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The Baseline
17 Oct 2022
Five analyst picks with high target upside
By Suhas Reddy
  1. HCL Technologies: Motilal Oswal reiterates its ‘Buy’ call on this IT consultancy company with a target price of Rs 1,240. This indicates an upside of 24.6%. In Q2FY23, HCL reported an increase in net profit of  6.3% QoQ to Rs 3,489 crore (2.8% higher than the brokerage’s estimate) and an increase in revenue of 4.4% QoQ to Rs 24,922 crore. Analysts Mukul Garg and Raj Prakash Bhanushali note that the revenue growth was led by  IT services, and engineering, research and development verticals. 

Garg and Bhanushali say, “Strong sequential growth within services, robust headcount addition, healthy deal wins, and a solid pipeline indicate an improved outlook.” Given the company’s abilities in the digital space, its strategic partnerships, and investments in the cloud, analysts expect HCL Technologies to emerge stronger on the back of an expected increase in enterprise demand for these services.

  1. Havells India: ICICI Securities maintains a ‘Buy’ call on this consumer durables company with a target price of Rs 1,621, indicating an upside of 31.1%. Aniruddha Joshi, Manoj Menon, Karan Bhuwania and Pranjal Garg say, “While consensus appears concerned about higher copper prices hurting earnings and stock price movement, we note there is a strong positive correlation (0.8) between copper prices and revenues and EBITDA of Havells.” They add that while copper prices increased at a CAGR of 8.5%, the company’s revenue grew at 15.3% CAGR over FY09-22. 

The analysts, while settling down the concern about inflation add, “Havells has historically been able to initiate pricing action to pass on additional costs and maintain/improve margins. With steady earnings growth, the stock price has also improved in spite of volatility in copper prices.” They remain positive on the company on the back of strong moats and growth opportunities.

  1. Tata Consultancy Services: KRChoksey upgrades its rating on this IT consulting & software company to ‘Buy’ from ‘Accumulate’ with a target price of Rs 3,739. This indicates an upside of 20.6%. Analyst Saptarishi Mukherjee is bullish on the stock despite its Q2FY23 revenue and net profit being marginally below the brokerage’s estimate. The analyst is positive about the company’s future growth prospects as all its business verticals grew on a sequential basis. 

Mukherjee sees TCS’s deal booking of $ 8.1 billion in Q2 as an indication that the demand for its services is healthy and stable. He adds “Operating margin is expected to improve on the back of lowering the sub-con cost, improvement in retention, pricing, and efficiency”. Overall, he believes the company is well-positioned to weather global macro uncertainties given its size, market leadership, and robust order book to deliver industry-leading growth in the coming quarters. The analyst expects the software giant’s revenue to grow at a CAGR of 13.6% over FY22-24. 

  1. Titan: Sharekhan maintains its ‘Buy’ rating on this jewellery & watch manufacturer with a target price of Rs 3,140. This implies an upside of 19.7%. The analysts at Sharekhan expect the company’s consolidated revenue to grow 20% in Q2FY23. They expect this growth to be led by the jewellery and watches segments after the company announced its pre-quarter business update. The firm’s standalone jewellery and watches segment grew by 18% and 20%, respectively. “The strong tailwind demand led by a desire to own more premium watches helped brand Titan grow fastest in the watches category aided by higher volume and average selling prices YoY”, the brokerage adds.

Analysts at Sharekhan are optimistic about the company’s future growth prospects given its aim to increase its revenue at a CAGR of 20% over FY22-27. They also believe that its consistent margin improvement will improve cash flow in the coming quarters. The analysts expect the company’s financial performance in FY23 to be strong due to a low base in its core businesses. They estimate the firm’s revenue to grow at a CAGR of 22.1% over FY22-25. 

  1. Bharti Airtel: Axis Direct maintains its ‘Buy’ rating on this telecom services company with a target price of Rs 875, implying an upside of 13.9%. The analysts at the brokerage expect data consumption in India to increase in the coming quarters, which they believe augurs well for the company. They add that in Q1, “The company continued a strong share of 4G net ads in the market as the 4G customer base grew by 4.5 million QoQ to reach 195.5 million”. The home business segment also saw a healthy addition of new customers, write the analysts.

Axis Direct is bullish on Airtel’s future growth as its revenue has consistently been rising sequentially, with growth across its business verticals. Positives here include the company’s efficient execution, superior customer mix, and strong customer additions in 4G will aid margins. The analysts expect Airtel’s net profit to grow at a CAGR of 39% over FY22-24.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 Oct 2022
Market closes higher, PVR’s Q2 loss narrows to Rs 71.2 crore

Trendlyne Analysis

Nifty 50rises over 125 points and closed above the 17,300 mark. European stocks traded higher as UK's new finance minister Jeremy Hunt is set to make a statement regarding a new fiscal plan. However, major Asian indices closed mixed, despite the US indices closing deep in the red on Friday. US stocks fell as investors digested the red-hot US inflation print, which pushes the US Federal Reserve to continue with its aggressive monetary policy. The tech-heavy NASDAQ 100 fell over 3% while the S&P 500 closed 2.4% lower. Brent crude oil futures trade higher after falling over 6.8% last week amid demand concerns due to rising risks of a global recession.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Energy and Nifty Auto closed higher than Friday’s levels. Nifty IT also closed higher, despite the NASDAQ 100 closing deep in the red on Friday.

Nifty 50closed at 17,320.55 (134.9, 0.8%), BSE Sensexclosed at 58,410.98 (491.0, 0.9%) while the broader Nifty 500closed at 14,915.20 (100.1, 0.7%)

Market breadth is in the red. Of the 1,967 stocks traded today, 785 were gainers and 1,125 were losers.

  • Shree Cementssees a short build-up in its October 27 future series as its open interest rises 13.1% with put to call ratio of 0.51.

  • HM Bangur, Managing Director of Shree Cements, expects the volume to grow 10% in FY23. He also expects EBITDA per tonne to rise up to Rs 900-1000 during Q3FY23. This comes after the company reported a fall in net profit by 67% YoY in Q2FY23.

  • Godfrey Philips Indiaand Sun Pharmaceutical industrieshit their 52-week highs of Rs 1,409.5 and Rs 985, respectively. Godfrey Philips rises for three sessions, while Sun Pharma trades higher for four sessions.

  • ACC posts a loss of Rs 87.3 crore in Q2FY23 compared to a profit of Rs 450.2 crore in Q2FY22 despite its revenue growing 7% YoY. A rise in the company’s cost of materials consumed, power & fuel expenses, and purchases of stock-in-trade hurt its profitability. Its EBITDA margin falls by 19.1 percentage points YoY to 0.4%.

  • Commodity Printing/Stationery, Food & Drugs Retailing, and Roads & Highways industries rise over 3% in trade today

  • PVR’s Q2FY23 net loss narrows to Rs 71.2 crore from Rs 153.1 crore in Q2FY22 as its revenue jumps 5.7X YoY. Revenue from movie screenings, production and distribution increases more than 2.5 times in Q2. The management is focused on improving admissions back to cinema halls and expects a full recovery in business by the end of FY23.

  • Craftsman Automation is rising as its Q2FY23 net profit is up 25.1% YoY to Rs 62.5. Revenue increases by 35.9% YoY driven by growth across all its business segments. The stock shows up on the screener for companies with improving return on assets over the last two years.

  • Ujjivan Small Finance Bank's board approves its merger with the company's subsidiary, Ujjivan Financial Services. Shareholders of Ujjivan Financial Services will get 116 shares of Ujjivan Small Finance for every 10 shares held in Ujjivan Financial Services.

  • Public sector banks like Canara Bank, Bank of Baroda and Bank of Maharashtra rise more than 3% in trade. The broader Nifty PSU Bank index trades above 2.5%.

  • Stocks like ICICI Prudential Life Insurance, Bajaj Auto, Cyient, Shree Cements, and Wipro report a QoQ fall in net profit in Q2FY23.

  • CLSA maintains its ‘Sell’ rating on Jubilant Foodworks with a target price of Rs 550. The brokerage believes the company's peers have a better earnings outlook. It also says that the company is falling behind on its diversification plan.

  • HDFC Securities remains positive on the future growth prospects of Angel One as it retains its ‘Buy’ rating on the company with a target price of Rs 2,020, indicating an upside of 22.4%. The brokerage believes the company is well-placed to capitalize on the growth momentum of the Indian capital markets given its flat-fee model, market share gains and cost management. The brokerage expects the company’s revenue to grow at a CAGR of 18.1% over FY22-25.

