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Trendlyne Marketwatch
Trendlyne Marketwatch
08 Jul 2022
Market closes higher, sugar stocks trade in the green

Trendlyne Analysis

Nifty 50 closed in the green with the volatility index, Nifty VIX, falling below 18.5%. Indian indices are up for three straight sessions. European indices traded mixed as investors look ahead to a speech by European Central Bank's President Christine Lagarde.

Major Asian indices closed in the green, tracking the US indices, which closed sharply higher on Thursday. US stocks rose as investors assess the measures taken by the US Federal Reserve to tackle high inflation without causing a recession. The tech-heavy index, NASDAQ 100 rose 2.2% while the Dow Jones closed 1.1% higher. Brent crude oil futures fell marginally after rising 4.5% on Thursday. Tight crude oil supply due to the geopolitical crisis, and fears of slow economic growth remain the key factors affecting the crude oil price.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Energyand Nifty Pharmaclosed higher than Thursday’s levels. Nifty ITclosed in the green, tracking the NASDAQ 100, which rose 2.2% on Thursday.

Nifty 50closed at 16,220.60 (87.7, 0.5%), BSE Sensexclosed at 54,481.84 (303.4, 0.6%) while the broader Nifty 500closed at 13,828.25 (62.7, 0.5%)

Market breadth is in the green. Of the 1,877 stocks traded today, 968 were gainers and 835 were losers.

  • Brightcom Group, Blue Star, Alkem Laboratories, and Sudarshan Chemical Industriesare trading with higher volumesas compared to Thursday.

  • SRF sees a long build-up in its July 28 future series as its open interest rises 6.6% with put to call ratio of 0.74.

  • Brokerage Jefferies downgrades IT stocks as it expects a US recession to impact their revenues. Its top pick in Infosys among Indian listed IT companies.

  • Stocks like Cummins India, Ceat, Endurance Technologies, and Siemens are in the overbought zone according to the technical indicator relative strength index or RSI.

  • Power stocks like Power Grid, Tata Power, NTPC among others are rising. The broader BSE Power index trades in the green.

  • Dr Reddy's Laboratories gets a form 483 from the US FDA with two observations. The observations pertain to a pre-approval inspection at the company's Srikakulam manufacturing unit.

  • Varun Beverages and Siemenstouch a life high of Rs 849.5 and Rs 2,692.7 respectively. Varun Beverages rises for two consecutive sessions while Siemens rises for three.

  • CLSA expects the risk-reward on Hindalco to be favourable as it believes that the stock’s underperformance is overplayed given the strong earnings of the company, according to reports. Hindalco’s foreign subsidiary Novelis’s performance remains stable even though the growth in the cans segment fell globally. The brokerage sees lower risk here, assuming there is an increase in Novelis’s profitability and volumes. It revises its target price to Rs 525 from Rs 580.

  • Capital goods stocks like Larsen & Toubro, Finolex Cables, Bharat Forge, Suzlon Energy, and ABB India, among others, are rising in trade. The broader sectoral index BSE Cap Goods is also trading in the green.

  • Krishna Institute of Medical Sciences is trading with more than six times its weekly average trading volume. Kalpataru Power Transmissions, Solara Active Pharma Sciences, India Cements and Vaibhav Global are trading at more than five times their weekly average trading volumes.

  • Craftsman Automation rises as the company expects business performance to improve driven by the recovery in offtake from the automobile sector over the medium term, according to the FY22 annual report.

  • Sugar stocks like Shree Renuka Sugars, EID Parry (India), Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, among others, are rising by more than 2% in trade, as the Centre extends the deadline for the export of sugar by two weeks to July 20.

  • ICICI Direct maintains its ‘Buy’ rating on Minda Industries with a target price of Rs 575, indicating an upside of 15%. The brokerage remains positive on the company’s prospects due to rising demand for its products, technology-driven products, and softening raw material prices. It expects the company’s net profit to grow at a CAGR of 41.6% over FY22-24.

  • Equity Mutual Funds' net inflow falls by 16.4% MoM to Rs 15,497.7 crore in June 2022. Industry MFs see the biggest rise in outflows by 827.3% MoM to Rs 69,852.9 crore, led by debt schemes, closed-ended schemes (debt and equity), and hybrid schemes. Equity-oriented open-ended schemes saw an inflow of nearly Rs 15,500 crore.

  • Tata Power to invest Rs 75,000 crore in the next five years to expand its renewable energy generation capacity to 15 GW. In FY23, the company will invest Rs 10,000 crore in renewables, and a total capex of Rs 14,000 crore.

  • Tata Motors’ arm Jaguar Land Rover’s Q1FY23 retail sales fall 37% YoY to 78,825 units and remain flat on a QoQ basis. Sales fall due to the global chip shortage and Covid lockdowns in China despite the order book growing to 2 lakh units this quarter, the company said. Jaguar’s retail sales rise 4% QoQ and fall 48% YoY to 15,207 units. Land Rover sees its retail sales fall 1% QoQ and 33% YoY to 63,618 units, however, the order book indicates a strong demand for its new models this quarter.

  • Indian rupee depreciates 12 paise to 79.25 against the US dollar in early trade today, amid persistent foreign fund outflows.

  • Mahindra & Mahindra (M&M) rises after British International Investment (BII) agrees to invest Rs 1,925 crore in M&M's four-wheeler passenger electric vehicle (EVCo) business. EVCo will be incorporated as a wholly-owned subsidiary of M&M where M&M plans a total capital infusion of Rs 8,000 crore over FY24-27. EVCo is valued at an estimate of Rs 70,070 crore.

  • Vedanta to acquire the debt-ridden company Athena Chattisgarh Power in an all-cash deal worth Rs 564.6 crore. The company went through the bankruptcy court under the Insolvency and Bankruptcy Code and was under liquidation. With this deal, Vedanta will be able to fulfill its power requirement for its aluminium business. The acquisition is likely to be completed in FY23.

Riding High:

Largecap and midcap gainers today include SRF Ltd. (2,175.50, 4.95%), Larsen & Toubro Ltd. (1,687.45, 4.74%) and Tata Motors Limited (DVR) (220.40, 4.38%).

Downers:

Largecap and midcap losers today include FSN E-Commerce Ventures Ltd. (1,393.85, -4.09%), Bandhan Bank Ltd. (271.90, -2.75%) and Ashok Leyland Ltd. (144.10, -2.64%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Uflex Ltd. (634.90, 7.46%), India Cements Ltd. (173.35, 4.93%) and Cyient Ltd. (769.35, 4.75%).

Top high volume losers on BSE were Alembic Pharmaceuticals Ltd. (732.95, -1.51%), Godfrey Phillips India Ltd. (1,070.10, -1.25%) and Krishna Institute of Medical Sciences Ltd. (1,205.00, -1.10%).

Kalpataru Power Transmissions Ltd. (355.50, -0.59%) was trading at 9.0 times of weekly average. Vaibhav Global Ltd. (304.70, -1.01%) and Prism Johnson Ltd. (112.70, 3.87%) were trading with volumes 8.4 and 5.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

5 stocks took off, crossing 5- week highs,

Stocks touching their year highs included - ITC Ltd. (293.05, 0.38%), Mahindra & Mahindra Ltd. (1,133.60, 0.03%) and Siemens Ltd. (2,681.35, 0.67%).

13 stocks climbed above their 200 day SMA including IIFL Wealth Management Ltd. (1,567.45, 2.60%) and VIP Industries Ltd. (636.55, 2.48%). 8 stocks slipped below their 200 SMA including Responsive Industries Ltd. (147.45, -1.90%) and Cholamandalam Investment & Finance Company Ltd. (630.95, -1.75%).

 
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The Baseline
07 Jul 2022
Chart of the week: Analysts are positive on banks, NBFCs and packaged foods industries

With the new earnings season about to start, investors are trying to figure out which stocks are likely to see a good result, despite rising inflation and a volatile global economy. We checked the Trendlyne Forecaster estimates to identify the companies and industries analysts are most bullish on.

Here we first take a look at industries that have a ‘Strong Buy’ and ‘Hold’ stance from analysts. We then check revenue growth expectations within these industries for some Nifty 50 companies. 

Banks, NBFCs and packaged foods industries are among those  that the street is bullish on. Analysts have a ‘strong buy’ stance for these three industries. 

Within banks, Bajaj Finance has the highest expected revenue growth of 35.6% in Q1FY23. But on a QoQ basis, the expectation is of a muted 0.6% revenue growth. HDFC Bank andState Bank of India’s Q1FY23 expected YoY revenue growth, according to Trendlyne’s Forecaster estimates are 11.6% and 8.4%, respectively. Tata Consumer, part of the packaged foods industry, is expected to post revenue growth of 13.7% YoY, and  7.8% on a QoQ basis in Q1FY23.

If we look at the industries which have consensus stance of ‘Hold’ from analysts, these are pharmaceuticals, iron & steel/intermediate products, cement & cement products, 2/3 wheelers and marine port & services. Trendlyne Forecaster’s consensus estimates show that the street expectsAdani Ports & SEZ Q1FY23 revenue to fall by 5.6% YoY, but on a QoQ basis, the street expects a near 12% rise in revenues. 

