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Trendlyne Marketwatch
Trendlyne Marketwatch
30 May 2022
Market closes higher, Unichem Laboratories posts a profit of Rs 71.5 crore in Q4

Trendlyne Analysis

Nifty 50 closed in the green with the Indian volatility index, India VIX falling by more than 5.5%. Sensex rallied over 1,000 points over easing of lockdown measures in Shanghai and positive cues from global markets. All Indian sectoral benchmarks ended in green with BSE Consumer Durables and Nifty Realty leading the pack. PayMate India filed IPO papers with SEBI to raise Rs 1,500 crore. The offer consists of fresh issue of Rs 1,125 crore and an offer of sale of upto Rs 375 crore.

Nifty 50closed at 16,661.40 (309.0, 1.9%), BSE Sensexclosed at 55,925.74 (1,041.1, 1.9%) while the broader Nifty 500closed at 14,154.80 (281.7, 2.0%)

Market breadth is highly positive. Of the 1,908 stocks traded today, 1,431 were gainers and 439 were losers.

  • Cholamandalam Financial Holdings, Carborundum Universal, Cera Sanitaryware, and Kansai Nerolac Paintsare trading with higher volumesas compared to Friday.

  • Jubilant Foodworks sees a long build-up in its Jun 30 futures series as its open interest rises 14.4% with put to call ratio at 0.55

  • Hindustan Zinc's Q4FY22 profit rises 18% YoY to Rs 2,928 crore. The profit rises as EBITDA margin rise 60 bps to 56.4% on the back of a 25.3% rise in revenues to Rs 9,074 crore.

  • Stocks like Reliance Industries, Tata Consultancy Services, Kotak Mahindra Bank, Hindustan Unilever, Bharti Airtel, among others, are outperforming their respective sectors in the past month.

  • Edelweiss maintains a ‘Buy’ rating on PSP Projects with a target price of Rs 715, indicating an upside of 38%. The brokerage remains positive about the company’s prospects due to its robust order pipeline and strong balance sheet. The company is set to bag orders worth Rs 2,200 crore in FY23 and its EBITDA to grow at a 7.4% CAGR over FY22-24, the brokerage said.

  • Unichem Laboratories reports a net profit of Rs 71.5 crore in Q4FY22 against a net loss of Rs 0.41 crore. Revenue increases 35% to Rs 369.9 crore. The stock is rallying as the board recommends a dividend of Rs 4 per equity share for FY22.

  • Timken India is rising as its Q4FY22 net profit rises 128.9% YoY to Rs 121.3 crore and revenue rises 40.4% to Rs 667.4 crore. Revenue growth is driven by growth in the industrial segment. Profit is up as the operating margin rises by 8.7 percentage points YoY to 26.9% on price hikes.

  • Realty stocks like DLF , Macrotech Developers, Godrej Properties, Oberoi Realty, Phoenix Mills, among others, are rising in trade. The broader sectoral index Nifty Realty is also trading in green.

  • Sun TV Network is rising despite its Q4FY22 net profit falling 15.8% to Rs 410.2 crore. Profit is down given a high base, due to a deferred tax credit of Rs 426.8 crore in Q4FY21. Revenue rises 6.8% YoY to Rs 912.8 crore and EBITDA rises 2.3% YoY to Rs 563.9 crore.

  • All IT stocks trade in green, with stocks like Tata Consultancy Services, Infosys, HCL Technologies, Wipro, Tech Mahindra, among others rising above 2%. The broader sectoral index Nifty IT is also trading in the green.

  • Fine Organic Industries is trading with more than 9 times its weekly average trading volume. 3M India, City Union Bank, IFB Industries, and Timken India are trading at more than five times their weekly average trading volumes.

  • Larsen & Toubro rises as it bags a contract worth Rs 1,000-2,500 crore for the Chennai Metro Rail Project. The company will construct an elevated viaduct of 10 km including an elevated ramp and ten elevated metro stations in the city. The construction is to complete in 35 months.

  • Real estate developer Shriram Properties rises after it reports a net profit of Rs 64.5 crore in Q4FY22 against a net loss of Rs 3.2 crore in Q4FY21. EBITDA margin rises 18.1 percentage points YoY to 38.4%. Revenue increases 48.7% YoY to Rs 205.1 crore. Total sales volume increases 25% YoY to 3.76 million square feet for FY22.

  • FSN E-Commerce Ventures (Nykaa) is rising despite its Q4FY22 net profit falling 96.5% YoY to Rs 8.6 crore. Profit is down due to employee costs rising 32% YoY to Rs 90.8 crore and purchases of traded goods rising 26.8% YoY to Rs 664.3 crore. However, revenue rises 31.4% YoY to Rs 973.3 crore, driven by orders growing 35.2% YoY to 73 lakh orders.

  • Indian rupee appreciates 12 paise to Rs 77.46 against the US dollar in early trade today

  • Tata Motors shares rise after the company announces the signing of an MoU (memorandum of understanding) with the Government of Gujarat for acquiring Ford India's (FIPL) Sanand vehicle manufacturing facility. The acquisition will include acquiring the land and buildings, vehicle manufacturing plant, machinery, equipment, and transfer of eligible employees of FIPL. Tata Motors plans to establish an installed capacity of 3 lakh units after it acquires the plant.

  • ONGC's standalone Q4FY22 profit rises 31.6% YoY to Rs 8,859.5 crore while revenue jumps 63% YoY to Rs 35,841 crore. Net sales realizations jump over 60% YoY on buoyant oil prices inturn driving the overall revenue growth of the company. ONGC declares final dividend of Rs 3.25 per share for FY22.

  • Mahindra & Mahindra hit a 52-week high as its Q4FY22 net profit rises 109.1% YoY to Rs 2,237.4 crore on the back of a gain on the sale of stakes in certain joint ventures and higher sales volume. Revenue rises 20.9% YoY to Rs 25,934.4 crore, driven by revenue from the automotive segment rising 46.9% YoY to Rs 12,492.8 crore. However, the operating margin falls by 161 bps YoY to 16.5% on higher input costs.

  • Ethos’ shares list at 6.4% discount to the issue price of Rs 878 on its debut on the bourses. The Rs 472.3-crore IPO was subscribed for 1.04X of the total shares on offer.

  • ITC acquires a 10.1% stake in Blupin Technologies, which operates direct-to-consumer (D2C) brand, Mylo, for nearly Rs 40 crore. This will enable ITC to strengthen its position in the mother and baby care segment. This is second investment in this space by the company after Mother Sparsh in November 2021.

  • 3M's stock is rising as its Q4FY22 net profit rises 57.4% YoY to Rs 110.9 crore with revenue increasing 11.9% to Rs 925.5 crore. Revenue from the healthcare segment grows the most with a 35% YoY increase to Rs 147.8 crore. Total tax expenses shoot up 65.9% YoY to Rs 40.5 crore.

Riding High:

Largecap and midcap gainers today include Dixon Technologies (India) Ltd. (3,804.05, 11.19%), 3M India Ltd. (19,475.05, 10.88%) and Jubilant Foodworks Ltd. (566.85, 9.70%).

Downers:

Largecap and midcap losers today include Dr. Lal Pathlabs Ltd. (2,096.30, -4.91%), Tata Elxsi Ltd. (8,076.70, -3.12%) and Jindal Steel & Power Ltd. (386.95, -2.40%).

Movers and Shakers

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

Top high volume gainers on BSE included Dixon Technologies (India) Ltd. (3,804.05, 11.19%), 3M India Ltd. (19,475.05, 10.88%) and Fine Organic Industries Ltd. (4,507.70, 10.06%).

Top high volume losers on BSE were Tasty Bite Eatables Ltd. (9,497.65, -3.32%), Symphony Ltd. (1,000.15, -1.18%) and TCNS Clothing Co. Ltd. (573.35, -1.10%).

TTK Prestige Ltd. (833.95, 0.80%) was trading at 13.3 times of weekly average. City Union Bank Ltd. (138.60, 9.48%) and IFB Industries Ltd. (857.25, -1.06%) were trading with volumes 12.0 and 8.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Adani Power Ltd. (340.25, 3.70%), Blue Dart Express Ltd. (7,472.40, 0.94%) and EID Parry (India) Ltd. (558.05, 5.53%).

Stocks making new 52 weeks lows included - Heidelberg Cement India Ltd. (182.50, -1.06%) and Ipca Laboratories Ltd. (900.35, -0.09%).

