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Trendlyne Marketwatch
Trendlyne Marketwatch
16 Jan 2025
Market closes higher, HDFC Life's net profit grows 14.6% YoY to Rs 421.3 crore in Q3
By Trendlyne Analysis

Nifty 50 closed at 23,311.80 (98.6, 0.4%), BSE Sensex closed at 77,042.82 (318.7, 0.4%) while the broader Nifty 500 closed at 21,714.55 (163.4, 0.8%). Market breadth is overwhelmingly positive. Of the 2,393 stocks traded today, 1,749 were in the positive territory and 609 were negative.

Indian indices closed higher, with the benchmark Nifty 50 index closing at 23,311.8 points. The Indian volatility index, Nifty VIX, rose 1.3% and closed at 15.5 points. Bharat Dynamics closed sharply higher as it bagged an order worth Rs 2,960 crore from the Ministry of Defence to supply medium-range surface-to-air missiles for the Indian Navy.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green. Nifty Metal and Nifty PSU Bank closed higher. According to Trendlyne’s sector dashboard, Transportation emerged as the best-performing sector of the day, with a rise of 2.3%.

European indices are trading higher, except for Spain’s IBEX 35 and Germany’s DAX. Major Asian indices closed mixed. US index futures are trading mixed, indicating a cautious start to the trading session. Bank of America, Morgan Stanley, U.S. Bancorp, and UnitedHealth Group are set to report their earnings later today.

  • L&T Technology Services sees a long buildup in its January 30 futures series, with open interest increasing by 23.8% and a put-call ratio of 0.7.

  • Mastek's revenue rises 10.9% YoY to Rs 869.5 crore in Q3FY25, driven by improvements in the UK & Europe and North Americas operations. Net profit grows 25.8% YoY to Rs 94.7 crore during the quarter. It features in a screener of stocks with increasing net profit and profit margin (QoQ).

  • Alok Industries is falling as its net loss expands by 18.7% YoY to Rs 273 crore in Q3FY25 due to higher finance and power & fuel costs. Revenue plunges 30.5% YoY to Rs 870.6 crore during the quarter. It shows up in a screener of stocks with low Piotroski scores.

  • HDFC Life Insurance surges as its net profit grows 14.6% YoY to Rs 421.3 crore in Q3FY25. However, revenue declines 36.5% YoY to Rs 16,979.3 crore, impacted by lower earnings from funds managed under the shareholders’ account. It shows up in a screener of stocks where mutual funds increased their holding in the past quarter.

  • Bernstein notes that 2024 was a strong year for internet companies, with the sector delivering over 50% returns. The brokerage expects this trend to continue in 2025. It has an 'Outperform' rating on Zomato, Swiggy, and Info Edge, with target prices of Rs 315, Rs 635, and Rs 8,630, respectively.

  • Sterling & Wilson Renewable Energy surges as it posts a net profit of Rs 14.8 crore in Q3FY25 compared to a net loss of Rs 63.8 crore in Q3FY24, helped by lower employee benefits and finance costs. Revenue grows 3x YoY to Rs 1,842.7 crore, driven by improvements in the engineering, procurement & construction (EPC) and operation & maintenance service segments. It features in a screener of stocks with decreasing promoter pledges.

  • DB Corp is falling as its net profit declines 4.7% YoY to Rs 118.2 crore in Q3FY25. Revenue falls 1.4% YoY to Rs 655.6 crore, impacted by the printing, publishing and allied businesses. It shows up in a screener of stocks with weakening technicals and share price decline.

  • Gland Pharma receives an establishment inspection report (EIR) from the US FDA following a good manufacturing practices (GMP) inspection at its Dundigal facility in Hyderabad in July 2024, marking the closure of the inspection.

  • Ashwani Kumar, Managing Director & CEO of UCO Bank, states the bank has received approval from the Government of India to raise Rs 2,000 crore through a QIP, which will result in a 3% reduction in the government’s stake. He adds that the bank aims to achieve a 75% credit-deposit (CD) ratio, a target in line with their previous guidance.

  • Indian Railway Finance Corp rises sharply after signing a Rs 250 crore lease agreement with NTPC to finance eight bogie open bottom rapid (BOBR) rakes. This marks the first phase of funding for 20 rakes under the General Purpose Wagon Investment Scheme (GPWIS).

  • Bharat Dynamics rises sharply as it bags an order worth Rs 2,960 crore from the Ministry of Defence (MoD) to supply medium-range surface-to-air missiles (MRSAM) for the Indian Navy.

  • EMS is rising sharply as it bags an order worth Rs 105.1 crore from Deltabulk Shipping India to develop, operate, and maintain the Multimodal Logistics Park (MMLP) in Nagpur on a design, build, finance, operate, and transfer (DBFOT) basis.

  • Rubicon Research, a leading player in the pharma sector, plans to raise Rs 500 crore through an initial public offering (IPO) to support inorganic growth, strategic initiatives, and loan repayment. The company recently acquired Alkem Laboratories' Pithampur (Madhya Pradesh) facility for Rs 149 crore through a slump sale.

  • Nazara Technologies rises sharply as its board of directors schedules a meeting on January 20 to consider and approve raising funds through a preferential issue of shares.

  • Punjab & Sind Bank is surging as its net profit grows 146.7% YoY to Rs 282 crore in Q3FY25, helped by lower employee benefits expenses. Revenue increases by 14.6% YoY to Rs 3,269.4 crore, led by improvements in the treasury and corporate banking segments. The bank's asset quality improves as its gross and net NPAs decline by 187 bps YoY and 55 bps YoY, respectively.

  • Gensol Engineering rises sharply as it partners with Refex Green Mobility (Refex eVeelz) to transfer 2,997 electric four-wheelers valued at Rs 315 crore. Refex eVeelz will integrate these into fleet operations and lease them to Blu-Smart Mobility.

  • According to a poll of analysts, the weakening Indian rupee could drive up inflation due to more expensive imports. They anticipate the Reserve Bank of India will make policy adjustments at its February meeting, though many now expect the rate cuts to be delayed until April-June. Since Trump's victory, the rupee has depreciated by about 3% against the rising US dollar in just over two months, marking a sharp shift from nearly two years of relative stability and low volatility.

  • GAIL (India) is rising as it enters a settlement agreement with SEFE Marketing & Trading Singapore worth $285 million (~ Rs 2464.4 crore). As per the agreement, the companies will withdraw the arbitration proceedings before the London Court of Arbitration.

  • Azad Engineering is surging as it bags an order worth $112 million (~ Rs 960 crore) from GE Vernova International, USA, to supply airfoils for advanced gas turbine engines.

  • Ceat falls sharply as its Q3FY25 net profit drops 46.5% YoY to Rs 97.1 crore due to higher raw material costs and other expenses. However, revenue increases 11.4% YoY to Rs 3,299.9 crore, surpassing the Forecaster estimates by 1%. It appears in a screener of stocks with improving book value over the past two years.

  • UBS upgrades Indus Towers to a 'Buy' rating with a target price of Rs 425. The brokerage notes the company is steadily adding towers to support Airtel's rural expansion. It adds that Vodafone Idea is paying Rs 800-1000 crore in dues per quarter and expects potential upside as VI increases tower uptake, improving the tenancy ratio.

  • Oracle Financial Services Software falls sharply as its Q3FY25 net profit declines 6.3% QoQ to Rs 541.3 crore due to higher employee benefits, travel, and professional expenses. However, revenue grows 0.4% QoQ to Rs 1,784.9 crore, helped by an improvement in the product licenses and related activities segment. It shows up in a screener of stocks with growing costs YoY for long-term projects.

  • Rail Vikas Nigam rises sharply as it receives a Rs 3,622.1 crore contract from Bharat Sanchar Nigam (BSNL) for BharatNet's middle-mile network. The project is under a design-build-operate-maintain (DBOM) model and involves a three-year construction phase and 10-year maintenance.

  • AXISCADES Technologies is rising as its board of directors appoints Alfonso Martinez as the Chief Executive Officer (CEO) and Managing Director (MD), effective January 20.

  • L&T Technology Services surges as its net profit grows 0.9% QoQ to Rs 322.4 crore in Q3FY25. Revenue increases 3.1% QoQ to Rs 2,653 crore, driven by improvements in the sustainability and tech segments. It features in a screener of stocks with PEG lower than industry PEG.

  • The market opened on an upbeat note. Nifty 50 was trading at 23,335.75 (122.6, 0.5%), BSE Sensex was trading at 77,158.33 (434.3, 0.6%) while the broader Nifty 500 was trading at 21,756.15 (205.0, 1.0%).

  • Market breadth is surging up. Of the 1,939 stocks traded today, 1,737 were gainers and 178 were losers.

Riding High:

Largecap and midcap gainers today include Rail Vikas Nigam Ltd. (411.15, 10.6%), L&T Technology Services Ltd. (5,244.40, 8.1%) and IDBI Bank Ltd. (79.63, 7.9%).

Downers:

Largecap and midcap losers today include Oracle Financial Services Software Ltd. (10,189.85, -3.4%), Trent Ltd. (6,211.55, -2.8%) and Dr. Reddy's Laboratories Ltd. (1,302.75, -2.6%).

Movers and Shakers

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

Top high volume gainers on BSE included Ircon International Ltd. (220.41, 16%), Jupiter Wagons Ltd. (494.75, 14.2%) and Gujarat Mineral Development Corporation Ltd. (326.90, 11.7%).

Top high volume losers on BSE were Oracle Financial Services Software Ltd. (10,189.85, -3.4%), Ceat Ltd. (3,044, -0.4%) and Endurance Technologies Ltd. (2,070, -0.3%).

L&T Technology Services Ltd. (5,244.40, 8.1%) was trading at 8.3 times of weekly average. HDFC Life Insurance Company Ltd. (641.40, 7.9%) and Punjab & Sind Bank (49.48, 6.9%) were trading with volumes 8.1 and 8.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

1 stock took off, crossing 52 week highs, while 4 stocks tanked below their 52 week lows.

Stock touching their year highs included - Biocon Ltd. (393.15, 2.9%).

Stocks making new 52 weeks lows included - Asian Paints Ltd. (2,215.60, -0.6%) and Relaxo Footwears Ltd. (579.10, 0.4%).

21 stocks climbed above their 200 day SMA including L&T Technology Services Ltd. (5,244.40, 8.1%) and HDFC Life Insurance Company Ltd. (641.40, 7.9%). 8 stocks slipped below their 200 SMA including Oracle Financial Services Software Ltd. (10,189.85, -3.4%) and Kalyan Jewellers India Ltd. (539.20, -2.9%).

 
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The Baseline
15 Jan 2025
A turnaround for Indian pharma in the US | Screener: High momentum pharma stocks
By Tejas MD

The fireworks were soggy for Indian markets in the new year. In the first 15 days of 2025, the Nifty 50 slipped into correction territory, down over 10% from its highs, while the Indian rupee tumbled to a record low, breaching 86 against the US dollar.

According to Bloomberg, the mood will be muted this earnings season as well, as Q3FY25 results could bring a flurry of downgrades.

Pictet Asset Management portfolio manager Prashant Kothari, who oversees about $1 billion in an Indian equity fund, says, “We have had very good economic expansion in India, but there may be clouds on the horizon.” He adds that opportunities in India "are not juicy."

But falling valuations may not be a bad thing, if you know where to look. Warren Buffett loved buying great stocks at discount valuations, and famously said, "Be fearful when others are greedy, and greedy when others are fearful." 