In Iron & Steel, JSW Steel is expected to post revenue growth of nearly 73% YoY in Q1FY23, indicating that it will probably continue its stellar run of revenue growth, despite recent export restrictions. On a QoQ basis, revenue growth is expected to be a more moderate 6.5%. 

In the auto industry, Eicher Motors’ Q1FY23 revenue is expected to grow by 69.2% YoY (on a low base) and 4.6% QoQ. And in pharmaceuticals, Sun Pharmaceuticals and Dr. Reddy’s Laboratories’ revenues are expected to grow 8.6% YoY and 12.8% YoY, respectively, and 11.7% QoQ and 2.1% QoQ, respectively. 

With many headwinds affecting industries across the board, let’s see if these companies meet or beat these consensus expectations in Q1FY23.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
07 Jul 2022
Market closes higher, ICICI Securities maintains ‘Buy’ on Macrotech Developers

Trendlyne Analysis

Indian indices closed in the green with the volatility index, Nifty VIX, falling below 19.5%. European stocks traded higher than Wednesday’s levels amid positive global cues. Major Asian indices closed in the green, tracking the US indices, which closed higher on Wednesday. US stocks rose as investors assessed the minutes from the US Federal Reserve’s June meeting. The minutes suggested the possibility of an “even more restrictive policy” to tame elevated inflation levels. Meanwhile, US job openings dip slightly in May but remained near record levels, indicating resilient labour demand. Brent crude oil futures rose after falling below $100 per barrel on Wednesday amid demand concerns due to recessionary fears.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Realty and Nifty Pharma closed higher than Wednesday’s levels. Nifty IT closed in the green, tracking the tech-heavy index, NASDAQ 100, which rose 0.62% on Wednesday.

Nifty 50 closed at 16,132.90 (143.1, 0.9%), BSE Sensexclosed at 54,178.46 (427.5, 0.8%) while the broader Nifty 500closed at 13,765.60 (134.3, 1.0%)

Market breadth is surging up. Of the 1,879 stocks traded today, 1,316 were gainers and 516 were losers.

  • Procter & Gamble Health, Indoco Remedies, Blue Star, and TCNS Clothing Co.are trading with higher volumesas compared to Wednesday.

  • Titan Company sees a long build-up in its July 28 future series as its open interest rises 1.1% with put to call ratio of 0.9.

  • Infosys beats Wipro in YoY profit growth, FII and MF holding, return on equity and return on capital employed, but lags in QoQ profit and revenue growth, promoter holding and broker average target upside.

  • Stocks like V Mart Retail, Wockhardt, Vedanta, Laxmi Organic Industries, and IDBI Bank are in the oversold zone according to the technical indicator relative strength index or RSI.

  • Phoenix Mills rises to a new all-time highof Rs 1,268.5. The stock is rising for the last two consecutive sessions.

  • ICICI Securities maintains its ‘Buy’ rating on Macrotech Developers with a target price of Rs 1,348, indicating an upside of 23.2%. The brokerage remains positive on the company’s prospects due to its robust operating cash flows, lower interest costs on debt reduction, and new launches. It expects the company’s net profit to grow at a CAGR of 36.4% over FY22-24.

  • Tyre stocks like MRF, Apollo Tyres, Ceat, JK Tyre & Industries, TVS Srichakra, among others are up by more than 1.5% in trade amid fall in global crude oil prices.

  • Kalyan Jewellers rises after its reports a 105% YoY growth in revenue in Q1FY23. The revenues increased because of a shift in demand to the organized segment from the unorganized segment, the company said. Gross margins also improved YoY because of a better product mix, and an increase in the share of business from the non-south markets. Its online jewellery platform, Candere, sees an 80% YoY increase in revenue in Q1FY23.

  • Escorts Kubota rises as the company will hike prices across all tractor models from Monday. This is to offset the rise in input costs due to a spike in commodity prices.

  • General insurance stocks rise as the general insurance industry’s overall June gross direct premium underwritten rises 21% YoY, according to the General Insurance Council. In Q1FY23 the industry’s gross direct premium underwritten rises 23% YoY. ICICI Lombard General Insurance’s June gross direct premium underwritten rises 53.8% YoY to Rs 1,588.7 crore. Its Q1FY23 gross direct premium underwritten rises 43.9% YoY to Rs 5,370.3 crore and its market share rises by 143 bps YoY to 9.86%. Star Health’s June gross direct premium underwritten rises 10.3% YoY to Rs 949.7 crore. Its Q1FY23 gross direct premium underwritten rises 12.9% YoY to Rs 2,466.1 crore and its market share falls by 40 bps YoY to 4.53%.

  • Bajaj Finance is falling as brokerage Macquarie initiates coverage on the stock with an ‘Underperform’ rating and a target price of Rs 4,500, indicating a downside of 20.1%. The brokerage believes the company has a limited runway for growth due to its weak presence in the online consumer financing segment, according to reports. It believes the company will have a hard time penetrating the online space due to stiff competition from existing companies.

  • Auto stocks like Mahindra & Mahindra, Tata Motors, Bajaj Auto, Eicher Motors, Balkrishna Industries, Tube Investments of India, MRF, among others are rising in trade .The broader sectoral index BSE Auto hits a 52-week high today.

  • Jubilant Pharmovais trading with more than nine times its weekly average trading volume. Equitas Small Finance Bank, Kalyan Jewellers India, NBCC (India), and Natco Pharmaare trading at more than four times their weekly average trading volumes.

  • Bharat Heavy Electricals rises after the company announces that it has commissioned India's largest floating solar photovoltaic power plant at 100 mega watts at MTPC Ramagundam in Telangana. BHEL has now successfully installed three floating solar power plants in the last 10 months.

  • Lupin rises after receiving an establishment inspection report (EIR) from the US FDA for its manufacturing plant in Somerset, New Jersey. The US FDA classifies the inspection as voluntary action indicated (VAI). This means that the US FDA found some objectionable conditions in the inspection but will not be taking any regulatory action against the company. This report comes after the warning letter issued by US FDA in June 2022. The company is working towards maintaining high quality in its manufacturing and supply processes.

  • Equitas Small Finance Bank is rising as its advances in Q1FY23 are up 22% YoY (up 5% QoQ) to Rs 21,699 crore. The bank’s disbursements rise 2.6X YoY to Rs 3,238 crore but fall 1% QoQ. Its total deposits rise 19% YoY to Rs 20,386 crore and CASA (current account savings account) ratio stands at 51.7%.

  • Consumer durables stocks like Havells India, Voltas, Crompton Greaves Consumer Electricals, Dixon Technologies (India), Whirlpool of India, among others are rising in trade. The broader sectoral index BSE Consumer Durables is also trading in the green.

  • Raymond rises as its step-down wholly-owned subsidiary company Ten X Realty signs a joint development agreement for a premium residential project in Mumbai. The company estimates the project’s revenue potential at Rs 2,000 crore.

  • Sobha’s bookings rise 67.7% YoY to Rs 1,145.5 crore in Q1FY23. The company’s sales volumes increase 51.7% to 13.5 lakh square feet. Bengaluru sales volumes see the highest growth of 59.7% YoY to 10.6 lakh square feet because of three new project launches.

  • JSW Steel’s total crude steel production rises 16% YoY to 5.88 million tonnes but falls 2% QoQ due to the preponement of certain scheduled shutdowns during Q1FY23. The company’s Indian operations steel production rises 37% YoY to 5.62 million tonnes whereas its production including joint control rises by 16% YoY to 5.72 million tonnes.

  • Titan’s Q1FY23 sales surge 205% YoY, on a low base, helped by its jewellery business. The jewellery business sales grew 207% as the number of walk-ins and buyers grew. Sales of plain jewellery rose 3X YoY. Other businesses like fragrance, fashion accessories, and Indian dress wear also rise 271% because of an increase in sales from trade and e-commerce channels.

Riding High:

Largecap and midcap gainers today include Star Health and Allied Insurance Company Ltd. (531.90, 11.74%), Canara Bank (208.55, 8.20%) and Vedanta Ltd. (227.70, 6.18%).

Downers:

Largecap and midcap losers today include Godrej Consumer Products Ltd. (855.20, -2.81%), GlaxoSmithKline Pharmaceuticals Ltd. (1,504.45, -2.78%) and Adani Transmission Ltd. (2,466.10, -1.81%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Star Health and Allied Insurance Company Ltd. (531.90, 11.74%), Sobha Ltd. (641.05, 9.83%) and Ceat Ltd. (1,122.10, 9.53%).

Top high volume losers on BSE were Natco Pharma Ltd. (633.40, -0.92%) and Cyient Ltd. (734.45, -0.24%).