30 stocks climbed above their 200 day SMA including KPIT Technologies Ltd. (521.70, 9.58%) and Allcargo Logistics Ltd. (318.25, 7.48%). 7 stocks slipped below their 200 SMA including Torrent Pharmaceuticals Ltd. (2,885.25, -1.76%) and Lakshmi Machine Works Ltd. (9,106.00, -1.32%).

 
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The Baseline
30 May 2022
Five analyst picks that outperformed the Nifty 50

Considering the volatility in the markets, five analyst picks looks at stocks that outperformed the Nifty 50 over the past week and have a buy call from analysts in the past month. 

  1. Bata India: Edelweiss maintains a ‘Buy’ call on this footwear company with a target price of Rs 2,365. This indicates an upside of 26%. The company outperformed the Nifty 50index by 4.1% over the past seven days.

“Bata India's performance in Q4FY22 was better than expected on the margin front,” say analysts Kapil Jagasia and Praveen Sahay. Gross margin increased 450bps YoY to 57.6% and  EBITDA margins expanded 540bps YoY to 24.4%. According to the analysts, margins improved on account of price hikes, lower discounting and manufacturing efficiencies. In Q4FY22, revenue grew 13% YoY to Rs 665 crore (10% lower than analysts’ estimates) but profit was up 11.3% YoY to Rs 63 crore (25% higher than estimates).

“The management’s continuous focus on cost control measures, distribution expansion, and cash-rich balance sheet (Rs 1,092 crore as of March 2022) are key positives for the company,” Jagasia and  Sahay said. They further added that Bata’s strong market leadership, revival of formal footwear along with strong growth in casual portfolio and various distribution initiatives, would help it recoup its lost revenue in FY23.

  1. Dr. Reddy's Laboratories: Axis Securities maintains a ‘Buy’ call on this pharmaceuticals company but has reduced the target price to Rs 4,500 from Rs 5,100, now indicating an upside of 3%. The stock outperformed the Nifty 50index by 0.3% over the past seven days. 

In Q4FY22, the company reported revenue growth of 14.8% YoY (vs the brokerage’s expectation of 8%) to Rs 5,475 crore. Analyst Ankush Mahajan believes that it was “led by strong performance in geographies such as the US, India, and Emerging Markets.” Mahajan adds, “Dr. Reddy is currently investing in various businesses that may provide excellent growth in the long term.” According to him, the company is building a global pipeline of biosimilars, developing a new chemical entity for Immuno-oncology, and building up a neutraceuticals portfolio, vaccines, CDMO (contract development and manufacturing company), and digital healthcare platforms. However, Axis cautions that high inflation could decrease margins.

  1. Container Corporation of India: Motilal Oswal maintains a ‘Buy’ on this warehousing and logistics company but has reduced its target price to Rs 710, indicating an upside of 6.9%. The stock outperformed the Nifty 50 index by 13.4% over the past seven days.

Analysts Alok Deora and Dhirendra Patro said, “Container Corp reported a weak operational performance in Q4FY22 with margin contracting 20.2% (versus estimate of 23.8%) due to higher provisions made towards employee costs and higher other expenses.” Volumes and revenue were in line with their estimates.  In Q4FY22, the company’s revenue grew 5% YoY to Rs 2,043 crore and total volumes remained flat YoY at 1.07 million twenty-foot equivalent units (TEUs). The analysts note that the company is planning a capex of Rs 8,000 crore over the next 3-4 years to be funded through internal accruals. “We expect volumes to pick up with commissioning of DFCs, thereby leading to 19% revenue CAGR during FY22-24,” they added. They also believe that with the pick-up in domestic volumes, EBITDA margin is likely to be stable at 23%, resulting in a 20% EBITDA CAGR over FY21-24.

  1. Britannia Industries: Geojit BNP Paribas maintains a ‘Buy’ rating on this FMCG company’s stock with a target price of Rs 3,890, indicating an upside of 8.9%. The stock outperformed the Nifty 50 index by 1.1% over the past seven days. 

Analyst Vincent K.A. is positive about the company’s prospects. He adds, “Britannia has a robust portfolio and efficient distribution network”. In Q4FY22 net profit rose by 4.3% YoY to Rs 380 crore and revenue rose by 15.5% YoY to Rs 3,508.4 crore. The analyst noted revenues rose because of price hikes and an increase in volumes, adding that the number of rural distributors increased 13% YoY to 26,000 in FY22. However, EBITDA margins fell by 90 bps YoY to 15.7% due to input cost inflation in Q4FY22 and Vincent expects inflation in commodity prices to put pressure on margins in the near term. The management is expected to undertake price increases and grammage cuts to offset the pressure on margins. Geojit estimates the company’s profit to grow at a 16.8% CAGR over FY22-24.

  1. Ashok Leyland: LKP Securities maintains a ‘Buy’ rating on this commercial vehicle maker with a target price of Rs 173, indicating an upside of 23.9%. This stock outperformed the Nifty 50 index by 4.4% over the past seven days. 

Analyst Ashwin Patil said “the company posted a superb set of numbers in Q4 with all the underlying parameters falling in place”. The company’s standalone net profit rose 3.7X YoY to Rs 901.4 crore and revenue 25% YoY to Rs 8,744.3 crore. Patil believes higher realisations were the main drivers of this growth which were up 13% YoY due to price hikes and a better product mix. Patil expects the company to maintain this growth momentum on pick up in CV (commercial vehicle) demand due to an increase in infrastructure projects. “New launches also should help Ashok Leyland to further improve sales and fill in the gaps within the portfolio,” Patil added. LCV (light commercial vehicles) and bus demand are expected to rise as Covid-19 restrictions are lifted. LKP expects the company’s profit to grow at a 106.5% CAGR over FY22-24.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
27 May 2022
Market closes higher, Motherson Sumi Systems’ Q4 profit falls 82.9% YoY to Rs 121.6 crore

Trendlyne Analysis

Nifty 50 closed in the green with the Indian volatility index, India VIX falling by more than 6.5%. Asian shares closed higher, following the US indices which also closed sharply higher on Thursday. US equities rose as minutes from Federal Reserve's May meeting indicated the central bank would remain flexible and might pause rate hikes later in the year. Strong retail earnings outlook from top retail companies also boosted the market sentiment. S&P 500 closed 2% higher while Dow Jones closed over 1.66% higher than Thursday’s levels. Crude oil edge lower after touching a two-month high on Thursday amid fears of supply disruption as a result of the proposed European ban on Russian oil. European indices follow the global trend and trade higher than Thursday's levels.

Nifty Next 50 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Auto and Nifty FMCG closed higher than Thursday’s levels. Nifty IT closed over 2.5% higher, tracking the tech-focused NASDAQ 100, which closed in the green on Thursday.

Nifty 50closed at 16,352.45 (182.3, 1.1%), BSE Sensexclosed at 54,884.66 (632.1, 1.2%) while the broader Nifty 500closed at 13,873.15 (150.6, 1.1%)

Market breadth is overwhelmingly positive. Of the 1,875 stocks traded today, 1,301 were in the positive territory and 538 were negative.

  • Easy Trip Planners, Krishna Institute of Medical Sciences, Kansai Nerolac Paints, and Zydus Wellness are trading with higher volumesas compared to Thursday.

  • Hindalco Industries sees a long build-up in its Jun 30 futures series as its open interest rises 6.1% with put to call ratio at 0.44

  • Stocks like Reliance Industries, HDFC Bank, Infosys, Adani Total Gasand Maruti Suzuki India, among others, are outperformingtheir respective sectors in the past week.

  • Allcargo Logistics' Q4FY22 profit rises 359.6% YoY to Rs 246.8 crore. The profit rises as EBITDA margins rise 171 bps to 7.5% on the back of a 72.2% rise in revenues to Rs 5,786.6 crore.

  • Axis Securities maintains a ‘Buy’ rating on HG Infra Engineering with a target price of Rs 850, indicating an upside of 62%. The brokerage believes the company is well-placed to benefit from the ongoing growth in the infrastructure space, given its healthy balance sheet, robust order book and proven execution prowess. The brokerage expects the company’s profit to grow at a 21.3% CAGR over FY22-24.

