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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. 

1. 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. 

2. 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." 

3. 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."

4. 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.

5. 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."

With the stock markets testing record highs, everyone has a favourite sector. For mutual funds, that sector seems to be banks and financial services companies. In the last four months, mutual funds have consistently increased their stake in banks like HDFC Bank, IDFC First Bank, and Federal Bank, and non-banking financial services companies (NBFCs) like Muthoot Finance, Power Finance Corporation, and Manappuram Finance.

1. Tech Mahindra: This company’s stock is now among the most overbought IT services companies among the Nifty 500, according to technical indicators like RSI and MFI. The company’s stock rose a little over 26% after it announced its Q1FY22 results at the end of July. The company’s over 4% dollar revenue growth enthused investors, which has pushed its TTM PE ratio to its highest ever at 25.2. 

2. ICICI Bank: This private bank’s shares received the highest number of target price upgrades (seven) over the past one month as analysts were enthused by its performance in Q1FY21. The bank posted a 50% YoY rise in its Q1FY22 profit at Rs 4,747.4 crore on the back of a 5bps expansion in its net interest margin to 3.89% and a 20% YoY growth in retail loans. The stock ended Tuesday’s trade within 2.2% of its average target price of Rs 701.20.

3. Aurobindo Pharma: This pharma company’s stock was on a falling spree even before its results were announced last Thursday. In the past three weeks, the stock has fallen nearly 20%, with nearly 11% of the fall coming after the company declared its results. It was the only stock that touched a 52-week low on Tuesday. The company’s net profits fell nearly 4% QoQ in Q1FY22 to Rs 770 crore, while revenues fell nearly 4.9% QoQ to Rs 5,783.3 crore. A slowdown in the company’s US business due to delays in product launches amid a third wave of the pandemic and lower sales of anti-retrovirals doesn't bode well. As the company’s stock kept falling over the previous three weeks, many promoter entities had to pledge an additional 1.28% of their stake in the company over the last few days as collateral for loans taken by those entities.

4. KEI Industries: Over the past three months, this electrical products maker’s stock rose nearly 46% and touched a 52-week high of Rs 783.7. This company was severely impacted by the first wave of the pandemic in Q1FY21 and its profits fell by 20% YoY. The company’s profits rose rapidly over the next three quarters, which helped it post a higher profit in FY21 than FY20,  despite the impact of the first wave. Q1FY22 however, disappointed even though the impact of the second wave was not as severe, the company’s net profit fell nearly 25% to Rs 67 crore. Promoter Anil Gupta cashed in on this frenzy in the share price of the company, and from June 18, 2021 to August 16, 2021, pared his holdings through multiple sales by 1.59% to 13.64%.

5. Apollo Hospital Enterprises: This hospital chain company’s stock was the best performing stock among the Nifty 500 and gained the most on Tuesday, rising 13.2%. It also gained nearly 23% over the past week. On Friday, the company announced that its profits nearly tripled QoQ in Q1FY22, despite a mere 31% rise in its revenues.

1. EClerx: This analytics and BPO services company - which has been in our top screeners for a while now - is a buy from ICICI Securities with an upside of 16%+  on a target price of Rs. 2650. "Traction in customer care, RPA, analytics & content development, cross sell and up sell to Personiv clients to drive growth," analyst Devang Bhatt writes, "Lower roll offs from one off client specific event, improving deal wins and revival in growth are expected to drive revenues."

2. Oil India: HDFC Securities is bullish on this oil business, giving it a target price of 200 and an upside of 21%+. "Our reco is premised on (1) increase in crude price realisation and (2) improvement in domestic gas price realisation (at USD 2.5/mmbtu)," analyst Harshad Katkar and team write. "We expect oil price realisation to increase to ~USD 59/bbl in FY22E and USD 61/bbl in FY23E vs. USD 44/bbl in FY21, given the expected global economic rebound, post COVID. Q1FY22 revenue was 4% below our estimates while EBITDA was 3% above, owing to lower-than-expected crude realisation offset by lower-than-expected operating expenses."

3. PNC Infratech: IDBI Capital is a buy on this infrastructure company, with analysts Vishal Periwal and Shouvik Chakraborty assigning it an upside of 27.9% on a target price of Rs. 350. "Q1FY22 PAT was in-line with our consensus estimate," they note, "Q1FY22 execution (revenue) was up 38% YoY with improved EBITDA margin of 14.0% vs 13.2% YoY. On toll collection front, Q1FY22 collection increased by 15% YoY and to grow further by Q3FY22. Q1FY21." The outlook looks bullish, they write, "Order book at Rs121bn provides revenue visibility (equals 2x TTM Revenue) and going ahead PNCL is focusing more on road construction project."

4. Jindal Steel and Power:  This steel company's prospects have improved, according to Prabhudas Lilladhar. "JSP's current net debt/EBITDA fell to comfortable level of 1.3x on normalised earnings assumed in FY23e with EBITDA margins at Rs12,000/t," Prabhudas Lilladhar analysts Kamlesh Bagmar and Amit Khimesra write, giving the company an upside of 18%+ on a target price of Rs. 500. "JSP underperformed its peers by an average of 40% over last four months due to concerns on JPL deal and pressure on margins due to high iron ore prices and softness in long product’s prices." One factor that has shifted recently, they note, is iron ore prices. "Recent weakness in iron ore prices allays the concerns on iron ore cost to a large extent while long product prices would improve as activity picks up post monsoon."

5. Endurance Technologies: This company is "well poised for growth, despite reporting mixed quarterly results," according to Axis Direct, which gives it an upside of 15%+ on a target price of Rs. 1886. "The share of EV/Hybrid technology is expected to increase in the near future as the demand in Europe shifts towards less polluting vehicles to reduce carbon footprint," analyst Senha Prashant writes. "In this backdrop, we expect the company to post Revenues/EBIDTA/PAT CAGR of 11%/15%/16% respectively over FY20-23E."

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