My Newsfeed

logo
The Baseline
06 Oct 2022
Chart of the week: Hong Kong's Hang Seng index falls the most in the past six months
By Abdullah Shah

2022 has seen rising inflation and interest rates, as well as conflict in Europe. The weakening environment has spooked investors,  resulting in a global sell-off across indices as people hunt for less risky options for their money.

The Hang Seng index of Hong Kong, China fell 18.4%, the most in the past six months among global indices. The index fell to its lowest level since October 2011. The major reason for this fall is traders selling equities for much safer government bonds, as Covid zero policies and weakening GDP growth discourage investment. 

The USA’s S&P 500 fell 15.6% in the last six months. Ever since the Federal Reserve raised interest rates by 75 bps for the third consecutive time on September 21, the index has taken another plunge and dropped below the lows of June.

The United Kingdom’s FTSE 100 index fell 7.1% over the last six months. The US Fed’s interest rate hikes combined with the UK government’s unfunded tax cuts in its mini-budget have resulted in the British pound falling to its all-time low of $1.038 on September 26. The concerns around the tax cuts fuelling further inflation in the UK has caused investors to pull out of the equity market.

India’s Nifty 50 index has fared well compared to most other global indices. It has fallen just 2.4% in the past six months. A broad sell-off from foreign investors contributed to this drop. Another reason is the fall of the Indian rupee to its all time low of Rs 81.9 per dollar on September 28. Japan’s Nikkei index has recovered in recent weeks on the back of strong buying from retail investors.

As we head into the second half of FY23, central banks are likely to further increase interest rates to keep inflation in check. 

 
T
Trendlyne Marketwatch
06 Oct 2022
Market closes higher, Apollo Hospitals acquires 60% stake in Kerala First Health Services

Trendlyne Analysis

Nifty 50 closed in the green but fell from its day’s high towards the final hour of the trading session. European shares traded higher as investors awaited minutes of the European Central Bank’s September monetary policy meeting. India's services Purchasing Managers' Index or PMI missed estimates and fell to 54.3 in September from 57.2 in August.

Major Asian indices closed higher despite the US indices closing marginally lower on Wednesday. US stocks settled lower after strong US labour demand suggested the Federal Reserve could keep the federal funds rate higher for a more extended period. Previously, on Monday and Tuesday, US indices posted their best two-day rally since 2020. Brent crude oil futures traded lower after rising over 9% in the last three days. Crude oil prices rose over 2% on Wednesday after OPEC+ agreed to cut oil production by 2 million barrels per day to arrest a fall in crude oil prices.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Media closed sharply higher than Tuesday’s levels. Nifty IT closed in the green, following the NASDAQ 100 futures, which are trading higher.

Nifty 50closed at 17,316.30 (42, 0.2%), BSE Sensexclosed at 58,222.10 (156.6, 0.3%) while the broader Nifty 500closed at 15,042.90 (77.1, 0.5%)

Market breadth is overwhelmingly positive. Of the 1,938 stocks traded today, 1,340 were on the uptick, and 549 were down.

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

  • HFCL is rising as it enters into an agreement with Qualcomm Technologies to design and develop 5G outdoor small cell products. The company believes its investment in 5G outdoor small cell products will lead to a faster rollout of 5G networks, improve user experience, and efficient utilisation of the 5G spectrum.

  • Sugar stocks Shree Renuka Sugars, EID Parry (India), Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, among others rise by more than 3% in trade today. The sugar industry also trades in the green.

  • Electronics Mart’s Rs 500-crore IPO gets bids for 7.6X of the available 6.25 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 7.8X of the available 3.1 crore shares on offer.

  • Sharekhan maintains its 'Buy' rating on APL Apollo Tubes with a target price of Rs 1,275 per share. This indicates an upside of 16.2%. The brokerage believes that the first mover advantage in structural steel tube space and a potential rise in margins will aid revenue growth. It estimates the company's net profit to grow at a CAGR of 33% over FY22-25.

  • Apollo Hospitals Enterpriseacquires a 60% stake in Kerala First Health Services through primary and secondary equity investment for a combined consideration of Rs 26.40 crore. Kerala First Health Services offers ayurveda medical care services under the brand AyurVAID Hospitals.

  • Macrotech Developers’ Q2FY23 bookings rise 57% YoY to Rs 3,148 crore and collections grow by 24% YoY on the back of robust demand. During the quarter, the company took on four new projects with a saleable area of 2.2 million square feet and a gross development value of Rs 3,100 crore. The stock makes it the screener which lists companies with an improving book value per share over the past two years.

  • SpiceJet rises on reports that the airline may get additional funds worth Rs 1,000 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) in order to manage rising fuel costs and pay pending dues. The Centre raises the ELCGS limit for the aviation industry to Rs 1,500 crore from Rs 400 crore.

  • OPEC+ to cut oil production amid rising interest rates. The output will be cut by 2 million barrels per day.

  • Glenmark Pharmaceuticals rises after announcing the launch of lobeglitazone, an oral drug used for treating type 2 diabetes in adults. The company is the first to launch this drug in India. Oral anti-diabetic drugs in India had annual sales of Rs 11,725 crore for the 12 months ended August 2022.

  • Metal stocks like JSW Steel, Vedanta, Hindalco Industries, Jindal Steel & Power and Steel Authority of India (SAIL) are up by more than 2.5%. All constituents of the BSE Metal index are also trading in the green.

  • ICICI Securities continues to remain positive on the future growth prospects of Phoenix Mills as it retains its ‘Buy’ rating on the company with a target price of Rs 1,638. This implies an upside of 19%. The brokerage believes the company is well-placed to benefit from the revival in consumption across malls in India. This is due to its strong brand recall, market share leadership, robust pipeline of projects, and healthy balance sheet. It expects the company’s revenue to grow at a CAGR of 34.6% over FY22-25.

  • India’s September Services PMI falls to 54.3 compared to 57.2 in August as growth in the services industry falls to a six-month low amid inflationary pressures.

  • Larsen & Toubro's arm L&T Construction wins an order worth Rs 1,000-2,500 crore from an automobile company to construct a manufacturing facility in Haryana. The company also wins an order to construct a police reserve campus in Guwahati from the government of Assam.

  • JSW Energy is rising as its arm inks a pact with the state government of Maharashtra for a 960-MW hydropower plant in Raigarh.

  • JP Morgan upgrades its rating on Persistent Systems to ‘Overweight’ from ‘Neutral’ and raises the target price to Rs 4,100 from Rs 3,900. The brokerage says that having a defensive portfolio (isolation from reaction to broad market movements) and maximum revenue coming in US dollar is a sign of strength.

  • Media stocks Zee Entertainment Enterprises, PVR, Inox Leisure, among others are rising in trade. The broader Nifty Media index rises above 3%.

  • Happiest Minds Technologies rises after the board approves fund raising of Rs 1,400 crore via equity or debt bonds. The company shows up on a screener which lists stocks with strong cash-generating ability from core business.

  • Mahindra Lifespace Developers establishes a joint venture with Actis to develop industrial and logistics real estate facilities across India. The total combined investment in the joint venture over the initial years is estimated to be Rs 2,200 crore.

  • Indian Energy Exchange’s total production volumes fall 8% YoY to 8,160 million units. Supply issues continue because of the high prices of e-auction of coal and gas. However, according to National Load Dispatch Center’s data, energy consumption is up 11% YoY to 127 billion units.

  • Bajaj Finance’s Q2FY23 assets under management rise 30.8% YoY to Rs 2.1 lakh crore as new loans disbursed go up by 7.9% to 68 lakhs. The NBFC’s deposit book also grows 37% YoY in Q2. The company shows up on a screener of stocks with improving cash flow and good durability.