  • Motherson Sumi Systems’ Q4FY22 net profit falls 82.9% YoY to Rs 121.6 crore and revenue rises by 1.2% YoY to Rs 17,184.8 crore. EBITDA margin falls by 290 bps YoY to 7.6% on higher input costs and lower revenue.

  • Ipca Laboratories and Sundaram Finance touch 52-week low of Rs 902.7 and Rs 1,611.6 respectively. Both stocks are falling for three sessions.

  • All bank stocks are trading in green, with stocks like IndusInd Bank, Bandhan Bank, IDFC First Bank and Federal Bank, among others, rising above 2%. The broader sectoral index Nifty Bank is also rising in trade.

  • India Cements reports a loss of Rs 10.6 crore in Q4FY22 against profit of Rs 50.2 crore in Q4FY21. Revenue for the quarter falls 3.7% YoY to Rs 1417.6 crore. The company suffers a loss due to an increase in the cost of raw materials and an increase in expenses on power and fuel.

  • Piramal Enterprises hits a 52-week low despite it posting a net profit of Rs 109.5 crore in Q4FY22 as opposed to a loss of Rs 571.2 crore in Q4FY21. Revenue rises 23.4% YoY to Rs 4,401 crore on the back of the Financial Services segment rising 36.9% YoY to Rs 2,023.8 crore. However, the operating margin falls by 24 percentage points YoY to 28.3% on rising employee costs and finance costs.

  • Hindalco Industries is rising as its Q4FY22 net profit rises 99.7% YoY to Rs 3,851 crore and revenue rises 37.6% YoY to Rs 55,764 crore. The growth is driven by revenue from Novelis rising 37% YoY to Rs 36,411 crore and the aluminium segment rising 65% YoY to Rs 9,847 crore. The operating margin slightly dips by 86 bps YoY to 13.1% as the cost of materials consumed rises 44.1% YoY to Rs 36,121 crore.

  • Reserve Bank of India's annual income rises 20% YoY to Rs 1.6 lakh crore in FY22. However, expenses jump 3.8X YoY to Rs 1.3 lakh crore. Out of the expenditure, RBI transferred Rs 1.15 lakh crore in the contingency fund to maintain the risk buffer at minimum required level. The apex bank also paid a surplus of Rs 30,307 crore to the government of India in FY22.

  • Godrej Industriesis trading with more than 38 times its weekly average trading volume. AstraZeneca Pharma India, Muthoot Finance, Cholamandalam Financial Holdings, and Piramal Enterprisesare trading at more than four times their weekly averagetrading volumes.

  • Sun Pharmaceutical Industries' arm S.C. Terapia S.A., Romania acquires Uractiv portfolio from Fiterman Pharma. The Uractiv portfolio comprises food supplements including minerals, vitamins, and adjuvants, and cosmetics and medical devices used for maintaining urinary tract health. The portfolio has annualised revenue of approximately $ 8.7 million.

  • Page Industries is rising as its Q4FY22 net profit rises 64.8% YoY to Rs 190.5 crore and revenue rises 26.1% YoY to Rs 1,111.1 crore, driven by retail expansion and new product launches. Operating margin rises by 476 bps YoY to 24% led by higher revenue.

  • NMDC is falling as its Q4FY22 net profit falls 36% YoY to Rs 1,813 crore due to employee benefits costs rising 60.4% YoY to Rs 465.4 crore and royalty and other levies rising by 74.7% YoY to Rs 2,701.5 crore. Revenue marginally falls 2.1% YoY to Rs 6,702.2 crore as revenue from the iron ore segment falls 2% YoY to Rs 6,672.1 crore.

  • Ruchi Soya Industries' Q4FY22 profit falls 24.9% YoY to Rs 234.4 crore despite a 37.1% YoY increase in the revenue to Rs 6,663.7 crore. The profit falls due to the increasing cost of raw materials and purchases of stock-in-trade expenses. The board of directors has announced a maiden dividend of Rs 5 per equity share for FY22.

  • Zee Entertainment Enterprises, Saregama India, Inox Leisure, PVR, TV18 Broadcast and Sun TV Network, among others, are rising in trade. The broader sectoral index Nifty Media is also trading in green.

  • Oil And Natural Gas Corporation, Oil India, and Vedanta fall on reports that the Centre may consider a windfall tax on oil and gas producers to offset the shortfall in revenues. This could help fund public expenditure on fuel, food, and fertilizer subsidies.

  • Paradeep Phosphates’ shares list at a 4.7% premium to the issue price of Rs 42 on its debut on the bourses. The Rs 1,501.7-crore IPO was subscribed for 1.7 times the total shares on offer.

  • Zee Entertainment Enterprises is rising despite its Q4FY22 net profit falling 34% YoY to Rs 181.9 crore due to operational costs rising 49% YoY to Rs 1,257.9 crore. Revenue rises 18.2% YoY to Rs 2,322.9 crore on revenue from other sales and services surging 8.8X YoY to Rs 348.2 crore. The operating margin fell by 6.7 percentage points YoY to 21.8% on high input costs.

  • Berger Paints (India's) Q4FY22 net profit rises 5.6% YoY to Rs 220.3 crore with revenue increasing 8% to Rs 2,187.5 crore. EBITDA rises 3.2% to Rs 346.4 crore. Total expenses for the company are up 9% YoY to Rs 1,915.4. The company recommends a dividend of Rs 3.1 per equity share for FY22.

Riding High:

Largecap and midcap gainers today include Godrej Industries Ltd. (484.70, 10.38%), Dr. Lal Pathlabs Ltd. (2,204.50, 9.67%) and Whirlpool of India Ltd. (1,622.40, 7.86%).

Downers:

Largecap and midcap losers today include Piramal Enterprises Ltd. (1,645.30, -11.61%), GAIL (India) Ltd. (142.80, -5.56%) and Oil And Natural Gas Corporation Ltd. (143.80, -5.33%).

Volume Rockets

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

Top high volume gainers on BSE included AstraZeneca Pharma India Ltd. (2,955.40, 11.99%), Godrej Industries Ltd. (484.70, 10.38%) and IndiaMART InterMESH Ltd. (4,515.30, 8.16%).

Top high volume losers on BSE were Piramal Enterprises Ltd. (1,645.30, -11.61%), Oil And Natural Gas Corporation Ltd. (143.80, -5.33%) and Muthoot Finance Ltd. (1,096.15, -3.61%).

Akzo Nobel India Ltd. (1,720.00, -0.59%) was trading at 11.8 times of weekly average. Cholamandalam Financial Holdings Ltd. (621.90, -1.25%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,520.00, 0.60%) were trading with volumes 5.7 and 5.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stock touching their year highs included - Blue Dart Express Ltd. (7,403.10, 1.20%).

Stocks making new 52 weeks lows included - 3M India Ltd. (17,563.45, 0.61%) and Ipca Laboratories Ltd. (901.15, -1.65%).

24 stocks climbed above their 200 day SMA including AstraZeneca Pharma India Ltd. (2,955.40, 11.99%) and Balrampur Chini Mills Ltd. (399.50, 6.41%). 9 stocks slipped below their 200 SMA including GAIL (India) Ltd. (142.80, -5.56%) and Triveni Turbine Ltd. (175.65, -5.26%).

 
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The Baseline
27 May 2022
The companies still winning in a tough market

"It's been a difficult time," CEO Sudhir Sitapati says when talking about the challenges for Godrej Consumer.

"This turbulent period is definitely not over," Whirlpool Chairman Arvind Uppal says about the coming months.

"We saw 12% increase in input costs at a group level in FY22. Even going forward, it remains unabated," CFO Ankush Jain of Dabur India notes.

We are in unpredictable times - countries are dealing with food and fuel price inflation, while some like Sri Lanka are in a fiscal crisis. Back home, the Centre finally acknowledged raging commodity price inflation, imposed export limits for sugar, export duties on steel and banned international wheat shipments.

But despite this upheaval, there was one particular sector and some companies which did surprisingly well. 

In this week’s Analyticks we take a look at these rare winners:

  • Agrochemical exporters cash in, thanks to higher agri-commodity prices globally in Q4
  • Screener: Companies that beat inflation fears in a tough quarter, and expanded margins in Q4

Let’s get into it.

Agrochemical players end FY22 with strong growth and optimism

The world has gone back to basics, focusing on agriculture output and food security. International prices of staple cereals like wheat, corn and soya bean had jumped nearly 40% YoY in March '22 triggered by Russia’s invasion of Ukraine. The prices of wheat crops alone rose over 60% YoY in March and have risen another 15% in May after  India banned wheat exports.  

