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Trendlyne Marketwatch
Trendlyne Marketwatch
19 Aug 2022
Market closes lower, PSU Bank stocks trade in the red

Trendlyne Analysis

Nifty 50 lost close to 200 points and closed in the red for the first time in nine trading sessions. The Indian volatility index, India VIX, rose by 5.4%. European indices traded lower than Thursday’s levels as investors assessed Eurozone’s July inflation print, which came in at a record high of 8.9%, in line with analysts’ expectations. Most major Asian indices closed in the red despite the US indices closing marginally higher on a volatile day of trade. The tech-heavy index, NASDAQ 100 rose 0.3% while the S&P 500 closed 0.2% higher. Brent crude oil futures traded lower after rising 3.9% on Thursday as strong US fuel consumption data offset prospects of slowing economic growth.

Nifty Smallcap 100 and Nifty Next 50 closed in the red, following the benchmark index. Nifty Metal and Nifty Bank closed lower than Thursday's levels. Nifty IT closed flat after trading in the green for most of the trading session.

Nifty 50closed at 17,758.45 (-198.1, -1.1%), BSE Sensexclosed at 59,646.15 (-651.9, -1.1%) while the broader Nifty 500closed at 15,236.65 (-168.0, -1.1%)

Market breadth is in the red. Of the 1,904 stocks traded today, 639 were gainers and 1,221 were losers.

  • Dhani Services, Sundram Fasteners, J B Chemicals & Pharmaceuticals, and Motilal Oswal Financial Servicesare trading with higher volumesas compared to Thursday.

  • Larsen & Toubrosees a long build-up in its August 25 futures series as its open interest rises 12.5% with a put-call ratio of 0.69.

  • Marine Port & Services, Advertising & Media, and Transport Support Services industries rise by more than 3% in trade today.

  • Sun Pharmaceutical falls for a second consecutive session after the US FDA issued form-483 flagging six quality control and procedure lapse issues at its Mohali plant. The form is issued when the regulator observes a violation of the Food Drug and Cosmetics Act. The company is working on addressing and resolving the issue promptly.

  • Stocks like Adani Enterprises, Apollo Tyres, Bajaj Finserv, and Ambuja Cementsare in the overbought zone, according to the technical indicator relative strength index or RSI.

  • Solar Industries India and Tata Chemicals hit their all-time highs of Rs 3,448.5 and Rs 1,182.2, respectively. Both stocks are rising for two consecutive sessions.

  • Realtystocks like DLF, Godrej Properties, Macrotech Developers, and Indiabulls Real Estate, among others, are falling in trade. The broader sectoral index Nifty Realty is also trading in red.

  • Havells India is falling as it quantifies the loss for the July 28 fire at its Neemrana plant in Rajasthan at Rs 150 crore. The company says the plant is fully insured.

  • ICICI Direct downgrades its rating on HEG to 'Hold' from 'Buy' with a target price of Rs 1,400. This indicates an upside of 6%. The brokerage believes that rising energy costs and inflation due to the conflict in Europe hurt demand in the European Union countries. It estimates the company's sales revenue to grow at a CAGR of 24% over FY22-24.

  • CEAT trades flat in a weak market after Chief Operating Officer Arnab Banerjee says the company plans to expand its tyre sales network through the FMCG distribution network to penetrate in rural markets. The company has tied up with various neighbourhood stores, auto spare parts shops, and puncture repair shops as a part of its distribution network. It also aims to double its outlets to one lakh in the next 2-3 years.

  • KR Choksey maintains its ‘Accumulate’ rating on Aurobindo Pharma with a target price of Rs 626, indicating an upside of 7.9%. The brokerage expects growth in the company’s US specialty injectable business to partially offset high input costs and improve margins going forward. It estimates the company’s net profit to grow at a CAGR of 14.8% over FY22-24.

  • IIFL Finance is trading with more than 32 times its weekly average trading volume. Computer Age Management Services, Go Fashion (India), ITI, and Ajanta Pharma are trading at more than six times their weekly average trading volumes.

  • India’s gold imports rose 6.4% in the April-July period in FY23 to $12.9 billion because of a surge in demand. An increase in gold and oil imports led to an increase in trade deficit by 65% YoY for the April-July period in FY23.

  • PSU banks like State Bank of India, Bank of Baroda, Canara Bank among others are falling in trade. All constituents of the broader Nifty PSU Bank index are trading in the red.

  • Sanjay Chaturvedi, Chief Executive Officer at IOL Chemicals expects the EBITDA margin of the company to rise by 15-17%. He is optimistic about the growing business in the chemical and pharma side.

  • Indian Railway Catering & Tourism Corp is rising as it intends to monetise its customer data to generate revenue. The company floats a tender to appoint a consultant to guide it on the monetization of its digital assets. According to reports, the company plans to raise Rs 1,000 crore through the monetisation of passengers’ data.

  • IT stocks like Tech Mahindra, Infosys, Wipro among others, are rising in trade. All constituents of the broader Nifty IT index are trading in the green.

  • HDFC AMC's Senior Fund Manager Gopal Agarwal says that he is optimistic about the growth prospects of India's industrial and manufacturing sectors for FY23 and FY24. He is also bullish on auto and auto ancillaries because of a correction in commodity prices.

  • Wipro is rising as it bags a multi-year contract from the UK's treasury department to deliver service integration and management (SIAM) services. The contract pertains to enabling end-to-end IT services across the UK's treasury department’s vendors.

  • Metropolis Healthcare revises the last working day of its outgoing Chief Executive Officer Vijender Singh to Wednesday from November 30. Singh resigned from his post on July 29.

  • Centre cuts windfall tax on locally produced crude oil to Rs 13,000 per tonne from Rs 17,750 per tonne. It reinstates an export duty on aviation turbine fuel to Rs 2 per litre after it was removed on August 2. The Centre increases the windfall tax on the export of diesel to Rs 7 per litre from Rs 5 per litre while the export of petrol will continue without the imposition of a windfall tax.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (2,411.35, 5.01%), Adani Ports & Special Economic Zone Ltd. (871.80, 4.65%) and Emami Ltd. (486.35, 4.37%).

Downers:

Largecap and midcap losers today include Zomato Ltd. (61.45, -8.42%), Varun Beverages Ltd. (988.15, -5.07%) and Tata Elxsi Ltd. (10,138.75, -4.48%).

Movers and Shakers

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

Top high volume gainers on BSE included Wockhardt Ltd. (263.00, 12.18%), Vardhman Textiles Ltd. (334.45, 7.38%) and Adani Green Energy Ltd. (2,411.35, 5.01%).

Top high volume losers on BSE were Borosil Renewables Ltd. (560.15, -6.00%), IIFL Finance Ltd. (332.90, -5.22%) and Computer Age Management Services Ltd. (2,255.65, -5.16%).

Tata Communications Ltd. (1,125.00, 3.55%) was trading at 9.4 times of weekly average. ITI Ltd. (117.80, 3.56%) and Ajanta Pharma Ltd. (1,297.15, 2.89%) were trading with volumes 9.0 and 7.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

13 stocks made 52-week highs,

Stocks touching their year highs included - Adani Power Ltd. (411.95, 3.13%), Adani Transmission Ltd. (3,635.25, 0.99%) and Apollo Tyres Ltd. (260.15, -2.38%).

14 stocks climbed above their 200 day SMA including Emami Ltd. (486.35, 4.37%) and Ajanta Pharma Ltd. (1,297.15, 2.89%). 18 stocks slipped below their 200 SMA including Jubilant Foodworks Ltd. (596.60, -3.80%) and Bharat Heavy Electricals Ltd. (54.10, -3.74%).

 
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The Baseline
19 Aug 2022
Five Interesting Stocks Today
  1. Bajaj Electricals: This household appliances company’s stock has been volatile for the past week. It rose nearly 1.5% on August 12 after it released its Q1FY23 results. But after announcing the permanent closure of its Parwanoo Unit on August 13 (over the Independence Day weekend), the stock fell 2.9% on Tuesday. Following this, the company declared a change in its management structure, triggering a jump of 2.7% on Wednesday.

The stock was up nearly 6% in trade on Thursday and shows up in the screener for companies where brokers have upgraded their target price and rating.

