, OR applies to all the parameters used after it.
 
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The Baseline created a screener OR Parameter in example …
07 Feb 2023
Shows how the OR parameter behaves in a filter with brackets. We use brackets here to stop the OR filter from making the rest of the query optional.
 
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Trendlyne Marketwatch
06 Feb 2023
Market closes lower, ICICI Securities upgrades rating on Mahindra Lifespace to ‘Buy’ from ‘Add’

Trendlyne Analysis

Indian indices closed in the red on a volatile day of trade. The Nifty 50 fell nearly 90 points and closed below the 17,800 mark. The Adani group’s stocks extended their sell-off today after rating agency Moody's warned on Friday that the group may struggle to raise capital, and S&P cut its outlook on two group companies. The Adani group is looking to prepay its debt of Rs 7,000-8,000 crore from its loans against shares (LAS) portfolio to calm the sell-off in its share prices.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, despite the benchmark index closing lower. BSE Telecom index rose sharply, led by Vodafone Idea, which jumped over 20% as the Centre directed the company to convert interest due on deferred spectrum auction installments and revenue dues into equity for approximately Rs 16,113.2 crore.

Major Asian indices closed in the red - Chinese stocks were down after the US shot down what it said was a Chinese spying balloon in American skies. The sole exceptionwas Japan’s Nikkei 225, which closed higher for a third consecutive day amid expectations that the Bank of Japan will maintain its extremely accommodative monetary policy.

European markets tradelower, taking cues from US indices’ futures. Investors assess key central bank decisions, strong US job additions and corporate earnings. Crude oil pricestrade higher after falling over 7% in the previous week on fears of slowing global economic growth.

Nifty 50closed at 17,764.60 (-89.5, -0.5%), BSE Sensexclosed at 60,506.90 (-335.0, -0.6%) while the broader Nifty 500closed at 14,934.15 (-28.2, -0.2%)

Market breadth is in the green. Of the 1,975 stocks traded today, 1,040 were on the uptrend, and 873 went down.

  • Money flow index(MFI) indicates that stocks like Ratnamani Metals & Tubes, ITC, Persistent Systemsand Jindal Stainlessare in the overbought zone.

  • Britannia Industries beats Tata Consumer Products in YoY and QoQ net profit growth, PE Ratio and one-year price change. But it lags in price-to-book value, three-year price change, QoQ revenue growth and broker average target upside.

  • Asian Paintssees seven broker target price and one recommendation downgradesin the past month, while Bajaj Finance, Avenue Supermartsand Bandhan Bank see five broker target price downgrades.

  • Credit rating agency Fitch Ratings expects Indian banks’ net interest margin (NIM) to contract slightly by around 10 bps in FY24 amid deposit rate hikes taken by the banks.

  • Easy Trip Planners is rising as its Q3FY23 net profit rises 4.2% YoY to Rs 41.7 crore and revenue surges by 57.3% YoY driven by robust volume growth in the flight and hotels segments. The stock shows up in a screener for companies with zero promoter pledges.

  • Commercial Services & Supplies, Utilities and Transportation sectors fall more than 15% over the past month.

  • Rakesh Khanna, Managing Director & CEO of Orient Electric, says e-commerce contributes 10% to the total sales of the company and expects it to improve to 20% in a year. He adds that the company focuses on products with high growth potential.

  • ICICI Securities upgrades its rating on Mahindra Lifespace Developers to ‘Buy’ from ‘Add’ and increases the target price to Rs 483 from Rs 461. This implies an upside of 21.5%. The brokerage anticipates the company’s sales growth momentum to accelerate on the back of new project launches and a robust business development pipeline.

  • Indian Oil Corp decides to ink a memorandum of understanding with LanzaJet to produce sustainable aviation fuel at its Panipat refinery, according to reports.

  • One97 Communications (Paytm) is rising as its Q3FY23 net loss narrows on a YoY basis to Rs 392 crore from Rs 778.4 crore. Revenue rises 41.6% YoY on the back of growth in merchant subscriptions, loan distribution and payment services. The stock shows up in a screener for companies with revenues increasing sequentially over the past four quarters

  • Varun Beverages' Q3FY23 net profit rises 353.28% YoY to Rs 74.8 crore in a seasonally weak quarter, while its revenue increases 27.9% YoY. Realisation per unit improves with price hikes, rationalised discounts & incentives and improved product mix. The stock shows up in a screener for companies with consistent high returns over five years.

  • Timken India, Relaxo Footwears and VIP Industries are trading below their third support or S3 level as the market trades lower.