For the middle class and most businesses, the pinch of higher inflation has been sharp. But the agrochem sector is an exception, benefiting from higher agri-commodity prices in Q4FY22 as well as in FY22.

Agrochemical players with a higher share of exports like UPL, PI Industries and Sharda Cropchem saw healthy demand and better prices for their crop protection products in Q4FY22 and full-year FY22. These particular companies manufacture formulations used in fungicides, herbicides and insecticides. 

Will these companies see growth momentum continue in FY23?

More demand and tight supply: Agrichem sees revenue growth in Q4

Higher crop rates led to more staples being planted which increased demand for crop inputs like fertilisers, seeds and crop protection products. This along with tighter supplies boosted the prices of agri-inputs. Sharda Cropchem and UPL’s Q4FY22 sales realisation grew 42% and 19% YoY, respectively. However sales volumes saw muted growth. In fact, Sharda Cropchem’s volumes fell 11% YoY due to subdued demand in Europe as well as shipping and logistic issues seen across geographies. 

North American and Latin American regions are the growth drivers for these companies. According to Crisil Research and UPL’s management, strong demand for herbicides and insecticides is coming in from Latin American countries like Brazil and Argentina. 

The North American region (NAFTA) aided the overall topline growth for Sharda Cropchem in FY22 as the revenues rose 59% YoY to Rs 1,159 crore. UPL, on the other hand, sold higher volumes and earned better sales realisations for glufosinate, an herbicide, in the NAFTA region. 

Coming to PI Industries, domestic revenues jumped 47% YoY to Rs 281 crore backed by higher demand for herbicides for wheat. The export revenues grew 11% YoY to Rs 1,114.2 crore and made a higher incremental contribution to the company's overall revenue growth in Q4FY22. In FY22, the export revenues grew at a much faster clip of 20% as compared to the domestic revenues (4% YoY). 

Among the top agrochemical companies, Sharda Cropchem saw a stellar YoY growth of over 30% in its revenue and profit in Q4FY22. 

Notably, Sharda focuses on exports and has an unusual business model. It first identifies generic molecules with expiring patents and then registers the particular formulations under its name. It then outsources the manufacturing of these formulations and undertakes only the marketing and distribution part.

Thus, the company works on an asset-light model i.e., investment in fixed assets is minimal. It is also able to save time and capital required for research and development of new formulations. However, Sharda Cropchem still has to invest around Rs 25-40 crore on each product registration. 

Agrochemical players to gain from the positive global agri-cycle in H1FY23

With global prices for cereal crops rising and demand robust, Sharda Cropchem and PI industries are confident of  clocking revenue growth of 15-20% in FY23. PI Industries plans to launch four new molecules in the agrochemical exports segment and five new products for the domestic business in FY23. The company is seeing goodtraction in export-related enquiries. Analysts are also working with similar top line growth estimates (13% YoY on an average) for FY23, according to Trendlyne’s Forecaster.

Agrochemical companies expect higher export volumes to primarily drive their revenue growth in H1FY23, provided North American weather conditions are benign. They also foresee strong domestic demand on expectations of a normal south-west monsoon in 2022. Notably, the chances of further price hikes are lower unless there is a material spike in input costs. The companies are also likely to sustain their EBITDA margin levels of 20-22% in FY23. 

All in all, Indian agrochem companies look well placed to deliver yet another strong financial performance in FY23 amid a tough global environment. 

Screener: Some companies successfully tamed runaway inflation in Q4

Cost pressure is the buzzword for companies around the world. But there are some that have managed to walk through this minefield without hurting themselves.This screener shows 54 companies that saw their operating and net profit margins improve in Q4FY22. Out of these,  25 companies are part of  the Nifty 500 group.

Commodity and speciality chemical companies like Gujarat Alkalies & Chemicals, GHCL, DCM Shriram and Gujarat Fluorochemicals feature in this screener. The sustained rise in prices of soda ash and caustic soda (up 2.5X YoY in Q4FY22) due to tight supply chains aided margin growth of companies involved in chlor-alkali and chlor-vinyl chemistry. Other than this, agrochemical companies like Anupam Rasayan and Bayer Cropscience saw their operating margins improve by more than 7 percentage points on YoY basis.

Sugar companies like Dwarikesh Sugar Industries, Uttam Sugar Mills are also part of this list of companies as higher sales growth in the distillery segment (ethanol) resulted in margin expansion. 

While most pharmaceutical companies missed Q4FY22 earnings estimates due to muted growth in US markets and increase in costs, some companies like Abbott India, Procter and Gamble Health and Neuland Laboratories bucked the trend. Better product mix, lower marketing and other expenses aided the margin growth of these companies.

You can find some popular screeners here.

 
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The Baseline
27 May 2022
Five Interesting Stocks Today
  1. InterGlobe Aviation (Indigo): This airline stock surged more than 7% even after it posted a loss in Q4FY22. IndiGo’s net loss rose  47% YoY to Rs 1,681 crore because of a 68% YoY surge in fuel costs to Rs 3,220.5 crore. The positive stock movement after the results was because of CEO Ronojoy Dutta’s positive outlook for the company. He said that profitability is a top priority, and also hinted at a hike in ticket prices. The CEO believes the key to profitability is managing the business well on the revenue side. It’s important to note that IndiGo has over 50% market share in India’s commercial aviation market, ending Q4 with a market share of nearly 59%.

The company’s revenue rose in Q4FY22 by 28.9% to Rs 8,020.7 crore. But due to high aviation turbine fuel (ATF) costs the EBITDA margin fell 8.3 percentage points to 2.1%. The increase in ATF costs was much higher than the rebound in demand for air travel.

However, it will be interesting to see how IndiGo fights to maintain its market share as Air India and SpiceJet expand flight operations. IndiGo also faces threats from new entrants like Akasa, and Jet Airways. With a volatile and bearish market, brokerage JM Financial expects the stock to remain under pressure because of increasing competition, margin pressure due to the rise in ATF prices, and Rakesh Gangwal’s decision to reduce his 36.6% stake in the company.

  1. ICICI Lombard General Insurance: This general insurance company’s stock fell over the past week after reports came in early in the week that the insurance regulator is considering a move to allow life insurers to sell health insurance products. The stock rebounded back and outperformed its industry over the past three months. This outperformance was probably due to another regulatory action that would lead to higher motor insurance premium for general and health insurers. The Ministry of Road Transport and Highways issued a notification on that will lead to an increase in third-party motor insurance premium for various categories of vehicles. The underwriting and claims head of the company considers this a positive step as premiums will rise as motor insurance premium rates were stagnant for the last two years.

The company’s net profit in Q4FY22 fell 9.2% YoY to Rs 313 crore even though its gross direct premium income (GDPI) rose 34.2% YoY to Rs 4,666 crore. The management attributes the fall in profit to a rise in claims and underwriting losses due to the pandemic. Underwriting losses rose 128% to Rs 308.9 crore. Maximum underwriting loss was in the health segment with the retail health insurance segment’s losses growing 4.8X to Rs 50.7 crore.

While the company faced underwriting losses in the health insurance segment, the product mix for health insurance stands unchanged at 22%, the same as FY21. Motor insurance share in the total product mix decreased to 46% in FY22 since the auto sector was on a slowdown the entire FY22.

  1. Torrent Pharmaceuticals: This pharmaceutical company’s stock rose by 10.2%, despite posting a loss of Rs 118 crore in Q4FY22 as opposed to a profit of Rs 324 crore in Q4FY21. The stock rose significantly after the company declared a final dividend of Rs 23 per share, with the total payout amounting to Rs 389.2 crore. The company’s board also recommended issuing bonus shares in the ratio of 1:1 or one share for each fully paid-up share held. The company declared a dividend despite its net profit falling 37.9% YoY to Rs 777 crore in FY22. Its cash flow from operations and trade receivables marginally increased compared to FY21. 

The stock is also currently in the PE ‘Sell Zone’, according to Trendlyne’s Check Buy or Sell feature.. This means the stock is trading at higher PE levels than normal. The stock has remained below its current PE levels 90.7% of the time.

The company’s revenue rose 10% YoY, driven by strong growth momentum in branded generic markets in India and Brazil. Going forward, the management guided for a 100-150bps EBITDA margin improvement in FY23 compared to 28.6% in FY22. It expects the improvement to be driven by the closure of its liquid business, cost optimization measures, and favourable pricing in the branded generics segment.

