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Trendlyne Marketwatch
Trendlyne Marketwatch
04 Oct 2024
Market closes lower, Wonderla Holidays' board approves Rs 800 crore share issue via a QIP.
By Trendlyne Analysis

Nifty 50 closed at 25,014.60 (-235.5, -0.9%) , BSE Sensex closed at 81,688.45 (-808.7, -1.0%) while the broader Nifty 500 closed at 23,534.95 (-220.5, -0.9%). Market breadth is in the red. Of the 2,326 stocks traded today, 808 were on the uptrend, and 1,490 went down.

Nifty 50 closed in the red after paring its gains in the afternoon session. The Indian volatility index, Nifty VIX, increased by 7.3% and closed at 14.1 points. HDFC Bank's gross advances grew by 7% YoY to Rs 25.2 lakh crore in Q2FY25, helped by rising domestic retail, commercial, and rural banking loans.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. Nifty Media and Nifty FMCG were among the top index losers today. According to Trendlyne’s Sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a jump of over 1.7%.

Asian indices closed mixed while European indices are trading higher, except the UK’s FTSE 100 which is trading 0.5% lower. US index futures traded flat, indicating a cautious start to the trading session in anticipation of the job growth and unemployment data release later today. Brent crude oil futures are trading in the green.

  • Money flow index (MFI) indicates that stocks like Lloyds Metals & Energy, Balrampur Chini Mills, National Aluminium, and JSW Steel are in the overbought zone.

  • Orient Cement secures a work order from Madhya Pradesh Power Generating Co (MPPGCL) to install a clinker grinding unit at the Satpura Thermal Power Station in Sarni, along with a 25-year Fly Ash supply contract.

  • Media stocks like Saregama India, Network18 Media & Investments, Nazara Technologies, and Dish TV India fall more than 2.5% in trade. All constituents of the broader Nifty Media index are trading in the red.

  • Foreign institutional investors sell equity worth Rs 11,271.2 crore in the market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 39,781 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, investing Rs 13,977.2 crore during the same period.

  • Ceigall India's board intends to establish two new wholly-owned subsidiaries dedicated to the Ayodhya Bypass project. The company plans to set up Ceigall Southern Ayodhya Bypass and Ceigall Northern Ayodhya Bypass, after the required statutory approvals.

  • RBM Infracon rises to its all-time high of Rs 1,029.8 and hits a 5% upper circuit limit as it reportedly enters into a memorandum of understanding (MoU) with Greenzo Energy India to develop and implement green hydrogen generation facilities at two locations in Gujarat-Jamnagar and Kutch. The total planned investment for this project is Rs 200 crore.

  • R Systems International rises sharply after 1 crore shares worth Rs 465.2 crore reportedly change hands in a block deal.

  • Wonderla Holidays' board of directors approves a Rs 800 crore fundraising by issuing equity shares through a private placement, qualified institutional placement (QIP), or other modes. The board also approves raising the company's equity capital to Rs 80 crore divided into 8 crore shares from Rs 60 crore divided into 6 crore shares.

  • Samhi Hotels’ board approves the acquisition of Benguluru-based Innmar Tourism and Hotels for an enterprise value of Rs 205 crore. This acquisition will give Samhi Hotels a stronger foothold in the city.

  • Mahindra & Mahindra Financial Services falls sharply as its total disbursements decline 1% YoY to Rs 13,160 crore in Q2FY25. However, business assets improve 20% YoY to Rs 1.1 lakh crore with a coefficient efficiency of 96%.

  • G R Infraprojects rises as its subsidiary, GR Hasapur Badadal Highway, secures an Rs 872.2 crore order from the National Highways Authority of India. The project involves six-laning a stretch of the Surat–Nashik–Ahmednagar–Solapur road in Maharashtra, to be executed under the Hybrid Annuity Mode as part of the Bharatmala Pariyojana initiative.

  • Edelweiss maintains its 'Buy' call on V2 Retail with a higher target price of Rs 1,754 per share. This indicates a potential upside of 24.6%. The brokerage believes the company's revenue and EBITDA margin will increase, driven by new store expansion and higher revenue per square foot. It expects the firm's revenue to grow at a CAGR of 48.5% over FY25-26.

  • Nuvama Alternative & Quantitative Research believes HDFC Bank could attract $1.8 billion (Rs 15,000 crore) in inflows as the global index services provider MSCI may increase its weight during the final phase of its rejig in November. The September shareholding pattern for HDFC Bank indicates that foreign institutional investor (FII) headroom remains comfortably above 20%.

  • HDFC Bank's gross advances grow by 7% YoY to Rs 25.2 lakh crore in Q2FY25, helped by rising domestic retail, commercial, and rural banking loans. Its deposits also increase by 15.4% to Rs 23.5 lakh crore during the quarter.

  • Shilpa Medicare is rising as its subsidiary, Shilpa Pharma Lifesciences, receives a certificate of suitability (CEP) from the European Directorate for the Quality of Medicines & Healthcare (EDQM) for its active pharmaceutical ingredient (API) for Desmopressin. The drug is used to treat diabetes insipidus and bedwetting.

  • Diffusion Engineers' shares debut on the bourses at a 20.9% premium to the issue price of Rs 168. The Rs 158 crore IPO received bids for 114.5 times the total shares on offer.

  • India’s services PMI moderates to a 10-month low of 57.7 in September, from 60.9 in August, due to a slightly slower growth in export orders.

  • Garden Reach Shipbuilders & Engineers signs an agreement with Carsten Rehder Schiffsmakler and Reederei GmbH of Germany for the construction and delivery of the fifth multi-purpose vessel (MPV) with a deadweight tonnage of 7,500.

  • Vedanta's aluminium production rises 3% YoY to 6.1 lakh tonnes in Q2FY25, while saleable steel production falls by 22% YoY to 3 lakh tonnes. Its oil and gas output declines 22% YoY to 1 lakh average daily gross operated production.

  • Indian Oil Corp signs a business-to-business (B2B) framework agreement with Nepal Oil Corp (NOC) to extend the Motihari-Amlekhgunj petroleum pipeline to Chitwan, Nepal. The deal also includes building oil storage terminals at Chitwan and Jhapa, along with a new pipeline from Siliguri, India, to Jhapa, Nepal.

  • JPMorgan maintains its 'Overweight' rating on Coforge with a higher target price of Rs 9,300. The brokerage attributes the increase in target price to the consolidation of Cigniti starting in Q2FY25, naming the company as its top pick in the IT services sector. It has raised its earnings estimates by 15-20% for FY25-27 and anticipates Cigniti will grow more rapidly than Coforge's organic business.

  • Uflex's Egyptian subsidiary, Flex Asepto (Egypt), plans to set up an aseptic packaging facility with a capacity of 12 billion packs per annum and an estimated capex of $126 million (approx. Rs 1,066.3 crore).

  • Sundaram-Clayton is rising as its board of directors approves the qualified institutional placement (QIP) of shares at a floor price of Rs 2,320.8 per share.

  • JTL Industries' board of directors approves the sub-division/split of one equity share of the company having face value of Rs 2 each, into two equity shares with a face value of Rs 1 each.

  • CESC's subsidiary, Purvah Green Power, enters into a binding agreement to acquire 100% shareholding of Bhojraj Renewables Energy for a cash consideration of up to Rs 108.6 crore. The acquisition focuses on securing approvals for a 300 MW wind project and a 150 MW solar project, aiming to expand its renewable energy assets.

  • Nifty 50 was trading at 25,176.50 (-73.6, -0.3%), BSE Sensex was trading at 82,244.25 (-252.9, -0.3%) while the broader Nifty 500 was trading at 23,664 (-91.5, -0.4%).

  • Market breadth is horizontal. Of the 1,904 stocks traded today, 893 were on the uptrend, and 960 went down.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (572.75, 6.3%), Mankind Pharma Ltd. (2,611.65, 2.9%) and Torrent Pharmaceuticals Ltd. (3,473.55, 2.4%).

Downers:

Largecap and midcap losers today include Mahindra & Mahindra Financial Services Ltd. (300.45, -6.8%), Godrej Properties Ltd. (2,897.45, -5.7%) and Adani Energy Solutions Ltd. (962.75, -5.2%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included VIP Industries Ltd. (563.80, 7.9%), Home First Finance Company India Ltd. (1,240, 4.9%) and Aptus Value Housing Finance India Ltd. (356, 4.6%).

Top high volume losers on BSE were Avenue Supermarts Ltd. (4,737.55, -4.2%), Action Construction Equipment Ltd. (1,321.50, -3.6%) and Ingersoll-Rand (India) Ltd. (4,095, -0.9%).

Chennai Petroleum Corporation Ltd. (943.20, 2.7%) was trading at 5.7 times of weekly average. Sapphire Foods India Ltd. (350, -0.2%) and Grindwell Norton Ltd. (2,413, -0.3%) were trading with volumes 4.9 and 4.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks made 52 week highs, while 3 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Info Edge (India) Ltd. (8,198.65, 0.9%), JSW Steel Ltd. (1,033.75, -0.5%) and Whirlpool of India Ltd. (2,362.60, 1.5%).

Stocks making new 52 weeks lows included - RBL Bank Ltd. (197.69, -0.8%) and CreditAccess Grameen Ltd. (1,149.80, -1.8%).

10 stocks climbed above their 200 day SMA including Steel Authority of India (SAIL) Ltd. (139.01, 1.4%) and Indian Bank (523.35, 1.4%). 33 stocks slipped below their 200 SMA including Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (645.75, -4.7%) and Honasa Consumer Ltd. (427.20, -4.5%).

 
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The Baseline
03 Oct 2024
The big winners: Five stocks expected to stand out in the September results
By Tejas MD

China and Hong Kong just delivered the best weekly performance for their indices in 16 years, fueled by Beijing’s boldest stimulus package since the pandemic. It was rolled out just ahead of the Golden Week holidays. The surge has investors buzzing—but what does this mean for Indian markets? Is what is good for China, bad for India?

India and China are seen as the two great rising rivals of this century. Much ink has been spilled on comparing the two. The Dragon versus the Tiger, etc etc. In recent months, China's star had dimmed somewhat, with a recession, a real estate bust, and US sanctions. The stimulus however has put China back in the spotlight - for now.

With many analysts seeing Indian stocks as overvalued, there’s growing concern that global money managers might trim Indian holdings to make room in their portfolios for surging Chinese stocks. DBS Bank predicts that Indian equities could face headwinds, underperforming their Chinese counterparts in the near future. 

One game-changer for investors eyeing India would be a strong set of Q2FY25 earnings. An upbeat earnings season would boost valuations, easing concerns that the Indian market is too pricey right now. So all eyes are on the upcoming results season.

Which stocks are poised to shine brightest in Q2FY25? We pick five contenders that could deliver a strong performance.