Jubilant Pharmova Ltd. (367.65, 6.64%) was trading at 18.1 times of weekly average. NBCC (India) Ltd. (31.85, 9.45%) and Equitas Small Finance Bank Ltd. (39.90, 1.40%) were trading with volumes 12.9 and 8.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

7 stocks overperformed with 52-week highs,

Stocks touching their year highs included - Mahindra & Mahindra Ltd. (1,133.30, 2.60%), Phoenix Mills Ltd. (1,234.00, 4.40%) and Siemens Ltd. (2,663.60, 0.59%).

17 stocks climbed above their 200 day SMA including Ceat Ltd. (1,122.10, 9.53%) and VIP Industries Ltd. (621.15, 3.98%). 4 stocks slipped below their 200 SMA including Godrej Consumer Products Ltd. (855.20, -2.81%) and Max Healthcare Institute Ltd. (364.85, -1.29%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
06 Jul 2022
Market closes higher, Spicejet hits 52-week low after DGCA issues show-cause notice

Trendlyne Analysis

Indian indices closed in the green with the volatility index, Nifty VIX, falling below 20.5%. Nifty 50 rose 1.1% and closed just below the 16,000 mark. European indices traded sharply higher led by UK stocks. However, most Asian indices closed in the red as investors continue to be concerned over the slow global economic growth induced by the aggressive rate hikes by the global central banks to tame high inflation levels.

US indices closed mixed on Tuesday with the US dollar hovering around a two-decade high against the euro. The tech-heavy index NASDAQ 100 rose 1.7% while the Dow Jones closed 0.4% lower. Crude oil rose after falling over 8% on Tuesday as weakening demand concerns outweigh the tight supply.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green following the benchmark index. Nifty Autoand Nifty Realty closed higher than Tuesday’s levels. Nifty Metal, which opened in the red, closed flat. Nifty IT closed in the green, following the NASDAQ 100, which rose 1.7% on Tuesday.

Nifty 50closed at 15,989.80 (179.0, 1.1%), BSE Sensex closed at 53,750.97 (616.6, 1.2%) while the broader Nifty 500closed at 13,631.30 (169.5, 1.3%).

Market breadth is in the green. Of the 1,872 stocks traded today, 1,035 showed gains, and 783 showed losses.

  • The Reserve Bank of India eases routes of forex funding by allowing foreign investors to invest in short-term corporate debt and purchase government securities under the fully accessible route. This decision comes with an aim to reduce volatility and global spillovers as the rupee depreciated by 4.1% against the dollar till July 5 in FY23.

  • G R Infraprojects, Galaxy Surfactants, ZF Commercial Vehicle Control Systems India, and Aditya Birla Sun Life AMC are trading with higher volumes as compared to Tuesday.

  • Kotak Mahindra Bank sees a long build-up in its July 28 future series as its open interest rises 6.5% with put to call ratio of 1.02.

  • Indian rupee rises 5 paise from a record low of Rs 79.33 to Rs 79.28 against the dollar in trade today

  • Hindustan Zinc and IndiaMART InterMESH hit their 52-week lows of Rs 243 and Rs 3,676 respectively. While Hindustan Zinc falls for two consecutive sessions, IndiaMART InterMESH trades lower for three sessions.

  • Emkay Global feels the production-linked incentive scheme can add up to Rs 2.4 lakh crore, or 4% to India's GDP, according to reports. The brokerage adds that since the rollout of PLI schemes, cash ROCE (return on capital employed) improved to 20% in FY22, the highest since FY18.

  • Spicejet hits a 52-week low today after aviation regulator DGCA issues a show-cause notice in connection with poor safety measures and maintenance actions. The airline reported at least eight incidents of technical malfunctioning in the last 18 days. The management has 3 weeks to respond to the show-case notice.

  • Havells India rises in trade after it announces the initiation of the new air conditioner manufacturing facility at Sri City in Chittoor district of Andhra Pradesh. The proposed capacity addition for Chittoor plant is 11.2 lakh units per annum with an estimated investment of Rs 400 crore.

  • Edible oil stocks like Adani Wilmar and Ruchi Soya Industries fall in trade. This comes after the Department of Food & Public Distributions asks companies to reduce the retail price of edible oils within a span of one week, according to reports.

  • Auto stocks like Hero MotoCorp, Mahindra & Mahindra, TVS Motor Co, Maruti Suzuki India, and Eicher Motors, among others, are rising in trade. The broader sectoral index BSE Auto is also trading in the green.

  • Aurobindo Pharma's arm Eugia Pharma Specialities receives USFDA approval for triamcinolone acetonide injectable suspension used for treatment of intramuscular and intrarticular diseases. The product will launch this month and has estimated market size of $73 million.

  • Ceat is trading with more than 11 times its weekly average trading volume. Brightcom Group, KPR Mill, TCNS Clothing Co., and Container Corporation of India are trading at more than five times their weekly average trading volumes.

  • Godrej Consumer Products (GCPL) and Dabur India rise as they announce their Q1FY23 business updates. While GCPL expects double-digit sales growth, Dabur expects a single-digit revenue growth because of rising inflation. Inflation is adding pressure on consumption in both urban and rural markets. GCPL expects profits to improve in Q1FY23 and EBITDA margins to go down on a YoY basis. Dabur India expects its price hikes to support margin growth in Q1FY23.

  • ICICI Securities maintains its ‘Buy’ rating on CreditAccess Grameen with a target price of Rs 1,300, indicating an upside of 22.7%. The brokerage is positive on the company’s prospects due to its presence in diverse geographical locations, customer-centric business model, and its growing secured portfolio. It expects the company’s profit to grow at a 63.3% CAGR over FY22-24.

  • Brokerage Jefferies gives a 'Buy' rating to Supreme Industries with a target price of Rs 2,540, indicating an upside of 40%. It expects the price of the company's key raw materials--PVC--to fall 20% in July, which may improve the affordability and demand for its products in the medium term. The brokerage also expects volumes to grow by 12% CAGR over FY22-25.

  • Metal stocks like Hindalco Industries, Vedanta, NMDC, Hindustan Copper, and Jindal Steel & Power, among others, are falling in trade. The broader sectoral index Nifty Metal is also trading in red.

  • FMCG stocks like Hindustan Unilever, Nestle India, Britannia Industries, Godrej Consumer Products, among others are trading in the green after palm oil price drops by 10%. The broader sectoral index BSE FMCG Sector is also rising in trade.

  • Bajaj Hindusthan Sugar is falling as lenders declare the company to be a non-performing asset after it defaults on its debt payments, according to reports. The company’s gross debt stood at Rs 4,814 crore as of March 2022.

  • Paint stocks like Asian Paints, Berger Paints (India), Kansai Nerolac Paints, Shalimar Paints, among others are rising by more than 2% in trade amid fall in global crude oil prices.

  • J Kumar Infraprojects rises after bagging a contract worth Rs 571 crore from the Brihanmumbai Municipal Corporation to design and build a sewer tunnel. J Kumar is executing the project in a joint venture with Michigan Engineers where the former will hold a 60% stake.

  • Macrotech Developers’ bookings rise 194% YoY to Rs 2,814 crore despite Q1 being a seasonally weak quarter for the company. Collections in Q1FY23 rise 53% to Rs 2,616 crore.

  • Bajaj Finance’s assets under management at the end of Q1FY23 rises 31% YoY to Rs 2.04 lakh crore while deposits increase 22% to Rs 34,100 crore. New loans disbursed are up 15.6% YoY to 74 lakh.

Riding High:

Largecap and midcap gainers today include Kansai Nerolac Paints Ltd. (399.65, 8.73%), Tube Investments of India Ltd. (1,975.75, 8.54%) and Honeywell Automation India Ltd. (35,230.00, 6.81%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (173.50, -8.97%), Oil And Natural Gas Corporation Ltd. (120.95, -5.06%) and PB Fintech Ltd. (572.55, -2.27%).

Volume Shockers

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

Top high volume gainers on BSE included Responsive Industries Ltd. (153.00, 17.83%), Kansai Nerolac Paints Ltd. (399.65, 8.73%) and Tube Investments of India Ltd. (1,975.75, 8.54%).

Top high volume losers on BSE were Cyient Ltd. (736.20, -3.51%), KPR Mill Ltd. (503.05, -1.43%) and Blue Star Ltd. (875.00, -1.10%).

Ceat Ltd. (1,024.45, 7.61%) was trading at 16.0 times of weekly average. Brightcom Group Ltd. (38.00, 4.97%) and Nesco Ltd. (573.00, 2.25%) were trading with volumes 8.6 and 6.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Blue Dart Express Ltd. (7,969.50, 2.00%), Siemens Ltd. (2,654.85, 3.69%) and Varun Beverages Ltd. (821.00, 3.22%).

Stocks making new 52 weeks lows included - Hindustan Zinc Ltd. (247.05, -0.62%) and IDBI Bank Ltd. (30.75, 0.00%).