One defensive sector that gets interesting in tough times is pharma. Since 2005, the Nifty 50 has delivered an annual negative return three times, but the Nifty Pharma index has outperformed the benchmark index all three times. 

So which stocks are looking especially strong ahead of Q3FY25 results? Let’s dive in. 

In this week’s Analyticks,

  • Indian pharma companies are adapting - and winning - in a changing US market
  • Screener: Pharma stocks with high momentum and durability scores, with rising operating profit margin in Q2

US market recovery gives Indian pharma a boost

Indian drug makers have seen booms and busts in the past 15 years, due to their heavy reliance on the US generics business. 

The problem with generics? A generic drug contains the same chemical substance as one originally protected by patents. Its main appeal is its lower price.

So competition in the generic drug market is fierce. A single generic option usually causes a 40% fall in the drug's prices, and five to six generic players cause a 90% reduction. As a result, this segment has lower margins, and no product differentiation to bank on. 

Trendlyne’s share price history data shows that Nifty Pharma outperformed the Nifty 50 from 2010 to 2016. This was due to a sharp uptick in US generics sales, which Indian players benefitted from by exporting low-cost generic drugs to the US. 

Nifty Pharma outperforms the Nifty 50 in nine out of past 15 years

But the easy generics money soon ran out, and a slowdown took hold in 2016. US generics became less profitable due to stricter regulations by the US FDA. The regulator also encouraged more generics competition. Nifty Pharma posted negative returns from 2016 to 2019.

Post-Covid, Indian pharma companies pivoted towards specialty and complex generics segments in the US to beat the slowdown in generics sales. Industry leaders like Sun Pharma, Cipla, and Dr Reddy’s embraced this strategy.

This pivot led to Nifty Pharma's sharp rise of 34% in 2023, and 39% in 2024. Relatively smooth USFDA inspections have also contributed to this, allowing Indian drug makers to speed up product launches and enhance profitability in the competitive US market.

However, not all companies enjoyed similar success. Firms like Aurobindo Pharma and Alkem Labs attempted to diversify into specialty injectables and biosimilars but faced challenges. Weak demand and persistent supply chain issues have undermined their efforts, limiting revenue growth.

India vs US: Where is pharma's focus? 

Post-COVID, Indian companies have switched away from the broad generics space in the US, which had high competition, to complex generics (Cipla, Dr Reddy’s), specialty products (Sun Pharma), and peptides. 

Abhay Gandhi, Sun Pharma's CEO (North America Business), said in the Q2FY25 earnings call, “The US specialty business has grown YoY. The underlying prescription trends for the specialty business are strong.” 

This diversification strategy has fueled two growth engines - India and the US. In addition, the number of adverse classification outcomes from US FDA inspections fell in 2024 after a sharp uptick in 2019. 

USFDA’s red flags decrease in 2024

In 2024, 206 USFDA inspections were conducted, of which only 14 (6.6%) resulted in official action (OAI). The OAI percentage has fallen from 11% in 2019. An OAI from the USFDA greatly impacts the profitability and product launch timeline for drugmakers. 

US generics remain an important vertical. Several bestseller drugs are expected to go off-patent in the US, increasing the potential for generic alternatives. This could help offset any lower-than-expected India sales. The Indian pharmaceutical market's growth moderated to 7% in 2024. This was primarily due to a lack of price hikes on the National List of Essential Medicines products and a regulatory ban on 156 fixed-dose combination drugs. 

The US market, on the other hand, has picked up in the last few quarters after a period of underperformance. This was helped by strong sales of the complex generic cancer drug Revlimid (lenalidomide). 

In the generics space, companies must launch new complex generics to find the next blockbuster, which remains a concern. 

Pharma companies expected to post strong numbers in Q3

According to a Q3 result preview report by KR Choksey, pharma companies’ revenue is expected to grow 10.8% YoY, led by strong US business, and domestic growth.

The EBITDA margin is expected to expand 198 bps YoY, led by a favorable product mix and increased focus on complex products. Falling freight and raw material costs are also expected to help margins. The average price of raw materials has fallen around 25% YoY in Q3FY25 to $114/Kg. 

A diverse set of companies, from API manufacturers to branded generics manufacturers, are in the list of players expected to post positive revenue and net profit growth in Q3. 

Divi’s Labs expected to post high revenue and net profit growth

Mankind Pharma depends mainly on Indian market growth (over 90% of revenue share), and its Q3FY25 revenue and net profit are set to increase for the eighth quarter. Its outperformance in market growth with IPM is expected to continue in the chronic segment in Q3. 

Companies like Sun Pharma and Dr Reddy’s get a notable portion of their revenues from the US. While specialty products should drive revenue growth for Sun Pharma, new product launches remain key for Dr Reddy’s. 

Divi’s Labs and Lupin saw a sharp turnaround in the past two years. Divi’s Labs is benefitting from lower raw material prices and high demand in the custom synthesis segment. 

When it comes to Trendlyne’s DVM scores, these pharma companies boast high durability scores. 

Pharma companies have medium momentum scores despite a weak quarter

Despite a weak quarter, these pharma companies’ momentum scores remain in the ‘Medium’ category. Zydus Lifesciences has the highest DVM score. It has good durability, medium valuation, and momentum scores, making it a ‘Mid-range Performer.’ 

Screener: Pharma stocks with high momentum and durability with rising operating profit margin in Q2

Pharma stocks with high momentum scores and rising operating margins

As we enter the results season, we look at stocks from the pharmaceutical industry with good momentum and durability with rising operating profit margin growth in Q2FY25. This screener shows pharmaceutical stocks with high Trendlyne momentum and durability scores with rising operating profit margins in Q2FY25.

Major stocks that feature in the screener are Procter & Gamble Health, Lupin, Granules India, Ipca Laboratories, Mankind Pharma, Orchid Pharma, Innova Captab, and Caplin Point Laboratories. 

Lupin features in the screener with a good Trendlyne momentum score of 57 and a growth of 5.4 percentage points YoY in operating profit margin in Q2FY25. This pharma stock has a high momentum score, helped by an 18.7% rise in stock price over the past six months. The company’s operating margins improved due to lower freight costs, combined with a better mix of high-margin products, helped by new product launches like Mirabegron in the US and Luforbec in the UK.

Ipca Laboratories also appears in the screener after its operating profit margin grew by 3 percentage points YoY to 18.8% in Q2FY25. Operating margin improved, led by reduced raw material costs and a 25-30% cost reduction in active pharmaceutical ingredient (API) processes at its subsidiary, Unichem Laboratories. It also has a good Trendlyne Momentum score of 59, driven by a 28.7% surge in its stock price over the past six months.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

 
Trendlyne Marketwatch
Trendlyne Marketwatch
15 Jan 2025
Market closes higher, J Kumar Infra bags a Rs 1,073 crore order from NBCC
By Trendlyne Analysis

Nifty 50 closed at 23,213.20 (37.2, 0.2%), BSE Sensex closed at 76,724.08 (224.5, 0.3%) while the broader Nifty 500 closed at 21,551.20 (70.2, 0.3%). Market breadth is balanced. Of the 2,392 stocks traded today, 1,220 were on the uptick, and 1,128 were down.

Indian indices closed in the green, with the benchmark Nifty 50 index closing at 23,213.2 points. The Indian volatility index, Nifty VIX, declined 1.1% and closed at 15.3 points. HDFC AMC’s Q3FY25 net profit grew by 31% YoY to Rs 641.5 crore, while revenue increased by 26.2% YoY, helped by higher assets under management (AUM).

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. S&P BSE Utilities and BSE Power were among the top index gainers today. According to Trendlyne’s Sector dashboard, Retailing emerged as the best-performing sector of the day, with a rise of 2.1%.

Asian indices closed mixed, while European indices are trading in the green, with an exception of Russia’s MOEX & RTSI index. US index futures traded in the green, indicating a positive start to the trading session. Brent crude oil futures are trading in the green. Barclays notes that the S&P 500’s growth in Q4 earnings season depends on technology stocks. It observes that downward revisions for sectors outside tech are 300bps higher than average, signaling bearish sentiment ahead of the reporting season.

  • Relative strength index (RSI) indicates that PTC Industries is in the overbought zone.

  • NESCO rises as it wins a contract from National Highways Logistics Management to develop, operate, and maintain wayside amenities on the Raipur-Visakhapatnam Expressway. The project is expected to cost Rs 200 crore, with an estimated annual revenue of Rs 300 crore from year four of operations.

  • Alembic Pharmaceutical receives final approval from the US FDA for its abbreviated new drug application (ANDA) for Brexpiprazole tablets. The drug is a therapeutic equivalent to Otsuka Pharmaceutical's reference listed drug (RLD), Rexulti tablets, used to treat major depressive disorder (MDD) and schizophrenia. It has an estimated market size of $2 billion for the year ending September 2024.

  • Maharashtra Scooters is rising as its net profit surges 3.3X YoY to Rs 3.3 crore in Q3FY25, helped by lower raw material and employee benefit expenses. However, revenue falls by 9.1% YoY to Rs 5.8 crore due to a reduction in the manufacturing segment. The company appears in a screener of stocks where mutual funds increased their holding in the past quarter.

  • January crude oil futures reach Rs 6,729 on Multi Commodity Exchange (MCX) during the initial hour of trading after a weekly report by the industry body American Petroleum Institute (API) indicated a decline in inventories by 2.6 million barrels in the US for the week ending January 10.

  • Network18 Media & Investments plunges to its 52-week low of Rs 58.2 per share as its Q3FY25 net loss expands to Rs 1,435.5 crore compared to Rs 58.8 crore in Q3FY24 due to higher finance costs. Revenue declines by 25.3% YoY to Rs 1,442.6 crore, led by lower demand during the festive period and reduced advertising volumes. It shows up in a screener of stocks with high interest payments compared to earnings.

  • Premier Energies rises sharply as three subsidiaries secure orders worth Rs 1,460 crore for solar PV cells and modules. These include Rs 1,041 crore to supply modules and Rs 419 crore for cells, starting May 2025.

  • NBCC rises sharply as it secures orders worth Rs 405 crore, including projects for Delhi University's Hindu College, Fakir Mohan University in Odisha, and Maharaja Sriram Chandra University in Mayurbhanj.

  • BofA Securities upgrades Maruti Suzuki India to a 'Buy' rating with a target price of Rs 14,000. The brokerage highlights that the company started its EV journey with the launch of the 'e-Vitara,' and the Toyota alliance has fueled growth, with combined exports now at 20% of volume. It expects a 7.5% volume CAGR and over 10% revenue CAGR for FY25-27.

  • J Kumar Infraprojects is rising as it bags an order worth Rs 1,073.4 crore from NBCC (India) to develop Silicon City Phase-IV Group housing in Sector 76, Noida. The project will be undertaken on an engineering, procurement & construction (EPC) basis, with operations and maintenance for two years.

  • HDFC Asset Management rises sharply as its Q3FY25 net profit grows by 31% YoY to Rs 641.5 crore, beating Forecaster estimates by 7.3%. Revenue increases by 26.2% YoY, helped by higher assets under management (AUM). It features in a screener of stocks with rising net cash flow and cash from operating activities.

  • Quadrant Future Tek surges to its all-time high of Rs 532.8 per share as it appoints Mohit Vohra and Amit Kumar Jain as its Managing Director (MD) and Chief Executive Officer (CEO), respectively.

