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Trendlyne Marketwatch
14 Mar 2022, 03:51PM
Market closes higher, Lupin receives USFDA for its Vigabatrin oral solution

Trendlyne Analysis

Nifty 50 closed in the green for the fifth consecutive day. Falling crude oil prices and Bharatiya Janata Party winning four out of five state assembly elections last week lifted up the markets. However, most Asian indices closed lower amid mixed global cues with the Russia-Ukraine war as the focal point. The US Federal Reserve is set to commence the interest rate hikes after its two-day monetary policy meeting, starting tomorrow. This comes after the US inflation print hit a 40-year high of 7.9% last week.

Nifty Midcap 100 and Nifty Smallcap 100, which opened higher than Friday's levels, closed marginally higher underperforming the benchmark index. Nifty Media and Nifty Bank extended their gains from last week by closing in the green. Nifty Metal closed in the red while Nifty IT ended the day sharply higher, tracking the tech-heavy NASDAQ 100 futures, which is trading in the green.

Markets closed up today. Nifty 50 closed at 16,871.30 (240.9, 1.5%), BSE Sensex closed at 56,486.02 (935.7, 1.7%) while the broader Nifty 500 closed at 14,374.60 (137.5, 1.0%)

Market breadth is in the red. Of the 1,897 stocks traded today, 836 showed gains, and 1,024 showed losses.

  • Supreme Industries, Godrej Industries, Sanofi India, and Amber Enterprises trading with higher volumes as compared to Friday.

  • Media stocks like Zee Entertainment, Sun TV Network, PVR, TV18 Broadcast, and Saregama India are rising. The broader sectoral index i.e., Nifty Media is also trading up today.

  • Larsen & Toubro's arm L&T Construction recieves engineering, procurement and construction orders worth Rs 1,000-2,500 crore from Gujarat Water Infrastructure for the Dhanki-Navda Bulk Pipeline project.

  • Lupin receives US Food and Drug Administration (FDA) for its abbreviated new drug application (ANDA), Vigabatrin for oral solution (500 mg). Vigabatrin is an anti-epilepsy drug with an estimated annual sales of $ 275 million (around Rs 2,100) in the US.

  • Ruchi Soya rallies as it files a red herring prospectus (RHP) for its follow-on public offer (FPO) for Rs 4,300 crore upon receiving approval from its board of directors. The company will offer equity shares with a face value of Rs 2 each amounting to Rs 4,300 crore under the FPO. The issue will open on March 24 and will be available for bidding till March 28, 2022.

  • Ingersoll-Rand (India) is trading with more than seventeen times its weekly average trading volume. Jubilant Foodworks, WABCO India, Godfrey Phillips India, and Sharda Cropchem are trading at more than three times their weekly average trading volumes.

  • HDFC Bank rises after RBI revokes the restrictions on business generating activities planned under the Bank’s Digital 2.0 program w.e.f. March 11, 2022. The apex bank had earlier eased the restictions on new credit card issuances by HDFC Bank in August, 2021.

  • Zydus Lifesciences receives US Food and Drug Administration (FDA) approval for its Colestipol Hydrochloride tablets in the strength of 1mg. Colestipol Hydrochloride is used to lower high cholesterol levels in the blood to help prevent medical problems caused by cholesterol clogging the blood vessels.

  • Jubilant Foodworks' Chief Executive Officer and full-time Director Pratik Rashmikant Pota resigns to pursue opportunities outside the company. The resignation will be effective from June 15, 2022.

  • GAIL announces the second interim dividend of Rs 5 per share for FY22. The total dividend payout amounts to nearly Rs 2,220 crore. The record date is March 22, 2022

  • Tech Mahindra acquires a 100% stake worth Rs 320 crore in the enterprise-application company Thirdware, in an all-cash deal. The IT company expects the acquisition to bolster its digital solutions and services in automotive consulting, design, and development.

  • Sobha's Managing Director Jagdish Chandra Sharma resigns citing personal reasons. The resignation will be effective from April 1, 2022.

  • Reserve Bank of India (RBI), on Friday, directs Paytm Payments Bank, an associate of One97 Communications, to stop onboarding new customers with immediate effect. RBI has also directed the company to appoint an IT audit firm to conduct a system audit of its IT system as it observes supervisory concerns with the bank operations.

Riding High:

Largecap and midcap gainers today include Ruchi Soya Industries Ltd. (963.75, 20.00%), Deepak Nitrite Ltd. (2,207.65, 7.66%) and Zee Entertainment Enterprises Ltd. (259.20, 6.91%).

Downers:

Largecap and midcap losers today include Jubilant Foodworks Ltd. (2,514.00, -12.24%), Au Small Finance Bank Ltd. (1,121.10, -6.03%) and Hindustan Petroleum Corporation Ltd. (279.20, -5.13%).

Movers and Shakers

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

Top high volume gainers on BSE included Ruchi Soya Industries Ltd. (963.75, 20.00%), CreditAccess Grameen Ltd. (804.30, 14.58%) and Hatsun Agro Products Ltd. (1,205.90, 10.66%).

Top high volume losers on BSE were Jubilant Foodworks Ltd. (2,514.00, -12.24%), Mahindra CIE Automotive Ltd. (174.95, -2.34%) and WABCO India Ltd. (7,174.85, -0.23%).

Brightcom Group Ltd. (102.10, 4.99%) was trading at 6.9 times of weekly average. Godfrey Phillips India Ltd. (1,040.35, 1.50%) and Johnson Controls-Hitachi Air Conditioning India Ltd. (1,856.70, 3.25%) were trading with volumes 5.7 and 4.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Cipla Ltd. (1,048.65, 0.45%), GHCL Ltd. (525.50, 6.39%) and Sun Pharmaceutical Industries Ltd. (892.25, -1.08%).

Stocks making new 52 weeks lows included - 3M India Ltd. (19,704.95, -0.97%) and Jubilant Foodworks Ltd. (2,514.00, -12.24%).

21 stocks climbed above their 200 day SMA including Hatsun Agro Products Ltd. (1,205.90, 10.66%) and Deepak Nitrite Ltd. (2,207.65, 7.66%). 14 stocks slipped below their 200 SMA including Au Small Finance Bank Ltd. (1,121.10, -6.03%) and Sobha Ltd. (701.90, -5.98%).

 
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The Baseline
14 Mar 2022, 11:57AM
Five analyst stock picks this week

  1. Hindustan Aeronautics: ICICI Securities maintains a ‘Buy’ rating on this aerospace company with a target price of Rs 2,618, indicating an upside of 88.6%. The brokerage is bullish for the company’s order pipeline. The current outstanding order book is Rs 79,230 crore at the end of 2021 and with the defence ministry clearing more procurement proposals forwarded by the Indian defence forces, it is expected to strengthen the order book further by Rs 30,000 crore. Apart from this, the management is also expecting more orders worth around Rs 25,000 crore to be finalized in Q1FY23. 

HAL procures Rs 4,000 crore worth of spares and parts from Russia, for which it has maintained inventory to cater to the requirement for at least the next 8-9 months. “The company is also focusing on indigenous production of Russian supplies to reduce the import dependence,” said the analysts at ICICI Securities. The brokerage expects the company’s profit to grow by 8.3% CAGR over FY22-FY24 on a robust order pipeline and improving production capacity.

