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The Baseline
11 Oct 2024
Five Interesting Stocks Today - October 11, 2024

1. Transformers & Rectifiers (India):

Thistransformer manufacturer hassurged 15.6% over the past week, hitting its upper circuit of 5% for four consecutive days after announcing its Q2 FY25 results on Tuesday. The firm reported revenuegrowth of 83% YoY at Rs 473 crore, with a net profit of Rs 45 crore, which is 28X higher compared to the same period last year.

The surge in net profit and revenue is from the high demand for its transformers, thanks to India’s aim to become energy-independent by 2047 and achieve net-zero emissions by 2070. As of September 30, the company’s order book stood at Rs 3,500 crore, with nearly 50% of those orders secured in the past two quarters. In their investor presentation, the company also revealed that they are in negotiations for inquiries worth Rs 18,500 crore.

Currently, 10% of the order book consists of export orders, and the company plans to increase this to 25% by 2026. To meet this goal, the firm is exploring opportunities in international markets such as Europe, Africa and the Americas. Speaking on the margins and pricing of these transformers, Chairman, Jitendra Mamtora said, “Price of transformers is not a concern for buyers, early delivery is what is of main importance, even if it comes at a higher cost.” CFO Chanchal Rajora added that the company faces no competition within India in its segment, and its international competitors have their hands full for the next 2-3 years.

Mamtora also projects that due to the transition of the Indian Railways to high-speed trains, the demand for new, more robust transformers will be huge which will in turn open a new revenue stream for the company. He highlights that the company has already received orders as they got their prototype transformer tested and approved and expects production to start in the coming quarters.

In light of this strong demand, the company aims to achieve an annual revenue of $1 billion (Rs 8,400 crore) by the end of FY26, effectively doubling its revenue each year. To support this growth, they plan to start production at a new facility with a capacity of 15,000 MVA in January 2025, adding to their existing capacity of 40,000 MVA (megavolt-amperes). They also aim to achieve 100% backward integration by Q1 FY26 to reduce production bottlenecks and improve profit margins.

2. Bharat Electronics:

This defence stock rose by 4.8% on October 8 after it secured multiple orders worth Rs 500 crore. The orders include the supply of electromagnetic interference (EMI) shelters, air mobility command (AMC) systems for integrated air command and control, gun system spares, and communication systems.

The company's YTD FY25 order inflow stands at Rs 7,689 crore, contributing to a total order book of ~Rs 79,000 crore. Chairman and MD, Manoj Jain, said, "We expect an order inflow of Rs 25,000 crore for FY25 as well as FY26, excluding the quick reaction surface-to-air missile (QRSAM). If QRSAM orders come in, it will definitely contribute an additional Rs 20,000 to Rs 25,000 crore."

Bharat Electronics (BEL) generates about 84% of its revenue from the defence sector, supplying products to the Indian government, while the non-defence segment contributes around 14% and exports account for 2%. On September 27, BEL and Israel Aerospace Industries (IAI) announced the formation of a joint venture called BEL IAI AeroSystems. This joint venture will be the main point of contact for providing long-term support for the medium-range surface-to-air Missile (MRSAM) systems used by India's defence forces. The company has also signed a teaming agreement with Reliasat Inc. of Canada to explore opportunities in space products. 

Over the past quarter, BEL has declined by 14.4%, but it has outperformed its industry by 2%.

BEL currently holds a 37% market share in India's defence electronics. Analysts expect the share of defence electronics in total defence production will increase from 25% to ~35% in the coming years. The company is well-positioned to benefit from the government's increasing investment in domestic defence systems. Trendlyne’s Forecaster estimates profit to increase 10.3% YoY in Q2FY25 while revenue growth of 16.6% YoY.

Geojit BNP Paribas maintains a 'Hold' rating on BEL, citing a positive outlook driven by the government's focus on domestic manufacturing, and a healthy order backlog that provides strong visibility for the next 3–4 years. The brokerage expects revenue and net profit CAGR of 16.6% and 16.4% respectively over FY25-26.

3. Godrej Properties:

This realty company rose by 3.4% on October 8, following the announcement of its business update. Godrej Properties’ booking value increased by 3% YoY to Rs 5,200 crore in Q2FY25. This marks the company’s highest-ever Q2 booking value. Its cash collections were up 68% YoY to 4,000 crore during the quarter.

During H1FY25, the company’s booking value surged by 89% YoY to Rs 13,800 crore, driven by strong demand for new projects, including Godrej Vrikshya in Delhi NCR and Godrej Woodside Estate in the Mumbai Metropolitan Region. With this, Godrej Properties has already achieved 51% of its annual booking value guidance for FY25 of Rs 27,000 crore. Gaurav Pandey, the MD & CEO said, “Sales growth was on the back of both an improving project mix as well as strong volume growth’. 

The real estate developer has added 8 new projects YTD in FY25 with a total estimated saleable area of approximately 11 million square feet (msf), and a booking value potential of around Rs 12,650 crore. The management highlighted that the new projects during the quarter have built a solid pipeline of launches for the current year as well as the coming years. According to Trendlyne’s Forecaster, the company’s revenue is expected to grow by 49.5% YoY in Q2FY25. Godrej Properties is set to declare its Q2 results on October 23.

Nuvama Institutional Equities remains bullish on Godrej Properties and upgraded its rating to 'Buy' with a target price of Rs 3,415 per share. The brokerage believes that with the housing cycle turning, sales momentum will remain strong. It highlights that the increasing market share in key city markets and the shift in customer preference toward organised developers bode well for Godrej. 

4. Amber Enterprises:

This consumer electronics company rose by over 12% in the past month. The company signed a Business Transfer Agreement (BTA) with its wholly owned subsidiary, AmberPR Technoplast India for the purchase of its business via a slump sale at book value. The agreement is effective from the start of its month, and management expects this restructuring to provide greater flexibility for B2B expansion.

For Q1FY25, the company’s net profit had risen by 58.6% YoY to Rs 72.4 crore, while its revenue rose by 40.7% YoY, driven by a 45.6% YoY rise in the consumer durables segment. The firm beat Trendlyne’s Forecaster estimates for revenue by 8.2%, but missed the net profit estimate by 4.2% as QoQ its net profit declined by 8.9%. The stock appears in a screener for stocks giving consistent high returns over the past five years in Nifty500.

India’s room air-conditioners (RAC) market is projected to grow at a robust CAGR of 12% and reach $ 5.6 billion (Rs 50,000 crore) by FY28-29. The company has maintained its market share of 25-26% in the RAC market and expects a similar trend in future. Analysts note that although the company can cater to Indoor Unit (IDU) and Outdoor Unit (ODU), it has got better margins in RAC components than in finished products in the past. There is potential for further indigenization in the RAC industry, as import dependence remains high for certain components.

The electronics market in India is expected to reach $ 300 billion (Rs 25.2 lakh crore) by FY30. Printed Circuit Boards (PCBs) constitute nearly 3-4% of the finished electronic component cost. The company currently holds 20% of total market share in PCB manufacturing. For PCB assembly, the company is looking to move up the value chain to manufacture Flex and Semiconductor substrate PCBs through its MoU with Korea Circuit. Until FY22, the company's electronics segment accounted for 99% of consumer durables and just 1% of automotive components. By FY24, it diversified into margin-accretive businesses like smartwatches and IT & Telecom components, which now make up 19% and 4% of its electronics segment, respectively.

Analysts see the company as well-positioned to meet rising demand from indigenization of fully built-up units and a components ecosystem. It is expected to benefit from PLI schemes for air conditioners and is expanding capacity with two greenfield projects in Supa, Pune, and Chennai. Management is optimistic about export opportunities for fully built-up units and components over the next 3-4 years, despite short-term challenges like slow volume growth in FY24 and margin pressures.

Motilal Oswal maintains a ‘Buy’ rating on Amber Enterprises with a target price of Rs 5,500. The brokerage projects the company’s revenue to grow at a 21% CAGR from FY24 to FY27, driven by 17% in consumer durables, 36% in electronics, and 26% in mobility. It forecasts operating cash flow (OCF) of Rs 220 crore, Rs 640 crore, and Rs 790 crore for FY25, FY26, and FY27, respectively.

5. Tata Motors:

Thiscars & utility vehicles manufacturer fell 4.1% on October 3 as its totalsales in the domestic & international market for Q2FY25 declined 11.5% YoY to 2,15,034 vehicles, compared to 2,43,024 units in Q2FY24. 

Total domestic sales fell 15% YoY to 69,694 units in September while it declined 11% YoY to 2.1 lakh units in Q2FY25. Commercial vehicles sales dropped 19% YoY in Q2FY25 and 23% YoY in September, due to a slowdown in infrastructure projects, mining activity and drop in fleet utilization caused by heavy rains.

Passenger vehicle sales, including electric vehicles, decreased 6% YoY in Q2FY25 and 9% YoY in September as it saw more than 5% YoY decline in retails (vahan registrations) due to slow consumer demand and seasonal factors. Additionally, Tata Motors readjusted their wholesales to lower-than-expected retails to keep channel inventory under control, contributing to the overall decline in sales.

Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility,said, "Registrations picked up pace towards the end of the September month, which augurs well for the festive period ahead." He also highlighted the strong response to the newly launched SUV coupe, Curvv and higher-range Nexon.ev. 

Global wholesales for Jaguar Land Rover (JLR) was  lower by 10% compared to Q2FY24, mainly due to supply disruptions from high-grade aluminum suppliers. A temporary hold was placed on 6500 vehicles at the end of September, primarily in the UK and Europe, for additional quality control checks. The company has alsotargeted an EBIT margin of at least 8.5% for FY25 and aims to go net debt free? by FY25 for JLR.

Motilal Oswalreiterates its 'Neutral' rating on Tata Motors, with a target price of Rs 990. The brokerage expects JLR margins to remain under pressure over FY 25-26 due to rising costs and EV investments. They project a net sales CAGR of 7.5% and an EBITDA CAGR of 8% over FY25-26, with flat margins anticipated for Tata Motors' Indian business during this period.

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
11 Oct 2024
Market closes flat, Just Dial's Q2FY25 net profit grows by 9.1% QoQ to Rs 154.1 crore
By Trendlyne Analysis

Nifty 50 closed at 24,964.25 (-34.2, -0.1%) , BSE Sensex closed at 81,381.36 (-230.1, -0.3%) while the broader Nifty 500 closed at 23,611.25 (13.1, 0.1%). Market breadth is even. Of the 2,305 stocks traded today, 1,173 were in the positive territory and 1,104 were negative.