  • Reports suggest that the Adani Group is in advanced talks with Dubai-based Emaar Properties to acquire a majority stake in its Indian subsidiary, Emaar India, for an estimated Rs 4,000-5,000 crore. The deal will likely involve the acquisition of 70-100% ownership in Emaar India, primarily through Adani Realty, an unlisted entity within the Adani Group.

  • Indian Railway Finance Corp is rising as it emerges as the lowest bidder to finance Rs 3,167 crore for the Banhardih Coal Block development in Jharkhand. The project will be undertaken by Patratu Vidyut Utpadan Nigam, a joint venture (JV) between NTPC and Jharkhand Bijli Vitran Nigam.

  • Sula Vineyards' revenue declines marginally by 0.7% YoY to Rs 217.3 crore in Q3FY25. However, wine tourism revenue grows 11.5% YoY. It features in a screener of stocks with rising net cash flow and cash from operating activities.

  • Aether Industries rises as it amends its supply agreement with Baker Hughes. The deal finalizes volume and pricing for two products exclusively manufactured by its subsidiary, Aether Specialty Chemicals.

  • According to Trendlyne’s shareholding data, mutual funds substantially raised their stake in One 97 Communications (Paytm) during Q3FY25, reaching an all-time high. By the end of December 2024, 27 mutual funds held an 11.2% stake in Paytm, amounting to 7.1 crore shares. This represents a significant increase from the 7.9% stake held in Q2FY25.

  • Delta Corp's revenue rises marginally by 0.4% YoY to Rs 235.3 crore in Q3FY25. Net profit grows 3.6% YoY to Rs 35.7 crore, helped by lower raw material and depreciation & amortization expenses. The company appears in a screener of stocks with net profit increasing over the past two quarters.

  • Welspun Corp rises sharply as it signs a memorandum of understanding (MoU) with Saudi Aramco to set up a 3.5 lakh MT per annum longitudinal submerged arc welding (LSAW) pipe manufacturing unit in Saudi Arabia.

  • Shoppers Stop rises sharply as its revenue rises 11.5% YoY to Rs 1,379.5 crore in Q3FY25. Net profit surges 41.7% YoY to Rs 52.2 crore, helped by inventory destocking. The company features in a screener of stocks with increasing net profit and profit margin (QoQ).

  • Nuvama Research expects FTSE to raise Adani Wilmar's weight in the index during its rebalancing today, following the offer for sale by its promoter. This could result in passive inflows of $25 million (approximately Rs 206 crore), equivalent to 7.8 million shares or 1.7 days of trading impact. The research highlights that trading volume mainly drives such events, not just price movements.

  • Aditya Birla Fashion and Retail's board of directors approves raising Rs 2,400 crore through a qualified institutional placement (QIP) and a preferential issue of 8.1 crore shares. The board sets the issue price at Rs 272.4 for the QIP and Rs 317.5 for the preferential issue.

  • Adani Green Energy rises sharply as it expands its operational renewable capacity to 11,666.1 MW. This follows the commissioning of a 57.2 MW wind power project in Gujarat under its wind-solar hybrid initiative, operational from January 15.

  • Angel One is rising as its net profit grows 8.1% YoY to Rs 281.5 crore in Q3FY25, driven by a reduction in fees & commission expenses. Revenue increases 19.1% YoY to Rs 1,263.8 crore, led by improvements in the active client base, number of orders, and average daily turnover (ADTO). It appears in a screener of stocks with a decrease in provisions in recent results.

  • HCL Technologies is rising as its Q3FY25 net profit grows 8.4% QoQ to Rs 4,591 crore, beating Forecaster estimates by 0.3%. Revenue increases 3.6% QoQ to Rs 30,367 crore, helped by improvements in the IT & business services, engineering & R&D services, and HCL Software segments. It features in a screener of stocks near their 52-week highs with significant volumes.

  • Markets are up today morning. Nifty 50 was trading at 23,225.45 (49.4, 0.2%), BSE Sensex was trading at 76,882.06 (382.4, 0.5%) while the broader Nifty 500 was trading at 21,536.80 (55.8, 0.3%).

  • Market breadth is highly positive. Of the 1,918 stocks traded today, 1,426 were gainers and 449 were losers.

Riding High:

Largecap and midcap gainers today include Thermax Ltd. (4,014.90, 7.5%), Phoenix Mills Ltd. (1,656.90, 5.5%) and FSN E-Commerce Ventures Ltd. (172.77, 4.8%).

Downers:

Largecap and midcap losers today include Central Bank of India (51.32, -7.3%), Indian Overseas Bank (49.91, -7.2%) and UCO Bank (42.41, -6.3%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Newgen Software Technologies Ltd. (1,755.90, 11.5%), Devyani International Ltd. (193.29, 8.4%) and Alok Industries Ltd. (20.88, 8.1%).

Top high volume losers on BSE were Central Bank of India (51.32, -7.3%), Cello World Ltd. (669, -2.3%) and Birla Corporation Ltd. (1,155.20, -1.8%).

Vardhman Textiles Ltd. (474.80, 3.0%) was trading at 51.5 times of weekly average. Shoppers Stop Ltd. (625.10, 0.8%) and Welspun Living Ltd. (150.99, 2.7%) were trading with volumes 17.3 and 13.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

1 stock took off, crossing 52 week highs, while 9 stocks hit their 52 week lows.

Stock touching their year highs included - Newgen Software Technologies Ltd. (1,755.90, 11.5%).

Stocks making new 52 weeks lows included - Asian Paints Ltd. (2,229.70, -0.5%) and Kansai Nerolac Paints Ltd. (243, -0.2%).

25 stocks climbed above their 200 day SMA including Phoenix Mills Ltd. (1,656.90, 5.5%) and Zomato Ltd. (243.90, 4.4%). 10 stocks slipped below their 200 SMA including Kalyan Jewellers India Ltd. (555.10, -6.9%) and Bajaj Finserv Ltd. (1,671.65, -2.4%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
13 Jan 2025
Market closes lower, GR Infra secures an order worth Rs 1,947 crore from MSRDC
By Trendlyne Analysis

Nifty 50 closed at 23,085.95 (-345.6, -1.5%), BSE Sensex closed at 76,384.73 (-994.2, -1.3%) while the broader Nifty 500 closed at 21,243.45 (-555.6, -2.6%). Market breadth is sharply down. Of the 2,446 stocks traded today, 196 were on the uptick, and 2,223 were down.

Indian indices closed lower, with the benchmark Nifty 50 index closing at 23,086 points. The Indian volatility index, Nifty VIX, rose 7.2% and closed at 16 points. The market declined after the US imposed sanctions against producers, insurers, and vessels dealing in Russian crude.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, tracking the benchmark index. Nifty Media and Nifty Realty were among the worst-performing indices of the day. According to Trendlyne’s sector dashboard, Fertilizers emerged as one of the worst-performing sector of the day, with a fall of 6%.

European indices are trading lower, except Russia’s RTSI and MOEX indices, trading 1.6% higher each. Major Asian indices closed in the red. US index futures are trading lower, indicating a cautious start to the trading session in anticipation of the inflation data set to be released on Wednesday.

  • Money flow index (MFI) indicates that stocks like PTC Industries, Lloyds Metals & Energy, SRF, and Vijaya Diagnostic Centre are in the overbought zone.

  • Puravankara's customer collections from the real estate business grow by 6% YoY to Rs 993 crore Q3FY25. The company achieves pre-sales of Rs 1,265 crore, 2% higher than Q3FY24.

  • Afcom Holdings secures a long-term contract with Etihad Airways to operate regular flights for cargo between Chennai and Male.

  • GR Infraprojects emerges as the lowest bidder for a contract worth Rs 1,947 crore from Maharashtra State Road Development Corp (MSRDC) to construct the access-controlled Pune Ring Road from Sonori to Garade. The company will undertake the project on an engineering, procurement, and construction (EPC) basis and expects to complete it in the next three years.

  • Sharekhan selects SBI as its top pick for 2025. The brokerage has given the stock a 'Buy' rating with a target price of Rs 975. It expects advances to grow by 13% YoY, and projects net interest margins (NIMs) to remain slightly lower QoQ. The brokerage also anticipates that SBI's asset quality will remain broadly stable in Q3FY25.

  • Interarch Building Products bags two orders worth Rs 221 crore from Tata Semiconductor Assembly & Testing and Agratas Energy Storage Solutions. The Tata Semiconductor order is for its semiconductor facility in Assam, while the Agratas Energy order is to set up its lithium-ion battery manufacturing unit in Gujarat.

  • Indraprastha Gas falls as its board appoints Sukhmal Kumar Jain as the company's new Chairman, succeeding RK Jain, effective January 14.

  • NBCC (India) signs a memorandum of understanding (MoU) with Sarkari Awas Nirman Avam Vitt Nigam to develop 588 acres of land in Lucknow for mixed use. Under Phase 1 of the project, NBCC will develop 50 acres of land valued at ~Rs 3,500 crore.

  • Waaree Renewable Technologies falls 20% after Dilip Panjwani tendered his resignation as chief financial officer (CFO), citing personal reasons. Exchanges have put the securities of Waaree Renewable Tech under the long-term ASM (Additional Surveillance Measure) framework to caution investors about high volatility in share prices.

  • Brigade Enterprises signs a memorandum of understanding (MoU) with Technopark to develop a World Trade Centre and a business hotel in Thiruvananthapuram. The company plans to invest ~Rs 1,500 crore in Kerala's IT infrastructure in coming years.

  • Varroc Engineering receives approval from the National Company Law Tribunal (NCLT) to merge its subsidiary, Varroc Polymers with itself.

  • Ola Electric Mobility falls as the Central Consumer Protection Authority (CCPA) seeks additional documents to investigate alleged consumer rights violations, misleading advertisements, and unfair trade practices following a show-cause notice on October 8, 2024.

  • Adani Wilmar falls over 6%, continuing its decline from Friday. Its promoter, Adani Commodities, announced a stake sale via an offer for sale (OFS) route on January 10, 2025, at a floor price of Rs 275. Over the past two days, the edible oil company's stock has dropped by over 17%.

  • ICICI Lombard General Insurance receives an income tax refund of Rs 174.6 crore from the Income Tax (IT) Department for FY13 and FY16-18.

  • Poly Medicure forms a joint venture with AMPIN C&I Power to establish a solar power project in Haryana. The project will serve as a captive power source for Poly Medicure's facility, with AMPIN holding 74% and Poly Medicure 26%.

  • Motilal Oswal maintains its 'Buy' call on Tata Consultancy Services with a target price of Rs 5,000 per share. This indicates a potential upside of 16.4%. The brokerage believes the company's recovery in discretionary client spending and strengthening of the US economy will help in revenue growth. It expects the firm's revenue to grow at a CAGR of 7.1% over FY25-27.

  • HDFC AMC to release its quarterly results on January 14. Motilal Oswal anticipates a revenue growth of 35.7% YoY, with EBITDA expected to rise by 41.1% YoY. The net profit is projected to increase by 23.9% YoY, reaching Rs 606.7 crore. The brokerage expects equity assets under management (AUM) to continue its growth trend, driven by improved fund performance, though it anticipates a sequential decline in yields.

  • JSW Energy's subsidiary, JSW Neo Energy, acquires three special purpose vehicles (SPVs) with a total capacity of 125 MW from Hetero Group at an enterprise value of Rs 630 crore.

