23 May 2022
20 May 2022
- Chennai Petroleum Corporation:This refinery companyoutperformed the Nifty 50 index by a whopping 88% in the past month, and by 22% in the past week. Moreover, last month, Superstar investor Dolly Khanna bought 10 lakh shares or 0.7% stake in this company worth Rs 26.3 crore. Even FIIs steadily increased their holdings in the company to 3.37% in Q4FY22 from 1.33% in Q2FY22. So, what exactly fueled the recent rally for this oil refining company?
Chennai Petroleum Corp saw a 4.3X jump in its Q4 net profits at Rs 994.4 crore driven by an 88% YoY rise in its revenues at Rs 16,427 crore. This company is a pure-play crude oil refining company and is not involved in marketing of downstream petroleum products. While its refining throughput rose by 10% YoY to 2.91 million metric tonne in Q4FY22, a 2.2X jump in gross refining margins (GRMs) played the real magic. Average GRMs rose to $14.18/bbl from $6.4/bbl in Q4FY21. Notably, Singapore GRMs were trading at $7.8/bbl levels in Q4FY22. In fact, it rose to $17/bbl levels in April backed by robust demand for refined petroleum products and supply constraints. According to Moody’s, global sanctions on Russia led to higher offtake of Asian fuels as European countries sought other alternatives. Additionally, supply fell owing to lower exports from China and due to significant refinery closures. According to the International Energy Agency, crude oil throughput in April 2022 fell by 1.4 metric barrels/day to 78 metric barrels/day, lowest since May 2021.
Interestingly, every dollar of GRM expansion can potentially add Rs 700-800 crore to the topline of an oil refining company. Hence, amid a tight supply situation, GRMs will stay buoyant and lead to oil refineries earning windfall gains at least in Q1FY23.
- Lupin: This pharmaceutical company’s stock fell over 7% on Thursday after it announced its Q4FY22 results. Lupin posted a loss of Rs 518 crore in Q4FY22 against a profit of Rs 460 crore in the same quarter previous year. However, revenues increased 2.8% YoY to Rs 3,864.5 crore in Q4FY22.
As the company is not consistent in posting profits, it shows up in the screener that lists stocks that are seeing big swings between profit and loss in quarterly results.
The drug-maker posted losses in Q4FY22 as its EBITDA margin fell by 13.1 percentage points YoY to 7.3% mainly due to an increase in raw material costs and manufacturing expenses. Raw material costs rose 23.9% YoY to Rs 1,317.6 crore and manufacturing expenses increased by 18.2% to Rs 1,117.8 crore. Also, an impairment expense on its acquisition of Gavis IP of Rs 130 crore and a rise in deferred taxes contributed to losses in Q4FY22.
High raw material and manufacturing costs come at a time when the US markets are already under pricing pressure amid intense competition. This is putting further pressure on margins. Lupin was affected more by this as it derives a majority (over 37%) of its revenues from the US markets. The company’s revenue from US markets fell 5.3% YoY to Rs 14,162. However, its revenue from India increased 5% YoY to Rs 13,511. But this seems lower when compared to its peers. Cipla’s and Dr Reddy’s revenue from the Indian market grew 25% and 15% YoY respectively in Q4FY22. In fact, Cipla outperforms Lupin in YoY and QoQ profit growth, price to earnings ratio, and foreign institutional investors or FII holding.
- Kotak Mahindra Bank: This bank’s stock outperformed the Nifty 500 index this week after it announced its Q4FY22 results. According to reports, Kotak Mahindra Bank recently made it to the top 10 most valuable companies, replacing Adani Green Energy at the tenth position. It is the fourth bank to enter the elite club after HDFC Bank, ICICI Bank, and State Bank of India. However, thanks to the bearish market, the stock fell more than 3% on the bourses on Thursday. The bank posted robust growth in net profit and maintained stable asset quality.
Net profit was up 64.5% YoY to Rs 2,767 crore with net interest income rising by 17.7% YoY to Rs 4,521 crore. Total advances for the bank also grew 21% YoY to Rs 2.7 lakh crore as businesses picked up pace after the third wave of Covid. Among the loan segments, the corporate loan demand is expected to increase. The management also plans to increase capex in this segment to meet rising demand. Also, the management thinks that an increase in repo rates by the Reserve Bank of India will not hamper credit growth.
Operating expenses increased 26.1% YoY to Rs 3,007.8 crore keeping the operating profit growth flat at 1.2% YoY to Rs 3,340 crore. The increase in expenses is because of the rise in spending on digital and promotional expenses. The management plans to continue its growth plans even if costs run high in the near term.
- Aditya Birla Capital: This Aditya Birla Group’s holding company’s stock tanked 5% on Monday because of reports of a whistleblower accusing the former CEO of the Aditya Birla Group Ajay Srinivasan of insider trading. This shook investors confidence as it is similar to allegations made for fund managers who were sacked at Axis Mutual Fund. The company, however, denied the allegations against Srinivasan of insider trading and frontrunning in stocks at Aditya Birla Sun Life AMC (mutual fund arm of Aditya Birla). The management asked Srinivasan to step down as the CEO, according to the BSE filing dated April 23, 2022, as the company says that it is looking to settle him into a new role. The management explicitly maintains its stance that this is in no way related to the allegations made against him, according to reports. Vishakha Muley will replace him as the CEO of Aditya Birla Capital starting from June 1, 2022.
According to reports, the Securities and Exchange Board of India (SEBI) is investigating both Aditya Birla Capital and Aditya Birla Sun Life AMC for the alleged wrongdoings.
- Indraprastha Gas: This city gas distributor’s stock plunged 6% in trade on Thursday, despite its Q4FY22 net profit rising 14.9% YoY to Rs 430.9 crore to beat Trendlyne’s Forecaster estimates by 8.4%. The company also showed up on this screener which lists companies that saw their net profit rising QoQ and YoY in Q4FY22. However, it looks like the company’s robust performance led by rise in sales volume and price hikes were not enough to escape the bearish sentiment in the market.
In the last 6 months the price of CNG for automobiles has been hiked 40.6% to Rs 73.61 per kg in the Delhi-NCR region, with the latest price hike coming in on Monday. The Managing Director of Indraprastha Gas expects gas prices to remain high for the coming quarters due to geopolitical tensions and supply constraints.
Furthermore, the government’s amendment to its gas allocation policy to city gas distributors (CGD), which makes GAIL (Gas Authority of India) responsible for providing gas to CGDs and gas prices will be uniform for all CGDs. With the amendment in place, domestic gas supply to CGDs will increase every quarter instead of every six months. The management expects this amendment to improve domestic gas supply and decrease raw material costs for the company. It will also lead to a reduction in sourcing of gas from the international spot market. This amendment took effect from May 16, 2022.
The management expects the volumes of CNG to rise 20%, driven by robust demand for CNG vehicles in FY23. It also expects to keep its margins stable through price hikes in the coming quarters.
Trendlyne's analysts identify stocks that are seeing interesting price movement, analyst calls or new developments. These are not buy recommendations.
20 May 2022
Trendlyne Analysis
Nifty 50 recovered all of its losses from Thursday and closed 2.9% higher with the Indian volatility index, India VIX falling by 5.9. Asian shares closed higher as China cut a key lending benchmark – five-year loan prime rate by a steeper than expected 15 basis points to 4.45% in order to support a slowing economy. Covid-19 lockdowns in China continue to impact economic growth by disrupting the global supply chain. Investors remain cautious of macroeconomic factors like high inflation rates, and the effects of impending rate hikes by the central banks. Sell-off continued in the US markets on Thursday as the indices closed in the red for the second consecutive session. European indices open higher than Thursday’s level, tracking the Asian markets amid positive cues from China. Crude oil prices remained steady this week as weaker demand due to slow economic growth concerns offset the planned European ban on Russian oil. In the last week, foreign investors have sold over Rs 6,078.1 crore worth shares of Indian companies.
Nifty Next 50 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Media trade higher than Thursday’s levels. Nifty IT, which fell over 5% on Thursday closed in the green.
Nifty 50closed at 16,266.15 (456.8, 2.9%), BSE Sensexclosed at 54,326.39 (1,534.2, 2.9%) while the broader Nifty 500closed at 13,895.05 (344.2, 2.5%)
Market breadth is surging up. Of the 1,878 stocks traded today, 1,536 were on the uptrend, and 310 went down.
Go Fashion (India), Carborundum Universal,J B Chemicals & Pharmaceuticals, and Kajaria Ceramics are trading with higher volumes as compared to Thursday.