Indian indices closed flat, with the benchmark Nifty 50 index closing at 24,966.9 points. The Indian volatility index, Nifty VIX, fell 2.1% and closed at around 13.2 points. TCS closed 1.9% lower as its net profit fell 1.1% QoQ to Rs 11,909 crore in Q2FY25.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green. BSE Metal and Nifty Pharma closed higher. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a rise of 2.3%.

European indices traded in the red. Major Asian indices closed mixed, with China’s FTSE China 50 and Hong Kong’s Hang Seng indices closing 3.4% and 3% higher, respectively. US index futures traded lower, indicating a cautious start to the trading session as markets await the Q3 results of large banks like JP Morgan Chase and Wells Fargo.

  • Money flow index (MFI) indicates that stocks like Hitachi Energy India, Lloyds Metals & Energy, Whirlpool of India, and Jaiprakash Power Ventures are in the overbought zone.

  • Foreign institutional investors sell equity worth Rs 26,831.8 crore in the market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 21,612.5 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, investing Rs 7,717.7 crore during the same period.

  • Just Dial rises sharply to its 5-year high of Rs 1,395 per share as its Q2FY25 net profit grows by 9.1% QoQ to Rs 154.1 crore. Revenue increases by 8.4% QoQ to Rs 398.4 crore during the quarter. It features in a screener of stocks with increasing net profit for the past three quarters.

  • Trent is rising after Tata Trusts reportedly appoints Noel Tata as the Chairman, succeeding his late brother Ratan Tata.

  • Shreya Sodhani, Regional Economist at Barclays, notes that current conditions allow the MPC more flexibility. She highlights the "satisfactory" rate transmission to the credit market, indicating the RBI may be preparing the market for a potential rate cut in its next meeting.

  • Krsnaa Diagnostics touches a new 52-week high of Rs 902.4 as it secures two agreements with Ranchi Institute of Neuro-Psychiatry & Allied Services (RINPAS) and Sadar Hospital. The contracts involve establishing radiology centers and pathology services under a public-private partnership basis.

  • Endurance Technologies is rising as its board of directors approves a capex of Rs 300 crore to set up a two-wheeler alloy wheels manufacturing facility with a capacity of 2.3 lakh sets per month on a 30-acre land parcel in Aurangabad Industrial City.

  • Sansera Engineering rises as it sets a floor price of Rs 1,635.5 per equity share for its Rs 1,200 crore qualified institutional placement (QIP).

  • Goldman Sachs downgrades Cummins India to ‘Sell’ with a target price of Rs 2,900. The brokerage notes the growing adoption of battery energy storage systems (BESS) and shifts towards sustainable energy sources. This is expected to lower demand for diesel generators, posing a threat to Cummins’ core business.

  • Geojit BNP Paribas initiates coverage on Muthoot Finance with an 'Accumulate' call and a target price of Rs 2,140 per share. This indicates a potential upside of 9.7%. The brokerage believes the company is well positioned to receive a premium valuation, given the resilience of gold as a secure investment. It expects the firm's net interest income (NII) to grow at a CAGR of 17.7% over FY25-26.

  • JSW Steel partners with BHP and Carbon Clean to explore deploying CycloneCC technology for carbon capture at its Vijayanagar site in Karnataka. The initiative aims to capture up to 1 lakh tonnes of carbon dioxide (CO2) annually by 2026.

  • Ahluwalia Contracts (India) secures an order worth Rs 1,094.7 crore from DLF City Centre. The contract involves the construction of civil and composite steel structural works, including rough finishing for Blocks 5, 6, and 7 at Downtown, Phase 2, Sector 25A, Gurugram.

  • UBS maintains its ‘Neutral’ stance on Kotak Mahindra Bank with a higher target price of Rs 1,950. The brokerage notes cyclical challenges related to NIMs (net interest margins) and CASA deposits and rising credit costs. UBS highlights that stability in core business operations will be necessary for any potential re-rating in the future.

  • Anand Rathi Wealth is rising as its net profit grows by 32.4% YoY to Rs 76.1 crore in Q2FY25. Revenue increases by 32% YoY to Rs 249.6 crore, helped by improved distribution and inflows in the mutual funds segment. It features in a screener of stocks with the highest recovery from their 52-week lows.

  • Ashoka Buildcon is rising as it secures an order worth Rs 918 crore from the Brihanmumbai Municipal Corporation (BMC) to construct the arm-1 arm-2 flyovers at the T Junction on the Sion-Panvel Highway in Maharashtra.

  • Indian Renewable Energy Development Agency's net profit grows 36% YoY to Rs 387.7 crore in Q2FY25. Revenue increases by 38.5% YoY to Rs 1,630.4 crore during the quarter. It shows up in a screener of stocks with increasing revenue for the past four quarters.

  • Foreign portfolio investors (FPIs) reduce their exposure to Adani Green Energy and Adani Power but increase their stake in Adani Enterprises. Mutual funds raised their stake in Adani's flagship by 43 bps to 2.2% from 1.8% in the June quarter. FPIs have increased their stake in Adani Enterprises to 9.2% as of September 30.

  • Bondada Engineering is rising as it secures bulk orders worth Rs 1,132.3 crore from Maharashtra State Power Generation Company (MAHAGENCO). These include an engineering, procurement, and construction (EPC) contract for a solar photovoltaic (PV) power plant valued at Rs 763.2 crore and another for solar PV agriculture feeder solarization worth Rs 369.1 crore.

  • Tata Elxsi's net profit grows by 24.6% QoQ to Rs 229.4 crore in Q2FY25 due to lower inventory expenses. Revenue increases by 6.3% QoQ to Rs 1,019.4 crore, driven by improvements in the software development & services and system integration & support services segments. It shows up in a screener of stocks with rising cash flow from operations in the past two years.

  • Vishnu Prakash R Punglia is rising as it receives an order worth Rs 160.8 crore from North Western Railway, Jaipur. The project includes earthwork, construction of station buildings, electrical and signaling structures, and development of platforms and amenities between Jaipur and Chaksu stations for the Jaipur-Sawai Madhopur Doubling Project.

  • Citi maintains its 'Buy' rating on Indus Towers with a target price of Rs 500. The brokerage notes that recovery of past dues and clarity on new tenancies will be key factors in its Q2 results. In addition, the completion of Vodafone Idea's delayed bank funding and the government's waiver of the bank guarantee requirement for telecom companies will significantly impact the company.

  • Tata Consultancy Services' net profit falls by 1.1% QoQ to Rs 11,909 crore in Q2FY25 due to higher employee benefits and equipment & software licence expenses. However, revenue grows by 2.2% QoQ to Rs 64,988 crore, helped by improvements in the banking, financial services & insurance (BFSI), manufacturing, consumer, and life sciences & healthcare segments. It features in a screener of stocks with increasing revenue for the past eight years.

  • Bandhan Bank is rising as the RBI approves the appointment of Partha Sengupta as the Managing Director and Chief Executive Officer for three years, effective November 10. Additionally, the bank is set to receive a payout of Rs 314.7 crore from the National Credit Guarantee Trustee Co following a forensic audit.

  • Oberoi Realty's board of directors approves a fundraising worth Rs 6,000 crore by issuing equity and other securities in multiple tranches through private placements.

  • Mazagon Dock Shipbuilders receives a purchase order worth Rs 121.7 crore from Maharashtra State Power Generation Company (MAHAGENCO). The contract involves the supply, installation, and commissioning of an AI-based Comprehensive Infrasecure Project at Gas Turbine Power Station-Uran and Koyna Generating Station Complex-Pophali.

  • Nifty 50 was trading at 24,954.10 (-44.4, -0.2%) , BSE Sensex was trading at 81,573.63 (-37.8, -0.1%) while the broader Nifty 500 was trading at 23,560.15 (-38, -0.2%)

  • Market breadth is in the red. Of the 1,887 stocks traded today, 779 were on the uptrend, and 1,063 went down.

Riding High:

Largecap and midcap gainers today include Bandhan Bank Ltd. (210.26, 12.0%), Persistent Systems Ltd. (5,469.55, 4.4%) and Ipca Laboratories Ltd. (1,655.05, 4.1%).

Downers:

Largecap and midcap losers today include Cummins India Ltd. (3,614.15, -4.5%), Star Health and Allied Insurance Company Ltd. (547.60, -3.3%) and JSW Energy Ltd. (706.70, -3.0%).

Movers and Shakers

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

Top high volume gainers on BSE included Usha Martin Ltd. (422.10, 15.0%), Bandhan Bank Ltd. (210.26, 12.0%) and Nippon Life India Asset Management Ltd. (700.25, 9.2%).

Top high volume losers on BSE were Cummins India Ltd. (3,614.15, -4.5%), CreditAccess Grameen Ltd. (1,075.25, -3.9%) and Tata Consultancy Services Ltd. (4,149.20, -1.9%).

Rajesh Exports Ltd. (291.45, 5.3%) was trading at 10.7 times of weekly average. Just Dial Ltd. (1,308.85, 3.0%) and Anand Rathi Wealth Ltd. (4,041.85, -0.3%) were trading with volumes 9.6 and 6.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

14 stocks made 52 week highs, while 1 stock hit their 52 week lows.

Stocks touching their year highs included - Divi's Laboratories Ltd. (6,142.25, 3.4%), Glenmark Pharmaceuticals Ltd. (1,790.65, 1.7%) and HCL Technologies Ltd. (1,839.65, 1.7%).

Stock making new 52 weeks lows included - CreditAccess Grameen Ltd. (1,075.25, -3.9%).

16 stocks climbed above their 200 day SMA including Usha Martin Ltd. (422.10, 15.0%) and Bandhan Bank Ltd. (210.26, 12.0%). 5 stocks slipped below their 200 SMA including Star Health and Allied Insurance Company Ltd. (547.60, -3.3%) and L&T Finance Ltd. (163.76, -2.2%).

 
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The Baseline
10 Oct 2024
Rubber prices puncture margins for tyre companies | Screener: auto parts stocks with rising profit margins
By Swapnil Karkare

Once upon a time (meaning, when I was a teenager) talking about the weather used to be considered a boring conversation. Not anymore. We live in an age where wildfires are destroying entire towns in Greece, California and Australia. A 250 km/hour storm is hitting Florida's biggest cities as I type this.

Extreme weather has hit sugar crops in Brazil and rubber crops in Thailand. Thailand, the world's largest rubber producer, saw its production fall by 1-2% due to incessant rains and a fungal disease. This year, the situation got worse with Typhoon Yagi, which killed over 800 people across South East Asia, and caused flooding in Thailand just as the peak rubber tapping season started in September.