  1. Alkem Laboratories: Motilal Oswal reiterates its ‘Buy’ rating on this pharmaceuticals stock with a target price of Rs 3,870, indicating an upside of 14.1%. “Given the turmoil on the international front, the branded domestic formulations segment remains well protected. It is also on the growth path, with the easing of Covid-related restrictions,” say analysts Tushar Manudhane and Gaurang Sakare. The company delivered 34.5% YoY sales growth in 9MFY22 and exports grew at 18% CAGR over FY16-21. The analysts cut their FY23 and FY24 earnings estimates by 6% and 7% respectively to factor in elevated operational costs for prolonged periods of time. But the brokerage expects a 10% earnings CAGR over FY22-24 on the back of steady outperformance in the domestic formulation segment, a positive benefit of inflation-linked price hike on products, and a consistent compliance track record.

  2. Ion Exchange (India): Hem Securities initiates a ‘Buy’ call on this environment solutions company with a target price of Rs 2,526. This indicates an upside of 42.7%. In Q3FY22, the company posted a net profit of Rs 28 crore, down 3.44% YoY, and consolidated revenues of Rs 388 crore, up 11.18% YoY. The engineering division saw improvement in the order book. The company got an order from Numaligarh Refinery. The UP Jal Nigam project commenced in the quarter, and the management is expecting a higher revenue contribution in the next few quarters. Domestic sales improved and new products were launched by the company. The total order book was Rs 2,756 crore and the company has already bid for Rs 5,640 crore, mainly related to pipelines. Return on equity is 30% and the company is debt-free. The brokerage feels that the company’s market capitalisation can double from here over a longer-term. 

  3. Infosys: Axis Securities has a ‘Buy’ rating on this software services company with a target price of Rs 1,895, indicating an upside of just 1.3%. The company’s management “has taken cost optimization efforts which help them to gain long term sustainable operating margins” said analysts at Axis Securities. The deal pipeline remained robust in Q3FY22 at $2.53 billion. It won multiple large transformation deals, despite uncertainty across sectors like BFSI, communication, manufacturing, and auto. 

The digital transformation business is intact, as its engagement with its partner network expanded beyond certifications into the setup of co-innovation centres, building industry solutions, and joint sourcing of deals. The company will continue to invest in Its digital product, digital talent, and sales and marketing to drive growth. The brokerage expects Infy’s profit to grow by 10.6% CAGR over FY22-FY24 on a strong deal pipeline and robust demand.

  1. Avanti Feeds: Geojit BNP Paribas maintains ‘Buy’ on this food products company but reduced its target price to Rs 535, indicating an upside of 25.1%. For Q3FY22 the company’s sales grew by 17% YoY to Rs 1,069 crore on the back of 18%YoY growth in the feed segment and 12% YoY growth in the processing segment. But the company’s profit fell 46% to Rs 40 crore. Avanti Feeds announced a capacity expansion of 1.75 lakh metric tonne, with a capital expenditure of Rs 125 crore by Q1FY23. The brokerage expects revenue CAGR of 13% over FY22-24. 

In 2021, USFDA advised Avanti to voluntarily recall certain products processed between October 23, 2020 to November 11, 2020, which were identified as potential for contamination for containing Salmonella.  The total recall was for products worth more than Rs 66 crore. The company hiked prices to reduce the impact of cost inflation. Yet analyst Vincent Andrews says that “demand outlook is improving given the re-opening of hotels & malls in export markets along with better export & farm gate prices and favourable shrimp culture conditions.” He said the brokerage reduced its target price due to impending margin pressure.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Mar 2022
Market closes in green, LIC’s Q3 net profit surges 1.5X YoY due to change in fund distribution policy

Trendlyne Analysis

Indian indices finally closed in the green after gyrating between gains and losses. Asian indices ended mixed amid weak global cues after rebounding on Thursday. The US indices closed lower yesterday as the US inflation print hit a 40-year high of 7.9%. This points to interest rate hikes by the Fed in the next week’s monetary policy meeting. Investors breathed a sigh of relief on Thursday as Bhartiya Janata Party won four out of the five states, indicating political stability at the center.

Nifty Smallcap 100 ended the week in green, gaining close to 6% in the last four trading sessions. Nifty Pharma surged 2.4% to outperform the benchmark index. Nifty IT closed flat despite the tech-heavy NASDAQ 100 closing 1.1% lower on Thursday.

Nifty 50 closed at 16,625.50 (30.6, 0.2%), BSE Sensex closed at 55,550.30 (85.9, 0.2%) while the broader Nifty 500 closed at 14,233.95 (45.0, 0.3%).

Market breadth is in the green. Of the 1,864 stocks traded today, 1,115 were in the positive territory and 715 were negative.

  • LIC’s Q3FY22 net profit surges 1.5X YoY to Rs 235 crore as a change in fund distribution policy now allows shareholders to receive a higher share. Shareholders now receive 5% of surplus from participating fund, and 100% from the non-participating fund. Total premium collection rises 0.8% YoY to Rs 97,761 crore with new business premiums rising 10% to Rs 8,748 crore.

  • Geojit PNB Paribas upgrades from ‘Accumulate’ to ‘Buy’ rating for Avanti Feeds and reduces the target price from Rs 620 to Rs 535, indicating an upside of 25%. The brokerage is bullish for the company on a positive demand outlook due to the re-opening of hotels & malls, better export prices, and favourable shrimp culture conditions.

  • Ajcon Global maintains a ‘BUY’ rating on Ajanta Pharma with a target price of Rs 2,400, indicating an upside of 39.5%. According to the report, the brokerage has a positive outlook on the company as its business model is well diversified across geographies with strong research and development (R&D) capabilities. The brokerage expects the company to retain leadership in the anti?glaucoma segment in India.

  • Symphony is trading with more than fifteen times its weekly average trading volume. JK Paper, The Fertilisers and Chemicals Travancore, MOIL, and Central Depository Services (India) are trading at more than four times their weekly average trading volumes.

  • Strides Pharma Global, a wholly-owned subsidiary of Strides Pharma Science receives US Food & Drug Administration (USFDA) for its Colchicine Tablets, 0.6 mg. Colchicine tablets are used for the treatment and prevention of gout. The product will be manufactured at the company’s facility in Bengaluru.

  • Geojit PNB Paribas recommends a ‘Buy’ rating on Aarti Industries with a target price of Rs 1,038, indicating an upside of 25%. The brokerage has a positive view of the company given its focus on new products through backward and forward integration, a strong customer base, and an improving sector outlook. The brokerage expects the company’s profit to grow by 30% CAGR over FY21- FY24.

  • Exide Industries rises after it announces a technical collaboration with SVOLT Energy Technology for manufacturing of lithium-ion batteries. This Chinese company will provide Exide the neccesary technology and know-how for the manufacturing process. Additionally, Exide is also in process of setting-up a special pruspose vehicle to engage in this new segment

  • Jindal Steel & Power announces an interim dividend of Rs 1 per share for FY22. The total dividend payout amounts to nearly Rs 102 crore. The record date is March 19, 2022.

  • Lupin launches its first reference laboratory in East India at Kolkata. The new reference laboratory has the capabilities to conduct a broad spectrum of routine and specialized tests in various fields including molecular diagnostics, microbiology, and routine biochemistry. The company had forayed into the diagnostics segment in December last year as part of its strategy to provide integrated healthcare in India.

  • Hulst BV, an affiliate of Baring Private Equity Asia, and promoter of Coforge sells 9.86% stake (60 lakh shares) worth Rs 2,560 crore through a bulk deal. The IT company’s share price plunged 6% in intra-day trading on Thursday.