Godrej Consumer Products sees a short build-up in its May 26 futures series after it announces Q4FY22 results. Its open interest rises 12.4% with put to call ratio at 0.44
Ethos’ Rs 472-crore IPO gets bids for 104% of the available 39.8 lakh shares on offer on the final day of bidding. The retail investor quota gets bids for 84% of the available 19.6 lakh shares on offer
Zydus Lifesciences' Q4FY22 profit rises 12.1% YoY to Rs 525 crore and revenue rises 5.3% YoY to Rs 3,863.8 crore. For FY22, the profit rises 11.7% to Rs 2,298.8 crore.
Auto stocks like Ashok Leyland, Tata Motors, Bosch, and Sona BLW Precision Forgings among others are rising in trade. The broader sectoral index Nifty Auto is also trading in green.
eMudhra’s Rs 412.8-crore IPO gets bids for 48% of the available 1.1 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 94% of the available 57.6 lakh shares on offer. The public offer comprises of a fresh issue of Rs 161 crore as well as an offer for sale of Rs 251.8 crore.
Reserve Bank of India’s report on scheduled banks shows that bank credit grew 10.8% YoY to Rs 120.5 lakh crore and deposits by 9.7% to Rs 166.9 lakh crore in the fortnight ended May 6, 2022. In FY22 bank credit rises 8.59% YoY and deposits rise by 8.94%.
Krishna Institute of Medical Sciencesis trading with more than 12 times its weekly average trading volume. Welspun Corp, JK Lakshmi Cement, TeamLease Servicesand, Poly Medicureare trading at more than three times their weekly average trading volumes.
Edelweiss maintains a ‘Buy’ rating on DLF with a target price of Rs 481, indicating an upside of 46%. The brokerage is positive about the company’s prospects on the back of robust pre-sales growth, sales margin growth, new launches, and increase in occupancy levels. The brokerage expects revenue to grow at a 60% CAGR over FY22-24.
Axis Securities maintains a ‘Buy’ rating on Bharti Airtel with a target price of Rs 900, indicating an upside of 29%. The brokerage is positive about the company on the back of strong mobile subscriber growth in Q4FY22 and high active subscriber ratio. The brokerage expects the telecom company’s revenue to grow at a 6.5% CAGR over FY22-FY24.
Godrej Consumer Products is falling as its Q4FY22 net profit falls marginally by 0.7% YoY to Rs 363.2 crore due to cost of materials consumed rising 19.5% YoY to Rs 1,428.9 crore. However, the revenue rises 7% YoY to Rs 2,939.6 crore on the back of revenue growth came from the personal care segment at 18% YoY. In FY22, net profit rises 15% YoY to Rs 1,720.8 crore and revenue rises 10.7% YoY to Rs 11,095.7 crore.
YES Bank rises as it picks JC Flowers Asset Reconstruction Company as its joint venture partner to offload nearly Rs 51,000 crore of distressed loans. This could lead to the re-rating of this stock and attract new equity investments.
Bank stocks like IDFC First Bank, Bank of Baroda, State Bank of India, and IndusInd Bank among others are rising in trade. The broader sectoral index Nifty Bank is also trading in green.
Prince Pipes & Fittings' Q4FY22 profit falls 9.2% YoY to Rs 88.2 crore despite a 17.7% rise in revenue to Rs 901.3 crore due to an increase in the cost of raw materials. In FY22, the company's profit rises 12.4% YoY to Rs 249.4 crore.
Ashok Leyland is rising despite its Q4FY22 net profit falling 60.2% YoY to Rs 140.2 crore due to an impairment in the value of net assets of subsidiaries and loss on fair valuation of investment. However, net profit on a standalone basis rises 3.7X times to Rs 901.4 crore. Revenue rises 21.7% YoY to Rs 9,958 crore on the back robust demand for commercial vehicles from end user industries.
Nifty 50 sees a short covering in its May 26 futures series as its open interest falls 7.2% with put to call ratio at 0.89.
Glenmark Pharma is rising as it receives United States Food & Drug Administration (U.S. FDA) approval for its Abiraterone Acetate tablets in the strength of 500 mg. This drug, which is used to treat prostate cancer, is a generic version of Zytiga 1 tablets of Janssen Biotech. Abiraterone Acetate has a market size of $ 260.2 million.
Prudent Corporate Advisory Services' shares list at a 3.2% premium to the issue price of Rs 630 on its debut on the bourses after getting bids for 1.2X of the total shares on offer.
Biocon is rising as the Competition Commission of India (CCI) approves the merger by absorption of Covidshield Technologies into Biocon, according to reports. This is in consideration for approximately 15 per cent equity shareholding of Biocon Biologics by Serum Institute Life Sciences.
One97 Communications (Paytm) rises more than 2% to Rs 568 ahead of its Q4FY22 earnings scheduled for today
Gland Pharma is falling despite its Q4FY22 net profit rising by 7.8% YoY to Rs 285.9 crore. Total revenue rises 25% YoY to Rs 1,168.2 crore. However, EBITDA margin falls 5.0 percentage points to 35% on the back of high raw material costs and employee benefit expenses. Net profit rises 21.5% YoY in FY22 to Rs 1,211.6 crore and revenues increase by 28.5% to Rs 4,624.6 crore.
Hindustan Petroleum Corporation’s Q4FY22 net profit falls 34% YoY to Rs 2,018.4 crore on account of higher costs. Cost of materials surges 71.7% to Rs 26,312.2 crore. However, the sale of products for the company rises 23.5% YoY to Rs 1.1 lakh crore with revenue from downstream petroleum increasing 23.5% YoY to Rs 1.05 lakh crore. Domestic sales for the company is up 4% YoY to 10.26 million tonnes. The company recommends a dividend of Rs 14 per share for FY22.
Riding High:
Largecap and midcap gainers today include JSW Energy Ltd. (293.35, 9.87%), Macrotech Developers Ltd. (988.90, 9.68%) and Sun TV Network Ltd. (438.35, 8.40%).
Downers:
Largecap and midcap losers today include Container Corporation of India Ltd. (573.40, -5.49%), Godrej Consumer Products Ltd. (758.40, -4.68%) and Adani Green Energy Ltd. (2,273.65, -1.89%).
Movers and Shakers
22 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Welspun Corp Ltd. (244.90, 17.23%), JK Lakshmi Cement Ltd. (493.75, 17.13%) and Welspun India Ltd. (73.45, 13.61%).
Top high volume losers on BSE were Container Corporation of India Ltd. (573.40, -5.49%), Advanced Enzyme Technologies Ltd. (277.85, -2.65%) and Supreme Industries Ltd. (1,802.50, -1.34%).
Krishna Institute of Medical Sciences Ltd. (1,261.70, 0.52%) was trading at 14.0 times of weekly average. KIOCL Ltd. (217.75, 7.74%) and Indigo Paints Ltd. (1,620.05, 3.51%) were trading with volumes 11.2 and 9.1 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
6 stocks hit their 52-week highs, while 5 stocks tanked below their 52-week lows.
Stocks touching their year highs included - Adani Power Ltd. (312.25, 4.99%), ITC Ltd. (280.00, 1.58%) and Welspun Corp Ltd. (244.90, 17.23%).
Stocks making new 52 weeks lows included - Container Corporation of India Ltd. (573.40, -5.49%) and Firstsource Solutions Ltd. (108.85, 0.51%).
21 stocks climbedabove their 200 day SMA including Aegis Logistics Ltd. (225.75, 12.68%) and IRB Infrastructure Developers Ltd. (234.25, 9.92%). 6 stocks slipped below their 200 SMA including Equitas Small Finance Bank Ltd. (52.55, -11.61%) and Caplin Point Laboratories Ltd. (776.65, -2.98%).
19 May 2022
Trendlyne Analysis
Nifty 50 falls over 430 points to close over 2.65% lower with the Indian volatility index, India VIX rising by 10%. Asian indices closed sharply lower following the US indices which closed in the red on Wednesday. S&P 500 fell over 4% and registered its biggest daily drop in over two years. The tech-heavy index NASDAQ 100 also plunged over 5% loss amid high inflation concerns and hawkish commentary from the US Federal Reserve chairman Jerome Powell. Investors continue to monitor the prevailing high inflation levels all over the world. UK’s consumer price index or CPI rose 9% in April hitting a 40-year high while Canadian CPI rose 6.8% in April. European indices follow the global trend and trade lower than Wednesday’s levels.