  1. National Aluminium Company (Nalco): This aluminium company’s stock closed 0.7% lower on Thursday, even though its Q4FY22 net profit rose 9.6% YoY to Rs 1,025.5 crore. The company’s profit marginally missed Trendlyne’s Forecaster estimates. The company’s revenue rose 53.8% YoY to Rs 4,340.8 crore in Q4FY22, driven by high LME (London Metal Exchange) prices, and effective raw material procurement according to the management. In FY22 the company produced 4.6 lakh tonnes of aluminium and 75.1 lakh tonnes of bauxite, its highest ever since its inception, according to the management.

Interestingly, this stock showed on a screener which tracks big changes in FII (foreign institutional investors) holding in companies on a quarterly basis. FII holding in the company increased by 4.7 percentage points QoQ to 18%. By far, Nalco saw the biggest jump in FII holding compared to other key aluminium players such as Hindalco (+2.8 percentage points QoQ) and Vedanta (+0.7 percentage points QoQ).

Even as aluminium prices have corrected nearly 30% from record highs during Q4FY22, the Managing Director of Nalco expects to keep up the growth momentum by increasing production and reducing raw material costs. As the company has been allocated two coal mines namely Utkal D and E, the management expects the cost of procuring coal to gradually reduce from FY24. For the coming quarters, the management expects aluminium to stabilise as it sees the gap between global production of aluminium and consumption narrowing down.

  1. Aster DM Healthcare: This healthcare service provider’s stock rose over 13% intraday after it announced its Q4FY22 results on Wednesday. Its net profit jumped 2.2X YoY to Rs 226.3 crore and revenues increased by 14.1% to Rs 2,727.8 crore. Revenue rose on the back of a 26.2% YoY growth in its India businesses. EBITDA margin rose 360 basis points YoY to 17% mainly due to a decrease in its laboratory outsourcing costs, which fell 61% YoY to Rs 54.8 crore. This stock shows up on a screener that lists companies that announced results in the last two weeks, with rising operating profit margin and YoY profit growth.

Aster DM gets a majority (77%) of its revenues from Gulf Cooperation Council (GCC) countries and the remaining 23% from India. However, the company is focusing more on expanding its network in India as its India business is growing faster. Revenue from GCC rose 11% YoY to Rs 2,121 crore while revenue from India increased by 26.2% to Rs 607 crore in Q4FY22. This is reflected in the average occupancy rate (AOR) as well. AOR of hospitals in GCC fell 100 bps YoY to 51% in FY22 while ARR of hospitals in India rose 10 percentage points to 66%. The company plans to add up to 1,000 beds in India in FY23, indicating a 25.6% increase.

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

 
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The Baseline created a screener Stocks with a high …
26 May 2022
Stocks with a high percentage of retail investors
 
Trendlyne Marketwatch
Trendlyne Marketwatch
26 May 2022
Market closes higher, Whirlpool touches 52-week low as its Q4 profit falls 35% YoY

Trendlyne Analysis

Nifty 50 snapped its three-day losing streak and closed in the green on a volatile day of trade. The Nifty 50 recovered its losses and closed 0.9% higher. However, most Asian indices closed lower amid mixed global cues. Ratings agency Moody's Investors Service lowered its growth forecast for India by 30 basis points from 9.1 to 8.8 percent for 2022.

US equities rose on Wednesday after a majority of Federal Open Market Committee members judged that further half a point percentage point hikes would ‘likely be appropriate’, in line with analysts’ expectations. Policymakers unanimously feel that the US economy is very strong as they try to curb high inflation levels. Crude oil edges higher and trades at elevated levels as European Union’s proposed ban on Russian oil could disrupt its supply. The pan-European STOXX 600 opens marginally higher as investors continue to monitor major central banks’ monetary policies to curb high inflation levels.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal, which lost over 10% in the last three trading sessions, closed sharply higher. Nifty IT closed in the green, following the NASDAQ 100, which closed 1.5% higher on Wednesday.

Nifty 50closed at 16,170.15 (144.4, 0.9%), BSE Sensexclosed at 54,252.53 (503.3, 0.9%) while the broader Nifty 500closed at 13,722.55 (134.8, 1.0%)

Market breadth is in the green. Of the 1,880 stocks traded today, 1,020 were gainers and 821 were losers.

  • Mangalore Refinery And Petrochemicals, Alok Industries, Prism Johnson, and Grindwell Norton are trading with higher volumes as compared to Wednesday.

  • Stocks like Zydus Lifesciences, Hindustan Aeronautics, MRF, Siemens, and Tata Elxsi, among others, are outperforming their sectors over the past month.

  • Power utility stocks like Adani Transmission, Adani Green Energy, JSW Energy, Tata Power Co, among others fall in trade as the Centre will unveil a plan to help state-run electricity distribution companies (discoms) to pay outstanding dues. The scheme will entail payment of dues in monthly installments over four years. The broader sectoral index BSE Utilities is trading flat.

  • ICICI Direct maintains a ‘Buy’ rating on Birlasoft with a target price of Rs 440, indicating an upside of 18%. The brokerage expects the company’s revenue to grow on the back of multi-year deals, higher client acquisitions, and expansion into European and Asia-Pacific markets. The brokerage expects profit to grow at a 10.9% CAGR over FY22-24.

  • Aether Industries’ Rs 808-crore IPO gets bids for 6.3X of the available 93.5 lakh shares on offer on the last day of bidding. The retail investor quota gets bids for 114% of the available 45.4 lakh shares on offer.

  • Moody’s Investor Services lowers India's growth forecast for 2022 by 30 bps to 8.8%. The agency expects rising crude oil, food, and fertilizer prices, to affect household finances and spending in the coming months.

  • Consumer durables company Whirlpool of India touches a 52-week low of Rs 1,365.1 as its Q4FY22 net profit declines 35% YoY to Rs 84.5 crore. The fall in profit is because of weak industry demand and a rise in commodity costs. Its revenue from operations also fell 4.1% YoY to Rs 1,706.9 crore. The board recommends a final dividend of Rs 5 per equity share for FY22.

  • Metal stocks like JSW Steel, Tata Steel, Jindal Steel & Power, Steel Authority of India, NMDC, among others are rising in trade. The broader sectoral index BSE Metal also trades in the green.

  • IT Stocks like MphasiS, Birlasoft, Nazara Technologies, Wipro, and Cyient, among others, are in the oversold zone according to the technical indicator relative strength index or RSI.

  • ITIis trading with more than 46 times its weekly average trading volume. Thyrocare Technologies, Torrent Pharmaceuticals, Asahi India Glass, and General Insurance Corporation of India are trading at more than five times their weekly average trading volumes.

  • Colgate-Palmolive (India) Q4FY22 profit rises 2.8% YoY to Rs 323.6 crore and revenue rises 1.4% YoY to Rs 1,293.4 crore. The company delivers marginally improved EBITDA margins of 32.2%, up by 11 bps YoY, on the back of calibrated pricing and focus on cost optimization initiatives and efficiencies.

  • Aurobindo Pharma is rising as its arm Eugia Pharma Specialties receives United States Food & Drug Administration (USFDA) approval for its pemetrexed injections. This drug, which has an estimated market size of $ 1.3 billion, is therapeutically equivalent to Alimta injection of Eli Lilly. Pemetrexed injections are used to treat certain types of cancer.

  • Power Finance Corp is falling despite its Q4FY22 net profit rising 9.7% YoY to Rs 3,205.9 crore and revenue rising 3.9% YoY to Rs 18,873.5 crore. The growth in revenue is driven by a rise in interest income, and fees and commission income. The board recommends a final dividend of Rs 1.25 per share for FY22.

  • Jubilant Foodworks rises after Jefferies upgrades its rating to ‘Buy’ from ‘Hold’. The brokerage expects the economic slowdown to not have a major impact on the earnings. The company will declare its Q4FY22 results on May 30.

  • National Aluminium Company (NALCO) is falling despite its Q4FY22 net profit rising 9.6% YoY to Rs 1,025.5 crore and revenue rising 53.8% YoY to Rs 4,340.8 crore. The maximum revenue growth came from the aluminium segment, rising 68.2% YoY to Rs 3,269.2 crore.