Riding High:

Largecap and midcap gainers today include JSW Energy Ltd. (330.65, 12.75%), Bharat Forge Ltd. (763.90, 8.05%) and Persistent Systems Ltd. (3,552.75, 7.69%).

Downers:

Largecap and midcap losers today include Godrej Consumer Products Ltd. (853.65, -4.79%), Gland Pharma Ltd. (2,074.80, -2.68%) and Lupin Ltd. (723.20, -2.57%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included JSW Energy Ltd. (330.65, 12.75%), HEG Ltd. (1,186.15, 10.98%) and Sterlite Technologies Ltd. (180.70, 8.95%).

Top high volume losers on BSE were Godrej Consumer Products Ltd. (853.65, -4.79%), Sheela Foam Ltd. (2,736.20, -3.13%) and Galaxy Surfactants Ltd. (2,990.45, -0.48%).

Praj Industries Ltd. (443.65, 7.01%) was trading at 10.2 times of weekly average. Mishra Dhatu Nigam Ltd. (229.70, 7.26%) and Graphite India Ltd. (382.10, 5.29%) were trading with volumes 10.0 and 7.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

18 stocks took off, crossing 52-week highs,

Stocks touching their year highs included - Cipla Ltd. (1,134.45, -0.89%), EID Parry (India) Ltd. (604.60, 2.54%) and IDFC First Bank Ltd. (54.30, 2.07%).

33 stocks climbed above their 200 day SMA including JSW Energy Ltd. (330.65, 12.75%) and Bharat Forge Ltd. (763.90, 8.05%). 6 stocks slipped below their 200 SMA including Lupin Ltd. (723.20, -2.57%) and NLC India Ltd. (69.15, -1.71%).

 
logo
The Baseline
04 Oct 2022
Five analyst stock picks from the banking and finance sector
By Suhas Reddy

This week, we look at five analyst picks from the banking and finance sector, which has been in the green over the past quarter.

  1. IndusInd Bank: Sharekhan maintains its ‘Buy’ rating on this bank with a target price of Rs 1,400. This indicates an upside of 19.8%. Analysts at the brokerage believe that “the bank is well positioned to resume on the path of higher credit growth, as it has recovered from past asset quality challenges''. They note that concerns over the bank’s asset quality are fading as its collection efficiencies, liquidity position, and internal costs have been improving for a few quarters. The bank’s credit costs are also expected to fall, and they anticipate a decline of 150 bps annually over FY23-25.

Sharekhan believes IndusInd’s loan disbursement growth will be driven by its vehicle finance, micro-finance and MSME business segments in the coming quarters. Overall, the company’s growth is expected to be broad-based. The analysts are positive about the firm’s foray into new segments such as NRI banking, tractor finance, and affordable housing. They expect the bank’s net profit to grow at a CAGR of  29.5% over FY22-25.

  1. Star Health and Allied Insurance: Motilal Oswal maintains a ‘Buy’ call on this insurance provider with a target price of Rs 830. This indicates an upside of 19%. Prayesh Jain and Nitin Aggarwal say, “Star Health outlined strong growth opportunities in the health insurance space in India. After the lifting of COVID-related restrictions, there is growing acceptance of the need for hospitalization, leading to larger customer walk-ins wanting to avail health insurance policies without being prospected.” 

According to the analysts, the insurance company is planning to expand its presence in rural India by creating a dedicated vertical for addressing demand from these geographies. Jain and Aggarwal expect Star Health to deliver an 18% gross premium CAGR over FY22-25, led by strong growth in retail health insurance and expect claim ratios to improve due to the pandemic receding. They also remain optimistic about the company due to its healthy earnings growth and limited cyclicality risk.

  1. Bandhan Bank: ICICI Securities maintains its ‘Buy’ rating on this bank but reduces its target price to Rs 408 from Rs 414. This implies an upside of 54.9%. Analysts Kunal Shah, Renish Bhuva, and Chintan Shah have cut their target price mainly due to the disruptions in collection efficiency and disbursements in Q1FY23. These disruptions were caused by the Assam floods and the revision in RBI regulations. However, they expect a recovery in the bank’s collection efficiency and disbursements in the coming months. They are constructive on mortgage lending growth as well.

The analysts say the bank is looking to open more than 500 branches in FY23, predominantly outside of its key markets Assam and West Bengal. Given these expansion plans, they expect the bank’s operating expenses to rise but the operating expenses to assets guidance of 2.6-2.7% to be maintained. They also see the firm’s increasing investment in technology as a key positive. They estimate the company’s net profit in FY24 to grow by 24.4% over FY23.

  1. Au Small Finance Bank: Axis Direct retains its ‘Buy’ rating on this small finance bank with a target price of Rs 705, implying an upside of 17.7%. The analysts at the brokerage expect the bank’s strong disbursement growth momentum to continue over the medium term. They see this growth led by vehicle finance, home loans, credit cards, and business banking segments. The bank’s asset quality recovery since the disruptions caused by the pandemic is a key positive. They expect its asset quality to further improve as “the restructured book has been exhibiting strong collection trends and slippages from the pool well below the anticipated levels”.

The analysts also expect the company’s net interest margin to remain stable despite an increasing interest rate environment. However, operating expenses can increase in the medium term as the firm is investing in expansion and technology. Nonetheless, Axis is positive about the small finance bank’s growth prospects given its stable NIMs and low credit costs, and the analysts expect the company’s net profit to grow at a CAGR of 26.3% over FY22-25.

  1. Union Bank of India: Motilal Oswal maintains a ‘Buy’ call on this public sector bank with a target price of Rs 50, indicating an upside of 14.8%. After attending the Union Bank’s thematic investor day on asset quality, Nitin Aggarwal, Yash Agarwal, and Vinayak Agarwal say, “The bank has segregated and shifted the loan portfolio to dedicated verticals, which focuses on marketing and general servicing.” The bank has opened 250 retail loan points, 125 MSME loan points, mid-corporate branches, and 13 large corporate branches to primarily focus on specific loan segments. 

The analysts note, “The bank saw recoveries of Rs 3,800 crore and is on track to achieve total recoveries of Rs 15,000 crore in FY23.” For FY23, they expect GNPA and NNPA to be at 9% and 3% respectively, and expect the slippages to moderate to less than 2%, with a credit cost of less than 1.7%. 

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

(You can find all analyst picks here)

 
T
Trendlyne Marketwatch
04 Oct 2022
Market closes higher, HDFC Bank's advances rise by 23.5% YoY

Trendlyne Analysis

Indian indices closed sharply higher with the volatility index, India VIX, falling below 20%. The Nifty 50 rose 387 points and closed above the 17,250 mark. European indices followed the global trend and traded higher than Monday’s close. India's exports fall 3.5% to $32.6 billion in September against $33.8 billion in the same month in 2021 with the trade deficit widening to $26.7 billion.

Major Asian indices closed in the green, in line with the US indices, which closed sharply higher on Monday. The tech-heavy NASDAQ 100 rose around 2.4% while the Dow Jones and S&P 500 also closed over 2.5% higher. Brent crude oil futures traded higher after rising close to 4% on Monday as OPEC+ considers cutting output of up to 1 million barrels per day at a meeting scheduled on Wednesday.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Bank and Nifty Auto closed higher than Tuesday’s close. Nifty IT closed sharply higher, tracking the NASDAQ 100, which closed in the green on Monday.

Nifty 50closed at 17,277.45 (390.1, 2.3%), BSE Sensexclosed at 58,065.47 (1,276.7, 2.3%) while the broader Nifty 500closed at 14,965.35 (326.9, 2.2%)

Market breadth is overwhelmingly positive. Of the 1,950 stocks traded today, 1,542 showed gains, and 364 showed losses.