Riding High:

Largecap and midcap gainers today include Atul Ltd. (9,537.30, 6.61%), Cipla Ltd. (1,043.95, 5.76%) and Hindustan Petroleum Corporation Ltd. (294.30, 5.43%).

Downers:

Largecap and midcap losers today include Dalmia Bharat Ltd. (1,429.85, -3.53%), Havells India Ltd. (1,092.60, -3.11%) and Godrej Industries Ltd. (500.15, -2.08%).

Volume Rockets

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

Top high volume gainers on BSE included Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (708.85, 12.43%), JK Paper Ltd. (266.50, 11.67%) and Esab India Ltd. (3,154.30, 8.01%).

Top high volume losers on BSE were Procter & Gamble Health Ltd. (4,378.70, -3.99%), Godrej Industries Ltd. (500.15, -2.08%) and Torrent Power Ltd. (480.85, -0.52%).

Symphony Ltd. (1,037.35, 6.19%) was trading at 20.1 times of weekly average. MOIL Ltd. (176.85, 3.60%) and Gujarat State Fertilizer & Chemicals Ltd. (139.15, 6.26%) were trading with volumes 6.9 and 6.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Cipla Ltd. (1,043.95, 5.76%), GHCL Ltd. (493.95, 6.44%) and Sun Pharmaceutical Industries Ltd. (902.00, 3.73%).

Stock making new 52 weeks lows included - Procter & Gamble Health Ltd. (4,378.70, -3.99%).

22 stocks climbed above their 200 day SMA including Atul Ltd. (9,537.30, 6.61%) and Rashtriya Chemicals & Fertilizers Ltd. (80.60, 6.61%). 7 stocks slipped below their 200 SMA including EIH Ltd. (123.45, -1.20%) and HFCL Ltd. (72.90, -0.82%).

 
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The Baseline
11 Mar 2022
Crude prices hurt Indian Oil, BPCL; which stocks are outperformers amid market turbulence?

On March 7, the Nifty 50 breached the psychological level of 16,000 and fell to 15,771.65 after four days of trading in red. Concerns on higher inflation, a weakening rupee and record crude oil prices had spooked investors. Though the index is up 3% in the last two days, the Russia-Ukraine war is far from over.

This week, we dive into a sector with direct correlation with the current oil shock, and how a healthcare company is taking on competition in the post-pandemic world. 

In this week’s Analyticks:

  • Record crude oil prices add to woes of Indian Oil, BPCL and HPCL, as analysts forecast weak FY23
  • Going to war - on the internet: Apollo Hospitals looks to raise capital for its healthcare platform, to compete with PharmEasy
  • Screener: Which stocks are outperforming their industries, with strong fundamentals and lower PE? 

Let’s get into it.

As crude oil jumps, oil marketing companies hope for price hikes at the pump

With crude oil prices scaling the $130/bbl peak before falling back, speculations are rife about upcoming price hikes in petrol and diesel prices in India. Many believe that the four month long pause in fuel price increases were because of state assembly elections. 

Petrol and diesel prices haven’t moved up since November 2021 despite the sustained rise in crude oil prices from December. The current petrol price in New Delhi is Rs 95.4/litre and diesel price is Rs 86.67/litre. According to rating agency ICRA, the Indian crude oil basket, which indicates the purchase price of our crude imports, averaged at $114.6/bbl in March 2022 (March 1-7), relative to $93.3 a barrel in February 2022.

Ideally an increaseof $1/bbl in crude oil requires a 50 paise corresponding increase in retail fuel prices. This means that petrol prices should have increased by Rs 17/litre to Rs 112.41/litre.

A recent report stated that OMCs are suffering a marketing loss of Rs 20 per litre with current crude prices, amounting to a Rs 900 crore loss per day. On the face of it, OMCs are free to revise retail fuel prices fortnightly based on the movement in crude oil prices in international markets since 2014.

But more often than not, fuel prices move or don’t move with the political events occurring across India. Interestingly, fuel prices weren’t increased even after the recent state assembly polls got over on Monday. According to a senior government official, the Center is working on options involving reduction in excise duty that might reduce the burden on consumers. 

Will OMCs take a considerable hike in prices to protect their marketing margins - the mark-up they charge on fuel costs - in the current environment of spiraling oil prices? Or will the invisible hand of politics push them to keep prices benign?

Weak marketing margins cast a shadow on healthy refining profits in Q3FY22

The benchmark Singapore gross refining margin (GRM) saw a consistent rise to $6/bbl in January, 2022 and then to $7.5/bbl in February, 2022. Higher auto and aviation fuel demand led to a favorable improvement in gasoline, aviation turbine fuel and naphtha cracks in Q3FY22. Crack is the difference the oil refiners earn by converting crude oil into refined petroleum products. Understandably, the gross refining margins of Indian oil marketers also jumped 3X YoY and 2X QoQ to an average of $9.4/bbl in Q3FY22. 

Notably, Indian Oil Corp stands to benefit the most amongst other OMCs if the GRMs continue to rise or remain at such high levels. This is because the company is not only the top refiner in India but also controls one-third of India's five-million-barrels-per-day refining capacity. Also, more than 90% of its market sales volumes are met through its own refining output. As of 9 months ended December, 2021; the company derived around 38% of its EBITDA through refining operations. 

Interestingly, the OMCs’ sales volumes recovered in double-digits on a sequential basis in Q3 led by healthy demand witnessed for motor spirits. However, high-speed diesel demand continued to lag. If we come to the market sales reported by the OMCs for Q3FY22, they were largely range-bound on an YoY basis. 

The Centre reduced excise duty on petrol and diesel from November 4, 2022. Hence the OMCs could not pass on the burden of higher excise duties they paid on their fuel inventory outlets to the final consumers. Understandably, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) suffered marketing inventory losses between Rs 1,400 and Rs 1,800 crore in Q3. 

Ultimately, weak profits from the marketing segment affected the overall operational performance of OMCs in Q3FY22.

All eyes are now on impending fuel price hikes as crude is boiling

When crude oil prices are on a downward slope, OMCs do not pass on the complete benefit of lower input costs to consumers. This is where they make higher marketing margins. If we talk about the refining segment, profits are generally lower as GRM adjusts to lower crude prices. In such a situation, analysts generally recommend a company like HPCL since it does not rely on its refining output to meet its market sales target. 

Currently our situation is the opposite to the example given above i.e. crude oil prices are rising and are at high levels. Hence, OMCs are also witnessing higher input costs which they may not be able to completely pass on. People are already feeling the pinch of high inflation and high fuel prices. 

However, higher gross refining margins on improved cracks will soften the impact of lower marketing profits. So, for Q4FY22, performance of OMC might be on the weaker side yet again as the fuel prices at their retail outlets haven't moved in tandem with international crude oil prices in the past four months. 

The spike in crude prices is so sharp, it is inevitable that pump prices will rise again.  If they do, any material impact on marketing margins of OMCs might be visible only from Q1FY23.

Analysts expect OMCs’ revenues to see a dismal YoY rise of 4% in FY23 on an average. They expect the earnings to fall by nearly 30% YoY on an average in the next fiscal.

Apollo Hospitals leverages its strong network to ramp up its omnichannel digital healthcare services

Apollo Hospitals posted strong Q3FY22 results, despite Q3 being a typically weak quarter for the hospital sector. The company’s revenues and profits continue to grow with the help of multiple growth levers. Apollo Hospital’s major growth project is Apollo HealthCo, which Apollo Hospitals formed in June 2021 to house its front-end and back-end pharmacy businesses, and the high growth digital business branded Apollo 24|7. 