  • Apollo Hospitals Enterprise is falling as its Q4FY22 net profit falls 46.3% YoY to Rs 90 crore despite a 23.6% YoY rise in revenue to Rs 3,546.4 crore. Net profit declines mainly due to a deferred tax charge of Rs 104 crores. Revenue rises on the back of strong growth in its healthcare services and pharmacy distribution segment.

  • InterGlobe Aviation (Indigo) rises despite its net loss widening by 47% YoY to Rs 1,681 crore. The widening of loss is because of a surge in fuel expenses by 68% YoY to Rs 3,220.5 crore. However, revenue increases 28.9% to Rs 8,020.7 crore but EBITDA margin falls 8.3 percentage points to 2.1%. The airline plans to increase capacity by 60% in FY23 as it sees an improvement in demand.

  • Bharat Petroleum Corporation (BPCL) is falling as its Q4FY22 net profit falls 72.7% YoY to Rs 2,802.7 crore as fuel prices did not increase during the quarter despite a rise in the price of crude oil. The cost of materials consumed rises 78.2% YoY to Rs 55,384.7 crore. However, revenue rises 23.5% YoY to Rs 1,23,217.1 crore on higher oil prices.

  • Torrent Pharmaceuticals is rising despite posting losses of Rs 118 crore in Q4FY22 against a profit of Rs 321 crore in the same quarter previous year. The company posted losses mainly on account of impairment charges worth Rs 439 crore as it discontinued liquid manufacturing business in the US. However, revenues rise 10% YoY in Q4FY22 to Rs 2,131 crore on the back of strong growth in the India business.

  • Coal India’s Q4FY22 net profit surges 46.3% YoY to Rs 6,715 crore with net sales increasing 22.6% to Rs 30,046.2 crore. Total revenue from operations rises 22.5% to Rs 32,706.7 crore because of an increase in volumes and better realizations. Its raw coal production for Q4FY22 rises 2.8% YoY to 209 million tonnes with raw coal offtake increasing 9.3% to 180.25 million tonnes. The mining company’s current tax expenses also see a rise of 19% YoY to Rs 2,253.2 crore.

Riding High:

Largecap and midcap gainers today include Torrent Pharmaceuticals Ltd. (2,919.75, 10.81%), InterGlobe Aviation Ltd. (1,816.20, 10.36%) and Adani Total Gas Ltd. (2,438.60, 10.00%).

Downers:

Largecap and midcap losers today include Havells India Ltd. (1,172.75, -4.61%), 3M India Ltd. (17,463.95, -2.58%) and ITC Ltd. (266.70, -2.20%).

Volume Rockets

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

Top high volume gainers on BSE included ITI Ltd. (97.40, 15.95%), Torrent Pharmaceuticals Ltd. (2,919.75, 10.81%) and InterGlobe Aviation Ltd. (1,816.20, 10.36%).

Top high volume losers on BSE were Suzlon Energy Ltd. (7.85, -9.77%), Vardhman Textiles Ltd. (285.80, -3.36%) and 3M India Ltd. (17,463.95, -2.58%).

Thyrocare Technologies Ltd. (690.30, 8.67%) was trading at 16.2 times of weekly average. AIA Engineering Ltd. (2,056.10, 9.63%) and General Insurance Corporation of India (113.75, 3.22%) were trading with volumes 8.4 and 8.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

77 stocks hit their 52-week lows.

Stocks making new 52 weeks lows included - 3M India Ltd. (17,463.95, -2.58%) and Akzo Nobel India Ltd. (1,722.00, -0.40%).

16 stocks climbed above their 200 day SMA including Mahindra & Mahindra Financial Services Ltd. (173.35, 6.38%) and Poonawalla Fincorp Ltd. (234.40, 6.38%). 24 stocks slipped below their 200 SMA including Suzlon Energy Ltd. (7.85, -9.77%) and GMM Pfaudler Ltd. (4,330.00, -4.12%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
25 May 2022
Market closes lower, ICICI Direct maintains a ‘Buy’ rating on Divi’s Laboratories

Trendlyne Analysis

Indian indices closed in the red with the volatility index, India VIX, easing by 1.4%. Major Asian indices closed higher than Tuesday’s levels amid mixed global cues. Investors continue to monitor the impact of global sell-off in technology stocks and growing worries of imminent rate hikes by central banks. US indices closed flat to lower on Tuesday amid high volatility. The tech-focused NASDAQ 100 fell over 2% after Snapchat’s parent company, Snap plunged 43% as the company warned of a worsening economic outlook. The Dow Jones recovered towards the end of the trading session and closed marginally higher. Investors await minutes from the US Federal Reserve’s previous meeting, which is due later today. European indices trade in the green, recovering from their fall on Tuesday. Eurozone's business slowed down in May as Eurozone Manufacturing Purchasing Managers Index (PMI) came in at 54.4 while services PMI decreased to 51.8. Both PMI numbers failed to meet the estimates.

Nifty Next 50 and Nifty Smallcap 100 closed in the red despite the benchmark index trading flat. Nifty Metal, which lost over 9% in the last two trading sessions, extended its losing streak to three days. Nifty IT closed deep in the red, following the NASDAQ 100, which fell over 2% on Tuesday.

Nifty 50closed at 16,025.80 (-99.4, -0.6%), BSE Sensexclosed at 53,749.26 (-303.4, -0.6%) while the broader Nifty 500closed at 13,587.75 (-159.5, -1.2%)

Market breadth is moving down. Of the 1,882 stocks traded today, 241 showed gains, and 1,617 showed losses.

  • Mangalore Refinery And Petrochemicals, SIS, GMR Infrastructure, and TeamLease Servicesare trading with higher volumesas compared to Tuesday.

  • Hindustan Zinc rises as the Union Cabinet Committee on Economic Affairs approves selling the Centre's entire stake in Hindustan Zinc, according to reports. The government holds a 29.5% stake in the company worth Rs 36,000 crore.

  • Johnson and Johnson’s and Momenta Pharmaceuticals file a case against Natco Pharma and its marketing partner Mylan Pharmaceuticals in Pennsylvania Federal Court in USA for infringement of two patents. These patents are associated with 20mg/ml and 40mg/ml glatiramer acetate injection.

  • ICICI Direct maintains a ‘Buy’ rating on Divi’s Laboratories with a target price of Rs 4,655, indicating an upside of 19%. The brokerage is positive about the company as it remains well positioned in the custom synthesis and active pharmaceutical ingredients or API segments. The brokerage expects the company’s revenue to grow at a CAGR of 7.5% over FY22-24.

  • Aether Industries’ Rs 808-crore IPO gets bids for 49% of the available 93.5 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 67% of the available 45.4 lakh shares on offer.

  • Media stocks like Zee Entertainment Enterprises, Sun TV Network, Network 18 Media & Investments, Saregama India, and TV 18 Broadcast, among others, are falling in trade. The broader sectoral index Nifty Media is also trading in the red.

  • Edible oil companies' stocks like Adani Wilmar, Ruchi Soya Industries, Gujarat Ambuja Exports, among others, slump in trade after government exempts customs duty and agri cess on importing 2 million tonnes of soyabean and sunflower oil per year. This exemption is applicable for crude soyabean and sunflower oil for FY23 and FY24.

  • Metropolis Healthcare is falling as its Q4FY22 net profit declines 34.8% YoY to Rs 40 crore despite a 4.9% increase in revenue to Rs 305.9 crore. EBITDA margin falls 7.2 percentage points YoY to 26% on the back of a rise in cost of materials consumed. Revenue per patient declines by 2% YoY to Rs 904 and number of patient visits increases by 7% to 34 lakh.

  • Aster DM Healthcare is trading with more than 37 times its weekly average trading volume. Bayer Cropscience, SIS, Minda Industries, and TCI Express are trading at more than four times their weekly average trading volumes.

  • JM Financial's Q4FY22 profit rises 1.18% YoY to Rs 178.8 crore despite a 0.2% YoY fall in revenue to Rs 839.2 crore. The profit rises as the company's finance cost and employee benefit expense falls. The board of directors recommends a final dividend of Rs 1.15 per share.

  • All IT stocks trade in the red after Nomura downgraded its target price and revised its recommendation for Tata Consultancy Services, Larsen & Toubro Infotech, Wipro, HCL Technologies, and Persistent. It expects tech spending to fall because of changes in macro-economic conditions and deceleration in revenue. Nomura downgraded its rating for Tata Consultancy Services, Larsen & Toubro Infotech to 'Reduce' from 'Neutral'. It cuts its rating on Wipro, HCL Technologies, and Persistent's rating to 'Neutral' from 'Buy'.