In this week’s Analyticks,

  • Q2 pre-results special: Five companies that could deliver high growth in the September quarter
  • Screener: Stocks where Q1FY25 revenue growth outperformed their sectors, with high Forecaster estimates for revenue growth in Q2FY25

The big winners: Five stocks expected to stand out in the Q2FY25 results season

Heading into the Q2FY25 results, we shortlisted five stocks from the Nifty 500 that are predicted to post high revenue and net profit growth YoY and QoQ in Q2FY25, according to Trendlyne’s Forecaster. What’s more? These companies already set the bar high with strong results in Q1FY25.

Zomato and Kaynes Tech’s revenue and net profit to rise sharply in Q2FY25E

All five stocks in focus, Zomato, Kaynes Technology India, Kalyan Jewellers India, KEC International and Bharat Electronics are from different industries. All these stocks have not only risen sharply over the past year but have also outperformed the Nifty 50 by a huge margin. 

Only Bharat Electronics lags Nifty 50 in the past quarter

As a result of the share price rise, Trendlyne’s Momentum scores for these companies have ranged from neutral to high, indicating buying interest in the market. However, low Valuation scores (except KEC International) signal that they may be expensively priced. But these companies boast of high earnings growth. 

All stocks in focus have good Durability scores with strong fundamentals

These companies have high durability scores, thanks to strong financials and management stability. 

Zomato zooms in the past year, but will Swiggy spoil the party? 

Zomato’s net profit and revenue have risen QoQ every quarter since it posted profit for the first time five quarters ago. Analysts expect the company’s top line and bottom line to rise 64% and 657.8% in Q2FY25. 

Zomato’s revenue and net profit on consistent growth track

Blinkit, Zomato’s quick commerce platform, remains the fastest-growing vertical for the company. Blinkit’s gross order value jumped 130% YoY in Q1, while the food delivery segment rose around 26%. 

Axis Securities believes Zomato has built a resilient business model by securing multiple strategic verticals across food delivery, dining out, Blinkit and Hyperpure. Zomato acquiring Paytm’s entertainment and ticketing business has added to this. 

This food delivery company is in focus after its rival Swiggy filed its updated DRHP for a Rs 3,750 crore fresh issue. Zomatos shares closed 2.3% lower on the same day. While Zomato recorded a profit of Rs 351 crore in FY24, Swiggy reported a loss of Rs 2,350.2 crore in the same period. However, Swiggy managed to reduce its losses by 43% in FY24.

Kaynes Tech on the growth track, enters the semiconductor industry

Kaynes provides design solutions and manufactures advanced electronic modules. Kaynes’ revenue and net profit have been on the rise for the past seven quarters and analysts expect this streak to continue in Q2FY25.

Industrials (including EVs) and automotive are the two major revenue segments driving the company’s top line. These two segments contribute to 85% of the total revenue. Revenue from Industrials (including EVs) and automotive jumped 2.7 times and 56% YoY respectively in Q1FY25. 

Industrials (including EVs) and automotive segments drive revenue higher

Management expects revenue to surpass Rs 3,000 crore in FY25 and exceed the previous guidance of 60% YoY growth driven by rising orders from these two major segments.

The company has also forayed into the semiconductor space by setting up a manufacturing unit in Gujarat with an investment of Rs 3,300 crore. Chief Financial Officer Jairam Sampath said, “We get 75% subsidies on plant and machinery from central and state governments. For every rupee of capex, the revenue potential is between Rs 1 to Rs 1.5”. The management expects the first revenue from this plant by Q4FY26. 

Kalyan Jewellers’ expansion push drives revenue jump

This gems and jewellery stock has jumped over 10X in the past three years. In 2022, the company started to expand its footprint rapidly in the industry through the Franchise Owned Company Operated (FOCO) model.

Kalyan Jewellers has outperformed its competition by gaining market share on the back of aggressive consumer offers (discount on making charges), higher ad spending and faster retail expansion. Analysts expect the company’s revenue and net profit to rise 31.5% and 44.3% respectively in Q2FY25.

New store additions to drive Kalyan Jewellers’ revenue in Q2

In Q1FY25, its Indian business revenue growth came in at 26.5% YoY, driven by an acceleration in store expansion and same-store sales growth (SSSG) of 12% YoY. 

The company added 24 stores in Q1, taking the total count to 241 stores in India. It plans to open 35 Kalyan and 20 Candere stores before Diwali to capitalize on the festival season this year.

T&D emerges as the star segment for KEC International 

This engineering, procurement and construction (EPC) company has been on the rise thanks to the capex push by the Centre. The company’s transmission and distribution (T&D) vertical is the major revenue driver. In Q1FY25, the T&D segment grew 17% YoY with its new orders doubling to Rs. 5,000 crore. 

T&D and civil segment expected to improve KEC’s profitability

The T&D segment is experiencing significant traction driven by the energy transition. The management anticipates Rs 70,000 to 80,000 crore in opportunities from the integration of 500GW of renewable energy. This segment is projected to grow 25% YoY revenue CAGR over the next 4-5 years.  

On September 25, KEC rose 3.7% after the company launched its qualified institutional placement (QIP) issue to raise Rs 4,500 crore. 

High order inflows, better execution drive Bharat Electronics’ revenue

Bharat Electronics Ltd. (BEL) is a Navaratna enterprise that has a 37% market share in Indian defence electronics. This stock debuted on the headline Nifty 50 index on 30 September as part of the benchmark index’s rejig. 

However, this is the only company among the five that has fallen in the past quarter. But, it has still managed to outperform its industry (Defence)  by 4.2%. 

Analysts are positive about the company on the back of high order books and revenue visibility. The current order backlog is at Rs.76,705 crore (3.3x FY25E revenue), providing strong visibility for the next 3 to 4 years. 

Bharat Electronics’ revenue and net profit to rise in Q2FY25

The company maintains its order inflow guidance of Rs 25,000 crore annually in FY25E & FY26E. This defence electronics manufacturer’s revenue and net profit are expected to rise due to better execution & improving profitability. 

Screener: Stocks where Q1FY25 revenue growth outperformed sector averages, with high Forecaster estimates for revenue growth in Q2FY25

Forecaster expects banking & finance stocks’ revenue to grow the most in Q2

As Q2FY25 comes to an end, we look at the best-performing stocks that are expected to continue the growth trend. This screener shows stocks where Q1FY25 revenue growth outperformed sector averages, with high Forecaster estimates for revenue growth in Q2FY25. These stocks have also risen in the past quarter. 

The screener is dominated by stocks from the banking & finance, software & services, consumer durables, and pharmaceuticals & biotechnology sectors. Most notable stocks that feature in the screener are BSE, Dixon Technologies (India), ICICI Securities, Multi Commodity Exchange of India, Trent, Eris Lifesciences, 360 One Wam, and Jubilant Foodworks.

BSE appears in the screener with a 158.3% YoY rise in revenue to Rs 674.3 crore in Q1FY25, outperforming the banking & finance sector by 140 percentage points. This helped the stock price to surge by 49.1% in the last quarter. Forecaster expects this exchange company’s revenue to grow by 86.6% YoY in Q2FY25. Analysts at Motilal Oswal believe that the company’s market share will continue to grow, driven by continued momentum in its MF business, and improvement in the cash & derivatives segment. 

Trent’s revenue increased by 56.2% YoY to Rs 4,150.1 crore in Q1FY25, outperforming the retailing sector by 42.6 percentage points. Forecaster expects this department stores stock’s revenue to grow by 48.2% YoY in Q2FY25. Axis Direct expects Trent’s sales growth to continue, owing to its focus on rapid store expansion and plans to add new products to its portfolio for the winter season.

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
03 Oct 2024
Market closes lower, Alembic Pharma receives USFDA approval for Lamotrigine tablets
By Trendlyne Analysis

Nifty 50 closed at 25,250.10 (-546.8, -2.1%) , BSE Sensex closed at 82,497.10 (-1,769.2, -2.1%) while the broader Nifty 500 closed at 23,755.45 (-515.9, -2.1%). Market breadth is moving down. Of the 2,319 stocks traded today, 444 were on the uptrend, and 1,849 went down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 25,250.1 points. The Indian volatility index, Nifty VIX, increased by 9.9% and closed at 13.2 points. Maruti Suzuki India's total wholesales rose 1.9% YoY to 1.8 lakh units in September due to a 23.2% YoY increase in exports.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. S&P BSE Midsmallcap and S&P BSE Large MidCap 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 0.9%.

Asian indices closed mixed while European indices are trading lower. US index futures traded in the red, indicating a cautious start to the trading session. Brent crude oil futures are trading in the green. Tesla reported disappointing Q3 deliveries, even after cutting prices and introducing new incentives to attract customers. The company delivered 4,62,890 cars from July to September, a 6.4% YoY increase, but fell short of Wall Street's expectations of 4,69,828 units.

  • Relative strength index (RSI) indicates that stocks like Lloyds Metals & Energy, Britannia Industries, Himadri Speciality Chemical, and National Aluminium Company are in the overbought zone.

  • Bandhan Bank falls by over 3% after the credit rating agency ICRA downgrades its non-convertible debentures (NCD) to ‘AA-’ from ‘AA’ and changes the outlook to 'Stable' from 'Negative'. However, the agency reaffirms its ‘A1+’ rating for the bank's certificates of deposit.

  • Shivalik Rasayan surges as the USFDA approves its API manufacturing facility in Dahej, Gujarat. The company receives the establishment inspection report (EIR), confirming compliance and allowing it to expand its operations in the US market.

  • GE Power India receives a purchase order worth Rs 20.9 crore from MP Power Generating to supply boiler parts for the Sanjay Gandhi Power Station.

  • Prasanna Kumar Motupalli, CMD of NLC India, expects demand for electricity to increase by 7-8% till 2031-32 under the National Electricity Plan (NEP). He projects the capacity to increase from 6 GW to 20 GW by 2030 and anticipates renewable energy to make up 50% of the mix.

  • Alembic Pharma rises sharply as it receives USFDA approval for Lamotrigine Extended-Release tablets, used to manage specific seizures. The market size of these tablets is estimated to be around $163 million as of June 2024.

  • RailTel Corp of India receives two work orders from Bangalore Metro Rail Corporation. These include a Rs 75 crore order to supply, install, test, and commission (SITC) IT network infrastructure at stations & depots and a Rs 69.5 crore order to upgrade the CCTV system.

  • Knowledge Marine & Engineering Works is rising as it receives a work order worth Rs 17.8 crore from Dredging Corp of India (DCI) for maintenance dredging and salvage work at Kandla Port.

  • Indian stock markets attract strong interest from foreign portfolio investors (FPIs) so far in FY25, fueled by improving macroeconomic conditions, declining inflation, and a major rate cut by the US Federal Reserve. In H1FY25, FPIs invested Rs 89,717 crore in Indian equities, continuing their buying trend after a record Rs 2 lakh crore inflow in FY24.