In the post Q1FY23 earnings call, the management said certain disruptions in their operating technology systems led to a loss in sales of 10 days of around Rs 30-50 crore. However, the management expects to recoup this in Q2FY23 and clarified that further phases of the OS implementation will have minimal impact.

The company saw revenues grow 43% YoY to Rs 1,229 crore in Q1FY23 because of price hikes in April. However, brokerages like ICICI Securities and Prabhudas Lilladher have a cautious approach towards the stock. Although ICICI Securities upgraded the stock to ‘Add’ from ‘Hold’ the brokerage feels that risks like an increase in input costs, delay in the launch of new products and increasing competition in the market may result in lower earnings.

  1. Gujarat Alkalies & Chemicals: This commodity chemical maker’s stock rose over 10% on Tuesday after the company announced the commissioning of a 1,05,000 tonnes per annum (TPA) chloromethanes plant at Dahej, Gujarat. The chloromethane market includes various end-user industries such as textile, automotive, personal care, pharmaceutical, and paints & coating. In addition, Meridian Chem Bond bought 5.3 lakh shares (0.7% stake) in the company for Rs 44.5 crore in a bulk deal on Tuesday. All of these factors led the stock to rise over 17% in three trading sessions until Thursday, and it is now in the overbought zone according to the money flow index or MFI.

This chemical manufacturer is currently in a phase of rapid expansion and the newly commissioned plant for the production of chloromethanes will help expand the company’s footprint in the textile industry. Revenues from the textile segment contributed to over 19% of the total revenue and strong market demand helped the company post 56% revenue growth YoY in Q1FY23. The company’s revenue is rising for the past six quarters YoY. It shows up in a screener that lists companies that saw improvement in net profits, operating profit margin and revenues in the most recent quarter.

  1. Apollo Tyres: The tyre maker’s stock hit a 52-week high on Thursday and outperformed the Nifty 500 index by over 16% in the past week. The company’s stock received three target price upgrades from brokers in the past month.

Apollo Tyres is the only tyre maker among the top five listed players like MRF and Balkrishna Industries which saw a sequential and YoY rise in its Q1FY23 net profit. This was backed by healthy top-line growth. In fact, Apollo Tyres managed to improve its margins sequentially mainly driven by its India operations. While its industry-leading performance certainly impressed the street, the company’s management gave out mixed signals for the quarter ahead. Notably, the company derives nearly 45% of its revenues from the truck and bus radial segment. However, it is seeing weak demand from the Indian commercial vehicle space due to the monsoon season in Q2FY23. On the other hand, demand trends are strong for the European passenger vehicle sector despite inflationary trends. This is partly due to the extended disruption of premium tyre imports from Russia. The company also expects the prices of key commodities like rubber to stabilize and then decline from Q3FY23 onwards.

  1. Happiest Minds Technologies: This IT consulting and software firm’s stock rose 15.6% over the past week till Thursday. It has been on an uptrend for five consecutive sessions on the back of its positive business outlook, as it recently launched Identity Vigil 2.0, its identity management services platform. The company’s Q1FY23 net profit rose 8.1% QoQ to Rs 56.3 crore and revenues by 9.4%. Revenue growth was driven by the product engineering services and digital business solutions segments. The company shows up on a screener that lists companies with sequentially rising profits for the past four quarters.

The management said that it aims to reach $1 billion annual revenues in seven years - by FY31, and expects that continued, long-term demand for digital services will help achieve this goal. Brokerage ICICI Securities initiated coverage of the stock on August 12 with an ‘Add’ rating. The brokerage believes that Happiest Minds is well-positioned in the high-growth IT digital market given its robust customer-centric sales engine.

The management guided for revenue growth of 25% in FY23 and an EBITDA margin of 22-24% in the medium to long term. The company is aiming for a revenue CAGR of 25% for the next five financial years. The management believes it can maintain a high level of revenue growth as it derives 97% of its revenue from digital and new technologies, more than any of its listed peers. The company shows up on a screener which lists stocks with strong cash-generating ability from their core business. It is also investing heavily in emerging technologies like the blockchain and metaverse to strengthen its digital capabilities.

  1. Trent: This retail company’s stock rose 8.6% over the past week till Thursday, mainly due to its good Q1FY23 results. The company is back in the black with a net profit of Rs 130.5 crore as compared to a loss of Rs 126.6 crore in Q1FY22. Revenues rose nearly 3.7X YoY and beat Trendlyne’s Forecaster estimates by 20.3%. The growth in revenues and profit was led by Westside and Zudio, helped by a strong recovery in demand and aggressive store expansion. The company shows up on a screener with stocks that consistently gave high returns over the past five years. This consistent growth over time has led to a Trendlyne Durability score of 70, the highest in the department stores industry.

But the company's margins are still under pressure from high input costs, as its EBITDA margin fell 420 bps to 16.2% as compared to 20.4% in the pre-Covid quarter of Q1FY20. According to reports, margin pressure is expected to persist given the company’s aggressive store expansion strategy. The business added 15 stores in Q1FY23, taking the total to 450 stores. A robust balance sheet, aided by healthy cash flow generation, allows the company to add new stores while keeping its debt low. Over the past few quarters, Trent has ramped up its online presence as it sees immense growth opportunities in the e-commerce space. This helped its revenues from online sales to jump significantly, contributing 6% to Westside’s revenue in Q1FY23. Going forward in FY23, the management aims to improve its cost optimisation to reduce margin pressure and increase the company’s profit.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
18 Aug 2022
Market closes flat, Syrma SGS’s IPO gets bids for 32.6X of total shares on offer

Trendlyne Analysis

Indian indices recovered their losses towards the end of the trading session and closed flat on a volatile day of trade. The Nifty 50 closed above the 17,950 mark and closed in the green for an eight straight session. European indices traded higher as investors look ahead to Eurozone’s July inflation print. Most major Asian indices closed lower, tracking the US indices, which closed in the red on Wednesday. However, the US stocks pared their losses after the US Federal Open Market Committee (FOMC) Meeting minutes suggested that the Fed could raise the federal funds rate at a less aggressive pace than anticipated. The Dow Jones fell 0.5% while the S&P 500 closed 0.7% lower. Brent crude oil prices traded marginally higher but continue to hover around its six-month low due to rising output from Russia and demand concerns on the back of slow global economic growth.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher, outperforming the benchmark index. Nifty Metal and Nifty Bank closed higher than Wednesday’s levels. Nifty IT closed in the red, tracking the NASDAQ 100, which fell over 1.2% on Wednesday.

Nifty 50closed at 17,964.45 (20.2, 0.1%), BSE Sensexclosed at 60,298.00 (37.9, 0.1%) while the broader Nifty 500closed at 15,409.95 (30.9, 0.2%)

Market breadth is in the green. Of the 1,903 stocks traded today, 988 were on the uptick, and 850 were down.

  • Star Health and Allied Insurance, Ajanta Pharma, Equitas Small Finance Bank, and Procter & Gamble Hygiene & Healthcareare trading with higher volumesas compared to Wednesday.

  • Adani Enterprisessees a long build-up in its August 25 futures series as its open interest rises 2.1% with a put-call ratio of 1.09.

  • HDFC Securities maintains its 'Reduce' rating on JK Cements with a target price of Rs 2,475, indicating a downside of 6.7%. The brokerage believes that the commissioning of the company's integrated unit in the central region will increase its grey cement capacity to 25 million metric tonnes in the north and central regions. It estimates sales revenue to grow at a CAGR of 10.7% over FY22-24.

  • Stocks like Adani Enterprises, Bajaj Finserv, Trent, Apollo Tyres, and Tata Elxsi are in the overbought zone, according to the technical indicator relative strength index or RSI.

  • The board of directors of Tata Power Renewable Energy, an arm of Tata Power, approve the preferential allotment of 8.36 crore equity shares to GreenForest New Energies Bidco. The shares are allotted at Rs 239.2 per share, aggregating to Rs 2,000 crore. This completes the first tranche of the transaction and the second tranche of Rs 2,000 crore will take place in accordance with the agreement.

  • Adani Enterprises and SBI Life Insurance hit their all-time highs of Rs 3,152.6 and Rs 1,333, respectively. Adani Enterprises rises for five consecutive days, while SBI Life Insurance trades higher for two sessions.

