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The Baseline

24 Aug 2021

Five Interesting Stocks Today

Eicher Motors: Troubles are brewing at the helm of this two wheeler and commercial vehicle maker. On August 13, Vinod Dasari, the CEO and Executive Director of the company stepped down just two years after he took charge of the company. Last week, during the company’s annual general meeting (AGM), shareholders voted against the reappointment of the company’s former Managing Director Siddhartha Lal. According to reports, shareholders opposed a 10% hike in Lal’s salary due to the impact of the pandemic on the automobile maker. On August 23, the board reappointed Lal as Managing Director subject to public shareholder’s approval.
Escorts: This tractor maker’s stock is up by 12% in one month reaching its highest point in FY22. In Q1FY22, the company’s revenue jumped by 57% YoY to Rs 1,671 crore, with net profits doubling to Rs 185 crore on improved demand for tractors. With a trailing 12-month price to earnings (PE) ratio of 18.2, against an average PE of 26.2, it remains in the neutral zone.
Marico: This FMCG company reported its highest ever quarterly sales in Q1FY22 despite the pandemic suppressing demand in its rural market. Its EBITDA margins expanded by 2.8 percentage points QoQ in Q1FY22 to 19.9% due to falling input costs. The management expects input costs to fall further in Q2 and Q3. However, price hikes that were enforced to deal with rising input costs will not be called off. Analysts expect this to help the company’s bottom line in the coming quarters.
PVR: Brokerages are concerned this cinema operator is unlikely to recover even as commercial activity ramps up. In a note, Geojit BNP Paribas lowered its target price on the stock to a 2% upside. The brokerage said the movie pipeline in Q2FY22 is lack lustered as many production houses have delayed launches to the second half of FY22. As of August 2021, only 63% of its screens were operational.
Asian Paints: After five months, mutual funds are now buying this paints company’s stock. In July 2021, mutual funds purchased 8.2 lakh shares in the company, increasing their holding in the company by 3.1% on a monthly basis. Between February to June, mutual funds sold 35.2 lakh shares, decreasing their holding in the company by 15%. In the past year, mutual funds were net buyers of the company’s stock in only two months — January and July 2021.

Trendlyne Marketwatch

24 Aug 2021

Markets close higher, Competition Commission of India imposes a penalty on Maruti Suzuki India

Markets closed up today. Nifty 50 closed at 16,624.60 (128.2, 0.8%) , BSE Sensex closed at 55,958.98 (403.2, 0.7%) while the broader Nifty 500 closed at 14,063.25 (132.7, 1.0%)

Market breadth is ticking up strongly. Of the 1,757 stocks traded today, 1,317 were in the positive territory and 399 were negative.

AIA Engineering, Jamna Auto Industries, ICICI Lombard General Insurance Company, and Great Eastern Shipping Company are trading with higher delivery volumes compared to Monday.
Motilal Oswal maintains a 'Buy' rating on State Bank of India with a target price at an upside of 47% due to its gross NPAs declining by 43% in three years and its resilient ROE of over 15%.
Eicher Motors' board of directors unanimously decide to reappoint Siddhartha Lal as Managing Director of the company subject to approval from public shareholders.
Canara Bank raises Rs 2,500 crore through a qualified institutional placement of equity shares at a floor price of Rs 158.5 per share.
Bajaj Finserv hits a 52-week high as it receives approval from SEBI to set up an asset management company and a trustee company.
Zydus Wellness, Info Edge (India), Gujarat Gas, BASF India, and Carborundum Universal are trading with more than two times their weekly average trading volume.
Elara India Opportunities Fund buys 27 lakh shares (0.44% stake) of Karda Constructions for Rs 6 crore in a bulk deal on Monday.
Indian Hotels Company to raise up to Rs 3,000 crore through a rights issue which will be used for capital expenditure and reducing debt. As of June 2021, the company's net debt was Rs 3,612 crore, a 16% rise sequentially.
Bharti Airtel and Reliance Jio add 24.3 lakh and 23.7 lakh active subscribers in June 2021, while Vodafone Idea loses 48.8 lakh active subscribers in the month.
Chemplast Sanmar lists at Rs 525 per share, a 3% discount to the issue price of Rs 541 per share. The specialty chemical maker's IPO comprised of a Rs 1,300 crore fresh issue and an OFS of Rs 2,550 crore.
CLSA Global Markets buys 12.8 lakh shares (4.84% stake) of RPSG Ventures for Rs 76.8 crore in a bulk deal on Monday.
Aptus Value Housing Finance lists at Rs 330 per share, a 6.5% discount to the issue price of Rs 353 per share. The housing finance company's IPO comprised of a Rs 500 crore fresh issue and an OFS of Rs 2,280 crore.
Maruti Suzuki India trades lower after the Competition Commission of India imposes a penalty of Rs 200 crore on the company for implementing a discount control policy on its dealers.
Nifty 50 was trading at 16,539.50 (43.1, 0.3%) , BSE Sensex was trading at 55,686.79 (131, 0.2%) while the broader Nifty 500 was trading at 13,982.50 (52.0, 0.4%)
Market breadth is in the green. Of the 1,670 stocks traded today, 992 were in the positive territory and 630 were negative.

