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The Baseline
22 Dec 2022
Portfolio X-Ray: Ashish Kacholia has an eye for smallcap and midcap winners
By Abhiraj Panchal

Ashish Kacholia is known in the industry for his skill in picking small and midcap winners. He started his career in Prime Securities, and later moved to Edelweiss. He co-founded Hungama Digital with Rakesh Jhunjhunwala and now serves as a board member. He started his own company Lucky Securities in 2003. Kacholia holds a Bachelor's degree in Production Engineering and a Master's in Management Studies. 

Kacholia primarily invests in small-cap and a few mid-cap companies, and has an uncanny eye for finding potential multibagger stocks.  His net worth in Q2FY23 was Rs 1,772 crore, and he publicly holds stakes in 40 stocks, of which 37 are small-cap companies.

Best-performing companies in Kacholia’s portfolio are Beta Drugs, Safari Industries (India) and Carysil. The price of Beta Drugs has increased 573.4% since he added it to his portfolio in Q4FY19. He currently owns a 5.7% stake in the pharma company. 

Kacholia bought stakes in  Safari Industries (India) and Carysil in Q4FY20 and Q3FY16 respectively. Their stock prices have also risen by 328.4% and 276.3%respectively since the purchase. The investor booked profits on Mastek (bought in Q2FY19), Vishnu Chemicals (bought in Q3FY16) and Mold-Tek Packaging (bought in Q1FY18) before cutting his stake to below 1% in Q2FY23, as they started to hurt the portfolio holding value. The prices of these companies rose by 271.6%, 353.4% and 191.9% respectively till Q2FY23, since the time of purchase.

The worst-performing stocks in Kacholia’s portfolio are IOL Chemicals and Pharmaceuticals and  United Drilling Tools. Their prices have fallen by 52.7% and 41.5%respectively since added to the portfolio in Q3FY21 and Q3FY22. He also cut his stake in Kwality Pharmaceuticals to below 1% in Q2FY23 as its price fell 50.8% by the end of the quarter of purchase. 

Chemicals, consumer durables, textiles among Kacholia’s favourite sectors

Kacholia’s diversified portfolio has 16.4% investment in the chemicals and petrochemicals sector, aggregating to Rs 300.7 crore. He has invested 14.9% of his portfolio in consumer durables, 13.9% in textiles, apparel and accessories, and 9.4% in general industrials. While commercial services and supplies and pharmaceuticals and biotechnology amounts to 8.3% each, software and services has 7.8%, and diversified consumer services 5% of his portfolio. The least invested sectors are food, beverages and tobacco, banking and finance, FMCG, realty, and hardware technology and equipment with less than 2% each.

The marquee investor went on a buying spree and added nine new stocks to his portfolio in Q2FY23. He also increased his holdings in 12 companies during the same period. He reduced his holdings in ten companies, of which five were cut to below 1%. In new additions, he bought 5% of Dudigital Global, 3.3% of D-Link (India) and 2.6% of Agarwal Industrial Corp. He also increased his stakes in Hindware Home Innovation and Ador Welding by 1.3% and 1% respectively. Kacholia cut a 0.3% stake in Genesys International Corp and 0.2% in Safari Industries (India) and reduced holdings in Mastek, Mold-Tek Packaging, Vishnu Chemicals, VRL Logistics and Kwality Pharmaceuticals to below 1%. 

During the recent quarter, Kacholia bought a 2.1% stake in Raghav Productivity Enhancers on November 4, a 1% stake in Likhitha Infrastructure on November 30 and a 0.8% stake in Aditya Vision on December 9. On December 21, he sold a 0.6% stake in D-Link (India) in a bulk deal.

Kacholia prefers companies with good fundamentals

Of the 40 companies that Kacholia holds, only one reported a net loss in Q2FY23. Sastasundar Ventures reported a consolidated net loss of Rs 4.9 crore despite a 60.3% rise in consolidated revenue, while the rest had net profit. 

During Q2FY23, Best Agrolife reported a net profit of Rs 129.8 crore, indicating an increase of 415.4% YoY, while its revenue rose by 115.9% YoY. Agarwal Industrial Corp, Safari Industries (India) and Barbeque-Nation Hospitality reported a YoY rise in net profit by 257.1%, 144.2% and 142.6% respectively, while their revenue increased by 40.4%, 67% and 40.6%. Kacholia cut his stake in Vishnu Chemicals to below 1%, while its profit grew by 111.2% in Q2FY23. Eleven companies in the portfolio reported a YoY fall in net profit, while three reported a YoY fall in revenue. United Drilling Tools, IOL Chemicals and Pharmaceuticals, Carysil and Vaibhav Global are among the companies that reported a fall in net profit.

From the portfolio, 22 companies outperformed their respective industries over a year and quarter, and 17 companies outperformed over a month. PCBL, Arvind Fashions and La Opala RG are among the companies that outperformed their industries.  

Sastasundar Ventures announced the highest basic annual EPS of Rs 222.7, followed by Bharat Bijlee (Rs 98.3), Garware Hi-Tech Films (Rs 72), Agarwal Industrial Corp (Rs 51.1) and Best Agrolife (Rs 46).

While 21% of the stocks in Kacholia’s holdings, like Barbeque-Nation Hospitality, Best Agrolife, Shaily Engineering Plastics and Safari Industries (India) are currently trading in the PE Buy Zone, 27% are trading in the PE Sell Zone. Companies in the Sell Zone include HLE Glasscoat, Vaibhav Global and Fineotex Chemical. Meanwhile, the PE of seven stocks is above their respective sectors, like HLE Glasscoat, Arvind Fashions, Genesys International Corp, Megastar Foods and Shankara Building Products.

How volatile is Kacholia’s portfolio?

Over a year, the beta for 20 stocks in Kacholia’s portfolio is below 1 and 16 are greater than 1. However, 29 stocks have a beta lesser than 1 for a quarter. The average beta of the portfolio for a year is 0.94, whereas it is 0.8 for a quarter. 

The Beta of Ashish Kacholia’s portfolio is lesser than that of the Nifty 50. Even though the volatility is marginally in line with the benchmark index for a year, it is lower over the quarter. We can conclude that Kacholia, despite his preference for smaller companies, may make safer bets while buying stocks. On the valuation side, he currently holds stocks in both the PE Buy and Sell Zones.  

Overall, the marquee investor looks for companies with strong fundamentals and have the potential to turn into multibagger stocks. He then tends to hold them for a longer period to book higher profits, and rarely panics during downturns.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
22 Dec 2022
Market closes lower, Elin Electronics’ IPO gets bids for 3.1X of the total shares on offer

Trendlyne Analysis

Indian indices closed in the red on a volatile day of trade as Covid omicron subvariant BF.7 outbreak in China spooked investors. However, European stocks traded higher than Wednesday’s levels amid mixed global cues. UK’s gross domestic product rose 1.9% YoY in the third quarter but fell 0.3% QoQ.

Most major Asian indices closed in the green, in line with the US indices, which closed higher on Wednesday. US indices registered their biggest daily gain in December with help from Nike and FedEx, which rose sharply after beating forecaster estimates in their quarterly earnings. Improving consumer confidence and cooling inflation expectations from investors also helped US stocks to rise. The tech-heavy Nasdaq 100 index rose nearly 1.5% while the Dow Jones closed 1.6% higher on Wednesday. Crude oil prices traded higher after rising over 3% on Wednesday as US crude supplies remained tight ahead of the holiday season.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. Nifty Metal and Nifty Media closed lower than Wednesday’s levels. Nifty IT closed flat, despite the Nasdaq 100 closing in the green on Wednesday.