  • Syrma SGS Technology’s Rs 840 crore IPO gets bids for 32.6X of the available 2.9 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 5.5X of the available 1.4 crore shares on offer.

  • Tata Motors wins an order of 921 low-floor 12-metre electric buses from Bengaluru Metropolitan Transport Corporation (BMTC).The order is a part of the larger tender by Convergence Energy Services. According to the contract, Tata Motors will supply, operate and maintain the electric buses for 12 years.

  • Dilip Buildcon is rising as the company wins orders worth Rs 1,400.4 crore form the Madhya Pradesh government. The order pertains to engineering, procurement, construction, testing and commissioning of various components of Gandhisagar-2 multi-village scheme for the districts of Mandsaur and Neemuch. The order also includes trial run and operation and maintenance of the entire water supply scheme for 10 years in Madhya Pradesh.

  • IT Networking Equipments, Household Products, and Data Processing Services industries rise by more than 3% in trade today.

  • Sona BLW Precision Forgings is trading with more than 30 times its weekly average trading volume. Bajaj Holdings & Investment, Sundram Fasteners, Solara Active Pharma Sciences, and Bajaj Electricalsare trading at more than four times their weekly average trading volumes.

  • ICICI Direct maintains its ‘Buy’ rating on Apollo Tyres with a target price of Rs 290, indicating an upside of 16%. The brokerage expects the company to benefit from the expected rise in demand for tyres on the back of an uptick in demand for passenger and commercial vehicles. It believes the company’s profitability will improve given its healthy cash flow generation and focus on capital efficiency. The brokerage estimates the company’s profit to grow at a CAGR of 40.9% over FY22-24.

  • Reliance Jio gains 42.2 lakh wireless subscribers in June on a net basis, while Bharti Airtel adds a net 7.93 lakh subscribers. Vodafone Idea loses 18 lakh subscribers.

  • Ultratech Cement is rising as it expects its production capacity to increase to 159.25 million tonne per annum (MTPA) after its ongoing expansion plans are completed. The company is currently undertaking a 22.6-MTPA capacity expansion with an investment of Rs 12,866 crore.

  • Craftsman Automation rises after it announces the commencement of commercial operations at its new plant situated in Pune, Maharashtra. The existing capacity of the Pune plant is 11.5 lakh units. The company plans to increase its capacity by 2% with an investment of Rs 5 crore, according to reports.

  • Power Mech Projects is rising as it bags five orders for flue gas desulphurisation (FGD) projects worth Rs 6,163.2 crore from the Adani Group. The orders involve the installation of 15 FGD retrofits to Adani Group’s coal-based power plants. The projects will be executed over a period of 30 months.

  • Hotel and restaurant stocks like Jubilant Foodworks, Indian Hotels, EIH among others, are rising in trade. The rise comes after the union cabinet approves an increase in the limit of the emergency credit line guarantee scheme (ECLGS) from Rs 50,000 crore to Rs 5 lakh crore. This amount will be available to companies in the hotels, restaurants and tourism sector till March 31, 2023.

  • Natco Pharma is rising as the US Food and Drug Administration grants tentative approval to its abbreviated new drug application for trabectedin (generic of yondelis). The drug generated annual sales of $49.7 million over the past year till June in the US market.

  • CLSA says that all IT companies’ Q1FY23 EBIT margins were below its estimates. The brokerage is concerned about the poor cash conversion by most companies in Q1. It says that Infosys, TCS and HCL Technologies are its preferred stock picks.

  • Oil and Natural Gas Corporation signs an agreement with ExxonMobil Corp for exploration of oil and gas in the deep sea on India’s east and west coasts. The nature of the partnership remains undisclosed. However, the companies will focus on exploration projects to increase production and help reduce imports of oil in future.

  • Private equity firm Blackstone plans to sell up to a 13.6% stake in Sona BLW Precision Forgings in a block trade today, according to reports. The total deal value is around Rs 3,971 crore.

Riding High:

Largecap and midcap gainers today include Indian Railway Catering & Tourism Corporation Ltd. (714.15, 6.33%), Adani Power Ltd. (399.45, 4.99%) and Adani Enterprises Ltd. (3,153.65, 4.82%).

Downers:

Largecap and midcap losers today include SBI Cards and Payment Services Ltd. (957.85, -4.29%), Sona BLW Precision Forgings Ltd. (518.10, -3.90%) and Oil And Natural Gas Corporation Ltd. (135.55, -2.94%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Jindal Stainless Ltd. (130.05, 7.43%), Bajaj Electricals Ltd. (1,226.15, 6.09%) and Jindal Stainless (Hisar) Ltd. (251.30, 5.86%).

Top high volume losers on BSE were Sona BLW Precision Forgings Ltd. (518.10, -3.90%), Bombay Burmah Trading Corporation Ltd. (892.15, -3.09%) and Dr. Reddy's Laboratories Ltd. (4,225.10, -2.10%).

Bajaj Holdings & Investment Ltd. (5,531.00, 1.83%) was trading at 11.9 times of weekly average. Dhanuka Agritech Ltd. (711.00, 1.56%) and Infibeam Avenues Ltd. (15.80, 4.98%) were trading with volumes 6.7 and 6.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

18 stocks hit their 52-week highs,

Stocks touching their year highs included - Adani Power Ltd. (399.45, 4.99%), Adani Transmission Ltd. (3,599.55, 0.05%) and Apollo Tyres Ltd. (266.50, 2.50%).

16 stocks climbed above their 200 day SMA including India Cements Ltd. (204.00, 5.26%) and Bharat Heavy Electricals Ltd. (56.20, 4.56%). 5 stocks slipped below their 200 SMA including TTK Prestige Ltd. (895.75, -1.41%) and Grasim Industries Ltd. (1,613.75, -0.17%).

 
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The Baseline
17 Aug 2022
Chart of the week: Largest upcoming IPOs in 2022
By Abdullah Shah

As markets rise, many companies are lining up with IPOs to raise funds. One of the largest upcoming IPOs is EbixCash, with a fresh issue of shares up to Rs 6,000 crore. The company is a digital product and services  provider in the payments, travel and financial technologies space. 

The next largest IPO on the anvil, for which draft papers have been filed with SEBI, is Flipkart founder Sachin Bansal’s fintech firm Navi Technologies. This too is a fresh issue of shares of up to Rs 3,350 crore. Navi provides a gamut of financial services including loans, insurance and mutual funds. 

The third largest upcoming IPO, with draft prospectus pending approval with SEBI, is of mutual fund registrar and transfer agent KFin Tech. This Rs 2,400 crore IPO is entirely an offer for sale by private equity firm General Atlantic.

Then we have Imagine Marketing (BOAT), Hemani Industries and Allied Blenders & Distillers with an issue size of Rs 2,000 crore each. The IPOs are a combination of fresh issue of shares and offers for sale by the company promoters.

BOAT is a digital-first consumer products company and one of the largest Indian digital-first brands in terms of revenue in FY21. Hemani Industries is an agrochemical and speciality chemical maker with products used in crop and wood protection, as well as veterinary, household and public health applications.

Another upcoming IPO is PayMate India, which is a fresh issue of shares and an offer for sale worth up to Rs 1,500 crore. It is a B2B  payments  and  services  provider  that digitizes and  automates payments in supply chains.

As the stock markets in India stabilize after the volatility in early FY23, many investors are waiting for these IPOs to hit the street.You can track all IPOs on our IPO dashboard.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 Aug 2022
Market closes higher, Edelweiss keeps ‘Buy’ rating on KNR Construction

Trendlyne Analysis

Nifty 50rose close to 120 points and closed in the green for a seventh straight session. European stocks traded lower than Tuesday’s levels as UK consumer price index or CPI print topped analysts' expectations and rose 10.1% in July due to high food and energy prices.

Major Asian indices closed higher, tracking the US indices which mostly closed in the green on Tuesday. US stocks rose on the back of stronger than expected retail earnings and outlooks from Walmart and Home Depot. The Dow Jones rose 0.7% while the S&P 500 closed 0.2% higher. However, the tech-focused index, NASDAQ 100, closed in the red as investors await the release of the Federal Reserve's July meeting minutes later today. Brent crude oil futures hovered around its six-month low as Iran responds to the EU’s draft text to restore the 2015 nuclear deal, which could increase the crude oil supply by over two million barrels per day in the long run.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Media and Nifty Energy closed higher than Tuesday’s levels. Nifty IT closed in the green, despite the NASDAQ 100 closing 0.2% lower on Tuesday.