The typhoon also wiped out farms across China, the Philippines, Laos, Vietnam, and Myanmar - a crucial region accounting for 80-90% of the world’s output.

Even as supply is under threat, demand is up. Strong auto purchases globally and a stable US economy have driven rubber prices higher, by over 70% in international markets and 50% in India, in one year. 

The tyre industry consumes 70% of all rubber, and has been reeling under these price increases. The industry is struggling with margins and profitability.

In this week's Analyticks:

  • A nail in the tyre: Soaring rubber prices hit margins for tyre companies
  • Screener: Auto parts players with rising operating profit margins

Rubber prices jump, as supply tightens

Tyre companies can't seem to catch a break right now. Even as rubber prices surged, crude oil prices jumped past $80 per barrel as well as Israel went on a war footing in the Middle East. Crude oil is the key raw material for synthetic rubber, an alternative to natural rubber.

The stimulus package in China, the world’s largest rubber consumer, is expected to drive demand up, pushing prices of rubber even higher. In India, domestic prices are at a 13 year high due to weak tapping activity in Kerala due to floods, and labour shortages. 

Kotak Institutional Equities in a recent report, noted, “Overall, the stockpile of global natural rubber is expected to decline to 2.1 million tons in CY2024E from 2.8 million tons in CY2023, which may increase rubber prices unless the demand trend weakens.” 

For tyre companies, margins are at risk

The margins of tyre manufacturers negatively correlate with the prices of natural rubber. Crisil estimates tyre raw material costs might increase by 4-6% in FY25, keeping margins subdued beyond FY25.

Demand is also not in full swing. The Indian auto sector is a mixed bag, despite the many new launches, with passenger car demand slowing down while two-wheelers register double-digit growth. 

But the industry earns around 70% of its revenue from the replacement segment, which seems promising. Here’s what companies said recently:

“We expect FY25 volume growth in replacement segment to remain healthy.” – CEAT management

“Passenger car replacement should be doing well because overall replacement cycle is getting shortened.” - JK Tyre management

“So, the replacement demand overall should be at high single digits, so we will recover some of the lost ground.” – Apollo Tyre management

Tyre producers have increased prices by 2-3.5% this fiscal, offsetting some of the impact of raw material prices. Kotak highlights the need for 5% more in price hikes to reach Q4FY24 margins. That's not easy given the slowing demand in some segments and MRF’s aggressive pricing strategy in TBR (Truck, Bus and Radial), TBB (Truck Bus Bias) and two-wheeler segments. These account for 70% of industry revenue. So margins will likely stay under pressure.

A silver lining for tyre companies

A bit of good news for tyre company CEOs is that the link between company profitability and rubber prices is not as strong as it used to be. Price-indexed gross margins for tyre companies are now 4-5% higher compared to two years ago.

MRF's falling market share, better managed capex plans across competitors, premiumisation, rising import duties for boosting domestic production and better export opportunities have helped tyre margins hold up despite rising raw material costs.

Almost all major tyre companies right now have strong fundamentals and mid-valuation levels. Still, due to falling margins, brokers estimate a decline in FY25 profits, despite strong revenue growth.

The trees grow slowly, limiting supply

Rubber trees require 5-7 years to mature enough for tapping, which limits the supply in the short term. Even with some delinking of rubber prices from tyre margins, the high prices will take a toll.

While a big drop in global tyre demand could ease raw material costs, this is hardly the solution tyre companies want. Margins will remain under pressure for now, likely dragging on the bottom line for several quarters. 

Screener: Tyre stocks lag the auto parts industry in operating profit margin growth

Auto tyres stocks lag the auto parts industry in operating profit margin growth

This week, we look at the impact of rising rubber prices on the operating profit margins of auto tyres & rubber products stocks and compare them to that of auto parts & equipment stocks. This screener shows stocks from the auto parts and tyres industries with the highest QoQ growth in operating profit margins in the latest quarter.

Of the total number of 36 stocks in the screener, only three stocks belong to the auto tyres & rubber products industry. The most notable stocks in the screener are Greaves Cotton, Banco Products (India), Sharda Motor Industries, Subros, SJS Enterprises, Pix Transmissions, JK Tyre & Industries, and Balkrishna Industries. 

Greaves Cotton saw the highest growth of 6.6% QoQ in its operating profit margins in Q1FY25. This auto parts & equipment company’s operating profit margin improved on the back of lower raw material costs, employee benefits, and depreciation expenses. However, the company’s revenue declined by 4.3% QoQ to Rs 656.7 crore during the quarter due to a reduction in the engines and cables & levers segments. 

Auto tyres & rubber products stocks, however, witnessed a slower growth in operating margins due to a sharp rise of 11.9% in rubber prices from April 1 to June 7. JK Tyre & Industries’ operating profit margin grew marginally by 1.4% QoQ in Q1FY25, helped by the company’s effort to offset the rise in rubber costs by reducing the cost of sales and product premiumisation.

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Oct 2024
Market closes flat, Ashoka Buildcon's majority JV secures a Rs 1,668 crore order from CIDCO
By Trendlyne Analysis

Nifty 50 closed at 24,998.45 (16.5, 0.1%) , BSE Sensex closed at 81,611.41 (144.3, 0.2%) while the broader Nifty 500 closed at 23,598.15 (-1.5, 0.0%). Market breadth is in the green. Of the 2,301 stocks traded today, 1,263 were in the positive territory and 1,010 were negative.

Indian indices closed in the green, with the benchmark Nifty 50 index closing at 24,998.5 points.  The Indian volatility index, Nifty VIX, fell 4.5% and closed at around 13.5 points. Ashoka Buildcon closed 2.2% higher after its majority JV bagged a Rs 1,667.8 crore order from the City & Industrial Development Corporation to construct roads and bridges.

Nifty Midcap 100 closed lower, while Nifty Smallcap 100 closed in the green. Nifty Metal and Nifty Financial Services closed higher. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a rise of 2.9%.

European indices traded mixed. Major Asian indices closed higher, except for Indonesia’s IDX Composite, which closed in the red. US index futures traded mixed, indicating a cautious start to the trading session as markets await the consumer price index (CPI) inflation print. CPI inflation is seen cooling to 2.3% YoY in September from 2.5% in August.

  • Chambal Fertilisers & Chemicals sees a long buildup in its September 26 futures series, with open interest increasing by 15.9% and a put-call ratio of 0.3.

  • CreditAccess Grameen reports a 12% YoY growth in assets under management to Rs 25,133 crore in Q2FY25. However, its disbursements decline 19% YoY to Rs 4,004 crore during the quarter. The company appears in a screener of stocks with improving book value per share over the past two years.

  • Indian Railway Finance Corp's board of directors appoints Manoj Kumar Dubey as its Chairman, Managing Director (MD), and Chief Executive Officer (CEO) for the next five years.

  • Rain Industries rises sharply as its wholly-owned subsidiary, Rain Carbon, enters into a joint development agreement with Northern Graphite to develop and commercialize natural graphite battery anode material (BAM) products for lithium-ion batteries used in electric vehicles.

  • Defense stocks like Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics rise following the approval of defense deals worth Rs 80,000 crore by the Cabinet Committee on Security (CCS) led by Prime Minister Narendra Modi, for 31 predator drones from the US and two nuclear submarines.

  • Alkem Laboratories signs a licensing agreement with Sonnet BioTherapeutics to develop, manufacture, and commercialize ‘SON-080’, used to treat diabetic peripheral neuropathy (DPN) in India.

  • Motilal Oswal maintains its 'Neutral' call on Clean Science & Technology with a higher target price of Rs 1,580 per share. The brokerage believes that the company's focus on research & development and entry into the Hindered Amine Light Stabilizers (HALS) series will help in revenue growth. It expects the company's revenue to grow at a CAGR of 28.8% over FY25-26.

  • Easy Trip Planners is rising as its board of directors schedules to meet on October 14 to consider and approve the issue of bonus shares to its shareholders.

  • Amarendu Prakash, Chairman of the Steel Authority of India (SAIL), highlights the need to impose tariffs on steel imports to support the domestic steel industry. This comes after India’s finished steel imports from China reaches a seven-year high.

  • NBCC (India) secures a Rs 198 crore order from SAIL Bokaro Steel Plant to design, supply, and install a rooftop solar system in Bokaro, Jharkhand.

  • Ashoka Buildcon rises sharply as its majority joint venture (JV), Ashoka JV, bags an order worth Rs 1,667.8 crore from the City & Industrial Development Corporation of Maharashtra (CIDCO) to construct roads and bridges.

  • Sonata Software is rising as it partners with insurance technology provider iNube to deliver digital solutions for the insurance sector. The platform streamlines policy administration, claims processing, and customer engagement while enhancing operational efficiency.

  • Star Health and Allied Insurance Co declines over 2% as it investigates allegations that its chief information security officer was involved in a data leak by a self-proclaimed hacker. This hacker, known as xenZen, used Telegram chatbots and websites to share customers' medical records and personal information, claiming on his site that the executive had "sold all this data to me."

  • Suzlon Energy secures a 400 MW wind power project from Jindal Renewables to support the decarbonisation of steel production. The project involves installing 127 advanced wind turbine generators in Karnataka, each with a 3.15 MW capacity. These turbines will supply power to steel plants in Chhattisgarh and Odisha.

  • Puravankara's customer collections from the real estate business grow by 18% YoY to Rs 1,033 crore Q2FY25. The company achieves pre-sales of Rs 1,331 crore, 18% higher than Q2FY24.

  • PNC Infratech is rising as it bags an infrastructure project worth Rs 2,091 crore near Navi Mumbai Airport from the City & Industrial Development Corporation of Maharashtra (CIDCO). The project includes road development, flyovers, bridges, and electrical works under the Navi Mumbai Airport Influence Notified Area (NAINA) project.

  • The Union Ministry of Heavy Industries initiates an investigation into the service-related issues faced by Ola Electric’s customers. This comes after a show cause notice issued by the Central Consumer Protection Authority (CCPA) over allegations of violation of consumer rights, misleading advertisement, and unfair trade practices.

  • JSW Steel is rising as its India crude steel production increases by 7% YoY to 6.6 million tonnes in Q2FY25. Capacity utilisation at its Indian operations stands at 91% during the quarter.

  • Diamond Power Infrastructure surges to its 5% upper limit as it receives an order worth Rs 109.4 crore from Swastika Infra. The order involves the supply of high-voltage cables for a project under Madhya Gujarat Vij (MGVCL) schemes.