Nifty 50closed at 18,127.35 (-71.8, -0.4%), BSE Sensexclosed at 60,826.22 (-241.0, -0.4%) while the broader Nifty 500closed at 15,431.50 (-96.1, -0.6%)

Market breadth is sharply down. Of the 1,940 stocks traded today, 281 were on the uptrend, and 1,640 went down.

  • Relative strength index(RSI) indicates that stocks like The Fertilisers and Chemicals Travancore, UTI Asset Management, Abbott Indiaand Thyrocare Technologiesare in the overbought zone.

  • Zydus Lifesciencesreceives final approval and 180 days of shared exclusivity from the US Foods & Drug Administration to market selexipag tablets. The drug is used to treat high blood pressure in the vessels that carry blood to the lungs and will be manufactured in the company’s facility in Ahmedabad SEZ, Gujarat. The tablet had annual sales of $577 million in the US as of September 30.

  • JK Cementtrades in green in a falling market. The company inks a pact with Acro Paints to acquire a 60% stake via its subsidiary JK Paints and Coatings. The cost of acquisition will be Rs 153 crore and it will help JK Paints foray into the construction chemicals segment.

  • Fertilizer stocks like Coromandel International, The Fertilisers and Chemicals Travancore, Chambal Fertilisers & Chemicals and Rashtriya Chemicals & Fertilizersfall over 2% in trade today. The broaderFertilizers industry is also trading in the red. Reports suggest that fertilizer companies must pay for 40% of gas in cases of spot buying.

  • Abbott Indiarises for six consecutive sessions and touches its 52-week high of Rs 21,975. It ranks high on Trendlyne's checklist with a score of 77.3%. The stock also features in a screenerof companies with high TTM EPS growth.

  • Realty stocks like Indiabulls Real Estate, Sunteck Realty, Godrej Properties and Oberoi Realty are falling in trade. The broader sectoral index Nifty Realty is also trading in the red.

  • Capital goods stocks like Elgi Equipments, Praj Industries, AIA Engineering and Sona BLW Precision Forgings are falling in trade. The broader sectoral index BSE Cap Goods is also trading in the red.

  • Ajanta Pharma is rising in a weak market. The stock ranks high on the Trendlyne Checklist score. Trendlyne’s consensus recommendation shows that seven analysts recommend a ‘Buy’ on the stock.

  • Elin Electronics’ Rs 475 crore IPO gets bids for 3.1X the available 1.4 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 2.2X the available 71.04 lakh shares on offer.

  • K Natarajan, Executive Director and COO of Galaxy Surfactants, expects the company’s volume growth to be flat or negative in FY23 but 6-8% in FY24.

  • ICICI Direct maintains a ‘Buy’ rating on Sheela Foam with a target price of Rs 1,650, implying an upside of 27%. The brokerage expects the company to gain market share in the Indian mattresses industry, given its new product launches and strong balance sheet. It also sees the firm’s recent order wins and focus on ramping up exports as key positives. The brokerage anticipates Sheela Foam’s net profit to grow at a CAGR of 22% over FY22-24.

  • Torrent Investments wins an auction to buy debt-laden Reliance Capital with the highest bid of Rs 8,640 crore, beating Hinduja Group and Oaktree Capital, say reports. This comes after Reliance Capital was suspended from trading after initiating a corporate insolvency resolution process on Tuesday.

  • Samvardhana Motherson International is falling as 1.6 crore shares (0.5% equity) amounting to Rs 111.5 crore change hands, according to reports.

  • Maruti Suzuki India signs a five-year agreement with Kamarajar Port in Ennore, Chennai, to export around 20,000 cars annually, say reports. The company will use the port to export cars to Africa, West Asia, Latin America and South & South-East Asia. Kamarajar Port becomes the fourth port to be used to export cars by the company. The stock shows up in a screener for companies with high TTM EPS growth.

  • Strides Pharma Science's arm Strides Pharma Global receives 94 million Australian dollars (Rs 525 crore) as deferred consideration for the sale of its Australian operations in 2019.

  • Tata Communications’ arm Tata Communication (Netherlands) is set to acquire 100% stake in Switch Enterprises for $58.8 million (Rs 486.3 crore). Switch Enterprises is a US-based media-enabled services company. It believes this acquisition will drive the expansion of its video connect business and its footprint in the media ecosystems in Europe and North America.

  • VS Ganesh, Managing Director of Page Industries, says that the company will not take price hikes even if cotton prices rise. He maintains a revenue target of Rs 10,000 crore and capex in the range of Rs 200-250 crore.

  • Ashish Kacholia sells a 0.6% stake in D-Link (India) for approx Rs 5.2 crore in a bulk deal on Wednesday.

  • Sula Vineyards’ shares list at a 1.1% premium to the issue price of Rs 357 on its debut on the bourses. The 960.3 crore IPO was subscribed for 2.3X the total shares on offer.

  • Supriya Lifesciences inks a pact with Enrich Energy, a Pune-based firm, to build a 4.68 MWp solar photovoltaic project in Nanded, Maharashtra. This project will generate and supply green energy, fulfilling 50% of the company's requirements. Supriya Lifesciences also signs a long-term agreement with Enrich energy for operations and maintenance services for the project, which will be operational by FY23-24.

  • Torrent Pharma’s board approves its merger with Curatio Health Care. Curatio’s net worth is Rs 115.39 crore. This merger will aid Torrent Pharma’s overall growth and ease supply & distribution network and costs. Torrent Pharma shows up in a screener of stocks with improving book value for the past two years.

  • Reliance Retail Ventures (RRVL), a subsidiary of Reliance Industries, acquires Metro Cash & Carry for a cash consideration of Rs 2,850 crore. This acquisition will add large-format stores to RRVL's existing store count and strengthen its e-commerce business. Isha Ambani, Director of RRVL says, “We believe that Metro India’s healthy assets and our deep understanding of the Indian merchant/kirana ecosystem will offer a differentiated value proposition to small businesses in India.”

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (175.70, 4.61%), Jubilant Foodworks Ltd. (533.80, 2.42%) and REC Ltd. (112.50, 2.23%).

Downers:

Largecap and midcap losers today include Union Bank of India (76.15, -6.22%), Adani Wilmar Ltd. (552.60, -6.04%) and Adani Power Ltd. (276.00, -4.99%).

Volume Rockets

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

Top high volume gainers on BSE included Ajanta Pharma Ltd. (1,227.40, 4.74%), Wockhardt Ltd. (236.35, 3.34%) and Aster DM Healthcare Ltd. (241.20, 2.46%).

Top high volume losers on BSE were Thyrocare Technologies Ltd. (623.80, -10.99%), Vardhman Textiles Ltd. (308.15, -5.71%) and CreditAccess Grameen Ltd. (883.15, -2.74%).

Jyothy Labs Ltd. (202.95, 1.73%) was trading at 17.5 times of weekly average. Capri Global Capital Ltd. (757.15, 1.57%) and Sun Pharma Advanced Research Company Ltd. (215.70, 2.45%) were trading with volumes 9.6 and 6.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks made 52-week highs, while 17 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (2,1842.45, 1.36%) and Jyothy Labs Ltd. (202.95, 1.73%).

Stocks making new 52 weeks lows included - Sunteck Realty Ltd. (344.55, -2.38%) and Voltas Ltd. (807.35, -0.78%).

5 stocks climbed above their 200 day SMA including Sonata Software Ltd. (540.00, 1.33%) and Kotak Mahindra Bank Ltd. (1,826.05, 0.63%). 43 stocks slipped below their 200 SMA including Thyrocare Technologies Ltd. (623.80, -10.99%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (663.35, -6.14%).