Apollo Hospital’s revenue rose 32% YoY to Rs 3,656 crore and net profit rose 75% to Rs 228.4 crore. Revenue growth was driven mainly by the return of elective surgeries and higher average revenue per operating bed (ARPOB). ARPOB increased by 14.8% YoY to Rs 46,062 mainly driven by the better payor (over 75% from self-pay and insurance category) and case mix. Hospitals prefer higher contributions from self-pay and commercial insurance categories as they have higher margins than the government contracts.  

Apollo HealthCo is an omnichannel digital healthcare platform, directly competing with API Holdings (PharmEasy), which recently got the regulator’s approval for its Rs 6,250 crore initial public offering (IPO). Both online platforms are new age “healthtech'' companies offering a wide range of healthcare services. Apollo Hospitals, the parent company of Apollo HealthCo, is looking for investors to raise capital for the past two quarters. However, a deal is elusive. With API Holding’s IPO on the cards, Apollo HealthCo might then be benchmarked to  its valuation.

Apollo HealthCo posted a higher revenue of Rs 5,000 crore (9M FY22) compared to API Holdings’ Rs 2,335 crore reported in FY21 . But API Holding plans to leverage its higher number of registered users (250 lakhs vs 66 lakh of Apollo HealthCo) to drive revenues. 

Apollo Hospitals hopes to improve its operating profit margin through the backward integration of Apollo HealthCo, especially from the e-pharmacy segment. Currently, 41% of Apollo Hospital’s total revenue is derived from the pharmacy segment. Revenue from the combined pharmacy platform business rose 15% YoY in Q3FY22 to Rs 1,661 crore. The customer acquisition cost for the e-pharmacy industry is around Rs 500. However, Apollo HealthCo boasts a customer acquisition cost of Rs 150 helped by the strong network provided by its parent company. While older hospitals continue to boost the operating margins (22%), new hospitals reported lower operating margins of 12.4% in Q3FY22. With Apollo Hospitals’ plan to launch around six new hospitals in the next three years, the operating margin can come under pressure. 

The operating profit margin of Apollo Hospitals is on an uptrend from Q4FY20, helped by higher bed occupancies and higher margins from older hospitals. The operating profit margin improved by 190 basis points YoY while bed occupancy increased by 200 basis points to 65% in Q3FY22. 

Brokerages like HDFC Securities and ICICI Securities  have a positive outlook on the company as they expect it to announce strategic funding partnerships for Apollo HealthCo and in turn, drive revenue growth. The company’s management plans to raise the capital by the end of FY22. The delaying of this deal, coupled with the aggressive expansion of API holdings, can become a roadblock for Apollo Hospitals to gain market share through its omnichannel healthcare platform. 

Screener: Stocks which are outperforming their industry, with strong durability and momentum scores

Markets tumbled this month as Russia waged a war on Ukraine. The Nifty 50 and Nifty Midcap 100 indices fell 6% and 7.5%, respectively. However, the Nifty Metal gained (2%) over the past week-and-a-half.

This screener (subscriber access) shows 13 Nifty500 stocks with PE TTM lower than their industry, which are outperforming their industry in one year returns. These stocks are consistent performers with decent topline and bottom-line growth in Q3FY22.

Among the 13 companies, Narayana Hrudalaya is the only healthcare company. Pharma company Laurus Labs has also made the list.

Metal stocks like Tata Steel, among others, are gaining on analysts' expectations of upcoming export opportunities for the entire metal industry in US and European markets.On a surprising note, fertilizer stocks like Gujarat State Fertilizer & Chemicals also came up in this screener, despite crude oil prices rising. 

You can find popular screenershere.

 
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The Baseline
11 Mar 2022
Five Interesting Stocks Today
  • JK Cement: The stock of this cement company plunged nearly 14% in just two days after it announced a foray into paints business on March 5, 2022. A year ago, Grasim made a similar announcement and ended up gaining 12% in the next one week. Why did the market react to two similar events differently?

The announcement of JK Cement comes at a time when both cement and paint stocks are underperforming the broader indices. Paints and cement companies are reeling under inflationary cost pressures and posted weak results in Q3FY22. With the Russia-Ukraine conflict far from over, crude oil prices are unlikely to cool off anytime soon.

But there is more to this story. Grasim had a clear aim to become the No. 2 player in the paints industry, and the quantum of investment was accordingly set at Rs 5,000 crore. Analysts and investors took this as a positive, despite the fact that the decorative paints segment is a difficult market to crack owing to high competition. Grasim also brought with it a strong distribution network and brand. JK Cement is planning a much smaller investment of Rs 600 crore and might incur some EBITDA losses in the initial years. It is also the third company after Grasim and JSW group planning to enter the paints space. Another concern of analysts w.r.t JK Cement is a previously failed investment in the white cement plant of Fujairah, UAE. The company invested Rs 692 crore in the project and took an impairment of Rs 328 crore so far. Though the new paints business will bank on the strength of robust sales channels of JK Cement’s white cement division, the stock reaction after the announcement makes it clear that investors are not enthused with its capital allocation policy as of now.

  • HDFC Bank: This private bank’s stock tanked with the broader market, falling 7% on the bourses on March 3.Nifty Bank is down 11% this month. Some analysts suggest that the stock was reeling under investor concerns over FPI (Foreign Portfolio Investment) outflows. This is because the US Federal Reserve tightened its monetary policies over the ongoing Russia-Ukraine war. These large FPI outflows shadowed HDFC Bank’s Q3FY22 performance.

HDFC Bank’s Q3 net profit rose 18.3% YoY to Rs 10,843 crore with loan AUM (assets under management) growing by 16% YoY to Rs 12,609 crore. Its credit card segment is also inching towards winning back market share after RBI lifted its ban over the issuance of new credit cards. In January 2022, HDFC Bank’s market share in outstanding credit cards stood at 23%, close to its January 2021 market share of 25%. This shows the bank’s resilience, as it regained its market share after the seven-month ban on issuing new credit cards from December 2020 to July 2021.

Reports suggest that HDFC Bank’s market share for outstanding credit cards stands at 23% for 9MFY22, with State Bank of India holding the second position with 19%.

HDFC Bank’s market share for credit card spends is at 26.6%, higher than ICICI Bank with 19.9%. With stabilizing asset quality of the bank and robust loan growth, the brokerage Motilal Oswal, gives a positive outlook on the bank in Q4FY22 as well.

  • Natco Pharma: This pharmaceutical company’s stock rose 9% intraday on Tuesday as the company launched the first generic version of Revlimid (lenalidomide). Natco Pharma launched the drug with Teva Pharmaceuticals as its marketing partner in the US market. Currently, Celgene (acquired by Bristol Myers Squibb - BMS) manufactures and markets Revlimid, which is used to treat cancer, such as multiple myeloma, follicular lymphoma, and mantle cell lymphoma.

As per BMS’ quarterly filings, Revlimid’s annual US total sales were $ 8.7 billion. Natco Pharma has a 180-day exclusivity for all the strengths it has launched (5mg, 10mg, 15mg, and 25mg). Natco Pharma and Dr Reddy’s were the only two companies out of 15 to receive the product approval from the US Food and Drug Administration. Dr Reddy’s is expected to be the second to launch Revlimid in the US with 180-day exclusivity for two strengths (2.5mg and 20mg). Other generics manufacturers have also announced plans for their own versions of lenalidomide. Natco Pharma has a differentiated approach of manufacturing hard-to-make complex generic drugs including the Paragraph IV and First to File (FTF). Paragraph IV filing is a subset of an abbreviated new drug application - ANDA, where the generic applicant (Natco Pharma in this case) claims that the patent they are targeting is unenforceable.