  • KPI Green Energy's subsidiary, KPIG Energia, secures approval from the Chief Electrical Inspector (CEIG) for a 5 MW solar power project under its Captive Power Plant (CPP) business segment.

  • Yes Bank's deposits grow by 18.3% YoY to Rs 2.8 lakh crore, and advances increase 13.1% YoY to Rs 2.4 lakh crore in Q2FY25. The bank's CASA deposits grow by 28.4% YoY during the quarter.

  • Dabur India falls more than 5% as its management expects a 'mid-single-digit decline' in consolidated revenue for Q2FY25. The company highlights the impact of heavy rains and floods in certain regions on consumer offtake. The topline also experiences a decline following efforts to move towards 'correct distributor inventory' in the general trade channel.

  • HSBC maintains its 'Buy' rating on ITC with a higher target price of Rs 580. The brokerage highlights the company is trading at a larger discount compared to its FMCG peers. It adds that a stable tax regime for cigarettes will be crucial for ITC's business and boost its earnings growth prospects in the FMCG sector.

  • J Kumar Infraprojects is rising as it receives an order worth Rs 1,847.7 crore from the Mumbai Metropolitan Region Development Authority (MMRDA) to design and construct an elevated road in Thane, from Anand Nagar to Saket, on the Eastern Express Highway.

  • Adani Ports & Special Economic Zone's cargo volumes rise 14% YoY to 37.5 million metric tonnes (MMT) in September, primarily driven by an increase in containers (31% YoY) and liquids & gas(11% YoY). The company reports an 8.5% YoY growth in cargo volumes at 219.8 MMT in H1FY25.

  • Transformers & Rectifiers (India) surges as it secures an order worth Rs 565 crore from Power Grid Corp of India to manufacture and supply transformers and reactors. The equipment ranges from 80 megavolt amperes reactive (MVAr) to 500 megavolt amperes (MVA) and 420 kilovolt (kV) to 765 kV class.

  • Venkatraman Narayanan, Managing Director and Chief Financial Officer at Happiest Minds Technologies, highlights the firm is targeting an exit run rate of $280-300 million in FY25, with a projected growth of 30-35%. He anticipates this year will be the strongest since its public debut in September 2020. Narayanan adds that the firm has doubled its size over the past three financial years, achieving a growth rate of 115%.

  • ITD Cementation surges to its 20% upper circuit as it bags an order worth Rs 1,937 crore to construct a multi-story commercial building in Uttar Pradesh.

  • Maruti Suzuki India's total wholesales rise 1.9% YoY to 1.8 lakh units in September due to a 23.2% YoY increase in exports.

  • KRN Heat Exchanger and Refrigeration’s shares debut on the bourses at a 118.2% premium to the issue price of Rs 220. The Rs 341.5 crore IPO received bids for 214.4 times the total shares on offer.

  • JP Morgan maintains its ‘Overweight’ rating on Cipla with a target price of Rs 1,165. The brokerage believes the domestic outlook is healthy. It highlights the company’s focus on peptides and complex generics in the US. It adds that China will likely become a key market for Cipla.

  • Hero MotoCorp's monthly wholesales rise 18.7% YoY to 6.4 lakh units in September due to higher motorcycle sales and domestic business. However, its exports grow by 21.7% YoY to 20,344 units during the month.

  • NMDC's total sales rise 13.8% YoY to 3.5 million tonnes (MT) in September as its production grows marginally to 3 MT.

  • TVS Motor’s wholesales rise 20% YoY to 4.8 lakh units in September, driven by a 22% YoY increase in two-wheelers and a 42% YoY growth in electric vehicles. Exports surge 11% YoY during the same period.

  • JSW Energy's wholly owned subsidiary, JSW Neo Energy, receives an order from Maharashtra State Electricity Distribution Co (MSEDCL) to supply 1,500 MW / 12,000 MWh of pumped hydro energy storage.

  • Indian markets slumped today. Nifty 50 was trading at 25530.45 (-266.5, -1.0%) , BSE Sensex was trading at 83002.09 (-1264.2, -1.5%) while the broader Nifty 500 was trading at 24004.65 (-266.7, -1.1%)

  • Market breadth is moving down. Of the 2045 stocks traded today, 328 were in the positive territory and 1668 were negative.

Riding High:

Largecap and midcap gainers today include Petronet LNG Ltd. (364.45, 5.9%), Jindal Steel & Power Ltd. (1,051.05, 1.5%) and Aurobindo Pharma Ltd. (1,458.60, 1.4%).

Downers:

Largecap and midcap losers today include Hindustan Petroleum Corporation Ltd. (415.05, -6.7%), Dabur India Ltd. (580.20, -6.3%) and Godrej Properties Ltd. (3,071.15, -5.6%).

Volume Rockets

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

Top high volume gainers on BSE included Amber Enterprises India Ltd. (5,163.85, 6.6%), Petronet LNG Ltd. (364.45, 5.9%) and Jubilant Ingrevia Ltd. (818.25, 5.6%).

Top high volume losers on BSE were Dabur India Ltd. (580.20, -6.3%), Crisil Ltd. (4,495, -3.2%) and Krishna Institute of Medical Sciences Ltd. (541, -2.7%).

Eris Lifesciences Ltd. (1,316, -0.6%) was trading at 13.6 times of weekly average. Just Dial Ltd. (1,192.75, 2.4%) and HBL Power Systems Ltd. (640.65, 1.8%) were trading with volumes 6.2 and 5.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

14 stocks overperformed with 52 week highs, while 3 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Britannia Industries Ltd. (6,331.75, -1.8%), Deepak Fertilisers & Petrochemicals Corporation Ltd. (1,125.75, 1.4%) and EID Parry (India) Ltd. (853, -1.9%).

Stocks making new 52 weeks lows included - RBL Bank Ltd. (199.23, -2.0%) and Equitas Small Finance Bank Ltd. (75.12, -2.6%).

3 stocks climbed above their 200 day SMA including Angel One Ltd. (2,742.15, 5.5%) and Dalmia Bharat Ltd. (1,952, -0.2%). 27 stocks slipped below their 200 SMA including Titagarh Rail Systems Ltd. (1,133.70, -4.6%) and L&T Technology Services Ltd. (5,099.95, -4.6%).

 
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The Baseline
01 Oct 2024
By Aditi Priya

Veteran Emerging Markets investor Mark Mobius said on Friday, "We are now in a long-term bull market for India. And I see the Sensex going up to 100,000 probably by the end of the year provided that the measures taken by SEBI do not put a big damper on the market." This bullish outlook on India's equity market has driven the rapid growth of mutual funds. 

Mutual funds have become an increasingly popular investment option in India, due to their simplicity and diversification. Among the various types, direct mutual funds have become especially popular, particularly direct growth mutual funds. These funds allow investors to bypass intermediaries and brokers, resulting in lower expense ratios compared to regular mutual funds.

The mutual fund industry is witnessing exceptional growth in assets under management (AUM). According to data from the Association of Mutual Funds in India (AMFI), assets managed by the mutual fund industry increased by 40.7% from Rs 46.9 lakh crore in August 2023 to Rs 66 lakh crore in August 2024. The jump in mutual fund assets is also attributable to the increase in Systematic Investment Plan (SIP) contributions. More than 3 crore people have registered for SIP between April and August 2024 and the total number of outstanding SIP accounts has increased by 14.4% to 9.6 crore in August 2024 from 8.4 crore in March 2024. 

Sridharan Sundaram, Founder of Wealth Ladder Direct,said, “There are two key reasons for this surge in mutual fund assets in the past year. One is that small and mid-caps jumped anywhere between 30-40% in the past year, and the second is the continuous inflow into mutual funds via SIPs to the tune of around Rs 20,000 crore every month.”

Mutual funds’ performance rebounds after falling in 2022

In this edition of the chart of the week, we examine the performance of equity mutual funds from three different angles. The first representation, a heatmap, shows the yearly returns of the major mutual fund categories over the past four years. It indicates that equity mutual funds have been doing well over the past two years. However, in 2022, these funds were under pressure due to rising inflation, interest rate hikes, and global conflicts disrupting the global supply chain. 

In 2021, the lifting of Covid-19 lockdowns helped mutual funds post stellar returns, with small-cap funds leading the way with 63.3% returns. In March 2020, equity mutual funds saw significant declines due to COVID-19-induced lockdowns and economic uncertainty. However, by the end of 2020, there was a remarkable recovery driven by government stimulus measures and liquidity infusion by central banks. Equity mutual funds, particularly multi-cap funds, rebounded strongly, delivering returns of 37.32%.

Sectoral/thematic funds emerge as top performers based on one-year and five-year return

If we look at the second chart, sectoral/thematic, particularly infrastructure funds, dominate the top-performing mutual funds over the past year. Bandhan Infrastructure Dir Gr had the highest returns of 75.2% over the past year, while the five year compound annual growth rate (CAGR) of the fund is 32.9%. Also, certain mid-cap equity mutual funds, like Motilal Oswal Mid Cap Dir Gr, have also been at par with the infrastructure mutual funds, mainly because they offer a balance between growth potential and stability, attracting investors seeking diversification with the chance for higher returns compared to large-cap funds.

How has performance been over the long term?

The third chart shows that Quant Small Cap Dir Gr has the highest five-year annualized returns of 49.5%, outperforming the small-cap funds category average by 22 percentage points. Quant Mid Cap Dir Gr returned 38.5% over the past five years, enabling the fund to outperform its category average by 16 percentage points over the same period.

Within mutual fund houses, Quant Mutual Funds has seen impressive growth in AUM between August 2021 and August 2024. The mid cap fund experienced a remarkable increase of 5,340%, expanding from Rs 172 crore to Rs 9,367 crore. Similarly, the small cap fund's AUM grew by 2,342%, growing from Rs 1,045 crore to Rs 25,534 crore.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
01 Oct 2024
Market closes flat, GE Power bags a contract worth Rs 240.4 crore from Blue Energy
By Trendlyne Analysis

Nifty 50 closed at 25,796.90 (-14.0, -0.1%) , BSE Sensex closed at 84,266.29 (-33.5, 0.0%) while the broader Nifty 500 closed at 24,271.30 (26.1, 0.1%). Market breadth is in the green. Of the 2,298 stocks traded today, 1,341 were gainers and 931 were losers.

Nifty 50 closed flat after switching between losses and gains throughout the day. The Indian volatility index, Nifty VIX, fell 6.3% and closed at 11.9 points. NTPC signed a memorandum of understanding (MoU) with the Government of Rajasthan to set up renewable energy projects with a total capacity of 25 gigawatts (GW).

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green. Nifty Media and S&P BSE SME IPO 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 rise of 2.5%.

Asian indices closed mixed, and European indices are trading mixed as investors await for key inflation data. US index futures are trading in the red, indicating a negative start to the trading session as investors anticipate key economic data and react to Federal Reserve Chair Jerome Powell’s comments that the central bank is not rushing to cut interest rates. Brent crude oil futures are trading lower.