 
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The Baseline
22 Dec 2022
Screener of the week: FII favourites among high scoring DVM stocks
By Abdullah Shah

As 2022 comes to a close, we take a look at high scoring DVM stocks that have seen more than a 0.5% rise in their FII holdings in Q2FY23. This screener lists stocks that FIIs bought in significant numbers, which have high durability and momentum scores along with a decent valuation score. 

It features 24 stocks from Nifty 500 and two stocks from the Nifty 50 index. Industries like banks, construction & engineering, paper & paper products, utilities: non-electrical and defence dominate the screener. Major stocks featured in the screener are Hindustan Aeronautics, City Union Bank, IIFL Finance, JK Paper and Great Eastern Shipping. 

City Union Bank saw the highest rise of 3.2% QoQ in its FII holdings. Major contributors to this rise were Kotak Funds India Mid Cap Fund and Bank Muscat India Fund. The largest foreign investor of the company is Smallcap World Fund as it holds 4.9% stake. The stock has a high Trendlyne durability score of 65.

Great Eastern Shipping’s foreign investor holding increased by 1.9% over the past quarter. City of New York Group Trust bought 1.2% stake in the company. Other major foreign institutional investors of the company are Nalanda India Fund and Abu Dhabi Investment Authority with 7.4% and 2.2% stakes respectively. The stock also has a high Trendlyne durability score of 65.

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
21 Dec 2022
Markets closes lower, KFin Technologies’ IPO gets bids for 2.59X of the total shares on offer

Trendlyne Analysis

Nifty 50 fell over 270 points from the day's high and closed just below the 18,200 mark, with the volatility index, India VIX, rising sharply. However, European stocks traded higher than Tuesday’s levels. Major Asian indices closed mixed, in line with the US indices, which closed mixed on Tuesday. Dow Jones and S&P 500 snapped their four-day losing streak and closed marginally higher amid high volatility. However, the tech-heavy Nasdaq 100 index extended its losses to a fifth straight day. Crude oil prices traded higher after US crude inventories dropped by more than expected due to supply disruptions caused by the temporary closure of the Keystone pipeline.

Nifty Smallcap 100and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Bankand Nifty FMCG closed lower than Tuesday’s levels. However, Nifty IT bucked the trend and closed higher, tracking the Nasdaq 100 futures, which was trading in the green.

Nifty 50closed at 18,199.10 (-186.2, -1.0%), BSE Sensexclosed at 61,067.24 (-635.1, -1.0%) while the broader Nifty 500closed at 15,527.55 (-198.7, -1.3%)

Market breadth is overwhelmingly negative. Of the 1,938 stocks traded today, 261 were in the positive territory and 1,641 were negative.

  • City Union Banksees a short buildup in its December 29 future series as its open interest rises 18.1% with a put-call ratio of 0.33.

  • GAIL (India) and Japan's Mitsui OSK Lines ink a time charter contract for a newbuild liquefied natural gas (LNG) carrier and joint ownership of an existing LNG carrier.

  • Motilal Oswal maintains its ‘Buy’ rating on Indian Hotels Co with a target price of Rs 390, implying an upside of 19%. The brokerage expects the company’s occupancy rates and average room rates to rise as demand-supply dynamics improve. It also sees higher income from management contracts and brand launches driving revenue growth. The brokerage expects the firm’s net profit to grow at a CAGR of 30.3% over FY23-25.

  • Finance Minister Nirmala Sitharaman says that slashing corporate tax is necessary for the growth of businesses in India. She adds that India will double its GDP in the coming years.

  • Elin Electronics’ Rs 475 crore IPO gets bids for 95% of the available 1.4 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 1.3X% of the available 71.04 lakh shares on offer.

  • KFin Technologies’ Rs 1,500 crore IPO gets bids for 2.59X of the available 2.37 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 1.36X the available 43.2 lakh shares on offer.

  • Healthcare Services and diagnostic stocks like Vijaya Diagnostic Centre, Vimta Labs, Dr. Lal Pathlabs and Metropolis Healthcare are surging as the Covid situation in China worsens.

  • Shyam Metalics & Energy rises as it acquires Mittal Corp to foray into the stainless steel and wire rod and bar mills business. The company aims to expand its existing capacity to 14.45 MTPA from 8.85 MTPA. It has planned a capex of Rs 10,000 over the next five years.

  • RBI Governor Shaktikanta Das says that India’s economic activity is going strong but global headwinds could be a risk.

  • FSN E-Commerce Ventures (Nykaa),Adani Green Energy and Lupin’s PE TTM are trading above their Industry PE TTM. Lupin rises 4% over the past month, while Nykaa and Adani Green Energy fall in trade.

  • Pharma stocks like Glenmark Pharmaceuticals, Granules India, Lupin and Aurobindo Pharma are rising in trade. The broader sectoral index Nifty Pharma is also trading in the green.

  • Atul Lall, Vice-Chairman and Managing Director of Dixon Technologies, expects revenue of Rs 4,000-4,500 crore in the company’s mobile business for FY23, compared to the earlier guidance of Rs 4,500-5,000 crore. The fall in guidance is because of lower demand for products like LED TV and mobiles.

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

  • Jindal Steel & Power is rising in a volatile market, trading near its all-time high. The stock ranks high on the Trendlyne checklist score. It is trading below its historic averages, inching towards the Buy Zone. It shows up in a screener of stocks giving consistently high returns over the past five years.

  • Glenmark Pharmaceuticals rises as it launches a triple fixed-dose combination of teneligliptin with pioglitazone and metformin for adults with type-2 diabetes and high insulin resistance in India.

  • City Union Bank is falling as the Reserve Bank of India (RBI) discovers a divergence in additional gross non-performing assets (NPA) in FY22, amounting to Rs 259 crore. However, the bank claims the divergence consists of 231 borrowers, of which five accounts have been classified as NPAs and 57 stand closed.

  • Reports suggest that 69.4 lakh shares (2% equity) of Max Financial Services, amounting to Rs 471.3 crore, change hands on BSE and NSE.

  • Norwegian Government Pension Fund sells a 1.02% stake (7.03 lakh shares) in Sudarshan Chemical Industries for Rs 26.5 crore in a bulk deal.

  • Uno Minda is rising as it enters into a technical license agreement with Korea-based Ascentec to develop, design, manufacture and market wheel speed sensors in India. The stock shows up in a screener for companies with quarterly revenue increasing sequentially for the past four quarters.

  • Promoters Gyan Enterprises and Chowdry Associates sell nearly 1% stake in Dabur India through a block deal. The amount will be used to fund other business opportunities. The company shows up in a screener of stocks with zero promoter pledges.

  • Reports suggest that Tata Group is in talks with UTI Asset Management Coto buy a majority stake from four financial entities. Currently, Punjab National Bank, Life Insurance Corp of India, State Bank of Indiaand Bank of Barodaown a 45.16% stake in UTI Asset Management Co. However, in a recent clarification issued by UTI Asset Management, it denies being in talks with other parties for a stake sale.

Riding High:

Largecap and midcap gainers today include Dr. Lal Pathlabs Ltd. (2,430.30, 6.26%), Divi's Laboratories Ltd. (3,518.75, 4.99%) and Apollo Hospitals Enterprise Ltd. (4,766.20, 3.69%).

Downers:

Largecap and midcap losers today include General Insurance Corporation of India (167.95, -10.57%), Indian Railway Finance Corporation Ltd. (32.30, -9.40%) and YES Bank Ltd. (19.85, -6.81%).

Movers and Shakers

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

Top high volume gainers on BSE included Thyrocare Technologies Ltd. (700.85, 15.16%), Glenmark Pharmaceuticals Ltd. (440.40, 7.61%) and Metropolis Healthcare Ltd. (1,370.85, 7.01%).