12 stocks climbed above their 200 day SMA including Responsive Industries Ltd. (153.00, 17.83%) and Godrej Consumer Products Ltd. (879.95, 5.73%). 3 stocks slipped below their 200 SMA including NTPC Ltd. (138.95, -1.35%) and VIP Industries Ltd. (595.55, -1.21%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
05 Jul 2022
Market closes lower, Sugar stocks trade in the green

Trendlyne Analysis

Nifty 50 lost over 200 points and closed marginally lower on a volatile day of trade. Nifty 50 tested the 16,000 mark but lost the gains and closed lower than the 15,850 level. India's services purchasing managers' index (PMI) in June rises to 59.2, the highest level since April 2011.

European stocks opened in the green but traded lower than Monday’s levels after Eurozone PMI composite fell to 52.0 in June from 54.8 in May. In reaction, the Euro fell to a new 20-year low against the Dollar. Most major Asian indices closed higher amid speculation that the US may announce a rollback of some tariffs on Chinese consumer goods. US indices futures trade higher than Friday’s levels. US markets were closed on Monday for the Independence Day holiday. Crude oil rose as a labour strike in Norway is expected to disrupt oil and gas output, tightening the supply. Investors continue to monitor the impact of aggressive rate hikes by the Central banks on global economic growth.

Nifty Smallcap 100 closed flat, following the benchmark index. Nifty Metal and Nifty Energy closed higher than Monday’s levels. Nifty IT closed in the red, following the NASDAQ 100 futures, which is trading lower.

Nifty 50closed at 15,810.85 (-24.5, -0.2%), BSE Sensexclosed at 53,134.35 (-100.4, -0.2%) while the broader Nifty 500closed at 13,461.85 (-10.8, -0.1%)

Market breadth is neutral. Of the 1,876 stocks traded today, 895 were on the uptick, and 906 were down.

  • Brightcom Group, Supreme Industries, Procter & Gamble Health, and ZF Commercial Vehicle Control Systems Indiaare trading with higher volumesas compared to Monday.

  • Cipla sees a long build-up in its July 28 future series as its open interest rises 7.6% with put to call ratio of 0.8.

  • India’s trade deficit widens to $25.6 billion in June 2022 from $9.6 billion in June 2021, as imports rise 51% YoY to $63.6 billion and exports rise by only 16.8% YoY to $37.9 billion. The trade deficit in Q1FY23 widens to $70.2 billion compared to $31.4 billion in Q1FY22. Imports rise 47.3% YoY to $187 billion and exports rise 22.2% YoY to $116.8 billion.

  • The Centre's move to impose taxes on exports of petrol, diesel, and aviation turbine fuel, and on domestic production of crude oil could generate revenues of Rs 94,800 crore in FY23, according to Moody's Investors Service.

  • Britannia's shareholders reject a resolution authorising its board to make investments, loans, give guarantees, and security to another company worth up to Rs 5,000 crore. Around 29.14% of its shareholders voted against the proposal, which needed at least 75% of its shareholders to approve it.

  • SpiceJet is falling in trade after one of its flights travelling to Dubai from Delhi made an emergency landing in Karachi after developing a technical glitch, according to reports. All the passengers on board are safe and a replacement aircraft is sent to Karachi to pick up the passengers and transport them to Dubai.

  • Sugar stocks like Shree Renuka Sugars, Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, Bajaj Hindusthan Sugar, among others are rising in trade after the Centre intents to provide excise concession on 12% and 15% ethanol blended petrol.

  • Garware Technical Fibres rises as brokerage ICICI Direct initiates coverage on the stock with a 'Buy' rating, according to reports. It set a target price is set at Rs 3,695 (an upside of 21%) on the stock. The brokerage believes that increased profit over the last decade, balance sheet strength, and expansion of aquaculture cage businesses are the key parameters for driving revenue growth of the company. It expects profit CAGR to be 20% over FY22-24E with return on capital employed in the range of 22-24%

  • Galaxy Surfactants is trading with more than 11 times its weekly average trading volume. Elgi Equipments, Jyothy Labs, Indian Overseas and Finolex Cables are trading at more than five times their weekly average trading volumes.

  • YES Bank and Ujjivan Small Finance Bank rise in trade after reporting their Q1FY23 operational updates shows their toal loans rising. YES Bank’s total advances rise 14% YoY to Rs 1.8 lakh crore while Ujjivan Small Finance Bank’s total advances are up 38.3% to Rs 19,409 crore. Although YES Bank’s total deposits rise 18.3% YoY to Rs 1.9 lakh crore, they were down 2% QoQ. Ujjivan Small Finance Bank’s asset quality improves as gross NPAs fall to 5.9% in June 2022 against 6.6% in May 2022.

  • ICICI Securities maintains its ‘Buy’ rating on KEC International with a target price of Rs 502, indicating an upside of 29.4%. The brokerage believes the company’s margins will expand on the back of robust order intake in FY23. It expects commodity prices to correct in H2FY23, leading to higher profitability. The brokerage estimates the company’s net profit to grow at a 47% CAGR over FY22-24.

  • Galaxy Surfactants is trading with more than 11 times its weekly average trading volume. Elgi Equipments, Jyothy Labs, Indian Overseas and Finolex Cables are trading at more than five times their weekly average trading volumes.

  • Pharmaceutical companies like Dr. Reddy's Laboratories, Aurobindo Pharma, Sun Pharma among others are rising. The broader index Nifty Pharma trades in the green.

  • Life Insurance Corporation of India (LIC) rises after Motilal Oswal initiates coverage on the stock with a ‘Buy’ rating as it finds its expected embedded value of FY24 at 0.7 times reasonable. The brokerage set a target price of Rs 830 for the stock, a 20% upside from the current market price. The brokerage expects new business premium to grow at a 10% CAGR over FY22-24. LIC is also planning to increase its non-participating products business as its major product mix still consists of savings and participating products.

  • Metal stocks like JSW Steel, Tata Steel, Vedanta, Hindalco Industries, Jindal Steel & Power, among others, are rising in trade. The broader sectoral index BSE Metal is also trading in the green.

  • Retail sales for the automotive industry are up in June as total retail sales rise 27% YoY 15.5 lakh units, but a 6.1% MoM fall shows demand is still tepid, according to data from the Federation of Automotive Dealers' Association. Tata Motors is second among carmakers in retail market share with a 14.18% share of car retail sales in June. Even though demand for two-wheelers is tepid (June retail sales are down 8.2% MoM to 11.2 lakh units, but up 20.2% on a low-base.) TVS Motor continues to claw share away from Bajaj Auto. TVS Motor ended June with a 14.87% retail market share compared to Bajaj Auto's 8.94%.

  • Reliance Industries is rising as brokerage Nomura upgrades its rating on the company to a 'Buy' from 'Neutral', according to reports. Nomura believes that the correction in the stock is overdone and presents a buying opportunity for investors. It set a target price of Rs 2,800, indicating an upside of 16%.

  • Marksans Pharma is rising as its board of directors will consider a buyback of shares on Friday.

  • India's Purchasing Manager's Index (PMI) for services rises to 59.2 in June, the highest since April 2011, due to the fast-paced expansion of services industry. A PMI of above 50 indicates expansion.

  • Tata Steel's arm completes the acquisition of 49.75% stake in Nelachal Ispat Nigam from MMTC. The total acquisition cost is Rs 12,100 crore and was part of the Centre's strategic disinvestment of the Odisha-based Neelachal Ispat

  • Vedanta’s alumina production rises a mere 1% YoY to 4.6 lakh tonnes in Q1FY23 with total aluminium production increasing just 3% to 5.7 lakh tonnes. Although mined metal production rises 14% YoY to 2.5 lakh tonnes, and copper production rises 37% YoY to 0.4 lakh tonnes in Q1FY23, iron ore sales fall 24% YoY to 12.6 lakh tonnes.

  • Reserve Bank of India (RBI) fines IndusInd Bank with Rs 1 crore for failing to the restrict number of transactions in accounts opened through e-KYC. RBI also fines Kotak Mahindra Bank with Rs 1.05 crore for its delay in processing the credit involving unauthorized electronic transactions, according to reports.

  • The Reserve Bank of India approves HDFC's merger with HDFC Bank. This comes after the stock exchanges approved the merger on Monday. This merger includes the merger of HDFC Investments and HDFC Holdings into HDFC and the eventual merger of HDFC into HDFC Bank.

Riding High:

Largecap and midcap gainers today include Tube Investments of India Ltd. (1,820.25, 4.24%), Avenue Supermarts Ltd. (3,639.05, 4.11%) and SBI Cards and Payment Services Ltd. (816.55, 3.89%).

Downers:

Largecap and midcap losers today include SRF Ltd. (2,052.70, -5.85%), Oil India Ltd. (190.60, -5.48%) and TVS Motor Company Ltd. (812.40, -3.39%).

Volume Rockets

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

Top high volume gainers on BSE included Elgi Equipments Ltd. (374.45, 8.82%), AstraZeneca Pharma India Ltd. (2,966.80, 8.20%) and Asahi India Glass Ltd. (577.15, 6.86%).