Nifty Next 50 and Nifty Smallcap 100 closed in the red, following the benchmark index. Nifty Metal and Nifty Energy closed lower than Wednesday’s levels. Nifty IT falls over 5.5%, following the NASDAQ 100, which fell over 5% on Wednesday.
Nifty 50closed at 15,805.05 (-435.3, -2.7%), BSE Sensexclosed at 52,792.23 (-1,416.3, -2.6%) while the broader Nifty 500closed at 13,547.80 (-370.4, -2.7%)
Market breadth is moving down. Of the 1,855 stocks traded today, 291 were in the positive territory and 1,542 were negative.
Dhani Services, Nuvoco Vistas Corporation, Westlife Development, and City Union Bankare trading with higher volumesas compared to Wednesday.
Nifty 50 sees a short build-up in its May 26 futures series as its open interest rises 15.2% with put to call ratio at 0.73.
Realty stocks like Godrej Properties, Oberoi Realty, Phoenix Mills, and Sunteck Realty, among others are falling in trade. The broader sectoral index Nifty Realtyis also trading in the red.
Bosch is falling as its Q4FY22 net profit falls 27.3% YoY to Rs 350.9 crore and revenue marginally rises 2.1% YoY to Rs 3,403.6 crore on rising inventory and employee costs. Revenue growth is led by the power tools segment, rising 34.5% YoY to Rs 480.9 crore.
Dr Reddy’s is rising despite its Q4FY22 net profit falling by 83.5% YoY to Rs 97 crore. The fall in net profit is mainly due to impairment losses of Rs 930 crore. Revenue rises 15.4% YoY to Rs 5,596.8 crore on the back strong demand in its global generic products. Net profit rises 11.8% YoY to Rs 2,182.5 crore and revenues rise by 13.9% to Rs 22,029.6 crore.
Ethos’ Rs 472- crore IPO gets bids for 44% of the available 39.8 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 68% of the available 19.6 lakh shares on offer.
Paradeep Phosphates’ Rs 1,501.7-crore IPO gets bids for 1.7X of the available 26.8 crore shares on offer on the final day of bidding. The retail investor quota gets bids for 1.4X of the available 13.1 crore shares on offer.
Edelweiss maintains a ‘Buy’ rating on Vinati Organics with a target price of Rs 2300, indicating an upside of 13%. The brokerage anticipates the company’s profitability to improve in FY23 on the back of robust demand, new product launches, and capacity expansion. The brokerage expects the company’s net profit to grow at a 24.1% CAGR over FY23-25
Finolex Industries is rising as its Q4FY22 net profit rises 65.7% YoY to Rs 495.1 crore and revenue rises 28.2% YoY to Rs 1,619.3 crore. Maximum revenue growth comes from the PVC pipes and fittings segment, rising 41.6% YoY to Rs 1,276.9 crore. However, EBITDA margin falls by 16 percentage points YoY to 17% on the cost of materials consumed rising 14.9% YoY to Rs 913.5 crore.
Axis Securities maintains a ‘Buy’ rating on Abbot India with a target price of Rs 20,000, indicating an upside of 14%. The brokerage is positive about the company on the back of its strong growth in gasteroinsteinal and hormone segments. The brokerage expects the company’s revenue to grow at a CAGR of 10.9% over FY22-FY24.
JK Lakshmi Cementis trading with more than 21 times its weekly average trading volume. Lupin, Manappuram Finance, Dhani Services, and Westlife Developmentare trading at more than three times their weekly average trading volumes.
JPMorgan sees revenue growth for IT companies to slow down and EBIT margins taking a hit because of rising inflation globally. The brokerage downgrades its stance on IT sector to ‘Underweight’ and target multiples by 10-15%. It downgrades Tata Consultancy Services, HCL Technologies, Wipro, and L&T Technology Services to ‘Underweight’ from ‘Neutral’.
Mahindra & Mahindra and Volkswagen ink a pact to collaborate on MEB electric components like electric motors, battery system components and battery cells. The main objective of the companies is to electrify the Indian automotive market and decarbonize the mobility sector. Mahindra & Mahindra stands to gain from Volkswagen’s technology, innovation, and vertical integration of supply chains for their next project called “Born Electric Platform”. The binding supply contract will conclude by end of 2022.
Media Stocks like Network 18 Media & Investments, TV18 Broadcast, Sun TV Network, Saregama India and Zee Entertainment Enterprises, among others are falling in trade. The broader sectoral index Nifty Media is also trading in red.
Nestle India touches a 52-week low of Rs 16,006. Stock falls for two consecutive sessions. However, ITC touches a 52-week high of Rs 279.3. Stock rises for three consecutive sessions.
Manappuram Finance slumps as its Q4FY22 net profit falls 44.3% YoY to Rs 261 crore as the company shifts its sales from high-yielding gold loans to low-yielding gold loans. Revenue from gold loans falls 17.5% YoY to Rs 1,109.2 crore. The NBFC's net interest income fell 10.2% to Rs 986.5 crore. The board approves the payment of an interim dividend of Rs 0.75 per share.
Pidilite Industries falls in trade as its Q4FY22 net profit falls 16.9% YoY to Rs 254.3 crore, despite its revenue rising 11.8% YoY to Rs 2,518.2 crore. Profit falls due to the cost of materials consumed rising 30.1% YoY to Rs 1,413.9 crore on high input costs. In FY22, net profit rises 6.7% YoY to Rs 1,207.6 crore and revenue rises 35.1% YoY to Rs 9,957.3 crore.
Lupin is falling as it posts a loss of Rs 518 crore in Q4FY22 against a profit of Rs 460 crore in the same quarter previous year. However, revenues increase by 2.8% YoY in Q4FY22 to Rs 3,864.5 crore. The company posted losses mainly due to deferred tax expenses and one-time expenses of Rs 193.2 crore regarding its Metformin and Oseltamivir drugs.
Arvind's Q4FY22 profit rises 58.2% YoY to Rs 84.2 crore and revenue rises 32% YoY to Rs 2,213.3 crore. In FY22, the company makes profit of Rs 238.2 crore as against a loss of Rs 16.5 crore in FY21.
Route Mobile is falling as its Q4FY22 profit falls 1.8% QoQ to Rs 45.7 crore. However, revenues increase by 11.8% QoQ to Rs 634.5 crore. Net profit falls as employee benefits expense rises 51.1% QoQ to Rs 39.9 crore in Q4FY22. Net profit rises 24.6% YoY in FY22 to Rs 166.2 crore and revenues increase by 42.2% to Rs 2,022.1 crore.
ITC’s Q4FY22 net profit rises 11.6% YoY to Rs 4,259.6 crore as gross revenue from the sale of goods and services increases 14.9% to Rs 17,569.7 crore. The maximum revenue growth came from the hotels segment with a 34.8% YoY rise to Rs 407.4 crore. Agri business grows 29.3% YoY to Rs 4,375.4 crore and FMCG-Cigarettes grew 10.3% to Rs 7,177 crore as GST on cigarettes remains the same, driving cigarette sales. The board recommends a final dividend of Rs 6.25 per share for FY22.
Riding High:
Largecap and midcap gainers today include ITC Ltd. (276.00, 3.45%), Abbott India Ltd. (18,129.90, 1.42%) and Adani Power Ltd. (298.75, 1.37%).
Downers:
Largecap and midcap losers today include Coforge Ltd. (3,665.00, -7.22%), Lupin Ltd. (634.95, -7.08%) and MphasiS Ltd. (2,462.45, -6.84%).
Crowd Puller Stocks
10 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included JK Lakshmi Cement Ltd. (430.45, 9.52%), Caplin Point Laboratories Ltd. (809.65, 9.06%) and ITC Ltd. (276.00, 3.45%).
Top high volume losers on BSE were Manappuram Finance Ltd. (94.40, -9.71%), Lupin Ltd. (634.95, -7.08%) and Route Mobile Ltd. (1,208.65, -6.18%).
Akzo Nobel India Ltd. (1,779.65, -0.08%) was trading at 11.0 times of weekly average. Dr. Reddy's Laboratories Ltd. (3,939.05, 0.85%) and Punjab & Sind Bank (15.65, 2.62%) were trading with volumes 5.7 and 5.4 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
2 stocks overperformed with 52-week highs, while 28 stocks hit their 52-week lows.
Stocks touching their year highs included - ITC Ltd. (276.00, 3.45%) and Mangalore Refinery And Petrochemicals Ltd. (90.75, 1.57%).
Stocks making new 52 weeks lows included - Astral Ltd. (1,679.65, -3.95%) and Aurobindo Pharma Ltd. (524.00, -6.36%).