  • Money flow index (MFI) indicates that stocks like Westlife Foodworld, Saregama India, Lloyds Metals & Energy, and Shree Renuka Sugars are in the overbought zone.

  • Rail Vikas Nigam emerges as the lowest bidder for an east coast railway project worth Rs 283.7 crore. The project involves executing the balance earthwork, constructing minor and major bridges, and completing P-way linking works between Jarapada and Talcher road over the next 24 months.

  • Senco Gold rises sharply to hit its all-time high of Rs 1,544 as it schedules a meeting on October 4 to consider fundraising and a stock split in its board meeting.

  • GE Power India receives a contract worth Rs 240.4 crore from Blue Energy to design and supply turbine and generator systems for the 100 MW Super Trishuli Hydropower project. The company will also install, test, and commission the supplied equipment.

  • MOIL cuts prices of ferro grade MN-44% manganese ore by 20% but increases prices of ferro grades below MN-44% manganese and all SMGR (MN-30% & MN-25%), fines and chemical grades by 5%. The company keeps the basic price of Electrolytic manganese dioxide (EMD) at Rs 2,05,000 per metric tonne.

  • NTPC signs a memorandum of understanding (MoU) with the Government of Rajasthan to set up renewable energy projects with a total capacity of 25 gigawatts (GW).

  • Godrej Properties rises as its board approves raising up to Rs 6,000 crore via issuance of equity shares, debentures, and other securities. The funds will be raised in one or more tranches via public or private offerings, including a qualified institutional placement (QIP), rights issue, and further public offer (FPO).

  • Alphageo (India) rises to its 5% upper circuit as it receives an order worth Rs 131.6 crore from Oil India for 2D seismic data acquisition in the Ganga-Punjab Basin.

  • NMDC reportedly raises lump ore prices by Rs 400 per tonne to Rs 5,750/ tonne, effective today. The company's lump & fines prices were down by Rs 1,000-1,100 since May.

  • Sharekhan retains its 'Buy' call on Larsen & Toubro with a higher target price of Rs 4,550 per share. This indicates a potential upside of 24.3%. The brokerage expects the company to benefit from healthy order intake in the international segment led by the Middle East and a pick up in domestic order inflows in H2FY25. It expects the firm's revenue to grow at a CAGR of 13.3% over FY25-27.

  • Spicejet rises sharply as Plutus Wealth Management LLP acquires 85 lakh shares (0.7% stake) worth Rs 51 crore through a block deal, at an average price of Rs 59.9 per unit.

  • Rites receives a letter of award (LoA) worth $4.3 million (approximately Rs 35.9 crore) from Tsiko Africa Logistics to supply, commission, and provide a one-year onsite warranty for overhauled Cape Gauge 3100 HP diesel-electric locomotives.

  • Shares of Muthoot Finance and Manappuram Finance are falling as the Reserve Bank of India (RBI) identifies several irregular practices among gold loan financiers. RBI has noted issues such as improper application of risk weights, inadequate monitoring of the loan-to-value (LTV) ratio, and a lack of transparency in the auction process for gold ornaments and jewellery when customers default on loans.

  • Blue Dart Express rises sharply as it announces a general price increase (GPI) of shipments ranging from 9-12%, effective January 2025. The company attributes the price hike to rising long-term costs.

  • Welspun Corp hit an all-time high of Rs 794.8 per share as it bags a Rs 2,400 crore order in the US for supplying coated HSAW pipes for a natural gas pipeline project; to be executed by FY26.

  • Mahindra & Mahindra rises as its wholesales grow 16% YoY to 87,839 units in September. Passenger vehicle wholesales increase 24% YoY, while commercial vehicle sales rise 5.7% YoY.

  • Oil marketing companies announce an immediate price hike for commercial LPG gas cylinders, effective today. The cost of a 19 kg commercial LPG cylinder increases by Rs 48.5, while the price of 5 kg Free Trade LPG cylinders rises by Rs 12. Domestic LPG cylinder prices remain unchanged at Rs 803 for a 14 kg cylinder. This increase comes just before major festivals like Dussehra and Diwali.

  • PC Jeweller surges to its 5-year high of Rs 187.1 per share as its board approves the sub-division (stock split) of its existing equity shares from one equity share with a face value of Rs 10 into ten equity shares with a face value of Re 1.

  • Escorts Kubota's total wholesales rise 2.5% YoY to 12,380 units in September, while its exports decline 47.1% to 395 units. The company's domestic wholesales increase by 5.7% to 11,985 units.

  • Ipca Laboratories is falling as its subsidiary, Bayshore Pharmaceuticals, sells nine abbreviated new drug applications (ANDAs) and generic formulations business to Unichem Laboratories for $12.7 million (approx. Rs 106 crore). This move is part of Unichem's plans to consolidate Ipca's USA generic formulations business under one entity.

  • Investec initiates coverage on Aadhar Housing Finance with a target price of Rs 600. The brokerage is confident about growth in the near term due to its diversified sources, and presence across different states and union territories. It expects assets under management to grow at a 21% CAGR over FY25-27.

  • Newgen Software Technologies' US subsidiary receives orders worth $1.5 million (approx. Rs 12.6 crore) to provide and implement an enterprise content management solution.

  • Tata Steel is falling as it ceases operations at Blast Furnace 4, including associated iron and steelmaking assets in Port Talbot. However, the company plans to invest £1.25 billion (approx. Rs 14,012 crore) to set up an electric arc furnace at the Port Talbot facility and expects it to be operational by CY27-28.

  • Kalpataru Projects International surges as it secures orders worth Rs 1,241 crore from domestic and international markets. These include projects in the transmission & distribution (T&D) sector and residential & commercial building projects in India.

  • Piramal Pharma is rising as its subsidiary, Piramal Pharma Solutions, plans an investment worth $80 million (approx. Rs 670.4 crore) to expand its sterile injectables facility in Kentucky, US. The company also plans to add 24,000 square feet of manufacturing space with new labs and machines, increasing the plant's capacity to 240 annual batches from 104 annual batches currently.

  • Nifty 50 was trading at 25,897.35 (86.5, 0.3%), BSE Sensex was trading at 84,257.17 (-42.6, -0.1%) while the broader Nifty 500 was trading at 24,317.75 (72.6, 0.3%).

  • Market breadth is highly positive. Of the 1,972 stocks traded today, 1,376 were gainers and 562 were losers.

Riding High:

Largecap and midcap gainers today include PB Fintech Ltd. (1730.45, 6.8%), One97 Communications Ltd. (731.35, 6.3%) and Polycab India Ltd. (7326.55, 5.3%).

Downers:

Largecap and midcap losers today include Muthoot Finance Ltd. (1955.90, -3.7%), Jubilant Foodworks Ltd. (658.80, -3.4%) and Jindal Stainless Ltd. (767.40, -2.9%).

Volume Shockers

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

Top high volume gainers on BSE included Caplin Point Laboratories Ltd. (2078.20, 9.5%), Welspun Living Ltd. (175.01, 6.9%) and Star Cement Ltd. (213.67, 6.5%).

Top high volume losers on BSE were Global Health Ltd. (1000.65, -2.1%), Jyothy Labs Ltd. (547.10, -2.0%) and Krishna Institute of Medical Sciences Ltd. (556.15, -0.1%).

Blue Dart Express Ltd. (8601, 4.8%) was trading at 25.5 times of weekly average. BASF India Ltd. (7852, 6.3%) and Olectra Greentech Ltd. (1749.65, 5.7%) were trading with volumes 11.6 and 7.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

19 stocks hit their 52 week highs, while 1 stock tanked below their 52 week lows.

Stocks touching their year highs included - BASF India Ltd. (7852, 6.3%), Bombay Burmah Trading Corporation Ltd. (2884.90, 0.6%) and Britannia Industries Ltd. (6446.05, 1.7%).

Stock making new 52 weeks lows included - RBL Bank Ltd. (203.19, -0.5%).

9 stocks climbed above their 200 day SMA including Star Cement Ltd. (213.67, 6.5%) and Olectra Greentech Ltd. (1749.65, 5.7%). 9 stocks slipped below their 200 SMA including Intellect Design Arena Ltd. (925.60, -3.8%) and Rites Ltd. (334.25, -3.2%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
30 Sep 2024
Market closes lower, Mahindra Logistics forms a 50:50 JV with Seino Holdings
By Trendlyne Analysis

Nifty 50 closed at 25,810.85 (-368.1, -1.4%) , BSE Sensex closed at 84,299.78 (-1,272.1, -1.5%) while the broader Nifty 500 closed at 24,245.20 (-244.4, -1%). Market breadth is in the red. Of the 2,325 stocks traded today, 966 showed gains, and 1,340 showed losses.

Nifty 50 extended its losses in the afternoon session to close lower, as Israel presses on with its attacks on Hamas and Hezbollah in the Middle East. The Indian volatility index, Nifty VIX, rose 6.9% and closed at around 12.8 points. The Nifty Metal index touched its 52-week high of Rs 10,263.7 following the People's Bank of China's announcement (PBOC) on Sunday to reduce mortgage rates for existing home loans by at least 30 points before October 31.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red. Nifty Metal and Nifty Media closed in the green. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a rise of 1.9%.

European indices traded lower, while Asian indices closed mixed. US index futures traded lower, indicating a cautious start to the trading session. China’s FTSE China 50 closed 3.2% higher as the government of China introduced changes like allowing funds, insurers, and brokers easier access to funding to buy stocks. The government also lifted restrictions on buying homes in Guangzhou, Shanghai, and Shenzhen cities.

  • Relative strength index (RSI) indicates that stocks like Bajaj Auto, Trent, Lloyds Metals & Energy, and Sun Pharmaceutical Industries are in the overbought zone.

  • Mahindra Logistics announces a 50:50 joint venture with Japan's Seino Holdings to provide warehousing and trucking services primarily for Japanese automobile and auto ancillary companies in India.

  • Aurobindo Pharma is falling as its subsidiary, Apitoria Pharma, receives ten observations from the US FDA after an inspection at its active pharmaceutical ingredient (API) manufacturing facility, Unit-II.

  • Avantel is rising as it receives a purchase order worth Rs 44.5 crore from Larsen & Toubro to manufacture and supply satellite communication systems.

  • Crude oil futures rise in the morning session amid concerns over supply disruptions due to escalating tensions in West Asia. December Brent oil futures increased by 0.4% to $71.83, while November West Texas Intermediate (WTI) crude futures climbed 0.5% to $68.50.

  • Reliance Infrastructure rises sharply as the Calcutta High Court rules in favor of the company regarding a petition against an arbitration award of Rs 780 crore related to the Raghunathpur thermal power project. The court has also ordered the release of a Rs 600 crore bank guarantee provided by the company.

  • Welspun Corp rises to its all-time high of Rs 762.8 per share as it bags an order to supply coated longitudinal submerged arc welding (LSAW) pipes and bends to a client in the Middle East.