  • Standard Glass Lining Technology’s shares debut on the bourses at a 22.9% premium to the issue price of Rs 140. The Rs 410.1 crore IPO received bids for 183.2 times the total shares on offer.

  • Avenue Supermarts falls sharply as its net profit misses Forecaster estimates by 16% despite growing 4.8% YoY to Rs 723.7 crore in Q3FY25. Revenue rises by 17.6% YoY to Rs 15,996.7 crore, helped by new store additions. It appears in a screener of stocks near their 52-week lows.

  • Indian oil companies such as HPCL and BPCL witness a decline of over 2% as Brent crude prices surge above $81 per barrel, reaching their highest level in over four months. This increase comes amid expectations that broader US sanctions will impact Russian crude exports to major buyers like China and India. Since January 8, Brent and WTI have risen by more than 6%, with the surge following the imposition of expanded US Treasury sanctions on Russian oil.

  • Just Dial is plunging as its net profit declines by 14.8% QoQ to Rs 131.3 crore in Q3FY25, missing Forecaster estimates by 8.4%. Revenue falls by 8.5% QoQ to Rs 364.7 crore due to a reduction in total traffic during the quarter. It shows up in a screener of stocks with high promoter pledges.

  • Waaree Energies rises as it signs a share purchase agreement with Enel Green Power Development to acquire a 100% stake in its subsidiary, Enel Green Power India for up to Rs 792 crore.

  • Godrej Properties launches its first premium residential project in Hyderabad, Godrej Madison Avenue. The project offers 12 lakh sq. ft. of saleable area with 3 and 4 BHK apartments, estimated at Rs 1,300 crore in booking value.

  • PCBL falls sharply as its net profit declines 37.1% YoY to Rs 93.1 crore in Q3FY25 due to higher raw material prices, employee benefits, and finance costs. However, revenue grows by 21.5% YoY to Rs 2,021.1 crore, driven by improvement in the carbon black and chemicals segments. It appears in a screener of stocks with declining return on equity (RoE) over the past two years.

  • Gloom in markets in early trading. Nifty 50 was trading at 23241.70 (-189.8, -0.8%) , BSE Sensex was trading at 76582.18 (-796.7, -1.0%) while the broader Nifty 500 was trading at 21564.75 (-234.3, -1.1%)

  • Market breadth is sharply down. Of the 2030 stocks traded today, 291 were on the uptrend, and 1695 went down.

Riding High:

Largecap and midcap gainers today include Aditya Birla Capital Ltd. (169.84, 1.3%), Biocon Ltd. (365.20, 1.2%) and Axis Bank Ltd. (1,049.30, 0.8%).

Downers:

Largecap and midcap losers today include Adani Wilmar Ltd. (262, -10%), Macrotech Developers Ltd. (1,165.30, -9.2%) and Rail Vikas Nigam Ltd. (357.95, -9.0%).

Volume Shockers

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

Top high volume gainers on BSE included Prism Johnson Ltd. (162.18, 7.2%), Piramal Pharma Ltd. (232.65, 5.2%) and Crisil Ltd. (5,806.35, 2.3%).

Top high volume losers on BSE were Just Dial Ltd. (899.30, -13.1%), PCBL Ltd. (351.85, -10.0%) and Adani Wilmar Ltd. (262, -10%).

Happiest Minds Technologies Ltd. (718.50, 1.7%) was trading at 7.2 times of weekly average. Aditya Birla Capital Ltd. (169.84, 1.3%) and KEI Industries Ltd. (3,974.95, -4.8%) were trading with volumes 5.2 and 5.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks hit their 52 week highs, while 80 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - HCL Technologies Ltd. (1,989.40, -0.3%) and Krishna Institute of Medical Sciences Ltd. (617.85, -4.9%).

Stocks making new 52 weeks lows included - ACC Ltd. (1,859.45, -3.7%) and Asian Paints Ltd. (2,252.65, -2.9%).

3 stocks climbed above their 200 day SMA including Tata Consultancy Services Ltd. (4,291.10, 0.6%) and Indian Renewable Energy Development Agency Ltd. (199.88, -0.6%). 57 stocks slipped below their 200 SMA including PCBL Ltd. (351.85, -10.0%) and Macrotech Developers Ltd. (1,165.30, -9.2%).

 
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The Baseline
10 Jan 2025
Five Interesting Stocks Today - January 10, 2025
By Trendlyne Analysis

1. Titan Company:

This gems and jewellery major has risen by 1.5% over the past week, outperforming its industry by 4.1%. This comes after Titan reported a 24% YoY growth in revenue in its Q3FY25 business update.

The jewellery segment (which contributes over 87% of the total revenue) grew by 25% YoY, driven by strong festive demand. Plain gold jewellery sales jumped 24% YoY due to robust festive and wedding purchases over October-December despite higher gold prices, while gold coin sales surged 48% YoY.

Analysts believe that jewellery consumption remained strong due to rising gold prices, more auspicious days, and a shift from unorganised to organised trade after a 900 bps gold import duty cut to 6% (during the FY25 Union Budget). The company’s peer Kalyan Jewellers has also reported healthy revenue growth in Q3FY25, with a 39% YoY rise. According to Trendlyne’s Forecaster, Titan’s revenue is expected to grow by 16.1% YoY in Q3FY25.

Meanwhile, the company added 69 stores on a net basis during the quarter, taking its retail store count to 3,240. Titan has a market share of 8% in the Indian jewellery market and has been working on expanding its retail footprint. It also aims to triple volumes in emerging segments like wearables, women’s bags and ethnic wear by FY27. It opened an exclusive store for its bags and accessories brand, IRTH, in Chennai, as part of its expansion plans in South India. Commenting on this, Manish Gupta, CEO of the Fragrances and Fashion Accessories Division, said, “We aim to achieve Rs 1,000 crore in revenue by FY26-27 from our IRTH and Fastrack bags divisions”.

InCred Equities gives an ‘Add’ rating on Titan Co with a target price of Rs 3,600. The brokerage remains positive on the company but expects margin pressures from higher gold prices and diamond price volatility. It expects EBITDA margins to contract by 105 bps YoY to 10% in Q3FY25.

2. Manappuram Finance:

This gold loan company’s share price jumped over 6% before paring its gains amid profit booking by investors. This surge followed the company’s announcement that the RBI had lifted its ban on new loans and disbursements by its subsidiary, Asirvad Micro Finance. The RBI had slapped this ban on Asirvad over two months ago on October 22, after it found “material supervisory concerns and non-compliance issues”.

Manappuram’s stock fell by over 13% after the ban was imposed and made a 52-week low in the days that followed. The removal of this ban is a significant development for the company, as its micro-finance business contributes around 30% to its total revenue. The other 70% of the company’s revenue comes from gold loans. 

The company's consolidated AUM (assets under management) jumped by 17.4% on a YoY basis in Q2. The gold loan segment has experienced remarkable growth over the past year, driven by higher-than-normal interest rates on unsecured loans. Bloomberg columnist Andy Mukherjee, writes that loans against gold jewellery have risen in India by 56.2% annually. In Q3, Forecaster expects revenue growth for Manappuram of 14.2%, with net profit growth of 8% on a YoY basis.

V P Nandakumar, MD and CEO, said, “The micro-finance sector is facing (collection-related) challenges in certain geographies.” Due to this, the company added around 5,000 new loan officers in Q2. He also said that he expects net interest margins to fall as operating expenses rise.

Motilal Oswal retains a 'Hold' rating on the stock with an upgraded target price of Rs 205. The brokerage anticipates a gradual recovery in Asirvad’s microfinance (MFI) and gold loan segments. However, it predicts that credit costs will remain high over the next two to three quarters due to industry-wide pressures. Currently, the stock is in the PE Buy Zone, trading at a relatively cheaper valuation than its historical PE.

3. Dabur India:

ThisFMCG producer declined 3.8% on January 6 following theannouncement of its Q3FY25 business update. Dabur India expects low single-digit (~1-5%) revenue growth due to weak demand in segments like Health Care, impacted by a delayed winter, and in Beverages, as consumersshift from non-carbonated to carbonated drinks. Higher-priced juices are seeing the biggest impact.

Management noted that rural demand for FMCG outpaced urban demand, contributing around 4-8% growth in the home & personal care (HPC) segment. Dabur expects its culinary brands to deliver double-digit growth, supported by brands like 'Homemade Cooking Pastes & Purees' and 'Badshah Spices.'

InQ2FY25, the company reported a revenue decline of 5.5% YoY to Rs 3,028.6 crore, with net profit falling 17.5% YoY to Rs 425 crore. This underperformance was due to heavy rainfall, floods, and high food inflation, which slowed down consumption. Dabur Indiareduced the inventory days of its general trade partners from 30 days to 21 days in Q2, to tackle challenges from alternative channels like modern trade, e-commerce, and quick commerce. The company aimed to reduce this by 19 days by the end of December ‘24. According toTrendlyne’s Forecaster estimates, the company’s revenue is expected to grow by 5.8% YoY in Q3FY25. 

Mohit Malhotra, CEO of Dabur India,said, “We expect the Home Care portfolio to grow in double digits going forward in the future, taking up the portfolio from Rs 700 crore to around Rs 1,000 crore in 2 to 3 years.” To achieve this, Dabur is premiumizing and expanding its home care range, introducing Odonil (room air freshener) in gel pockets, diffusers, and premium air fresheners, and launching Odomos (mosquito repellent) in a liquid vaporizer format. The recentacquisition of hair oil brand Sesa marks Dabur’s entry into the premium Ayurvedic hair oil market, in line with its strategy to diversify and expand.

Still, analysts are pessimistic. Following the business update, Citimaintained its ‘sell’ rating on Dabur India and lowered its target price to Rs 510. The brokerage expects a 2.5% YoY revenue growth in Q3FY25, citing weak performance in healthcare and beverages, rising costs, and shifting consumer preferences as key challenges.

4. Zydus Lifesciences:

This pharma company's stock rose by 1.4% over the past week after it signed an agreement with CVS Caremark, a US healthcare solutions provider, on January 7. The agreement also adds the ZituvioTM range - Sitagliptin and combination tablets - to CVS' list of medicines for type 2 diabetes treatment. 

On the same day, the US FDA accepted the New Drug Application (NDA) for CUTX-101, a potential treatment for Menkes disease, and assigned it priority review. The application was filed by Sentynl Therapeutics, the US subsidiary of Zydus. Menkes disease is a rare pediatric condition with no FDA-approved treatment, and often leads to death in infants. The CUTX-101 clinical trials showed promising results, with early-treated patients having an 80% lower death risk. The Menkes disease market, valued at approximately $8 million at the end of 2023, is expected to grow 5.9% annually through 2034.

Following the news, Nomura upgraded Zydus Life to ‘Buy’ from ‘Hold’ and raised its price target to Rs 1,140, indicating an upside of 13.5%. The brokerage also increased earnings estimates due to higher contributions from the Sitagliptin drug, used to regulate high blood sugar. They believe the drug’s market opportunity, estimated between $300-500 million, could provide Zydus with an annual revenue boost of $100-150 million. However, they anticipate a 5% decline in US revenues in FY26.

In Q2FY25, the company’s revenue increased 19.9% YoY to Rs 5,237 crore, driven by improvements in the US formulation (up 30%) and Indian formulation (up 9%). Its net profit rose 20.5% YoY to Rs 865.8 crore during the quarter. For Q3FY25, Trendlyne’s Forecaster estimates profit to surge 14.9% YoY, with a revenue growth of 17.8%.