  • GTPL Hathway is falling as its net profit declines 62.6% YoY to Rs 12.8 crore in Q2FY25 due to higher raw materials, operating, employee benefits, and finance costs. However, revenue grows by 9.1% YoY to Rs 862 core, helped by improvements in the cable TV and internet service segments. It appears in a screener of stocks with declining net cash flow.

  • Ratan Tata, chairman emeritus of Tata Sons, has passed away at 86. N Chandrasekaran, Chairman of Tata Sons, announced his death, praising Tata's commitment to excellence, integrity, and innovation. His love for stray animals was reflected in the dedicated kennels at Bombay House, Tata Group's headquarters in Mumbai, providing shelter for stray dogs.

  • Rashtriya Chemicals & Fertilizers surges as it places a purchase order worth Rs 1,000.3 crore with Larsen & Toubro. The order involves constructing a 1,200 metric tons per day (MTPD) complex fertilizer plant on a lump sum turnkey basis at Rashtriya Chemicals & Fertilizers' Thal facility.

  • GR Infraprojects is rising as it bags an order worth Rs 903.5 crore from Maharashtra Metro Rail Corp (MMRCL) to design and construct 17.6 km of an elevated metro viaduct, including a double-decker portion with vehicular underpass.

  • Va Tech Wabag is rising as it secures repeat orders worth Rs 300-500 crore from Reliance Industries for water treatment systems at its Dahej and Nagothane facilities.

  • Adani Enterprises' board of directors approves a fundraising reportedly worth $500 million (approx. Rs 4,197.2 crore) through a qualified institutional placement (QIP) at a floor price of Rs 3,117.5 per share.

  • Nifty 50 was trading at 25,052.50 (70.6, 0.3%), BSE Sensex was trading at 81,710.80 (243.7, 0.3%) while the broader Nifty 500 was trading at 23,684.85 (85.3, 0.4%).

  • Market breadth is surging up. Of the 1,920 stocks traded today, 1,450 were in the positive territory and 428 were negative.

Riding High:

Largecap and midcap gainers today include Mazagon Dock Shipbuilders Ltd. (4428.35, 8.4%), Gujarat Fluorochemicals Ltd. (4659.75, 6.8%) and CG Power and Industrial Solutions Ltd. (841.75, 4.8%).

Downers:

Largecap and midcap losers today include Lupin Ltd. (2154.65, -5.8%), Ambuja Cements Ltd. (585.25, -3.7%) and Cipla Ltd. (1618.90, -3.7%).

Volume Rockets

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

Top high volume gainers on BSE included Hitachi Energy India Ltd. (15960.15, 10.2%), Mazagon Dock Shipbuilders Ltd. (4428.35, 8.4%) and Usha Martin Ltd. (367.15, 7.0%).

Top high volume losers on BSE were Vedant Fashions Ltd. (1296, -2.6%), ZF Commercial Vehicle Control Systems India Ltd. (14850, -2.4%) and Procter & Gamble Hygiene & Healthcare Ltd. (16743.05, -0.8%).

Tata Investment Corporation Ltd. (6923.25, 5.7%) was trading at 36.9 times of weekly average. G R Infraprojects Ltd. (1638, -0.1%) and Rashtriya Chemicals & Fertilizers Ltd. (182.66, 6.8%) were trading with volumes 12.2 and 9.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

17 stocks overperformed with 52 week highs, while 1 stock hit their 52 week lows.

Stocks touching their year highs included - Atul Ltd. (7951, 0.5%), Glenmark Pharmaceuticals Ltd. (1760.95, -1.4%) and HCL Technologies Ltd. (1808.65, -0.1%).

Stock making new 52 weeks lows included - CreditAccess Grameen Ltd. (1119.20, -2.8%).

21 stocks climbed above their 200 day SMA including Usha Martin Ltd. (367.15, 7.0%) and EIH Ltd. (431.40, 5.9%). 9 stocks slipped below their 200 SMA including Star Health and Allied Insurance Company Ltd. (566.25, -2.0%) and Chennai Petroleum Corporation Ltd. (904.90, -1.7%).

 
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The Baseline
09 Oct 2024, 05:50PM
Five stocks to buy from analysts this week - October 09, 2024
By Divyansh Pokharna

1. Polycab India:

Hem Securities initiates a ‘Buy’ rating on this consumer durables company with a target price of Rs 8,427, indicating a potential upside of 13.9%. In Q1FY25, Polycab had reported a revenue growth of 20.8% YoY to Rs 4,698 crore. The company’s fast-moving electrical goods (FMEG) segment grew 21% YoY, driven by increased demand for fans following a heatwave across several parts of the country. However, EBITDA margins decreased by 171 bps YoY to 12.4%, due to a decline in international business growth. 

Analyst Mudit Jain said, “We expect the company to deliver strong numbers in the upcoming quarters, driven by rising demand from real estate and infrastructure activities.” He projects the share of organized players in the wires and cable business will increase from 78% in FY24 to 85% by FY28, fueled by premiumization. Polycab currently holds a 25% market share in the domestic organized sector. The company also aims to increase its international business share to 10% of total revenue by FY26 and is launching a distribution-based model in the US.

Jain anticipates the company’s revenue and PAT CAGR to grow at 16.5% and 15% respectively over FY25-26. He believes this growth will be driven by rising electricity demand in urban areas, fueled by industry, business, and housing.

2. Nazara Technologies:

Prabhudas Lilladher upgrades a ‘Buy’ rating on gaming company Nazara Technologies, with a target price of Rs 1,185, suggesting a 21.1% upside. Analysts Jinesh Joshi, Stuti Beria and Dhvanit Shah highlight the company’s strategic investment in Moonshine Technology (MTPL), which operates the online poker platform PokerBaazi, holding a 50-55% market share. Nazara acquired a 47.7% stake in MTPL for Rs 9.8 billion, paying Rs 5.9 billion in cash and issuing 2.5 million shares. 

The analysts point out that MTPL reported a revenue of Rs 4.1 billion in FY24, with a 10% EBITDA margin. This acquisition is expected to strengthen Nazara’s presence in the growing real-money gaming market, with MTPL’s revenues projected to grow at a 30% CAGR over the next three years.

Joshi, Beria and Shah note that they incorporated MTPL's projections into their estimates, since Nazara holds a 47.7% non-controlling stake. Consolidation is expected once the conversion of compulsorily convertible preference shares (CCPS) occurs. They project a revenue CAGR of 23%, along with EBITDA and PAT CAGRs of 41% and 47.6%, respectively, over FY 25-27.

3. Petronet LNG:

Emkay initiates a ‘Buy’ rating on this oil distribution company with a target price of Rs 425, indicating an upside of 20.7%. Analysts Sabri Hazarik, Harsh Maru and Arya Patel highlight that the company’s Dahej terminal saw 110% utilization in Q1FY25, largely driven by the power sector, which has now cooled off. They expect Q2 to be seasonally weaker but project that utilization will approach 100%, suggesting a full-year run rate exceeding 100%.

Petronet LNG is facing concerns about possible changes in tariffs for its buyers, known as offtakers. However, the company’s management says that any tariff changes will be minor and won't affect the interests of minority shareholders, as “offtakers are also company stakeholders”.

Hazarika, Maru and Patel note that Exxon’s second contract for 1.2 million tonnes per annum (mmtpa) will begin in FY26-27, along with a 5 mmtpa expansion of Dahej terminal. This is expected to drive volume growth for Petronet, benefiting from higher Kochi terminal tariffs.

4. V2 Retail:

Edelweiss maintains a ‘Buy’ rating on this department stores chain with a target price of Rs 1,754. This indicates an upside of 24.8%. V2 Retail added 12 new stores during Q2FY25, bringing the total store count to 139. The management plans to add 60 new stores in FY25 while maintaining double-digit same-store sales growth (SSSG) for the rest of the year. Analyst Palash Kawale expects 50 store additions and 20% SSSG for FY25.

The company aims for a 30-40% sales CAGR over the next three to four years, which is expected to drive margin expansion and improve store performance. V2 Retail also aims to maintain a 20% return on equity (RoE) and achieve Rs 1,800 crore in sales by FY25.

The company is focused on improving revenue per square foot, which grew by 30% YoY during Q2FY25. Kawale notes that value retailing in India is changing as consumers become more selective and aim for higher-quality products. This shift highlights the need for better shopping experiences, fashionable products, affordability, and larger wardrobes, with organized retail replacing unorganized formats.

5. Jindal Steel & Power:

Motilal Oswal maintains a ‘Buy’ rating on this iron and steel products company with a target price of Rs 1,200, indicating an upside potential of 20.1%. Analysts Alok Deora and Sonu Upadhyay highlight the company’s Rs 310 billion capital expenditure plan, which will increase steel production capacity to 15.9 million tons (mt) annually. A significant portion of this investment (75%) will be directed towards the expansion of the steel production plant in Angul, Odisha, with the remainder allocated to coal mines and other projects.

The analysts note that the company has already spent Rs 150 billion and plans to invest the remaining amount funds over the next three years. Post completion of these new projects, flat steel products will represent 55% of the total output, up from the current 35%.

Deora and Upadhyay are optimistic about the company’s financial health as the company has deleveraged its balance sheet from Rs 391 billion of net debt in FY19 to approximately Rs 104 billion as of Q1FY25. They expect steel production volumes of 9 mt in FY25 (an 18% YoY increase) and 11 mt in FY26 (a 25% YoY increase).

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 Oct 2024, 04:06PM
Market closes lower, Varun Beverages' board approves raising Rs 7,500 crore via a QIP
By Trendlyne Analysis

Nifty 50 closed at 24,981.95 (-31.2, -0.1%) , BSE Sensex closed at 81,467.10 (-167.7, -0.2%) while the broader Nifty 500 closed at 23,599.60 (87.1, 0.4%). Market breadth is highly positive. Of the 2,320 stocks traded today, 1,572 were on the uptick, and 717 were down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 24,981.9 points. The Indian volatility index, Nifty VIX, declined by 3.2% and closed at 14.1 points. The Reserve Bank of India (RBI) kept the policy repo rate unchanged at 6.5% and shifted its stance to ‘Neutral’ from 'Withdrawal of Accommodation’ during the Monetary Policy Committee (MPC) meeting.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green. BSE Realty index and Nifty Realty were among the top index gainers today. According to Trendlyne’s Sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a jump of over 2.6%.