Nifty 50closed at 17,944.25 (119, 0.7%), BSE Sensexclosed at 60,260.13 (417.9, 0.7%) while the broader Nifty 500closed at 15,379.05 (98.6, 0.6%)

Market breadth is in the green. Of the 1,904 stocks traded today, 1,121 were on the uptrend, and 729 went down.

  • Cholamandalam Financial Holdings, Max Healthcare Institute, GlaxoSmithKline Pharmaceuticals, and IFB Industriesare trading with higher volumesas compared to Tuesday.

  • L&T Technology Servicessees a long build-up in its August 25 futures series as its open interest rises 9.9% with a put-call ratio of 0.75.

  • Stocks like Adani Enterprises, Tata Chemicals, Tata Elxsi, Bajaj Finserv, and Adani Total Gasare in the overbought zone, according to the technical indicator relative strength index or RSI.

  • Lakshmi Machine Works and Devyani International hit their all-time highs of Rs 11,907 and Rs 211.8, respectively. Devyani International rises for three sessions, while Lakshmi Machine Works trades higher for six consecutive days

  • RateGain Travel Technologies is rising as Air India selects the company’s AirGain product to adjust prices with real-time and high-quality airfare data. The company says its product will aid Air India's competitiveness with accurate real-time pricing.

  • Syrma SGS Technology’s Rs 840 crore IPO gets bids for 2.3X of the available 2.9 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 2.7X of the available 1.4 crore shares on offer.

  • Brokerage CLSA maintains its ratings on Tata Steel (‘Underperform’), JSW Steel (‘Sell’), and Jindal Steel & Power (‘Outperform’). It says steel stocks are outperforming the Nifty 50 in the past month, due to declining coking coal prices.

  • Edelweiss maintains its ‘Buy’ rating on KNR Construction with a target price of Rs 338, indicating an upside of 30%. The brokerage continues to have a positive outlook on the company’s prospects given its debt-free balance sheet, healthy order book and strong execution track record. It expects the company’s revenue to grow at a CAGR of 19% over FY22-24.

  • Aarti Drugsis trading with more than 29 times its weekly average trading volume. Edelweiss Financial Services, CESC, Happiest Minds Technologies, and Century Textiles & Industriesare trading at more than five times their weekly average trading volumes.

  • Computer Hardware, Edible Oils, and Data Processing Services industries rise by more than 3% in trade today.

  • Textile stocks like Trident, Welspun India and Gokaldas Exports are rising in trade as Home Depot and Walmart post strong earnings. Welspun India and Gokaldas Exports are suppliers to Walmart and most of their revenues come from exports.

  • Axis Direct maintains its ‘Buy’ rating on Endurance Technologies with a target price of Rs 1,660, indicating an upside of 17%. The brokerage remains positive on the company’s prospects given its new order wins, increasing content per vehicle, and focus on electric vehicle-related products. It expects the company’s net profit to grow at a CAGR of 37% over FY22-24.

  • Bharti Airtel rises as it pays four years of spectrum dues in advance, worth Rs 8,312.4 crore to the Department of Telecom. These dues are a part of the 5G spectrum acquired recently by the company.

  • Media stocks like Zee Entertainment Enterprises, Saregama India, Network 18 Media & Investments and TV18 Broadcast are rising in trade. The broader sectoral index Nifty Media is also trading in the green.

  • NTPC is rising as reports suggest the company is approaching energy companies and infrastructure investment funds to raise funds for its clean energy platform. The company plans to move all its renewable energy assets into a special purpose vehicle and raise funds through a stake sale.

  • Indoco Remedies is set to acquire a 26% stake in Kanakal Wind Energy for a cash consideration of Rs 86.4 crore. The company plans to set up a solar power plant in Maharashtra's Solapur district through this acquisition.

  • Aarti Drugs surges in trade after the Directorate General of Trade Remedies (DGTR) recommends continuing the anti-dumping duty on ofloxacin imports from China. Aarti Drugs is a manufacturer of ofloxacin and had filed an application for anti-dumping duty earlier.

  • Bajaj Electricals elevates Anuj Poddar to the post of Managing Director and CEO from the position of Executive Director. This comes after the company decides to separate the posts of Chairman and Managing Director. Shekhar Bajaj will continue to serve as Executive Chairman of the company.

  • Meridian Chem Bond buys 5.3 lakh shares (0.7% stake) in Gujarat Alkalies & Chemicals for Rs 44.5 crore in a bulk deal on Tuesday.

  • Techno Electric & Engineering receives orders worth Rs 1,455 crore from Rajasthan Rajya Vidyut Utpadan Nigam for FGD (flue-gas desulfurization) projects.

  • Promoter Abrdn Investment Management sells 1.1 crore shares (5.5% stake) in HDFC AMC in a bulk deal on Tuesday. The transaction is worth Rs 2,303.3 crore.

Riding High:

Largecap and midcap gainers today include Zee Entertainment Enterprises Ltd. (252.30, 6.10%), Bajaj Finserv Ltd. (16,840.30, 5.81%) and Adani Power Ltd. (380.45, 5.00%).

Downers:

Largecap and midcap losers today include Sona BLW Precision Forgings Ltd. (539.10, -5.48%), Endurance Technologies Ltd. (1,424.25, -2.87%) and Hindustan Zinc Ltd. (285.60, -2.59%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Aarti Drugs Ltd. (469.65, 10.99%), Happiest Minds Technologies Ltd. (1,107.60, 10.75%) and Hikal Ltd. (322.35, 9.22%).

Top high volume losers on BSE were Sona BLW Precision Forgings Ltd. (539.10, -5.48%) and Ajanta Pharma Ltd. (1,274.50, -0.16%).

Edelweiss Financial Services Ltd. (62.20, 8.46%) was trading at 12.1 times of weekly average. Latent View Analytics Ltd. (377.10, 4.65%) and CESC Ltd. (80.60, 1.96%) were trading with volumes 7.2 and 6.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

29 stocks hit their 52-week highs,

Stocks touching their year highs included - Adani Power Ltd. (380.45, 5.00%), Adani Transmission Ltd. (3,597.65, 0.45%) and Apollo Tyres Ltd. (260.00, 3.94%).

28 stocks climbed above their 200 day SMA including Aarti Drugs Ltd. (469.65, 10.99%) and Happiest Minds Technologies Ltd. (1,107.60, 10.75%). 3 stocks slipped below their 200 SMA including Endurance Technologies Ltd. (1,424.25, -2.87%) and Petronet LNG Ltd. (215.75, -0.94%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
16 Aug 2022
Market closes higher, India’s WPI inflation falls to 13.93% in July

Trendlyne Analysis

Indian indices closed in the green with the volatility index, India VIX, rising close to 18%. The Nifty 50 rose for a sixth straight day and closed above the 17,800 mark. India’s Wholesale Price Index or WPI inflation fell to 13.93% in July compared to 15.18% in June. European indices followed the global trend and traded higher than Monday’s levels. Most major Asian indices closed higher as China lowered key lending rates to boost its slowing economic growth amid repeated Covid-19 lockdowns following its 'zero Covid' policy. US stocks closed in the green on Monday, led by the tech-heavy index, NASDAQ 100, which closed 0.8% higher. The Dow Jones rose 0.5% while the S&P 500 closed 0.4% higher. Brent crude oil futures traded higher after falling over 4.5% on Monday amid demand concerns.

Nifty Smallcap 100 and Nifty Next 50 closed in the green, following the benchmark index. Nifty Bank and Nifty Energy closed higher than Friday’s levels. Nifty IT closed flat after opening higher, despite the NASDAQ 100 closing in the green on Monday.

Nifty 50closed at 17,825.25 (127.1, 0.7%), BSE Sensexclosed at 59,842.21 (379.4, 0.6%) while the broader Nifty 500closed at 15,280.50 (140.0, 0.9%)

Market breadth is in the green. Of the 1,930 stocks traded today, 1,071 were in the positive territory and 791 were negative.