The company derives about 50% of its total revenue through exports, mainly from the US markets. With Indian Rupee hitting a lifetime low of Rs 77.01 against US Dollar on Monday, the company stands to improve its profit margin through forex gains. This comes at a time when Indian pharma companies are struggling in the US market amid intense competition. Most pharma companies reported aggressive price erosion in the formulations business in the US markets.

  • ITC: The stock of this tobacco-to-consumer goods company was up by more than 5% in the last week. It is one of the few large cap stocks that rose in while the markets were in turmoil. Although high input costs affected the margins of the company, it saw strong performance across all segments in Q3FY22 as its profit rose 15% YoY to Rs 4,056.7 crore. Revenues were up 28% YoY to Rs 18,787.7 crore as COVID-19 cases fell and business environment improved.

The company saw the revenue from its agribusiness rise 100% YoY to Rs 4,962 crore led by strong revenue growth in wheat, rice, spices, and leaf tobacco exports. The agribusiness segment contributes almost 30% to ITC’s consolidated revenue. The brokerage Edelweiss believes that the company could potentially gain from wheat exports amid the ongoing war between Ukraine and Russia. The two countries combined account for 30% of wheat exports worldwide. The brokerage added the company will gain only if regulators have a conducive policy and India’s food inflation does not become a big challenge.

In FY22, the company exported a significant quantity of wheat due to poor production in Russia and Ukraine. It has scaled up its wheat development program and has introduced location-specific superior seed varieties. As wheat production in India is estimated to reach a record high of 111.32 million tonnes this year and with the global wheat prices at a 14-year high, the Indian government wants to capitalize on this opportunity to increase exports. ITC tapping into European markets may be hard due to lack of regulatory approvals but will be able to gain in the Middle Eastern and Asian markets.  

  • Gujarat Narmada Valley Fertilizers & Chemicals: This fertiliser company’s stock rose 5.3% in the last five trading sessions and hit a lifetime high of Rs 635.2 this week. The company had a stellar Q3FY22 performance with a nearly 123% rise in profits YoY to Rs 540.78 crore and revenue growing 56.4% YoY to Rs 2,428.5 crore. The stock is up 38.5% since it announced its Q3FY22 results on February 4, 2022. The company derives 68.2% of its revenue from the chemical segment and 30.9% revenue from the fertiliser segment. Being the only manufacturer of acetic acid, Toluene Di-Isocyanate (TDI), and formic acid gives the company a significant advantage in the market. The company’s domestic market share in the product segments of TDI, Formic acid, and technical grade Urea stands at 66%, 38%, and 37%, respectively. The company capitalised on higher import costs due to rising commodity prices, as it was the only domestic producer of certain products. The company also has the largest Ammonia Plant and Urea plant in India.

Amid high input costs, GNFC's margins were shielded thanks to higher realisations, leading to a profitable product mix mainly in the chemical segment. In the case of fertilisers, the support from the government for granting a special subsidy aided in minimising the adverse impact on margins. The management said it is well-positioned to benefit from the rise in demand for specific products with a flexible and diverse product mix. The company is continuously looking for growth opportunities and has initiated a capex of Rs 3,000 crore to expand its production capacity for the next three years.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Mar 2022
Market closes higher, Nifty Bank is trading in green

Trendlyne Analysis

Nifty 50 closed higher with the Indian volatility index, India VIX falling 6.8%. Most Asian markets closed in the green after Ukraine confirmed that it is no longer pressing for NATO membership. US indices rebounded on Wednesday with S&P 500 closing 2.5% higher hoping for a ceasefire between Russia and Ukraine ahead of their first meeting since Russia invaded Ukraine. Oil prices bounced back after plunging 12% yesterday as United Arab Emirates called on OPEC+ to boost output. Investors will keep an eye on five state assembly election results to be announced later today.

Nifty Smallcap 100, which gained 2.4% yesterday, extended its gains by closing in the green. Barring Nifty IT, all sectoral indices closed in the green. Nifty Metal ended the session 2.3% higher than Wednesday’s level after opening in the red. Nifty IT closed flat despite the tech-heavy NASDAQ 100 closing 3.6% higher yesterday.

Nifty 50 closed at 16,594.90 (249.6, 1.5%), BSE Sensex closed at 55,464.39 (817.1, 1.5%) while the broader Nifty 500 closed at 14,189.00 (209.4, 1.5%)

Market breadth is ticking up strongly. Of the 1,859 stocks traded today, 1,339 showed gains, and 491 showed losses.

  • 3M India, Equitas Holdings, Procter & Gamble Health, and Poly Medicure are trading with higher volumes as compared to Wednesday.

  • Tata Power surges as its Singapore-based JV Resurgent Power Ventures wins bid to acquire the stressed asset of South East UP Power Transmission Company, after offering over Rs 3,200 crore to the creditors of the bankrupt asset.

  • Bank stocks like IndusInd Bank, Axis Bank, State Bank of India, Federal Bank among others are trading higher. The broader sectoral index Nifty Bank is trading in green.

  • ICICI Securities maintains a ‘Buy’ rating on Hindustan Aeronautics with a target price of Rs 2,618 indicating an upside of 87%. The brokerage remains bullish on the company’s growing order book. The brokerage expects new orders to strengthen the order book further by Rs 30,000 crore taking the total value to Rs 1,09,230 crore.

  • Oil and gas stocks like Adani Total Gas, Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation, among others rise as fuel demand rose 5.4% YoY to 17.57 million tonnes in February 2022. According to data given out by Petroleum Planning and Analysis Cell (PPAC), LPG sales also see a rise of 6.4% YoY to 2.4 million tonnes.

  • EPL is trading with more than fourteen times its weekly average trading volume. IOL Chemicals and Pharmaceuticals, Coforge, Bharat Rasayan, and BSE are trading at more than three times their weekly average trading volumes.

  • ICICI Securities maintains a ‘BUY rating on Cera Sanitaryware with a target price of Rs 5,545, indicating an upside of 26.5%. The brokerage remains positive on the company’s expansion plans in its two major categories, viz. sanitaryware, and faucetware. The brokerage expects the company’s revenue to grow at 18% CAGR over FY21-FY24.

  • Kajaria Ceramics surges after it announces the launch of its largest store in the country at Lajpat Nagar, New Delhi. It plans to sell tiles and bathware products in this store which will be spread over 11,000 sqft area.

  • Kalpataru Power Transmission receives a letter of intent (LoI) for a power transmission and distribution project for an estimated value of Rs 3,276 crore. The project involves the design, engineering, supply, and construction of an HVDC power transmission line of 700 km.

  • PNB Housing Finance says its board approves raising Rs 2,500 crore through a rights issue. This comes months after it terminated a Rs 4,000-crore fund-raising deal with a Carlyle-led group of investors, due to a controversy regarding the valuation of shares being offered to the investors.

  • Zydus Lifesciences is rising as it receives final approval from the US Food and Drug Administration (USFDA) for its Nitroglycerin Sublingual tablets in the strengths of 0.3 mg, 0.4mg, and 0.6mg. Nitroglycerin Sublingual tablets are used to relieve chest pain (angina) in people who suffer from certain heart conditions.