  • ICICI Direct upgrades its rating on JK Cement from ‘Hold’ to ‘Buy’ with a target price of Rs 2,850, indicating an upside of 20%. The brokerage expects the company to expand its market share in Northern India due to its increasing production capacity. The brokerage expects the company’s profit to grow at a 22.5% CAGR over FY22-24.

  • Minda Industries’ rises even though its Q4FY22 net profit falls 4.7% YoY to Rs 156.2 crore because of a one-time deferred tax credit payment of Rs 15.6 crore. However, revenue increases 7.9% YoY to Rs 2,415 crore. The board approves the issue of bonus shares in the ratio of 1:1 and a final dividend of Rs 1 per equity share for FY22.

  • Wipro and Info Edge (India) touch 52-week low of Rs 447.7 and Rs 3,380 respectively. Both stocks are falling for four sessions.

  • Aster DM Healthcare is rising as its Q4FY22 net profit jumps 2.2 times YoY to Rs 226.3 crore and revenues increase by 14.1% to Rs 2,727.8 crore. Net profit rises as laboratory outsourcing costs fall 61% YoY to Rs 54.8 crore. Outpatient visits rise 22.2% to 5.5 lakh and in-patient visits increase by 16.5% YoY to 46,600.

  • Latent View Analytics is falling as its Q4FY22 net profit declines 28.8% QoQ to Rs 35.6 crore despite a revenue rise of 9% to Rs 117.5 crore. Net profit falls in Q4 as the company posted an exceptional item gain of Rs 22.6 crore in Q3FY22 as a part of economic relief provided by the US government. EBITDA margin increases by 60 bps QoQ to 30.5%.

  • Rail India Technical and Economic Service (RITES) is falling as its Q4FY22 net profit is flat, rising only 0.6% YoY to Rs 142.4 crore. However, revenue rises 21.7% YoY to Rs 766 crore led by export sales rising 161.3% YoY to Rs 250.1 crore. EBITDA margin falls by 170 bps YoY to 26.7%. The board recommends a dividend of Rs 3.5 per share for FY22.

  • Paint company stocks like Asian Paints and Berger Paints are down as Grasim Industries announces it will double its investment in the paints business to Rs 10,000 crore from the earlier announced Rs 5,000 crore. The company is accelerating the execution of its paints business with two of its plants at Panipat and Ludhiana already under construction.

  • Ipca Laboratories is falling as its Q4FY22 net profit declines by 19.3% YoY to 130.2 crore despite a revenue rise of 15.7% to Rs 1,289.1 crore. EBITDA margin decreases by 265 bps YoY to 18.1%. Revenue from India business rises 27% YoY to Rs 551.8 crore while revenue from active pharmaceutical ingredients or API exports falls 14% to Rs 180.8 crore.

  • Adani Ports & Special Economic Zone’s Q4FY22 net profit falls 21.8% YoY to Rs 1,033.2 crore as total expenses increase 31% to Rs 3,309.9 crore. Revenue from operations increases 6.6% YoY to Rs 3,845 crore with port and SEZ activities revenue rising marginally by 1.4% YoY to Rs 3,369 crore. EBITDA is down 19.5% to Rs 1,858.8 crore with operating margin falling 6.8 percentage points to 62.2% in Q4FY22. The board recommends a dividend of Rs 5 per share for FY22.

Riding High:

Largecap and midcap gainers today include Container Corporation of India Ltd. (623.70, 6.28%), Bayer Cropscience Ltd. (4,974.30, 5.09%) and Balkrishna Industries Ltd. (2,161.50, 4.55%).

Downers:

Largecap and midcap losers today include Asian Paints Ltd. (2,838.05, -8.06%), Coromandel International Ltd. (896.70, -7.85%) and Berger Paints (India) Ltd. (566.15, -7.21%).

Volume Rockets

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

Top high volume gainers on BSE included Minda Industries Ltd. (889.85, 6.52%), Bayer Cropscience Ltd. (4,974.30, 5.09%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (595.90, 4.96%).

Top high volume losers on BSE were Balrampur Chini Mills Ltd. (354.70, -8.85%), Asian Paints Ltd. (2,838.05, -8.06%) and Berger Paints (India) Ltd. (566.15, -7.21%).

Aster DM Healthcare Ltd. (179.60, 4.51%) was trading at 60.3 times of weekly average. Nesco Ltd. (548.35, 3.48%) and Prism Johnson Ltd. (106.90, -5.40%) were trading with volumes 16.9 and 14.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

1 stock made 52-week highs, while 61 stocks were underachievers and hit their 52-week lows.

Stock touching their year highs included - Coromandel International Ltd. (896.70, -7.85%).

Stocks making new 52 weeks lows included - Akzo Nobel India Ltd. (1,729.00, -2.70%) and Amara Raja Batteries Ltd. (485.10, -0.96%).

12 stocks climbed above their 200 day SMA including Minda Industries Ltd. (889.85, 6.52%) and Bayer Cropscience Ltd. (4,974.30, 5.09%). 29 stocks slipped below their 200 SMA including Chambal Fertilisers & Chemicals Ltd. (358.40, -10.70%) and Balrampur Chini Mills Ltd. (354.70, -8.85%).

 
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The Baseline
25 May 2022
Big Misses: Many companies miss analyst profit estimates in Q4

Stock markets are volatile amid signs that all is not well in the corporate world. Q4FY22 results confirmed that many businesses are struggling with rising inflation, supply pressures and worried consumers. Trendlyne’s Forecaster estimates show quite a few companies from the Nifty 500 missing Q4 net profit estimates by a large margin.

Over 150 Nifty companies missed their adjusted net profit estimates. Trendlyne’s Forecaster shows that many companies in thepharmaceutical sector saw their actual adjusted net profit miss consensus estimates by more than 100%. Among these,Lupin’s Q4FY22 net profit missedTrendlyne’s Forecaster estimates by the widest gap of 310.7%.

Lupin’s miss was because of a deferred taxexpense of Rs 341.9 crore.GSK Pharma is another pharma company that missed its profit estimates due to a one-time tax adjustment of Rs 202 crore.

Most pharma companies struggled because of muted growth in US markets and an increase in costs because of freight charges, marketing expenses, and input costs. Cost pressures also led to companies in sectors likeautomobile,retailing,cement,banks, andconsumer services, to miss Trendlyne’s Forecaster profit estimates. The companies that missed Trendlyne Forecaster’s estimates by more than 100% includeTata Motors (156.9%),Trent (151.7%),Nuvoco Vistas Corporation (135.6%), andGMR Infrastructure (123.3%).

With inflation hitting nearly 8% in April 2022, the Reserve Bank of India is hiking its rates to reduce excess liquidity in the market. This will affect the earnings of corporates in H1FY23 as demand is likely to take a hit.

On the bright side, areport by ICICI Securities suggests that the earnings base will continue to expand over FY22-24 with more beats than misses. The brokerage expects demand and earnings to show significant improvement in sectors like real estate, banks, energy, and consumer services. As we head into the next quarter, let’s hope that the analysts' optimism turns out true in Q1FY23.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
24 May 2022
Market closes lower, Aether Industries’ IPO gets bids for 33% of the total shares on offer

Trendlyne Analysis

Indian indices closed in the red with the volatility index, India VIX rising by 9.5%. Asian indices closed in the red as investors continue to monitor high inflation levels, supply chain disruptions arising out of China due to stringent lockdowns, and imminent interest rate hikes by Central banks. US indices closed higher led by Dow Jones, which rose close to 2% on Monday. However, NASDAQ futures gave up all its gains and trades in the red as Snapchat plunged over 30% after trading hours as its CEO says the company will miss its earnings estimates. Crude oil prices rise marginally as weaker demand due to slow economic growth concerns offset the planned European ban on Russian oil. European indices follow the Asian markets and trade lower than Monday's levels.

Nifty Next 50 and Nifty Smallcap 100 closed in the red following the benchmark index. Nifty Metal, which lost over 8% on Monday, extended its losses and closed 1.2% lower. Nifty IT closed lower, following the NASDAQ futures, which is trading in the red.