  • KEC International, Cyient, Ajanta Pharma, and Aditya Birla Sun Life AMCare trading with higher volumesas compared to Friday.

  • Apollo Tyres sees a long build-up in its August 25 futures series as its open interest rises 19.3% with a put-call ratio of 0.87.

  • KR Choksey reiterates its 'Buy' rating on Zydus Lifesciences with a target price of Rs 445, indicating an upside of 15%. The brokerage is positive on the company due to a likely improvement in the company's India business sales and a keen focus on achieving EBITDA margins of around 20.0% in FY23. It estimates the company's revenue to grow at a CAGR of 7.2% over FY22-24.

  • Mahindra & Mahindra is rising after signing a term sheet with Volkswagen Group. According to the agreement, Volkswagen will supply modular electric drive matrix or MEB electric components for Mahindra & Mahindra’s new electric sports utility vehicles.

  • JK Paper and Home First Finance hit their all-time highs of Rs 447.2 and Rs 1,004.6, respectively. JK Paper rises for two sessions, while Home First Finance trades higher for five consecutive days.

  • Auto stocks like Escorts Kubota, Bosch, Maruti Suzuki India, Eicher Motors, and MRF are rising in trade. The broader sectoral index Nifty Auto is also trading in the green.

  • Syrma SGS Technology’s Rs 840-crore IPO gets bids for 92% of the available 2.9 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 1.5X of the available 1.4 crore shares on offer.

  • ICICI Direct maintains its ‘Buy’ rating on Info Edge with a target price of Rs 5,230, indicating an upside of 18%. The brokerage believes the company is well-placed to benefit from the improving hiring trend in the IT and healthcare sectors. Also, it expects the company’s revenue to grow on the rising demand for housing. It estimates the company revenue to grow at a CAGR of 20.2% over FY22-24.

  • Max Healthcare Institute is trading with more than 18 times its weekly average trading volume. Honeywell Automation India, UTI Asset Management Company, HDFC Asset Management Company, and Apollo Tyres are trading at more than nine times their weekly average trading volumes.

  • India’s Wholesale Price Index (WPI) inflation falls to 13.93% in July compared to 15.18% in June. This comes after the consumer price index (CPI) inflation slowed to 6.71% in July against 7.56% in June.

  • Zee Entertainment Enterprises is falling as its Q1FY23 net profit drops 50% YoY to Rs 106.1 crore. Rise in advertisement revenue aids total revenue to grow 3.9% despite a fall in subscription revenue. The stock features in the screener with high promoter stock pledges.

  • Samvardhana Motherson International rises after its board of directors approves a bonus issue of shares. The ratio of bonus issue will be, one bonus equity share against two existing equity shares, subject to the approval of the shareholders.

  • Rakesh Jhunjhunwala-owned stocks like Aptech, Tata Communications, Federal Bank, National Aluminium Co, and Metro Brands are falling in trade today. The big bull was a promoter in Aptech.

  • Life Insurance Corp of India is rising as its net profit jumps more than 24X YoY to Rs 602.8 crore. Profit growth is driven by the non-participating segment. The company’s market share of policies rises 412 bps YoY. The company has a high Trendlyne Checklist score of 58.3%.

  • Muthoot Finance is falling as its Q1FY23 net profit declines 16.8% YoY to Rs 819.2 crore. A fall of 6.9% YoY in interest income caused a decline in net profit. ICICI Direct downgrades Muthoot Finance to a 'Hold' rating from 'Buy'.

  • Adani Ports is rising as its arm Adani Logistics acquires Navkar Corporation’s inland container depot situated in Tumb, at Vapi in Gujarat for a lumpsum consideration of Rs 835 crore.

  • American equity firm KKR is to sell its entire 26% stake in Max Healthcare for Rs 9,416 crore today, according to reports.

  • Promoter Shakuntala Agarwal sells 50 lakh shares worth Rs 314.3 crore in AU Small Finance Bank in an insider trade on Friday. She now holds a 2.8% stake in the bank post the transaction. In another insider trade, promoter group firm MYS Holdings sells 25 lakh shares worth Rs 156.3 crore in the bank.

  • Oil and Natural Gas Corp is falling despite its profit surging 99.4% YoY to Rs 11,936.6 crore and revenue growing 69.1% YoY. Profit jumps on the back of elevated oil and gas prices. The company shows up on a screener with companies in which mutual funds increased their holdings in the past month.

  • KEC International secures new orders worth Rs 1,313 crore across its various business segments like railway, civil, cables, and oil and gas pipeline. The order also includes a transmission and distribution project secured in India, the Middle East and the US.

  • Hero MotoCorp’s Q1FY23 net profit rises 2.3X YoY to Rs 590 crore on account of higher volumes. Its revenue is up 53.5% YoY. Despite the supply chain disruptions and ongoing geo-political issues, the company’s EBITDA margin grew 180 bps YoY.

Riding High:

Largecap and midcap gainers today include HDFC Asset Management Company Ltd. (2,181.35, 11.49%), Max Healthcare Institute Ltd. (396.85, 9.66%) and Hindustan Zinc Ltd. (293.20, 7.12%).

Downers:

Largecap and midcap losers today include Muthoot Finance Ltd. (1,040.10, -12.41%), Grasim Industries Ltd. (1,591.55, -1.91%) and Hindalco Industries Ltd. (428.90, -1.68%).

Movers and Shakers

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

Top high volume gainers on BSE included Indiabulls Real Estate Ltd. (78.40, 15.89%), UTI Asset Management Company Ltd. (862.85, 15.08%) and HDFC Asset Management Company Ltd. (2,181.35, 11.49%).

Top high volume losers on BSE were Muthoot Finance Ltd. (1,040.10, -12.41%), IFB Industries Ltd. (1,012.35, -2.22%) and Zee Entertainment Enterprises Ltd. (237.80, -1.65%).

Max Healthcare Institute Ltd. (396.85, 9.66%) was trading at 25.0 times of weekly average. Honeywell Automation India Ltd. (42,503.35, 6.55%) and Apollo Tyres Ltd. (250.15, 5.95%) were trading with volumes 21.6 and 11.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

32 stocks hit their 52-week highs,

Stocks touching their year highs included - Adani Power Ltd. (362.35, 4.98%), Adani Transmission Ltd. (3,581.60, 1.30%) and Apollo Tyres Ltd. (250.15, 5.95%).

22 stocks climbed above their 200 day SMA including UTI Asset Management Company Ltd. (862.85, 15.08%) and HDFC Asset Management Company Ltd. (2,181.35, 11.49%). 6 stocks slipped below their 200 SMA including Grasim Industries Ltd. (1,591.55, -1.91%) and Alkyl Amines Chemicals Ltd. (3,045.40, -1.09%).

 
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The Baseline
16 Aug 2022
Five Analyst Picks with a Buy Consensus Recommendation

This week, we look at picks from analysts that also have high consensus recommendations and a high upside to their target price. 

  1. Indraprastha Gas: Brokerage Prabhudas Lilladher reiterates its ‘Buy’ call on this city gas distributor with a target price of Rs 576, indicating an upside of 32.3%. In Q1FY23, the company’s net profit rose  73.1% YoY to Rs 481.2 crore, and revenue by 128.6% to Rs 3,224.6 crore. Analyst Avishek Datta says, “Indraprastha Gas’ volumes improved at 8.0 million standard cubic metres as economic activity picked up.” He added that the company, “remains an enviable business model with high volume growth due to geographical expansion and the addition of new buses and taxis.” But Datta is cautious as rising natural gas prices still remain a concern. 

This city gas distributor’s stock also has a consensus recommendation of Buy according to Trendlyne’s Forecaster. Out of 28 analysts, 19 have a ‘Strong Buy’ recommendation on the stock, five have a ‘Buy’ rating, two have a ‘Hold’, and two have ‘Sell’ recommendations on the stock. 

  1. State Bank of India: KR Choksey maintains its ‘Buy’ call on this bank’s stock with a target price of Rs 680. This indicates an upside of 28.9%. Analyst Priyanka Baliga says, “State Bank of India will continue to see strong traction on the credit growth front, led by improvement of the corporate capex cycle and robust momentum in retail, especially home loans and Xpress credit segment.” 