  • Stocks like Rites, Cochin Shipyard, Mazagon Dock Shipbuilders, and Zydus Lifesciencesare in the overboughtzone, according to the Money Flow Index or MFI.

  • HDFC Bank rises as it reports a rise in advances by 23.5% YoY to Rs 14.8 lakh crore in Q2FY23. Total deposits grow 19% YoY led by retail deposits rising 20.5% YoY. The bank’s CASA ratio falls by 168 bps YoY to 45%.

  • FMCG sales in September fell 9.6% MoM, due to a slowdown in demand from rural areas amid inflationary pressures, according to the data from Bizom.

  • HDFC, Tata Consultancy Services and Hero MotoCorp trade above their third resistance or R3 level as market trades higher.

  • Oil companies plan to not lift the 6-month freeze on the daily price hike of automobile fuel prices in order to recover past losses, according to reports.

  • IndusInd Bank rises after it reports a rise in advances by 18% YoY to Rs 2.5 lakh crore in Q2FY23. The increase in loans is led by the retail segment, according to reports. The bank’s deposits also rise 15% YoY with deposits from retail and small businesses constituting 41% of total deposits.

  • Edelweiss Securities upgrades its rating on Maruti Suzuki to ‘Buy’ from ‘Hold’. The brokerage says that Maruti Suzuki India will majorly benefit from its new launches, rising demand, and fall in commodity prices.

  • Electronics Mart’s Rs 500-crore IPO, which is entirely a fresh issue, gets bids for 1.7X of the available 6.25 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 2X of the available 3.1 crore shares on offer.

  • Banks like IDFC First Bank, IndusInd Bank, Federal Bank, Bank of Baroda, and Bandhan Bank are rising in trade today. The broader sectoral index Nifty Bank is also trading in the green.

  • KRChoksey maintains its ‘Buy’ rating on Sun Pharmaceutical Industries with a target price of Rs 1,114. This implies an upside of 18%. The brokerage believes expects the company’s new product launches, a strong pipeline of generic products, market share gains, and better supply chain management to drive future revenue growth. It expects the company’s revenue to grow at a CAGR of 10.6% over FY22-24.

  • Angel One is rising as its client base increases 77.4% YoY to 1.15 crore in September. Growth in average daily turnover (ADTO) of F&Os helps the overall ADTO to increase by 116.4% YoY to Rs 13.7 lakh crore.

  • Larsen & Toubro rises as its power transmission & distribution business wins multiple orders worth Rs 1,000-2,500 crore in India and abroad. The company will work on building a 765kV transmission line in Gujarat and upgrade a distribution system in North-East India. The company won a repeat order to build 132 kV sub-stations in UAE and a 380 kV overhead line in Saudi Arabia.

  • Easy Trip Planners is rising as its board of directors will meet on Monday to consider a proposal for increasing the authorised share capital, bonus issue of shares, and a stock split.

  • Metal stocks like Hindalco Industries,APL Apollo Tubes, JSW Steel, among others are rising in trade. All constituents of the broader Nifty Metal index are trading in the green.

  • Vedanta is rising as its total aluminium production rises 2% YoY to 5.8 lakh tonnes in Q2FY23. Mined metal production rises 3% to 2.5 lakh tonnes. The company features in the screener with companies effectively using its capital to generate profit.

  • India’s September merchandise exports decline 3.5% to $32.6 billion amid a fall in demand for Indian goods due to global recession fears. India’s imports stand at $59.3 billion and the trade deficit in September is $22.7 billion.

  • Dilip Buildcon rises as its joint venture, RBL-DBL, receives a letter of acceptance from the Gujarat Metro Rail Corp. It pertains to the construction of a 10.6 km elevated viaduct and 11 metro stations worth Rs 1,061 crore for the Surat metro rail project.

  • Electronics Mart raises Rs 150 crore from anchor investors ahead of its IPO, which opens for subscription today. The company has allotted 2.5 crore equity shares at a price of Rs 59 per share to the anchor investors. The investors include Nippon Life India, Pinebridge Global Funds, Motilal Oswal Mutual Fund, Tata Mutual Fund, Whiteoak Capital, Abakkus Emerging Opportunities Fund, and Societe Generale.

  • Avenue Supermarts’ (Dmart) standalone revenue rises 35.8% YoY to Rs 10,384.6 crore in Q2FY23 on improved demand. Q2FY23 standalone revenue is 5.9% higher than the revenue of Q1FY23. The company shows up on a screener which lists stocks with quarterly growth in net profit and profit margin.

  • KEC International wins new orders worth Rs 1,407 crore across business verticals like transmission and distribution, railways, civil construction, and cables. The project pertains to the setting up of transmission lines in Kuwait and Saudi Arabia. The company shows up on a screener which lists stocks with an improving book value per share over the past two years.

Riding High:

Largecap and midcap gainers today include Mahindra & Mahindra Financial Services Ltd. (200.40, 11.49%), NHPC Ltd. (38.40, 8.17%) and IDFC First Bank Ltd. (53.20, 7.80%).

Downers:

Largecap and midcap losers today include Kansai Nerolac Paints Ltd. (484.15, -1.90%), Power Grid Corporation of India Ltd. (208.45, -1.11%) and Supreme Industries Ltd. (2,069.35, -1.08%).

Volume Rockets

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

Top high volume gainers on BSE included Angel One Ltd. (1,532.15, 12.35%), Mahindra & Mahindra Financial Services Ltd. (200.40, 11.49%) and IDFC First Bank Ltd. (53.20, 7.80%).

Top high volume losers on BSE were Gujarat State Petronet Ltd. (223.30, -1.76%) and Procter & Gamble Hygiene & Healthcare Ltd. (13,939.75, -0.44%).

Bank of Maharashtra (18.00, 2.56%) was trading at 9.3 times of weekly average. Godfrey Phillips India Ltd. (1,197.35, 5.47%) and Easy Trip Planners Ltd. (409.30, 6.89%) were trading with volumes 5.8 and 5.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

15 stocks took off, crossing 52-week highs,

Stocks touching their year highs included - Bharti Airtel Ltd. (808.70, 0.67%), Blue Dart Express Ltd. (9,369.45, 4.07%) and Cipla Ltd. (1,144.65, 1.23%).

43 stocks climbed above their 200 day SMA including Angel One Ltd. (1,532.15, 12.35%) and L&T Finance Holdings Ltd. (77.00, 6.43%). 2 stocks slipped below their 200 SMA including PVR Ltd. (1,739.60, -0.94%) and Shriram City Union Finance Ltd. (1,747.50, 3.37%).

 
T
Trendlyne Marketwatch
03 Oct 2022
Market closes lower, Eicher Motors's September total wholesales rise 9.2% YoY

Trendlyne Analysis

Indian indices closed in the red with the volatility index, India VIX, rising over 21%. The Nifty 50 lost over 200 points and closed below the 16,900 mark. European indices traded lower as Credit Suisse fell close to 8% in early trade after its CEO asked investors for 100 days to deliver a new turnaround strategy. Major Asian indices closed in the red, in line with the US indices, which closed lower on Friday. The S&P 500 extended its losses and posted its third-worst performance in the first nine months of a year since 1931. The Dow Jones and the tech-heavy NASDAQ 100 lost over 1.7% and closed in the red on Friday. Brent crude oil traded sharply higher as OPEC+ considered cutting output of up to 1 million barrels per day at a meeting scheduled on Wednesday.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Pharma bucked the market trend and closed higher than Friday’s level. Nifty IT closed in the red, taking cues from the NASDAQ 100, which closed 1.7% lower on Friday.