4 stocks climbed above their 200 day SMA including Caplin Point Laboratories Ltd. (809.65, 9.06%) and Timken India Ltd. (1,951.30, 0.58%). 18 stocks slipped below their 200 SMA including Trent Ltd. (1,024.50, -5.58%) and VIP Industries Ltd. (557.75, -4.80%).
18 May 2022, 03:50PM
Trendlyne Analysis
Indian indices closed flat after posting their highest daily gains in three months on Tuesday. Most Asian indices closed higher on Wednesday tracking the US indices, which closed sharply higher on Tuesday. The tech-heavy NASDAQ 100 rose 2.6% despite US Federal Reserve Chairman Jerome Powell’s hawkish remarks on Tuesday. Chairman Powell said the US central bank will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat. Investors continue to monitor the prevailing high inflation levels, tightening monetary policies, and geopolitical crisis in Europe. In the last week, foreign investors have sold over Rs 11,328.5 crore worth shares of Indian companies. UK’s consumer price index or CPI rises 9% in April hitting a 40-year high.
Nifty Smallcap 100 and Nifty Midcap 100 closed lower despite the benchmark index closing flat. Nifty FMCG and Nifty Pharma closed higher than Tuesday’s levels. Nifty Metal, which rose over 6.8% on Tuesday, closed in the red. Nifty IT gave up its gains and closed lower, despite the NASDAQ 100 closing in the green on Tuesday.
Nifty 50closed at 16,240.30 (-19, -0.1%), BSE Sensexclosed at 54,208.53 (-109.9, -0.2%) while the broader Nifty 500closed at 13,918.20 (-7.9, -0.1%)
Market breadth is in the green. Of the 1,876 stocks traded today, 1,013 showed gains, and 829 showed losses.
Dhani Services, Glenmark Life Sciences, Phoenix Mills, and Finolex Cables are trading with higher volumesas compared to Tuesday.
Dr. Lal Pathlabs sees a short build-up in its May 26 futures series after it announces Q4FY22 results. Its open interest rises 10.4% with put to call ratio at 0.51
Garments & apparel company Gokaldas Exports surges and hits an all-time high of Rs 519.9 on robust quarterly performance, growing order book and its ability to deal with supply-chain disruptions. The company’s net profit is up 2.8X to Rs 61 crore while revenues jump 58% YoY to Rs 588 crore for Q4FY22.
Teamlease Services Q4FY22 profit rises 61% YoY to Rs 31.6 crore and revenue rises 35% YoY to Rs 1,822 crore. In FY22, profit falls 49.7% to Rs 39.5 crore as employee benefits and other expenses increase.
Ruchi Soya surges as it announces acquisition of food retail business of Patanjali Ayurved for Rs 690 crore. It will also acquire manufacturing plants of Patanjali at Padartha, Haridwar, and Newasa. The acquisition is likely to be complete by July 15. The company also plans to change its name from Ruchi Soya Industries Limited to Patanjali Foods Limited, subject to approval from regulatory authorities.
Sugar stocks like Uttam Sugar Mills, Rajshree Sugars & Chemicals, Triveni Engineering & Industries, and Piccadily Agro Industriesamong others are rising in trade as cabinet advances 20% ethanol blending target In petrol to 2025-26 from 2030
Ethos’ Rs 472.3- crore IPO gets bids for 22% of the available 39.8 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 43% of the available 19.6 lakh shares on offer. The public offer comprises of a fresh issue up to Rs 375 crore as well as an offer for sale of up to Rs 97.3 crore.
Paradeep Phosphates’ Rs 1,501.7-crore IPO gets bids for 42% of the available 26.8 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 81% of the available 13.1 crore shares on offer.
Edelweiss maintains a ‘Buy’ rating on Brigade Enterprises with a target price of Rs 605, indicating an upside of 40%. The brokerage has a positive outlook on the company on the back of strong demand in residential segment and a rise in occupancy rate in the commercial space. The brokerage expects the company’s revenue to grow at a CAGR of 9.2% over FY22-FY24.
Tube Investments of India is trading with more than 14 times its weekly average trading volume. Sudarshan Chemical Industries, Wockhardt, NOCIL, and Galaxy Surfactants are trading at more than five times their weekly average trading volumes.
Avenue Supermarts, Bandhan Bank, PI Industries, and Coforge, among others, are rising over the past week after announcing their Q4FY22 results
DLF's Q4FY22 profit falls 15.7% YoY to Rs 405.3 crore and revenue falls 13.35% YoY to Rs 1,652.1 crore. In FY22, net profit rises 37.24% to Rs 1,500.9 crore on the back of increasing demand across segments and geographies. The Board recommends interim dividend of Rs 3 per share.
Metropolis Healthcare and Hindustan Petroleum Corporation touch 52-week low of Rs 1,766.1 and Rs.283.3 respectively. Both stocks are falling for three consecutive sessions.
S&P Global Ratings cuts India’s growth projection for FY23 to 7.3% from 7.8% on rising inflation and the extension of the ongoing geopolitical conflict. High inflation for a long duration may require central banks to raise rates affecting output and employment.
Acrysil is falling despite its Q4FY22 net profit rising 24.1% YoY to Rs 16.5 crore and revenues increasing by 33.9% YoY to Rs 141.1 crore. Raw material costs rise 71.2% YoY in Q4FY22 to Rs 52,2 crores and total expenses increase by 38% to Rs 119 crore. Net profit rises 65.5% YoY in FY22 to Rs 65.3 crore and revenues increase by 55.4% to Rs 494 crore.
NOCIL is rising as Q4FY22 profit rises 84.6% YoY to Rs 68.92 crore and revenue rises 43.7% YoY to Rs 462.74 crore. In FY22, profit rises 99.2% to Rs 176.11 crore.
Indian Oil Corporation falls as its Q4FY22 net profit is down 26.3% YoY to Rs 6,645.7 crore because of a jump in deferred tax expense by 1.4X YoY to Rs 160.4 crore. Revenue increases 25.9% YoY to Rs 2.1 lakh crore. Revenue from petroleum products rises 25.9% YoY to Rs 1.9 lakh crore in Q4FY22. The company’s FY22 revenue rises 41.5% YoY to Rs 7.28 lakh crore (without GST), the highest standalone revenue given out by an Indian Company.
Dr. Lal Pathlabs is falling as its Q4FY22 net profit declines 26.5% YoY to Rs 61.3 crore. However, revenue rises 11.9% YoY to Rs 495.5 crore as its non-Covid revenue increases by 12.2% YoY to Rs 419.7 crore. Operating profit margin decreases 280 bps YoY in Q4FY22 to 25.2% on the back of high employee benefit expenses and finance costs.
Premium watch retailer Ethos raises Rs 141.6 crore from investors by selling 16.1 lakh equity shares at Rs 878 per share to nine anchor investors. Investors include ICICI Prudential Flexi Cap Fund, Jupiter India Fund, Saint Capital Fund, UPS Group Trust, Nomura Singapore, among others.
Minda Corp is rising as its Q4FY22 profit jumps 5.9 times YoY to Rs 75.9 crore and revenues rise by 18.9% YoY to Rs 952.3 crore. Net profit jumps mainly due to a tax credit of Rs 22 crore related to earlier years. Net profit jumps 3.6 times YoY in FY22 to Rs 191.9 crore and revenues rise by 24.9% to Rs 3,000.1 crore.
Bharti Airtel’s Q4FY22 net profit jumps 1.4X QoQ to Rs 2,008 crore. Revenue increases 5.4% QoQ to Rs 31,500 crore because of a 20% tariff hike taken in November 2021. Revenue from home services rises 10% QoQ to Rs 876.2 crore and mobile services (India) increases 9.5% to Rs 17,616.8 crore. The operating margin is up 3.1 bps QoQ to 23.7%. The company recommends a dividend of Rs 3 per fully paid-up equity share and Rs 0.75 per partly paid-up equity share for FY22.
Riding High:
Largecap and midcap gainers today include Ruchi Soya Industries Ltd. (1,187.85, 9.60%), Adani Power Ltd. (294.70, 4.99%) and Petronet LNG Ltd. (223.50, 4.88%).
Downers:
Largecap and midcap losers today include Dr. Lal Pathlabs Ltd. (2,051.95, -6.07%), Indian Oil Corporation Ltd. (118.05, -5.10%) and Hindustan Petroleum Corporation Ltd. (243.65, -4.77%).