Asian indices closed mixed while European indices are trading higher except Russia’s MOEX & RTSI index. US index futures traded in the red, indicating a cautious start to the trading session. Brent crude oil futures are trading in the green. Oil prices climbed, recovering some of the significant losses from the previous session. However, crude's rebound was tempered by data from the American Petroleum Institute, which revealed that U.S. oil inventories increased by 10.9 million barrels last week, far exceeding the expected rise of 1.9 million barrels.

  • Relative strength index (RSI) indicates that stocks like BASF India, eClerx Services, and Trent are in the overbought zone.

  • Varun Beverages' board of directors approves a Rs 7,500 crore fundraising in multiple tranches through a qualified institutional placement (QIP).

  • Senco Gold rises sharply as it reports a retail growth of 27% YoY in Q2FY25, with a 19% YoY increase in H1FY24.

  • Zaggle Prepaid Ocean Services surges as it enters an agreement with Equinox India to provide the Zaggle Propel reward platform.

  • Nilesh Shah of Kotak AMC highlights RBI's cautious approach to monetary policy and its oversight of NBFCs. He notes the central bank's proactive measures in managing unsecured loans and inflation. Shah believes that a flexible monetary policy will bolster economic growth, with the RBI forecasting a 7.2% GDP growth for FY25 despite global uncertainties and challenges.

  • Diamond Power Infrastructure is rising as its board of directors schedules a meeting on October 15 to consider a proposal for a stock split.

  • NBCC (India) rises as it receives a work order worth Rs 50 crore from the Sports and Youth Service Department of the Government of Odisha to construct an integrated sports complex in Dhamnagar, Bhadrak, Odisha.

  • Emkay initiates coverage on Genus Power Infrastructures with a 'Buy' call and a target price of Rs 500 per share. This indicates a potential upside of 25.1%. The brokerage believes the company is poised to become one of the largest beneficiaries of the upcoming smart meter installation drive under the Rs 3 lakh crore revamped distribution sector scheme. It expects the firm's revenue to grow at a CAGR of 66.7% over FY25-27.

  • Honasa Consumer partners with Meesho to make high-quality personal care products more accessible in Tier 3 and emerging markets.

  • Arvind SmartSpaces rises as it announces the launch of a high-rise residential project on ITPL Road, Bengaluru. The project spans 2.9 acres with 4.2 lakh square feet of saleable area and has a revenue potential of Rs 600 crore.

  • TVS Motor rises as it enters a partnership with Ecofy to provide financing for electric three-wheelers across India.

  • Sharan Bansal, Director of Skipper, highlights the company's target to reach Rs 10,000 crore in revenue by FY29. He anticipates margins will improve to 11% over the next three years, supported by planned capital expenditures of Rs 800-1,000 crore in tower manufacturing. Bansal notes that reduced competition from China and Turkey in key markets led to a 64% increase in the firm's international pipeline in FY24.

  • Ceinsys Tech surges to its all-time high of Rs 848.4 as it secures an order worth Rs 331.6 crore from the State Water and Sanitation Mission (SWSM) under the Water Supply and Sanitation Department (WSSD) of the Government of Maharashtra. The order involves appointing system integrators to design, implement, and maintain an Internet of Things (IoT) platform for Phase II of the Jal Jeevan Mission.

  • Ajmera Realty rises sharply as its Q2FY25 sales grow by 1% YoY to Rs 254 crore. Collections for the quarter increase by 20% YoY to Rs 133 crore.

  • JSW Infrastructure's Chief Executive Officer (CEO) & Joint Managing Director Arun Maheshwari tenders his resignation, effective November 7. The company appoints Rinkesh Roy as his successor.

  • RBI Governor Shaktikanta Das states the Monetary Policy Committee will remain “watchful” of the evolving outlook. He expects a significant rise in CPI for September due to base effects and increasing food prices, projecting retail inflation at 4.1% for Q2FY25. The GDP growth forecast remains steady at 7% for Q2, 7.4% for Q3 and Q4, and a slight dip to 7.3% in Q1FY26.

  • Kalpataru Projects International plans to sell its entire 100% stake in a wholly owned subsidiary, Vindhyachal Expressway, to Actis Atlantic Holdings. The estimated enterprise value of the transaction is approximately Rs 775 crore.

  • Spicejet is rising as it settles a $131.9 million (approx. Rs 1,107 crore) dispute with its lessor, Babcock & Brown Aircraft Management (BBAM), for $22.5 million (approx. Rs 189 crore).

  • Premier Energies rises as its subsidiary, Premier Energies International, enters into a module supply agreement (MSA) with BN Hybrid Power-1. Under the agreement, the company will supply 173.4 megawatt-peak (MWp) of Topcon solar modules for the 300 megawatt (MW) wind, solar, and energy storage project in Barmer, Rajasthan.

  • The Reserve Bank of India (RBI) keeps the policy repo rate unchanged at 6.5% and shifts its stance to ‘Neutral’ during the Monetary Policy Committee (MPC) meeting.

  • Torrent Power surges to its all-time high of Rs 1,984.7 per share as it bags an order from Maharashtra State Electricity Distribution (MSEDCL) for the long-term supply of 2,000 MW energy storage capacity from InSTS connected pumped hydro storage plant.

  • Rites is rising as it signs a memorandum of understanding (MoU) with Etihad Rail. The agreement focuses on exploring cooperation and combining strengths to develop railways and related infrastructure services in the UAE and the surrounding region.

  • SKF India rises sharply as its board of directors approves the demerger of its industrial and automotive businesses. The board also approves incorporating a new subsidiary for the proposed demerger.

  • Lemon Tree Hotels is rising as it signs a license agreement for a new hotel in Udaipur, Rajasthan, set to open in FY27. The property will be managed by Lemon Tree's wholly-owned subsidiary, Carnation Hotels. It will feature 54 well-appointed rooms, a restaurant, a bar, a swimming pool, a meeting room, and a fitness center.

  • Nifty 50 was trading at 25,056.30 (43.2, 0.2%) , BSE Sensex was trading at 81,838.46 (203.7, 0.3%) while the broader Nifty 500 was trading at 23,610.40 (97.9, 0.4%)

  • Market breadth is surging up. Of the 1,965 stocks traded today, 1,620 were on the uptrend, and 316 went down.

Riding High:

Largecap and midcap gainers today include Divi's Laboratories Ltd. (5,989.75, 8.0%), Torrent Power Ltd. (1,935.15, 6.5%) and Gujarat Fluorochemicals Ltd. (4,395, 6.5%).

Downers:

Largecap and midcap losers today include ITC Ltd. (491.70, -3.2%), Au Small Finance Bank Ltd. (705.30, -3.0%) and Tata Communications Ltd. (1,949.35, -2.7%).

Volume Shockers

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

Top high volume gainers on BSE included Akzo Nobel India Ltd. (4,338.85, 10.7%), Gujarat Ambuja Exports Ltd. (142.71, 9.3%) and Rites Ltd. (325.10, 8.2%).

Top high volume losers on BSE were Bank of Maharashtra (54.66, -4.2%), IDFC Ltd. (107.97, -1.8%) and ZF Commercial Vehicle Control Systems India Ltd. (15,175, -1.2%).

Torrent Power Ltd. (1,935.15, 6.5%) was trading at 10.5 times of weekly average. Divi's Laboratories Ltd. (5,989.75, 8.0%) and Birla Corporation Ltd. (1,243.10, 2.0%) were trading with volumes 6.3 and 5.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

25 stocks hit their 52 week highs,

Stocks touching their year highs included - Akzo Nobel India Ltd. (4,338.85, 10.7%), Alembic Pharmaceuticals Ltd. (1,230.90, -1.3%) and Bosch Ltd. (38,606.15, 1.7%).

45 stocks climbed above their 200 day SMA including Action Construction Equipment Ltd. (1,355.45, 5.5%) and Elgi Equipments Ltd. (675, 5.2%). 7 stocks slipped below their 200 SMA including Nestle India Ltd. (2,516, -2.6%) and Adani Green Energy Ltd. (1,784.45, -1.6%).

 
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The Baseline
08 Oct 2024, 05:34PM
By Aditi Priya

Humans tend to focus on short-term rewards, and this shows up in the stock market as well, where investors often hunt for quick gains, the easy buck. But lasting success in the market comes from patience. Investor Peter Lynch said, "The real key to making money in stocks is not to get scared out of them." Instead of chasing short-term wins, and getting spooked by down cycles, staying committed for the long haul with a steady strategy is what typically leads to better returns. 

One way to maximize returns is by using screeners that search for stocks that outperform on not one or two but multiple metrics. The DVM score, for example, looks at metrics across management quality, financial health, valuation, as well as several dozen technicals, to identify high-scoring stocks. These scores help shortlist quality stocks for investing.

In this edition of Chart of the Week, we analyze one particular DVM screener: the ‘DVM - High Performing, Highly Durable Companies’ screener. This screener selects stocks from the ‘all stocks’ universe and Nifty 500 universe, that have strong financial durability, reasonable valuation, and positive momentum scores. It is optimized to highlight the top five stocks with the highest durability scores. 

High DVM stocks from the all-stocks universe outperformed those from the Nifty 500 universe

We ran screener backtests for both the Nifty 500 universe and the all-stocks universe from March 2013 to September 2024. These backtests evaluated the strategies’ quarterly performance against the Nifty 500 benchmark. The screeners delivered cumulative returns of 5,118.5% and 6,197.2% over 11 years and 7 months, with a CAGR of 40.7% and 42.7%, for the Nifty 500 and all stocks universe, respectively. In contrast, the benchmark’s CAGR stands at 16.3%. The portfolio review frequency chosen for this backtest is quarterly.

The heatmaps present a period analysis, showcasing the strategies’ quarterly returns from Q1FY14 to Q2FY25. The data reveals that this approach delivered positive returns in 32 out of 46 quarters for the Nifty 500 universe. It also outperformed the Nifty 500 index in 30 of these 46 quarters. For the all stocks universe, the data reveals that this approach delivered positive returns in 29 out of 46 quarters whereas it outperformed the Nifty 500 index in 30 of these 46 quarters. 

The strategy experienced a maximum drawdown of 27.6% in Q2FY23 in the case of Nifty 500 universe. For the ‘all stocks’ selection, the strategy experienced a maximum drawdown of  27.1% in Q2FY22. The term "maximum drawdown" represents the largest observed loss from a portfolio’s peak to its lowest point before a new peak is attained. This strategy is automated and does not have a set stop loss, so the drawdowns show the maximum loss potential under this approach. Introducing a stop loss can reduce periods of negative returns and lower maximum drawdowns.