  • Metal stocks like Adani Enterprises, Jindal Steel & Power, Hindustan Zinc and JSW Steel are falling in trade. The broader sectoral index Nifty Metal is also trading in the red.

  • InterGlobe Aviation's Q3FY23 net profit rises close to 11x to Rs 1,422.6 crore and revenue grows 62.6%. The strong performance is a result of robust demand for air travel, says Pieter Elbers, Chief Executive Officer. The stock shows up in a screener for companies with FII/FPI or Institutions increasing their shareholding.

  • Retail sales of the automotive industry rise 13.6% YoY to 18.3 lakh units in January, shows data from the Federation of Automotive Dealers' Association. Two-wheeler and car retail sales are up 10.1% and 21.9% YoY respectively.

  • Telecom stocks like Vodafone Idea, Indus Towers, GTL Infrastructure, Reliance Communications and Tata Communications are rising in trade. The broader sectoral index S&P BSE Telecom is also trading in the green.

  • Vodafone Idea surges as the government converts adjusted gross revenue dues of the company into equities for approx Rs 16,113.2 crore.

  • Indian rupee depreciates to 82.41 from the previous close of 81.83 against the US dollar in early trade today.

  • ITC's Q3FY23 net profit rises 23.4% YoY to Rs 5,006.6 despite its revenue falling 2.6% YoY. The increase is due to a 60.5% fall in purchases of stock-in-trade expense. The stock shows up in a screener for companies with increasing net profits sequentially for the past four quarters.

  • State Bank of India’s Q3FY23 net profit rises 68.5% YoY to Rs 14,205.3 crore on the back of healthy credit expansion and robust net interest income (NII) growth. Revenue increases by 24.3% YoY led by strong growth in retail and corporate banking operations. The stock shows up in a screener for companies with quarterly net profit growth and increasing net profit margin YoY.

  • Tata Power’s Q3FY23 net profit jumps 121.9% YoY to Rs 945 crore and revenue rises 29.5% YoY. This growth is driven by improved realisation, higher power generation and increased distribution sales. The stock shows up in a screener for companies with net profits rising sequentially for the past four quarters.

Riding High:

Largecap and midcap gainers today include Vodafone Idea Ltd. (8.25, 20.44%), Indus Towers Ltd. (162.05, 12.81%) and Adani Ports & Special Economic Zone Ltd. (545.45, 9.34%).

Downers:

Largecap and midcap losers today include Adani Transmission Ltd. (1,256.45, -10.00%), Adani Power Ltd. (182.35, -5.00%) and Adani Wilmar Ltd. (379.95, -5.00%).

Movers and Shakers

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

Top high volume gainers on BSE included Vodafone Idea Ltd. (8.25, 20.44%), Procter & Gamble Health Ltd. (4,702.70, 14.63%) and Elgi Equipments Ltd. (412.35, 8.31%).

Top high volume losers on BSE were Privi Speciality Chemicals Ltd. (908.45, -7.07%), Multi Commodity Exchange of India Ltd. (1,425.15, -5.56%) and Mahindra Logistics Ltd. (430.15, -3.45%).

Zydus Lifesciences Ltd. (470.15, 8.17%) was trading at 8.5 times of weekly average. Anupam Rasayan India Ltd. (602.90, 4.48%) and Mahindra & Mahindra Financial Services Ltd. (261.85, 7.49%) were trading with volumes 6.2 and 5.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Zydus Lifesciences Ltd. (470.15, 8.17%), Carborundum Universal Ltd. (999.05, 0.77%) and IDFC Ltd. (91.55, 3.39%).

Stocks making new 52 weeks lows included - Adani Transmission Ltd. (1,256.45, -10.00%) and BASF India Ltd. (2,315.85, -1.31%).

22 stocks climbed above their 200 day SMA including Procter & Gamble Health Ltd. (4702.70, 14.63%) and Cholamandalam Financial Holdings Ltd. (629.95, 4.89%). 14 stocks slipped below their 200 SMA including Poly Medicure Ltd. (827.50, -4.11%) and LIC Housing Finance Ltd. (388.20, -2.88%).

 
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The Baseline
03 Feb 2023
Five Interesting Stocks Today
  1. KPIT Technologies: This IT consulting & software company reached its all-time high of Rs 813 per share on Wednesday after posting strong net profit growth of 20.4% QoQ to Rs 100.5 crore in Q3FY23. Growth from the UK & Europe and rest of the world (ROW) markets aided an improvement in the company’s revenue by 23.2% QoQ to Rs 917.1 crore. As a result, it features in a screener of stocks with increasing revenue for the past eight quarters. Both revenue and net profit beat Trendlyne’s Forecaster estimates by 4.2% and 5% respectively.