Movers and Shakers
25 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Sudarshan Chemical Industries Ltd. (509.70, 19.34%), Wockhardt Ltd. (283.25, 15.78%) and Great Eastern Shipping Company Ltd. (440.90, 10.85%).
Top high volume losers on BSE were Route Mobile Ltd. (1,288.30, -14.66%), Metropolis Healthcare Ltd. (1,753.45, -9.28%) and Dr. Lal Pathlabs Ltd. (2,051.95, -6.07%).
Tube Investments of India Ltd. (1,669.30, -1.39%) was trading at 18.1 times of weekly average. Galaxy Surfactants Ltd. (2,687.80, 3.34%) and NOCIL Ltd. (254.35, 4.54%) were trading with volumes 7.2 and 7.0 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
5 stocks made 52-week highs, while 9 stocks hit their 52-week lows.
Stocks touching their year highs included - Coromandel International Ltd. (929.50, -1.41%), Great Eastern Shipping Company Ltd. (440.90, 10.85%) and Mangalore Refinery And Petrochemicals Ltd. (89.35, 9.97%).
Stocks making new 52 weeks lows included - Bharat Petroleum Corporation Ltd. (331.90, -3.08%) and Hindustan Petroleum Corporation Ltd. (243.65, -4.77%).
28 stocks climbed above their 200 day SMA including Praj Industries Ltd. (369.80, 7.03%) and Petronet LNG Ltd. (223.50, 4.88%). 5 stocks slipped below their 200 SMA including Indian Oil Corporation Ltd. (118.05, -5.10%) and Prestige Estates Projects Ltd. (426.55, -4.69%).
18 May 2022, 09:58AM
In Shakespeare's Romeo and Juliet, a character warns the hero, "These violent delights have violent ends." Go slow, he tells Romeo.
Like Romeo, the stock market may have moved too fast, especially when we compare it to India's real GDP growth. For the first time, India's total stock market capitalization (BSE) is at a record 165% of India's estimated real GDP for FY22. Pre-Covid, it was 108% of real GDP.
This value (total market cap to GDP) is commonly known as the Buffett indicator - Warren Buffett once said that it is “probably the best single measure of where valuations stand at any given moment.” This helps us compare stock market sentiment against actual economic output - telling us when there is a mismatch in investor expectation and reality.
The high level of this indicator right now is a signal to investors to be very cautious about adding more money to equities, especially in the riskier smallcap and midcap stocks, and overvalued stocks. Especially with CEOs across industries talking about rising costs impacting their margins in earnings calls. Achal Bakeri of Symphony puts this well:
"We cannot keep on repeating price increases over and over again. We have not been able to keep passing this. Even in the month of April, there were cost increases - commodity cost increases or basic raw material increases. You cannot just keep on changing your prices frequently in business like ours which is a consumer business. So we have absorbed quite a bit of cost increases."
As the RBI raises interest rates and liquidity shrinks, companies will have to battle both costs as well as the rising price of debt. This is likely to impact valuations further.
Plenty of Nifty500 stocks in the PE Sell Zone
Investors can check which stocks are in the PE Sell Zone (stocks that usually trade below their current PE most of the time). Even after the recent correction, 115 stocks in the Nifty500 are still in the PE Sell Zone, including Infosys, Adani Enterprises, Asian Paints and Bandhan Bank.
Results show some sectors turning wobbly
The Results Dashboard tracks results as they come in, and the Q4 results are illuminating. Some sectors beaten down by the pandemic are finally delivering strong results - Hotels are seeing profit margins jump by double digits, Specialty Retail including PVR and Inox are seeing net profit recovery.
Agrochemicals has so far also delivered a good quarter, although rising costs have put margins under pressure - this sector has limited capability of passing on costs to farmers, especially in India's price-sensitive rural market.
But over 50% of results declared so far have shown negative profit growth.
Sectors that have been weak include auto as well as the tyre industry, which are reeling under both demand and cost pressures.
Interesting reads
HDFC Life, despite the challenges of FY22 has closed the year on a high, showing rising premiums and improving metrics.
UPL delivered a strong set of results. But price hikes played a big part in this, as the company deals with rising costs.
FMCG bellweather HUL managed a difficult quarter well. But like others it has been hit by cost pressures. Does this threaten margins?
17 May 2022, 03:50PM
Trendlyne Analysis
Nifty 50closed sharply higher with the Indian volatility index, India VIX falling by 7.3%. Asian indices closed higher amid positive cues from China as Shanghai reports three days of zero Covid community transmission, which could help lift the stringent lockdowns in the city. US indices closed lower on Monday led by the tech-heavy index, NASDAQ 100 which fell 1.2%. Investors continue to monitor the prevailing high inflation levels, tightening monetary policies, and geopolitical crisis in Europe. Crude oil steadies but continues to trade at elevated levels with the European Union’s plan to ban Russian oil on cards. European indices follow the global trend and trade higher than Monday’s levels.
Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Media and Nifty Energy closed higher than Monday’s levels. Nifty IT closed higher despite the tech-focused index NASDAQ 100 falling 1.2% lower.
Nifty 50closed at 16,259.30 (417, 2.6%), BSE Sensexclosed at 54,318.47 (1,344.6, 2.5%) while the broader Nifty 500closed at 13,926.05 (354.9, 2.6%)
Market breadth is ticking up strongly. Of the 1,877 stocks traded today, 1,615 showed gains, and 237 showed losses.
Top diagnostic companies like Metropolis Healthcare and Dr. Lal Pathlabs see a short build-up in their May 26 futures series. Metropolis Healthcare futures’ put to call ratio is at 0.35 whereas Dr. Lal Pathlabs’ is at 0.53. Open interest increases close to 10% for both companies’ May 26 futures series.
Easy Trip Planners, Timken India, Phoenix Mills, and SJVN are trading with higher volumesas compared to Monday.
HDFC Asset Management Companyand Aurobindo Pharma touch 52-week low of Rs 1,744.1 and Rs 539 respectively. Both stocks fall for two consecutive sessions.
Wholesale Price Index (WPI) inflation rises 53 bps to 15.08% in April 2022 from 14.55% in March 2022. The high rate of inflation is due to a surge in the prices of mineral oils, basic metals, crude petroleum & natural gas, and food products, among others. The rise in food prices is because of an increase in the prices of edible oil and vegetables. WPI for the fuel and power segment is 38.66% and food is 8.35%.
HDFC Securities initiates coverage on Apollo Tyres with an ‘Add’ rating and a target price of Rs 229. This indicates an upside of 8%. The brokerage has a positive outlook on the company on the back of its strong investments in research and development and focus on ramping up distribution in rural regions.
Paradeep Phosphates’ Rs 1,501.7-crore IPO gets bids for 29% of the available 26.8 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 57% of the available 13.1 crore shares on offer. The offer comprises entirely of a fresh issue of Rs 1,501.7 crore.
SJVN inks an agreement to develop 490 MW Arun-4 project in Nepal worth Rs 4,900 crore. The Project will be developed in a joint venture with Nepal Electricity Authority. The project is expected to generate around 2,100 million units of energy per annum.
Dodla Dairy is rising as its Q4FY22 profit jumps 4.2 times YoY to Rs 40.5 crore and revenues rise 11.4% to Rs 594 crore. Net profit rises mainly due to a deferred tax credit of Rs 12.4 crore. The company’s net profit rises 5.3% YoY in FY22 to Rs 132.8 crore and revenues increase by 15.7% to Rs 1,950.4 crore.
Glenmark Life Sciencesis trading with more than seven times its weekly average trading volume. Indoco Remedies, Multi Commodity Exchange of India, GlaxoSmithKline Pharmaceuticals, and Bajaj Electricalsare trading at more than three times their weekly average trading volumes.
HDFC Asset Management (HDFC AMC) touches a new 52-week low of Rs 1,744.1 but recovers to trade in the green. The stock sees a long build-up in its May 26 futures series as its open interest rises 2.3%. However, its put to call ratio is at 0.5. HDFC AMC is also in the oversold zone according to the technical indicator, relative strength index or RSI.
Multi Commodity Exchange of India's Q4FY22 profit falls 5% YoY to Rs 36.5 crore despite an increase in revenue by 11.6% YoY to Rs 121 crore. The profit falls as the company spends Rs 20.4 crore on the development of an intangible asset that has been discontinued and the entire expenditure has been impaired. In FY22, profit falls 36.3% to Rs 143.45 crore.
Stocks like Bajaj Auto, Britannia Industries, Havells India, and Tata Elxsi, among others, are outperforming their sector over the past month.