The DVM screener for the all stocks universe currently includes stocks like Jindal Saw, ITD Cementation, Kriti Industries, Arrow Greentech and Visco Trade Associates. Meanwhile the screener for Nifty 500 universe currently has stocks such as Bombay Burmah Trading Corp, Elecon Engineering, Alembic Pharmaceuticals and MRF.

In the course of the backtest, for the Nifty 500 universe, Ceat gave the highest returns of 428.8%. On the other hand, Triveni Engineering & Industries’ stock price had the highest fall of 48.8%. In the all stocks universe, Aegis Logistics gave the highest returns of 199.2%, while Butterfly Gandhimathi Appliances’ stock price had the highest fall of 51.8%.

Let’s look at stocks with the highest returns over the past two years from the DVM screener’s backtest. Electrical equipment maker Apar Industries was part of the screener from March 31, 2023, to June 28, 2024. During this period, it delivered a return of 238.3%.

Apar Industries tops momentum screener performance over two years

Similarly, EIH, a hotel company belonging to the Oberoi Group, was active in the screener a quarter ago from December 29, 2023, to March 28, 2024. In these three months, the company gave a return of 80.2%. The jump came as the hotel stock saw its financials improve as domestic tourism boomed. In FY24, EIH witnessed a 103% YoY rise in its net profit to Rs 639 crore, aided by growth in the luxury hotel segment, which boosted average room rates.

Great Eastern Shipping Company, which provides shipping and offshore business services to primarily oil & gas companies, was active in the screener for a year. The stock delivered returns of 65% during the period starting June 30, 2023, to June 28, 2024.

The tobacco major, Godfrey Phillips remained in the screener for two quarters, from September 30, 2022, to March 31, 2023. During this period, the company gave 58.5% returns. The company's decision in October 2022 to sell its chewing tobacco business and other trademarks allowed it to concentrate on the cigarette business. Consequently, its net profit surged by 57.6% YoY in FY23 to Rs 690.5 crore.

Lastly, JK Tyre & Industries, an Indian tyre manufacturer that makes radial tyres for an entire range of vehicles including trucks, buses, and passenger cars among others, was active in the screener from September 30, 2023, to March 28, 2024. During this period, the stock delivered a return of 55.4%.

Bombay Burmah leads in one-year gain among active stocks

Moving to the quarterly and yearly price change percentages of stocks currently active in the screener. Packaged foods company Bombay Burmah Trading Corporation’s stock price rose by 31.8% in the past quarter and 123.2% in the past year. The company’s net profit increased by 147.3% YoY in Q1FY25.

Industrial products manufacturerJindal Saw witnessed its share price surge by 31.1% in the past quarter with gains of 99% in the past year. The company revenue increased by 15.3% YoY while net profit saw a surge of 61.2% YoY in Q1FY25.

Meanwhile, Elecon Engineering, which designs, develops and supervises the manufacture of electrical equipment, witnessed a 70.3% YoY increase in the share price. Alembic Pharmaceuticals, on the other hand, saw a 30.8% uptick in its stock price in the past quarter and 57.2% in the past year.

Lastly, MRF saw its share price surge by 3.5% in the past quarter, with over 23.2% gains in the past year. This tyre manufacturer saw a 48.2% QoQ increase in their net profit in Q1FY25. 

In summary, the screening criteria identify stocks that offer potential for medium to long-term gains with moderate risk. Despite uncertainties like the COVID-19 pandemic and volatile election periods, the Nifty 500 screener delivered a mean quarterly return of 10.4%. It consistently maintained an average of 4.7 stocks, indicating diversified investment, except for Q1FY21 when no stocks were held. Comparing both universes, the Nifty 500 stocks achieved positive returns in 32 out of 46 quarters, while stocks in the all-stocks universe posted positive returns in 29 out of 46 quarters.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
08 Oct 2024, 03:40PM
Market closes higher, PSP Projects secures a Rs 249 crore order in GIFT City
By Trendlyne Analysis

Nifty 50 closed at 25,013.15 (217.4, 0.9%) , BSE Sensex closed at 81,634.81 (584.8, 0.7%) while the broader Nifty 500 closed at 23,512.55 (330.6, 1.4%). Market breadth is highly positive. Of the 2,328 stocks traded today, 1,897 showed gains, and 402 showed losses.

Nifty 50 closed higher after rising throughout the day. The Indian volatility index, Nifty VIX, fell 3.3% and closed at 14.6 points. Ola Electric has received a show cause notice from the Central Consumer Protection Authority (CCPA) after allegations of violation of consumer rights, misleading advertisement, and unfair trade practices.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green. S&P BSE Momentum and S&P BSE IPO were among the top index gainers today. According to Trendlyne’s Sector dashboard, Telecommunications Equipment emerged as the best-performing sector of the day, with a rise of 4.5%.

Asian indices closed mixed, and European indices are trading in the red. US index futures are trading higher as investors reconsider the chances of Federal Reserve rate cuts before new inflation data, indicating a positive start to the trading session. Brent crude oil futures are trading lower.

  • Money flow index (MFI) indicates that BASF India is in the overbought zone.

  • Transformers & Rectifiers (India) rises to its 5% upper circuit as its Q2FY25 net profit surges by 13.9x to Rs 42.1 crore, helped by inventory destocking. Revenue rises 78.6% YoY to Rs 457.7 crore during the quarter. The company appears in a screener of stocks where mutual funds increased their shareholding in the last quarter.

  • ICICI Securities upgrades Vedanta to 'Buy' with a higher target price of Rs 600 per share. This indicates a potential upside of 21.5%. The brokerage believes the company's upcoming demerger will help with the individual entities' growth and offer investors an opportunity to invest in growth-oriented pure-play companies. It expects the firm's revenue to grow at a CAGR of 5.1% over FY25-26.

  • HDFC Bank rises as its board approves the sale of its 100% stake in HDFC Education and Development Services (HDFC Edu) to Vama Sundari Investments for Rs 192 crore.

  • CLSA upgrades Mahindra & Mahindra to 'Overweight' with a higher target price of Rs 3,400. The brokerage cites profitable growth in M&M’s SUV segment, along with a rising return on equity (ROE), as the key factors driving this sustainable re-rating.

  • Media stocks like Saregama India, Dish TV, Nazara Technologies, and Tips Music rise more than 4.5% in trade. All constituents of the broader Nifty Media index are trading in the green.

  • Zodiac Energy surges to its 5% upper circuit as it bags an order worth Rs 154.3 crore from Ahmedabad Municipal Corporation (AMC). The project involves designing, supplying, and installing a 30 MW ground-mounted solar facility in Gujarat, including erection, operation, and maintenance for five years.

  • Allied Digital Services rises sharply as it secures the Pune Safe City project, a six-year contract worth over Rs 430 crore. In collaboration with Pune Police and the Government of Maharashtra, the company will design, integrate, implement, and customize a comprehensive security solution to improve Pune's security infrastructure.

  • Varun Beverages rises more than 8% today, a day ahead of the board meeting to consider a proposal to raise funds via a qualified institutional placement (QIP).

  • PSP Projects rises sharply as it secures an order worth Rs 249 crore to construct the 'SIBAN' high-rise residential tower at GIFT City in Gandhinagar, Gujarat. The project has a completion timeline of 31 months.

  • SpiceJet is rising as it announces plans to add ten new aircraft to its fleet by November 2024, with seven leased and three from its grounded fleet. The company has finalized agreements for the leased aircraft, aiming for their complete induction by November 15.

  • MOIL rises as its September production grows 8.1% YoY to 1.5 lakh tonnes. The company achieves sales of 1.6 lakh tonnes, up 2% YoY.

  • National Securities Depository receives SEBI approval to launch an initial public offering (IPO). The IPO will consist of an offer for sale of up to 5.7 crore shares, with IDBI Bank, NSE, SBI, HDFC Bank, and Union Bank of India paring stakes.

  • Jyoti Structures rises sharply as Ashish Kacholia buys 2.2 crore shares (2.5% stake) for Rs 63.9 crore through a bulk deal.

  • Nuvoco Vistas Corp is rising as it emerges as the preferred bidder for three limestone blocks in Nimbol, Rajasthan, at an auction held by the Government of Rajasthan. The block has an estimated limestone reserve of 2.8 crore tonnes and is located near the company's cement factory, providing a strategic advantage.

  • Mindteck (India) receives trading approval from NSE and BSE for a bonus issue of equity shares with a face value of Rs 10 each. The company's shareholders will receive one new equity share for every four shares they hold.

  • The Federation of Automobile Dealers Associations (FADA) urges original equipment manufacturers (OEMs) to implement corrective measures ahead of the festive season following a 9% YoY decline in automobile retail sales in India. The fall was due to a significant buildup of passenger vehicle inventory linked to sluggish demand. FADA President C S Vigneshwar highlights that dealers reported largely stagnant performance during festivals like Ganesh Chaturthi and Onam.

  • Tata Motors is falling as Jaguar Land Rover's (JLR) wholesales decline by 10% YoY to 87,303 units in Q2FY25 due to a 7% YoY reduction in production to 86,000 units. Retail sales also decrease by 3% YoY to 1 lakh units during the quarter.

  • HEG is rising as it acquires an 8.2% stake in a NYSE-listed company, GrafTech International, for Rs 248.6 crore by purchasing shares in the secondary market.

  • Ola Electric receives a show cause notice from the Central Consumer Protection Authority (CCPA) after allegations of violation of consumer rights, misleading advertisement, and unfair trade practices. The CCPA has given the company a timeline of 15 days to respond to the notice.

  • Trent is rising as it enters the jewellery space with the launch of Pome, a lab-grown-diamond jewellery line. The brand will be available across its Westside stores.

  • Sobha falls sharply as its Q2FY25 sales value declines by 31.6% YoY to Rs 1,178.5 crore. However, the average price realization improves by 24% YoY to Rs 12,674 per square foot, helped by Gurugram projects and price increases in other projects.

  • Rites receives an order worth Rs 45.3 crore ($5.4 million) from Ntokoto Rail Holdings to supply and commission overhauled Cape Gauge ALCO diesel-electric locomotives. The locomotives will get new bogies, traction motors, control systems, and air brakes. The contract includes one year of on-site warranty support.

  • Hi-Tech Pipes' board of directors approves raising Rs 600 crore through a qualified institutional placement (QIP) of shares at a floor price of Rs 195 per share.