  • Porinju Veliyath sells stake in Cupid during Q2FY23, he now holds below 1% stake in the company as against a 1.3% stake at the end of Q1FY23.

  • Zydus Lifesciences is rising after it receives tentative approval from the US FDA for drugs used in the treatment of tardive dyskinesia. This drug had annual sales of USD 781 million in the US market and will be manufactured at a facility in Ahmedabad.

  • Avenue Supermarts is falling despite its Q2FY23 net profit surging 64.1% YoY to Rs 685.8 crore and revenue rising 36.6% YoY. This growth is driven by the company’s FMCG and staples segment performing well this quarter. However, its operating margin declines by 20 bps YoY due to higher purchases of stock-in-trade and other expenses.

  • L&T Infotech’s net profit for Q2FY23 rises 7.2% QoQ to Rs 679.3 with revenue increasing 6.9%. Maximum growth in revenue came from the energy and utilities segment followed by CPG, retail and pharma segments. Tata Elxsi’s net profit fell 5.4% QoQ on high employee benefit costs but revenue rises 5.1% QoQ in Q2.

  • Dilip Buildcon is rising as it wins an order from the Gujarat Metro Rail Corp for the construction of an 8.7 km long elevated viaduct for the Surat Metro Rail Project Phase-1. The cost of the project is estimated to be Rs 702 crore.

  • Centre raises the windfall tax on locally produced crude oil to Rs 11,000 per tonne from Rs 8,000 per tonne earlier. It also increases the export tax on diesel to Rs 12 from Rs 5. The Centre also imposed an export tax of Rs 3.5 on aviation turbine fuel (ATF) after removing it in the last fortnightly revision.

  • Electronics Mart India’s shares list at a 52.5% premium to the issue price of Rs 59, on its debut on the bourses. The Rs 500-crore IPO was subscribed for 71.9 times the total shares on offer.

  • Sunteck Realty’s pre-sales rise 24% YoY to Rs 337 crore in Q2FY23 with collections increasing 60% YoY. The company recently acquired a land parcel at Mira Road, Mumbai for a project, whose estimated revenue is nearly Rs 3,000 crore.

  • HDFC Bank’s Q2FY23 net profit rises 20% YoY to Rs 10,605.7 crore as net interest income increases 18.9% and provisions fall 17%. Revenue from retail and wholesale banking is also up in Q2. The bank’s asset quality further improved as gross NPA and net NPA falls 12 bps and 7 bps YoY, respectively. The bank shows up on a screener which lists stocks with improving net cash flow for the past two years.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (2,154.45, 5.97%), Canara Bank (237.40, 4.70%) and Bank of Baroda (136.15, 4.37%).

Downers:

Largecap and midcap losers today include Tata Elxsi Ltd. (7,782.80, -8.07%), Oberoi Realty Ltd. (857.60, -4.75%) and FSN E-Commerce Ventures Ltd. (1,160.50, -3.87%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included IRB Infrastructure Developers Ltd. (239.10, 10.62%), Aptus Value Housing Finance India Ltd. (331.60, 9.84%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (966.15, 8.00%).

Top high volume losers on BSE were Tata Elxsi Ltd. (7,782.80, -8.07%), Oberoi Realty Ltd. (857.60, -4.75%) and CreditAccess Grameen Ltd. (935.40, -4.27%).

Just Dial Ltd. (597.55, 4.85%) was trading at 18.4 times of weekly average. Grindwell Norton Ltd. (2,028.35, -1.01%) and Esab India Ltd. (3,489.70, 3.41%) were trading with volumes 17.4 and 12.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks took off, crossing 52-week highs, while 16 stocks hit their 52-week lows.

Stocks touching their year highs included - City Union Bank Ltd. (193.10, 4.92%), Federal Bank Ltd. (131.50, 0.88%) and IDFC Ltd. (77.50, 1.51%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (571.05, -0.13%) and Bharat Petroleum Corporation Ltd. (296.55, -0.44%).

16 stocks climbed above their 200 day SMA including IRB Infrastructure Developers Ltd. (239.10, 10.62%) and Aptus Value Housing Finance India Ltd. (331.60, 9.84%). 21 stocks slipped below their 200 SMA including Tata Elxsi Ltd. (7,782.80, -8.07%) and Oberoi Realty Ltd. (857.60, -4.75%).

 
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The Baseline
14 Oct 2022
Despite ‘September effect’, MFs make fresh buys in FMCG, Capital goods stocks
By Ketan Sonalkar

Traders often talk about the September Effect - that since 1928, indices have historically seen a decline during this month. And 2022 was no exception, as the benchmark Nifty index fell by 3.7% and retreated from the highs made in August. The month saw rising uncertainty around the Russia Ukraine war, and the US Fed and other Central Banks hiking rates to control inflation and the rise in oil prices. 

Despite this, mutual funds found buying opportunities in stocks that hold future potential. This month also saw a lot of recently launched schemes add stocks to their portfolios. This month's buys include a life insurance company, FMCG players as well as capital goods manufacturers.

This list is based on a screener where the mutual fund holding grew by a certain minimum percentage and at least four schemes bought more than a lakh of shares each.

HDFC Life - Tie up with group company to widen customer base

HDFC Life is one of India’s leading private life insurance companies and part of the HDFC Group. It has been gaining market share and also has better operating metrics than other private insurers.

In September 2022, it partnered with another group company,  general insurance player HDFC ERGO, to provide a combination of life insurance along with health insurance. This is expected to further widen its customer base. Another positive development for HDFC Life includes the approval of the merger of Exide Life with HDFC Life from the NCLT. 

Fund managers who bought shares of HDFC Life

Shares of HDFC Life were added to respective schemes by Mahesh Patil for Aditya Birla Sun Life Frontline Equity Fund Growth, Hiten Shah for Kotak Equity Arbitrage Fund Growth, Aniruddha Naha and A. Anandha Pabmanabhan for PGIM India Flexi Cap Fund Regular Growth as well as Vinay Sharma and Kinjal Desai for Nippon India Banking & Financial Services Fund Growth.

CG Power - Railway orders put the company on the fast track

CG Power (CG Power and Industrial Solutions) is a manufacturer and distributor of electrical equipment such as transformers, reactors, and other control equipment. It also manufactures industrial motors and pumps, and communication systems.

Indian Railways, which is undergoing dynamic growth in both freight and passenger transportation, has fueled CG Power with various opportunities for future growth. Indian Railways continue to give orders to CG Power for electrification, signaling system upgrades, and high horsepower locomotives. The company has also approved a capex of Rs 32 crore for the railway business. The motors business, which constitutes around 78% of the CG Power product portfolio, has also been issued a capex of Rs 80 crore.

Fund managers who bought shares of CG Power

Buying interest in CG Power saw addition to portfolios by Atul Bhole and Dhaval Gada toDSP Flexi Cap Fund Payout of Income Dist cum Cap Wdrl, Vinit Sambre and Resham Jain to DSP Midcap Fund Growth, Shridatta Bhandwaldar to Canara Robeco Flexi Cap Fund Growth and Atul Bhole and Vikram Chopra to DSP Equity & Bond Fund Growthschemes respectively.

Triveni Turbine - Robust demand and capacity expansion drive interest in the stock

Triveni Turbine is the domestic market leader in steam turbines up to 30 MW. The company designs and manufactures steam turbines up to 100 MW, and delivers end to-end solutions to customers. 

In Q1FY23 it registered a robust revenue growth of 40.7% to Rs 259 crore supported by 59% YoY increase in export business, while domestic business increased by 32% YoY. The management expects execution to pick up pace and to generate 35% top-line growth in FY23. This is backed by its expansion plans with the addition of a new bay in the Sompura plant. This is expected to augment the space for assembly and testing of steam turbines at the factory. The management expects this to be complete in Q2FY23 and post the expansion, the capacity will rise from 150-180 machines to 200- 250 machines per annum.

Fund managers who bought shares of Triveni Turbine

Fund managers who bought Triveni Turbines include Sohini Andani and Mohit Jain for SBI Magnum Midcap Fund Regular Growth, Mahesh Patil and Dhaval Shah for Aditya Birla Sun Life Multi-Cap Fund Regular Growth, Vishal Gajwani for Aditya Birla Sun Life Small Cap Fund Growth and Sudhir Kedia and Ravi Gopalakrishnan for Sundaram Flexi Cap Fund Regular Growthschemes respectively.

Dabur - Expanding product range and good monsoon to provide a boost

Dabur is one of India’s largest FMCG companies with a presence in segments like health supplements, oral care, hair care, home care and juices. Dabur also derives around 50% of its sales from rural regions with a presence in  90,000 villages.