Top high volume losers on BSE were CreditAccess Grameen Ltd. (1,010.60, -3.91%), Bombay Burmah Trading Corporation Ltd. (923.25, -1.41%) and Suven Pharmaceuticals Ltd. (448.35, -0.84%).

Galaxy Surfactants Ltd. (2,871.70, 0.79%) was trading at 12.3 times of weekly average. G R Infraprojects Ltd. (1,100.25, -0.04%) and Indian Overseas Bank (17.70, 1.72%) were trading with volumes 10.5 and 7.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks made 52-week highs, while 4 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Mahindra Lifespace Developers Ltd. (432.80, 1.94%), Siemens Ltd. (2,560.30, 1.54%) and Varun Beverages Ltd. (795.35, 1.18%).

Stocks making new 52 weeks lows included - Indiabulls Housing Finance Ltd. (91.85, -2.91%) and Wockhardt Ltd. (205.65, -0.75%).

16 stocks climbed above their 200 day SMA including AstraZeneca Pharma India Ltd. (2,966.80, 8.20%) and NLC India Ltd. (67.55, 4.97%). 3 stocks slipped below their 200 SMA including Mahindra Holidays & Resorts India Ltd. (222.40, -3.14%) and Petronet LNG Ltd. (217.00, -0.71%).

 
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The Baseline
04 Jul 2022
Five stocks beating their industry in analyst sentiment
By Abhiraj Panchal

  1. Bharat Electronics: This defense public sector firm has 21 consensus recommendations from analysts of a ‘Strong Buy’, which is better than the industry consensus (which analysts rate as ‘Buy’). Out of 21 analysts, 17 have ‘Strong Buy’ recommendations on Bharat Electronics, as well as one ‘Buy’, ‘Hold’ and ‘Sell’. The company has a Trendlyne Durability score of 70, indicating strong financials. In FY22, the company’s revenue grew 9.6% YoY to Rs 15,599.7 crore and profit by 14.3% to Rs 2,398.9 crore. 

According to Nilesh Soni from Prabhudas Lilladher, Bharat Electronics has a substantial order backlog and tender pipeline, and it is also diversifying into business verticals like EV batteries, medical equipment, etc. He further states, “order pipeline stands strong from the Akash weapon system, QRSAM, LRSAM, Naval equipment like a surveillance system, radars, and navigation systems”. Chirag Shah and Vijay Goel from ICICI Direct are also optimistic about the company’s prospects as it is diversifying into non-defense businesses and focuses on increasing exports. 

  1. Birlasoft: The consensus recommendation from 11 analysts on this IT consultancy services company is a ‘Strong Buy’. 10 analysts have a ‘Strong Buy’ ratings, while one analyst has a ‘Hold’ rating. The consensus recommendation on this company is better than the overall industry rating of ‘Hold’. The company has a Trendlyne Durability score of 75. In FY22, its revenue grew 16.2% YoY to Rs 4,130.3 crore ($523.4 million) and profit grew 44.5% YoY to Rs 463.6 crore.

The company guided for $1 billion revenue in FY25, out of which it expects $800-$850 million to be contributed by organic growth. The remaining $150-$200 million will be contributed by inorganic opportunities. The company expects to meet its FY25 revenue target by winning more large contracts. Sameer Pardikar of ICICI Direct says “revenue growth is expected to be achieved via client mining, cross-selling, multi-year deals, expansion in Europe & APAC and focus on niche verticals”. He also estimates dollar revenue to grow at a 13.7% CAGR and margin to expand by 50 bps to 16% over FY22-24. 

  1. DLF: The consensus recommendation from 19 analysts on this real estate company is a ‘Buy’. Out of these 19, 14 analysts recommended a ‘Strong Buy’, two recommended a ‘Buy’, two a ‘Hold’ rating, and one had a ‘Strong Sell’ rating on this Gurgaon-based real estate developer. The consensus recommendation on this company is better than its industry’s rating (of ‘Buy’) and has a Trendlyne Durability score of 85. In FY22, the company’s revenue rose by 5.6% YoY to Rs 5,717.4 crore and its profit rose by 37.2% YoY to Rs 1,500.9 crore.

The company’s pre-sales in FY22 grew 2.4X YoY to Rs 7,270 crore and beat its presales guidance of Rs 6,000-6,500 crore. The company’s overall sales margin grew by 15 percentage points to 51% in FY22. Brokerages like HDFC Securities and Edelweiss expect the occupancy rates in its office, retail, and residential portfolios to improve in the coming quarters and they both have a positive outlook on the company’s prospects. Amit Agarwal and Manan Shah of Edelweiss say the company “has aggressive launch pipelines to scale up the current portfolio and will be a key beneficiary when the commercial cycle recovers”. The management has guided robust exit rentals of Rs 4,400 - 4,500 crore for FY23, driven by new launches, higher retail yields and an increase in occupancy levels.

  1. Apollo Hospitals Enterprise: This healthcare company, with 21 analyst recommendations, has a consensus call of ‘Strong Buy’, better than the overall industry’s ‘Buy’ rating. 15 analysts have a ‘Stong Buy’ on the business, five have a ‘Buy’ rating, and one ‘Hold’. The company has a Trendlyne Durability score of 85. In FY22, the company reported revenue growth of 39% YoY to Rs 14,740.8 crore and profit growth of 601.9% YoY to Rs 1,055.6 crore. 

Param Desai and Sanketa Kohale from Prabhudas Lialladher say, “Apollo Hospitals pursued aggressive expansion in the past few years, which has created a strong growth platform”. According to the company’s Q4FY22 earnings call,  it expects a total of $3 billion of gross merchandise value from its offline pharmacies ($2 billion), Apollo 24*7 ($500-700 million), and companies partnership with amazon ($500 million) in the next 3-4 years. The company also expects its offline pharmacy to continue to grow at 20% in FY23 due to store expansion for its diagnostic business. It expects the business to grow to Rs 1,000 crore within three years. Apollo 24*7 has earmarked Rs 400 crore marketing expenditure for FY23. 

  1. Tech Mahindra: This IT consulting and software company has a consensus recommendation of ‘Buy’ from 41 analysts, better than the industry consensus rating. Out of the 41 analysts, 25 have a ‘Stong Buy’ call, seven have a ‘Buy’, five a ‘Hold’, and two are at ‘Stong Sell’. The company has a Trendlyne Durability score of 75. In FY22, the company’s revenue grew by 18.4% YoY to Rs 45,758.3 crore and profit grew by 25.7% to Rs 5,566.1 crore. 

According to the Q4FY22 earnings call transcript, the company’s new deal wins have amounted to $1 billion, constituting $366 million from the Enterprise segment, and the rest from communications, media, and entertainment (CME). The company has announced partnerships with Bharti Airtel to set up a joint 5G innovation lab to co-develop and market 5G in India. Tech Mahindra’s other recent collaborations include conversational-AI solutions with Yellow.ai, and collaboration with Cisco, and Celonis, among others, for the advancement in technology. 

Analysts from ICIC Direct, IDBI Capital and Geojit BNP Paribas, among others, believe that Tech Mahindra’s new deal wins and its capabilities in new technology, like 5G, automation and AI could drive its future revenue growth.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
04 Jul 2022
Market closes higher, Tata Power signs MoU with Tamil Nadu Government

Trendlyne Analysis

Nifty 50 closed in the green after gyrating between losses and gains on a volatile day of trade. European stocks followed the global trend and traded higher than Friday’s levels. Most Asian indices close higher, tracking the US indices which closed in the green on Friday. The S&P 500 snapped its four-day losing streak and closed 1.1% higher while Dow Jones rose over 1%. However, the US indices futures trade in the red ahead of June payroll report this week. Crude oil traded marginally lower after rising over 2% on Friday. Tight crude oil supply due to the geopolitical crisis, and fears of slow economic growth remain the key factors affecting the crude oil price.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty FMCG and Nifty Bank closed higher than Friday’s levels. Nifty IT closed in the red, taking cues from the NASDAQ 100 futures, which is trading in the red.

Nifty 50closed at 15,835.35 (83.3, 0.5%), BSE Sensexclosed at 53,234.77 (326.8, 0.6%) while the broader Nifty 500closed at 13,472.65 (78.2, 0.6%)

Market breadth is in the green. Of the 1,904 stocks traded today, 1,118 showed gains, and 721 showed losses.

  • Symphony, Brightcom Group, Jyothy Labs, and Procter & Gamble Hygiene & Healthcare are trading with higher volumesas compared to Friday.

  • Hindustan Unilever sees a long build-up in its Jul 28 future series as its open interest rises 7% with put to call ratio of 0.79.

  • FMCG stocks like Hindustan Unilever, United Breweries, Godrej Consumer among others are rising in trade. The broader Nifty FMCG index is also trading in the green.

  • Tata Power rises as it signs a memorandum of understanding with Tamil Nadu to set up a solar cell and solar module manufacturing plant. It will invest Rs 3,000 crore to set up the plant.

  • ITC and Chalet Hotels hit their 52-week highs of Rs 293.3 and Rs 339.3, respectively. Both stocks are rising for three consecutive sessions. 