  • Alembic Pharma is rising after the USFDA issues an establishment inspection report (EIR) for its oral solid formulation facility following an inspection in July 2024. The company now has EIRs in place for all its USFDA facilities.

  • Manan Shah, Managing Director of Man Infraconstruction, expects completion of the Atmosphere O2 tower by FY25, with a sales potential of Rs 3,000-3,500 crore. He highlights the company’s target to launch projects worth Rs 4,500 crore. Shah anticipates the onset of the US business by February 2025.

  • NBCC (India) rises as it receives an order worth Rs 101 crore from the National Highways Authority of India (NHAI) to construct a permanent office building for its regional offices (ROs) and project implementation units (PIUs).

  • PB Fintech is rising as it plans to enter the healthcare sector by acquiring a 20-35% stake in an independent healthcare management organisation (HMO) for up to $100 million (approx. Rs 838 crore).

  • Paras Defence and Space Technologies rises sharply as it receives an order worth approximately Rs 305 crore from Larsen & Toubro to manufacture and supply 244 Sight-25HD Electro-Optics (EO) systems.

  • Dr. Agarwal Health Care, an eye care hospital backed by Temasek Holdings and TPG, submits its draft prospectus (DRHP) with the market regulator SEBI to raise funds through an initial public offering (IPO). The IPO consists of a fresh issue of up to Rs 300 crore and an offer for sale of up to 69,568,204 equity shares by the promoter and other selling shareholders.

  • Lupin is falling as it receives six observations from the US FDA following an inspection at its API and finished product manufacturing facility in Pithampur.

  • Bajel Projects is rising as it secures its first order from an upcoming data centre service provider. The project involves designing and constructing a 220/33 KV gas-insulated substation (GIS) and transmission line extension in Navi Mumbai.

  • Manba Finance's shares debut on the bourses at a 20.8% premium to the issue price of Rs 120. The Rs 150.8 crore IPO received bids for 224.1 times the total shares on offer.

  • The Nifty Metal index touches a 52-week high of Rs 10,263.7 following the People's Bank of China's announcement (PBOC) on Sunday to reduce mortgage rates for existing home loans before October 31. The bank has instructed commercial banks in China to lower interest rates on existing mortgages by at least 30 basis points (bps) below the Loan Prime Rate (LPR) in phases. On average, existing mortgage rates are expected to decrease by approximately 50 bps.

  • Bharat Electronics receives approval from the Ministry of Corporate Affairs (MCA) for its 40:60 joint venture (JV), BEL IAI AeroSystems, with Israel Aerospace Industries.

  • NHPC is rising as it enters a joint venture (JV) with Andhra Pradesh Power Generation Corp (APGENCO) to set up pumped storage hydropower and renewable projects in Andhra Pradesh.

  • Rajoo Engineers receives a purchase order valued at $1.6 million (approximately Rs 13.4 crore) from an international customer to supply a high-barrier seven-layer blown film machine.

  • HSBC Global initiates a ‘Buy’ on Varun Beverages with a target price of Rs 780. The brokerage believes the company is poised to become the largest PepsiCo bottler with a 28% market share in carbonated soft drinks. It expects the firm to achieve double-digit volume growth through geographic expansion.

  • ICICI Lombard General Insurance is falling as it receives a tax demand worth Rs 1,388.9 crore from the Office of the Assistant Commissioner of Income Tax, Mumbai, for FY22.

  • Dr Reddy's Laboratories' board of directors approves a GBP 500 million (approx. Rs 5,606.9 crore) investment in its Swiss subsidiary, Dr Reddy's Laboratories SA. The company will use the investment to acquire Nicotinell and other brands owned by Haleon Group.

  • Welspun Enterprises surges as it secures an order worth approximately Rs 1,989.9 crore from Brihanmumbai Municipal Corporation (BMC) to design and construct a tertiary-treated water conveyance tunnel from Dharavi to Ghatkopar.

  • RailTel Corp of India rises as it receives a work order valued at Rs 134.5 crore from Adani Connex for an advanced smart metering infrastructure project.

  • Nifty 50 was trading at 26,089.45 (-89.5, -0.3%), BSE Sensex was trading at 85,208.76 (-363.1, -0.4%) while the broader Nifty 500 was trading at 24,426.30 (-63.3, -0.3%).

  • Market breadth is horizontal. Of the 2,044 stocks traded today, 1,020 showed gains, and 947 showed losses.

Riding High:

Largecap and midcap gainers today include Tube Investments of India Ltd. (4,336.05, 4.6%), NMDC Ltd. (244.91, 4.1%) and APL Apollo Tubes Ltd. (1,584.15, 3.4%).

Downers:

Largecap and midcap losers today include Macrotech Developers Ltd. (1,234.40, -5.1%), Hero MotoCorp Ltd. (5,712.40, -4.1%) and Adani Green Energy Ltd. (1,902.70, -4.0%).

Volume Rockets

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

Top high volume gainers on BSE included Mishra Dhatu Nigam Ltd. (405.50, 4.7%), Alok Industries Ltd. (26.53, 4.7%) and Whirlpool of India Ltd. (2,289.60, 4%).

Top high volume losers on BSE were Gujarat Mineral Development Corporation Ltd. (359.65, 0.0%) and JK Lakshmi Cement Ltd. (769.55, 0.0%).

Trident Ltd. (36.66, 2.8%) was trading at 6.7 times of weekly average. Eris Lifesciences Ltd. (1,316.15, 3.8%) and Vardhman Textiles Ltd. (473.40, 1.7%) were trading with volumes 4.5 and 3.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

23 stocks hit their 52 week highs, while 2 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Apollo Hospitals Enterprise Ltd. (7,199.15, -0.5%), Bharat Petroleum Corporation Ltd. (369.95, 0.7%) and Blue Star Ltd. (2,063.70, -2.6%).

Stocks making new 52 weeks lows included - CSB Bank Ltd. (313, 1.4%) and Ujjivan Small Finance Bank Ltd. (40.43, -1.2%).

10 stocks climbed above their 200 day SMA including APL Apollo Tubes Ltd. (1,584.15, 3.4%) and PNC Infratech Ltd. (446.30, 2.9%). 7 stocks slipped below their 200 SMA including IIFL Finance Ltd. (462.80, -3.1%) and IRB Infrastructure Developers Ltd. (61.06, -2.9%).

 
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The Baseline
27 Sep 2024
Five Interesting Stocks Today - September 27, 2024

1. Firstsource Solutions:

Thissoftware & services firm surged 6% on Tuesday after announcing that its arm, Firstsource Solutions UK, had acquired a UK-based customer service company, Ascensos, for Rs 469 crore. Chairman, Sanjiv Goenka, said, “This acquisition will help us expand in the retail segment which is a $28 billion market globally.” On September 16, the company alsoannounced a collaboration with Microsoft to provide digital transformation services using Azure OpenAI services.

Revenue in Q1 rose 17.1% YoY to Rs 1,793 crore, beating Forecaster estimates by 2.1%. While net profit surged 7.4% YoY to Rs 135 crore, it missed estimates by 4.8%. Trendlyne’s Forecaster estimates revenue growth of 18% on a YoY basis in Q2FY25, with net profit growth of 8.7% YoY. The company appears in ascreener of stocks where mutual funds increased their shareholding in the last quarter.

The miss in net profit was mainly because of marginal growth in its banking & financial services (BFS) segment, which is around 36% of the total revenue.Revenue mix shows that its healthcare services segment has outperformed other segments over the past year, contributing 36% to the revenue in Q1FY25, compared to 32% a year ago during the same period.

The healthcare vertical was the best-performing segment in the past quarter with revenue growth of 26% on a YoY basis. MD & CEO, Ritesh Idani,said, “Medicare utilisation has been on the rise in the US, putting pressure on the margins of healthcare insurers.” He highlights that this has led to insurers seeking optimizations in their cost structure, resulting in a stronger deal pipeline for Firstsource.

ICICI Securitiesmaintains a ‘Buy’ rating on Firstsource, with an upgraded target price of Rs 360, which implies a potential upside of 12.8%. This comes as management forecasts higher annual revenue growth of 11.5% to 13.5% for FY25, which is 8.7% higher growth than their previous guidance. The brokerage is optimistic as the company is diversifying from the BFS segment, and looking forward to broad-based growth in healthcare, communications and other segments.

2. Vodafone Idea:

Thistelecom service provider plunged 19.5% on September 19 following the Supreme Court’srejection of its petition seeking a re-evaluation of its adjusted gross revenue (AGR) dues. The ruling mandates that the company must pay the full amount of its AGR liabilities, approximately Rs 70,320 crore, as per the Department of Telecommunications (DoT). This adds to the company's existing burden of Rs 1.4 lakh crore in deferred spectrum payment obligations, bringing the total outstanding dues to Rs 2.1 lakh crore.

The government calculates this amount based on the total revenue of telecom companies, including income from non-telecom activities. The companies contend that this calculation is unfair and that they should be liable only for revenue directly related to telecom services. While Vodafone Idea seeks relief measures, such as the correction of calculation errors and reduction of penalties, the Indian government insists on its position on the full payment of the dues.

Akshaya Moondra, chief executive officer (CEO) of Vodafone Idea,said, “We've initiated new talks with the government to resolve AGR dues. While a favorable outcome would ease our liability, our long-term plans and revival strategy remain unchanged. This result doesn't affect our cash flows or business plans.” These ongoing discussions with the government are crucial, as a positive outcome could potentially influence how similar AGR dues issues are addressed for other telecom operators within the industry.

Despite these challenges, on September 22 Vodafone Idea announced adeal worth $3.6 billion (approx. Rs 26,784 crore) with global equipment vendors Nokia, Ericsson and Samsung. This investment, part of the company's three-year capital expenditure plan, aims to expand its 4G population coverage, launch 5G services, and improve network capacity. 

Goldman Sachsmaintains a 'sell' rating on Vodafone Idea with a target price of Rs 2.5. The brokerage expressed concerns about Vi's ability to raise tariffs to address its free cash flow gap and predicted larger market share gains for competitors like Bharti Airtel and Jio at Vodafone’s expense.

3. Power Grid Corp:

This electric utilities company has risen by 5.8% over the past week, and touched a new 52-week high of Rs 366.2 on Wednesday. The rise comes after it secured an order to establish an inter-state transmission system at Khavda Pooling Station 1 (KPS1) and Khavda Pooling Station 3 (KPS3) in Gujarat on a build, own, operate, and transfer (BOOT) basis. In addition, Goldman Sachs reiterated its ‘Buy’ stance on the company with a target price of Rs 370 per share. This is the highest target in the consensus – the average target from analysts on Power Grid according to Trendlyne’s Forecaster is Rs 328.

Khavda is the world’s largest renewable energy park, and is expected to significantly contribute to India's target of  achieving 500 GW of installed renewable energy capacity by 2030.