Nifty 50closed at 16,876.00 (-218.4, -1.3%), BSE Sensexclosed at 56,788.81 (-638.1, -1.1%) while the broader Nifty 500closed at 14,632.15 (-197.2, -1.3%)

Market breadth is highly negative. Of the 1,961 stocks traded today, 616 were gainers and 1,292 were losers.

  • Indraprastha Gassees a short build-up in its October 27 future series as its open interest rises 12% with put to call ratio of 0.4.

  • Ciplaand Vedant Fashionshit their all-time highs of Rs 1,144.9 and Rs 1,475, respectively. Both stocks rise for two consecutive sessions.

  • Kajaria Ceramics to make an investment of upto Rs 125 crore to set up a manufacturing facility in Nepal on a joint venture basis. The joint venture partner Ramesh Corp will invest Rs 125 crore in the facility.

  • Hotel stocks like Indian Hotels Co, EIH, Chalet Hotels, Oriental Hotels, among others are up by more than 2% in trade today. The hotels industry is also rising in trade today.

  • Eicher Motors is falling despite a 9.2% YoY rise in September's total wholesales to 6,631 units from its joint venture with Volvo, its exports fall 35.8% YoY. The company's subsidiary Royal Enfield's total wholesales rise 145% to 82,097 units.

  • Triveni Turbine rises as Anand Rathi initiates coverage on the stock with a ‘Buy’ rating and a target price of Rs 285, according to reports. The brokerage believes the company’s strong order book, capacity expansion, and industry-leading market share will aid growth in the coming quarters.

  • Eicher Motors, Delhivery, and Suzlon Energy trade below their third support or S3 level as market trades lower.

  • FSN E-Commerce Ventures' (Nykaa) board recommends bonus issue of five fully paid-up equity shares for every one fully paid-up equity share held by the shareholders, subject to shareholders’ approval.

  • Federal Bank's Q2FY23 total deposits rise by 10% YoY to Rs 1.9 lakh crore and gross advances rise by 19.4% YoY to Rs 1.6 lakh crore. The bank's CASA deposits rise 10.7% YoY to Rs 68,873 crore. This bank shows up on the screener that lists companies with increasing profits for four consecutive quarters.

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

  • Lupin is rising as it receives establishment inspection report (EIR) from the US FDA for its manufacturing facility in Ankleshwar, Gujarat. An EIR is issued after an inspection is completed without the need of observations. Inspection of the facility was conducted from August 16-19.

  • Coal India’s production for September rises 12.3% YoY to 45.7 MT. Its supply to the power sector increases by 7% YoY on rising demand from thermal power plants. Coal India’s production in H1FY23 rises 20% and its supply to power plants grows 17% compared to the same period last year.

  • Tata Motors is falling despite a 44% YoY rise in total domestic wholesales to 80,633 units in September. The passenger vehicle wholesales increases 85% YoY but the commercial vehicle (CV) wholesales rise marginally by 4% YoY due to a 36% fall in CV exports.

  • Axis Direct remains optimistic about the future growth prospects of JK Lakshmi Cements as it retains its ‘Buy’ rating on the company with a target price of Rs 680. This indicates an upside of 18%. The brokerage believes the company will benefit from the expected fall in commodity prices and a rise in demand given its production capacity plans, focus on cost optimisation, and higher realisation. It expects the company’s net profit to grow at a CAGR of 13% over FY22-24.

  • India’s September Manufacturing Purchasing Manager’s Index (PMI) falls to 55.42 compared to 56.2 in August, as India’s factory growth declines to a three-month low.

  • Zydus Lifesciences is rising as it receives the final approval from the US Food & Drug Administration and a 180-day shared exclusivity for mirabegron extended-release tablets. The drug is used to treat symptoms of overactive bladder. It had annual sales of $ 2.42 billion (approximately Rs 19,792.1 crore) in the US for the 12 months ended August 2022.

  • The Centre reduces windfall tax on locally produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne earlier. It also removes the tax on the export of aviation turbine fuel and halves export duties on diesel to Rs 5 per litre.

  • Telecommunication stocks like ITI, HFCL, Sterlite Technologies among others are rising in trade. The broader telecommunication equipment sector rises above 3%

  • Maruti Suzuki is falling despite its domestic passenger vehicle wholesales surging by 135.1% YoY to 1.48 lakh units. The rise in wholesales comes on the back of new product launches, improvement in the supply of semiconductor chips, and the onset of the festive season.

  • Konark Trust buys a 0.5% stake in Aptus Value Housing Finance India worth Rs 71.3 crore on Friday.

  • Hero MotoCorp’s September wholesales fall 1.9% YoY to 5.1 lakh units as motorcycle sales fall 1.8%. However, the company expects demand to rise because of the ongoing festive season. It also expects normal monsoons to improve farm activity and sales in rural areas.

Riding High:

Largecap and midcap gainers today include Lupin Ltd. (722.10, 6.21%),  Zydus Lifesciences Ltd. (409.35, 5.80%) and Aurobindo Pharma Ltd. (535.20, 4.82%).

Downers:

Largecap and midcap losers today include Adani Enterprises Ltd. (3,157.30, -8.64%), Adani Green Energy Ltd. (2,074.05, -8.26%) and Adani Total Gas Ltd. (3,100.80, -7.16%).

Volume Shockers

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

Top high volume gainers on BSE included Cochin Shipyard Ltd. (485.40, 10.07%), Triveni Turbine Ltd. (255.50, 8.77%) and VIP Industries Ltd. (714.65, 7.38%).

Top high volume loser on BSE was Eicher Motors Ltd. (3,463.35, -5.67%).

Avanti Feeds Ltd. (486.95, 3.97%) was trading at 9.3 times of weekly average. Ajanta Pharma Ltd. (1,286.90, 1.14%) and Finolex Industries Ltd. (137.80, 0.88%) were trading with volumes 9.2 and 7.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

14 stocks hit their52-week highs, while 3 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Bharti Airtel Ltd. (803.35, 0.43%), Cipla Ltd. (1,130.75, 1.42%) and Indian Hotels Company Ltd. (336.85, 1.55%).

Stocks making new 52 weeks lows included - Oracle Financial Services Software Ltd. (2,921.75, -2.04%) and Birlasoft Ltd. (278.90, -1.26%).

26 stocks climbed above their 200 day SMA including FDC Ltd. (275.80, 4.51%) and Avanti Feeds Ltd. (486.95, 3.97%). 21 stocks slipped below their 200 SMA including Adani Green Energy Ltd. (2,074.05, -8.26%) and Mahanagar Gas Ltd. (802.10, -3.61%).

 
logo
The Baseline
01 Oct 2022
Festival season boosts travel, jewelry, paint sectors; stocks flying high in a volatile market
By Deeksha Janiani

For a time, it was good: optimistic growth predictions for India helped drive a market rally over the past three months. But the world is becoming sharply volatile, and multiple global factors are now rocking the boat. Russia's gas cutoff has caused an energy crisis in Europe, threatening a deep recession, and US Fed Reserve Chairman Jay Powell announced an interest rate hike of 75 bps on September 21.

Higher US interest rates have made US treasury assets more attractive, and foreign investors renewed selling Indian equities. The "fear index" Nifty Vix is back up to June levels.  

However amid this gloom, the Indian consumer story is a bright promise. Indians are preparing for get-togethers and celebrations, with big spending plans this festive season.

In this week’s Analyticks:

  • Festive plans cheer travel, home improvement and jewellery sectors
  • Screener: These stocks are holding steady, with high-momentum and strong EPS growth predicted in FY23

Let’s get into it.

The great Indian festival season is here: What’s in store for tourism, home improvement and jewellery?