Top high volume losers on BSE were City Union Bank Ltd. (177.25, -6.12%), Chalet Hotels Ltd. (332.35, -4.52%) and Bharat Heavy Electricals Ltd. (81.15, -3.39%).

Shyam Metalics and Energy Ltd. (299.20, 2.62%) was trading at 35.9 times of weekly average. Max Financial Services Ltd. (688.75, -1.56%) and Dr. Lal Pathlabs Ltd. (2,430.30, 6.26%) were trading with volumes 21.3 and 11.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks overperformed with 52-week highs, while 9 stocks hit their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (21,548.50, 3.11%), Apollo Tyres Ltd. (319.00, -2.57%) and Axis Bank Ltd. (932.30, -1.84%).

Stocks making new 52 weeks lows included - Sunteck Realty Ltd. (352.95, -1.84%) and SIS Ltd. (386.90, -0.87%).

11 stocks climbed above their 200 day SMA including Thyrocare Technologies Ltd. (700.85, 15.16%) and Dr. Lal Pathlabs Ltd. (2,430.30, 6.26%). 24 stocks slipped below their 200 SMA including Deepak Fertilisers & Petrochemicals Corporation Ltd. (706.75, -5.99%) and Chemplast Sanmar Ltd. (454.00, -5.54%).

 
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The Baseline
20 Dec 2022
Five analyst picks this week
By Abhiraj Panchal
  1. Rites: Axis Direct maintains its ‘Buy’ rating on this construction & engineering company with a target price of Rs 405. This implies an upside of 21.9%. The analysts at the brokerage remain positive about the company due to its strong order book, execution capability, clean balance sheet and attractive valuations. 

The analysts also expect the firm to be a key beneficiary of the Centre’s push towards increasing infrastructure spending. “Being a leading player in the transport consultancy, Rites is expected to be a significant beneficiary of the Indian Railways’ infrastructure push,” they added. Given the higher capex for railways, the company is aggressively trying to bag new consultancy tenders from the metro and high-speed rail projects. 

The analysts believe the company’s well-diversified order book of Rs 5,950 crore gives revenue visibility for the next two years. They expect Rites’ net profit to grow at a CAGR of 11.7% over FY22-24.  

  1. Bharat Forge: Prabhudas Lilladher maintains its ‘Buy’ rating on this manufacturer of industrial products with a target price of Rs 1,005. This indicates an upside of 14.2%. Analyst Mansi Lall remains optimistic about the firm’s prospects given its diversification into multiple segments such as defence, aerospace, e-mobility and other industrial verticals. 

She expects the automotive segment in particular to drive growth as there are “multiple growth levers in the domestic & export automotive segment with the cyclical turnaround in the commercial vehicle industry”. Chip shortages are also expected to ease. 

Lall sees double-digit growth in high-margin non-auto segments such as aerospace and defence. The company has already bagged export orders for its artillery systems and is expected to win huge orders from the Indian Armed Forces, she added. The analyst sees the firm’s defence revenue rising to Rs 1,000 crore in a few years from the current Rs 300-500 crore. She anticipates Bharat Forge’s net profit to grow at a CAGR of 18.7% over FY22-25. 

  1. SBI Cards and Payment Services: Motilal Oswal reiterates its ‘Buy’ call on this credit card and payment solutions provider with a target price of Rs 1,000. This indicates an upside of 26.4%. Analysts Nitin Aggarwal and Yash Agarwal arranged an interactive session with Rama Mohan Rao Amara, Managing Director and Chief Executive Officer of SBI Cards. From this discussion, the analysts understood that the mix of EMI loans has increased and the revolver mix has moderated, while it has been increasing on an absolute basis.

The analysts said, “SBI Cards has been reporting a modest performance with healthy spends momentum, while higher credit cost and lower margins are dragging earnings.” They expect the revolver mix to increase gradually as spends mature, while near-term margins may continue to remain under pressure as borrowing cost increases further. Aggarwal and Agarwal believe that growth in spends is likely to stay healthy, aiding overall loan growth. They expect a profit CAGR of 41% for FY22-24.

  1. Dalmia Bharat: ICICI Securities maintains its ‘Buy’ call on this cement manufacturer with a target price of Rs 1,906, indicating an upside of 19.7%. Dalmia Bharat’s arm, Dalmia Cement (Bharat), recently acquired clinker, cement and power plants from Jaiprakash Associates at a capital cost of $73 per tonne (replacement cost of the cement asset is currently at $115-120 per tonne). Analyst Harsh Mittal remains optimistic about the company due to the asset acquisition at a competitive price. 

Mittal believes that this acquisition will help the cement manufacturer strengthen its presence in Central India. He adds that Dalmia Bharat aims to be a pan-India cement company with a capacity of 75 metric tonnes per annum by FY27 and 110?130 metric tonnes per annum by FY31. The analyst said, “We await the completion of the deal before factoring in the acquired capacity. However, we increase our realisation growth assumption for FY23/FY24, given the healthy price hikes in East and South India during Q3FY23.” 

  1. Carysil: Edelweiss initiates coverage on this small-cap sink and kitchen appliances manufacturer and gives it a ‘Buy’ call with a target price of Rs 784. This indicates an upside of 56.8%. According to the analysts at Edelweiss, Carysil doubled its quartz and steel sink capacity to meet increasing demand. “We believe strategic partnerships with large-scale retailers would sustain the revenue growth momentum in exports,” they added.

The analysts believe that strong industry tailwinds, high home-improvement spending and demand for aesthetically appealing products globally would continue to drive growth. They expect Carysil’s earnings per share to record a 20% CAGR over FY22-25, led by capacity addition, improved utilisation in quartz/steel sinks and increased penetration in domestic and international markets.  

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
20 Dec 2022
Market closes lower, Elin Electronics’ IPO gets bids for 37% of total shares on offer

Trendlyne Analysis

Indian indices recovered from their day’s low but still closed in the red on a volatile day of trade. European stocks followed the global trend and traded below Monday’s levels. Major Asian indices closed in the red, in line with the US indices, which extended their losing streak to three days. On Monday, US indices extended their losses and closed lower for a fourth straight session on a volatile day of trade. US stocks fell as investors continue to analyse the impact of high federal fund rates on the US economic growth as the Fed Chair maintained a hawkish tone to combat high inflation. The tech-heavy Nasdaq 100 fell 1.42% and the Dow Jones closed 0.5% lower on Monday. Brent Crude oil futures traded in the green for a second consecutive day amid traders’ optimism over demand recovery due to China’s reopening.

Nifty Smallcap 100 closed in the red, following the benchmark index. Nifty Realtyand Nifty Auto closed lower than Monday’s levels. Nifty IT closed in the green, despite the tech-heavy Nasdaq 100 closing 1.4% lower on Monday.

Nifty 50closed at 18,385.30 (-35.2, -0.2%), BSE Sensexclosed at 61,702.29 (-103.9, -0.2%) while the broader Nifty 500closed at 15,726.20 (-29, -0.2%)

Market breadth is in the red. Of the 1,938 stocks traded today, 825 were in the positive territory and 1,057 were negative.

  • Shriram FinancebeatsMuthoot Financein YoY & QoQ revenue and net profit growth, PE ratio, FII Holdings and broker average rating. But lags in annual RoE & RoCE, MF holdings and broker average target upside.

  • Axis Bankrises to an all-time highof Rs 952.75 per share. The stock has a high rank of 57.69% in Trendlyne's checklist score. It also features in a screenerwith strong annual EPS growth.