  • Bharat Electronics bags multiple orders worth Rs 500 crore for electromagnetic interference (EMI) shelters, air mobility command (AMC) for integrated air command, control systems, spares for gun systems, and communication systems.

  • Nifty 50 was trading at 24,777.65 (-18.1, -0.1%), BSE Sensex was trading at 81,035.36 (-14.6, 0.0%) while the broader Nifty 500 was trading at 23,111.15 (-70.8, -0.3%).

  • Market breadth is sharply down. Of the 1,985 stocks traded today, 601 showed gains, and 1,350 showed losses.

Riding High:

Largecap and midcap gainers today include One97 Communications Ltd. (750.60, 15.2%), Varun Beverages Ltd. (590, 8.9%) and Trent Ltd. (8041.95, 8.0%).

Downers:

Largecap and midcap losers today include NMDC Ltd. (218.99, -4.3%), SBI Life Insurance Company Ltd. (1728.05, -3.4%) and Tata Steel Ltd. (159.52, -2.9%).

Volume Shockers

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

Top high volume gainers on BSE included Triveni Turbine Ltd. (731.20, 11.0%), HEG Ltd. (2,447.50, 9.9%) and Rail Vikas Nigam Ltd. (487.05, 7.8%).

Top high volume losers on BSE were Supreme Petrochem Ltd. (766, -2.0%) and Carborundum Universal Ltd. (1,420.15, -0.2%).

Hatsun Agro Products Ltd. (1,121.10, 0.6%) was trading at 30.9 times of weekly average. AIA Engineering Ltd. (4,149, 0.1%) and ZF Commercial Vehicle Control Systems India Ltd. (15,201, 0.8%) were trading with volumes 6.8 and 4.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks hit their 52 week highs, while 4 stocks hit their 52 week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (3,881.50, 2.1%), Ipca Laboratories Ltd. (1,537.75, 3.5%) and Coforge Ltd. (7,340, 1.8%).

Stocks making new 52 weeks lows included - Zee Entertainment Enterprises Ltd. (126.79, 0.7%) and RBL Bank Ltd. (196.01, 2.9%).

28 stocks climbed above their 200 day SMA including Varun Beverages Ltd. (590, 8.9%) and Housing and Urban Development Corporation Ltd. (228.88, 8.8%). 32 stocks slipped below their 200 SMA including NMDC Ltd. (218.99, -4.3%) and Titan Company Ltd. (3,493.35, -2.7%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
07 Oct 2024
Market closes lower, Godrej Properties bookings grow 3% YoY to Rs 5,200 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 24,795.75 (-218.9, -0.9%) , BSE Sensex closed at 81,050 (-638.5, -0.8%) while the broader Nifty 500 closed at 23,181.95 (-353, -1.5%). Market breadth is moving down. Of the 2,367 stocks traded today, 233 were on the uptrend, and 2,114 went down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 24,795.8 points. The Indian volatility index, Nifty VIX, rose 6.7% and closed at around 15.1 points. Adani Group reportedly plans to acquire Germany’s Heidelberg Materials' India cement operations for Rs 10,000 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red. Nifty Auto and Nifty FMCG closed lower. According to Trendlyne’s sector dashboard, Telecommunications Equipment emerged as the worst-performing sector of the day, with a fall of 5.5%.

European indices traded mixed. Major Asian indices closed higher, except for India's Nifty 50 index, which closed in the red. US index futures traded mixed, indicating a cautious start to the trading session. Chevron plans to sell its oil projects in Alberta to Canadian Natural Resources in an all-cash deal worth $6.5 billion. This transaction is part of the company's target to divest $10-15 billion of its assets by 2028.

  • Relative strength index (RSI) indicates that stocks like Lloyds Metals & Energy, BASF India, Whirlpool of India, and National Aluminium are in the overbought zone.

  • Godrej Properties' booking value goes up 3% YoY to Rs 5,200 crore in Q2FY25 and 89% YoY to Rs 13,800 crore in H1FY25. Its cash collections also increase by 68% YoY to 4,000 crore during the quarter. The company features in a screener of stocks with improving book value over the past two years.

  • PSU Banks like Indian Overseas Bank, UCO Bank, Central Bank of India, Canara Bank, and Punjab National Bank fall more than 4% in trade. All constituents of the broader Nifty PSU Bank index are trading in the red.

  • Eraaya Lifespaces' subsidiary, Ebix Cash, bags a three-year contract worth Rs 138.8 crore from Punjab National Bank for its network integrating services.

  • Nuvama Institutional Equities initiates a ‘Buy’ rating on Jubilant Pharmova with a target price of Rs 1,450. The brokerage believes the company’s radio business will benefit from the Ruby-Fill ramp-up and I-MIBG launch, while its allergy business is expected to gain from ex-US market growth.

  • Heidelberg Cement India rises sharply to its 52-week high of Rs 258 following reports that Adani Group is in talks to acquire the Indian cement operations of Germany’s Heidelberg Materials for $1.2 billion (or Rs 10,000 crore).

  • Vodafone Idea falls sharply as the Department of Telecommunications reportedly issues notice over the non-payment of bank guarantees for past spectrum auction dues.

  • Lupin is falling as it receives five observations from the US FDA following a pre-approval inspection at the company's biotech facility in Pune.

  • Ola Electric Mobility declines more than 8% after a contentious exchange between its founder & CEO, Bhavish Aggarwal, and comedian Kunal Kamra. The debate focused on the service problems associated with Ola Electric's scooters. The company, which reportedly receives about 80,000 complaints each month, has faced criticism for service delays and unresolved issues.

  • RBL Bank's total deposits increase 20% YoY to Rs 1.1 lakh crore in Q2FY25, while gross advances grow by 15% YoY to Rs 88,443 crore.

  • Sharekhan retains its 'Buy' call on Zydus Lifesciences with a higher target price of Rs 1,268 per share. This indicates a potential upside of 20.2%. The brokerage believes the company is well-positioned for significant growth, driven by its strategic partnerships and active clinical programs. It expects the firm's revenue to grow at a CAGR of 13% over FY25-27.

  • Nestle India announces the retirement of Suresh Narayan as Chairman and Managing Director, effective July 31, 2025. The company nominates Manish Tiwary to succeed him as MD from August 1, 2025, subject to approval.

  • Brent crude oil futures rise over 8% in the past week, while WTI futures increase by 9.1%. One contributing factor is the escalation of conflicts in West Asia, including a missile attack on Israel by Iran. In addition, the available spare production capacity within the OPEC (Organization of the Petroleum Exporting Countries) has eased concerns about potential supply shortages in the market. You, 6 min

  • Tata Steel's India steel production grows 5% YoY to 5.3 million tonnes in Q2FY25. The company's delivery volumes improve by 5% YoY. It appears in a screener of stocks outperforming their respective industry over the past month.

  • Hitachi Energy India plans a capex of Rs 2,000 crore over the next five years to expand its capacity and improve its product portfolio.

  • ITC is rising as it receives approval from the National Company Law Tribunal, Kolkata Bench (NCLT), to demerge its hotel business. Under the demerger scheme, ITC will retain 40% ownership of ITC Hotels, while its shareholders will acquire the remaining 60% based on their stake in the parent entity.

  • RBI's Monetary Policy Committee (MPC) is scheduled to meet from October 7 to 9. According to a poll of economists, the MPC may implement a 25 bps rate cut, though this is more likely in December. Madan Sabnavis, Chief Economist at Bank of Baroda, highlights that maintaining the current rates is the most probable outcome. The inflation forecast will likely be revised by 10-20 bps, while the GDP forecast is expected to remain unchanged.

  • Kalyan Jewellers' India operations report a revenue growth of 39% YoY in Q2FY25, driven by healthy same-store sales growth. Its Middle East business also records a 24% YoY revenue increase. The company appears in a screener of stocks where mutual funds increased their holding in the past quarter.

  • Macrotech Developers is rising as its pre-sales grow 21% YoY to Rs 4,290 crore in Q2FY25. Collections for the quarter increase by 11% YoY to Rs 3,070 crore.

  • Natco Pharma surges as it announces that Mylan Pharmaceuticals and Novo Nordisk have settled the US patent litigation regarding the development of a generic Ozempic (Semaglutide) drug. Natco partners with Mylan on this product.

  • Retail sales for the automotive industry decline 9.3% YoY to 17.2 lakh units in September, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are down 8.5% YoY, while cars decrease by 18.8% YoY. FADA states that Ganesh Chaturthi and Onam failed to boost demand across the sector.

  • Jio Financial Services is rising as it receives approval from the Securities and Exchange Board of India (SEBI) to set up a mutual fund in partnership with Blackrock Financial Management.

  • GAIL (India) signs a memorandum of understanding (MoU) with Netherlands-based AM Green B.V. for the long-term supply of carbon dioxide for eMethanol production and renewable energy projects with a total capacity of 2.5 GW.

  • Antony Waste Handling Cell rises sharply as its subsidiary, AG Enviro Infra Projects, secures an order worth Rs 908 crore from Navi Mumbai Municipal Corporation (NMMC) to collect and transport municipal solid waste and related services over nine years.

  • IndusInd Bank rises as its net advances rise 13% YoY to Rs 3.6 lakh crore in Q2FY25, and deposits grow by 15% YoY to Rs 4.1 lakh crore. However, the bank's CASA ratio contracts by 350 bps YoY to 35.9%, indicating a higher cost of funds and lower margins.

  • Nifty 50 was trading at 25,118.90 (104.3, 0.4%), BSE Sensex was trading at 82,017.38 (328.9, 0.4%) while the broader Nifty 500 was trading at 23,636.30 (101.4, 0.4%).

  • Market breadth is highly positive. Of the 2,033 stocks traded today, 1,415 showed gains, and 567 showed losses.

Riding High:

Largecap and midcap gainers today include CG Power and Industrial Solutions Ltd. (759.15, 5.6%), Supreme Industries Ltd. (5,490, 3.9%) and LTIMindtree Ltd. (6,254.95, 2.3%).

Downers:

Largecap and midcap losers today include Rail Vikas Nigam Ltd. (451.70, -8.5%), Varun Beverages Ltd. (542.05, -6.4%) and One97 Communications Ltd. (651.85, -6.2%).

Volume Rockets

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

Top high volume gainers on BSE included Finolex Industries Ltd. (294.40, 8.4%), CG Power and Industrial Solutions Ltd. (759.15, 5.6%) and Natco Pharma Ltd. (1,401.65, 3.5%).