Analysts predict that the Indian power sector will see significant investments exceeding Rs 40 lakh crore, driven by modernisation, growing energy demand and a transition towards renewable sources. Meanwhile, Goldman Sachs notes that the Centre has upgraded the transmission capex estimate to $110 billion and believes Power Grid is poised to benefit from this. The company derives significant revenue (over 98%) from its transmission segment. 

During Q1FY25, the total value of transmission projects under execution rose sharply to over Rs 1.1 lakh crore from around Rs 50,000 crore in Q1FY24. As a result, the company raised its capex target for FY25 to Rs 18,000 crore.  RK Tyagi, CMD of the company said  “Last time we said that our capex plan is, say, 15,000 crore but we have since added six more projects. The completion schedule for these projects is 18-21 months, so we  have increased the capex target to meet the deadlines”. The company reported a 3.5% YoY increase in net profit to Rs 3,723.9 during Q1FY25, while revenue declined marginally by 0.4% YoY to Rs 11,006.2. 

Over the past year, Power Grid has risen over 78.6% outperforming the benchmark index Nifty 50 index which has gained around 33.2%. The company is currently trading the Strong Sell Zone, indicating that it is currently trading above its historical PE. 

4. Bharat Heavy Electricals:

This heavy electrical equipment manufacturer has risen 11.8% in the past week after receiving a Rs 6,100 crore engineering, procurement, and construction (EPC) order from NTPC for an 800 MW unit at the Sipat Supercritical Thermal Power Project in Chhattisgarh. The company appears in a screener of stocks outperforming their industry over the past week.

Bharat Heavy Electricals (BHEL) signed an agreement in August worth Rs 11,000 crore with Adani Power and its subsidiary Mahan Energen to set up three 2x800 MW supercritical thermal power projects in Rajasthan and Madhya Pradesh, expected to be completed in 49 to 55 months.

BHEL has recorded an order inflow of Rs 34,100 crore in FY25 so far and appeared as the lowest bidder for another 3GW project worth Rs 21,000 crore, leading to a bulging order book of Rs 1.6 lakh crore, up from Rs 1.3 lakh crore in FY24. Despite this, there has been no major improvement in delayed orders, with its outstanding order book remaining at Rs 1,35,000 crore as of Q1FY25. Chairman and Managing Director, K. Sadashiv Murthy, mentioned that to ramp up execution, BHEL plans to revise its policies to attract new vendors and re-engage those who had left. This effort, if successful, is expected to help improve gross margins as well, which declined by 32% over the past six years. 

The company has a 70:30 order distribution ratio, receiving 70-75% of orders from the power segment and 25-30% from the industry segment. In FY24, it secured a Vande Bharat order worth Rs 23,500 crore, partnering with Titagarh Wagons to supply 80 trainsets, of which BHEL's share is Rs 15,000 crore, and it anticipates a rise in orders from this industry segment in the future. Murthy said, "We expect more Vande Bharat orders in the next two to three years and aim for a long-term distribution of 50% from each segment."

ICICI Securities maintains a ‘Buy’ rating on BHEL, anticipating an order inflow of Rs 80,000 crore in FY25. The brokerage is optimistic about the outlook for coal-based capacity addition from the government and NTPC.

5. Trent:

This department stores company rose by over 6% in the past week as it is set to be included in the NIfty 50 on September 30th in the index’s semi-annual rejig. Analysts expect the company to attract a total of $495 million ( Rs 4,141.5 crore) inflows due to this inclusion. In May 2024, the company entered into a joint venture (JV) with Singapore-based MAS Amity for designing, developing and manufacturing intimate apparel and other related products in India.

For Q1FY25, the company’s net profit had surged by 126.3% YoY to 392.6 crore, while revenue rose by 54.8% YoY, driven by increased footfalls and strong performance across brands, concepts, categories, and channels. The firm beat Trendlyne’s Forecaster estimates for revenue by 7.6%, but missed the net profit estimate by 0.1% due to subdued market sentiment and heightened competitive intensity. The stock appears in a screener for stocks with strong momentum.

In Q1FY25 the company opened 6 new stores in Westside and added 14 stores in Zudio on a QoQ basis. Trent now operates 228 Westside stores and 559 Zudio stores across 178 cities in India. It has increased the average store area by approximately 16% and 19% YoY, reaching 19,400 sq. ft. for Westside and 9,200 sq. ft. for Zudio. Revenue from Star Bazaar, the company's grocery store brand, grew by 21% YoY to Rs 2,200 crore, primarily driven by a 27% like-for-like (LFL) growth. Zara's revenue increased by 8% YoY, supported by a 15% rise in store count (+3 new stores). Average revenue per Zara store also rose by 3% YoY. 

Analysts estimate India's retail market size to grow 18% YoY to $4.5 trillion (Rs 37,639.6 crore) by 2030 vs.  $1.4 trillion (Rs 11,710.1 crore) in 2023. Along with this they estimate India's fashion and lifestyle market to be Rs 6.5 lakh crore in 2024, with organized players accounting for 40% of this total. Trent's market share in the organized segment was 4.6% in FY24. Analysts observe that retailer-owned brands have gained significance recently, as they provide shoppers with better value for money while allowing retailers to achieve higher margins. These brands have the potential to evolve into self-sustaining propositions.

Citi has initiated a ‘Buy’ rating on Trent with a target price of Rs 9,250, citing growth from transformation to a multi-format and commodity player. The brokerage notes the company is utilizing its supply chain and turning around its Star Bazaar business. It believes the company is well-placed to grow its other pilot projects, including MISBU (the company’s fashion brand) and its JV with MAS Amity. The brokerage sees a revenue/EBITDA/PAT CAGR of 41/44/56% in FY25-27.

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
27 Sep 2024
Market closes lower, Sequent Scientific announces a Rs 8,000 crore merger with Viyash
By Trendlyne Analysis

Nifty 50 closed at 26,178.95 (-37.1, -0.1%) , BSE Sensex closed at 85,571.85 (-264.3, -0.3%) while the broader Nifty 500 closed at 24,489.55 (-7.4, 0.0%). Market breadth is horizontal. Of the 2,284 stocks traded today, 1,106 were in the positive territory and 1,153 were negative.

Nifty 50 touched a new all-time high of Rs 26277.4 before paring its gains in the afternoon session to close lower. The Indian volatility index, Nifty VIX, fell 0.3% and closed at around 12 points. SJVN closed 5.4% higher as it signed two memorandums of understanding (MoUs) with the Government of Maharashtra to set up pumped storage and floating solar projects.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red. Nifty Metal and Nifty PSU Bank closed in the green. According to Trendlyne’s sector dashboard, Oil & Gas emerged as the best-performing sector of the day, with a rise of 2%.

European indices traded higher, while Asian indices closed mixed. US index futures traded mixed, indicating a cautious start to the trading session as markets await personal spending and PCE (personal consumption expenditures) index data, which could provide a glimpse into the health of the US economy. PCE index is expected to rise by 0.2% MoM in August. On a YoY basis, the reading is seen cooling to 2.3% from 2.5% in July.

  • Money flow index (MFI) indicates that stocks like Rainbow Childrens Medicare, Lloyds Metals & Energy, Bharti Airtel, and Escorts Kubota are in the overbought zone.

  • Foreign institutional investors buy equity worth Rs 15,122.3 crore in the market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest inflow of Rs 56,514.9 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, investing Rs 3,790.9 crore during the same period.

  • Akme Fintrade rises as it announces a partnership with MAS Financial Services for co-lending in the MSME sector. Akme will handle 20% of the loan exposure, while MAS Financial will cover 80%, aiming to enhance credit access for underserved MSMEs.

  • Sequent Scientific surges to its 52-week high of a Rs 224.7 as it reportedly announces an Rs 8,000 crore merger with Viyash Life Sciences (Viyash). This merger aims to establish a global animal health platform with end-to-end integrated capabilities.

  • India's Oil Secretary Pankaj Jain states that India will not purchase liquefied natural gas (LNG) from Russia's Arctic LNG 2 project, which is under Western sanctions. The US has also imposed sanctions on companies involved in the project's development and LNG shipments. India imports nearly 40% of its crude oil from Russia. In July, it bought $2.8 billion (Rs 23,437 crore) worth of oil, making it the second-largest importer after China.

  • Genesys International Corp rises as it secures two orders worth Rs 35 crore from NEOM and the Saudi Geological Survey Authority to implement geospatial technology for infrastructural development in Saudi Arabia.

  • Alembic Pharma receives final approval from the US FDA for its abbreviated new drug application (ANDA) for Paliperidone extended-release tablets. The tablets are a generic equivalent of Janssen Pharma's reference-listed drug (RLD), Invega extended-release tablets, which have a market size of $48 million in the year ended June 2024, according to IQVIA.

  • Authum Investment and Mahi Madhusudan Kela sign a share purchase agreement to acquire a 46.9% controlling stake in Prataap Snacks for Rs 846.6 crore. The acquisition includes 1.13 crore shares at Rs 746 each from PE promoters Peak XV Partners Growth Investment I & II and Sequoia Capital GFIV Mauritius.

  • Morgan Stanley upgrades Tata Power to ‘Overweight’ from ‘Underweight’ earlier with a target price of Rs 577. The brokerage notes the company has a strong balance sheet and stable regulated business, enabling it to accelerate investments in transmission, utility-scale renewable energy, and pumped storage.

  • Newgen Software Technologies surges as it secures a purchase order worth Rs 25 crore from a domestic entity, expected to be executed over five years.

  • Shivalik Bimetal Controls rises as 81.8 lakh shares (4.5% stake), amounting to Rs 500 crore, reportedly change hands in a block deal. The transaction was executed at an average price of Rs 611 per share.

  • SJVN rises sharply as it signs two memorandums of understanding (MoUs) with the Government of Maharashtra to set up an 8,100 MW pumped storage project (PSP) and a 505 MW floating solar project (FSP).

  • Sugar stocks like Shree Renuka and Balrampur Chini rise following remarks by the Food Minister Pralhad Joshi. On Thursday, Joshi highlighted the Centre's plan to raise ethanol prices for the 2024-25 season and review the minimum selling price of sugar and sugar exports. The minister added that a committee of secretaries is currently examining a proposal to increase the minimum selling price of sugar.

  • Sterling and Wilson Renewable Energy rises as 1.9 crore shares (8% stake), amounting to Rs 1,192 crore, reportedly change hands in a large deal. The transaction was executed at an average price of Rs 629 per share.

  • Marsons surges to its all-time high of Rs 280.9 as it receives an order worth Rs 675 crore from the National Agricultural Cooperative Marketing Federation (NACOF) OORJA. The order includes the development of a 150 MW (AC) grid-interactive ground-mounted solar photovoltaic power generation plant at various locations in Rajasthan. This project is for the Rajasthan Renewable Energy Corp (RRECL) under the Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM) Scheme.

  • PC Jewellers surges to its 5-year high of Rs 659 per share as it receives a one-time settlement (OTS) approval from a consortium of banks, including Bank of India (BoI), for unpaid dues.