  • Future Retail receives termination notice for 835 stores, with respect to sub-leased properties, from Reliance Group. The notice comes for 342 large format stores like Big Bazaar, and small format stores like Heritage and easyday. Currently, it is in talks with Reliance Group to review its decision of termination, taking into consideration the stakeholder's interests.

Riding High:

Largecap and midcap gainers today include Procter & Gamble Hygiene & Healthcare Ltd. (15,535.65, 5.31%), Hindustan Unilever Ltd. (2,101.95, 5.21%) and Sona BLW Precision Forgings Ltd. (602.35, 5.09%).

Downers:

Largecap and midcap losers today include Coforge Ltd. (4,260.00, -6.50%), GAIL (India) Ltd. (147.50, -4.53%) and Gujarat Gas Ltd. (509.65, -4.45%).

Volume Shockers

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

Top high volume gainers on BSE included EPL Ltd. (176.15, 12.20%), TCNS Clothing Co. Ltd. (778.95, 11.44%) and IOL Chemicals and Pharmaceuticals Ltd. (413.20, 9.38%).

Top high volume losers on BSE were Coforge Ltd. (4,260.00, -6.50%), TeamLease Services Ltd. (3,740.45, -4.56%) and Bajaj Electricals Ltd. (1,008.05, -4.10%).

Swan Energy Ltd. (181.05, 6.22%) was trading at 35.7 times of weekly average. Brightcom Group Ltd. (92.65, 4.99%) and Star Cement Ltd. (94.55, 9.12%) were trading with volumes 10.5 and 5.4 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,

Stocks touching their year highs included - Swan Energy Ltd. (181.05, 6.22%), Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (630.50, 1.87%) and Balrampur Chini Mills Ltd. (449.30, 0.79%).

39 stocks climbed above their 200 day SMA including Century Textiles & Industries Ltd. (790.70, 6.31%) and Procter & Gamble Hygiene & Healthcare Ltd. (15,535.65, 5.31%). 2 stocks slipped below their 200 SMA including Fortis Healthcare Ltd. (260.50, -1.44%) and Suven Pharmaceuticals Ltd. (509.05, -1.21%).

 
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The Baseline
09 Mar 2022
Chart of the week: Steel production sees muted growth, with some recovery in demand

With the re-opening of economies globally, and construction activities gaining traction, demand for steel has seen a steady rise in Q3FY22.  However, while steel production for listed steelmakers increased it was below expected levels. While JSW Steel’s production rose 8% QoQ to 4.4 million tonnes, Jindal Steel’s production rose a mere 2% QoQ. Analysts from Geojit BNP Paribas reckon JSW Steel’s new plant at Dolvi helped boost production in Q3FY22. Jindal Steel’s production rose to 1.96 million tonnes helped by its leasing of Kasia iron ore mine from Odisha government in September 2021.

Tata Steel’s production rose a mere 1% QoQ in Q3FY22, weighed down by its acquisition of Tata Steel BSL, which is now delisted. Analysts from Motilal Oswal reduced their production volume estimate for Tata Steel BSL to 1.1 million tonnes for FY22 from 4.6 million tonnes. This could be one of the reasons for Tata Steel’s management expecting volumes to be flattish in Q4FY22 as well. 

Steel Authority of India’s (SAIL) production rose  5% QoQ to 4.5 million tonnes. The company expects demand to revive in Q4FY22, however, production may remain flat as input costs stay high.

Even with a muted rise in production, steel companies have scope to grow further. A report from ICRA suggests that the steel industry’s capacity utilization is likely to touch 80% by the end of FY23 and steel production capacity is likely to increase to 40 million tonnes per annum by FY22-26. This is double the steel production levels of FY17-21.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Mar 2022
Market closes higher, Edelweiss maintains a ‘Buy’ rating on Tata Consultancy Services

Trendlyne Analysis

Nifty 50 closed sharply higher despite negative cues from other Asian indices. US indices closed lower on Tuesday after President Joe Biden imposed a ban on imports of Russian oil, and more major firms announced they were shutting operations in Russia. Crude oil prices continue to trade at elevated levels after the US banned Russian oil imports. Russia ships around seven to eight million barrels of crude oil per day to fuel global markets. Investors await the results of Uttar Pradesh elections to be announced tomorrow.

Nifty Smallcap 100 traded in the green throughout the day and closed higher to outperform the benchmark index. Exports focused sectors, Nifty IT and Nifty Pharma closed sharply higher as the Indian Rupee continues to depreciate against the US Dollar leading to a possibility of higher margins for companies through forex gains.

Upbeat trading today. Nifty 50 closed at 16,345.35 (331.9, 2.1%), BSE Sensex closed at 54,647.33 (1,223.2, 2.3%) while the broader Nifty 500 closed at 13,979.60 (272.9, 2.0%)

Market breadth is ticking up strongly. Of the 1,860 stocks traded today, 1,560 were in the positive territory and 281 were negative.

  • TTK Prestige, GlaxoSmithKline Pharmaceuticals, Bajaj Holdings & Investment, and Bayer Cropscience are trading with higher volumes as compared to Tuesday.

  • ISGEC Heavy Engineering rises after it wins an order to manufacture and supply cement waste heat recovery boilers to Shree Cements' integrated cement Plant at Jhunjhunu, Rajasthan. This WHRS plan will generate nearly 35.5 MW of power for the cement major.

  • IndusInd Bank informs the stock exchanges that it will set aside Rs 13.5 crore as an additional provision this quarter (Q4FY22). This is in response to an external review of allegations by anonymous people about the lender’s subsidiary. The review found that Bharat Financial Inclusion Limited gave out microloans without the consent of customers, due to a technical glitch because of IT change management and process gap.

  • Auto stocks like Ashok Leyland, Mahindra & Mahindra, TVS Motor Company, Tata Motors among others are trading higher. The broader sectoral index Nifty Auto is also trading in the green.

  • Motilal Oswal maintains a ‘BUY’ rating on Alkem Laboratories with a target price of Rs 3,870, indicating an upside of 18%. The brokerage has a positive outlook on the company as it remains better placed to benefit from an improving outlook in the Indian formulations segment. Alkem Labs garners 70% of its revenue from India. The brokerage expects the company’s revenue to grow at 10% CAGR over FY22-FY24

  • IOL Chemicals and Pharmaceuticals is trading with more than ten times its weekly average trading volume. Bajaj Electricals,Zydus Lifesciences, Godrej Agrovet, andBoschare trading at more than three times their weekly average trading volumes.

  • Media stocks like Zee Entertainment, Sun TV Network, TV18 Broadcast, PVR and Saregama India are rising. The broader sectoral index i.e. Nifty Media is also trading up today.

  • Edelweiss maintains a ‘Buy’ rating on Tata Consultancy Services (TCS) with a target price of Rs 5,000 indicating an upside of 38%. The brokerage believes the company is well-positioned to benefit from the tech shift to cloud as many customers are embarking on multi-year, enterprise-wide transformation journeys. The brokerage also expects robust demand as growth indicators continue to be strong, including deal wins, client additions, and hiring trends.

  • Aviation companies’ stocks like InterGlobe Aviation, Spice Jet, Jet Airways, and TAAL Enterprises are trading up. As the Civil Aviation Ministry announces regular international flights to and from India will be resumed from the 27th of March, 2022.

  • Larsen & Toubro's arm L&T Construction wins a order worth Rs 1,000-2,000 crore from Delhi Metro Rail Corporation to design and construct the Underground Metro Project in Delhi

  • Sentynl Therapeutics, a wholly-owned subsidiary of Zydus Lifesciences, enters into an asset purchase agreement for the sale of Nulibry (Fosdenopterin) injections. The product, which is approved by the US Food and Drug Administration (USFDA), is used to reduce the risk of mortality in patients with molybdenum cofactor deficiency.