Top high volume losers on BSE were Rail Vikas Nigam Ltd. (451.70, -8.5%) and CIE Automotive India Ltd. (527.90, -4.4%).

Brigade Enterprises Ltd. (1,399, 2.1%) was trading at 5.4 times of weekly average. eClerx Services Ltd. (3,077.05, 1.8%) and MphasiS Ltd. (2,874.45, 1.0%) were trading with volumes 4.7 and 3.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - BASF India Ltd. (8,235.90, 0.7%), eClerx Services Ltd. (3,077.05, 1.8%) and Info Edge (India) Ltd. (8,000, -2.4%).

Stocks making new 52 weeks lows included - IDFC First Bank Ltd. (72.22, 0.5%) and Zee Entertainment Enterprises Ltd. (125.95, -4.4%).

9 stocks climbed above their 200 day SMA including Finolex Industries Ltd. (294.40, 8.4%) and Star Cement Ltd. (210.75, 1.2%). 57 stocks slipped below their 200 SMA including Graphite India Ltd. (535.30, -7.1%) and Varun Beverages Ltd. (542.05, -6.4%).

 
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The Baseline
04 Oct 2024
Five Interesting Stocks Today - October 04, 2024

1. Marico:

This FMCG company touched its all-time high of Rs 719.8 on Thursday following its business update. Q2FY25 volume growth shows signs of recovery, with mid-single-digit (around 5-6% YoY) growth. The company attributes this uptick to improved performance in its flagship Parachute coconut oil brand (contributing around 37% of the total revenue), recovering from a weaker 2% YoY volume growth in the previous quarter. The brand recorded double-digit revenue growth, helped by price hikes taken at the start of the year and falling inflationary pressures.

The company also highlighted that its consolidated revenue grew by high-single-digits (around 7-9% YoY) during the quarter. International business witnessed double-digit growth in the MENA (Middle East and North Africa) and South African regions. In Q1, Marico’s revenue had risen by 6.7% YoY to Rs 2,643 crore,  driven by improvements in the Indian and international markets. According to Trendlyne’s Forecaster, the company’s revenue is expected to grow by 6.9% YoY In Q2FY24. Marico is set to declare its Q2 results on October 29.

In the business update, the FMCG giant also highlighted stable demand trends with rural outperforming urban on a YoY basis for the third consecutive quarter. In contrast, its peer Dabur reported a sharp revenue decline due to weak demand in its food and beverage segment, impacted by floods and heavy rain across different regions. However, it hopes to bounce back starting in October.

Marico expects revenue growth to move into double digits in the second half of this year,  driven by improving rural demand and pricing actions, despite ongoing inflationary pressures on raw materials. The company remains optimistic about managing competition from unorganised players and believes that recent price increases will drive future growth. The Parachute oil maker took another round of price hikes at the end of the quarter, as copra prices increased higher than expected. 

According to analysts, Marico’s business update offers reassurance amid a generally weak performance in the sector. Nuvama expects sustained growth in the international markets and a gradual improvement in the domestic business. The brokerage maintains its ‘Buy’ rating on the stock with a target price of Rs 780. 

2. Angel One:

Thisbroking firm surged 7.5% over the past week after it announced that it willincrease brokerage charges for equity delivery transactions. Effective November 1, Angel One will charge Rs 20 or 0.1% with GST (whichever is lower) per executed order compared to the zero brokerage levied earlier. Analysts expect this move to increase revenue per user but could potentially affect the company’s market share if other discount brokers continue to charge zero brokerage.

Of the gross broking revenue of Rs 920 crore in Q1FY25, 84% came from the derivatives segment. This is a growing business risk, considering the recent F&Ocurbs proposed by SEBI like allowing only one weekly expiry of index derivatives per exchange and increasing the value of contract size to above Rs 15 lakh (up by around 2.5 times) is expected to negatively impact derivative volumes in the coming quarter. Zerodha CEO, Nithin Kamathsays this move by SEBI could impact 60% of their overall trades and 30% of overall orders, assuming that those trading weekly don't move on to trading monthly.

As ofQ1FY25, the total client base of the company increased 11.2% QoQ to 24.7 million. This led to a higher market share of 18.9% in the overall equity segment, up from 18.1% a quarter ago. Revenue from operations increased 74.1% YoY to Rs 1,405.5 crore in Q1, while net profit jumped 32.6% YoY to Rs 293 crore. Forecasterestimates revenue growth of 5.8% YoY, with net profit growth of 39.5% YoY in Q2FY25.

Chairman and Managing Director, Dinesh Thakkar,said, “Customers don't mind paying a few rupees extra per order or paying for cash segment. What is important for them? They should get the best service on this platform.” If volumes are intact, analysts expect around an 8% increase in overall revenue from all the fee changes.

Motilal Oswalmaintains a ‘Buy’ rating on Angel One as their analysis highlights zero impact on earnings in FY26. They expect the hike in brokerage fees to offset the decline in volumes. They also highlight that new product categories such as distribution of loans and fixed income instruments, wealth management and AMC, will start contributing meaningfully over the next couple of years, adding to the firm’s profitability.

3. ITD Cementation India:

This construction & engineering company rose by over 19% over the past week. On October 3rd the company won an order worth Rs 1,937 crore to construct a multi-story commercial building in Uttar Pradesh. The acquisition of the contract is expected to strengthen the company's growth trajectory and expand its portfolio of completed projects.

In Q1FY25, the company’s net profit had surged by 91.9% YoY to 100.2 crore, while its revenue rose by 30.2% YoY driven by a 30.3% QoQ rise in order book to Rs 1,053 crore. The firm beat Trendlyne’s Forecaster estimates for revenue by 8.1% and net profit estimate by 6%. The stock appears in a screener for stocks with strong momentum.

Until FY24, 49% of the company’s order book consisted of government orders, followed by 33% in private sector orders and the remaining 18% from PSUs.  The current government approved Rs 3 lakh crore worth of infrastructure projects in the first 100 days of its third term. Major initiatives include the Rs 76,200 crore Vadhavan port in Maharashtra, which is projected to be among the world's top 10 ports, and construction of 62,500 km of roads under PMGSY-IV. These projects offer significant opportunities for the company in road, bridge, tunnel, railway, and port construction, aligning with the company’s expertise.

India's infrastructure sector is estimated to reach $204.1 billion (Rs 17.2 lakh crore) in 2024 and $322.3 billion (Rs 26.7 lakh crore) by 2029, growing at a CAGR of 9.5%. Projections suggest the sector could hit $1.4 trillion by 2025, driven by government initiatives, changing consumer preferences, and tech advancements. 

Reports indicate that both the Adani Group and RPG Group’s KEC International are interested in acquiring the 46.6% stake that its promoter Italian-Thai Development Public Co. holds in ITD Cementation. However, the company’s management has stated that no decision has been reached yet regarding the proposed divestment. The management has reassured its stakeholders that there are no significant technical deficiencies, reinforcing their capacity to operate independently.

Asit C Mehta Investment has initiated an ‘Accumulate’ rating on ITD Cementation with a target price of Rs 758. The brokerage is optimistic about the company's growth story and guides a revenue CAGR of 17% for FY25-26 and a forward P/E multiple of 27X based on FY26E EPS of Rs 28.08.

4. Alembic Pharmaceuticals:

This pharma stock has risen by 3.9% in the past week, after the USFDA issued an establishment inspection report (EIR) for its oral solid formulation facility, following an inspection in July 2024. The company now has EIRs for all its facilities approved by USFDA.

The company also got final approval from the USFDA for its Lamotrigine tablets in 200 mg, 250 mg, and 300 mg doses. These tablets are used to treat certain types of seizures in patients and have an estimated market size of $268 million. Alembic now has 216 abbreviated new drug application (ANDA) approvals, including 188 final approvals. It also received approval for its Albendazole tablets, which are used for treating parasitic infections. This drug has an estimated market size of ~$200 million.

Trendlyne’s Forecaster projects the company’s net profit will grow 27.2% YoY in the upcoming Q2FY25 results, while revenue will increase 3% YoY during the quarter. In Q1FY25, the company had reported a revenue growth of 5% YoY to Rs 1,563 crore, thanks to strong performance in the US and high single-digit (9% YoY) growth in India. Alembic has faced a double-digit price erosion on some of its products. To counteract this pressure, it intends to sell certain products at higher prices than its competitors.

The company’s US business, which accounts for ~30% of the total sales, grew by 18% YoY in Q1FY25, with the launch of two new products in the US market. Managing Director Pranav Amin said, “We expect the US business to grow by about 10% - 12% in FY25, factoring in both increasing competition and ongoing price erosion.” He also noted that the API segment, which declined by 15% in Q1 due to pricing pressure, is expected to return to growth, with a projected 10% YoY increase in FY25.

KR Choksey maintains a ‘Hold’ rating on the firm, noting that despite challenges like price erosion in the US market and rising costs, it expanded profitability margins. The brokerage expects the company to drive growth through new US product launches, improved capacity utilization, and continued outperformance in the Indian market.

5. SJVN:

Thiselectric utilities company rose 6.2% on September 27, following theannouncement of two memorandums of understanding (MoUs) with the Government of Maharashtra for the development of energy projects in the state.

The first MoU was signed with the State's Department of Water Resources to develop five Pumped Storage Projects (PSPs) with a combined capacity of 8,100 megawatts (MW). The second MoU was inked with Maharashtra State Power Generation Company (MAHAGENCO) for a 505 MW Floating Solar Project at the Lower Wardha Dam in Amravati district.

The total estimated investment for these projects is around Rs 48,000 crore, which is expected to generate approximately 8,400 direct and indirect employment opportunities. Sushil Sharma, Chairman and Managing Director of SJVN,highlighted that these MoUs will facilitate the company to undertake survey, investigations, and the preparation of detailed project reports (DPRs). 

SJVN reported strong financial results inQ1FY25, with net revenue growing 29% YoY, driven by a 56% YoY increase in power generation, which reached 3,292 million kilowatt-hours. The company has set an ambitious target of achieving 50,000 megawatts (MW) of installed capacity in renewable energy by 2040. In the near term, SJVN plans to expand its renewable energy capacity, aiming to add 2,638 megawatt (MW) in FY25 and a further 5,673 MW in FY26.

Monarch Networth Capital hasmaintained its ‘hold’ rating on SJVN, with a target price of Rs 144. The brokerage noted that while delays in the commissioning of SJVN’s projects are typical risks in this sector, the current delays were not unusually long. Analysts expect the company’s capacity to reach 9.3 gigawatt (GW) in FY26 and 11.3 GW in FY27.

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