  • Macquarie notes the declining trend in credit card spends and expects the slowdown to continue due to tightened scrutiny and the impact of new RBI norms. The brokerage continues monitoring the impact of increased stress in the banks’ credit card portfolio on credit costs and asset quality.

  • Nuvama Wealth Management rises as 22.1 lakh shares (6.2% stake), amounting to Rs 1,464.8 crore, reportedly change hands in a block deal. Edel Finance Company and Ecap Equities are the likely sellers in the transaction.

  • Biocon rises as it signs a licensing and supply agreement with Tabuk Pharmaceutical Manufacturing to commercialize its glucagon-like peptide (GLP-1) products for diabetes treatment and chronic weight management in the Middle East and North Africa (MENA) region.

  • Bondada Engineering surges to its 5% upper circuit as it bags an order worth Rs 468 crore from KPI Green Energy to supply components for a 130-megawatt peak (MWp) solar power plant.

  • The Central Government increases minimum wage rates for workers by revising the variable dearness allowance (VDA), effective October 1, 2024. Following the revision, minimum wages are Rs 783 per day (Rs 20,358 per month) for unskilled work. For semi-skilled work, the rate is Rs 868 per day (Rs 22,568 per month). Skilled, clerical, and watch & ward without arms earn Rs 954 per day (Rs 24,804 per month), while highly skilled and watch & ward with arms receive Rs 1,035 per day (Rs 26,910 per month).

  • Gulf Oil Lubricants India's promoter sells 40.2 lakh shares (8.2% stake), worth Rs 542.7 crore, at an average price of Rs 1,351.5 per share in a block deal. UTI Mutual Fund (MF), ITI MF, Aditya Birla Sun Life Insurance, Axis Securities, and Societe Generale are among the buyers in the transaction.

  • Ola Electric Mobility's subsidiary, Ole Electric Technologies, receives certification for compliance with eligibility as per the production-linked incentive (PLI) scheme for components of its Ola S1 X 2kWh scooter.

  • Rites emerges as the lowest bidder for an order worth Rs 42.9 crore from Delhi Metro Rail Corp (DMRC) for retrofit work on DMRC's RS-1 trains.

  • RailTel Corp of India rises sharply as it bags an order worth Rs 155.7 crore from the Rural Development Department, Maharashtra, to set up the Aaple Sarkar Seva Kendra (ASSK)-GP project in Konkan, Pune and Nashik.

  • Nifty 50 was trading at 26221.95 (5.9, 0.0%) , BSE Sensex was trading at 85893.84 (57.7, 0.1%) while the broader Nifty 500 was trading at 24506.85 (10.0, 0.0%)

  • Market breadth is ticking up strongly. Of the 1925 stocks traded today, 1280 were gainers and 603 were losers.

Riding High:

Largecap and midcap gainers today include Bharat Petroleum Corporation Ltd. (367.30, 6.4%), Indian Oil Corporation Ltd. (180.01, 5.1%) and Polycab India Ltd. (7,054.80, 4.6%).

Downers:

Largecap and midcap losers today include Macrotech Developers Ltd. (1,300.40, -6.1%), One97 Communications Ltd. (672.30, -4.7%) and JSW Energy Ltd. (740.30, -4.7%).

Volume Rockets

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

Top high volume gainers on BSE included Shree Renuka Sugars Ltd. (53.05, 10.3%), Lakshmi Machine Works Ltd. (17,916.85, 10.0%) and Balrampur Chini Mills Ltd. (654.80, 6.9%).

Top high volume losers on BSE were Tamilnad Mercantile Bank Ltd. (450.90, -5.5%), JSW Energy Ltd. (740.30, -4.7%) and ITI Ltd. (264.25, -4.0%).

Westlife Foodworld Ltd. (930.45, 6.1%) was trading at 43.6 times of weekly average. Sterling and Wilson Renewable Energy Ltd. (648.75, 1.0%) and Praj Industries Ltd. (801.55, 5.5%) were trading with volumes 17.8 and 15.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Apollo Hospitals Enterprise Ltd. (7,249, 1.1%), Bajaj Auto Ltd. (12,666.40, 0.4%) and Bajaj Finserv Ltd. (2,010.70, 1.4%).

Stock making new 52 weeks lows included - CSB Bank Ltd. (308.70, -2.0%).

13 stocks climbed above their 200 day SMA including SJVN Ltd. (133.84, 6.2%) and IRB Infrastructure Developers Ltd. (62.91, 2.4%). 3 stocks slipped below their 200 SMA including IIFL Finance Ltd. (477.80, -2.3%) and Bandhan Bank Ltd. (203.22, -1.0%).

 
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The Baseline
26 Sep 2024
Cut-throat competition in India's cement industry | Screener: Stocks with strong revenue estimates for Q2
By Swapnil Karkare

On May 15, 2022 - a Sunday - Adani did not have a cement business. On Monday, he was India's second biggest cement player. The announcement by the Adani Group of a massive $10.5 billion deal to buy Swiss company Holcim's India business, changed the industry overnight.

When India's richest billionaire makes eye contact with a sector, the existing players get nervous. Adani's entry has set off an intense fight between him and the industry leader, Aditya Birla's Ultratech Cement, for market share.

Over the past several months, the top two players have been busy filling their concrete shopping bags. Ultratech Cement acquired over 50% of India Cements in July 2024. Meanwhile, Ambuja Cements, part of the Adani Group, has fully acquired Penna Cement and is reportedly eyeingITD Cementation. 

Since 2016, there have been 21 significant deals totalling at least Rs. 1.6 trillion. This surge in acquisitions is rapidly reshaping the sector. While such consolidation excites financial markets, it poses challenges for both the industry players and investors.

In this week's Analyticks:

  • Adani versus Birla: Growing pains in the Indian cement industry 
  • Screener: Rising stocks with strong Forecaster revenue estimates for Q2FY25 

Trying to find the shortest route to the top

The Adani Group is in a hurry. It became the second-largest cement player after it acquired Swiss-based Holcim’s India business, which included Ambuja Cements and ACC. It has also reportedlyset aside $3 billion for more acquisitions. 

Its production capacity has jumped from 68 million tonnes per annum (mtpa) in 2022 with the Holcim acquisition to 89 mtpa today with the addition of Sanghi Industries and Penna Cement. It plans to reach 140 mtpa by 2028.

Meanwhile, Ultratech Cement, once known for its organic growth strategy, is also in acquisition mode. In the last few months, it has acquired Burnpur Cement, Kesoram Industries and India Cements. From 115 mtpa, its capacity has reached 155 mtpa today with a target of reaching 200 mtpa by FY27.

CareEdge Ratings estimates that the top four cement companies’ share of India's capacity has increased from 35% in FY12 to 50% in FY24, with projections to hit 60% soon. Their share in cement demand has jumped from 47% to 65% over the same period. Smaller players have lost ground, and could see their market shares fall further.

Acquisition fever has South India in focus

The cement industry is not homogenous; it varies by region. Regional dynamics define pricing as well as market leadership. 

In South India for instance, the market is more fragmented, with the top five players holding 47% of the market share compared to 83% in the North. The capacity utilisation level is lower (60-65%) than the North (85%). This complicates acquisition strategies.

However, the competitive landscape has intensified in the last few years as large players seek to expand their market share.

The acquisition spree is not over yet. Southern companies such as Deccan Cement, Chettinad Cement, MyHome Industries and Bharthi Vicat, holding 9% of India’s capacity, could be prime targets for acquisition, according to an Emkay Securities report. Higher capacities, fragmented markets, and rising cement demand have made the region an attractive hunting ground. 

Large players are pricing to the bottom as they fight for market share

While demand usually drives up prices, rising competition has disrupted this in cement.The big companies are using aggressive pricing strategies to undercut smaller, regional players. For instance, leading companies have sold cement cheaper by Rs.10-15 a bag to compete with Orient Cement in the South.

Orient Cement’s management explained how this strategy has hurt them. “We see that their goal is to sweat the asset, and sell more volume in the market. But their aggression in driving volumes is pushing pricing lower, while demand is not robust enough."

"So the only option for people like us is to either succumb to the pressure of very low pricing and start losing money, literally losing money, or to follow our own strategy and make sure that the business being done is not at a loss”, Deepak Khetrapal, Orient's MD & CEO, saidrecently.

As a result, smaller companies are facing lower margins, and if their financial position isn’t healthy, they risk becoming acquisition targets.

Are cement companies overvalued?

The acquisition wave has inflated valuations for cement players. As the market anticipates more M&As, the large companies are seeing their valuation multiples soar. Stock prices of smaller companies tend to spike even on rumours about potential acquisitions, as seen recently with ITD Cementation. 

Although most experts are positive about the sector, analysts at Kotak Institutional Equities have flagged valuation concerns. Cement is a capex-heavy commodity business, with a low fixed asset turnover ratio (around 1x). A ratio of 1x means that if the company adds Rs. 100 in assets, it generates Rs. 100 in sales. If that ratio is higher, then it can generate more revenue with low investments.

But the low ratio of cement companies means that capex drags free cash flows (FCF) down, resulting in a low FCF to profit-after-tax (PAT) ratio. Kotak analysts believe that FCF to PAT is a better metric than the price-to-earnings (P/E) ratio for such sectors. That number suggests the sector is overvalued at 30-40x PE.

Trendlyne scores do not suggest overvaluation as the scores are still above 30. Larger players are a bit pricey compared to the smaller ones, but they are fundamentally strong.

Capex plans stay ambitious, thanks to manageable debt

Despite the buzz around acquisitions, companies are not neglecting organic growth. The industry has plans for an overall capex of Rs. 1.5 trillion in the next 2-3 years, almost 1.4X the amount spent in the last five years.

Analysts from Crisil note that this expansion will largely be funded through internal resources and operating cash flows, thanks to the healthy balance sheets and low debt levels of these cement firms.

The focus on both organic growth and acquisitions has made the race to the top a fierce one. It also reflects confidence in India’s economy, as the government’s infra push and a robust real estate market is driving cement demand. India right now, has lots of room to grow.

The future? Mostly sunny, with some clouds

Trendlyne forecasts suggest moderate revenue growth for cement companies in FY25. In the first half of this fiscal year, elections and monsoons dampened demand. Higher raw material costs and a weak pricing environment could impact profitability too.

However, analysts are predicting a demand uptick from Q3 this year, especially as government infrastructure projects kick off after the Diwali festival. Whether this increase in demand will translate into pricing power remains uncertain, amid fierce competition for market share. 

The cement sector is going through a major transformation. The big companies are on top right now, dictating prices and turning smaller players into acquisition targets. Once the dust settles in a few quarters, the industry will look very different.