  • Salasar Techno Engineering is rising as it bags two contracts worth Rs 748.5 crore from Pashchimanchal Vidyut Vitran Nigam. Both orders pertain to the construction of electricity distribution circles in Uttar Pradesh. The stock shows up in the screener for companies with quarterly profits increasing sequentially for the past three quarters.

  • Capacite Infraprojects is rising as it receives an order worth Rs 117.2 crore from DLF for the construction of a mall in Goa. The company shows up in a screener for stocks in the PE Buy zone with a good durability score and rising momentum.

  • Samiran Chakraborty, Chief Economist (India) of Citigroup, says that global slowdown will impact India’s net exports. He expects rural demand to improve over urban demand next year.

  • Mahanagar Gas appoints Ashu Shinghal as an Executive Director (Additional) designated as Managing Director of the Company with effect from December 23.

  • Elin Electronics’ Rs 475 crore IPO gets bids for 37% of the available 1.4 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 55% of the available 71.04 lakh shares on offer. The IPO is a fresh issue of Rs 175 crore and an offer for sale of Rs 300 crore.

  • KFin Technologies’ Rs 1,500 crore IPO gets bids for 70% of the available 2.37 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 74% of the available 43.2 lakh shares on offer.

  • RC Bhargava, Chairman of Maruti Suzuki India, says that high tax rates will hinder the auto sector's growth. His statement comes after the GST Council announced a standard rate for sports utility vehicles (SUVs) across all states—GST of 28% and 22% cess, taking the effective rate to 50%.

  • ICICI Securities upgrades its rating on Phoenix Mills to ‘Buy’ from ‘Add’ with a target price of Rs 1,648, indicating an upside of 17.9%. The brokerage turns positive on the company after its acquisition of a 7.2-acre land parcel for a new mall in Surat. It believes the firm’s focus on building new office and mall spaces will increase rental income and drive long-term revenue growth. The brokerage expects the company’s revenue to grow at a CAGR of 34.6% over FY22-25.

  • According to Trendlyne's FII dashboard, foreign institutional investors invested a total of Rs 6,487.1 crore in the equity market over the past 30 days, while mutual funds did only Rs 2,823.7 crore. Index options received the highest inflow of Rs 56,826.7 crore from foreign investors.

  • Rajesh Gopinathan, CEO of Tata Consultancy Services, expects 2023 to be a balanced year with improving margins. He adds that the company is on the path to increasing its revenue to $50 billion by 2030 and attrition rates will fall in H2FY23.

  • NTPC completes capacity (100 MW out of 300 MW) expansion of the Nokhra Solar Project at Bikaner, Rajasthan. The plant is now ready to commence operations. The stock shows up in a screener with improving RoA for the past two years.

  • Realty stocks like Godrej Properties, DLF, Oberoi Realty and Macrotech Developers are falling in trade. The broader sectoral index Nifty Realty is also trading in the red.

  • The President of India sells a 5% stake in Indian Railway Catering & Tourism Corp for approx Rs 2,726.8 crore, now holds 62.4%.

  • Just Dial is falling as the company's promoter, Reliance Retail Ventures, intends to sell 16.8 lakh shares (or 2% stake) through an open market sale to increase public shareholding. As per regulatory norms, the total public shareholding in a company should be at least 25%. Currently, Just Dial's public shareholding is 14%. The promoter plans to complete the sale within eight trading sessions starting Wednesday.

  • Dabur falls over 2% in early trade as 1.9 crore shares (1.06% equity) amounting to Rs 1,079 crore change hands, according to reports.

  • NBCC (India) is rising as it secures a contract worth Rs 69.3 crore from the Odisha Power Transmission Corp. The project involves the construction of a quarter complex in Bhubaneswar, Odisha. The stock shows up in a screener for companies with no debt.

  • IRB Infrastructure Developers' board will meet on January 4, 2023, to consider a stock split.

  • Promoters of Sterling and Wilson Renewable Energy decide to sell their stakes in the company via an offer for sale on December 20 and 21. Shapoorji Pallonji and Co will offload a 3.69% stake, while Khurshed Yazdi Daruvala will sell a 1.58% stake in the company. The floor price for the sale is set at Rs 270 per share.

  • Elin Electronics raises Rs 142.5 crore from anchor investors ahead of its IPO by allotting 57.7 lakh shares at Rs 247 per equity share. Investors include SBI Life Insurance, Aditya Birla Sun Life Trustee and Pinebridge Global Funds.

  • Adani Group’s arm Vishvapradhan Commercial acquires an additional 8.27% stake for Rs 156.7 crore in New Delhi Television (NDTV) through an open offer. This transaction takes the subsidiary’s overall shareholding to 37.45%.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (35.65, 8.52%), Max Healthcare Institute Ltd. (437.00, 2.92%) and Adani Enterprises Ltd. (4,165.30, 2.21%).

Downers:

Largecap and midcap losers today include Indian Overseas Bank (30.85, -6.09%), Godrej Properties Ltd. (1,275.80, -2.88%) and SBI Life Insurance Company Ltd. (1,231.25, -2.86%).

Movers and Shakers

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

Top high volume gainers on BSE included Chemplast Sanmar Ltd. (480.65, 9.64%), Indian Railway Finance Corporation Ltd. (35.65, 8.52%) and RHI Magnesita India Ltd. (847.60, 3.79%).

Top high volume losers on BSE were Sterling and Wilson Renewable Energy Ltd. (273.40, -3.56%), Supreme Industries Ltd. (2,500.00, -2.33%) and Dabur India Ltd. (579.50, -1.62%).

Shipping Corporation of India Ltd. (141.25, 0.64%) was trading at 8.6 times of weekly average. JK Paper Ltd. (439.85, 3.47%) and Wockhardt Ltd. (225.65, 0.87%) were trading with volumes 6.6 and 4.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Abbott India Ltd. (20,898.70, 0.06%), Apollo Tyres Ltd. (327.40, 0.89%) and Axis Bank Ltd. (949.75, 0.38%).

Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (438.20, 0.11%) and Sunteck Realty Ltd. (359.55, -0.83%).

8 stocks climbed above their 200 day SMA including Chemplast Sanmar Ltd. (480.65, 9.64%) and Can Fin Homes Ltd. (546.25, 0.86%). 15 stocks slipped below their 200 SMA including Sonata Software Ltd. (531.55, -2.90%) and Prince Pipes & Fittings Ltd. (602.05, -2.01%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
19 Dec 2022
Market closes higher, KFin Technologies’ IPO gets bids for 55% of total shares on offer

Trendlyne Analysis

Indian indices closed in the green, with the Nifty 50 rising above the 18,400 mark. European indices traded higher than Friday’s levels. However, most major Asian indices closed lower, in line with the US indices, which extended their losing streak to three days. US stocks fell as investors remained worried about high federal funds rate pushing the US economy into recession. US indices posted losses for a second straight week. The tech-heavy Nasdaq 100 fell 0.8% and the S&P 500 closed over 1.1% lower on Friday. Brent crude oil futures rise nearly 1% after falling over 4% in the last two trading sessions as traders weigh supply and demand concerns amid slowing global economic growth.

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

Nifty 50closed at 18,420.45 (151.5, 0.8%), BSE Sensexclosed at 61,806.19 (468.4, 0.8%) while the broader Nifty 500closed at 15,755.20 (118.9, 0.8%)

Market breadth is in the green. Of the 1,968 stocks traded today, 1,114 were on the uptrend, and 794 went down.

  • Money Flow Index (MFI) indicates that stocks like Central Bank of India, The Fertilisers and Chemicals Travancore, EPLand Rashtriya Chemicals & Fertilizersare in the overbought zone.