Vishnu Chemicals’ Q4FY22 net profit rises 162.3% YoY to Rs 28.6 crore and revenue rises 56.3% YoY to Rs 335.6 crore on the back of a better product mix and a rise in exports. EBITDA margin rises by 381 bps YoY to 15.8% and exports rise 76.9% YoY to Rs 175.2 crore.
Tata Power partners with Hyundai Motor India to build an EV charging network and accelerate the adoption of EVs across India. Under the partnership, Tata Power will install EZ charge fast chargers at Hyundai's existing 34 EV dealer locations across 29 cities along with supply, installation, and commissioning of home charging for Hyundai's EV customers.
Commodity stocks like Reliance Industries, SRF, Deepak Nitrite and Tata Steel , among others are rising in trade. The broader sectoral index Nifty Commodities is also trading in green.
Nifty 50 sees a long build-up in its May 26 futures series as its open interest rises 2.7% with put to call ratio at 0.95.
Indian rupee falls to an all-time low of Rs 77.63 against the US dollar as foreign investors continue to sell domestic stocks. Foreign investors sold Rs 11,289.6 crore worth of Indian shares in the last week.
VIP Industries posts a net profit of Rs 12.4 crore in Q4FY22 as opposed to a loss of Rs 3.8 crore in Q4FY21. Revenue rises 39.5% YoY to Rs 361.7 crore and operating margin rises by 7.8 percentage points YoY to 9.1%. In FY22, the company posts a profit of Rs 66.9 crore as opposed to a loss of Rs 97.5 crore a year ago and revenue rises 98.8% YoY to Rs 1,325.9 crore.
KEC International bags orders worth Rs 1,147 crore across various business verticals. The order wins include transmission and distribution projects in the Americas and the Middle East, a diverse set of civil and railway projects in India, and cabling orders from the Middle East and India.
Life Insurance Corporation of India (LIC) shares list at 8.1% discount to the issue price of Rs 949 on its debut on the bourses after getting bids for 3X of total shares on offer.
GlaxoSmithKline Pharmaceuticals is rising as its profit rises to Rs 1,219 crore against Rs 14.3 crore in the same quarter previous year. However, revenues fall 1.8% YoY in Q4FY22 to Rs 828 crore. Profit increases multifold mainly due to profit from discontinued operations amounting to Rs 1,652.2 crore. This is due to transfer of trademarks pertaining to Iodex and Ostocalcium brands in India to GlaxoSmithKline Asia.
Raymond’s Q4FY22 net profit rises more than 4X YoY to Rs 263.3 crore and revenue rises 44.3% YoY to Rs 2,031.7 crore. Revenue grows on the back of robust consumer demand for branded apparel and branded textiles driven by the wedding season and the opening up of offices. EBITDA margin rises by 364 bps YoY to 17.6% due to higher revenue.
Riding High:
Largecap and midcap gainers today include Vedanta Ltd. (321.00, 11.79%), Hindalco Industries Ltd. (428.40, 9.58%) and Oil India Ltd. (241.55, 8.46%).
Downers:
Largecap and midcap losers today include Aurobindo Pharma Ltd. (535.65, -2.80%), Dalmia Bharat Ltd. (1,413.70, -1.48%) and Dr. Lal Pathlabs Ltd. (2,184.60, -0.99%).
Crowd Puller Stocks
15 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Affle (India) Ltd. (1,108.80, 14.68%), Sterlite Technologies Ltd. (179.80, 13.19%) and Shyam Metalics and Energy Ltd. (329.05, 9.99%).
Top high volume loser on BSE was Amber Enterprises India Ltd. (2,679.95, -0.87%).
Indoco Remedies Ltd. (350.45, 5.54%) was trading at 14.2 times of weekly average. Bajaj Electricals Ltd. (998.75, 9.13%) and Multi Commodity Exchange of India Ltd. (1,211.90, 2.87%) were trading with volumes 12.1 and 7.2 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
13 stocks tanked below their 52-week lows.
Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (535.65, -2.80%) and JK Lakshmi Cement Ltd. (394.75, 0.27%).
20 stocks climbed above their 200 day SMA including Angel One Ltd. (1,462.60, 9.98%) and Elgi Equipments Ltd. (323.30, 8.13%). 3 stocks slipped below their 200 SMA including Escorts Ltd. (1,618.85, -1.61%) and ZF Commercial Vehicle Control Systems India Ltd. (7,596.55, -1.19%).
16 May 2022
Dalmia Bharat: Motilal Oswal maintains a ‘Buy’ rating on this cement company but cut its target price to Rs 1,915 from Rs 2,000, indicating an upside of 34.6%. Analysts Sanjeev Kumar Singh and Mudit Agarwal cut their target price as they expect high energy costs and freight costs to persist. However, the analysts “like the company owing to its growth plans, a locational advantage in East India and cost reduction measures”. Revenue rose 7% YoY to Rs 3,380 crore driven by improvements in realisations and sales volume and realisation improved 4% YoY to Rs 5,121 per tonne, as cement prices increased during Q4FY22.
The analysts expect demand for cement to grow at 8-9% over the next few years, driven by higher Infrastructure spending, low-cost housing and rural demand. They believe the company is well-placed to benefit from the rise in demand given its focus on capacity expansion and cost-efficiency measures. They expect the company’s operating revenue to grow at a 10.9% CAGR over FY22-24.
Polycab India: BOB Capital Markets maintains a ‘Buy’ rating on this cable and fast moving electrical goods maker with a target price of Rs 3,000, indicating an upside of 16.5%. Analysts Vinod Chari, Someel Shah, and Tanay Rasal remain positive about the company’s prospects given its robust Q4FY22 results, market leadership in cables and wires, and distribution presence. The company’s Q4FY22 net profit rose 20% YoY to Rs 320 crore and revenue rose 35% YoY to Rs 3,943.7 crore led by growth across the cables and wires segments.
The analysts say that “being the market leader in cables and wires, we expect Polycab to not only pass on the higher raw material cost but also to gain market share given its superior product quality”. The company commands 22-24% market share in the organised market and 15-16% share in the fragmented market in India The brokerage take is that the ongoing revival in infrastructure and construction activities to benefit the cable and wire industry, especially organised market leaders like Polycab. The analysts expect the company’s revenue to grow at a 15.1% CAGR over FY22-24.
Federal Bank: Axis Securities maintains a ‘Buy’ rating on this bank stock but reduced its target price to Rs 115 from Rs 125. The new target price indicates an upside of 35.2%. “Federal Bank reported a muted Q4FY22 with operational performance below our expectations,” says analyst Dnyanada Vaidya. In Q4FY22, Net Interest Income grew by 7% YoY to Rs 1,525 crore which was below the brokerage’s estimate of Rs 1,595 crore, he added Vaidya says that lower than expected provisions for NPAs supported profit growth. Provisions were down 69% YoY to Rs 75 crore which led to profit rising 13% YoY to Rs 541 crore, he said.
Vaidya adds that the bank “has been taking a cautious approach in building the loan mix toward high-rated corporates and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of 92% and the bank looking to improve its CASA deposits gradually over the medium term.” He expects that the bank’s focus on high-margin businesses such as microfinance institutions and credit cards will gradually aid in margin improvement.
SRF: Edelweiss maintains its ‘Buy’ call on this chemical company’s stock and increased its target price to Rs 2,800 from Rs 2,700, indicating an upside of 24.9%. “SRF Ltd posted a strong beat on the top line and bottom line, underpinned by highest ever operating performance in Chemicals Business,” says analyst Anshul Verdia. In Q4FY22 the company’s consolidated revenue grew 36% YoY to Rs 3,549 crore, higher than the brokerage’s estimate. According to Verdia, the positive growth in the chemicals business was driven by the strong demand across the markets and new capacity addition in Hungary and Thailand.
Verdia expects refrigerant gas prices to remain firm. He also expects the demand for specialty chemicals to continue to remain strong and packaging segment volumes to be driven by upcoming biaxially oriented polypropylene and aluminum foil capacity. Lastly, the brokerage remains positive as the company has also planned capex of about Rs 2,600 crore for FY23.
Hindalco Industries: ICICI Securities maintains its ‘Buy’ rating on this aluminium miner's stock with a target price of Rs 700, indicating an upside of 78.8%. Analysts Abhijit Mitra, Mohit Lohia, and Pritish Urumkar say that “progressively higher contract prices across product segments are also leading to an improved margin outlook in the medium term”. They expect the demand for beverage cans and automobiles to grow 5% YoY and 10% YoY in CY22, respectively. They believe the company is well-placed to benefit from the rise in demand given its capacity expansion and healthy balance sheet.