  • Va Tech Wabag rises in trade after securing an EPC (engineering, procurement, and construction) order worth Rs 430 crore from Reliance Industries. The project involves the construction of a 53 million litres per day desalination plant in Jamnagar, Gujarat.

  • NTPC’s power generation increases 21.7% YoY to 104.4 billion units in Q1FY23, according to reports. In June 2022, power generation rises by 29.3% YoY to 34.8 billion units on account of an increase in demand for power.

  • ICICI Direct reiterates its 'BUY' rating on Reliance Industries but cuts its target price to Rs 2,800, indicating an upside of 16%. The brokerage believes that the additional excise duty of Rs 13/litre on diesel and Rs 6/litre on petrol and ATF exports by the Centre will limit the gains of the company. According to the brokerage, the strategy of the company regarding export volumes and the global refining scenario will be the key reasons determining the company's earnings. In the long term, the brokerage believes that the company's consumer business will be the major growth driver.

  • Dilip Buildcon rises after emerging as the lowest bidder for a tender floated by the Gujarat Metro Rail Corp worth Rs 702 crore. The project involves the construction of an 8.7 km elevated viaduct and seven metro stations and is expected to be completed within 26 months.

  • Procter & Gamble Health is trading with more than nine times its weekly average trading volume. Dilip Buildcon, Blue Star, IFB Industries, and Rallis India are trading at more than two times their weekly average trading volumes.

  • Foreign Portfolio Investors (FPIs) withdraw Rs 50,203 crore from the Indian equity market in June 2022. This is the highest net outflow since March 2020.

  • Nifty Bank trades in green as banks report their operational update for Q1FY23. AU Small Finance Bank, Federal Bank, IDFC First Bank, and HDFC Bank report an increase in their gross advances in Q1FY23. AU Small Finance Bank’s gross advances rise 42% YoY to Rs 49,366 crore while IDFC First Bank’s CASA deposits rise 22.3% YoY to Rs 46,439 crore. HDFC Bank’s gross loans rise 21.5% YoY to Rs 13.9 lakh crore in Q1FY23.

  • Hindustan Zinc’s Q1FY23 mined metal production rises 14% YoY to 2.5 lakh tonnes on the back of higher ore production. However, its mined metal production falls 15% QoQ from 2.95 lakh tonnes on lower ore production and metal grades. Its refined metal production rises 10% YoY to 2.6 lakh tonnes but remains flat sequentially. The company’s integrated zinc production rises 10% YoY to 2.06 lakh tonnes but falls 2% QoQ.

  • All metal stocks are trading in the red. Stocks like JSW Steel, Tata Steel, Hindalco Industries, Jindal Steel & Power, NMDC, and Steel Authority of India (SAIL) are down by more than 2%. The broader sectoral index BSE Metal is also falling in trade.

  • Hero MotoCorp’s June wholesales rise 3.3% YoY to 4.8 lakh units. Domestic wholesales rise 5.6% YoY to 4.6 lakh units but exports fall 29.3% YoY to 21,657 units.

  • Endurance Technologies acquires a 51% stake in Maxwell Energy Systems for Rs 135 crore. Acquisition of stake is through infusion of fresh funds of Rs 71.5 crore and secondary purchase from existing investors of Rs 63.5 crore. The balance 49% stake will be bought in a phased manner over the next five financial years. With this, Maxwell Energy is now a subsidiary of Endurance Technologies.

  • Eicher Motors’ arm Royal Enfield’s June wholesales rise 43% YoY to 61,407 units. Domestic wholesales rise 42.6% YoY to 61,407 units and exports rise 54% YoY to 7,233 units.

  • InterGlobe Aviation is falling in trade as more than half its flights on Saturday were delayed due to a large number of its cabin crew members not reporting for duty, according to reports. Many cabin crew members reported being sick on Saturday, throwing the airline’s operations into disarray.

  • Avenue Supermarts’ (Dmart) standalone revenue rises 95% YoY to Rs 9,806,8 crore in Q1FY23 as lockdown restrictions cease to exist. Q1FY23 standalone revenue is 14% higher than Q4FY22 revenue of Rs 8,606.1 crore. This is 155.8% higher than the standalone revenue number of Rs 3,833.2 crore in Q1FY21.

  • Centre restricts exports of diesel, petrol and aviation turbine fuel (ATF) by levying excise duties of Rs 13, Rs 6, and Rs 6 per litre respectively. Centre’s restrictions state that 50% of the oil exported is to be sold in India. According to reports, a duty of Rs 23,250 per million tonne on oil production is expected to hit upstream companies, however, companies with less than 2 million bbl/year of production are exempted.

Riding High:

Largecap and midcap gainers today include IDFC First Bank Ltd. (34.05, 5.58%), Indian Overseas Bank (17.40, 5.14%) and Star Health and Allied Insurance Company Ltd. (497.95, 5.06%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (201.65, -5.70%), JSW Steel Ltd. (551.50, -4.72%) and Adani Green Energy Ltd. (1,883.60, -4.08%).

Volume Shockers

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

Top high volume gainers on BSE included Dilip Buildcon Ltd. (207.80, 9.48%), AIA Engineering Ltd. (2,369.15, 7.10%) and Central Bank of India (17.85, 6.25%).

Top high volume losers on BSE were Heidelberg Cement India Ltd. (168.80, -1.57%), Blue Star Ltd. (883.80, -1.38%) and Dalmia Bharat Ltd. (1,317.80, -0.68%).

Procter & Gamble Health Ltd. (4,205.40, 1.51%) was trading at 9.6 times of weekly average. IFB Industries Ltd. (926.75, 3.65%) and Jubilant Ingrevia Ltd. (506.55, 6.13%) were trading with volumes 5.4 and 3.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

8 stocks took off, crossing 52-week highs, while 1 stock was an underachiever and hit its 52-week lows.

Stocks touching their year highs included - AIA Engineering Ltd. (2,369.15, 7.10%), Blue Dart Express Ltd. (7,772.75, -0.67%) and Coromandel International Ltd. (982.05, 1.74%).

Stock making new 52 weeks lows included - IndiaMART InterMESH Ltd. (3,765.55, -1.39%).

17 stocks climbed above their 200 day SMA including Westlife Development Ltd. (515.35, 4.22%) and Trent Ltd. (1,118.20, 4.16%). 8 stocks slipped below their 200 SMA including Oil India Ltd. (201.65, -5.70%) and Cipla Ltd. (930.65, -1.96%).

 
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The Baseline
01 Jul 2022
Five Interesting Stocks Today

  1. Macrotech Developers (Lodha): This real estate developer’s stock outperformed the Nifty 500 index by over 20% in the past month. It is also one of the top picks of foreign brokerage house Jefferies in the real estate sector.

On June 23, the company announced its foray into the Bengaluru residential market by acquiring a 100% stake in G Corp Homes. Macrotech will be launching a housing project of 1.3 million sq ft area in the next 6-12 months in Bangalore. According to its press release, this Bengaluru-based project has a sales potential of roughly Rs 1,200 crore. Mumbai Metropolitan Region and Pune are the main markets of the Lodha Group and this will be the third major city it will be entering into. It will be competing with players like  Prestige Estates and Sobha who already have a strong presence in the city. Macrotech’s stock rose by 5% since this announcement. The company additionally plans to launch 8.7 million sq ft (msf) worth of projects in Mumbai and Pune in FY23, with a sales potential of over Rs 13,000 crore.

However, real estate consultant Anarock said there was a 15% QoQ fall in home sales across the top seven cities in India in Q1FY23. The rise in property prices and interest rate hikes have impacted the sentiments of prospective homeowners. Nearly 75% of Macrotech’s homes in volume terms are taken on a mortgage. Hence, if the home loan interest rates rise beyond 8.5% p.a. from 7.5-7.9% p.a., its sales bookings could be impacted in FY23 and beyond.

  1. Reliance Industries: The oil refinery stock fell 7% in trade on Friday, one of the top losing stocks, after the government imposed an export duty on petrol, diesel, and ATF (aviation turbine fuel). An excise duty of Rs 6 per litre on petrol and ATF, and Rs 13 per litre on diesel has been imposed. It will be interesting to see how the company plans its earnings as this means private oil players will be paying an additional $40.6 per barrel in duties.

The stock had also fallen on Tuesday after reports that the company’s plans of acquiring Boots UK, a pharmacy retailer, fell through after Wallgreens Boots Alliance decided to not sell the business. Reliance wanted to acquire Boots UK’s pharmacy retail chain as it was looking for growth opportunities in global markets and made a bid for its UK pharma retail business. The company says that no third party has been able to bid adequately for Boots. Boots UK was valued at 7 billion euros and Reliance made a bid for 5-6 billion euros, according to reports.