The rise in revenue in Europe comes after KPIT’s subsidiary, KPIT Technologies GmbH acquired four companies under the Technica Group for a total consideration of Rs 640 crore on September 21, 2022. Additionally, a leading European OEM selected KPIT as its key partner for next-generation electronic control units (ECU) while Renault Group selected KPIT as a strategic technology partner on November 23, 2022.

As a result, revenue from UK & Europe rose 48.2% QoQ in Q3, despite a broad economic slowdown in the region. Kishor Patil, Co-founder, Chief Executive Officer (CEO) and Managing Director of the company commented, “Q3FY23 has been better than expectations. Our performance gives us confidence in beating our FY23 growth outlook.”

The stock ranks high in Trendlyne’s checklist with a score of 78.3%. However, the company has a high trailing twelve-month or TTM PE ratio of 60.4 against the industry PE average of 29.6. Because of the high PE ratio compared to its historical levels, the company features in the PE sell zone.

  1. Britannia Industries: This FMCG stock’s Q3FY23 net profit surged 2.5X YoY to Rs 932.4 crore. The surge in net profit was because of an exceptional gain reported by the company. The gain amounted to Rs 359 crore (net of tax) and was received by selling a stake in Britannia Dairy to Bel SA. As inflation moderated, the company’s operating margin improved by 447 bps YoY to 18.14%. Price hikes also helped in the growth of margins. The management plans to continue with gradual price hikes in the coming quarters. It also expects the partnership with Bel SA to drive sales in the under-penetrated cheese market. Net sales for the company grew 16.2% YoY to Rs 4,101.5 crore on new product launches, growing customer franchise and market share gains.

The stock was trading near its 52-week high before touching an all-time high of Rs 4,596 in a volatile market today. Removing the exceptional gains from the net profit, Britannia beats Trendlyne’s Forecaster estimates by 21.6%. It shows up in screeners of stocks with increasing revenue and profit for the past two quarters. It also is in a screener of stocks with strong momentum growth.

Foreign brokerage Jefferies has maintained a ‘Buy’ on the stock as its margin growth beat expectations on low input prices and raw material inventory. It has upgraded its target price by 14.4% to Rs 5,000. ICICI Securities maintains its ‘Add’ rating and expects its revenue CAGR to grow by 13% over FY22-24E. The outlook for the FMCG sector looks good as the Centre’s relief for the middle class in the Union Budget 2023-24 is likely to improve customer demand.

  1. AIA Engineering: This other industrial goods manufacturer’s stock rose 12.4% over the past week till Thursday, on account of its Q3FY23 results beating the street’s expectations. The company’s net profit and revenue beat Trendlyne’s Forecaster estimates by 64.9% and 5.8%, respectively. Its net profit jumped more than 2.5X YoY to Rs 352.5 crore on the back of higher realisations, strong sales volumes and falling raw material and power & fuel costs. Only freight expenses increased YoY, which the company was able to pass on to its customers.

Cost declines helped the  EBITDA margin surge by 10.8 percentage points YoY to 29.8%. The firm shows up in a screener for stocks in the PE Buy zone with a high durability score and rising momentum.

The company’s volume grew by 23% YoY to 71,439 metric tonnes per annum (mtpa) in Q3, led by a 60% growth in the non-mining segment. Its mining segment saw modest growth of 8% YoY in volumes. ICICI Securities expects demand from the mining sector to increase on the back of capacity expansion and elevated commodity prices. It believes AIA Engineering is well-placed to capitalise on this demand growth, given its technologically superior products. ICICI Securities upgraded its rating on the company to ‘Buy’ from ‘Hold’.

In anticipation of growing demand, the management said it has planned to expand its installed capacity to 5.2 lakh mtpa from 4.4 lakh mtpa. The company has planned a capex of Rs 300 crore, most of which will be utilised towards capacity expansion. However, the management does acknowledge a risk of volatility in commodity prices.

  1. Data Patterns (India): Thedefence and aerospace solution provider released itsQ3FY23 results on 28th January. Data Patterns’ revenue grew by 2.5x YoY and 26.27% QoQ. On account of better execution, gross margins have expanded 140 bps QoQ while EBITDA margins for Q3FY23 were at 42.2% vs. 35.7% in Q3FY22. The order book at the end of Q3FY23 was Rs 888 crore. The company won orders worth Rs 163 crores in January 2023, which has increased the order backlog to Rs 1,014 crore. Development orders comprised 56% of total order backlog inflows as of Q3FY23. The production segment share was pegged at 38% with 6% from the services segment.