Managing Director Sharvil Patel mentioned that Zydus is focusing on expanding its portfolio in the US by targeting high-value products that offer better returns and margins. This involves launching limited-competition products and exploring in-licensing opportunities for niche, high-value products. He added, “We anticipate topline growth in the high teens (15-17%) and maintain our FY25 margin guidance of 27%, with an expected improvement of 100-150 basis points over last year.”

5. Reliance Industries:

This refineries & petro-products company has declined by over 4% in the past month. The company has reportedly raised $3 billion (approximately Rs 24,900 crore) from a consortium of 11 banks, marking its largest borrowing deal in nearly two years. The five-year loan, finalized last month, was set at 120 bps above the three-month Secured Overnight Financing Rate (SOFR), with $450 million (around Rs 3,700 crore) denominated in Japanese yen. It is also reported that the company is gearing up for substantial loan repayments in 2025.

The company posted a nominal 0.3% YoY increase in revenue for Q2FY25. However, its net profit declined by 4.8% to Rs 16,563 crore due to a decline in EBIT of the Oil-to-Chemical(O2C) segment. The Trendlyne Forecaster estimates the company’s revenue to rise by 2.9% and the net profit to rise by 4.8% Q3FY25. Morgan Stanley expects the company's refining segment to grow on the back of increasing global demand. It appears in a screener of stocks where mutual funds have increased holdings in the past month.

Mukesh Ambani, chairman & MD of the company, said, “Jio and Retail are expected to double their revenues and EBITDA in the next 3-4 years. I see immense growth potential in our media business. I foresee our New Energy business becoming as big and profitable over the next 5-7 years, as our O2C business which we had built over the past 40 years.” 

Global brokerage firm Jefferies points out that while Reliance lagged behind the Nifty 50 index by 15% in 2024, primarily due to concerns about its retail business's medium-term growth and weak earnings growth for the year, the company’s retail segment is expected to see mid-teen growth going forward. Additionally, improved profitability is anticipated in the Oil-to-Chemicals (O2C) segment by FY26. Jefferies also notes the potential initial public offering (IPO) of Reliance Jio, the company’s telecom arm in FY26.

Geojit has maintained Reliance Industries at a ‘Buy’ rating as it expects the recent tariff hikes and ongoing technology advancements to strengthen Jio's customer base, supporting its growth momentum. The brokerage also says that although the recent tariff hikes led to some SIM consolidation and a higher churn rate, the management expects the full impact of the hikes to be reflected in the earnings over the next 2-3 quarters. With a target price of Rs 1,516, the stock has a potential upside of over 22%.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Jan 2025
Market closes lower, CESC revenue rises 9.8% YoY to Rs 3,561 crore in Q3FY25'
By Trendlyne Analysis

Nifty 50 closed at 23,431.50 (-95, -0.4%), BSE Sensex closed at 77,378.91 (-241.3, -0.3%) while the broader Nifty 500 closed at 21,799 (-247.6, -1.1%). Market breadth is highly negative. Of the 2,397 stocks traded today, 358 were in the positive territory and 2,020 were negative.

Indian indices closed lower, with the benchmark Nifty 50 index closing at 23,440 points. The Indian volatility index, Nifty VIX, rose 1.7% and closed at 14.9 points. Tata Consultancy Services closed deep in the green as its net profit grows 3.4% QoQ to Rs 12,380 crore in Q3FY25, revenue decreases marginally QoQ to Rs 63,973 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red. Nifty Media and BSE Power closed lower. According to Trendlyne’s sector dashboard, Software & Services emerged as the best-performing sector of the day, with a rise of 2.3%.

European indices are trading mixed. Major Asian indices closed mixed. US index futures are trading lower, indicating a cautious start to the trading session in anticipation of the unemployment data set to be released later today.

  • Relative strength index (RSI) indicates that stocks like PTC Industries, SRF, Lloyds Metals & Energy, and Navin Fluorine International are in the overbought zone.

  • CESC falls sharply as its net profit declines 5.7% YoY to Rs 265 crore in Q3FY25. Its revenue rises 9.8% YoY to Rs 3,561 crore but misses Forecaster estimates by 2.7%. The company appears in a screener of stocks with profits declining from last two quarters.

  • Shilpa Medicare receives marketing authorization in Portugal, Europe, for Tadalafil Orodispersible Films (20 mg), used to treat erectile dysfunction. The European market for this drug is valued at approximately $400 million (around Rs 3,437.2 crore).

  • Indegene enters a partnership with CliniOps to speed up the process of clinical trials. Under the partnership, Indegene will provide its expertise in patient recruitment and data services, using CliniOps' Unified platform to streamline data collection.

  • IndusInd Bank declines over 4% as Goldman Sachs downgrades its rating to 'Neutral' with a lower target price of Rs 1,090. The brokerage anticipates consolidation in the bank's credit growth and consumer retail for households due to increased leverage. It adds that higher credit costs are a concern, as various loan segments are experiencing a credit downcycle.

  • Delta Corp rises sharply as the Supreme Court stays GST proceedings on Rs 1.1 lakh crore show cause notices to online gaming firms, providing relief until the apex court reaches a final decision.

  • Syrma SGS Technology partners with MSI as its manufacturing partner in India to produce laptops for the Indian market. Under this partnership the company will assemble laptops for MSI at its Chennai facility.

  • Geojit BNP Paribas upgrades PVR INOX to 'Buy' from 'Accumulate' but lowers the target price to Rs 1,437 per share. This indicates a potential upside of 24.9%. The brokerage expects the company's profitability to improve, led by festive demand and the release of blockbuster and franchise movies combined with its initiative to revive footfalls and reduce costs. It expects the firm's revenue to grow at a CAGR of 9.5% over FY25-26.

  • Sundararaman Ramamurthy, CEO of BSE, believes India’s record capital-raising momentum will continue in 2025, driven by a strong pipeline of companies planning to go public. He notes that over 90 companies have already submitted their draft prospectus to the regulator, aiming to raise an estimated Rs 1 lakh crore ($11.7 billion) this year.

  • Hindustan Copper announces the reopening of the Rakha Copper Mine in Jharkhand after over two decades. The mine, along with a new Chapri underground mine and concentrator plant, will be developed by South West Mining (SMWL) under a Rs 2,700 crore project.

  • Aditya Birla Fashion and Retail's board of directors schedules a meeting for January 15 to consider a proposal to raise funds via a qualified institutional placement (QIP) of equity shares or other methods.

  • Neogen Chemicals is falling as the National Company Law Tribunal (NCLT) approves the merger of its subsidiary, Buli Chemicals India, with itself.

  • The National Restaurant Association of India (NRAI) reportedly opposes e-commerce platforms Zomato and Swiggy's "private labelling" efforts as they venture into quick commerce food delivery via separate apps. NRAI plans to file complaints with regulators, claiming that these practices violate fair competition principles and pose a threat to restaurants nationwide.

  • Phoenix Mills rises as its consumption sales rise 21% YoY to Rs 3,998 crore in Q3FY25, driven by a strong festive season performance at PMC Mumbai, PMC Pune, and Phoenix Palassio. Meanwhile, 9MFY25 consumption grows 23% YoY to Rs 10,504 crore.

  • Sona BLW Precision Forgings is rising as it signs a memorandum of understanding (MoU) with NMICPS Technology Innovation Hub on Autonomous Navigation Foundation at IIT Hyderabad (TIHAN-IITH) during CES 2025 in Las Vegas, USA. The agreement involves the development of connected, autonomous, and electric technologies for autonomous ground vehicles (AGVs), drones, and electric vertical take-off and landing vehicles (eVTOLs).

  • Indian Overseas Bank is falling as it reportedly plans to sell its non-performing assets (NPA) portfolio, consisting of 46 non-performing loans, for Rs 11,500 crore, through an e-auction.

  • Macquarie initiates coverage on IRCTC with an 'Outperform' rating and a target price of Rs 900. The brokerage highlights the company has a monopoly in Indian Railways' e-ticketing and catering services, offering a dominant market position. It sees the potential for 2x returns, driven by IRCTC's strategic role in India's railways and high-margin business model.

  • Adani Total Gas announces a 20% rise in administered price mechanism (APM) gas allocation, effective January 16, following communication from GAIL (India). This update reverses earlier reductions announced in October and November 2024.

  • Vodafone Idea is falling as its board of directors approves allotting 169.3 crore shares to its promoters, Omega Telecom Holdings and Usha Martin Telematics, for Rs 1,910 crore.

  • Adani Wilmar falls sharply as its promoter, Adani Commodities, announces plans to sell 17.5 crore shares (13.5% stake) through an offer for sale (OFS) on the stock exchange at a floor price of Rs 275 per share.

  • Jefferies expects CY25 to be a key year for earnings growth in the contract development and manufacturing organization (CDMO) sector. However, it also warns that potential slippages could impact the sector's high valuations. The brokerage names Piramal Pharma its top pick and retains a 'Buy' rating with a target price of Rs 310. It upgrades Syngene Int. to a 'Hold' rating and downgrades Gland Pharma to 'Underweight' with target prices of Rs 890 and Rs 1,630, respectively.

  • Polyplex Corp's board of directors approves the capacity expansion of its biaxially oriented polyethylene terephthalate (BOPET) film manufacturing plant by 52,400 million tonnes per annum (MTPA) with a capex of $65 million (~ Rs 558 crore).

  • Tata Elxsi plunges to its 52-week low of Rs 5,929.9 per share as its net profit declines by 13.3% QoQ to Rs 199 crore in Q3FY25. Revenue decreases by 4% QoQ to Rs 979 crore, impacted by the software development & services and system integration & support services segments. It appears in a screener of stocks with a QoQ degrowth in revenue, profits, and operating profit margin in recent results.

  • Ceinsys Tech rises to its 5% upper limit as it receives a letter of intent (LoI) for an order worth Rs 381.2 crore from Vidarbha Irrigation Development Corporation (VIDC). The order involves a detailed survey, hydrology study, design, and estimation of key infrastructure such as canals, pipelines, tunnels, and other structures for the Wainganga-Nalganga River Link Project. The project spans districts in Maharashtra, including Nagpur, Wardha, and Yavatmal.

  • Tata Consultancy Services is rising as its net profit grows 3.4% QoQ to Rs 12,380 crore in Q3FY25, driven by lower employee benefit expenses. Revenue decreases marginally QoQ to Rs 63,973 crore. The company appears in a screener of stocks with improving return on equity over the past two years.

  • Nifty 50 was trading at 23,561.05 (34.6, 0.2%), BSE Sensex was trading at 77,682.59 (62.4, 0.1%) while the broader Nifty 500 was trading at 22,015.95 (-30.6, -0.1%).

  • Market breadth is moving down. Of the 1,930 stocks traded today, 510 were gainers and 1,371 were losers.

Riding High:

Largecap and midcap gainers today include Tata Consultancy Services Ltd. (4,265.65, 5.6%), LTIMindtree Ltd. (6,124.40, 4.9%) and Tech Mahindra Ltd. (1,705.60, 3.8%).

Downers:

Largecap and midcap losers today include Adani Wilmar Ltd. (291.10, -10%), General Insurance Corporation of India (427.50, -8.0%) and Indian Renewable Energy Development Agency Ltd. (201.15, -6.9%).