Dabur introduced new products across categories in the past few months. These include the premium tea segment with the Vedik Tea brand. It has also entered a new segment of peanut butter. Dabur is also pushing its marketing strategy by hiring Amitabh Bachchan as their brand ambassador. Another factor favourable to Dabur is a good monsoon season which is expected to boost the rural economy, a major contributor to its sales.

Fund managers who bought shares of Dabur

Fund managers who added shares to respective schemes include Mahesh Patil for Aditya Birla Sun Life Frontline Equity Fund Growth, Yogesh Patil forLIC MF Large & Mid Cap Regular Growth andLIC MF Large Cap Fund Growth, and Hiten Shah forKotak Equity Arbitrage Fund Growth.

Sundram Fasteners - Rebound in the auto sector drives growth

Sundram Fasteners manufactures a range of high tensile fasteners for precision-driven sectors like Automotive, Wind Energy, Aviation, Farm Equipment and Infrastructure. They specialize in  cold extruded and precision forged parts used in two-wheelers, front wheel drive vehicles and internal combustion engines.

The company has planned a capex with fresh investments worth Rs 400 crore over the next two years as it sees bright prospects for the Indian automobile sector. The powertrain components division had won contracts worth Rs 150 crore for EV products in July 2022.

Fund managers who bought shares of Sundram Fasteners

Addition of shares of Sundram Fasteners was done by Harish Bihani and Sharmila D’mello to ICICI Prudential Long Term Equity Fund (Tax Saving) Growth andICICI Prudential Smallcap Fund Growth, Samir Rachh and Kinjal Desai to Nippon India Small Cap Fund - Growth and Vishal Gajwani to Aditya Birla Sun Life Small Cap Fund Growth.

Tata Chemicals - Strong leadership to be further strengthened with capacity expansion

Tata Chemicals is one of the top five players in the global soda ash market. The company  manufactures soda ash, sodium bicarbonate, cement, salt, marine chemicals and crushed refined soda along with other specialty chemicals. Basic chemicals form 75% of overall revenue while the rest comes from specialty products.

The company posted its highest ever quarterly revenues and net profits in Q1FY23. In the Q1FY23 results management commentary, they said that demand for soda ash is strong in spite of high prices. Demand is also robust from the detergent and glass industry. They expect better growth from solar panels to aid demand for the glass industry and thereby soda ash. 

The company has expansion plans with a capex of Rs 1,100 crore in progress where the capacity of soda ash will increase by 2.3 lakh MT, bicarb by 0.7 lakh MT and salt by 3.3 lakh MT.

Fund managers who bought shares of Tata Chemicals

Buyers of Tata Chemicals for respective schemes include Pankaj Tibrewal for Kotak Small Cap Growth, Kayzad Eghlim and Priyanka Khandelwal for ICICI Prudential Equity Arbitrage Fund Regular Growth, Sailesh Jain for Tata Arbitrage Fund Regular Growth and Neeraj Kumar and Arun R. for SBI Arbitrage Opportunities Fund Regular Growth.

Interglobe Aviation - Demand for air travel crosses pre Covid levels

Interglobe Aviation, more commonly known as Indigo is one of India’s low cost carriers (LCC) with a market share of 54% in the Indian aviation sector. 

The airline industry which was affected badly during the pandemic is now bouncing back in FY23. Indigo operated at a load factor of 80% in Q1FY23. The rising load factor was driven by a strong rebound in leisure & corporate travel. Further, international travel has normalised and has reached its precovid levels. 

Indigo in September also announced that it has entered freight services. Its first freight plane was one that was converted from a passenger plane. The freight carriers will be able to service markets between China in the east and the Gulf in the west, as well as the CIS countries to the north, according to the management. IndiGo also said it will be utilising the same pool of pilots and engineers that fly and service its current fleet for the cargo planes.

Fund managers who bought shares of Interglobe Aviation

Shares of Indigo were bought by Manish Gunwani and Kinjal Desai for Nippon India Growth Fund - Growth, Atul Penkar and Dhaval Gala for Aditya Birla Sun Life Tax Relief 96 Pyt of Inc Dis cum Cap Wdrl, Sailesh Jain for Tata Arbitrage Fund Regular Growth and Mahesh Patil for Aditya Birla Sun Life Frontline Equity Fund Growthschemes respectively

Syngene - New international deal to have significant long term impact

Syngene International serves pharmaceutical, biotechnology, nutrition, animal health, consumer goods and speciality chemical companies globally, with a range of integrated research services for the clinical development and manufacturing process.

Recently Syngene signed a 10-year biologics manufacturing agreement with leading animal health company, Zoetis. It will manufacture the drug substance for Librela (bedinvetmab), a monoclonal antibody used for treating osteoarthritis in dogs. According to the management, this agreement paves the way for development and manufacturing of other molecules in the coming years and is expected to be worth $500 mn to Syngene over 10 years, subject to regulatory approvals and market demand. 

Fund managers who bought shares of Syngene

Addition of shares of Syngene was done to respective schemes by Harish Bihani and Sharmila D’mello for ICICI Prudential Long Term Equity Fund (Tax Saving) Growth and ICICI Prudential Smallcap Fund Growth, Gaurav Misra for Mirae Asset Focused Fund Regular Growth, and Pranav Gokhale and Amit GanatraInvesco India Growth Opportunities Fund Growth.

Hatsun Agro Products - Expansion to a pan India brand drives revenue growth

Hatsun Agro Products manufactures and markets dairy products  like milk, curd, ice creams, dairy whitener, skimmed milk powder, ghee, paneer and other milk based products. The Q1FY23 results recorded highest ever quarterly revenues at Rs 2,020 crore. This was the result of expanding beyond its stronghold in South India.

While the company for most of its existence was limited to the southern states, its retail expansion in the last two years helped it reach customers in new markets like Maharashtra, Odisha, West Bengal and Madhya Pradesh. Hatsun Agro Products invested about Rs 450 crore in the last financial year across new manufacturing facilities for capacity expansion in ice cream, milk, curd, milk products and cattle feed.

Fund managers who bought shares of Hatsun Agro Products

Shares of Hatsun were added by S. Bharath and Ratish Varier to Sundaram Mid Cap Growth, Sohini Andani and Mohit Jain to SBI Magnum Midcap Fund Regular Growth, R. Srinivasan and Mohit Jain to SBI Focused Equity Fund Growth and Saurabh Pant and Mohit Jain to SBI Large & Midcap Fund Regular Payout Inc Dist cum Cap Wdrlschemes respectively.

Britannia - Management rejig and and international foray key positive triggers

Britannia, a leading food-products company, sells various brands of biscuits, cakes, dairy products, breads etc. in India as well as globally. 

The company recently teamed up with Nairobi-based Kenafric Industries to purchase Catalyst Capital-backed Britannia Foods Ltd. in Kenya in a $20 million transaction that also involved acquiring property and a plant, Mikul Shah, a director at Kenafric, said in an interview. Britannia Industries, unrelated to Britannia Foods, took a controlling stake in the partnership.

The company also saw a change in the top management team with Ranjit Kohli taking over from Varun Berry as the CEO, while Varun Berry was elevated to executive vice-chairman and managing director.

Fund managers who bought shares of Britannia

Buyers in Britannia included Sohini Andani and Mohit Jain for SBI Bluechip Fund Regular Growth, Sankaran Naren and Sharmilla D’mello for ICICI Prudential Focused Equity Fund Growth, Shridatta Bhandwaldar for Canara Robeco Flexi Cap Fund Growth and Neelesh Surana and Ankit Jain forMirae Asset Emerging Bluechip Fund Growthschemes respectively.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
14 Oct 2022
Market closes higher, Angel One's Q2FY23 net profit grows 59.1% YoY

Trendlyne Analysis

Indian indices closed in the green, with the volatility index, India VIX, falling significantly. Nifty 50lost over 160 points from its day’s high but still closed 1% higher. European stocks followed the global trend and traded higher than Thursday’s levels.

Major Asian indices closed in the green, in line with the US indices, which closed sharply higher on Thursday. US inflation print came in at 8.2% in September, with energy and food prices accelerating to a new four-decade high. In reaction, US indices gyrated overnight with indices closing over 2% higher after losing 2% in early trade on Thursday. The tech-heavy NASDAQ 100 index opened in the red but recovered over 5% from its day’s low and closed 2.3% higher. The S&P 500 rose 2.6% while the Dow Jones closed 2.8% higher. Crude oil prices headed for a weekly loss as Covid cases in China hurt demand amid higher-than-expected US crude oil inventories.