The Indian festive season kick-started with the arrival of Ganesh Chaturthi and Onam in August-end. Now, it’s in full swing with the onset of Navratri. For the first time in two years, people will be able to gather for the Garba Utsav without restrictions - no mandatory masking, no one checking your Covid certificate at the door, no limits on the number of people.

Indians are itching to get into their party clothes, and are ready to loosen their purse strings. According to a survey undertaken by LocalCircles, consumer spending during the festive season is expected to hit $32 billion this year, higher than both 2020 and 2021. Although this is below the pre-Covid level (2019) of $37 billion, this will boost India Inc in an otherwise inflationary and tough global environment. 

24% of respondents in this survey plan to spend on travel and tourism in this season - the highest among all categories. Jewellers and home improvement players will also see the benefit of higher consumer spends. 

Hotels and Tourism sizzle, as consumer segments come alive

When the worst of the pandemic got over in March 2022, short-haul travel became the top priority for millennials. Businesses also restarted events and conferences as employees were back in offices. 

By the summer of ’22, there was high traction visible across both leisure and corporate travel segments. The occupancy rates and revenue per available room of the hospitality sector crossed pre-pandemic levels in Q1FY23 thanks to the demand rebound in metros. 

According to the management of Indian Hotels, robust demand especially in the corporate segment continued in July and August, despite the seasonal weakness. Now, with consumers willing to spend more on travel, the demand outlook from September to November also looks strong. 

Traveller mix shifts towards richer Indians

Overall festive spends this year are being driven by higher income groups, as they saved a lot of money in the work-from-home era, according to LocalCircles.

This may also be true for the travel sector.

Let’s consider some hard facts here: the traveller mix is changing. In Q1FY23, the premium chains of Indian Hotels like ‘SeleQtions’ and ‘Vivanta’ saw over20% growth in occupancies while mid-segment chains like ‘Ginger’ fell 11% compared to pre-covid levels.

The overall occupancy level of a mid-segment hotel chain like Lemon Tree has been consistently lower than that of premium and luxury players like Indian Hotels and EIH in the past three quarters. Clearly, higher price inflation has impacted the discretionary spends of middle-income groups, while the affluent class is relatively unaffected. 

Foreign travellers will also drive demand for hospitality and recreational sectors in H2FY23. According to a RateGainreport, foreign tourist arrivals in Delhi and Mumbai are likely to see double-digit MoM growth between September and November owing to the festivities and a favourable climate in India. 

These demand trends bode well for an online travel agent like Easy Trip Planners. This travel startup has showcased consistent profitability in the past 10 quarters despite the pandemic. This was achieved on the strength of its ‘no convenience fee’ model and easy refunds policy. The company now looks to double its gross booking revenue to Rs 6,500-7,000 crore in FY23 and makes a good proxy play in the travel sector. 

Enthused by the current travel boom, hotel chains have drawn up ambitious expansion plans. Indian Hotels looks to add 18 hotels in its portfolio this year while Lemon Tree seeks to complete a major hotel project in Mumbai. 

According to Trendlyne Forecaster’s consensus estimates, annual revenues of the top three listed hotels will jump by over 60% YoY in FY23 with all of them returning to profitability. 

Jewellery makers sparkle on lower gold prices, healthy demand

Women customers have also made a comeback - retail sales of jewellery have grown in double-digits in the past four months, backed by the correction in gold prices. This trend is likely to continue in the coming months as the peak festive season has begun, which will be followed by the wedding season. According to C K Venkataraman, Managing Director at Titan, the affluent class has amassed a lot of wealth in the pandemic years and are now ready to spend on high value items.

The period from Navratri upto Diwali is an auspicious period to buy jewellery in India. In order to leverage this, Tanishq, a brand owned by Titan, has launchednew collections like ‘Zoya’, ‘Aishani’, 'Chozha' and ‘Alekhya’. This is also in line with the company’s strategy to cater to more regional tastes to capture higher market share. 

Kalyan Jewellers aims to spend Rs 250 to 300 crore to open 10 stores across Delhi, Maharashtra, Uttar Pradesh, Orissa and Chhattisgarh by this Diwali. Meanwhile, Titan aims to launch 50 Tanishq stores in FY23 to meet rising demand. The revenue of both these players is set to jump over 20% in FY23 with profits rising faster. 

Paint companies are all set for a 'double delight' 

Another major beneficiary of this festive season will be the home improvement sector, as people repaint and refurbish their houses for Laxmi Pooja. Paint makers like Asian Paints and Berger Paints already witnessed robust sales volumes in Q1FY23, backed by premium and luxury products. Such strong demand trends will continueinto Q2FY23 with the early onset of Navratri. 

Demand growth is coming with lower costs - a double delight for paint companies. Pressure on the gross margins of these companies have eased up thanks to the 27% correction in crude oil prices since May 2022. Analysts predict oil prices will zoom back up towards the end of the year as China comes out of lockdowns, but Q3FY23 may still see the double benefit of low input costs and high demand. This is why analysts predict these companies’ net profit rising more than their revenues in FY23.

However, Kajaria Ceramicsis likely to suffer margin compression on account of higher natural gas prices. Nevertheless, the tile-maker is positive on the demand front and is putting up new capacities in the sanitaryware and bathware segments. 

Hopes are high for a bumper festive season across consumer facing sectors in India. The promise is clear: let's see which companies are able to make the most of it. 

Screener: Stocks flying high in a volatile market, with medium to high momentum score and rising EPS forecasts

With the result season just around the corner, we take a look at stocks which have a medium to high momentum score, with high EPS growth forecasts. This screener consists of 34 companies within the Nifty 500 index. The companies belong to industries like telecom services, realty, non-alcoholic beverages, two-wheelers among others.

Major stocks featured in the screener are Bharti Airtel,Phoenix Mills, Adani Enterprises, Varun Beverages and Eicher Motors. Bharti Airtel has the highest annual EPS growth forecast of 237%. According to Prabhudas Lilladher, the telecom company’s customer focused strategies along with digital investments has helped increase revenue and subscriber market share. It has a Trendlyne momentum score of 60.7, indicating that it has high buying interest and improving sentiment.

The second highest annual EPS growth forecast is for Phoenix Mills. The company saw a 316% rise in its annual EPS in FY22. According toICICI Securities, the realty player has a strong pipeline of projects which will aid its bottomline growth. It has a Trendlyne momentum score of 61.8.

Analysts see Eicher Motors clocking an EPS growth of over 65% in FY23. Axis Securitiesbelieves that lower commodity prices, improving demand and easing of supply-side constraints will aid its earnings growth. 

Varun Beverages has a healthy EPS growth estimate of 88% for FY23. The demand outlook for this Pepsico franchise is strong given that its juices, energy drink and dairy segments are performing well,and it is expanding into newer markets.

You can find some popular screeners here.

 
logo
The Baseline
30 Sep 2022
Five Interesting Stocks Today
  1. Nestle India:The foreign parent of this FMCG major is set to invest Rs 5,000 crore in the business over the next three years, a significant ramp-up compared to its investment of Rs 8,000 crore made over the last 60 years. The stock rose nearly 3% after Nestle S.A.’s CEO Mark Schneider made this announcement in a press conference on September 23.

Given the sheer size of the investment vis-à-vis the previous commitment, India has clearly become an important emerging market for Nestle. The CEO highlighted that the company was facing a difficult situation globally on account of runaway inflation. India, on the contrary, appears to be in a bright spot owing to its rising middle-class population and increasing per-capita income levels.

According to Suresh Narayanan, Chairman at Nestle India, the investment outlay will be spent across new growth opportunities in the nutrition segment, including plant-based proteins and healthy snacking. The Maggi maker may look to acquire companies present in this segment. Additionally, the capex will be utilized in developing the emerging categories of pet care and toddlers’ snacks. The pet care market size is roughly Rs 4,000 crore in India and growing at a CAGR of 20-25%. Given the fresh capex, Nestle India will be able to take on Hindustan Unilever. It has some catching up to do here – HUL has actively invested in building its health and nutrition segment since FY20, notable investments, being the acquisition of Horlicks and Boost brands.