The management maintained its FY23-25 revenue guidance of 25-30% growth with a gross margin of 65% and EBITDA margin of 40%. The company is confident of winning orders to the tune of Rs 150-200 crore in Q4FY23. The management expects Rs 2,000-3,000 crore worth of orders in the pipeline for the next three to four years. The stock shows up in thescreener for growth in quarterly net profit and increasing profit margin.

ICICI Securities says Data Patterns has the ability to deliver revenue and PAT CAGR of 29.3% and 28.5% respectively over FY22-25E. However, the stock has run up, limiting further upside given the rich valuations and no room for execution error at such multiples. The brokerage has revised its Buy rating to Hold.

  1. Indian Hotels Company: This hotel company surged over 8% in trade on Wednesday after it announced strong Q3FY23 results. The Finance Minister’s announcement on the Centre’s support for the tourism industry in the Union Budget also added to the rise. The hotels industry rose over 5% in trade on the same day.

The company reported its highest-ever net profit of Rs 383 crore, up 403% YoY in Q3. IHCL also posted strong growth in revenues, up 54% YoY to Rs 1,743.5 crore. Its solid performance was driven by robust demand across markets as well as airline catering. As a result, the company features in a screener of companies that saw growth in net profit with an increasing profit margin (QoQ).

However, the occupancy rate remains below pre-covid levels at 72.1%. On the bright side, the average room rate jumped 25% to Rs 15,456, compared to pre-covid levels, due to a series of price hikes.

Commenting on the company’s strong performance during the quarter, Puneet Chhatwal, Managing Director & CEO of Indian Hotels, said that the demand outlook for the sector in 2023 remains robust with sporting events such as the hockey and cricket world cup, global events like the ongoing G20, and the increase in inbound travel. In 9MFY23, IHCL has added over 30 hotels to the pipeline and has opened 14 hotels, in addition to strong growth in amã Stays & Trails and Qmin.

ICICI Securities is positive about the company’s outlook due to its efforts in leveraging its existing brand equity to focus on new business segments. The brokerage upgraded its rating to ‘Buy’ from ‘Add’ and raised the target price to Rs 399 from Rs 366, implying a potential upside of 25.7%.

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

 
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The Baseline
03 Feb 2023
Chart of the week: Centre expects fiscal deficit to fall to 5.9% of GDP in FY24
By Abdullah Shah

As global economic growth slows down, India’s GDP growth in FY23 is also expected to slow down to 7% from 8.7% in FY22. GDP growth in FY24 is expected to further reduce, to 6.5%. 

This is important for India’s Budget as the fiscal deficit is expressed as % of GDP. As the GDP estimate is revised downward, the Centre will have to reduce the expenditure to reduce the fiscal deficit.

The fiscal deficit as % of GDP rose to a record high of 9.5% in FY21, and Nirmala Sitharaman, the Finance Minister, had committed to reducing it. In line with the guidance, fiscal deficit as a % of GDP fell to 6.4% in FY23. The centre aims to further lower this to 5.9% of the GDP in FY24 and eventually to 4.5% of the GDP by FY25. 

In order to achieve a lower fiscal deficit in FY24, the government has planned to reduce expenditure on subsidies and pensions while keeping the spending on rural development constant. However, the Centre continues to focus on transport and defence segments as its spending is expected to rise 32.4% and 5.7% in these segments respectively, when compared to FY23 revised estimates. In addition, interest expenditure is also expected to rise 14.8% in FY24. 

Revised estimates of subsidies for food and fertilisers overshot FY23 budgeted amounts as the government had to boost support via free food grains and fertiliser subsidies amid higher commodity inflation. 

In FY24, the government has decided to curb the expenditure on subsidies with an estimated spend of Rs 2 lakh crore on food (-31.3%) and Rs 1.8 lakh crore on fertilisers (-22.2%). The estimated expenditure on pensions has also been marginally reduced to Rs 2.3 lakh crore in FY24 from the revised estimates of Rs 2.4 lakh crore in FY23.

The interest, transport and defence are the segments with the highest estimated expenditure in FY24. These segments contribute to 45.1% of the total estimated expenditure. The Centre has increased the estimated expenditure of interest to Rs 10.8 lakh crore in FY24 from t Rs 9.4 lakh crore in FY23 revised estimates. 

The rise comes on the back of higher requirements for payment of interest on market loans, discount on Treasury Bills, Central Government securities issued by National Small Savings Fund and state provident funds.