Nifty Smallcap 100 and Nifty Midcap 100 closed flat, despite the benchmark index closing in the green. Nifty Media and Nifty Metal closed lower than Thursday’s levels. Nifty IT closed in the green, as investors assess major IT companies’ Q2FY23 earnings.

Nifty 50closed at 17,185.70 (171.4, 1.0%), BSE Sensexclosed at 57,919.97 (684.6, 1.2%) while the broader Nifty 500closed at 14,815.10 (84.8, 0.6%)

Market breadth is in the red. Of the 1,935 stocks traded today, 874 were on the uptick, and 972 were down.

  • Stocks like Cochin Shipyard, Rajesh Exports, Castrol India, and Mazagon Dock Shipbuildersare in the overbought zone, according to the relative strength index or RSI.

  • Bharat Heavy Electricals signs a non-binding MoU with Coal India and NLC India with the intention of setting up coal gasification projects. The company will set up the projects using its indigenously-developed pressurised fluidised bed gasification technology.

  • FNS E-Commerce Ventures (Nykaa) and PB Fintech hit their all-time lows of Rs 1,198 and Rs 445.2, respectively. Both stocks fall for five consecutive sessions.

  • Rakesh Jhunjhunwala's portfolio sees sale of a 0.5% stake in Canara Bank in Q2FY23, bringing the holdings down to a 1.5% stake.

  • Restaurant Brands Asia is falling in trade as Everstone Capital may sell its stake in the company, according to reports.

  • Cyient is falling as its Q2FY23 net profit declines 31.9% QoQ to Rs 79.1 crore due to an increase in employee benefit expenses and other expenses. Revenue rises 11.7% QoQ driven by growth in the services segment. The company’s board announces an interim dividend of Rs 10 per share for FY23, which will be paid by November 9.

  • BSE Realty, BSE Oil & Gas, and S&P BSE Utilities fall more than 2% in the past week.

  • Federal Bank touches a 52-week high after its Q2FY23 net profit rises 52.9% YoY to Rs 703.7 crore as net interest income rises 19% YoY. The bank’s asset quality improves as its gross NPA and net NPA fall 78 bps and 34 bps YoY, respectively. The bank shows up on a screener of stocks with growth in quarterly net profit and increasing profit margin (YoY).

  • India’s Wholesale Price Index (WPI) inflation eases to 10.7% in September, compared to 12.41% in August. WPI food inflation falls to 8.08%.

  • ICICI Securities maintains its ‘Buy’ rating on Havells India with a target price of Rs 1,621. This implies an upside of 31.6%. The brokerage believes the stock is well-placed to grow despite a rise in copper prices due to its ability to pass on high raw material costs. It expects the company’s revenue to grow at a CAGR of 21.9% over FY22-24.

  • Angel One is rising as its Q2FY23 net profit grows 59.1% YoY to Rs 213.6 crore. The company's client base rose 77.4% YoY and average daily turnover is up 110.2% YoY to aid the rise in net profit. It shows up in the screener which reflects stock that have a rising return on equity over the past two years.

  • The Centre mulls PLI Scheme for footwear and leather sectors, according to reports. The PLI scheme could offer incentives of up to 8%.

  • Larsen & Toubro is rising as its construction business wins repeat orders worth Rs 1,000-2,500 crore from the government of Gujarat. The order is for design, supply, construction and commissioning of pumping system and pipeline work from Tappar dam to Nirona dam.

  • Banks like HDFC Bank, Kotak Mahindra Bank, ICICI Bank, AU Small Finance Bank, and Bandhan Bank are rising in trade. The broader sectoral index Nifty Bank is also trading in the green.

  • PSP Projects comes out as the lowest bidder for the Centre’s development project of a sustainable tourist/pilgrimage destination in Gujarat. The bid value was worth Rs 345.3 crore. The company shows up on a screener of stocks with improving book value for the last two years.

  • Mindtree is rising as its Q2FY23 net profit grows 7.9% QoQ to Rs 508.7 crore. Its revenue rises 8.9% QoQ driven by the banking, financial services, and insurance segment and robust deal wins. Revenue from North America and the UK & Ireland grows, while revenue from the European market declines. The stock shows up on the screener which lists companies with consistent high share price growth over the past five years.

  • CLSA maintains its ‘Outperform’ rating on Tata Motors with a target price of Rs 473. The brokerage expects strong demand in the commercial vehicles segment. It also expects the company’s new launches to improve market share.

  • Ashish Kacholiaadds Shankara Building Products to his portfolio in Q2FY23, buys a 2% stake in the company worth Rs 32.9 crore.

  • Infosys’ Q2FY23 net profit rises 12.3% QoQ to Rs 6,021 crore with revenue increasing by 6%. Revenue from North America increased however revenue from European clients fell marginally in Q2. The management is being cautious by reducing its margin guidance to 21-22% as it suspects a slowdown in western geographies. However, it raised the lower end of its revenue growth guidance to 15%-16% (from 14%-16%) in FY23. The company also announced a buyback of equity shares worth Rs 9,300 crore at a price of Rs 1,850 per share.

Riding High:

Largecap and midcap gainers today include Federal Bank Ltd. (130.35, 4.36%), Indraprastha Gas Ltd. (384.95, 3.86%) and Infosys Ltd. (1,474.25, 3.83%).

Downers:

Largecap and midcap losers today include Adani Power Ltd. (331.25, -4.50%), Adani Wilmar Ltd. (654.85, -4.23%) and Adani Total Gas Ltd. (3,047.15, -4.10%).

Volume Shockers

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

Top high volume gainers on BSE included IFB Industries Ltd. (985.20, 11.35%), Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (698.05, 5.29%) and Elgi Equipments Ltd. (421.95, 5.20%).

Top high volume losers on BSE were Max Financial Services Ltd. (714.45, -3.39%), Asahi India Glass Ltd. (609.20, -2.11%) and Cyient Ltd. (759.95, -1.64%).

TCNS Clothing Co. Ltd. (655.85, 3.51%) was trading at 4.7 times of weekly average. Federal Bank Ltd. (130.35, 4.36%) and CSB Bank Ltd. (244.15, 0.35%) were trading with volumes 4.2 and 4.0 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 12 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Federal Bank Ltd. (130.35, 4.36%), IDFC First Bank Ltd. (54.30, -0.28%) and IDFC Ltd. (76.35, 2.35%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (571.80, -0.66%) and Biocon Ltd. (261.30, -0.42%).

31 stocks climbed above their 200 day SMA including IFB Industries Ltd. (985.20, 11.35%) and Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (698.05, 5.29%). 6 stocks slipped below their 200 SMA including Shipping Corporation of India Ltd. (116.55, -2.75%) and Supreme Industries Ltd. (1,939.55, -1.82%).

 
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The Baseline
14 Oct 2022
Five Interesting Stocks Today
  1. Campus Activewear: This footwear company touched an all-time high of Rs 617.95 on Wednesday, and gained 59.7% over the past 90 days. The uptick in the stock comes on the back of a robust business outlook. The management believes that the Indian sports & athleisure (S&A) footwear market is underpenetrated, and this provides it with an opportunity to expand.

    Within the retail industry, the footwear segment is expected to be one of the fastest-growing. According to reports, the S&A footwear market in India is expected to grow at a CAGR of 21%, beating the overall footwear industry’s CAGR of 17% in FY22-25. The optimism around the stock is due to the fact that it is the only listed company in the S&A footwear space in India. As of FY21, the company commanded a 17% market share in the branded S&A market in India.

The company also performed well in Q1FY23 - its net profit surged 10.9X YoY and revenue jumped 2.5X YoY on the back of sales volumes increasing 2.4X YoY. Trendlyne’s Forecaster estimates the company’s net profit to grow by 30.9% in FY23. The company also shows up on the screener which lists businesses with low debt.  

Campus Activewear’s key advantage is that its average selling price is significantly cheaper than its competitors. According to Motilal Oswal, given its wide product portfolio, competitive pricing, and wide-distribution network the company looks well poised to make massive market share gains.

  1. JSW Steel:This steel stock released its production numbers for Q2FY23, where its crude steel production increased 12% YoY to 5.6 million tonnes but decreased sequentially by 3%. The reduction in volumes QoQ is because of a 73% fall in the production of JSW Ispat Special Products, because of maintenance shutdowns. Also, market conditions are not conducive for the company’s USA unit, and it reported a 48% fall in volumes. The management also says that logistics issues and underutilization of capacity at some plant locations in India are other reasons for a fall in total production levels.