Volume Rockets

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

Top high volume gainers on BSE included Ramkrishna Forgings Ltd. (957.10, 5.9%), Tata Consultancy Services Ltd. (4,265.65, 5.6%) and Anand Rathi Wealth Ltd. (4,154.35, 5.3%).

Top high volume losers on BSE were Adani Wilmar Ltd. (291.10, -10%), Tata Elxsi Ltd. (6,000.60, -6.8%) and Piramal Pharma Ltd. (221.25, -6.7%).

Indian Railway Catering & Tourism Corporation Ltd. (779.15, 2.0%) was trading at 7.2 times of weekly average. Aadhar Housing Finance Ltd. (422.95, 0.1%) and Sterling and Wilson Renewable Energy Ltd. (447.55, 2.0%) were trading with volumes 6.1 and 4.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks overperformed with 52 week highs, while 35 stocks hit their 52 week lows.

Stocks touching their year highs included - HCL Technologies Ltd. (1,995.10, 3.1%), Lloyds Metals & Energy Ltd. (1,449.65, 1.0%) and PTC Industries Ltd. (17,083.15, -1.8%).

Stocks making new 52 weeks lows included - Bank of India (94.27, -4.5%) and Can Fin Homes Ltd. (679.35, -2.0%).

7 stocks climbed above their 200 day SMA including Tata Consultancy Services Ltd. (4,265.65, 5.6%) and Procter & Gamble Health Ltd. (5,250.25, 3.5%). 48 stocks slipped below their 200 SMA including Indian Renewable Energy Development Agency Ltd. (201.15, -6.9%) and Techno Electric & Engineering Company Ltd. (1,399.05, -5.8%).

 
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The Baseline
09 Jan 2025
Five stocks to buy from analysts this week - January 09, 2025
By Ruchir Sankhla

1. Radico Khaitan:

Sharekhan retains its ‘Buy’ rating on this breweries and distilleries company with a target price of Rs 2,996. This indicates an upside potential of 25.4%. Radico Khaitan (RKL) has been focusing on premiumisation, and aims for 15-18% volume growth in the prestige & above (P&A) category for FY25. This segment has delivered 15 consecutive quarters of double-digit growth. The P&A portfolio’s contribution to Indian-made foreign liquor sales increased from 28% in FY19 to 46% in FY24 and is expected to reach 56% by FY27.

The company is implementing cost-optimisation measures such as backward integration with the Sitapur distillery and packaging shifts from glass to plastic bottles in the regular segment. These initiatives are expected to improve operating profit margins (OPM) by 125-150 bps annually, with a target to achieve late-teens OPM within three years.

The analysts mention that with no major capex planned for the next 6-7 years, RKL aims to repay most of its Rs 745 crore debt by FY27. They expect a CAGR of 16.6% in revenue and 29.6% in net profit over FY25-27.

2. Signatureglobal (India):

Motilal Oswal reiterates its ‘Buy’ rating on this NCR-based realty company with a target price of Rs 2,000. This indicates an upside potential of 52.8%. The company is expected to achieve a 35% CAGR in pre-sales from FY25-27, driven by its shift from affordable housing to the mid-luxury segment. Since 2014, the company has sold over 32,000 units (~25 million square feet) and achieved a 63% CAGR in pre-sales from FY21-24.

Analyst Abhishek Lodhiya notes that the company has a pipeline of 25.4 million square feet (msf), including projects in Gurugram's high-demand markets like South Peripheral Road and Dwarka Express Highway. The company is executing approximately 51msf of projects, with 25.3msf underway and 25.4msf in forthcoming projects that are set to be launched in the next 12-24 months. 

Lodhiya believes that the company has a strong launch pipeline of premium projects, and expects it to deliver a 35% CAGR in bookings over FY25-27. He estimates the value of Signatureglobal’s current project pipeline at Rs 15,000 crore.

3. Metro Brands:

Emkay initiates a ‘Buy’ rating on this footwear manufacturer with a target price of Rs 1,500. This indicates an upside potential of 18.1%. Analysts Devanshu Bansal, Vishal Panjwani and Mohit Dodeja highlight Metro’s 20% CAGR growth in India’s sports and athleisure market from FY18-23. The company holds exclusive rights to FILA and Foot Locker.

The analysts note that the company caters to a wide audience with products priced from Rs 700 to Rs 12,000. Around 30% of employee compensation is linked to sales, which improves performance and drives consistent same-store growth of 3-4%. Analysts mentions that the company has ample expansion potential as premium brands like Tanishq operate in 290 cities, while Metro’s brands such as Metro, Mochi, and Crocs are present in only 171, 122, and 97 cities, respectively. They anticipate Metro can add 110-120 stores annually.

Bansal, Panjwani and Dodeja expect Metro Brands to continue adding 80-90 exclusive Metro/Mochi brand outlets annually to deliver a 18% revenue CAGR over FY25-27. They also expect net profit to grow at a CAGR of 22% over the same period.

4. Black Box:

Ventura maintains a ‘Buy’ rating on this IT software firm with a target price of Rs 826. This indicates a potential upside of 28.2%. The company offers digital infrastructure solutions in data centers and cybersecurity, as well as consulting services. Black Box expects its pipeline to grow to $3 billion from $2 billion and aims for a conversion rate of ~25%, up from the current 20%.

Analysts highlight that the company plans to expand its data center operations, primarily in North America and India, which contribute about 20% of its revenue. Black Box expects major clients like Meta, Amazon, and Microsoft to invest heavily in data centers, driving revenue growth. Analysts anticipate data center revenue to grow at a CAGR of 15%, rising from Rs 1,256 crore to Rs 1,994 crore by FY27.

Black Box has redefined its strategy by focusing on its top 300 customers and exiting less profitable long-tail clients, which do not contribute to margin growth. The company achieved an 8.9% EBITDA margin in Q2FY25 and 8.5% for H1FY25. Analysts note that Black Box has consistently outperformed in H2 compared to H1 in terms of operating profitability. They expect revenue to grow at a CAGR of 8% and net profit at a CAGR of 25.9%.

5. Canara Bank:

Hem Securities maintains its ‘Buy’ rating on this bank with a target price of Rs 118, suggesting a potential upside of 23.3%. The company’s management targets an 11% YoY increase in credit for FY25. Analyst Madhur Mandhana highlights that, of the total Rs 18,000 crore in unsecured personal loans, about Rs 12,000 crore was allocated to retirees and wage account holders, which poses no concerns. The remaining Rs 6,000 crore was used for education loans.

Mandhana believes that the 2020 merger of Canara Bank with Syndicate Bank enhanced its market position, giving it a market share of over 6% in advances and deposits as of FY24. The bank's net profit rose by 37.3% YoY to Rs 14,554 crore in FY24, with the net interest margin (NIM) increasing to 2.6%, up from 2.5% in FY23. It expects a gross NPA of 3.5% and a net NPA of 1.1% for FY25, compared to 4.2% and 1.3% in FY24. However, Mandhana expects these figures to stay below 3.5% and 1.1%, respectively.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Jan 2025
Market closes lower, ACME Solar commissions 90 MW solar capacity in Rajasthan
By Trendlyne Analysis

Nifty 50 closed at 23,526.50 (-162.5, -0.7%), BSE Sensex closed at 77,620.21 (-528.3, -0.7%) while the broader Nifty 500 closed at 22,046.55 (-185.3, -0.8%). Market breadth is highly negative. Of the 2,404 stocks traded today, 594 were on the uptrend, and 1,764 went down.

Indian indices closed lower, with the benchmark Nifty 50 index closing at 23,526.5 points. The Indian volatility index, Nifty VIX, rose 1.3% and closed at 14.7 points. Borosil Renewables surged to its 5% upper circuit as its board of directors approved a 50% capacity expansion of solar glass manufacturing to 1,500 tonnes per day (TPD) from 1,000 TPD.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red. Nifty Consumer Durables and Nifty Media closed lower. According to Trendlyne’s sector dashboard, Telecommunications Equipment emerged as the worst-performing sector of the day, with a fall of 4.9%.

European indices are trading mixed. Major Asian indices closed flat or lower. US index futures are trading mixed, indicating a cautious start to the trading session. The Biden administration reportedly plans to introduce one final round of AI chip export restrictions before leaving office to prevent advanced technology from reaching China and Russia.

  • Navine Fluorine International sees a long buildup in its January 30 futures series, with open interest increasing by 33.2% and a put-call ratio of 0.5.

  • ACME Solar Holdings rises sharply as it commissions an additional 90 MW of solar capacity in Rajasthan, increasing its total operational renewable generation capacity to 2,453 MW.

  • Swiggy is rising as its as its quick commerce platform, Swiggy Instamart, expands to 76 cities nationwide. It will soon be available as a standalone app, offering users a more direct experience while continuing to benefit from the multi-service app.

  • Realty stocks like Anant Raj, Signatureglobal (India), Sobha, and Phoenix Mills fall more than 2% in trade. All constituents of the broader BSE Realty index are also trading in the red, causing it to plunge more than 2%.

  • The Securities and Exchange Board of India (SEBI) formally lifts the suspension on JSW Cement's long-awaited initial public offering (IPO). The IPO will proceed through the standard regulatory process, with final approval expected within 30-60 days. The company aims to raise Rs 4,000 crore, consisting of a fresh issue of Rs 2,000 crore and an equal amount through an offer for sale.

  • Ajmera Realty & Infra India's Q3FY25 sales grow 7% YoY to Rs 270 crore, while collections increase 10% YoY to Rs 167 crore. The company's sales rise 14% YoY to Rs 830 crore for 9MFY25.

  • Puravankara acquires a 3.6-acre land parcel in Vajrahalli, Kanakapura Road, Bengaluru, to strengthen its presence in the city's high-demand micro-markets. The new parcel offers a saleable area of 5.4 lakh square feet, with an estimated gross development value (GDV) of over Rs 700 crore.

  • NMDC's board of directors approves the incorporation of a subsidiary in Gujarat and the opening of liaison offices in the United Arab Emirates (UAE) and Australia.

  • Mutual Funds' net equity inflows rise to Rs 41,136 crore in December, up from Rs 35,927.3 crore in November, according to data released by the Association of Mutual Funds in India (AMFI). Meanwhile, SIP inflows rise to Rs 26,459.5 crore in December, compared to Rs 25,320 crore last month.

  • Bharat Heavy Electricals (BHEL) commissions two units of the 6x170 MW Punatsangchhu-II hydroelectric project (PHEP-II) in Bhutan. The greenfield project includes BHEL’s scope for designing, manufacturing, and installing turbines, generators, and other key components.

  • Morgan Stanley reportedly maintains its 'Overweight' call on Reliance Industries with a higher target price of Rs 1,662 per share. This indicates a potential upside of 32%. The brokerage believes the company's refining segment will grow due to increasing global demand. It also expects the firm's profitability to improve in the retail segment, driven by an improvement in store footprint.

  • Persistent Systems launches Pi-OmniKG, an AI-driven knowledge graph solution built with Google Cloud technology. This solution empowers healthcare and life sciences organizations to accelerate biomedical research, streamline data mining, and deliver insights more quickly and accurately.

  • Kotak Institutional Equities retains a ‘Buy’ rating on Zomato with a target price of Rs 305. The brokerage projects a 19% YoY growth in the company's food delivery GMV (gross merchandise value) and a 114% increase in Blinkit's GMV. It notes that while Blinkit's expansion may lead to larger EBITDA losses, its solid unit economics continue to drive long-term growth prospects.