Riding High:

Largecap and midcap gainers today include Bajaj Finserv Ltd. (16,461.70, 7.79%), NMDC Ltd. (154.75, 5.42%) and Cholamandalam Investment & Finance Company Ltd. (510.10, 5.35%).

Downers:

Largecap and midcap losers today include The New India Assurance Company Ltd. (152.80, -4.65%), JSW Energy Ltd. (215.90, -4.09%) and Varun Beverages Ltd. (806.80, -3.20%).

Volume Shockers

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

Top high volume gainers on BSE included Jindal Stainless Ltd. (150.85, 17.07%), Linde India Ltd. (2,285.70, 12.39%) and Galaxy Surfactants Ltd. (3,216.50, 8.98%).

Top high volume loser on BSE was Blue Star Ltd. (782.20, -2.26%).

India Tourism Development Corporation Ltd. (382.65, 5.95%) was trading at 6.4 times of weekly average. Responsive Industries Ltd. (120.50, 2.47%) and Bajaj Finserv Ltd. (16,461.70, 7.79%) were trading with volumes 4.9 and 4.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

13 stocks hit their 52 week highs, while 5 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Bajaj Finance Ltd. (6,980.10, 3.38%), Bajaj Finserv Ltd. (16,461.70, 7.79%) and Carborundum Universal Ltd. (737.10, 1.79%).

Stocks making new 52 weeks lows included - Aurobindo Pharma Ltd. (688.20, 0.77%) and Hero MotoCorp Ltd. (2,675.85, -0.18%).

21 stocks climbed above their 200 day SMA including NBCC (India) Ltd. (44.15, 7.95%) and NCC Ltd. (75.85, 7.06%). 11 stocks slipped below their 200 SMA including ICICI Lombard General Insurance Company Ltd. (1,465.25, -1.39%) and Coromandel International Ltd. (783.85, -1.37%).

The Baseline

24 Aug 2021

Chart of the week: Reliance Jio’s inactive subscribers rise

In June, Reliance Industries' Jio added 5.5 lakh new subscribers, while Bharti Airtel added 3.8 lakh new subscribers. This was the fifth straight month in which Jio's subscriber additions were higher than Bharti Airtel's subscriber additions. However, the concern for Jio remains its inactive subscribers. Inactive subscribers are those who do not consume data or make calls. These subscribers do not contribute to a telecom company’s revenues

Jio's inactive subscribers jumped to 9.6 crore in June, a 3.2% jump MoM. Bharti Airtel's and Vodafone Idea's inactive subscribers were 0.8 crore and 3.8 crore respectively in the month.

The Baseline

23 Aug 2021

Five analyst stock picks this week

Fine Organic: HDFC Securities is bullish on this chemicals company, noting key strengths and giving it an upside of 22%+ on a share price of Rs. 3480. Analysts Nilesh Ghuge and team write that the recommendation is based on, "(1) constant focus on R&D, (2) diversified product portfolio, (3) capacity-led expansion growth opportunity, and (4) leadership in oleo-chemical based additives in the domestic and global markets with a loyal customer base." Their projection includes double digit profit growth.
Cadila Healthcare: The outlook is strong for this healthcare company, according to Geojit, driven by domestic formulations. Analyst Sheen G assigns the company a target price of Rs. 632, an upside of 16%. "We expect growth momentum to continue," he notes, "backed by new launches in injectables and generic products, R&D investment, strengthening of development pipeline (417 ANDAs, 325 approvals), and rapid capacity enhancement."
NMDC: ICICI Securities is bullish on this iron ore mining business, assigning it a target price of Rs. 210 - an upside of 39%. "PAT for the quarter was at Rs 3193 crore (up 499% YoY & 13% QoQ), higher than our estimate of 2704 crore," analyst Dewang Sanghavi writes, "NMDC has chalked out a capex plan of Rs 3750 crore for FY22E. Of this approx Rs 2150 crore would be spent on its upcoming steel plant."
KIMS: This hospital chain gets an upside of 18.8% from Edelweiss on a target of Rs. 1535. Analysts Praveen Sahay and Ajit Sahu note that "KIMS should continue benefiting from its regional market leadership, strong cash flow generation and focus on operational efficiency and capacity expansion." KIMS is planning to add 1,500 beds over the next four years at an approximate cost of INR90-110lakhs/bed - per bed capex slightly higher than historical rate.
HDFC Bank: RBI lifting the restriction on new credit card issue for the bank triggered a sigh of relief from investors, as well as a buy call from MOswal with a target price of 1800, an upside of 18.8%. "The RBI’s move addresses the key overhang as HDFC Bank is the largest credit card issuer in the country, and this segment is key to the bank’s overall profitability," analysts Nitin Aggarwal and team write. "The bank has lost ~0.6m cards since the embargo. On the other hand, ICICI Bank, SBI Card and Axis Bank added almost 1.3 mn, 0.75 mn and 0.3 mn new credit cards respectively over that period."