The company also reports a sharp decline in exports. This is because of the 15%-45% export duty imposed on various types of steel in May. Steel companies were expecting an early end to the export duties levied by the Centre, according to reports, but it looks like they will have to wait until the next Union budget for duty cuts. 

This is because while steel prices fell in May, June, and July, it started rising again in August, causing a hiccup in the duty cuts as the Centre wants more data to understand the metal’s demand-supply dynamics before making a final decision. Since the demand in the domestic market is low and inventory levels for steel companies are high, the removal of export duty may help steel companies tap into the global markets.

On the positive side, reports suggest that JSW steel has capex plans worth $1 billion to build a specialty steel manufacturing unit in India in partnership with Japan’s JFE Steel. This will largely help India reduce its import dependency on electric steel.

In terms of the sector outlook, the Nifty Metal index made it through the ‘golden cross’ on September 22. The golden cross indicates a stock’s  50-day moving average crossing above  the 200-day moving average. This means there is improving sentiment around that stock, or in this case, the Nifty metal index. Reports suggest the Nifty metal index has the potential of rising further by 11%. This could bode well for all metal stocks in the metal universe. JSW Steel shows up on a screener that lists stocks with consistent returns over the last five years.

  1. One97 Communications (Paytm): This internet software company’s stock rose consecutively from September 30 to October 10, until the markets went on a downtrend. The rise comes with JP Morgan maintaining an ‘overweight’ stance on the stock. The brokerage expects the stock to regain its Rs 1,000 mark by March 2023 and expects Paytm’s losses to narrow down in Q2FY23. In terms of business, it expects its annual loan disbursements to reach Rs 29,000 crore with an improved penetration into the market by 4%. It also expects Paytm’s margins to improve and processing costs to rationalise in FY23. In its Q2FY23 business update Paytm did record an increase in its value of loan disbursements by 482% YoY to Rs 7,313 crore. Its monthly transacting users were also up 39% YoY. But asset quality trends on its disbursements are so far unclear. 

Goldman Sachs also has a positive recommendation for the stock. It expects the stock to go up by 112% in a bull case, which is pretty significant given that the stock is currently trading at 64% below its issue price. 

Another danger for the stock is the end of the lock-in period on November 18. Given the history of IPOs like Zomato where the stock plunged once its lock-in period ended, Paytm will have to deliver good results to keep up investor faith and may need to plan for an exit strategy like PB Fintech (Policybazaar) where it plans to line up buyers for its shares to avoid a Zomato-like situation, according to reports. Policybazaar’s lock-in period also ends in November. 

  1. TVS Motors Company: The market capitalization of this two-wheeler maker surpassed that of market leader Hero MotoCorp on October 12. This is despite the fact that its net profits in FY22 were only one-third of Hero’s profit figure. The company’s stock also outperformed its industry by over seven percentage points in the past month. 

TVS Motors’ two-wheeler wholesales have grown at a compounded rate of nearly 10% in the past six quarters, much faster than that of Hero MotoCorp and Bajaj Auto. In fact, its two-wheeler wholesales for Q2FY23 rose in double-digits YoY while others saw a minor fall. Robust domestic sales drove the Q2 volumes for TVS, making up for the YoY fall in exports. Additionally, its focus on premium brands like Apache, Ntorq, and Ronin contributed to its healthy volumes. 

On the other hand, Hero’s volume growth suffered owing to its reliance on the entry-level segment which basically consists of motorbikes with 100 CC engines. Customers in this segment mainly belong to the rural and semi-urban regions and are highly price-sensitive. Demand from rural parts of India is still muted on account of inflationary pressures.

TVS Motors has plans to launch new electric two-wheeler models in the coming quarters. It also looks to ramp up the production capacity of its existing electric brand ‘iQube’ to 10,000 units per month very soon and then to 25,000 units per month. K N Radhakrishnan, CEO of TVS Motors, is quite confident of the demand trends in this festive season. According to consensus estimates of analysts, the company’s earnings may jump by over 35% in FY23 backed by strong sales. Investors should also watch out for the possible inclusion of TVS Motors in the MSCI Index from November 2022. 

  1. Sobha: This realty company’s share price fell over 3.4% on Tuesday after it released its September business update. Sobha’s share price fell despite its total sales volume rising 13% YoY in September on the back of increased demand for residential and office spaces in Q2FY23. This was mainly due to a 20% sales volume rise in its Bengaluru market, which contributes over 75% of total volumes.

The fall in share price could be due to total sales volume declining by 0.9% QoQ. In addition, mortgage rates are rising in line with interest rates since May. The Reserve Bank of India has raised the repo rate by 190 bps since May to 5.9% and is expected to continue with its tight monetary policy. The company’s stock has fallen by around 30% in 2022, underperforming Nifty Realty by nearly 18%. With such a fall in share price, it comes up in the screener that shows companies with weak momentum scores. Notably, Sobha’s promoter pledging increased by 6.6% in Q1FY23 to 20.3%.

However, ICICI Securities has a positive outlook on the company due to strong H1FY23 performance despite rising mortgage rates and a strong launch pipeline. Post Sobha’s business update announcement, the brokerage retained its ‘Buy’ rating with a target price of Rs 808, indicating a 26.7% upside. However, the stock is currently in the sell zone as it has traded 86% of the days below its current price-to-earnings ratio. 

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

 
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The Baseline
13 Oct 2022
Chart of the week: SME, Metal, Industrial stocks boost indices over the quarter
By Abdullah Shah

As anticipation of the result season grows, investors are buying into stocks which are showing potential for growth despite market volatility. We take a look at the indices which have grown the most in the past quarter and the stocks driving this growth.

The S&P SME BSE IPO rose 58.6% over the last 90 days, the most among all the indices. Shree Venkatesh Refineries, Maruti Interior Products and Ekkenis Software Services rose above 100% in the past 90 days, contributing to the surge in the index. The index has risen 9.3% in the past week, despite the market being volatile and the rupee falling to new lows.

The Nifty Metal index has also seen a broad recovery in the quarter after being in the doldrums in the past year, as it rose 18.5%. APL Apollo Tubes, Vedanta and Jindal Steel & Power grew more than 20%, helping the index to rise. After already beating Forecaster estimates for revenue growth in Q1FY23, analysts are estimating an average revenue growth of 18.7% in Q2FY23 for APL Apollo Tubes. The Nifty Metal index continued its gains in the past week and is up 0.5%.

S&P BSE Industrials index comes in third as it rose 17.2% in the past 90 days. Hindustan Aeronautics, Bharat Electronics and ABB India rose above 25% in the last 90 days, aiding this growth. Bharat Electronics’ forecaster estimates for revenue growth for Q2FY23 is at 24.4% after beating the forecaster estimates for revenue growth in Q1FY23. The Industrials index grew 0.7% in the past week.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
13 Oct 2022
Market closes lower, Rites wins order worth Rs 499.4 crore from Bangalore Metro Rail Corp

Trendlyne Analysis

Indian indices closed in the red with the volatility index, India VIX, rising above 20.5%. The Nifty 50 lost over 100 points but closed just above the 17,000 mark. European stocks traded higher after opening in the red as investors awaited the US inflation print to be released later in the day. India’s retail inflation rose to a five-month high of 7.41% in September and stayed above RBI’s upper tolerance limit of 6% for three consecutive quarters. India's index of industrial production fell 0.8% YoY in August, missing analysts' estimates.

Asian indices closed lower as US indices closed flat to lower on Wednesday. Minutes from the previous US Federal Reserve meeting indicated that the policymakers agreed to maintain a restrictive monetary policy stance going forward. Brent crude oil futures traded higher after posting losses for three straight trading sessions amid demand concerns due to rising risks of a global recession.

Nifty Smallcap 100 and Nifty Next 50 closed in the red, following the benchmark index. Nifty Realty and Nifty Bank closed lower than Wednesday’s levels. Nifty IT closed lower as investors assess major IT companies’ Q2FY23 results.

Nifty 50closed at 17,017.80 (-105.8, -0.6%), BSE Sensexclosed at 57,235.33 (-390.6, -0.7%) while the broader Nifty 500closed at 14,732.35 (-97.6, -0.7%)

Market breadth is overwhelmingly negative. Of the 1,934 stocks traded today, 588 were on the uptick, and 1,298 were down.

  • HCL Technologiessees a long build-up in its October 27 future series as its open interest rises 6.8% with put to call ratio of 0.61.

  • Yashovardhan Saboo, Founder and Chairman of Ethos, expects Q3FY23 to be the biggest quarter for the company driven by festive and wedding season. He also expects the company’s revenue to grow 30-35% during FY23.