The company’s telecom business recently appointed Akash Ambani, aged 30, as the new Chairman of Reliance Jio Infocomm after Mukesh Ambani stepped down on June 27. Akash Ambani was involved with Reliance Jio since its inception as its Chief Strategy Officer earlier. He was also involved in Jio’s acquisitions related to digital space like the acquisition of Saavn - a music platform, American tech firm Radisys, among others, according to reports. The major challenge for the new Chairman would be unlocking the potential of the digital business and steering Jio to an expected IPO.

  1. Hikal: This pharma company’s stock has been highly volatile this week. It rose 5.4% on Monday after the Bombay High Court directed the Maharashtra Pollution Control Board (MPCB) to grant permission to re-start manufacturing activities at the company's Taloja manufacturing unit. Previously on April 22, MPCB had ordered Hikal to shut its Taloja unit due to non-compliance issues. The Taloja manufacturing unit contributed Rs 260 crore or 15% of total revenues in FY21. In an eventful week for Hikal, Smallcap World Fund sold a 2.03% stake in the company worth Rs 62 crore on Wednesday. Following this, the stock fell over 4%.

The company’s stock price is on a downtrend since hitting its all-time high in July 2021. In the past month, the stock fell over 25%. With such a steep fall in its share price, it comes up in the screener that lists stocks with big falls from their 52-week highs.

Hikal gets 61% of its revenues from the pharmaceutical segment and the remaining 39% from the crop protection segment. While revenue from its pharma segment rose marginally by 3% YoY to Rs 308 crore in Q4FY22, crop protection’s revenue fell 17% YoY. In the Q4FY22 investor presentation, Executive Chairman of Hikal, Jai Hiremath, said “we expect FY23 to be a challenging year, one of consolidation, and the following year we will return to sustainable and profitable growth”.

However, brokerages still have a positive outlook on the company. As a result, it shows up in this screener which lists stocks with high analyst ratings and have an upside of at least 20% from their current price. In addition, mutual funds increased their holdings in this company last month.

  1. Mahindra CIE Automotive: This auto component maker’s stock gained more than 35% in the last three months. The company is one of the top forging players globally with its customers spread across Europe and India. According to a report from brokerage Geojit, most of the company’s global customers are outperforming their industry’s average revenue growth. This shows that the company has a good pipeline of orders in place. According to Geojit's report, the current order book is likely to remain strong till October.  An increase in business with existing customers, and the shifting of the production centre to India to enhance exports is good value-addition for the company.

Auto companies are facing a shortage of semiconductor chips for the past year now, and despite these issues, Mahindra CIE’s European business margin came in at 10.2% in Q4FY22. The improvement in margins is likely to continue on a YoY basis with a revenue growth estimated at 14% CAGR over CY 21-23. The company is focused on bringing in a favourable product mix to improve profitability, especially in the EV market. The stock has an average brokerage target price of Rs 236, implying a 20% upside.

  1. UltraTech Cement: This cement stock fell 37.4% from its 52-week high till June 17 and since then it has risen 8.3% till Jun 30. The stock’s rise is due to brokerages like ICICI Direct and Motilal Oswal having a positive outlook on the company. The brokerages also expect cement demand to grow in the next 3-5 years. IDBI Capital expects the demand for cement to rise at a 6.3% CAGR over FY 22-25. It also believes UltraTech is best placed to see long-term growth, and is trading at attractive valuations. The company also shows up on this screener with stocks in the buy zone based on days traded at current PE and P/BV (price-to-book value).

Recently the company announced a capacity expansion of 22.6 million tonnes per annum (mtpa) at a capex of Rs 12,886 crore. It expects to complete this capacity expansion by FY25. This management expects an EV/tonne (enterprise value/tonne) of $76, meaning the company would be spending $76 to set up one tonne of cement capacity. According to ICICI Direct, the company’s capex allocation efficiency is the best among its peers, as the industry average EV/tonne is $125-130/tonne.

This new capacity expansion will take the company’s total India grey cement capacity to 159.2 mtpa in FY25 from the current 119.9 mtpa, implying a CAGR of 9.9% over FY22-25. The management expects demand for cement to be driven by the housing and road infrastructure segments in India. However, the risk of lower demand and a sharp increase in input costs remains, which may lead to lower cash flows available for its capacity expansion plans.

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
01 Jul 2022
Market closes lower, Maruti Suzuki's total wholesales in June rises 5.8% YoY

Trendlyne Analysis

Indian indices recovered sharply from the day’s low and closed marginally lower on a volatile day of trade. Nifty 50 bounced back from its 250 points fall and closed above the 15,750 level. European stocks, which opened in the red, traded higher than Thursday’s levels. Most Asian indices closed in the red as investors continue to assess the global economic growth concerns due to high inflation levels. US stocks closed in the red on a volatile day of trade on Thursday. The tech-heavy NASDAQ 100 fell 1.3% while the S&P 500 closed 0.9% lower. The S&P 500 posted its biggest first-half slide this year since 1970. Crude oil fell over 3% on Thursday after OPEC+ confirmed it would only increase the output in August as announced previously despite tight global supplies.

Nifty Smallcap 100 and Nifty Midcap 100closed in the green despite the benchmark index closing lower. Nifty Infra and Nifty Energy closed lower than Thursday’s levels. Nifty FMCG and Nifty Realty, which opened in the red, closed higher. Nifty IT closed in the green despite the NASDAQ 100 closing lower on Thursday.

Nifty 50closed at 15,752.05 (-28.2, -0.2%), BSE Sensexclosed at 52,907.93 (-111.0, -0.2%) while the broader Nifty 500closed at 13,394.45 (6.9, 0.1%)

Market breadth is horizontal. Of the 1,873 stocks traded today, 914 were on the uptrend, and 901 went down.

  • Dhani Services, Hatsun Agro Products, TCNS Clothing Co., and Aditya Birla Sun Life AMC are trading with higher volumesas compared to Thursday.

  • Escorts Kubota India is rising despite its total wholesales in June falling 19.8% YoY to 10,051 units. Domestic tractor wholesales fall by 22.5% YoY to 9,265 units while exports rise 36.2% YoY to 786 units.

  • ICICI Securities initiates coverage on Delhivery with a ‘Hold rating and a target price of Rs 484. The brokerage believes the company is well placed to benefit from the growing e-commerce market in India, as it has a 90% market share in the third-party logistics distribution market. It expects the company’s revenue to grow at a 37.3% CAGR over FY22-25.

  • India’s manufacturing PMI falls to 53.9 in June compared to 54.6 in May, due to the rise in input costs and inflation concerns.

  • Maruti Suzuki India is falling despite a 5.8% YoY rise in total wholesales to 1.55 lakh units with total passenger vehicle wholesales up 7.8% YoY to 93,695 units. Mini and compact car segment’s wholesales rise 6.8% to 92,188 units and mid-size car wholesales rise 150.3% YoY to 1,507 units. Total exports rise 40% YoY to 23,833 units.

  • Ashok Leyland is falling in trade despite its total wholesales in June rising 2.2X YoY to 14,531 units. The growth is driven by total domestic wholesales rising 2.3X YoY to 13,469 units. The M&HCV (medium & heavy commercial vehicles) Truck segment’s wholesales rise by 3.4X YoY to 8,211 units and LCV (light commercial vehicle) wholesales rise 41% YoY to 5,177 units.

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

  • Sanofi India and Deepak Nitrite hit their 52-week lows of Rs 6,333 and Rs 1,681.2, respectively. While Sanofi India falls for two sessions, Deepak Nitrite trades lower for three sessions.

  • IIFL Wealth Management is trading with more than five times its weekly average trading volume. Mahindra Holidays & Resorts India, REC, Reliance Industries, and Metro Brands are trading at more than two times their weekly average trading volumes.

  • Eicher Motors' joint venture VE Commercial Vehicles’ June 2022 total wholesales rise 158.7% YoY to 6,307 units. Domestic wholesales rise 217.3% YoY to 5,584 units but exports fall 1.5% YoY to 601 units.

  • Hindustan Unilever (HUL) approves the appointment of CEO Sanjiv Mehta on the board of PT Unilever Indonesia TBK as President Commissioner. He will continue to hold the position of CEO & MD of HUL and President of Unilever South Asia.

  • Bajaj Auto is falling as its total wholesales for the month of June marginally rise by 0.2% YoY to 3,47,004 units. Total two-wheeler wholesales grew 2% YoY to 3,15,948 units, as domestic wholesales fall 20% YoY to 1,25,083 units. Exports rise 23% YoY to 1,90,865 units.

  • Freight charges for containers fall as inflationary pressures ease. The composite rate has fallen in January 2022 compared to July 2021.

  • Federal Bank rises as its board approves raising up to Rs 4,000 crore through issuance of equity shares. The shareholders will take up this proposal at the annual general meeting to be held on July 27,2022.

  • Oil and Gas stocks like Reliance Industries, Oil and Natural Gas Corp, Indian Oil Corp, among others, are falling in trade after the Centre raises taxes on the export of petrol and diesel. The broader sectoral index BSE Oil & Gas is also trading in the red.

  • Indian rupee depreciates 5 paise to 79.11 to a new all-time low, against the American Dollar in early trade today, amid foreign capital outflows.