  • Aether Industries is rising as the Gujarat Pollution Control Board (GPCB) lifts the closure order on its Surat manufacturing facility. The move enables the complete resumption of its operations following a fire incident in November 2023, with required compliance.

  • Keystone Realtors is rising as its pre-sales grow 40% YoY to Rs 863 crore in Q3FY25. Its collections increase 20% YoY to Rs 542 crore during the quarter, helped by a Real Estate Regulatory Authority (RERA) project completion in Mumbai and two project additions with a gross development value (GDV) of Rs 980 crore.

  • Manappuram Finance is rising as the Reserve Bank of India (RBI) lifts restrictions on loan sanctioning and disbursal imposed on its subsidiary, Asirvad Micro Finance.

  • HSBC downgrades Indian equity markets to 'Neutral' from 'Overweight' amid slowing growth and high valuations. It also lowers its 2025-end Sensex target by 5,000 points to 85,990. The brokerage acknowledges India's strong emerging market outlook and suggests that a rebound in rural demand could support a broader economic recovery.

  • Tata Motors' Jaguar Land Rover (JLR) wholesales increase 3% YoY to 1 lakh units in Q3FY25, driven by higher sales across the Range Rover, Range Rover Sport, and Defender models. However, retail sales decline 3% YoY to 1 lakh units during the quarter.

  • Prataap Snacks is falling as it receives an open offer from Authum Investment & Infrastructure with Mahi Madhusudan Kela to acquire a 26% stake in the company.

  • Lupin receives an establishment inspection report (EIR) with a voluntary action indicated (VAI) status from the US FDA for its Pithampur Unit-1 manufacturing facility, which manufactures both APIs and finished products.

  • Industrial gas manufacturers such as SRF and Navin Fluorine International surge over 9% after US gas distributors announce price hikes for refrigerant gases. US-based IGas reported disruptions in the supply of R32 and R125, leading to price increases of up to 200%. Brokerage firm Equirus estimates that a $1/kg change in R32 prices could boost SRF's EBITDA by Rs 260 crore, while Navin Fluorine's EBITDA will likely increase by Rs 77 crore.

  • Zen Technologies receives a patent for its T-72 Containerized Crew Gunnery Simulator System (T-72 CGS), an advanced training platform designed to train T-72 tank commanders and gunners.

  • NTPC Green Energy forms a 74:26 joint venture (JV), NTPC Rajasthan Green Energy, with Rajasthan Rajya Vidyut Utpadan Nigam (RVUNL). The JV will set up renewable energy plants with a total capacity of 25 GW and develop green hydrogen and its derivatives in Rajasthan.

  • Anand Rathi Wealth is rising as its board of directors schedules a meeting for January 13 to consider a proposal for a bonus issue of shares.

  • Borosil Renewables surges to its 5% upper circuit as its board of directors approves a 50% capacity expansion of solar glass manufacturing to 1,500 tonnes per day (TPD) from 1,000 TPD.

  • Nifty 50 was trading at 23,618.20 (-70.8, -0.3%), BSE Sensex was trading at 78,206.21 (57.7, 0.1%) while the broader Nifty 500 was trading at 22,180.35 (-51.5, -0.2%).

  • Market breadth is in the green. Of the 1,927 stocks traded today, 1,016 were on the uptick, and 870 were down.

Riding High:

Largecap and midcap gainers today include SRF Ltd. (2,673.90, 13.7%), Marico Ltd. (666.90, 4.5%) and General Insurance Corporation of India (464.90, 4.1%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (467, -5.0%), PB Fintech Ltd. (1,919.55, -4.2%) and GAIL (India) Ltd. (183.02, -4.0%).

Volume Shockers

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

Top high volume gainers on BSE included SRF Ltd. (2,673.90, 13.7%), Balaji Amines Ltd. (1,909.05, 9.7%) and Navin Fluorine International Ltd. (3,824.55, 9.5%).

Top high volume losers on BSE were Chemplast Sanmar Ltd. (485.05, -1.4%) and Manappuram Finance Ltd. (179, -0.5%).

Alkyl Amines Chemicals Ltd. (1,870.20, 7.6%) was trading at 69.7 times of weekly average. Kama Holdings Ltd. (2,655, 7.7%) and AstraZeneca Pharma India Ltd. (7,009.15, 1.9%) were trading with volumes 14.2 and 10.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks took off, crossing 52 week highs, while 12 stocks tanked below their 52 week lows.

Stocks touching their year highs included - SRF Ltd. (2,673.90, 13.7%), Navin Fluorine International Ltd. (3,824.55, 9.5%) and PTC Industries Ltd. (17,305, 0.9%).

Stocks making new 52 weeks lows included - Mahindra Lifespace Developers Ltd. (446.50, -1.2%) and Rajesh Exports Ltd. (222.21, -1.0%).

15 stocks climbed above their 200 day SMA including SRF Ltd. (2,673.90, 13.7%) and Kama Holdings Ltd. (2,655, 7.7%). 28 stocks slipped below their 200 SMA including KIOCL Ltd. (400.10, -4.4%) and Ashok Leyland Ltd. (214.40, -3.7%).

 
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The Baseline
08 Jan 2025
Potential rockets? Defence stocks of 2025 | Screener: Defence stocks with high durability scores and growth forecasts
By Swapnil Karkare

Welcome to 2025 - which Defence Minister Rajnath Singh calls the "Year of Reforms" for India’s defence sector. Singh wants to modernise the sector, and increase local production.

The government has been arguing that our defence processes are frozen in time. But reforms face many blocks, including outdated command structures, internal resistance to change ("we have always done it this way"), and tight budgets.

Still there has been progress: India’s defence exports have jumped 30X in the last decade, with help from the private sector.

The growth is happening just in time. The world is becoming increasingly violent, with the Israel-Hamas conflict, the Ukraine-Russia war, and China-Taiwan all simmering. The US has elected a President that puzzlingly, wants to annex Canada and Greenland. India’s defence needs will grow in a more aggressive world, and will need heavy investments.

One can argue that people being the way they are, the market for bullets will never die. A defence investor may see this as an optimistic statement, and these stocks have become quite popular. The message from Motilal Oswal’s Defense Fund ad — "India is investing in defence, are you?" — captures the shift over the last ten years.

In this week's Analyticks:

  • Defence stocks boom, as private companies make their mark
  • Screener: Defence stocks with high durability scores and revenue growth forecasts for Q3

India moves towards the West, and away from Russia

The French Rafale deal controversy marked an early shift in India's defence strategy. India hugged Russia close for decades for its military needs - the country accounted for 76% of our arms imports between 2009 and 2013.

That has drastically reduced, and is below 50had % for the first time since the 1960s. While Russia is still the largest supplier with36% of our imports, Western countries - France (33%) and the US (13%) - are getting the larger share. This is part of a strategy to reduce our reliance from any single nation. 

India is the world’s largest arms importer, accounting for 9.8% of global arms imports. However, the country is now focusing more on manufacturing defence products here and reducing dependency on foreign suppliers.

India's defence makeover: government push boosts production and exports

Our defence transformation took off with 2014’s ‘Make in India’ initiative. The government identified over 36,000 defence items that could be produced locally, ranging from complex systems, sensors, weapons, and ammunition. Since then, public sector companies have placed orders worth over Rs. 7,500 crore with domestic defence vendors

India's diplomats have also turned into brand ambassadors for Indian-made defence products. India’s defence exports touched Rs. 21,000 crore in FY24, growing by 40% CAGR over the last decade. Defence production has soared 8% CAGR, from around Rs. 74,000 crores in FY17 to Rs. 1.3 trillion in FY24. The government hopes to hit Rs. 3 trillion in production and Rs. 50,000 crore in exports by 2030.

Enter the entrepreneurs: open doors for the private sector

The public sector has long dominated India's defence production, but the private sector has made recent gains, with a 20% share in production and 60% in exports. The increase in private sector participation has led to interest from a wide range of investors, including retail, mutual funds, and foreign institutions.

In 2022, the NSE launched the Nifty India Defence Index, which has seen an impressive 4.5-fold rise since its inception, further fueling investor interest in the sector. As a result of this growing interest, fund houses like HDFC, Motilal Oswal, Aditya Birla Sun Life, and Groww have launched defence-specific schemes, with three of them debuting in 2024. 

A Balasubramanian, CEO of Aditya Birla Sun Life, highlighted the large order books of top defence companies as attractive for investors. However, he noted that state-owned firms still dominate the sector, with the government holding majority stakes in many companies. Limited free float also makes these stocks vulnerable to price swings.

High valuations is another worry. The HDFC scheme, for example, had to stop accepting fresh investments due to worries about peak valuations. But over the last six months, the defence sector index corrected by 20%, driven by slower order inflows, supply chain disruptions, and other execution challenges.

Valuations are a high wall to climb for defence

The sector is promising, but stocks are at pretty high valuations. Surjitt Singh Arora of PGIM India AMC warns that “valuations have run ahead of fundamentals”. Shiv Chanani of Baroda BNP Paribas Mutual Fund agrees, pointing out that while order books provide revenue visibility, execution hurdles and rich pricing are worries.

Despite this, Binod Modi of Mirae Asset Sharekhan, is among the optimists, arguing that the sector’s growth potential justifies its current valuations. He also says that the sector will see premium valuations for the next 3-5 years. Brokerages like Antique and Elara Securities share this bullish outlook, and point to the recent correction as a good entry point for long-term investors. 

Diamonds in the mix?: Looking for good fundamentals amid high valuations

Among the key players in the industry, Solar Industries, Astra Microwave, Hindustan Aeronautics (HAL) and Bharat Electronics (BEL) have grown steadily in revenue, net profit, order books and return ratios. 

ICICI Securities expects Solar Industries to increase its share of defence revenue over the next five years, particularly with the global shortage of ammunition creating new opportunity. Astra Microwave’s healthy order book and robust pipeline have also kept its revenue and profitability healthy, especially with a focus on higher-margin domestic contracts.

ICICI Direct forecasts that HAL’s revenue growth will rise significantly from FY26, due to better execution. And Mirae Asset Sharekhan expects BEL to be the biggest beneficiary of recent proposals from the Defence Acquisition Council, including maritime surveillance, and other capability upgrades. 

Challenges like high valuations or FII sell-offs could dampen the sentiment in the near term. But the long-term potential of the sector has made analysts upbeat. 

Since FY23, the government has cleared Rs. 8.3 trillion worth of Acceptance of Necessities (AoNs) for defence projects — a 53% jump from the past decade. Government procurement begins after an AoN, and this signals a massive pipeline of upcoming projects for defence companies. According to Elara Securities analysts, there are substantial growth opportunities for the sector in the coming years, driven by the government’s focus on indigenisation and exports.


The government is also looking to increase the role of startups, SMEs, and corporates in various segments such as research and AI. Antique Research is particularly excited about the untapped potential in this space, noting that several defence companies with unique technologies and capabilities are still not publicly listed - including Tata Advanced Systems, Reliance Naval and Engineering, Mahindra Aerospace, Kalyani Strategic Systems, DRDO, Munitions India, and BrahMos Aerospace. A long established sector is seeing fresh excitement, with young players rising alongside promising, listed companies.