  • Elin Electronics, an electronics manufacturing services provider, opens for IPO subscription tomorrow. The price band for the issue is Rs 234-247 per share. The size of the issue is Rs 475 crore, comprising a fresh issue of Rs 175 crore and an offer for sale of Rs 300 crore.

  • Crude oil prices rise amid demand recovery as the US plans to buy back oil to fill its state reserves and China relaxes Covid-19 restrictions.

  • KFin Technologies’ Rs 1,500 crore IPO gets bids for 55% of the available 2.37 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 26% of the available 43.2 lakh shares on offer. The IPO is entirely an offer for sale of Rs 1,500 crore.

  • Metal stocks like Jindal Steel & Power, Hindustan Zinc, Vedanta, National Aluminium Co and Tata Steel are rising in trade. All the constituents of the broader sectoral index BSE Metal are trading in the green.

  • Stocks like Motherson Sumi Wiring India, LTI Mindtree and Easy Trip Planners see their mutual fund holdings rise more than 4% over the past month.

  • Reliance Jio gains 14.1 lakh wireless subscribers in October on a net basis, while Bharti Airtel adds 8.1 lakh and Vodafone Idea loses 35.1 lakh.

  • HDFC Bank nears 52-week high in trade. Reports suggest that the bank plans to issue 10 lakh credit cards every month in an attempt to double the pace of its current issuance. The bank shows up in a screener of stocks with increasing revenue over the past four quarters.

  • Motilal Oswal maintains its ‘Buy’ rating on KNR Constructions with a target price of Rs 310, indicating an upside of 21%. The brokerage is optimistic about the company’s prospects as it expects strong order inflow from the road segment given its robust tender pipeline. It expects a ramp-up in execution and falling input costs to improve profitability in the coming quarters. The brokerage anticipates the company’s revenue to grow at a CAGR of 14.1% over FY22-24.

  • Alembic Pharmaceuticals is falling as the US FDA issues form 483 with five procedural observations. The observations were made after a pre-approval inspection (PAI) at the company's solid oral formulation facility in Jarod.

  • Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, expects a decline in the current account deficit if crude oil prices stay at current levels. She adds that the average price for crude oil will be in the range of $100-$105 per barrel.

  • Dilip Buildcon is rising as its bags three contracts from the National Highways Authority of India for new hybrid annuity model projects worth Rs 5,191 crore. The orders pertain to the construction of highways in Karnataka, Chhattisgarh and Telangana. The stock shows up in a screener for companies with improving cash flow from operations in the past two years.

  • KEC International wins new orders worth Rs 1,313 crore across its various businesses. The orders include transmission and distribution projects in India, East Asia Pacific and SAARC, and a 500 MW solar PV project in India.

  • Larsen & Toubro divests its entire 51% stake in L&T Infrastructure Development Projects to Yield Plus II, an infrastructure fund managed by Edelweiss Alternatives. Larsen & Toubro and Canada Pension Plan Investment (holds the remaining 49% stake) will receive Rs 2,723.4 crore from the sale.

  • Glenmark Pharmaceuticals is rising as it receives final approval from the US FDA for nicardipine hydrochloride capsules, a generic version of cardene capsules of Chiesi USA. According to IQVIA, cardene capsules achieved annual sales of $10.9 million over the 12 months ending October 2022.

  • Sugar stocks like Shree Renuka Sugars, EID Parry (India), Balrampur Chini Mills and Triveni Engineering & Industries are rising in trade. All constituents of the broader Sugar industry are also trading in the green. This comes after the GST rate for biofuel supply to refineries for blending ethanol was reduced to 5% from 18%, according to reports.

  • Tech Mahindra plans to divest its entire stake in its wholly owned subsidiary Dynacommerce Holdings B.V. for 6.6 million euros. The company will sell its stake to a subsidiary of Comviva Netherlands B.V.

  • GMR Airports Infrastructure's arm GMR Airports Infrastructure BV receives Rs 1,389.9 crore for the sale of shares in GMR Megawide Cebu Airport Corp and the issuance of exchangeable notes to Aboitiz InfraCapital, according to reports.

  • KFin Technologies raises Rs 675 crore from anchor investors ahead of its IPO by allotting 1.84 crore shares at Rs 366 each. Investors include Carmignac Portfolio, Pinebridge Global Funds and IIFL Special Opportunities Fund.

  • Sun Pharma is falling after its Halol facility received a warning letter from the US FDA on Friday regarding its current goods manufacturing practice (cGMP). This is after the import alert raised by the US FDA on December 08.

  • Phoenix Mills completes the acquisition of a 7.22-acre land parcel through its indirect subsidiary, Thoth Mall and Commercial Real Estate, in Surat. The total value of the acquisition is Rs 510 crore. The company ranks high in the Trendlyne checklist score.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (187.35, 12.42%), Life Insurance Corporation of India (734.60, 6.69%) and PB Fintech Ltd. (485.60, 4.73%).

Downers:

Largecap and midcap losers today include Delhivery Ltd. (353.25, -2.89%), FSN E-Commerce Ventures Ltd. (163.25, -2.86%) and JSW Energy Ltd. (279.90, -2.17%).

Movers and Shakers

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

Top high volume gainers on BSE included General Insurance Corporation of India (187.35, 12.42%), UTI Asset Management Company Ltd. (859.55, 11.45%) and Shipping Corporation of India Ltd. (140.35, 8.76%).

Top high volume losers on BSE were Mahindra Logistics Ltd. (458.30, -2.43%), KPR Mill Ltd. (501.85, -1.99%) and Grindwell Norton Ltd. (1,908.00, -1.76%).

SIS Ltd. (390.60, 0.75%) was trading at 9.4 times of weekly average. Varroc Engineering Ltd. (302.90, 3.95%) and Torrent Power Ltd. (515.20, 0.31%) were trading with volumes 7.2 and 7.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks took off, crossing 52-week highs, while 9 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Britannia Industries Ltd. (4,526.50, 1.84%), V-Guard Industries Ltd. (271.25, 0.93%) and Engineers India Ltd. (85.55, 4.84%).

Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (437.70, -0.94%) and Bata India Ltd. (1,656.00, 1.66%).

10 stocks climbed above their 200 day SMA including IndiaMART InterMESH Ltd. (4,481.15, 3.38%) and Sonata Software Ltd. (547.40, 3.08%). 27 stocks slipped below their 200 SMA including Chemplast Sanmar Ltd. (438.40, -5.05%) and Gujarat State Fertilizer & Chemicals Ltd. (143.75, -2.34%).

 
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The Baseline
16 Dec 2022
Five Interesting Stocks Today
  1. Siemens: This heavy electrical equipment stock is trading near its 52-week high after rising for four consecutive sessions since December 7. The uptick came after the company announced that it was the lowest bidder for the 9,000 HP (horsepower) Electric Locomotives project in Dahod, Gujarat. The bid was made for an Indian Railways project estimated at Rs 20,000 crore. Winning this project is expected to improve the company’s revenue. Trendlyne’s Forecaster estimates a 22.9% YoY increase in revenue for the company in FY23.

Indian Railways expects the delivery of its first locomotive by the end of 2024. This will be  a decade-long project for Siemens, and the number of deliveries will increase in the coming years. With an increase in capex from the Centre in railways and infrastructure (upcoming ‘Vande Bharat’ trains, building data centres and e-charging stations, among others), Siemens stands to benefit the most, according to reports.

This has especially enthused brokerages like Prabhudas Lilladher and ICICI Securities who have raised their target price for the stock by 10.9% and 5.7% respectively. Analysts expect that increased government spending in green infrastructure, automation and electrification space will also boost the company’s growth. According to Trendlyne’s Forecaster consensus recommendation, 12 analysts recommend a ‘Buy’ while 6 recommend a ‘Hold’ on the stock.