The analysts expect the $2.5-billion greenfield investment in Alabama to improve EBITDA margins and reduce manpower costs by 30% through automation in the coming years. Furthermore, they see limited earning tailwinds from Novelis and expect its earnings to continue to benefit from cyclicality in FY23. The key risks for the company are lower aluminium prices, lower profitability at Novelis, and a reduction in LME spreads, according to the analysts.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
16 May 2022
Trendlyne Analysis
Nifty 50 closed higher with the Indian volatility index, India VIX rising above 24.5%. Asian indices closed higher, tracking the US indices which also closed sharply higher on Friday but still posted weekly losses. The tech-heavy NASDAQ 100 closed 3.7% higher on Friday but lost over 2.4% last week. Market volatility is expected to continue this week as investors continue to monitor high inflation levels, slowing economic growth, and the effect of hawkish monetary policies from central banks. Nifty 50 fell 3.8% last week on the back of interest rate hikes, a weakening Indian rupee, and foreign investors pulling out over Rs 14,180.9 crore from the Indian market. European stock markets trade lower, as investors remain cautious over the outlook for global economic growth amid prevailing geopolitical tensions.
Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Energy and Nifty Metal close higher than Tuesday’s levels. Nifty IT closed in the red, despite the tech-focused NASDAQ 100 closing 3.7% higher on Friday.
Nifty 50closed at 15,842.30 (60.2, 0.4%), BSE Sensexclosed at 52,973.84 (180.2, 0.3%) while the broader Nifty 500closed at 13,571.20 (99.7, 0.7%)
Market breadth is in the green. Of the 1,887 stocks traded today, 1,229 were gainers and 621 were losers.
Procter & Gamble Health, Saregama India, SIS, and AIA Engineering are trading with higher volumes as compared to Friday.
Eicher Motors sees a long build-up in its May 26 futures series after it announces Q4FY22 results. Its open interest rises 13.5% with put to call ratio at 0.83.
Affle India's Q4FY22 net profit rises 10.3% QoQ to Rs 68.5 crore but revenues fall 2.7% to Rs 344.4 crore. The company’s revenues from India fall 2.5% QoQ to Rs 108.4 crore. Net profit rises 58.6% YoY in FY22 to Rs 213.9 crore and revenue jumps 2.1 times to Rs 1,153.3 crore.
Stocks like Oberoi Realty, Nazara Technologies, Trent, Tanla Platforms, and Emami, among others, are in the oversold zone according to the technical indicator relative strength index or RSI.
PSU Banks stocks like SBI, Canara Bank, Bank of Baroda, Indian Bank and Indian Overseas Bank are rising in trade. The broader sectoral index Nifty PSU Bank is also trading in green.
Eicher Motors' Q4FY22 profit rises 16% YoY to Rs 610.1 crore and revenue rises 8.4% YoY to Rs 3,311.3 crore. In FY22, the company's profit rises 24.5% to Rs 1,676.6 crore.
Auto stocks like Maruti Suzuki India, Mahindra & Mahindra, Bajaj Auto, Eicher Motors, and Hero MotoCorp, among others are rising in trade. The broader sectoral index Nifty Auto is also trading in the green.
Paytm’s associate company, Paytm lnsuretech, terminates the share purchase agreement to acquire 100% of Raheja QBE General Insurance Company. Paytm Insuretech terminates the deal as the share purchase agreement was not consummated within the time period set by the parties.
Nazara Technologies' Q4FY22 profit falls 74.1% QoQ to Rs 2.2 crore due to increase in content, event, web server, and other expenses. Revenue falls 2.7% QoQ to Rs 184.7 crore. In FY22, the company's profit rises 208.7% to Rs 28.4 crore.
ICICI Direct maintains a ‘Buy’ rating on Brigade Enterprises with a target price of Rs 550, indicating an upside of 35%. The brokerage expects robust residential sales volume growth led by strong end-user demand and a recovery in demand for commercial real estate to drive profitability for the company. The brokerage expects net profit to grow at a 68.2% CAGR over FY22-24.
Oracle Financial Services Software and Honeywell Automation India touch 52-week low of Rs 3,101 and Rs 32,303 respectively. Both stocks are falling for 2 consecutive sessions.
Shipping Corporation of India's Q4FY22 profit rises 77.43% YoY to Rs 152.2 crore and revenue rises 51.5% YoY to Rs 1,364.6 crore. In FY22, the profit rises 24.3% to Rs 865.2 crore.
Amber EnterprisesIndia is trading with more than 12 times its weekly average trading volume. ACC, Ambuja Cements, Elgi Equipments, and Dr. Lal Pathlabsare trading at more than four times their weekly average trading volumes.
Maruti Suzuki India to invest Rs 11,000 crore to set up a manufacturing site of 800 acres in Haryana. The first plant with a manufacturing capacity of 2.5 lakh vehicles per annum is expected to be commissioned within the year 2025.
Bank of Baroda posts a net profit of Rs 2,073 crore in Q4FY22 as opposed to a loss of Rs 740.8 crore in Q4FY21, due to lower provision for tax, at Rs 121.9 crore as compared to Rs 3,724.3 crore a year ago. Revenue falls 5.4% YoY to Rs 22,470.5 crore due to a fall in other income and the net interest margin rises by 36 bps YoY to 3.1%.
Alkem Laboratories’ Q4FY22 net profit falls 55% YoY to Rs 107.6 crore despite its revenues increasing by 11.9% to Rs 2,504.4 crore. Net profit falls as cost of raw materials rises 36% YoY to Rs 901.2 crore. Net profit rises 3.8% YoY in FY22 to Rs 1,645.6 crore and revenues increase by 18.7% to 10,796.9 crore.
Realty stocks like Godrej Properties, Macrotech Developers, Sobha and Brigade Enterprises, among others are rising in trade. The broader sectoral index Nifty Realty is also trading in green.
JK Paper’s Q4FY22 net profit rises 25.2% YoY to Rs 170 crore and revenues increase by 45.6% to Rs 1,361.8 crore. Net profit rises on the back of higher volume and realization despite an increase in input costs. Net profit jumps 2.3 times YoY in FY22 to Rs 542.6 crore and revenue rises 41.5% to Rs 4,244.3 crore.
Adani Enterprises' subsidiary i.e., AMG Media Networks is set to buy 49% stake in a leading digital news company Quintillion Business Media for an undisclosed amount. Quintillion Business Media operates the digital news platform BloombergQuint. With this acquisition, Adani Group is set to foray into the Indian media business.
Avenue Supermarts’ Q4FY22 net profit rises 3.1% YoY to Rs 426.8 crore and revenue rises 18.2% YoY to Rs 8,819 crore. EBITDA margin rises by 10bps YoY to 8.4% despite the omicron wave of Covid-19 slowing down recovery. In FY22, net profit rises 35.7% YoY to Rs 1,492.5 crore and revenue rises 27.7% YoY to Rs 31,093.8 crore.
Nifty 50 sees a long build-up in its May 26 futures series as its open interest rises 0.5% with put to call ratio at 0.8.
Tech Mahindra’s Q4FY22 net profit rises 10.1% to Rs 1,505 crore and revenues increase by 6.5% YoY to Rs 12,436 crore. The company’s total contract value rises 44% QoQ to $ 1.01 billion, indicating a healthy deal pipeline. Net profit rises 25.7% YoY in FY22 and revenues increase by 18.4% to Rs 45,758.3 crore.
Adani Group to buy Holcim's stake in Ambuja Cements and ACC for $10.5 billion, making it the second-largest cement maker in India with a capacity of about 70 million tonnes per annum. Holcim, through its subsidiaries, holds 63.2% in Ambuja Cements and 54.53% in ACC.
Riding High:
Largecap and midcap gainers today include Vodafone Idea Ltd. (9.40, 12.57%), Avenue Supermarts Ltd. (3,561.10, 10.23%) and Balkrishna Industries Ltd. (2,050.45, 8.60%).
Downers:
Largecap and midcap losers today include Honeywell Automation India Ltd. (32,377.05, -5.69%), Aditya Birla Capital Ltd. (95.05, -5.00%) and Nippon Life India Asset Management Ltd. (265.05, -3.71%).
Volume Shockers
16 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Elgi Equipments Ltd. (299.00, 16.12%), Crisil Ltd. (3,673.30, 12.36%) and Vinati Organics Ltd. (1,996.35, 11.11%).