Nifty 50closed at 16,125.15 (-89.6, -0.6%), BSE Sensexclosed at 54,052.61 (-236, -0.4%) while the broader Nifty 500closed at 13,747.25 (-88.6, -0.6%)

Market breadth is highly negative. Of the 1,880 stocks traded today, 458 were gainers and 1,387 were losers.

  • Orient Electric, Jyothy Labs, Westlife Development, and Cholamandalam Financial Holdings are trading with higher volumes as compared to Monday.

  • Reliance Industries sees a long build-up in its May 26 futures series as its open interest rises 10.3% with put to call ratio at 0.44.

  • Sugar stocks like Shree Renuka Sugars, Balrampur Chini Mills, Dalmia Bharat, and EID Parry (India), among others, fall as reports suggest the Centre is mulling export restrictions on sugar. According to reports, the Centre plans to cap sugar exports at 10 million tonnes to ensure adequate stock before the next sugar season starts in October.

  • Bank of India is rising as Q4FY22 profit rises 142.3% YoY to Rs 606 crore and net interest income rises 35.8% YoY to Rs 3,986. Bank's NIM (global) and NIM (domestic) improves 57 bps YoY and 74 bps YoY to 2.6% and 2.9%, respectively. Asset quality improves with gross NPA declining 19.3% YoY to Rs 45,605 crore and net NPA declining 19.7% to Rs 9,852 crore.

  • Rupa & Company is falling as its Chief Executive Officer Dinesh Kumar Lodha and Chief Financial Officer Ramesh Agarwal resign, effective May 31, 2022. Also, the company’s Q4FY22 net profit is down 25.2% YoY to Rs 49.3 crore due to rising raw material costs. Revenue rises marginally by 0.3% YoY to Rs 455.5 crore and EBITDA margin falls 370 bps YoY to 16.3%.

  • NBCC (India) receives order worth Rs 313.8 crore to execute various infrastructure developments works under Puducherry Smart City Development as project management consultant.

  • Aether Industries’ Rs 808-crore IPO gets bids for 33% of the available 93.5 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 42% of the available 45.4 lakh shares on offer. The public offer comprises of a fresh issue up to Rs 627 crore as well as an offer for sale of up to Rs 181 crore.

  • eMudhra’s Rs 412.8-crore IPO gets bids for 2.7X of the available 1.1 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 2.6X of the available 57.6 lakh shares on offer.

  • Stocks like Sun Pharma, Mahindra & Mahindra, Muthoot Finance, and Page Industries, among others, are rising over the past week, ahead of their financial results.

  • Shilpa Medicare is trading with more than 41 times its weekly average trading volume. Hikal, GMR Infrastructure, Jyothi Labs, and Divi's Laboratoriesare trading at more than five times their weekly average trading volumes.

  • HDFC Securities maintains an ‘Add’ rating on V-Guard Industries with a target price of Rs 275, indicating an upside of 22.2%. The brokerage is positive about the company as its revenue from the electrical segment rose 32.5% YoY to Rs 507.3 crore in Q4FY22. The brokerage expects the company’s revenue to grow at a CAGR of 13.1% over FY22-24.

  • Graphite India falls despite its Q4FY22 net profit rising 48.4% YoY to Rs 95 crore and revenue rising 47.3 % YoY to Rs 915 crore on the back of higher realisations. The maximum revenue growth came from the graphite and carbon segment, rising 49.9% YoY to Rs 790 crore. EBITDA margin falls by 5 percentage points YoY to 19% due to higher input costs.

  • All IT stocks trade in the red. Stocks like Larsen & Toubro Infotech, MindTree, and L&T Technology Services, are down by more than 2%. The broader sectoral index Nifty IT is also falling in trade

  • Axis Securities maintains a ‘Buy’ rating on Ashok Leyland with a target price of Rs 160, indicating an upside of 23%. The brokerage believes the company is well-positioned to benefit from a strong recovery in demand for commercial vehicles, given its new product launches and diversified product portfolio. The brokerage expects the company’s EBITDA to grow 71.6% YoY in FY24 over FY23.

  • Alembic Pharmaceuticals is rising as it receives United States Food & Drug Administration (USFDA) approval for its Pirfenidone tablets in the strengths of 267 mg and 801 mg. This drug, which is used to treat lung diseases, is therapeutically equivalent to Esbriet tablets of Genentech. Pirfenidone tablet has a market size of $ 548 million.

  • Zomato is rising despite its Q4FY22 loss widening by 2.7X YoY to Rs 359.7 crore due to employee costs and delivery charges rising by 2.1X to 2.6X, respectively. However, revenue rises 75% YoY to Rs 1,211.8 crore on the back of the company expanding into newer markets.

  • Natco Pharma is falling as FMC Corp files a suit against the company for infringement of a patent in the Delhi High Court. This patent, which expires on December 6, 2025, covers a process to prepare Chlorantraniliprole or CTPR.

  • Venus Pipes’ shares list at 3.5% premium to the issue price of Rs 326 on its debut on the bourses. The Rs 165.4-crore IPO was subscribed for 16.3X of the total shares on offer.

  • Delhivery shares list at a 2% premium to the issue price of Rs 487 on its debut on the bourses. The Rs 5,235-crore IPO was subscribed for 1.6X of the total shares on offer.

  • Ramco Cements is falling as its Q4FY22 net profit falls 45.2% YoY to Rs 118.6 crore despite a revenue increase of 4.9% YoY to Rs 1,722.7 crore. Net profit declines as fuel and power expenses rise 88.4% YoY to Rs 466.8 crore. Operating profit margin falls 10.3 percentage points YoY to 17.2% in Q4FY22.

  • Specialty Chemicals company Aether Industries raises Rs 240.3 crore from investors by selling 37.4 lakh equity shares at Rs 642 per share to anchor investors. Investors include Goldman Sachs, Nomura, SBI Mutual Fund, Aditya Birla Sun Life, Kotak MF, Axis MF, IDFC MF, and Tata MF.

  • Steel Authority of India’s Q4FY22 net profit falls 29% YoY to Rs 2,478.8 crore as the cost of materials shoots up 123% YoY to Rs 14,564.3 crore. Revenue rises 32% YoY to Rs 30,758 crore with maximum revenue coming in from Bhilai and Bokaro Steel Plant. Bhilai Steel Plant's revenue grows 29% YoY to Rs 8,521.6 crore while Bokaro Steel Plant’s revenue is up 26% YoY to Rs 8,243 crore. The board recommends a final dividend of Rs 2.25 per equity share for FY22.

Riding High:

Largecap and midcap gainers today include Coromandel International Ltd. (973.05, 4.46%), Ashok Leyland Ltd. (141.20, 3.98%) and Varun Beverages Ltd. (1,109.05, 2.78%).

Downers:

Largecap and midcap losers today include Divi's Laboratories Ltd. (3,661.70, -6.06%), JSW Energy Ltd. (294.10, -5.25%) and Ruchi Soya Industries Ltd. (1,099.05, -5.00%).

Volume Rockets

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

Top high volume gainers on BSE included Zomato Ltd. (64.95, 13.85%), Shilpa Medicare Ltd. (452.95, 10.49%) and Hikal Ltd. (392.00, 6.93%).

Top high volume losers on BSE were Divi's Laboratories Ltd. (3,661.70, -6.06%), Balrampur Chini Mills Ltd. (389.15, -5.75%) and Piramal Enterprises Ltd. (1,808.55, -4.10%).

Ipca Laboratories Ltd. (955.50, -2.31%) was trading at 9.1 times of weekly average. Jyothy Labs Ltd. (150.70, -0.89%) and SIS Ltd. (475.05, -0.64%) were trading with volumes 8.5 and 6.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks overperformed with 52-week highs, while 29 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Adani Power Ltd. (311.50, -4.99%), Coromandel International Ltd. (973.05, 4.46%) and KSB Ltd. (1,474.15, 0.38%).

Stocks making new 52 weeks lows included - Amara Raja Batteries Ltd. (489.80, -1.69%) and Berger Paints (India) Ltd. (610.15, -2.55%).

13 stocks climbed above their 200 day SMA including APL Apollo Tubes Ltd. (907.50, 2.68%) and Asahi India Glass Ltd. (456.70, 2.59%). 18 stocks slipped below their 200 SMA including Balrampur Chini Mills Ltd. (389.15, -5.75%) and IIFL Wealth Management Ltd. (1,502.50, -5.18%).