Screener: Rising stocks with strong Forecaster revenue estimates in Q2FY25 

Forecaster expects construction and cement stocks’ revenue to grow in Q2FY25

As we enter the last week of Q2FY25, we take a look at stocks that have risen over the past quarter, and where Forecaster expects YoY revenue growth. This screener shows stocks in the cement & construction sector rising over the past quarterwith strong Forecaster estimates for quarterly revenue YoY growth in Q2FY25.

Stocks from the construction & engineering and cement & cement products industries dominate the screener. Notable stocks in the screener include Capacit’e Infraprojects, ITD Cementation, Kalpataru Projects International, Grasim Industries, Larsen & Toubro, Ahluwalia Contracts (India), Dalmia Bharat, and UltraTech Cement.

Forecaster expects ITD Cementation’s revenue to grow by 32.6% YoY in Q2FY25. This construction & engineering stock has also risen by 16.8% over the past quarter, after reports emerged that the Adani Group is planning to buy a 46.6% stake in the company for Rs 5,888.7 crore. Analysts at Asit C Mehta Investment Intermediates expect the company’s revenue to grow, driven by the government push in the infrastructure sector, and strong order inflows. The brokerage expects the company’s revenue to grow at a CAGR of 17% over FY25-26.

Kalpataru Projects International, another construction & engineering company, shows up in the screener as Forecaster expects its revenue to grow by 17.7% YoY in Q2FY25. Its stock price rose by 12.9% in the last quarter. ICICI Direct believes the company is well positioned for revenue growth owing to its strong order pipeline in the transmission & distribution (T&D), buildings & factories (B&F), and water segments in the domestic market. It expects the company’s T&D business to win orders in the international market. The brokerage anticipates the company’s revenue to grow at a CAGR of 23.5% over FY25-26.

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
26 Sep 2024
Market closes higher, Tata Motors' arm, JLR, plans to invest approx. Rs 5,587.3 crore
By Trendlyne Analysis

Nifty 50 closed at 26,216.05 (211.9, 0.8%) , BSE Sensex closed at 85,836.12 (666.3, 0.8%) while the broader Nifty 500 closed at 24,496.90 (125.7, 0.5%). Market breadth is in the red. Of the 2,277 stocks traded today, 859 were on the uptrend, and 1,405 went down.

Indian indices closed in the green, with the benchmark Nifty 50 index closing at 26,216.1 points. The Indian volatility index, Nifty VIX, declined by 5.8% and closed at 12 points. Oil and Natural Gas Corp. board of directors approved a Rs 10,505 crore investment in its subsidiary, ONGC Petro additions (OPaL), by buying equity shares in the company.

Nifty Midcap 100 closed flat, while Nifty Smallcap 100 closed in the red. Nifty Auto and BSE Auto 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 2.3%.

Asian indices closed higher 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. Micron saw a surge in extended hours of trading today after the chipmaker provided Q1 guidance that significantly exceeded analysts' expectations, driven by a surge in demand for its memory chips used in artificial intelligence applications.

  • ITC sees a long buildup in its September 26 futures series, with open interest increasing by 49.6% and a put-call ratio of 0.3.

  • Mukta Arts surges as it signs a pact with Zee Entertainment for satellite and media rights to 37 films for six years starting August 25, 2027. The fee reportedly exceeds the previous agreement by 25%.

  • Sharekhan maintains its 'Buy' call on Affle (India) with an upgraded target price of Rs 1,820 per share. This indicates a potential upside of 16.8%. The brokerage expects the company to achieve sustained organic revenue growth due to its acquisitions, which helped create synergies and cross-platform efficiency. It expects the firm's revenue to grow at a CAGR of 22.8% over FY25-27.

  • One97 Communications rises sharply as 47.2 lakh shares (0.8% stake), worth Rs 327.8 crore, reportedly change hands in a block deal at an average price of Rs 701 per share.

  • Trent, Bharat Electronics, Canara Bank, JSW Energy, and Macrotech Developers, among others, are rising ahead of the semi-annual rebalancing of NSE indices, including Nifty, Bank Nifty, and Nifty Next 50. On a cumulative basis, Trent will likely attract $495 million ( Rs 4,141.5 crore) inflows, while BEL may attract $336 million ( Rs 2,811.2 crore) in inflows on the Nifty50 inclusion.

  • Linc surges as it forms a joint venture (JV) with Mitsubishi Pencil, Japan, with Mitsubishi holding a 51% stake and Linc holding 49%. This partnership aims to produce high-quality, affordable writing instruments for Indian consumers.

  • Godrej Properties' board of directors schedules a meeting for October 1 to consider a fundraising proposal by issuing equity or debt through a qualified institutional placement (QIP), preferential issue, or other modes.

  • Krsnaa Diagnostics announces plans to acquire a 23.5% stake in start-up Apulki Healthcare for exclusive rights to provide diagnostic services, expected to close in three months. Apulki Healthcare is engaged in establishing and maintaining hospitals under public-private partnerships.

  • Spicejet reportedly clears all pending salary dues for June-August, after raising Rs 3,000 crore through a qualified institutional placement. The airline company had Rs 80 crore in pending payments.

  • Tata Motors is rising as its subsidiary, Jaguar Land Rover (JLR), reportedly plans to invest £500 million (approx. Rs 5,587.3 crore) to retool its Halewood plant to manufacture electric SUVs.

  • GR Infraprojects reportedly plans to raise Rs 1,670 crore (approximately $200 million) in equity capital, with Standard Chartered Bank as the lead advisor to fund greenfield power transmission projects.

  • Prestige Estates Projects launches a residential project, Prestige Pine Forest, in Whitefield, Bengaluru. The development occupies 9 acres of land, with a sales potential of Rs 1,100 crore.

  • CDSL is set to introduce a uniform tariff of Rs 3.5 per debit transaction starting October 1 in compliance with SEBI regulations. The new rate will apply to all debit transactions involving shares. However, CDSL will maintain some discounts: a Rs 0.25 discount for debit transactions made by female demat account holders (as sole or first holders) and a Rs 0.25 discount for transactions involving mutual funds and bond ISINs.

  • Aarti Drugs is falling as it receives Form 483 with seven observations from the US FDA following an inspection at its active pharmaceutical ingredient (API) facility in Maharashtra.

  • Avantel receives a purchase order worth Rs 3.5 crore from Bharat Electronics to supply satellite communications equipment.

  • Reports suggest that 3.3 crore shares (11.2% stake) of Five-Star Business Finance, amounting to Rs 2,034.6 crore, have changed hands in multiple block deals. Peak XV Partners and other PE investors are the likely sellers in the transaction.

  • UBS maintains its 'Sell' rating on Hero MotoCorp with a target price of Rs 3,350. The brokerage notes that stock performance is driven by an expected increase in wholesale volumes for September and October, along with the management’s positive outlook for the festive season. However, this contrasts with Hero's retail trends, which show a significant inventory buildup. Its retail volume growth was just 11% for FY23 and 6% for FY24, notably lower than its peers.

  • KPI Green Energy receives a letter of award (LoA) from Sai Bandhan Infinium to develop a 66.2 MW hybrid power project under the company's captive power producer (CPP) segment.

  • Axis Direct initiates coverage on Arvind SmartSpaces with a 'Buy' call and a target price of Rs 1,085 per share. This indicates a potential upside of 28.1%. The brokerage is positive on the stock due to strong visibility in news launches, asset-light business, strong cash flow, and healthy strategic partnerships. It expects the company's revenue to grow at a CAGR of 45.4% over FY25-26.

  • ASK Automotive falls sharply as its promoter Kuldip Singh Rathee announces the sale of up to 1.1 crore equity shares (5.5% stake) valued at Rs 516 crore through an offer for sale on September 26 and 27. An additional 11 lakh shares (0.55% stake) may be sold if the oversubscription option is exercised.

  • Citi initiates a ‘Buy’ on Trent with a target price of Rs 9,250, citing growth from transformation to a multi-format and commodity player. The brokerage notes the company is utilising its supply chain and turning around its Star Bazaar business. It believes the company is well-placed to grow its other pilot projects, including MISBU, Samoh, and its JV with MAS.

  • Hindustan Copper is falling as its board of directors approves the sale of its copper ore tailing (COT) beneficiation plant in Madhya Pradesh.

  • Oil and Natural Gas Corp's board of directors approves a Rs 10,505 crore investment in its subsidiary, ONGC Petro additions (OPaL), by buying equity shares in the company.

  • UNO Minda rises as its subsidiary, Minda Onkyo India, enters into a technical license agreement with Hyundai Mobis, Korea, to manufacture licensed speakers.

  • IDFC First Bank is rising as it receives approval from the National Company Law Tribunal (NCLT) for the merger of IDFC Financial Holdings with IDFC and the subsequent merger of the resulting entity into IDFC First Bank.

  • Nifty 50 was trading at 26,030.05 (25.9, 0.1%), BSE Sensex was trading at 85,183.64 (13.8, 0.0%) while the broader Nifty 500 was trading at 24,375.10 (3.9, 0.0%).

  • Market breadth is horizontal. Of the 1,947 stocks traded today, 917 were in the positive territory and 964 were negative.

Riding High:

Largecap and midcap gainers today include Maruti Suzuki India Ltd. (13,383.80, 4.7%), Vedanta Ltd. (501.75, 4.6%) and NMDC Ltd. (234.29, 3.8%).

Downers:

Largecap and midcap losers today include Voltas Ltd. (1,857.55, -2.8%), Oil India Ltd. (564.20, -2.5%) and Jubilant Foodworks Ltd. (687.90, -2.4%).

Volume Rockets

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

Top high volume gainers on BSE included Maruti Suzuki India Ltd. (13,383.80, 4.7%), Swan Energy Ltd. (592.60, 4.4%) and Blue Star Ltd. (2,134.80, 4.1%).

Top high volume losers on BSE were Crompton Greaves Consumer Electricals Ltd. (419.25, -5.1%), CIE Automotive India Ltd. (552, -2.6%) and Granules India Ltd. (543.70, -2.2%).

Capri Global Capital Ltd. (207.18, -0.5%) was trading at 17.5 times of weekly average. Prism Johnson Ltd. (211.34, -0.6%) and Intellect Design Arena Ltd. (1,025.10, 1.3%) were trading with volumes 10.3 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

30 stocks overperformed with 52 week highs, while 1 stock were underachiever and hit their 52 week lows.

Stocks touching their year highs included - Apollo Tyres Ltd. (564.25, 3.6%), Bajaj Auto Ltd. (12,621.65, 1.8%) and Bajaj Finserv Ltd. (1,982.80, 2.8%).

Stock making new 52 weeks lows included - RBL Bank Ltd. (208, 0.1%).

7 stocks climbed above their 200 day SMA including NMDC Ltd. (234.29, 3.8%) and Steel Authority of India (SAIL) Ltd. (139.20, 3.7%). 6 stocks slipped below their 200 SMA including Tata Teleservices (Maharashtra) Ltd. (84.54, -0.9%) and IRB Infrastructure Developers Ltd. (61.41, -0.2%).