Trendlyne Marketwatch

20 Aug 2021

Markets close lower, Eicher Motors' shareholders reject Siddhartha Lal's reappointment as MD

Gloom in markets in today's trading. Nifty 50 closed at 16,450.50 (-118.4, -0.7%) , BSE Sensex closed at 55,329.32 (-300.2, -0.5%) while the broader Nifty 500 closed at 13,943.95 (-151.6, -1.1%)

Market breadth is sharply down. Of the 1,752 stocks traded today, 266 showed gains, and 1,461 showed losses.

Axis Direct downgrades its rating on JK Cement to 'Hold' from 'Buy' with a target price at a 3% downside due to the company's high valuations. JK Cement is priced at 28.5 times its trailing 12-month earnings, which is higher than its three-year average PE of 26 times.
MindTree hits a 52-week high as its Q1FY22 order book rose 34.2% QoQ to Rs 3,749 crore and revenues rise 10% rise Rs 2,363.5 crore. The stock price more than doubled in the last six months.
Procter & Gamble Hygiene & Healthcare, 3M India, Kansai Nerolac Paints, Gillette India, and Dhani Services are trading with higher delivery volumes compared to Wednesday.
HDFC Bank raises $1 billion (Rs 7,400 crore) by issuing bonds to overseas investors. Rating agency Moody's assigns a Ba3 rating to the bonds.
Coal India's Managing Director Pramod Agarwal expects a 10-15% increase in average price realization of coal in Q3FY22 due to higher demand. The state-owned miner is also looking to increase coal prices.
Indostar Capital Finance's promoter will sell 62 lakh equity shares (4.5% stake) through an offer for sale at a floor price of Rs 290 per share. The OFS opens on August 20 for institutional investors and on August 23 for retail investors.
Schneider Electric Infrastructure is trading in the green with more than 16 times its weekly average trading volume. Ujjivan Small Finance Bank, Ujjivan Financial Services, and Mahindra Logistics are trading with three times their weekly average trading volume.
Ujjivan Small Finance Bank's Managing Director and CEO, Nitin Chugh, tenders his resignation to the bank's board of directors.
HDFC Mutual Fund sells 1.2 crore shares (2.03% stake) of Aurobindo Pharma on Wednesday. It now holds nearly 1.8 crore shares (3.08% stake) of the company.
Kennametal India is rising as Q1FY22 revenue jumps 2.2X to Rs 211.9 crore, with net profits of Rs 21.6 crore, against a net loss of Rs 9.5 crore in the year-ago period.
Plutus Wealth buys 5.7 lakh shares (0.54% stake) of Clean Science & Technology for Rs 87.3 crore in a bulk deal on Wednesday.
Eicher Motors' public shareholders voted against a resolution to reappoint Managing director Siddharta Lal. According to reports, the shareholders rejected the resolution reappointing Lal as the Managing Director because it contained a proposal for a 10% hike in his salary.
Porinju V Veliyath's Equity Intelligence India sells 1.6 lakh shares (0.41% stake) of Emkay Global Financial Services on Wednesday.
CarTrade Tech lists at Rs 1,600 per share, a 1.1% discount to the issue price of Rs 1,618 per share. The multi-channel automobile platform provider's IPO comprised of a Rs 2,998.5 crore offer for sale.
Zomato completes 9.2% stake acquisition of Grofers India for Rs 518.2 crore and 8.9% stake acquisition of Hands on Trades for Rs 222.8 crore on Wednesday.
Nifty 50 was trading at 16,462.45 (-106.4, -0.6%) , BSE Sensex was trading at 55,432.88 (-196.6, -0.4%) while the broader Nifty 500 was trading at 14,008.45 (-87.1, -0.6%)
Market breadth is highly negative. Of the 1,699 stocks traded today, 364 showed gains, and 1,292 showed losses.