  • Jewellery company stocks like Titan Co, Asian Star Co, and Kalyan Jewellers, among others, are falling in trade, as the Centre raises its basic import duty on gold to 12.5% from the existing 7.5%. This is likely to raise the cost of gold, and could impact revenues of these companies.

  • Reco Zinnia (RZPL), a subsidiary of GIC (Realty) invests the second tranche of Rs 400 crore in Phoenix Mills’ subsidiaries (Offbeat Developers, Graceworks Realty, and Leisure). The first investment was completed on June 30, 2021, when RZPL invested Rs 111.1 crore. With the recent investment, RZPL will hold a 32.9% stake in each of Phoenix Mills subsidiaries.

  • Lupin is rising as the US FDA approves the company's abbreviated new drug application, or ANDA, for paliperidone extended-release tablets on Thursday. It also got approvals to market a generic equivalent of Invega extended-release tablets of Jansen Research and Development. The product will be manufactured in Lupin's Goa facility and has an estimated annual sales of $ 152 million in the US.

  • Jubilant HollisterStier, a wholly-owned subsidiary of Jubilant Pharmova, announces a 100 million canadian dollars (Rs 612.8 crore) expansion of its CMO (contract manufacturing organisation) manufacturing facility in Montreal, Canada. The Government of Quebec will be funding CAD 25 million (Rs 153.2 crore) through a loan, which includes a forgivable portion of CAD 6.3 million (Rs 38.6 crore). The company aims to modernize and augment its drug production capacity by over 100% through this investment.

  • Bharti Airtel opts to defer its adjusted gross revenue or AGR dues for FY19 for up to four years, while retaining the right to repay installment amounts. According to reports, total dues add up to Rs 3,000 crore. It opted for this offer under the Department of Telecommunication's scheme, instead of opting for conversion of the dues into equity like Vodafone Idea. Also, the Competition of Commission of India approved Google's $700 million investment in the company for 1.28% stake in the company.

Riding High:

Largecap and midcap gainers today include Muthoot Finance Ltd. (1,042.65, 6.80%), Jubilant Foodworks Ltd. (541.45, 5.70%) and Hindustan Petroleum Corporation Ltd. (228.45, 5.18%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (213.85, -14.97%), Oil And Natural Gas Corporation Ltd. (131.05, -13.53%) and Reliance Industries Ltd. (2,408.70, -7.20%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Responsive Industries Ltd. (139.60, 18.25%), Mahindra Holidays & Resorts India Ltd. (227.30, 6.02%) and IIFL Wealth Management Ltd. (1,545.20, 4.33%).

Top high volume losers on BSE were Reliance Industries Ltd. (2,408.70, -7.20%) and Symphony Ltd. (863.65, -1.49%).

REC Ltd. (125.70, 1.58%) was trading at 5.0 times of weekly average. HLE Glasscoat Ltd. (3,389.85, 2.87%) and Metro Brands Ltd. (621.10, 3.73%) were trading with volumes 4.5 and 3.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

4 stocks took off, crossing 52-week highs, while 19 stocks tanked below their 52-week lows.

Stocks touching their year highs included - ITC Ltd. (284.35, 3.97%), TVS Motor Company Ltd. (860.45, 2.20%) and Jamna Auto Industries Ltd. (124.90, 2.25%).

Stocks making new 52 weeks lows included - Bajaj Finserv Ltd. (11,322.55, 3.57%) and Biocon Ltd. (311.55, 1.02%).

15 stocks climbed above their 200 day SMA including Mahindra Holidays & Resorts India Ltd. (227.30, 6.02%) and Federal Bank Ltd. (93.65, 3.82%). 10 stocks slipped below their 200 SMA including Oil India Ltd. (213.85, -14.97%) and Reliance Industries Ltd. (2,408.70, -7.20%).

 
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The Baseline
01 Jul 2022
Copper as recession predictor, and FIIs buy options instead of stocks

When it comes to the stock market, we love mental shortcuts. Take for example, the link investors make between the price of copper and economic growth. Because copper is so widely used across industries, the up or down movement in the copper price tells us whether the global economy is going to boom or crash.

In recent months, copper has fallen sharply, along with other metal prices like aluminium, zinc, and steel. And expectations are that economic growth is slowing. This global slowdown is expected to impact future demand for all metals.

In this week's Analyticks,

  • Investors in metal stocks sweat over growth concerns
  • Foreign investors continue selling, but are buying in the F&O market

Let’s get into it.

Metal stocks struggle as investors see economic slowdown

Tariffs are notoriously bad at managing a rapidly changing economy. A little over a month ago India, worried about rising costs for infrastructure projects, imposedexport duties on steel.

The Centre couldn’t have predicted the crash in global metal prices that arrived soon after, which hit metal stocks badly and made these export duties an overreaction.

While its arguable that these duties on exports have reduced inflation in India, the demand for steel, aluminium, copper, and other metals is now falling due to concerns of a global recession.

Copperfell to its 16-month low last week. The fear of a fast-moving US Federal Reserve pushing the US into a recession is upending prices across assets and commodities. But despite thepessimism among traders, there is more than one way to look at this churn in metals.

Carmakers have faced acute cost pressures due to steel prices that were rising till recently. Cable makers were also hit by a rise in input costs, especially in metal. Wholesale price inflation reached 15.88% in May, a 30-year high for the WPI. But since its peak, this is how the Nifty Metal index has corrected—

This will certainly impact listedmetals and mining companies, which were expecting the surge in demand in 2021 to last longer. What’s causing the pain?

Valuations are shrinking everywhere

ICICI Securitiessays asset valuations globally are in reset mode. This will not leave metals unscathed, and the fear of a demand slowdown has led the brokerage to downgrade its ratings onTata Steel,Hindalco, andJSW Steel.

This is more bad news after the Centre imposed export duties on steel and iron ore prices, which led to asell-off in metal stocks. Most of these companies’ shares are down 15%-50% down from their year highs.

Kotak Institutional Equities alsodowngraded Tata Steel and JSW Steel to ‘Reduce’. It expects demand slowdown to impact margins at these steel makers.

If these export duties are just a temporary measure to curb rising prices (like in 2008), an eventual rollback could improve the margin outlook for metal stocks.

Metals companies fortunately also have cash in the bank to get through this crisis. In the months before, a commodities boom delivered high profits that helped them reduce their debt, and this keeps them on strong footing to weather the storm.

JSW Steel, Tata Steel, Hindalco andVedanta posted huge profits, with their FY22 net profit seeing at least a 4X rise from FY20. Vedanta swung to a huge Rs 15,000 crore profit in FY21 from a Rs 4,700 crore odd loss in FY20 and rose nearly 58% YoY to Rs 23,709 crore in FY22.

As all metals saw a surge in demand, evenHindustan Zinc posted higher profits, but its growth was not as rapid as other metal miners and product makers.

However, Trendlyne’s Forecaster shows that there might be some slowdown in demand growth going forward. The average revenue estimate in Forecaster’s consensus estimates indicate only JSW Steel seeing steady revenue growth over the next two financial years.

Analysts expect Hindustan Zinc to see a growth in revenue and profit in FY23, according toTrendlyne’s Forecaster estimates. But in FY24, this could taper off.

There are concerns over future demand for metals this year, and this is expected to impact most companies in the listed space. LME aluminium prices are down 36% from its peak seen in April as there is a surplus of aluminium in the market.

Analysts are taking cues from falling copper prices - a price correction in this metal is usually followed by an economic recession, and that’s what the market is pricing in. But a recession in Europe and the US might not be the calamity that it is expected to be, with many predicting a mild recession rather than a serious one.

China’s economy reopening is also a silver lining. China consumes nearly a third of the world’s steel and imports a lot of iron ore. Over the past couple of years, the country has been trying to cut carbon emissions from steel mills at home, and import steel instead. Investors in metal stocks will be hoping that there is a surge in demand for metals, as the Chinese economy comes back to life.

FII/DII flows: FII investors switch from equities to options

This week saw the rupee fall to a new all-time lowagainst the dollar, ending below Rs 79 on Wednesday. This is because foreign investors have been selling Indian shares and other assets. Over the past six months, we have seen a trend of FIIs pulling out cash from equities and putting them mainly in index and stock options. By contrast, domestic mutual funds are pumping cash into equities, as MFs see record SIP flows every month. 

In the last month,  FIIs pulled out a total of Rs 16,329.9 from the Indian stock market as a whole. They invested Rs 34,106.4 crore into index futures, but sold Rs 46,954.9 crore worth of shares during the same period. Indian mutual funds bought some of these shares foreign investors sold, with a Rs 20.712.9 crore investment.

In the past two weeks, FIIs sold shares worth Rs 21,587.2 crore. Mutual funds bought shares worth Rs 9,119 crore over the same period.

With SIP flows remaining steady, mutual funds may continue their buying despite foreign investors withdrawing in droves. MFs are not making up the shortfall completely, and there is volatility expected ahead for Indian markets.