In its analyst call on December 9, the management of Siemens talks about the growth in their order book in all segments including energy, infrastructure and mobility – which grew 136% YoY in FY22. Total order inflow rose 43% YoY. MD & CEO Sunil Mathur says that the infrastructure space is seeing a boom as global companies are setting up their data centres in India. Automotive, chemicals and even pharma businesses are expected to do well. However, semiconductor shortages, delay in deliveries, high inflation and increase in import costs could still be challenging.

  1. V-Guard Industries: This consumer durable stock rose over 6% in the past week and hit its 52-week high of Rs 273 on Thursday. V-Guard’s share price started to rise after the company announced the acquisition of Sun flame Enterprises Private (SEPL) for Rs 660 crore on December 9. With the recent rise in share price, the company features in a screener of stocks with prices above short, medium and long-term moving averages.

With the acquisition of SEPL, V-Guard is on its way to becoming a significant player in the domestic kitchen appliances segment. SEPL offers a wide product portfolio, including cooktops, chimneys, pressure cookers, mixer grinders and small kitchen appliances, that cater to a wide consumer segment. In FY22, SEPL recorded a revenue of Rs 349.8 crore. V Ramachandran, COO of V-Guard, said, "SEPL acquisition offers multiple levers for unlocking significant synergies in areas like geography, product portfolio and channels.” The management said the acquisition is expected to close by mid-January 2023 and will be funded through a mix of internal accruals and debt.

The acquisition comes at a time when the operating profit margin of V-guard has been on a downtrend since Q3FY21. Gross margin of the company fell 210 bps YoY to 28.6% in Q2FY23 despite a correction in commodity costs due to high cost-inventory. ICICI Securities believes the margins were affected mainly in the cables and wires segment. However, the company’s revenue has risen in the past seven quarters (YoY) and the SEPL acquisition is expected to aid revenue growth going forward.

  1. KEC International: This heavy electrical equipment company rose 10.4% over the past week due to its improving business outlook on the back of rising order intakes and the easing of inflationary pressures. The company’s year-to-date order intake grew 20% YoY to over Rs 13,000 crore. The management aims to increase the value of contracts won by 16.3% YoY to Rs 20,000 crore in FY23. Given the improvement in order intake, its order book, which used to be close to Rs 20,000 crore a year ago, has grown to nearly Rs 29,000 crore. The stock also received seven broker target price upgrades and one recommendation upgrade over the past three months.

Amid this optimism, the company announced new order wins worth Rs 1,349 crore on Monday. These contracts include projects in India and international markets, ranging across various segments like transmission & distribution, infrastructure and cables. This uptrend in price also helped the company show up in a screener for stocks with strong momentum.

In Q2FY23, the company’s net profit fell 31.2% YoY to Rs 55.2 crore despite its revenue rising 13.3% YoY. Its profit fell due to high input costs, logistics costs and subcontracting charges. However, the management expects its margins and profitability to improve due to falling commodity prices and growing order intake. It also plans to lower its interest charges by focusing on debt reduction. According to Nirmal Bang, the company’s margins will improve from Q3FY23 due to falling commodity prices and improving execution of projects. The management has guided a 20% YoY growth in revenue for FY23.

  1. Sapphire Foods India: This quick-service restaurant gained more than 5% in intraday trade on Thursday after it announced that its promoter groups and investors were planning to offload a part of their stakes. The offloading comes after the firm’s pre-IPO lock-in period expired on November 15, thus allowing 43.4% of the total shareholding to be sold. As of September, the promoter groups held a 51.3% stake in the company.

The largest stakeholder, Sapphire Foods Mauritius sold a 6.14% stake (39 lakh shares) for Rs 525.5 crore. Private equity fund Wwd Ruby sold a 4.5% stake for Rs 385.1 crore, effectively paring its stake to 5.3% from 9.8%. Another promoter, Sagista Realty Advisors, which owns a 4.5% stake (28.6 lakh shares) plans to offload 1.5 lakh shares.

In Q2FY23, the company was back in the black on a YoY basis after it posted a profit of Rs 26.9 crore. Its revenue also grew 35.9% YoY to Rs 562.8 crore, the highest-ever. The company shows up in a screener for stocks in the PE Buy zone with a good durability score and rising momentum. The stock also has a consensus recommendation of ‘Buy’, according to Trendlyne’s Forecaster.

However, gross margins fell 310 bps YoY due to high inflation and lower price increases. Although its India business saw its EBITDA grow 40 bps YoY, its Sri Lankan business was adversely impacted by high inflation, which brought down the overall EBITDA margin by 50 bps YoY. Despite high input costs, the company has been focusing on expanding its network; it opened 42 new restaurants in India and Sri Lanka in Q2. The company aims to double its footprint in the next 3-4 years.

  1. Colgate-Palmolive: This personal products company held an investor meet on Tuesday, outlining its growth strategy. During the meet, the management highlighted the four pillars of its growth strategy: toothpaste volume growth, science-led premiumisation, category growth in toothbrushes and devices, and building personal care portfolio. But this did not excite investors as the company’s share price fell over 4% on Wednesday. As a result, it comes up in a screener that lists stocks with RSI indicating price weakness.

The company’s focus areas in its premiumisation plan are powered toothbrushes and teeth whitening products. It plans to set up an exclusive professional eB2B platform for dentists and build a new segment dedicated to kids.

Post this conference, brokerages have mixed views about the company. Foreign brokerage Citi maintains its ‘Sell’ rating on the stock with a target price of Rs 1,650. It believes that driving change in consumer habits will require sustained investments, and the results of the same would be likely delayed.

Prabhudas Lilladher maintains its ‘Hold’ rating on the stock with a target price of Rs 1,639. The brokerage believes Colgate-Palmolive needs to be more aggressive in the personal care segment to boost growth.

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
16 Dec 2022
Market closes lower, Dilip Buildcon wins order worth Rs 976 crore from NHAI

Trendlyne Analysis

Nifty 50fell nearly 150 points and closed below the 18,300 mark on a volatile day of trade. European stocks followed the global trend and traded lower than Thursday’s levels. India's merchandise exports recorded a flat growth YoY at $ 31.99 billion in November, with the merchandise trade deficit narrowing marginally to $23.89 billion from $26.91 billion in the previous month.

Most major Asian indices closed in the red, in line with the US indices, which closed sharply lower on Thursday. US stock fell as investors digested the US Fed’s hawkish commentary. In addition, US retail sales fell more than expected in November, as the holiday season kicked off. The European Central Bank (ECB) raised rates by half a percentage point, its fourth successive hike on Thursday, Brent crude oil futures traded lower but is set for a weekly gain amid supply issues.

Nifty Smallcap 100and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Metaland Nifty Pharma closed lower than Thursday’s levels. Nifty IT closed in the red, taking cues from the tech-heavy Nasdaq 100 index, which fell over 3.3% on Thursday.

Nifty 50closed at 18,269.00 (-145.9, -0.8%), BSE Sensexclosed at 61,337.81 (-461.2, -0.8%) while the broader Nifty 500closed at 15,636.35 (-147.5, -0.9%)

Market breadth is highly negative. Of the 1,942 stocks traded today, 615 were on the uptrend, and 1,267 went down.

  • Relative strength index(RSI) indicates that stocks like Central Bank of India, Indian Overseas Bank, RBL Bankand General Insurance Corp of Indiaare in the overbought zone.

  • Ashok LeylandbeatsEscorts Kubota in YoY and QoQ revenue and profit growth, MF holdings and broker average rating. But lags in PE ratio, annual RoE and one-year stock price returns.