  • Hindustan Petroleum CorpandSanofi Indiahit their 52-week lows of Rs 205.6 and Rs 5,750.1, respectively. Both stocks fall for four consecutive sessions.

  • Samvardhana Motherson International, Bank of Indiaand Indian Hotelstrade below their second support orS2 levelas market trades lower.

  • Consulting Services, Commodity Printing/Stationery, and Shipping industries rise more than 10% over the past week.

  • Rites is rising as it secures an order worth Rs 499.4 crore from Bangalore Metro Rail Corp through a consortium. The order pertains to the construction of a depot cum workshop. The share of the company in this order is 51%.

  • Tata Teleservices is rising as it partners with Google Cloud to offer Google Workspace to small and medium businesses. The company will provide businesses with a single platform for communication and collaboration of their hybrid workforce.

  • The Society of Indian Automobile Manufacturers (SIAM) data shows that September auto wholesales surged due to the onset of the festive season. Two-wheeler wholesales rose 13% YoY to 17.4 lakh units and passenger car wholesales were up 122% YoY.

  • Tanla Platforms is rising after it sets October 25 as the record date for its proposed buyback of shares. The price is set at Rs 1,200 per share.

  • ICICI Securities upgrades HCL Technologies to 'Add' rating from 'Buy' with a target price of Rs 1,091. This indicates an upside of 7.2%. The brokerage believes that the company's risk-reward has become favourable as its order intake has been strong for the pas two quarters and a strong dividend yield gives the company a good base limiting downside risk. It expects the company's revenue to grow at a CAGR of 8.9% over FY22-24.

  • KR Choksey expects Sonata Software’s net profit to rise 12% YoY in Q2FY23, according to reports. It also expects net sales to rise 25.9% YoY. The stock shows up on a screener with increasing profits for the past four quarters.

  • Stocks like State Bank of India, Bajaj Finance and Housing Development Finance Corp are falling in trade. All stocks of the broader Nifty Financial Services index are trading in the red.

  • Oberoi Realty, Au Small Finance Bank, DCM Shriram, and Havells India’s weekly average delivery volumes rise ahead of their Q2FY23 results

  • India’s CPI inflation rises to a five-month high of 7.41% in September, compared to 7% in August. The rise is due to a surge in food inflation at 8.6% as against 7.6% in August.

  • Sterling and Wilson Renewable Energy is falling as it posts a net loss of Rs 296.9 crore in Q2FY23. The company's operating loss rises 7.7% to Rs 370.2 crore as its revenue falls 74.1% QoQ. The company features in the screener which reflects stocks that have a declining return on capital employed in the last two years.

  • ICICI Prudential Life Insurance sells a 0.54% stake (1.8 lakh shares) in Amber Enterprises for Rs 41.8 crore in a bulk deal on Wednesday.

  • India’s index of industrial production or IIP contracts 0.8% in August, an 18-month low. The contraction is due to fall in output of manufacturing and mining sectors.

  • Dolly Khannasells stake in Goa Carbonsduring Q2FY23, she now holds below 1% stake in the company as against a 1.1% stake at the end of Q1FY23.

  • HCL Technologies is rising as its Q2FY23 net profit rises 6.3% QoQ to Rs 3,489 crore driven by robust demand for cloud, engineering, and digital services. Its revenue grows by 5.2% QoQ led by the IT & business services segment. The stock shows up on the screener which lists companies with increasing revenue sequentially for the last eight quarters.

  • Wipro’s Q2FY23 net profit rises 3.5% QoQ to Rs 2,649.1 crore. Revenue increases 4.7% QoQ as revenue from the IT services segment (Americas, Europe and APMEA) rises. The management says that it expects revenue growth of 0.5-2% for Q3FY23 and 10-12% for FY23.

Riding High:

Largecap and midcap gainers today include HCL Technologies Ltd. (982.10, 3.16%), Dr. Lal Pathlabs Ltd. (2,358.80, 2.40%) and Nippon Life India Asset Management Ltd. (271.75, 2.39%).

Downers:

Largecap and midcap losers today include Wipro Ltd. (379.10, -7.07%), Indian Hotels Company Ltd. (317.15, -4.04%) and Zomato Ltd. (61.25, -3.92%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Tanla Platforms Ltd. (812.15, 3.62%), HCL Technologies Ltd. (982.10, 3.16%) and Sun Pharma Advanced Research Company Ltd. (236.75, 3.09%).

Top high volume losers on BSE were Wipro Ltd. (379.10, -7.07%), Affle (India) Ltd. (1,180.65, -2.43%) and Eris Lifesciences Ltd. (707.95, -1.84%).

Godrej Industries Ltd. (430.30, -0.59%) was trading at 5.4 times of weekly average. KEI Industries Ltd. (1,453.10, 1.46%) and Computer Age Management Services Ltd. (2,596.60, 1.14%) were trading with volumes 4.7 and 4.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

7 stocks made 52-week highs, while 12 stocks hit their 52-week lows.

Stocks touching their year highs included - IDFC Ltd. (74.60, -2.29%), Sun Pharmaceutical Industries Ltd. (968.40, 1.34%) and TVS Motor Company Ltd. (1,077.60, -0.93%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (575.60, -1.16%) and Biocon Ltd. (262.40, -1.89%).

12 stocks climbed above their 200 day SMA including Rajesh Exports Ltd. (672.70, 3.72%) and Marico Ltd. (515.55, 1.41%). 19 stocks slipped below their 200 SMA including Havells India Ltd. (1,230.95, -3.09%) and Avanti Feeds Ltd. (470.90, -2.43%).

 
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The Baseline
12 Oct 2022
Five analysts make their picks ahead of Q2 results
By Abhiraj Panchal
  1. Relaxo Footwears: Sharekhan maintains a ‘Buy’ call on this footwear brand with a revised target price of Rs 1,185. This indicates an upside of 18%. In H2FY22, the company took cumulative price hikes of 25-30% which affected the sales volume. To arrest the sales volume drop, the footwear manufacturer reduced prices by 12-15% in its key value-for-money brands such as Relaxo, Flite, and Bahamas.

Analysts at Sharekhan say, “The price corrections undertaken will take some time to come in the market and hence Q2FY23 sales volumes are expected to be muted due to weak consumer sentiment affected by inflationary pressures.” They expect a gradual recovery from Q3FY23. According to the analysts, Relaxo has a strong, debt-free balance sheet with good cash generation ability, and it is on track to achieve revenue and earnings CAGR of 14% and 22%, respectively over FY22-FY25.

  1. Phoenix Mills: ICICI Securities maintains a ‘Buy’ call on this retail mall developer with a target price of Rs 1,638, indicating an upside of 13.7%. FY21 and FY22 operations were impacted by mall shutdowns across India owing to successive Covid waves. However, with the waning Covid impact, in Q1FY23 like-to-like consumption across the mall stood at Rs 1,980 crore or 111% of Q1FY20. Analyst Adhidev Chattopadhyay estimates that thanks to  continued consumption strength, “we model for FY23 rental income of Rs 1,370 crore.” 

Phoenix Mills has nine operational malls and six under-construction malls which are expected to be operational over FY23-26. The estimated capex of these ongoing projects is Rs 9,320 crore, of which pending capex stands at Rs 5,050 crore.  Chattopadhyay adds, “We expect the company to generate annual operating cash flow of Rs 1,400-1,500 crore over FY23-25 which can comfortably fund the balance capex”. 

He also remains positive on the mall developer due to its strong brand recall and its leadership position among malls across India. 

  1. Divi's Laboratories: Ashika Research recommends a ‘Buy’ rating on this pharmaceutical company with a target price of Rs 4,110, indicating an upside of 12.1%. The analysts at the brokerage believe the company is well-placed to benefit from the expected growth in active pharmaceutical ingredients (API) manufacturing. Supply chain issues in China and the China+1 strategy among buyers has provided Indian API manufacturers with a great opportunity to expand, they added. The brokerage believes the firm’s capacity expansion plans and its strong capabilities in manufacturing APIs, intermediates, and active ingredients will enable it to expand its client base and gain market share.

The analysts also see the company’s generics segment driving growth along with APIs as a key positive. “Divi’s is expected to clock double-digit growth in established generics products where it enjoys market share in excess of 60-70%”, they add. The brokerage expects margin pressure to persist in the near-term but remains positive on the firm’s future growth prospects. It expects the company’s revenue to grow at a CAGR of 7% over FY22-24.

  1. Jubilant Foodworks: Bonanza initiates coverage of this restaurant chain company with a ‘Buy’ call and a target price of Rs 891, indicating an upside of 46.6%. “The quick service restaurant (QSR) master chef maintains its ground on the back of strong demand outlook and excellent execution capabilities,” says analyst Shreya Hanchate. 