In Q1FY23, the bank reported a 0.7% fall in its net profit to Rs 7,325.1 crore while revenue rose 1.4% to Rs 94,524.3 crore. Net interest income was up 12.9% YoY to Rs 31,195.9 croreand net interest margin or NIMs came in at 3.23% in Q1FY23 against 3.15% in Q1FY22. The analyst Baliga adds that “the bank is better placed than its PSU peers to manage the uncertainties, given its size & leadership in the banking system.” 

The bank’s stock also has a consensus recommendation of a Strong Buy from analysts, according to Trendlyne’s Forecaster. Out of 39 analysts, 33 analysts have a ‘Strong Buy’ recommendation, five have a ‘Buy’, and one has a ‘Hold’ recommendation. 

  1. Birla Corp: HDFC Securities maintains a ‘Buy’ call on the cement company with a target price of Rs 1,337. This indicates an upside of 37.5%. In Q1FY23, the company’s profit fell 56.2% YoY to Rs 61.9 crore despite a 26.1% rise in revenue to Rs 2,218.1 crore. Analyst Rajesh Ravi and Keshav Lahoti expect EBITDA to fall in FY23 due to operating losses amid the completion of the Mukutban plant. “We expect ramp-up from this plant and slower capex in the medium term to moderate gearing over the next two years,” the analysts said. They are positive on Birla Corp due to its large retail presence in the “lucrative” north and central regions, apart from various cost-cutting initiatives. 

The cement company’s stock also has a consensus recommendation of a Strong Buy, according to Trendlyne’s Forecaster. Out of the 14 calls by analysts, 12 have a ‘Strong Buy’ recommendation and two have a ‘Hold’ recommendation. 

  1. Bharti Airtel: Axis Securities maintains its ‘Buy’ rating on the telecom company with a target price of Rs 900. This indicates an upside of 27.7%. The company’s Q1FY23 net profit is up 5.7X YoY to Rs 1,606.9 crore and while revenue rose 22.2% YoY to Rs 32,804.6 crore. 

The analyst Omkar Tanksale attributes this growth in profit to “the company’s efficient execution, superior customer mix, and strong customer additions in 4G”. Revenue growth was led by the enterprise and home business segments, he added. He believes the company’s EBITDA margins will expand in the near term due to its efficient execution capabilities. Overall, he remains positive on the company’s prospects due to its superior margins, strong subscriber growth, and higher 4G conversions. The analyst expects the company’s profit to grow at a CAGR of 103.2% over FY22-24.

Bharti Aitel has a consensus recommendation of a ‘Strong Buy’, according to Trendlyne’s Forecaster. Out of 33 analysts, 25 have a ‘Strong Buy’ recommendation on the stock while six have a ‘Buy’ rating, one has a ‘Hold’, with one ‘Sell’ recommendation on the stock.

  1. Indian Hotels: ICICI Securities maintains its ‘Buy’ rating on this hotel chain with a target price of Rs 332. This indicates an upside of 20.7%. The company’s Q1FY23 revenue of Rs 1,266.1 crore beat the brokerage’s revenue estimates by 9%. The analyst Adhidev Chattopadhyay says this growth was “driven by stronger than expected average room rates across its hotels in India''. This also led to the company’s EBITDA (Rs 380 crore) to beat the brokerage’s estimates by 20%.

The analyst is positive on the company’s prospects as the management expects demand momentum to grow in the coming quarters. He has raised his revenue estimates for FY23 by 11%, and by 7% for both FY24 and FY25. Chattopadhyay believes the hotel chain will benefit from rising demand given its pricing power across its brands. He expects the company’s revenue to grow at a CAGR of 43.1% over FY22-25.

This hotel chain also has a consensus recommendation of a ‘Strong Buy’, according to Trendlyne’s Forecaster. Out of 13 analysts, 10 have a ‘Strong Buy’ recommendation on the stock while one has a ‘Buy’ rating, one a ‘Hold’, with one ‘Sell’ recommendation on the stock. 

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

 
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The Baseline
13 Aug 2022
The Big Fight: Contest between ICICI Bank and HDFC Bank | 11 profitable stocks outperforming the Nifty500
By Deeksha Janiani

India turns 75 on Monday. Our generation has been especially lucky, living in a free country and post 1991 liberalization. This week in Analyticks, we do a special face-off between India's top two private banks, who have been pivotal in fuelling the nation's financial growth since 1991. 

  • ICICI Bank has gained on HDFC Bank since FY20. Can the leader get back its momentum?
  • Screener:  11 profitable stocks that are outperforming the Nifty 500 index

Let’s get into it.

ICICI Bank has outperformed HDFC Bank in the last two years

The pandemic caused a tectonic shift in the banking space, especially with customer behavior. A typical savings account holder downloaded the banking app, rather than risk a visit to a crowded bank. For many customers, this was the first time they were doing this.

In the process, they discovered convenience: no searching for their passbook, or waiting in queues, or trying to talk through bulletproof glass to a bank teller. Best of all, their applications got processed much faster.  

Banking customers now increasingly prefer a digital app to meet their regular banking needs, rather than making a branch visit. With this big shift, the growth trajectory of the top two private banks changed. 

ICICI Bank lagged HDFC Bank in terms of topline and bottomline growth between FY16 and FY20. This was owing to the turbulent years of 2016-2018, when the former was caught in a cobweb of rising non-performing loans and misgovernance. Meanwhile, HDFC Bank was like the Rahul Dravid of this space, thanks to its growth consistency during the period.

Cut to the present, and ICICI Bank has found its inner Tendulkar. It has overtaken HDFC Bank in terms of growth pace in the last 8-9 quarters. 

ICICI Bank jumps post-Covid

ICICI Bank’s net interest income (NII) grew at a compounded quarterly growth rate of 4.5% between Q1FY21 and Q1FY23. This was driven by the growth in retail advances as well as SME and business banking loans. 

While the bank’s advances in these segments witnessed 20%+ growth CAGR in this period, other segments were also not far behind. Basically, ICICI Bank’s strategy of ‘One Bank, One ROE’ which focuses on tapping growth opportunities across products worked well in these two years. 

HDFC Bank’s NII growth lagged that of ICICI Bank between Q1FY21 and Q1FY23. This was owing to the slow rise in its retail advances. Sluggishness in auto and credit cards loans hurt growth in retail.

RBI had also barred HDFC Bank from fresh issues of credit cards and new digital initiatives between December 2020 and March 2022. This hit customer acquisition for the bank - and the news headlines covering the RBI ban didn’t help. It was a virtual advertisement to banking customers to go to the competition.

If we compare the NII growth of the top five private banks, ICICI Bank and Axis Bank stand out in terms of sequential and YoY growth in Q1FY23. HDFC Bank’s NII grew the slowest among other private banks. 

A higher share of retail loans, especially mortgages also led to a steady improvement in ICICI Bank’s net interest margins in the past nine quarters. 

If we look at ICICI Bank's loan portfolio, mortgages as well as the SME and business banking segments stand out. The bank’s cross-selling initiatives and its digital offering InstaBIZ aided the growth in SME and business banking loans. Infact, the InstaBIZ application saw an over 55% YoY rise in the value of transactions processed through it in Q1FY23 as the bank made this platform interoperable. 

HDFC Bank sees weaker growth, but has the lowest NPAs

For HDFC Bank, the rural banking and commercial segment grew in prominence between Q1FY21 and Q1FY23. Meanwhile, the corporate segment share reduced in its portfolio, as India Inc made its balance sheet leaner during this period. According to the management, HDFC Bank also lost Rs 40,000 - 50,000 crore worth of corporate business in Q1FY23 by deciding not to lend at lower interest rates.

HDFC bank continues to be the clear winner in terms of its asset quality. The bank had the lowest net non-performing asset ratio both in Q1FY21 and in Q1FY23, among others. A lower proportion of riskier retail loans definitely helped the bank here. 

Game on: HDFC Bank is investing in digital, ICICI Bank to benefit from rate hikes

HDFC Bank now has some serious catching up to do. Its first point of action is to increase the share of high-margin retail advances to 55% from its current 40%. When it does merge with HDFC, mortgage loans will automatically occupy a higher portion in the loans pie, helping the bank achieve its target loan mix. 