  • KFin Technologies, a financial services provider, opens for IPO subscription on Monday. The price band for the issue is Rs 347-366 per share and is entirely an offer for sale for Rs 1,500 crore.

  • Raymondand Mahindra CIE Automotivehit their all-time highs of Rs 1,644 and Rs 334 respectively. Raymond rises for three consecutive sessions, while the other trades higher for two sessions.

  • Mutual funds trim stakes in Gujarat Gas, HDFC Life Insurance and ICICI Bank in the past month.

  • Power stocks like ABB India, Adani Transmission, JSW Energy, Siemens and Tata Power are falling in trade. All constituents of the broader sectoral index BSE Power are trading in the red.

  • GMM Pfaudler falls over 18% in the early trade today. Reports suggest that the promoter entity likely sold 1.34 crore shares (29.88% stake) worth Rs 2,278 crore in the company via a block deal.

  • Dilip Buildcon wins an order worth Rs 976 crore from the National Highways Authority of India for four laning of the Mehgama-Hansdila section of NH-133 in Jharkhand.

  • Sugar stocks like Ugar Sugar Works, Bajaj Hindusthan Sugar, Dalmia Bharat Sugar and Industries, and Dhampur Sugar Mills are rising in trade as reports suggest that government may hike sugar export quota.

  • Sunil Bohra, Executive Director and Group CFO of UNO Minda, says that the company targets an EBITDA margin of 11-12% in FY23 and will improve revenues by 1.5X of the industry’s growth. He adds that the company aims to outperform its industry in the next 8-10 years.

  • CAMS rises more than 1.5% in trade in a weak market. The stock is trading above its second resistance or R2 level. It shows up in a screener of stocks with improving RoA for the past two years. The stock ranks medium on the Trendlyne checklist score.

  • Patel Engineering is rising as its board approves raising funds through a rights issue. It plans to raise Rs 350 crore by allotting equity shares with a face value of Rs 1 each to eligible shareholders of the company.

  • Public holder Kravis Investment Partners sells a 1.29% stake (3.6 crore shares) in FSN E-commerce Ventures (Nykaa) for Rs 629.06 crore in a bulk deal.

  • India’s November merchandise exports grew marginally to $32 billion from $29.8 billion in October. Imports stood at $55.9 billion and the trade deficit in November narrowed to $23.9 billion.

  • Promoter Sapphire Foods Mauritius sells a 6.14% stake (39 lakh shares) in Sapphire Foods for Rs 525.5 crore in a bulk deal. Another holder WWD Ruby sells a 4.5% stake in Sapphire Foods for Rs 385.1 crore. The Government of Singapore, PI Opportunities Fund I and Mirae Asset Mutual Funds, among others, pick up the shares.

  • Engineers India is rising as it secures an order from Mundra Solar Technology, a group company of Adani Enterprises. The order pertains to the production of 30,000 metric tonnes per annum (MTPA) of polysilicon and 500 MTPA of monosilane. The stock shows up in a screener for companies with no debt.

  • AIA Engineering acquires a 26% stake in Clean Max Meridus for setting up a Hybrid (solar and wind) Power Plant in Gujarat. AIA Engineering shows up in a screener of stocks with improving book value for the past two years.

  • The Centre slashes the windfall tax on locally produced crude oil to Rs 1,700 per tonne from Rs 4,900 earlier. It cuts the windfall tax on the export of diesel to Rs 5 per litre (including Rs 1.5 as road infrastructure cess) from Rs 8. The windfall tax on aviation turbine fuel (ATF) falls to Rs 1.5 per litre from Rs 5 earlier.

  • Porinju Veliyath buys a 0.5% stake in Max India for approx Rs 2.3 crore in a bulk deal on Thursday.

  • IDBI Bank files an insolvency plea against Zee Entertainment (ZEEL) to recover dues worth Rs 149.6 crore. ZEEL has, however, challenged the plea with the National Company Law Tribunal bench.

  • Hindustan Foodsis acquiring a pharmaceutical factory from Reckitt Benckiser Health in Himachal Pradesh to expand its healthcare and wellness division. The transaction is worth Rs 156 crore and likely to be completed by H2FY23. The company shows up in a screener of stocks with improving annual profits for the past two years.

Riding High:

Largecap and midcap gainers today include Bayer Cropscience Ltd. (4,830.20, 3.84%), Procter & Gamble Hygiene & Healthcare Ltd. (14,400.00, 3.27%) and Tube Investments of India Ltd. (2,921.85, 3.18%).

Downers:

Largecap and midcap losers today include Polycab India Ltd. (2,753.90, -7.63%), Union Bank of India (84.70, -5.94%) and General Insurance Corporation of India (166.65, -5.90%).

Volume Rockets

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

Top high volume gainers on BSE included EPL Ltd. (191.05, 13.86%), Kalyan Jewellers India Ltd. (125.45, 5.46%) and Sterlite Technologies Ltd. (186.65, 5.24%).

Top high volume losers on BSE were GMM Pfaudler Ltd. (1,644.50, -14.56%), Medplus Health Services Ltd. (649.60, -6.31%) and Bharat Electronics Ltd. (99.45, -3.68%).

Dr. Reddy's Laboratories Ltd. (4,309.10, -3.58%) was trading at 12.7 times of weekly average. Deepak Fertilisers & Petrochemicals Corporation Ltd. (820.65, 1.10%) and Krishna Institute of Medical Sciences Ltd. (1,451.80, 2.32%) were trading with volumes 12.2 and 7.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks made 52-week highs, while 5 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Aegis Logistics Ltd. (358.20, 3.21%), Apollo Tyres Ltd. (323.05, 0.14%) and Indian Overseas Bank (33.40, -3.88%).

Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (441.85, -1.13%) and SIS Ltd. (387.70, -0.46%).

6 stocks climbed above their 200 day SMA including Sterlite Technologies Ltd. (186.65, 5.24%) and Procter & Gamble Hygiene & Healthcare Ltd. (14,400.00, 3.27%). 29 stocks slipped below their 200 SMA including GMM Pfaudler Ltd. (1,644.50, -14.56%) and Avenue Supermarts Ltd. (3,990.00, -4.59%).

 
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The Baseline
15 Dec 2022
Screener of the Week: Rising durable stocks in the PE buy zone, with low volatility 
By Tejas MD

This stock screener looks at PE Buy Zone stocks with high Trendlyne durability scores, which outperformed both the benchmark index and their industry in the past month.

These stocks also have a beta lower than 1, meaning their stock prices are less volatile than the overall market. Beta is a measure of the volatility (or systematic risk) of a company compared to the market as a whole. It is important to note that this doesn't necessarily mean the company has fewer risks. It implies that its systematic market risk is lower compared to the benchmark index. It is possible for a firm to have low systematic risk but high firm-specific risks. 

Just twenty five companies from the Nifty 500 made it to the list. Companies from the pharma and agrochemical industries are well represented. The top two companies that rose the highest, outperforming both the industry and the benchmark, were Bank of Maharashtra and  Sharda Cropchem.

Bank of Maharashtra's share price rose over 50% in the past month. PSU banks have been in the news lately as the industry posted promising Q2FY23 results. Bank of Maharastra's revenue has been increasing for the past eight quarters. In addition, this PSU Bank's asset quality improving with rising net interest margins also excited investors.

Sharda Cropchem rose over 25% in the past month on the back of good Q2FY23 results. However, the company still trades in the PE Buy Zone, which means that its TTM PE ratio is lower than its historical PE ratio. According to Trendlyne's DVM classification, the stock comes under "strong performer, under radar stocks". 

You can find more screeners here.