Investors need to watch for Nestle India’s margins in upcoming quarters as they were under pressure owing to input cost inflation. In a major relief, the prices of edible oil and packaging material softened over the past few months. However, wholesale prices of wheat and milk continue to trend higher. 

  1. Torrent Pharmaceuticals: This pharma company’s stock fell over 5% intraday on Wednesday after it announced the acquisition of Curatio Healthcare for Rs 2,000 crores. Expensive deal valuation could be the reason why the acquisition did not excite investors. Torrent Pharma acquired Curatio at a costly valuation of 8.2 times enterprise value/trailing twelve months sales (EV/TTM sales). For reference, recent deals by big players in the pharma industry have an average of 4.2 EV/sales. In addition, the management in the analyst call on Tuesday said that 75-85% of the Rs 2,000 crore price tag would be funded by debt. This comes at a time when Torrent Pharma was reducing its debt and the stock comes up in a screener that lists companies that are decreasing leverage. 

Curatio derives over 82% of its revenue from the dermatology segment with cosmetic dermatology as the leading contributor. Over the last decade, cosmetic dermatology as a therapy grew at 18% CAGR, which is comfortably higher than the Indian pharmaceutical market’s (IPM) growth. Curatio’s revenue grew 25% YoY in FY22 after two years of stable sales and the management guided for 24% revenue growth from the Curatio portfolio in FY23, and expects to sustain this level going forward. 

Brokerages like ICICI Securities and Prabhudas Lilladher kept their ‘Buy’ rating on Torrent Pharma, indicating an upside of over 15%. The brokerages have a positive outlook on the company as the deal allows it to foray into the high-growth cosmetic dermatology segment. 

  1. Life Insurance Corporation of India (LIC): This insurance stock is falling in trade for the last five sessions, hitting all-time lows almost every day. It touched an all-time low of Rs 618 on Thursday, which is 29% lower than its issue price. The stock was also trading below its second support or S2 level on Tuesday. It also shows up on a screener of stocks with low to medium Trendlyne Momentum Score. 

Ever since its listing, LIC’s share price has been on a declining trend. Reports suggest that LIC’s declining market share and its dependency on the age-old, somewhat outdated model of agents as its biggest distribution network is a dampener in terms of growth. However, in its annual general meeting on Tuesday, LIC’s Chairperson M R Kumar said that the company is devising strategic changes in product mix and distribution channels to enhance growth and improve market share. The plan is to shift the product mix towards non-participating products, increasing this to 12-15% in the next 3-4 years. In non-participating products the profits and dividends are not shared with the policyholders, making it lucrative for insurance companies to sell such policies. M R Kumar also says that in the ‘LIC 3.0’ version the company plans to close Q2FY23 with increased market share and better technological processes to match the competitors.

LIC has also been making changes in its holdings. On Tuesday it announced the acquisition of an additional 2% stake in Bharat Petroleum Corp (BPCL) over a period of 9 months (December 28, 2021 to September 26, 2022). LIC now holds a 9% stake in BPCL. On Wednesday it announced a significant stake reduction in Gujarat State Fertilizers & Chemicals to 3.96% from 6.05% from April 8 to September 27. This transaction amounts to nearly Rs 133.9 crore. Possibly with these new changes, LIC may be able to adapt to the shifts in the market, the rise of digital channels and increasing interest rates affecting people’s investment choices.

  1. Power Grid Corporation of India: This power stock fell nearly 8% in trade on September 23 after reports of it buying shares of Power Finance Corporation (PFC) - a subsidiary of Power Grid, from Rural Electrification Corporation (REC). This suggests that Power Grid is getting into the business of financing power projects where its competence is limited. According to reports, this would cause the company’s dividend yields to drop to 4%.

However, on Tuesday the Centre rejected REC’s proposal to sell PFC’s stake to Power Grid. This drove the stock to rise 3% in trade on Tuesday in an otherwise volatile market. Foreign brokerage Citi gave a ‘Buy’ rating on the stock on a stable business outlook, high market share and better RoE. The stock also shows up on Trendlyne’s screener of companies with improving RoE over the past two years.

The company’s board also approved a power transmission project costing Rs 327.7 crore, on Monday. The project will connect Jamnagar Oil Refinery of Reliance Industries with Jam khambhaliya ISTS PS. 

Energy indices like BSE Power and Nifty Energy have been up for the past three months. Jefferies in its report says that it is bullish on the power sector and predicts decade-long growth. It also expects power stocks to improve their renewable energy capacity by 82% to 305 GW till FY30E. Power Grid is among Jefferies’ top picks from the sector. Trendlyne’s consensus recommendation also shows 17 analysts recommending a ‘Buy’ on the stock. 

  1. KPIT Technologies: This IT Consulting & Software company rose 14.6% over the past month, outperforming the Nifty 500 index by 18.2% till Thursday. This rise comes at a time when most IT companies are falling given the high inflationary environment. The Nifty IT declined by 6.5% over the past month as of Thursday. 

The surge in the stock was triggered by its acquisition of four Technica group companies in the automobile software and electrical space. The firm expects this acquisition to improve its scale of operations. The acquisition will cost the company a fixed consideration of 80 million euros, and a maximum variable payment of 30 million euros. Post the completion of the acquisition in October, the Technica group will be fully owned by the firm. 

The management believes that the acquisition will improve KPIT’s EPS upon consolidation and increase revenue by at least 10% by the end of FY24. It may raise its revenue guidance upon completing the acquisition, according to reports. In July, it had given a revenue guidance of 18-21% for FY23. Trendlyne’s Forecaster estimates KPIT Tech’s revenue to grow 6.1% QoQ to Rs 727.2 crore. The stock also shows up on a screener which lists companies with revenue increasing sequentially for the past four quarters.

The company expects to maintain its margin guidance for FY23 as well, according to reports. It says there is no slowdown in demand as its Europe business vertical is not impacted by the macroeconomic tailwinds yet. Its Europe business segment was the largest contributor to revenue in Q1FY23, accounting for nearly 30% of revenue.

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

 
T
Trendlyne Marketwatch
30 Sep 2022
Market closes higher, JP Morgan reiterates ‘Overweight’ rating on Paytm

Trendlyne Analysis

Nifty 50 rose over 250 points and closed above the 17,000 mark, with the volatility index, India VIX, falling significantly. Reserve Bank of India's Monetary Policy Committee raised the RBI's repo rate by an expected 50 bps to 5.9%. The RBI also lowered the GDP growth forecast for FY23 to 7% from 7.2%. India's current account deficit widens to $23.9 billion or 2.8% of the country's GDP in the April-June period. European indices traded higher as UK’s gross domestic product or GDP rises 0.2% QoQ in Q2FY23, topping analysts’ expectations.

However, most major Asian indices closed in the red, in line with the US stocks which closed sharply lower on Thursday. US indices fell to their lowest level since November 2020 as investors remain wary of slowing economic growth amid the Federal Reserve raising interest rates to combat record-high inflation levels. The tech-heavy NASDAQ 100 fell 2.9% while the S&P 500 closed 2.1% lower. Crude oil prices head for their first weekly gain in five weeks amid supply concerns as traders look ahead to the outcome of the OPEC+ meeting next week.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Energy and Nifty Media closed higher than Thursday’s level. Nifty IT closed in the red, despite the NASDAQ 100 falling close to 3% on Thursday.