A lot is happening in Q2FY23 under the bank's new CEO Sashi Jagdishan. HDFC Bank is launching ‘PayZapp 2.0’, an advanced version of its payment app, which will enable the bank to tap the retail customer base. It launched the ‘Xpress Car Loans’ app in April 2022 to improve the digital experience for customers seeking auto finance. Jagdishan hopes to transform it into a Neo bank or a virtual bank backed by such products. 

HDFC Bank is also deepening its rural footprint and expanding its network coverage to two lakh villages, from one lakh currently. It sees potential in this region as banking penetration remains low at 20-25%. On an overall level, the bank is looking to double its network by adding 1,500-2,000 branches every year from FY23 till FY28.

ICICI Bank, which is already riding high on growth, will see a positive change in its NIMs with RBI hiking repo rates by 140 bps from May 2022. Nearly 70% of its loans are linked to external benchmarks and its credit costs remain benign. ICICI Bank is also seeing good credit demand in the retail segment, but sounded some caution for quarters ahead given the interest rate rise. 

All in all, the dynamics within the sector may change again in next 3-5 years as HDFC Bank works to reclaim its top spot in terms of growth. It has an ambitious target of doubling its balance sheet size on a merged basis in this period. The Rahul Dravid of the banking space is firmly set on the pitch after some yorkers, and is now hoping for a successful innings.  

Screener:Stocks with positive profit growth, outperforming the Nifty 500 index

As most of the results for Q1FY23 are out, we take a look at companies whose net profits consistently grew in the past four quarters, have low debt and outperformed theNifty 500 index in the past month.

This screener reflects 11 Nifty 500 stocks that qualify. Notable ones among these are Hindalco Industries, Tata Elxsi, Schaeffler India, L&T Technology Services and IDFC First Bank.

IDFC First Bank clocked a net profit of Rs 485 crore in Q1FY23 as against a loss in Q1FY22 on lower provisions and higher NII. This banking stock outperformed the index by over 24 percentage points in past month. 

Hindalco Industries comes in next with a 2X rise in its net profits in Q1FY23, led by healthy sales realizations. It recorded consistent net profit growth in the past four quarters and outperformed the Nifty 500 by over 14 percentage points. 

Meanwhile, Tata Elxsi’s net profit grew by over 60% YoY in Q1FY23 on robust demand from foreign automotive OEMs. Despite its pricey valuations, the stock has outperformed the index by 10 percentage points in past month. 

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

 
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The Baseline
12 Aug 2022
Five Interesting Stocks Today
  1. IRB Infrastructure Developers: This road construction company’s stock rose 6.6% on Monday after announcing its Q1FY23 results. Its net profit jumped more than 5X YoY to Rs 363.2 crore and revenue rose 18.4% YoY. Higher traffic volume and a tariff hike of 10% led to robust growth in toll collections, which aided profit growth. However, the company’s profit was mainly boosted by an arbitration award of Rs 419 crore it received from the National Highways Authority of India. It received 75% (Rs 308 crore) of the compensation but recognised the entire amount as revenue in Q1FY23. This helped the company beat Trendlyne Forecaster’s revenue and profit estimates by 22% and 107.7%, respectively. According to the management, the arbitration award had a net impact of Rs 270 crore on the net profit. The boost in revenue by the arbitration award, and the resultant surge in profit, also helped the company to make it into this screener that lists companies with sequentially rising profits for the past three quarters.

The board of directors approved the transfer of the Vadodara Kim expressway project to the IRB InvIT Fund (trust) for a consideration of Rs 342 crore. This transaction will reduce IRB Infra’s debt by Rs 955 crore. Even though there was no new order wins the management sees healthy revenue visibility for the next three financial years.

  1. Hindustan Aeronautics (HAL): This aerospace company’s stock rose 8.1% and touched its 52-week high on Monday. This comes on the back of a strong business outlook given recent deal wins, according to reports. The stock is up 29.7% over the past month. The stock reacted positively to reports suggesting that the company is working on the development of AI-driven advanced multi-role drones for use in high-altitude areas. The company plans to conduct flying tests in the middle of next year and produce 60 drones in the first phase of the project. In July, the company also signed a contract worth $100 million with Honeywell for the supply and manufacture of 88 engines for the Hindustan Trainer Aircraft. The company shows up on a screener with improving cash flows and a good durability score.

According to the company’s annual report, its order book stood at Rs 82,000 crore at the end of FY22. The management expects a rise in orders as the Centre’s defence budget increased by 9.8% YoY for FY23. The company also plans to foray into civil aviation for both manufacturing and maintenance, repair, and overhaul, or (MRO) opportunities going forward.

  1. Zensar Technologies: This IT services company’s stock fell 7.3% on Monday and hit a 52-week low post its Q1FY23 results. This is despite Zensar Technologies’ revenue rising sequentially for the past five quarters till Q1FY23. Investors were left disappointed due to the 300 bps QoQ fall in its EBITDA margin to 11.2%, in addition to the 43% QoQ fall in net profit fall in Q1. An increase in the cost of delivery, and lower utilisation hurt the company’s EBITDA margin even without wage hikes in Q1. Add to this the 28% attrition (up 20 bps QoQ), and its clearer why investors might be fretting.

With all these factors at play, the management’s original guidance to reach an EBITDA margin in the mid-teens in FY23 was pushed forward to Q2FY24. This probably led to the sharp sell-off on Monday. This stock features in a screener that lists stocks that are near the oversold zone according to the relative strength index, or RSI.

However, brokerages like HDFC Securities and ICICI Securities maintain a positive outlook on the company on the back of strong revenue growth across all verticals. While HDFC Securities’ target price indicates a 36% upside, ICICI Securities’ indicates an upside of about 20%. However, the macroeconomic slowdown in the US (71% of total revenue) may lead to slow top-line growth.

  1. Delhivery: This logistics company’s stock was trading up from June 27 - July 24 until it started falling and slumped 6.6% on Wednesday after it reported a widening in its net loss to Rs 399 crore in Q1FY23 compared to Rs 129.5 crore in Q1FY22. The stock has seen choppy waters since it listed on May 24, falling 2% on listing day. But this coincided with weakness in the broader market as foreign investors were selling Indian shares, which brought the Nifty 50 to 16,000 levels.

After that, the stock rose in June and July, till the company announced its Q1FY23 results. The management attributed the widening loss to integration issues with Spoton (which it acquired in August 2021). The third phase of integration took longer than expected. Going forward, the management says the company is well-capitalized to carry out its expansion plans. But analysts aren’t enthused as ICICI Securities downgraded the stock to a ‘Sell’ from ‘Hold’. It believes that Delhivery will not be able to 'deliver' in the cross-border freight and parcel industry anytime soon, given the competition from Chinese players.

  1. JSW Energy: This power company’s stock rose 3% on Wednesday after it announced that its renewable energy arm, JSW Neo Energy, will buy Mytrah Energy’s 1.75 GW renewable portfolio. JSW Neo will pay Rs 10,531 crore to buy these solar and wind power assets. This sent JSW Energy’s stock higher by 3% on Wednesday, but the stock gave up some of these gains on Thursday.

This acquisition will help JSW Neo Energy to achieve its goal to have a power generation capacity of 10 GW by 2025, up from 4.8 GW currently. Moreover, once the company completes its under-construction project of 2.5 GW by June 2023, 65% of its generation capacity will be renewable power.

Mytrah Energy was on the lookout for buyers for its renewable assets since 2021 due to working capital concerns. In fact, around 205 MW of its capacity is not in operation due to pending dues from power distribution companies in Telangana and Andhra Pradesh. JSW Energy will also take over a considerable portion of debt of this company i.e., Rs 9,132 crore. Its net debt rose 11% QoQ to Rs 7,720 crore in Q1FY23. Moreover, management is most likely to fund a large part of the deal value through debt, according to reports. Hence, its net debt-to-EBITDA ratio is set to rise to 4X from 1.75X currently, after the acquisition is completed. Understandably, the market is on a wait and watch mode on this highly leveraged deal.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Aug 2022
Market closes higher, Edelweiss keeps ‘Buy’ rating on Max Healthcare Institute

Trendlyne Analysis

Nifty 50 closed higher, with the Indian volatility index, India VIX, falling below 18%. European stocks traded higher than Thursday’s levels. UK’s GDP contracts 0.1% in Q2CY22 against a 0.8% expansion in Q1CY22. However, the 0.1% fall in Q2 is less than the estimated 0.3% contraction. Major Asian indices closed mixed, tracking the US indices, which closed mixed on Thursday. US stocks lost their gains and closed mixed as investors remain uncertain of the pace of federal funds rate hike by the US Federal Reserve. Investors look ahead to the domestic consumer price index or CPI print to be released later today. Brent crude oil futures traded marginally lower after rising over 2% on Thursday.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher, following the benchmark index. Nifty Realty and Nifty Energy closed higher than Thursday’s levels. Nifty IT closed in the red, taking cues from the tech-heavy index, NASDAQ 100, which closed 0.7% lower on Thursday.