Screener: Defence stocks with the highest Durability scores and revenue growth estimates for Q3FY25

Defence stocks have high durability and revenue growth estimates in Q3

As we wait for the Q3 result season, we look at defence stocks with the highest Forecaster estimates for revenue YoY growth and a good Trendlyne durability score. Stocks with high durability scores are companies rated with good management, that have consistently demonstrated good growth and cash flow, stable revenues and profits, and low debt. This screener shows such defence stocks, which are expected to show high revenue growth in upcoming results

The most notable stocks in the screener are Bharat Dynamics, Data Patterns (India), ideaForge Technology, Bharat Dynamics, Hindustan Aeronautics, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers.

Bharat Dynamics shows up in the screener with a Trendlyne Durability score of 70 and Forecaster estimates revenue growth of 102.8% YoY in Q3FY25. This debt-free defence stock’s high score can be partly attributed to its net profit increasing YoY in five out of the past eight quarters. Analysts at Phillip Capital and Elara Capital expect the company’s revenue to grow due to a strong order backlog and its inclusion in defence modernisation programs.

Bharat Electronics also features in the screener with the highest Trendlyne Durability score of 85 among defence stocks. Its good durability can be attributed to consistent revenue growth YoY for the past nine consecutive quarters and net profit increasing YoY for the past eight quarters. The company also has low interest expenses and a strong return on equity (RoE) of 16.8% in FY24. Its trailing twelve-month (TTM) PE stands at 45.4, higher than its three-year and five-year average PE. Trendlyne’s Forecaster estimates this company’s revenue to grow by 28.6% YoY in Q3FY25. Analysts at Sharekhan expect its revenue to grow due to increasing defence spending in India, the structural trend of indigenisation, and export opportunities.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

 
Trendlyne Marketwatch
Trendlyne Marketwatch
08 Jan 2025
Market closes lower, TARIL's board approves a 1:1 bonus issue as its Q3 net profit surges 3.5X
By Trendlyne Analysis

Nifty 50 closed at 23,675.20 (-32.7, -0.1%), BSE Sensex closed at 78,148.49 (-50.6, -0.1%) while the broader Nifty 500 closed at 22,216.75 (-124.9, -0.6%). Market breadth is sharply down. Of the 2,351 stocks traded today, 715 were on the uptrend, and 1,603 went down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 23,688.9 points. The Indian volatility index, Nifty VIX, declined 1.5% and closed at 14.5 points. Transformers & Rectifiers’ Q3FY25 revenue grew by 51.4% YoY to Rs 559.4 crore, while net profit surges 3.5X YoY to Rs 55.5 crore. The company's board of directors approved a 1:1 bonus share issue and a Rs 750 crore qualified institutional placement (QIP).

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Oil & Gas and BSE Oil & Gas were among the top index gainers today. According to Trendlyne’s Sector dashboard, Oil & Gas emerged as the best-performing sector of the day, with a rise of 1.9%.

Asian indices closed lower, while European indices are trading in the green. US index futures traded in the green, indicating a positive start to the trading session. Brent crude oil futures are trading in the red. Barclays notes that market concentration remains a key risk in 2025. It pointed out that by October, the percentage of S&P 500 companies outperforming the index had reached a year-high, but dropped sharply in the last two months of 2024, due to significant decline in the Materials and Healthcare sectors.

  • Money flow index (MFI) indicates that stocks like Aeges Logistics, Saregama India, PTC Industries, and Lupin are in the overbought zone.

  • Transformers & Rectifiers rises sharply as its Q3FY25 revenue grows by 51.4% YoY to Rs 559.4 crore, while net profit surges 3.5X YoY to Rs 55.5 crore. The company's board of directors approves a 1:1 bonus share issue and a Rs 750 crore qualified institutional placement (QIP).

  • Vijay Kedia buys a 0.9% stake in Elecon Engineering in Q3FY25. He now holds a 2.2% stake in the company

  • Suven Life Sciences rises sharply as it begins the Phase 1 trial for SUVN-I6107, its fifth drug targeting central nervous system disorders. The US-based study evaluates the drug's safety, tolerability, and pharmacokinetics in healthy participants. The two-part trial includes single- and multiple-dose studies and exploratory tests on brain activity and cerebrospinal fluid.

  • The State Bank of India (SBI) revises its FY25 GDP growth forecast for India to 6.3%, slightly below the National Statistical Office's (NSO) estimate of 6.4%. SBI highlights a "downward bias" in its outlook, citing factors such as slower lending, weak manufacturing growth, and a large base effect impacting economic expansion.

  • United Breweries falls sharply as it reportedly suspends beer supply to Telangana after the government fails to revise the basic price of its beers since FY20.

  • Voltamp Transformers receives a Rs 41 crore purchase order from Adani Power and Mahan Energen to supply various ratings of distribution transformers, including design, manufacture, and testing.

  • Route Mobile partners with PT MRT Jakarta to introduce a WhatsApp-based metro ticketing solution through vending machines. The solution simplifies the process by providing ticket and travel information to commuters via WhatsApp.

  • One97 Communications (Paytm) falls over 6% after UBS highlights NPCI data showing no UPI market share gain in December, despite receiving clearance to onboard customers in October. Paytm's UPI share nearly halved from 10% at the start of 2024 to 5.5% by year-end, with no change in its share from October to November.

  • EMS is rising as it bags an order worth Rs 416.5 crore from Indore Municipal Corp to set up three sewage treatment plants in the city. The company will design and build three sewage treatment plants with a capacity of 120, 40, and 35 megalitres per day (MLD) and will operate and maintain the plants for the next 15 years.

  • Signature Global's Q3FY25 sales grow by 120% YoY to Rs 277 crore, with a 40% YoY increase in collections to Rs 108 crore. The company's pre-sales surge 178% YoY to Rs 867 crore for 9MFY25.

  • Mangalore Refinery And Petrochemicals is rising as it reportedly signs a memorandum of understanding (MoU) with Indian Strategic Petroleum Reserves (ISPRL). The agreement allows the company to use ISPRL's underground caverns for crude oil storage, strengthening its storage capacity and ensuring supply security.

  • Jayakumar Krishnaswamy, MD of Nuvoco Vistas Corp, highlights that the Vadraj Cement acquisition deal was executed at around Rs 2,800-3,000 crore, with an enterprise value of around 60-65$ per tonne. He adds that the company plans phased investments in Vadraj Cement over the next 15 months.

  • Geojit PNB Paribas initiates coverage on Karur Vysya Bank with a 'Sell' call and a target price of 201 per share. This indicates a potential downside of 5.7%. The brokerage believes that the bank's loan growth rate and returns have peaked with high valuations. It expects the lender's net interest income (NII) to grow at a CAGR of 8.6% over FY25-27.

  • Ola Electric Mobility falls as SEBI issues an administrative warning for disclosure violations. The regulator highlighted that the company announced its expansion plans on X (formerly Twitter) before formally disclosing the information to stock exchanges.

  • Ashiana Housing rises sharply as its value of area sold grows 161% YoY to Rs 454.3 crore in Q3FY25, driven by a 101% YoY increase in the area book. The company books 451 units, a 79% YoY rise during the quarter.

  • Nuvama Institutional Equities warns that the earnings downgrade trend in India, which began in Q1FY25, could persist in Q3, potentially disappointing investors. The brokerage expects Nifty EPS to grow 2% (down from 4% in H1FY25), raising risks of downgrades to H2FY25 growth estimates. Elevated valuations and tightening liquidity also call for caution.

  • Tata Elxsi partners with CSIR-National Aerospace Laboratories (CSIR-NAL) to drive air mobility innovations, focusing on unmanned aerial vehicles (UAVs), urban air mobility (UAM), and electric vertical take-off and landing (eVTOL) aircraft.

  • Tata Steel's India steel production grows 6.2% YoY to 5.7 million tonnes (MT) in Q3FY25. The company's delivery volumes improve by 8.4% YoY to 5.3 MT.

  • Rail Vikas Nigam signs a memorandum of understanding (MoU) with a Dubai-based infrastructure company, GBH International Contracting, to explore business opportunities within the civil infrastructure sector across the Gulf Cooperation Council (GCC) countries.

  • Jindal Worldwide touches a new 52-week high of Rs 470.9 as its board recommends a bonus issue of shares in the ratio of 4:1. The board also approves an increase in the authorized share capital and a subsequent alteration to the capital clause of the company’s Memorandum of Association.

  • Exicom Tele-Services surges to its 5% upper circuit as it signs a memorandum of understanding (MoU) with Mufin Green Infra to develop the EV charging infrastructure in India. As per the MoU, Exicom will manufacture and supply EV charging hardware for stations.

  • Tata Technologies is rising as it partners with Telechips to develop solutions for next-generation software-defined vehicles (SDVs). The partnership will focus on creating advanced systems for driver assistance, car cockpits, and gateway controllers, helping manufacturers improve integration and launch products faster.

  • Sobha is falling as its Q3FY25 sales value declines by 28.8% YoY to Rs 1,388.6 crore. However, the average price realization improves by 16.5% YoY to Rs 13,663 per square foot.

  • KEC International secures new orders worth Rs 1,136 crore across various businesses. The transmission & distribution (T&D) segment wins a 765 kV transmission line order from Power Grid Corp of India. The transportation segment receives an order for the Train Collision Avoidance System (TCAS), and the oil & gas pipelines segment secures a pipeline design and construction order.

  • Nifty 50 was trading at 23,707.90 (91.9, 0.4%) , BSE Sensex was trading at 78,319.45 (120.3, 0.2%) while the broader Nifty 500 was trading at 22,341.65 (116.3, 0.5%).

Riding High:

Largecap and midcap gainers today include Phoenix Mills Ltd. (1,649.75, 4.9%), Oil India Ltd. (490.65, 3.4%) and Oil And Natural Gas Corporation Ltd. (271.50, 3.0%).

Downers:

Largecap and midcap losers today include Dixon Technologies (India) Ltd. (16,899.45, -8.4%), Indraprastha Gas Ltd. (408.40, -5.2%) and Lupin Ltd. (2,256.60, -4.3%).

Volume Shockers

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

Top high volume gainers on BSE included CreditAccess Grameen Ltd. (999, 9.7%), MMTC Ltd. (75.86, 6.9%) and Anant Raj Ltd. (934, 5.6%).

Top high volume losers on BSE were Dixon Technologies (India) Ltd. (16,899.45, -8.4%), KEC International Ltd. (1,050, -6.8%) and Sobha Ltd. (1,426.50, -5.7%).

Mangalore Refinery And Petrochemicals Ltd. (147.10, 1.8%) was trading at 10.7 times of weekly average. Capri Global Capital Ltd. (188.50, 1.5%) and United Breweries Ltd. (1,990.50, -4.1%) were trading with volumes 8.6 and 7.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks took off, crossing 52 week highs, while 14 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Aegis Logistics Ltd. (947.95, -1.7%), Max Healthcare Institute Ltd. (1,199.15, 0.1%) and Krishna Institute of Medical Sciences Ltd. (653, 0.6%).

Stocks making new 52 weeks lows included - Astral Ltd. (1,551.65, -1.7%) and Container Corporation of India Ltd. (755, 0.1%).

7 stocks climbed above their 200 day SMA including Phoenix Mills Ltd. (1,649.75, 4.9%) and Signatureglobal (India) Ltd. (1,364.30, 0.9%). 24 stocks slipped below their 200 SMA including Intellect Design Arena Ltd. (925.40, -5.5%) and United Breweries Ltd. (1,990.50, -4.1%).