Top high volume losers on BSE were Amber Enterprises India Ltd. (2,703.60, -20.00%), Affle (India) Ltd. (966.90, -6.52%) and Aditya Birla Capital Ltd. (95.05, -5.00%).
ACC Ltd. (2,196.20, 3.92%) was trading at 8.2 times of weekly average. Ambuja Cements Ltd. (368.00, 2.48%) and Dr. Lal Pathlabs Ltd. (2,206.35, -3.45%) were trading with volumes 7.5 and 5.2 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
30 stocks were underachievers and hit their 52-week lows.
Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (551.10, -2.04%) and Axis Bank Ltd. (638.95, 0.47%).
26 stocks climbed above their 200 day SMA including Elgi Equipments Ltd. (299.00, 16.12%) and Vinati Organics Ltd. (1,996.35, 11.11%). 9 stocks slipped below their 200 SMA including Amber Enterprises India Ltd. (2,703.60, -20.00%) and DCM Shriram Ltd. (917.20, -7.55%).
13 May 2022
Cipla: This pharmaceutical company’s stock rose 3% intra-day after it announced its Q4FY22 results on Wednesday despite its net profit declining 12.4% YoY to Rs 362.1 crore. This stock also shows up on the screener identifying companies that announced results in the past week with declining net profit YoY or QoQ. The screener includes 37 more companies from the Nifty 500 index.
The net profit fell due to a one-time write-off of Covid-19 drugs inventory worth Rs 200 crore. Revenue grew 14.1% YoY to Rs 5,324.4, led by the One India and US business growing at 21% YoY and 17% YoY, respectively. The One India business growth is led by improved traction across segments, trade generics, and consumer health business. The US business posted its highest ever sales of $160 million (Rs 1,239.1 crore) while continuing to gain market share, driven by its respiratory portfolio and peptide assets. It continued its market-beating growth rate in large branded generic franchises in India & South Africa.
The management expects complex product launches to drive EBITDA margin growth in the coming quarters and has guided for an EBITDA margin of 21-22% in FY23. The company also reduced its debt by 53% YoY to Rs 824 crore in Q4FY22 to maintain a strong balance sheet and drive free cash flow generation.
Brokerages like Axis Securities, ICICI Direct, and Prabhudas Lilladhar maintain a ‘Buy’ rating on the company. They remain positive about its prospects given its strong traction in the branded generic segment and respiratory portfolio, rich US business order pipeline, and healthy free cash flow generation. Motilal Oswal maintains a ‘Neutral’ rating on the company due to concerns regarding higher procurement and logistic costs.
PVR: This multiplex company’s stock is falling since April 2022. It recovered slightly after it declared its Q4FY22 results on May 09, 2022, but that did not enthuse investors. Net loss narrowed to Rs 105.4 crore from Rs 289.1 crore YoY. However, the losses sequentially increased by 9.4X. This company also shows up in the screener including stocks that announced results in the past week with declining net profit YoY or QoQ.
Losses increased because of the third wave of Covid-19 as the government imposed capacity restrictions. Also, the lack of new content and a rise in movie releases on OTT platforms affected the multiplex industry in Q4FY22. However, March saw gradual improvement in occupancies and the release of strong content. This bodes well for growth in FY23.
The management believes the business will recover in FY23. Motilal Oswal also expects business to normalize with a 57% growth in EBITDA next year. This is because of PVR’s plans to add 126 more screens in FY23. Its expansion plans extend to increasing the number of screens in Tier-2 and Tier-3 cities. However, the brokerage continues to maintain a ‘Neutral’ rating on the stock as it is cautious about the projected growth in the cinema space as subscribers on OTT platforms increase. ICICI Securities is more positive about the company’s prospects, expecting the average ticket price (ATP) to reset to pre-Covid levels by H2FY23. Although the brokerage believes that EBITDA loss is large because of lower advertising, the management is positive about stabilizing its advertising revenue by Q1FY23. March 2022 saw advertising revenue reach nearly 40% of pre-Covid levels. With the INOX-PVR merger likely to happen in the coming quarters, the company might see better growth and earnings over FY23-24.
Voltas: This consumer electronics company’s stock fell over 22% in the past week post its Q4FY22 results. Its net profit fell 23.2% YoY to Rs 182.7 crore, missing Trendlyne’s Forecaster estimates by 17.6%. Lower revenues from electro-mechanical projects (EMPS) and a sharp decline in profitability of unitary cooling products (UCP) affected Voltas’ Q4FY22 results. While revenue from EMPS fell 21% YoY to Rs 691.5 crore, revenue from UCP rose 9.9% YoY to Rs 1,818 crore on the back of strong demand. But EBIT margin of unitary products fell 5.2 percentage points to 10.6% due to high raw material costs.
Voltas earns around 69% of its revenues from the UCP segment, and is a market leader in room air conditioning (RAC) category. However, the company’s market share fell 200 bps to 23% in FY22. This is due to lower sales in South India, despite strong demand in the RAC segment due to early onset of summer in 2022. Its 9.9% growth in UCP revenues seems low when compared to its peers. Blue Star’s UCP revenue grew 32% YoY in Q4FY22 to Rs 1,034 crore whereas Havell’s Lloyd’s segment rose 62% to Rs 959.6 crore.
The management said that it took price hikes in the range of 12-15% in FY22 and would consider further price hikes if the commodity prices stay elevated. However, with the company losing market share due to pricing pressure, increasing prices may reduce demand in its UCP segment.
Navin Fluorine International:This chemical company’s stock rose 4.1% since Monday after it announced itsQ4FY22 results on Saturday, despite its net profit marginally rising 0.5% YoY to Rs 75.2 crore. Its net profit missed Trendlyne’s Forecaster estimates by 8.7%. EBITDA margin declined by 238 bps YoY to 23% due to rising raw material prices, employee costs and logistics costs. However, its revenue rose 17.1% YoY to Rs 421.3 crore driven by an expanding order pipeline, price hikes, and new customer additions across all its business verticals. According to the management, growth was largely driven by the high-value business segment which is made up of specialty chemicals and CRAM (contract research and manufacturing services) segments, which grew 21% YoY and 16% YoY, respectively. The high-value business segment contributed 62% of the total revenue in Q4FY22. Furthermore, the management expects to pass on high input costs to customers over the next couple of quarters in the specialty chemicals segment.
Navin Fluorine Advanced Sciences, a wholly-owned subsidiary of the company, entered into a multi-year contract with a multinational company (MNC) to manufacture and supply a fluoro-specialty chemical. Management noted that this deal has a peak potential revenue of Rs 600 crore per annum and requires a capex of Rs 540 crore. The plant is expected to start operation by the end of CY23.
This company also comes up on a screener which shows stocks that received broker price or recommendation upgrades in the past month. 77 Nifty 500 companies saw an upgrade in broker price or recommendation.
Gujarat Gas: This natural gas distribution company’s stock rose by nearly 9% on Thursday after it declared its Q4FY22 earnings. This company shows up in the screener that includes stocks that outperformed the Nifty 500 index over the past week. The screener shows 204 stocks in the Nifty 500 index. Its net profit rose 27.5% YoY to Rs 444.4 crore with total revenue increasing 12.6% to Rs 4,773.4 crore. The company even declared a dividend of Rs 2 per share. Total volumes rose 14% YoY to 42.7 million metric standard cubic metres per day (mmscmd) with CNG volumes surging 52% YoY to 7.9 mmscmd.
The management continues its expansion plans as it adds a total of 155 new CNG (compressed natural gas) stations, taking the total to 711 stations. This is the highest number of CNG stations installed by any City Gas Distribution company in India.
However, the high price of LNG is hampering volume growth for Gujarat Gas. Industrial demand is falling, due to high spot LNG (liquefied natural gas) prices. LNG price in March was US $35.4 million British thermal unit (MMBtu), which fell to US $24.5 MMBtu in April 2022. Further cooling of these prices should aid in volume recovery.
Brokerage HDFC Securities believes that the company’s margins were protected because of weak demand for high-cost LNG and strong growth and high margin in low-cost CNG and domestic PNG (piped natural gas). EBITDA margin fell 120 bps YoY to 14.9% in Q4FY22. Resolution of the ongoing geopolitical tensions may help ease gas prices further and improve margins. The company’s recent successful bids for six geographical areas to set up city gas distribution centres should aid long-term growth.
Trendlyne's analysts identify stocks that are seeing interesting price movement, analyst calls or new developments. These are not buy recommendations.