Hanchate believes that Jubilant Foodworks is the largest food service brand in the QSR industry and has the benefit of being the first mover. It is also a leading fast-food industry player in terms of the number of stores (1,625 in Q1FY23). The company aims to grow up to 3,000 stores in the medium term. 

Hanchate says, “The resultant robust performance in Q1FY23, led by strong revenue growth, recovery in growth, and positive expectations from the new brands' portfolio makes Jubilant a hot pick.” On the back of sustained delivery demand, the analyst expects growth in EBITDA and profit margins of 26% and 11% respectively by FY24.

  1. Bajaj Finance: KRChoksey maintains its ‘Buy’ rating on this non-banking finance company (NBFC) with a target price of Rs 8,317, implying an upside of 14.8%. Analyst Vikrant Kashyap believes India’s growing housing market will be an important lever of growth for the company. He notes that the NBFC expects its assets under management to grow at an annual rate of 25-28% in FY23. He also believes that future growth will be fuelled by aggressive customer acquisition. He adds, “The NBFC is confident of adding 9-10 million customers by the end of FY23. The firm has been focusing on customer acquisition, which is expected to be its key growth driver”.

Kashyap expects the company’s position as a market leader in customer finance to bode well for it, as it is well-positioned to capitalise on the demand shift towards premium products across discretionary categories. He is also positive about the company’s ability to increase its presence and improve its technological capabilities. The analyst expects Bajaj Finance’s net profit to grow at a CAGR of 41.8% over FY22-24.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Oct 2022
Market closes higher, Traxcn Technologies' IPO gets bids for 2X of the available shares

Trendlyne Analysis

Nifty 50 recovered over 160 points from the day’s low and closed in the green, above the 17,100 mark. European stocks traded mixed as UK’s GDP fell 0.3% MoM in August, missing estimates. The International Monetary Fund or IMF cut India’s economic growth estimate for FY23 to 6.8% from its July estimate of 7.4%. The IMF also warned of a worsening outlook for the global economy.

Most major Asian indices closed in the red, in line with the US indices, which closed mostly lower on Tuesday. The tech-heavy NASDAQ 100 index lost over 1.2% while the S&P 500 closed 0.7% lower on a volatile day of trade. Brent crude oil futures traded in the green after posting losses for two straight trading sessions amid demand concerns due to rising risks of a global recession.

Nifty Smallcap 100 and Nifty Next 50 closed in the green, following the benchmark index. Nifty Bank and Nifty FMCG closed higher than Tuesday’s levels. Nifty IT also closed higher, despite the tech-heavy NASDAQ 100 shedding over 1% on Tuesday.

Nifty 50 closed at 17,129.05 (145.5, 0.9%) , BSE Sensex closed at 57,625.91 (478.6, 0.8%) while the broader Nifty 500 closed at 14,834.55 (112.7, 0.8%)

Market breadth is in the red. Of the 1,935 stocks traded today, 834 were gainers and 1,045 were losers.

  • Stocks like Chalet Hotels, Rites, and Cochin Shipyard are in the overbought zone, according to the Money Flow Index or MFI.

  • Life Insurance Corporation and Natco Pharma hit their 52-week lows of Rs 613.8 and Rs 588, respectively. Both stocks fall for four sessions.

  • Sugar stocks like Balrampur Chini Mills, Shree Renuka Sugars, Triveni Engineering & Industries, and Bannari Amman Sugars are rising in trade. The rise comes after the Centre extends the validity for exporting raw sugar to the US under the tariff rate quota to December 31 from September 30, according to reports.

  • Morgan Stanley maintains its ‘Overweight’ rating on Infosys with a target price of Rs 1,550. The brokerage believes that there is scope for a buyback of up to $1.4 billion via an open offer.

  • Public sector banks like State Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank and Union Bank of India are rising in trade. The broader sectoral index Nifty PSU Bank is also trading in the green.

  • Traxcn Technologies Rs 309.3-crore IPO gets bids for 2X of the available 2.1 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 4.9X of the available 38.6 lakh shares on offer.

  • Metropolis Healthcare, DCM Shriram and JBM Auto trade above their second resistance or R2 level as market trades higher.

  • FMCG stocks like Hindustan Unilever, ITC, Nestle India, Dabur India, Britannia Industries and Godrej Consumer Products are rising in trade. The broader sectoral index Nifty FMCG is also trading in the green.

  • Oil marketing and distribution companies like Indian Oil Corp and Bharat Petroleum Corp rise in trade as the Centre will approve a one-time compensation of under-recovery on LPG sales, according to reports. The compensation will be around Rs 20,000 crore.

  • L&T Finance Holdings is rising as Securities and Exchange Board of India approves the proposed sale of its 100% stake in L&T Investment Management to HSBC Asset Management (India). L&T Investment Management is the wholly-owned subsidiary of L&T Finance Holdings and also the asset manager of L&T Mutual Fund.

  • Biocon hits a 52-week low of Rs 262.25 today after trading low for the last five trading sessions. This is after the European Directorate for the Quality of Medicines and Healthcare (EDQM) found a major deficiency at its Bengaluru active pharmaceutical ingredient plant on October 6.

  • Mahindra & Mahindra (M&M) is rising as Jio-bp announces the strengthening of its partnership with the company, according to reports. This pertains to the setting up of an extensive charging infrastructure for M&M’s upcoming new electric vehicle launches. Jio-bp is a fuels and mobility joint venture between Reliance Industries and bp.

  • Crompton Greaves Consumer Electricals is falling as 20.79 lakh shares (0.33% equity) amounting to Rs 79 crore change hands in a large trade, according to reports.

  • Surface Transportation, Coal, and Advertising & Media industries rise more than 1.5% in trade today.

  • ICICI Securities remains positive on Sobha’s future growth prospects as it retains its ‘Buy’ rating on the company with a target price of Rs 808. The brokerage expects the company to achieve robust sales value growth in FY23 led by rising demand and a strong launch pipeline. It anticipates the company’s revenue to grow at a CAGR of 19.2% over FY22-24.

  • NMDC is rising as the Ministry of Corporate Affairs approves its merger into NMDC Steel along with the respective shareholders and creditors.

  • Genesys International Corp bags contract worth Rs 46 crore from the state government of Andhra Pradesh to digitize 30,000 sq km of the state’s land records. The company shows up on a screener with stocks that consistently gave high returns over the past five years.

  • KR Choksey expects Shree Cements' net profit to fall by 48% YoY in Q2FY23. However, net sales might rise 12.7% YoY. The stock shows up on a screener with increasing revenue for the past three quarters.

  • The International Fund (IMF) lowers its forecast for India’s GDP by 60 bps to 6.8% in FY23 from its earlier estimate of 7.4% due to sluggish growth in Q1FY23.

  • Suzlon Energy wins an order from the Aditya Birla Group to develop a 144.9 MW wind power project. Suzlon will install 69 units of wind turbine generators of 2.1 MW each. The project will be executed in Gujarat and Madhya Pradesh and will be commissioned in 2023.

  • Delta Corp posts a profit of Rs 68.2 crore in Q2FY23 compared to a loss of Rs 22.6 crore in Q2FY22. Its revenue rises more than 3.6X YoY driven by the gaming operations segment, as the revenue from this segment jumps 6.8X YoY. The company shows up on a screener which lists stocks with an improving book value per share for the past two years.

Riding High:

Largecap and midcap gainers today include L&T Finance Holdings Ltd. (77.90, 3.87%), IDFC First Bank Ltd. (55.10, 3.77%) and Mahindra & Mahindra Financial Services Ltd. (207.05, 3.71%).

Downers:

Largecap and midcap losers today include Zomato Ltd. (63.75, -2.75%), Laurus Labs Ltd. (498.75, -2.62%) and PB Fintech Ltd. (457.30, -2.21%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included La Opala RG Ltd. (384.70, 8.09%), Manappuram Finance Ltd. (104.10, 4.94%) and Cholamandalam Investment & Finance Company Ltd. (744.60, 3.53%).

Top high volume losers on BSE were Bombay Burmah Trading Corporation Ltd. (903.90, -0.65%), Indoco Remedies Ltd. (338.70, -0.35%) and Medplus Health Services Ltd. (597.65, -0.24%).

Century Textiles & Industries Ltd. (834.80, 2.25%) was trading at 3.0 times of weekly average.

BSE 500: highs, lows and moving averages

6 stocks overperformed with 52 week highs, while 8 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - IDFC First Bank Ltd. (55.10, 3.77%), IDFC Ltd. (76.35, 5.02%) and ZF Commercial Vehicle Control Systems India Ltd. (10,756.55, 4.82%).