Nifty 50closed at 17,107.20 (289.1, 1.7%), BSE Sensexclosed at 57,426.92 (1,017.0, 1.8%) while the broader Nifty 500closed at 14,837.45 (235.0, 1.6%)

Market breadth is surging up. Of the 1,927 stocks traded today, 1,349 were on the uptick, and 518 were down.

  • Rites and Cochin Shipyardare trading in the overboughtzone, according to the Money Flow Index or MFI.

  • Bharti Airteland Gujarat Fluorochemicalshit their 52-week highs of Rs 809 and Rs 4,024, respectively. Both the stocks rise for four consecutive sessions.

  • City gas distributor stocks like Adani Total Gas, Gujarat Gas, Indraprastha Gas, and Mahanagar Gasfall in trade today.

  • One97 Communications (Paytm) rises as JP Morgan reiterates its ‘Overweight’ rating on the company, with a target price of Rs 1,000, an implied return of 58.19%. The brokerage says that the company’s model is undergoing a shift and the company may turn profitable by September 2023.

  • Nestle India, Mphasis, Dabur India, and Dr. Reddy’s Laboratories’ weekly average delivery volumes rise, ahead of their Q2FY23 results.

  • Schneider Electric is rising as the company plans to invest Rs 300 crore for the development of a new smart factory in Telangana, according to reports. CEO of Schneider Electric, Anil Chaudhry says, they aim to make Hyderabad a leading manufacturing hub the country.

  • RBI is focused on price stability, says RBI’s Deputy Governor Micheal Patra. He expects the current account deficit to slightly widen during H1FY23 and to narrow in H2FY23.

  • HDFC Bank, Carborundum Universal and Bharti Airtel trade above their third resistance or R3 level as market trades higher.

  • Energy stocks like Adani Green Energy, Oil and Natural Gas Corp, Reliance Industries, Power Grid Corp of India, and Indian Oil Corp are rising in trade. The broader sectoral index Nifty Energy is also trading in the green.

  • Axis Direct continues to keep its positive outlook on ITC’s prospects as it retains its ‘Buy’ rating on the company with a target price of Rs 380. This implies an upside of 17%. The brokerage believes the firm is well-placed to capitalise on the stable tax regime. It expects revenue growth to be led by the recovery in its cigarette and hotels segments, scaling up of its FMCG business, and focus on increasing exports. The brokerage estimates the firm’s net profit to grow at a CAGR of 13.5% over FY22-25.

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

  • Motherson Sumi Wiring's board of directors approve a bonus issue of shares in the ratio of two shares for every five shares held in the company.

  • Marine Port & Services, Non-alcoholic beverages, andElectric Utilities industries fall more than 10% in trade over the past week.

  • Punjab National Bank is rising as it plans to sell its entire stake of 10.01% (3.25 crore shares) in Asset Reconstruction Co (India) in an all-cash consideration deal. Post the divestment the company will cease to be a shareholder of Asset Reconstruction Co (India). The stake sale is set to be completed by December 31.

  • Macrotech Developers' board of directors to meet today to approve the proposal of repaying Rs 125 crore in borrowings from Yes Bank, according to reports. The repayment comes five months ahead of schedule. The company features in the screener of companies with reducing debt.

  • India’s current account deficit widens to 2.8% of the GDP and stands at $23.9 billion during the April-June quarter due to rising global commodity prices and capital outflows.

  • Rail Vikas Nigam rises as it wins a contract worth Rs 408 crore from National Highways Authority of India. The order pertains to the construction of a four-lane highway in Andhra Pradesh.

  • The Reserve Bank of India's Monetary Policy Committee raises the RBI's repo rate by 50 bps to 5.9%

  • Bajaj Electricals is rising as it bags an order worth Rs 332.6 crore from the Power Grid Corp of India. The order is for supply and services of under the transmission line tower package TW04 associated with transmission network expansion in Gujarat.

  • Vodafone Idea rises after it clarifies that it is in talks with Indus Towers to discuss payment terms to clear its pending dues to the tower company. According to reports, the company owes Indus Rs 6,800 crore.

  • Hero MotoCorp to collaborate with Zero Motorcycles – a California-based manufacturer to develop electric motorcycles. Hero’s board approved an investment of $60 million in Zero Motorcycles for the same.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (2,260.80, 12.81%), Indus Towers Ltd. (197.45, 6.21%) and Tube Investments of India Ltd. (2,744.35, 6.21%).

Downers:

Largecap and midcap losers today include Indraprastha Gas Ltd. (396.80, -5.51%), Adani Transmission Ltd. (3,289.80, -3.42%) and Dr. Lal Pathlabs Ltd. (2,518.75, -2.80%).

Movers and Shakers

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

Top high volume gainers on BSE included Adani Green Energy Ltd. (2,260.80, 12.81%), Granules India Ltd. (345.35, 6.49%) and Bajaj Electricals Ltd. (1,202.20, 5.79%).

Caplin Point Laboratories Ltd. (744.40, 2.12%) was trading at 5.3 times of weekly average. Dilip Buildcon Ltd. (220.80, 3.93%) and Aptus Value Housing Finance India Ltd. (307.30, 1.20%) were trading with volumes 4.0 and 3.8 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 8 stocks hit their 52-week lows.

Stocks touching their year highs included - Bharti Airtel Ltd. (799.90, 4.61%), Cipla Ltd. (1,114.95, -0.08%) and Phoenix Mills Ltd. (1,399.10, 5.49%).

Stocks making new 52 weeks lows included - Sanofi India Ltd. (5,780.80, -0.17%) and Zensar Technologies Ltd. (211.65, 0.79%).

41 stocks climbed above their 200 day SMA including Adani Green Energy Ltd. (2,260.80, 12.81%) and Canara Bank (228.75, 6.20%). 9 stocks slipped below their 200 SMA including Balaji Amines Ltd. (3,167.50, -1.45%) and ITI Ltd. (105.45, -1.31%).

 
T
Trendlyne Marketwatch
29 Sep 2022
Market closes lower, US FDA issues warning letter to Lupin

Trendlyne Analysis

Nifty 50 closed lower for a seventh straight session with the volatility index, India VIX, at an elevated level of 22%. The benchmark index remained volatile today on the back of futures and options September 29 contract expiry. Investors look ahead to RBI’s Monetary Policy Committee or MPC meeting decision to be announced on Friday. Analysts expect RBI to raise interest rates by 50 bps to combat high inflation.

European stocks traded lower ahead of the German inflation print release for clues on interest rate hikes by the European Central Bank. Major Asian indices closed mixed, despite the US indices closing in the green on Wednesday. US stocks rose sharply amid falling treasury yields after the Bank of England announced a 65-billion-pound bond-buying program to stem a crisis in treasury markets due to a huge sell-off in government bonds. The tech-heavy NASDAQ 100 index and S&P 500 rose close to 2% while the Dow Jones closed 1.9% higher. Brent crude oil futures traded higher after rising over 6% in the past two days. Crude oil extended its gains on Wednesday after supply concerns emerged from the US due to a hurricane in the Gulf of Mexico. Traders will keep an eye on the Chinese manufacturing data and an OPEC meeting that could further aggravate the supply concerns.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, despite the benchmark index closing lower. Nifty Metal and Nifty Media closed higher than Wednesday’s close. Nifty IT closed in the red, despite the NASDAQ 100 rising close to 2% on Wednesday.

Nifty 50closed at 16,842.90 (-15.7, -0.1%), BSE Sensexclosed at 56,409.96 (-188.3, -0.3%) while the broader Nifty 500closed at 14,617.90 (-2.7, 0.0%)

Market breadth is in the green. Of the 1,916 stocks traded today, 1,029 were gainers and 826 were losers.

  • Sanofi India is trading in the oversold zone, according to the relative strength index or RSI.