  • Adani Ports and Special Economic Zone signs an agreement with the Indian Oil Corporation (IOC) towards the augmentation of IOC’s crude oil volumes at Mundra port. The refiner will expand its existing crude oil tank farm at Mundra Port, thus enabling it to handle and blend an additional 10 million metric tonnes of crude oil per annum. This agreement supports IOC’s expansion of its Panipat refinery.

Riding High:

Largecap and midcap gainers today include Dalmia Bharat Ltd. (1,465.10, 7.55%), Ashok Leyland Ltd. (106.75, 7.50%) and Dr. Lal Pathlabs Ltd. (2,614.70, 7.25%).

Downers:

Largecap and midcap losers today include Coforge Ltd. (4,556.10, -5.33%), Petronet LNG Ltd. (212.70, -3.69%) and Bosch Ltd. (14,224.20, -3.06%).

Movers and Shakers

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

Top high volume gainers on BSE included IOL Chemicals and Pharmaceuticals Ltd. (377.75, 20.00%), Mas Financial Services Ltd. (635.90, 16.23%) and Venky's (India) Ltd. (2,195.95, 10.02%).

Top high volume losers on BSE were Bajaj Electricals Ltd. (1,051.10, -5.40%), Bosch Ltd. (14,224.20, -3.06%) and Cholamandalam Financial Holdings Ltd. (604.95, -3.00%).

Zydus Lifesciences Ltd. (359.35, 4.31%) was trading at 4.5 times of weekly average. Alembic Pharmaceuticals Ltd. (722.15, 0.86%) and Godrej Agrovet Ltd. (485.00, -0.06%) were trading with volumes 4.3 and 3.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks took off, crossing 52-week highs, while 2 stocks hit their 52-week lows.

Stocks touching their year highs included - Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (618.95, 1.64%) and Lemon Tree Hotels Ltd. (57.70, 1.05%).

Stocks making new 52 weeks lows included - JK Cement Ltd. (2,257.55, 3.12%) and Whirlpool of India Ltd. (1,589.90, 1.31%).

33 stocks climbed above their 200 day SMA including Anupam Rasayan India Ltd. (882.25, 11.99%) and DCM Shriram Ltd. (1,027.15, 7.47%). 4 stocks slipped below their 200 SMA including Indian Oil Corporation Ltd. (116.95, -0.09%) and Polycab India Ltd. (2,246.20, 0.35%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
08 Mar 2022
Market closes higher, Axis Securities maintains a ‘BUY’ rating on Infosys

Trendlyne Analysis

Nifty 50 recoups its losses to close in the green to snap its four-day losing streak. Buying pressure in the last hour of the trading session pushed the Indian indices from losses to gains. Investors continue to remain cautious amid rising commodity prices owing to the Russia-Ukraine war. The Indian assembly elections voting of five states ended on Monday with exit polls indicating BJP to retain power in four states.

Exports focused sectors Nifty IT and Nifty Pharma buck the trend to close sharply higher as depreciating Indian Rupee against US Dollar leads to a possibility of higher margins companies through forex gains. Nifty Smallcap 100 and Nifty Midcap 100 close in the green outperforming the benchmark index. Nifty Metal takes a breather to close in the red after rising close to 15% in six trading sessions.

Nifty 50 closed at 16,013.45 (150.3, 1.0%), BSE Sensex closed at 53,424.09 (581.3, 1.1%) while the broader Nifty 500 closed at 13,706.75 (142.5, 1.1%)

Market breadth is surging up. Of the 1,853 stocks traded today, 1,337 were on the uptick, and 477 were down.

  • 3M India, GlaxoSmithKline Pharmaceuticals, KPR Mill, and Jyothy Labs are trading with higher volumes as compared to Monday.

  • Alembic Pharmaceutical’s joint venture Aleor Dermaceuticals receives US food and drug administration (USFDA) approval for Nystatin and Triamcinolone Acetonide ointment. These products are used to help relieve redness, swelling, itching, and other discomforts of skin problems.

  • Norway’s sovereign wealth fund puts Adani Ports & Special Economic Zone on watchlist for possible exclusion from its investments due to ethical concerns. The company's involvement in building a port terminal in military-ruled Myanmar is a major concern for the fund. The fund has a 0.7% stake in the company.

  • Motilal Oswal maintains a ‘Buy’ rating on TCI Express with a target price of Rs 2,130 indicating an upside of 25%. The brokerage is bullish on the company due to its well-diversified client base, a 95% share in the high margin business-to-business (B2B) express segment, investment in value-added areas like sorting centers and a debt free balance sheet.

  • Indraprastha Gas is trading with more than five times its weekly average trading volume. SIS, Mahanagar Gas, Natco Pharma, and Greaves Cotton are trading at more than two times their weekly average trading volumes.

  • Natural gas companies' stocks such as GAIL, Gujarat Gas, Indraprastha Gas and Mahanagar Gas are trading higher. With the ongoing Russia-Ukraine conflict disrupting the natural gas supply chains in India, it may lead to a hike in the price of natural gas.

  • Axis Securities maintains a ‘BUY’ rating on Infosys with a target price of Rs 1895, indicating an upside of 10%. The brokerage reduces the target price by 11.4% as the company’s operating margin fell 10 bps QoQ due to the unfavorable impact of higher subcontracting costs. However, the brokerage has a positive outlook as the digital transformation business growth is intact for the company.

  • IT stocks like Larsen & Toubro Infotech, Coforge, MindTree, Tata Consultancy Services among others are trading higher. The broader sectoral index Nifty IT is also trading in green.

  • IPO bound LIC's new business premium for February 2022 rises over 35% YoY and MoM to Rs 17,489.3 crore led by group single premiums. On the other hand, private listed insurers such as SBI Life and HDFC Life post over 7% and 9% YoY growth in new business premiums, respectively

  • JSW Steel's crude steel production rises 21% YoY to 16.8 lakh tonnes in February. The production of flat rolled products rises 25% YoY to 11.54 lakh tonnes and long rolled products rises 8% YoY to 3.67 lakh tonnes

  • Natco Pharma is rising as it announces the launch of first generic version of Revlimid (Lenalidomide capsules) in 5mg, 10mg, 15mg, and 25mg strengths in the US market. Lenalidomide is used to treat anemia (low red blood cells) in cancer patients.

  • Metro Brands rises after the board approves interim dividend payment of Rs 1.5 per equity share for FY22. The record date is March 19, 2022.

Riding High:

Largecap and midcap gainers today include Indraprastha Gas Ltd. (370.15, 9.63%), SBI Cards and Payment Services Ltd. (781.90, 7.03%) and Atul Ltd. (9,106.85, 5.88%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (1,629.65, -4.97%), Hindalco Industries Ltd. (589.95, -4.81%) and JSW Energy Ltd. (298.20, -4.64%).

Movers and Shakers

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

Top high volume gainers on BSE included Indraprastha Gas Ltd. (370.15, 9.63%), GHCL Ltd. (443.95, 7.01%) and Mahanagar Gas Ltd. (761.85, 6.75%).

Top high volume losers on BSE were JK Cement Ltd. (2,189.15, -6.32%), Orient Electric Ltd. (310.00, -2.19%) and TTK Prestige Ltd. (762.40, -1.80%).