Stocks making new 52 weeks lows included - Biocon Ltd. (267.45, -0.48%) and Natco Pharma Ltd. (590.50, -1.87%).

15 stocks climbed above their 200 day SMA including L&T Finance Holdings Ltd. (77.90, 3.87%) and Supreme Industries Ltd. (2,021.90, 3.07%). 19 stocks slipped below their 200 SMA including Aarti Drugs Ltd. (448.45, -2.82%) and Kajaria Ceramics Ltd. (1,100.85, -2.16%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Oct 2022
Market trades lower, Traxcn Technologies' IPO gets bids for 54% of the available shares

Trendlyne Analysis

Nifty 50 lost over 250 points amid selling pressure towards the end of the trading session and closed below the 17,000 mark. Indian indices closed in the red with the volatility index, India VIX, at around 20.5%. European stocks followed the global trend and traded lower than Monday’s close as the Bank of England warned of a "material risk to U.K. financial stability" due to crisis in the country's pension fund sector.

Major Asian indices closed in the red, in line with the US indices, which also closed lower on Monday. The tech-heavy index NASDAQ 100 lost over 1% and settled at its lowest level since July 2020. Investors look ahead to the Federal Open Market Committee meeting minutes and US inflation print to be released later this week. Brent crude oil futures traded sharply after losing 2.4% on Monday. However, crude oil is still up over 9% in the last six days amid supply concerns.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Energy and Nifty Pharma closed lower than Monday’s levels. Nifty IT closed in the red as investors assessed TCS’ Q2FY23 results announced on Monday.

Nifty 50 closed at 16,964.15 (-276.9, -1.6%) , BSE Sensex closed at 57,147.32 (-843.8, -1.5%) while the broader Nifty 500 closed at 14,700.90 (-250.8, -1.7%)

Market breadth is highly negative. Of the 1,937 stocks traded today, 419 showed gains, and 1,476 showed losses.

  • Stocks like Cochin Shipyard, Rites, Mazagon Dock Shipbuilders, and Tejas Networks are in the overbought zone, according to the relative strength index or RSI.

  • Brigade Enterprises' Chairman and Managing Director M R Jaishankar steps down as the company’s MD. He will continue to remain the Executive Chairman.

  • ITD CementationIndia wins orders worth Rs 1,755 crore for construction projects like container terminal in the port of Colombo in Sri Lanka, berth and yard facilities at Dhamra port in Odisha, and piling and civil work for coke oven project at Hazira plant in Gujarat.

  • Traxcn Technologies Rs 309.3-crore IPO gets bids for 54% of the available 2.1 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 2.6X of the available 38.6 lakh shares on offer.

  • Mastek and Medplus Health Services hit their 52-week lows of Rs 596.5 and Rs 1,663, respectively. Both stocks fall for three-consecutive sessions.

  • Larsen & Toubro’s arm L&T Construction wins repeat orders worth Rs 1,000-2,500 crore from the state government of Odisha. The order pertains to the execution of lift irrigation projects to enable the irrigation of almost 30,000 hectares in the districts of Keonjhar, Jajpur, and Kendrapada in Odisha.

  • HDFC Securities initiates coverage on Endurance Technologies with a ‘Reduce’ rating and a target price of Rs 1,340. The brokerage expects the company’s profitability to be impacted by the slowdown in demand for two-wheelers, a fall in demand for passenger vehicles in Europe, and a sharp rise in energy costs in Europe. The brokerage also believes the company is currently trading at an expensive valuation

  • Commerial Services & Supplies, Hardware Technology & Equipment and Hotels, Restaurants & Tourismsectors rise more than 25% in the past 90 days.

  • Rajesh Ravi of HDFC Securities expects the cement industry’s volume to grow 8% YoY. He also expects the industry’s margin to expand during H2FY23 however fluctuations in fuel prices remain a concern.

  • Sobha is rising as its total sales value rises 13% YoY to Rs 1,164.2 crore as demand for residential and office spaces increases in Q2FY23. Its average price realization is up 14% YoY. It shows up on a screener which lists stocks with strong cash-generating ability from core business.

  • Sugar stocks like Shree Renuka Sugars, EID Parry (India), Balrampur Chini Mills, and Dalmia Bharat Sugar and Industries are rising in trade. The sugar industry is up 2.5% in trade today.

  • Automotive Axles is rising as Cummins Inc places an open offer to acquire 26% stake (or 39.3 lakh shares) in the company. The open offer comes after Cummins' subsidiary, Rose Inc entered a merger agreement with Meritor Inc. Meritor is a promoter entity of Automotive Axles and holds 35.52% stake in the company.

  • Realtystocks like Brigade Enterprises, Oberoi Realty, Sobha, and Phoenix Mills are falling in trade. The broader sectoral index Nifty Realty is also trading in red.

  • IndusInd Bank falls over 3% as 1.2 crore shares (1.6% equity) amounting to Rs 1,442 crore change hands in a large trade, according to reports.

  • Infosys announces that its board of directors will consider a proposal to buyback equity shares at its upcoming board meeting on Thursday.

  • Adani Ports & Special Economic Zone (APSEZ) receives approvals from the national company law tribunals of Ahmedabad and Hyderabad to acquire the remaining 58.1% stake in Gangavaram Port (GPL). The company had already bought a 41.9% stake in GPL during FY22. The remaining stake will be purchased through a share swap deal, with 4.77 crore shares of APSEZ being issued to the promoters of GPL. The acquisition is valued at Rs 6,200 crore.

  • Morgan Stanley expects Delhivery’s express parcel volumes to go up during the festive season. It also expects the company's gross margin to improve to 21% in Q2FY23, compared to 16.8% in Q1.

  • RateGain Travel Technologies, a SaaS company, is rising in trade as Royal Orchid Hotels selects the company to help the hotel chain in providing competitive pricing and connect online travel agents globally.

  • Mohnish Pabrai buys a 0.4% stake in Rain Industriesin Q2FY23, he now holds an 8.8% stake in the company.

  • India Cements sells its entire shareholding in Springway Mining to JSW Cement for a cash consideration of Rs 476.9 crore. Springway Mining is no longer a wholly owned subsidiary of India Cements.

  • Tata Consultancy Services’ Q2FY23 net profit rises 10% QoQ to Rs 10,431 crore led by strong deal wins. Revenue increases by 4.8% QoQ driven by growth across all its business verticals led by the communication, media & technology and life sciences & healthcare segments. The stock shows up on the screener which lists companies with revenue increasing sequentially for the past eight quarters.

Riding High:

Largecap and midcap gainers today include Bata India Ltd. (1,810.30, 1.64%), Gland Pharma Ltd. (2,083.60, 1.58%) and Axis Bank Ltd. (785.55, 1.12%).

Downers:

Largecap and midcap losers today include JSW Energy Ltd. (326.85, -5.33%), Divi's Laboratories Ltd. (3,502.20, -5.00%) and Havells India Ltd. (1,279.40, -4.91%).

Movers and Shakers

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

Top high volume gainers on BSE included Kalpataru Power Transmissions Ltd. (447.90, 4.71%), Rajesh Exports Ltd. (625.90, 3.98%) and Star Cement Ltd. (110.05, 3.58%).

Top high volume losers on BSE were Divi's Laboratories Ltd. (3,502.20, -5.00%), IndusInd Bank Ltd. (1,164.60, -3.78%) and Intellect Design Arena Ltd. (502.65, -3.32%).

Motilal Oswal Financial Services Ltd. (697.80, -0.69%) was trading at 13.2 times of weekly average. Shipping Corporation of India Ltd. (118.85, 2.06%) and Aster DM Healthcare Ltd. (248.30, -2.65%) were trading with volumes 6.8 and 4.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks took off, crossing 52 week highs, while 7 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Kalpataru Power Transmissions Ltd. (447.90, 4.71%), Star Cement Ltd. (110.05, 3.58%) and Tata Chemicals Ltd. (1,164.35, -2.94%).

Stocks making new 52 weeks lows included - Biocon Ltd. (268.75, -3.12%) and Motilal Oswal Financial Services Ltd. (697.80, -0.69%).

8 stocks climbed above their 200 day SMA including Shipping Corporation of India Ltd. (118.85, 2.06%) and Honeywell Automation India Ltd. (38,890.20, 0.64%). 28 stocks slipped below their 200 SMA including United Spirits Ltd. (815.60, -4.94%) and PNB Housing Finance Ltd. (386.20, -4.79%).