Nifty 50closed at 17,698.15 (39.2, 0.2%), BSE Sensexclosed at 59,462.78 (130.2, 0.2%) while the broader Nifty 500closed at 15,140.55 (45.4, 0.3%)

Market breadth is even. Of the 1,895 stocks traded today, 928 were on the uptick, and 905 were down.

  • Pfizer, EPL, GlaxoSmithKline Pharmaceuticals, and PNB Housing Financeare trading with higher volumes as compared to Thursday.

  • Indraprastha Gas sees a long build-up in its August 25 future series as its open interest rises 13% with a put-call ratio of 0.95.

  • Grasim Industries is rising as its net profit increases 16% YoY to Rs 1,933.4 crore despite elevated raw material costs, and power & fuel expenses. Revenue growth of 40.8% YoY led by the cement and textile businesses. The company shows up on the screener which lists companies with zero promoter pledges.

  • Stocks like Adani Enterprises, Tata Chemicals, IDFC First Bank, and Bajaj Finservare in the overbought zone, according to the technical indicator relative strength index or RSI.

  • KR Choksey reiterates its 'Buy' rating on Reliance Industries with a target price of Rs 2,985, indicating an upside of 15.2%. The brokerage believes that retail and Reliance Jio will continue to see higher margins due to improved revenue mix, operating leverage and increased customer engagement. It estimates the company's revenue and EBITDA to grow at a CAGR of 13.4% and 15.6%, respectively, over FY22-24.

  • Metal stocks like JSW Steel, Tata Steel, Hindustan Zinc, Hindalco Industries, and Vedanta are rising in trade. The broader sectoral index Nifty Metal is also trading in the green.

  • Syrma SGS Technology’s Rs 840 crore IPO gets bids for 37% of the available 2.9 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 69% of the available 1.4 crore shares on offer.

  • Sunteck Realty is trading flat despite its Q1FY23 net profit growing 8.2X to Rs 24.9 crore. Revenue growth of 54.7% YoY is driven by the mid-income segment. Even though profit rises, the stock shows up in the screener which reflects companies with inefficient use of capital to generate profits as its return on capital employed falls for two consecutive years.

  • Tata Chemicals and Trent hit their all-time highs of Rs 1,160 and Rs 1,388.9, respectively. Both stocks are rising for five consecutive sessions.

  • Edelweiss maintains its ‘Buy’ rating on Max Healthcare Institute with a target price of Rs 470. This indicates an upside of 26%. The brokerage remains positive on the company’s prospects given its robust balance sheet, asset-light expansion plans, and sector-leading average revenue per occupied bed. It expects the company’s net profit to grow at a CAGR of 23.6% over FY22-24.

  • Phoenix Millsis trading with more than seven times its weekly average trading volume. Ipca Laboratories, Mangalore Refinery And Petrochemicals, PNB Housing Finance, and Bharat Forgeare trading at more than five times their weekly average trading volumes.

  • The Society of Indian Automobile Manufacturers’ (SIAM) data reveals that in July two-wheeler sales rise 9.5% YoY to 13.8 lakh units. Passenger car sales were up 10.3% YoY to 1.43 lakh units.

  • Other Leisure Facilities, Oil Equipment & Services, and Other Non-Ferrous Metals industries rise by more than 3% in trade today.

  • Oil and gas stocks like Indraprastha Gas, Gujarat Gas, Oil And Natural Gas Corp, and Hindustan Petroleum Corp, among others, are rising in trade. The broader sectoral index BSE Oil&Gasis also trading in green.

  • Adani Enterprises is rising as it will invest Rs 57,575 crore to set up two projects in the metal sectors of Odisha. The projects include a four million metric tonnes per annum integrated alumina refinery and a thirty million metric tonnes per annum iron ore (value addition) project.

  • Aditya Birla Capital and its arm Aditya Birla Health Insurance approve a proposal from a subsidiary of the Abu Dhabi Investment Authority for a capital infusion of Rs 665 crore in Aditya Birla Health Insurance for a 9.99% stake.

  • One97 Communications (Paytm) is falling as the management anticipates a slight moderation in growth in the coming quarters. It expects the new RBI norms to add operational complexity to the digital lending business. The company’s loan disbursals in July rises 3X YoY to 29 lakhs and the value of loans disbursed jumps 6X YoY.

  • Phoenix Mills is rising as it posts a profit of Rs 718.7 crore in Q1FY23 compared to a loss of Rs 24.3 crore in Q1FY22. Revenue surges 188.2% YoY to Rs 574.4 crore on the back of the hospitality and property segments. The stock has a high Trendlyne checklist score of 82.6%.

  • Aurobindo Pharma’s Q1FY23 net profit declines 32.4% YoY as raw material costs and other expenses increase. Revenue grows 9.4% YoY driven by the US formulations segment. The company shows up on a screener which lists companies where promoters have increased their pledged shares.

  • Syrma SGS Technology raises Rs 252 crore from investors by selling 1.14 crore equity shares for Rs 220 per share. Investors include Nomura, Eastspring investments, Volrado Ventures, Abakkus Emerging Opportunities, Franklin India, IIFL Special Opportunities Fund, and BNP Paribas Arbitrage, among others.

  • Apollo Hospital’s Q1FY23 net profit fell 35% YoY to Rs 317.1 crore because of a deferred tax reversal of Rs 154 crore. Revenue grew marginally by 0.9% YoY with an increase in revenue from healthcare services. However, revenue from clinics and the pharmacy distribution segments fell in Q1. It shows up in the screener of stocks that are showing a consistent share price growth with a 5-year price change of more than 200%.

Riding High:

Largecap and midcap gainers today include Tata Elxsi Ltd. (10,238.05, 7.78%), Bharat Forge Ltd. (790.20, 7.38%) and Zomato Ltd. (61.75, 6.65%).

Downers:

Largecap and midcap losers today include Ipca Laboratories Ltd. (928.05, -8.68%), Divi's Laboratories Ltd. (3,726.20, -5.62%) and One97 Communications Ltd. (787.30, -4.66%).

Volume Shockers

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

Top high volume gainers on BSE included KSB Ltd. (1,712.35, 8.13%), Tata Elxsi Ltd. (10,238.05, 7.78%) and TCNS Clothing Co. Ltd. (644.05, 7.53%).

Top high volume losers on BSE were Ipca Laboratories Ltd. (928.05, -8.68%), Divi's Laboratories Ltd. (3,726.20, -5.62%) and Shriram City Union Finance Ltd. (1,889.40, -5.07%).

Phoenix Mills Ltd. (1,312.35, 3.12%) was trading at 10.1 times of weekly average. Mangalore Refinery And Petrochemicals Ltd. (75.15, 4.59%) and India Cements Ltd. (193.05, 0.63%) were trading with volumes 9.7 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

17 stocks made 52-week highs, while 1 stock was an underachiever and hit its 52-week lows.

Stocks touching their year highs included - Adani Transmission Ltd. (3,535.60, 1.19%), Cummins India Ltd. (1,249.75, 0.98%) and ICICI Bank Ltd. (874.40, 1.71%).

Stock making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (652.50, 0.38%).

25 stocks climbed above their 200 day SMA including Indraprastha Gas Ltd. (430.35, 5.45%) and Greaves Cotton Ltd. (171.65, 3.87%). 14 stocks slipped below their 200 SMA including Ipca Laboratories Ltd. (928.05, -8.68%) and Max Healthcare Institute Ltd. (361.90, -2.70%).