SIS Ltd. (446.80, 2.80%) was trading at 4.9 times of weekly average. KRBL Ltd. (204.75, 6.31%) and Greaves Cotton Ltd. (166.85, 2.99%) were trading with volumes 3.9 and 3.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks took off, crossing 52-week highs, while 35 stocks hit their 52-week lows.

Stocks touching their year highs included - Oil And Natural Gas Corporation Ltd. (179.10, -4.20%) and Power Grid Corporation of India Ltd. (212.35, -0.21%).

Stocks making new 52 weeks lows included - Akzo Nobel India Ltd. (1,824.40, -0.13%) and Ambuja Cements Ltd. (282.90, 0.60%).

22 stocks climbed above their 200 day SMA including Indian Bank (144.75, 9.29%) and Sobha Ltd. (752.90, 7.40%). 16 stocks slipped below their 200 SMA including Tata Motors Limited (DVR) (187.45, -2.65%) and Aavas Financiers Ltd. (2,554.30, -1.76%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
07 Mar 2022
Market closes lower, Edelweiss maintains ‘Neutral’ rating on Bank of Baroda

Trendlyne Analysis

Nifty 50 closed in the red with the Indian volatility index, India VIX rising 4.9%. All Asian indices closed in red as investors remain highly cautious of the implications of the Russia-Ukraine war situation. Crude oil prices surge to touch $139 per barrel briefly, fearing its supply chain disruption. Rupee hits a lifetime low of Rs 76.96 per Dollar as oil prices climb to new highs and foreign institutional investors outflow continues to rise. Nifty Metal, which gained over 12% last week, closed 2% higher today.

Nifty Bank ended the session 4.35% lower, extending its decline from last week. Nifty IT closed flat outperforming the broader market indices as Indian Rupee touched a lifetime low against the US Dollar resulting in possibility of higher margins for IT companies through forex gains.

Markets fell in today's trading. Nifty 50closed at 15,863.15 (-382.2, -2.4%), BSE Sensex closed at 52,842.75 (-1,491.1, -2.7%) while the broader Nifty 500 closed at 13,564.25 (-328.9, -2.4%).

Market breadth is sharply down. Of the 1,891 stocks traded today, 271 showed gains, and 1,593 showed losses.

  • V-Guard Industries, SKF India, Nilkamal, and Carborundum Universal are trading with higher volumes as compared to Friday.

  • Realty stocks including, Godrej Properties, Macrotech Developers, Phoenix Mills, and Oberoi Realty, are falling in trade. The broader sectoral index Nifty realty is also trading in the red.

  • Metal stocks like Hindalco, Vedanta, Coal India, NMDC, and Jindal Steel and Power are trading higher. The broader sectoral index Nifty Metal is also trading in the green today.

  • Edelweiss maintains ‘Neutral’ rating on Bank of Baroda with a target price upside of 11% as it expects asset quality for the bank to improve by FY24. Analysts expect gross NPA and net NPA to fall below 5% and 2%, respectively, by FY24. Analysts also expect loan growth and reduced provisions to aid the bank’s profitability in FY23.

  • ICICI Securities maintains a ‘HOLD’ rating on Biocon with a target price of Rs 390, indicating an upside of 13%. The brokerage has a positive outlook on the company’s recent acquisition of Viatris for $3.3 billion in stock and cash. The brokerage expects Viatris to contribute to Biocon’s current biosimilars portfolio and related commercial and operational capabilities.

  • Paint companies’ stocks are trading lower with stocks like Asian Paints, Berger Paints (India), and Kansai Nerolac Paints, among others, falling in trade. This is because of spike in crude oil prices amid the ongoing war between Russia and Ukraine.

  • 3M India is trading with more than five times its weekly average trading volume. PNB Housing Finance, Jyothy Labs, GlaxoSmithKline Pharmaceuticals, and La Opala RG are trading at more than three times their weekly average trading volumes.

  • JK Cement falls on the bourses after it announces a foray into the paints business through a wholly owned subsidiary. The cement major will invest Rs 600 crore over the next 5 years to develop this new venture.

  • PNB Housing Finance is rising as the board of directors meeting is scheduled on Wednesday to consider fundraising options by the issue of equity shares through appropriate methods (including rights issues). The company had previously failed to raise Rs 4,000 crore by selling a stake to Carlyle Group last year.

  • Info Edge acquires a 76% stake in online dating company Aisle Network for Rs 91 crore. The company acquires 21,483 shares comprising 11,699 compulsory convertible preference shares and 9,784 equity shares through a mix of primary infusion and secondary purchase.

  • Nazara Technologies to acquire 33% stake in Datawrkz Business Solutions. The company will issue equity shares worth Rs 24.9 crore to existing shareholders of Datawrkz Business Solutions as consideration

  • In its fourth buyback offer of Rs 18,000-crore, TCS will buy 1 share for every 7 shares held by the retail investors on the record date i.e. February 23, 2022. TCS will buy back 1 share for a lot of 108 shares held by all other eligible investors

  • Auto stocks are trading lower with stocks like Maruti Suzuki, Mahindra & Mahindra, Hero MotoCorp, TVS Motor Company among others falling in trade. The broader sectoral index Nifty Auto is also trading lower today on the Union Ministry of Road Transport proposing a hike in the third-party motor insurance premium for various categories of vehicles.

  • Coal India's subsidiary Bharat Coking Coal’s (BCCL) production increases 61% YoY to 3.24 million tonnes in February 2022. BCCL’s coal offtake is up 66% YoY to 2.93 million tonnes.

Riding High:

Largecap and midcap gainers today include Oil And Natural Gas Corporation Ltd. (186.95, 13.13%), Zee Entertainment Enterprises Ltd. (238.00, 6.18%) and Hindalco Industries Ltd. (619.75, 6.16%).

Downers:

Largecap and midcap losers today include Godrej Consumer Products Ltd. (664.70, -7.94%), Piramal Enterprises Ltd. (1,886.60, -7.87%) and Cholamandalam Investment & Finance Company Ltd. (607.30, -7.78%).

Volume Shockers

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

Top high volume gainers on BSE included Oil And Natural Gas Corporation Ltd. (186.95, 13.13%), PNB Housing Finance Ltd. (425.90, 5.71%) and Cyient Ltd. (919.75, 4.62%).

Top high volume losers on BSE were JK Cement Ltd. (2,336.90, -11.47%), KEC International Ltd. (417.80, -6.38%) and KPR Mill Ltd. (594.00, -5.26%).

3M India Ltd. (19,925.95, -2.22%) was trading at 5.8 times of weekly average. Vinati Organics Ltd. (1,834.00, -0.01%) and GlaxoSmithKline Pharmaceuticals Ltd. (1,505.95, 1.24%) were trading with volumes 4.5 and 4.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks hit their 52-week highs, while 74 stocks hit their 52-week lows.

Stocks touching their year highs included - Hindalco Industries Ltd. (619.75, 6.16%), Oil And Natural Gas Corporation Ltd. (186.95, 13.13%) and Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (608.20, 1.57%).

Stocks making new 52 weeks lows included - 3M India Ltd. (19,925.95, -2.22%) and AIA Engineering Ltd. (1,586.45, 2.44%).

2 stocks climbed above their 200 day SMA including TCI Express Ltd. (1,757.70, 3.50%) and ITC Ltd. (224.95, -0.24%). 50 stocks slipped below their 200 SMA including Vodafone Idea Ltd. (9.55, -7.73%) and Maruti Suzuki India Ltd. (6,769.05, -6.60%).