  • Puneet Chhatwal, MD and CEO of Indian Hotels says that the upcoming festive season will be positive for the hospitality sector. He expects Q2FY23 to be the best quarter in the last 5-6 years.

  • Media stocks like Sun TV Network, PVR, Saregama, and Network 18 Media & Investmentrise in a volatile market. PVR and Network 18 rise more than 2.5% in trade today.

  • Sharekhan maintains its ‘Buy’ rating on Mahindra Logistics with a target price of Rs 600, implying an upside of 18.3%. The brokerage is optimistic about the company’s long-term growth potential given its focus on increasing warehousing capacity, scaling up network services, and strategic acquisitions in the logistics space. It expects the company’s revenue to grow at a CAGR of 18.5% over FY22-24.

  • Chemcon Speciality Chemicals surges as it commences commercial production at the P9 facility at Manjusar, Gujarat. The company adds a capacity of 2,400 metric tonnes per annum of bromobenzene at the P9 facility.

  • Russia may suggest OPEC+ to cut crude oil output by 1 million barrels per day in a meeting to be held on Wednesday, according to a report by Reuters. The meeting will be held to discuss market volatility and falling oil prices.

  • Abbott India, Pfizer and PVR trade above their third resistance or R3 level as market trades higher.

  • Apollo Pipes is rising in trade as Systematix Institutional Equities initiates coverage on the stock with a ‘Buy’ rating and a target price of Rs 650. This implies an upside of 27.25%. The brokerage expects the company to perform better than its peers as it focuses on high-margin products and high capacity utilisation. It also says that the company will benefit because of a healthy outlook on the plastic piping industry.

  • Lupin is falling after the US FDA issues a warning letter for its Tarapur facility near Mumbai. The filing does not disclose the observations given out by US FDA but the company is working towards resolving the issues highlighted. It however says that the warning letter will not have any impact on supplies or revenues generated from the Tarapur facility.

  • Adani Enterprises' wholly-owned arms achieve financial closure for the Ganga Expressway project in Uttar Pradesh. The company will invest Rs 6,826 crore as equity, with Rs 5,996 crore as viability gap funding, and has tied up loans worth Rs 10,238 crore from lenders.

  • Jefferies is optimistic about the growth potential of the power sector. It expects renewable energy capacity to rise by 82% by FY30E. NTPC, Power Grid and JSW Energy are its top picks in the sector.

  • Electronic Components, Other Non-Ferrous Metals, and Exploration & Production industries rise more than 2.5% in trade today

  • ICICI Securities remains positive on Torrent Pharmaceuticals’ prospects as it maintains its ‘Buy’ rating on the company but reduces its target price to Rs 1,769 from Rs 1,771. This indicates an upside of 15.3%. The brokerage revises its target price due to the additional debt the company will take on to complete the acquisition of Curatio Healthcare. It expects the firm’s new launches and robust branded chronic segment in India and Brazil to drive revenue growth. The brokerage anticipates the company’s net profit to grow at a CAGR of 57.4% over FY22-24.

  • FSN E-Commerce Ventures(Nykaa) is rising as its board of directors will meet on Monday to consider a bonus issue of shares

  • Bharat Heavy Electricals is rising as it bags an order to set up two 660 MW thermal power plants for the Talcher Thermal Power Project Stage-III in Odisha. The order consists of design, engineering, manufacturing, construction and commissioning of the two plants.

  • Metal stocks like Hindalco Industries, Jindal Steel & Power, Tata Steel among others are rising in trade. All constituents of the broader Nifty Metal index are trading in the green.

  • Blue Dart is rising in trade after the company announces a price increase, effective from January 1. The average shipment price will go up by 9.6%, depending on the shipping profile.

  • Ashish Kacholia buys a 1.38% stake in Agarwal Industrial Corp worth Rs 11.4 crore in a bulk deal on Wednesday.

  • PGIM India Mutual Fund sells a 0.75% stake (10 lakh shares) in Can Fin Homes for Rs 46.9 crore in a bulk deal.

  • Edelweiss Financial Services invests Rs 250 crore in subsidiary Edelweiss Tokio Life Insurance through a rights issue. This takes its stake up to 75% from 66% earlier.

  • US FDA issues Form 483 with three observations to Torrent Pharma for its manufacturing facility in Indrad, Gujarat. The form is issued when the regulator observes a violation of the Food Drug and Cosmetics Act. The company however maintains that none of the observations were related to data integrity.

Riding High:

Largecap and midcap gainers today include Abbott India Ltd. (1,9181.10, 5.74%), Zomato Ltd. (61.20, 5.43%) and Bank of India (48.20, 4.56%).

Downers:

Largecap and midcap losers today include Aarti Industries Ltd. (733.85, -6.06%), Vodafone Idea Ltd. (8.50, -5.56%) and Adani Transmission Ltd. (3,406.40, -5.43%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Sun Pharma Advanced Research Company Ltd. (231.10, 14.86%), Esab India Ltd. (3,511.00, 8.33%) and Rites Ltd. (323.90, 7.32%).

Top high volume losers on BSE were Aarti Industries Ltd. (733.85, -6.06%), Equitas Holdings Ltd. (93.60, -3.90%) and Lupin Ltd. (654.80, -2.30%).

Supreme Industries Ltd. (2,117.40, 0.16%) was trading at 8.8 times of weekly average. Pfizer Ltd. (4,228.65, 1.59%) and Adani Total Gas Ltd. (3,372.25, -2.20%) were trading with volumes 8.5 and 8.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

4 stocks made 52-week highs, while 13 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Cipla Ltd. (1,115.85, 1.70%), Cochin Shipyard Ltd. (432.85, 3.23%) and Rites Ltd. (323.90, 7.32%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (599.80, -0.41%) and Dhanuka Agritech Ltd. (637.85, 0.09%).

28 stocks climbed above their 200 day SMA including Esab India Ltd. (3,511.00, 8.33%) and Prism Johnson Ltd. (129.05, 6.87%). 12 stocks slipped below their 200 SMA including Dr. Lal Pathlabs Ltd. (2,591.40, -3.82%) and Vakrangee Ltd. (33.10, -2.93%).

 
logo
The Baseline
28 Sep 2022
Chart of the week: US interest rate hikes drive plunge in world currencies against the dollar
By Abdullah Shah

The US Federal Reserve is laser focused on cutting inflation in the US, and that’s causing the world a whole lot of pain. Federal Reserve Chairman Jay Powell announced another interest rate hike of 75 bps on September 21, taking the US federal funds rate to a target range of 3-3.25%. 

The aggressive pace of the Fed’s rate hikes in the past six months has strengthened the US dollar against world currencies, making commodities traded in dollars, like oil, expensive to purchase. It has also caused rapid outflows of foreign investor money from emerging markets.

In Asia, the Chinese yuan and Japanese yen have been the worst hit. The Chinese yuan has fallen 13.5% in six months against the dollar. The Japanese yen has fallen 16.8% over the same time period. The fall in the currencies of Asia’s largest economies might force foreign investors to sour on investments in  the region as a whole. 

The Indian rupee fell 7.7% in six months against the dollar and hit  a new all-time low of Rs 81.6 per dollar on Monday. FIIs have pulled out money from Indian equities everyday since September 21.

As currencies tanked against the dollar, Central Banks moved to limit the declines. China has disbursed $39.6 billion in the forex market to limit the fall of the yuan. The Reserve Bank of India (RBI) has spent $75.1 billion since the start of 2022 in order to support the rupee against the dollar.

Things are not that different in Europe, where the Euro fell 14.8% while the British pound dropped 22.4% in six months against the dollar. The recent tax cuts by the UK government have contributed to this fall, as investors fear that the move will lead to runaway inflation.