My Newsfeed

Trendlyne Marketwatch
Trendlyne Marketwatch
04 Nov 2024
Market closes lower, VST Tillers Tractors' net profit up 22.9% YoY to Rs 44.8 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 23,995.35 (-309, -1.3%), BSE Sensex closed at 78,782.24 (-941.9, -1.2%) while the broader Nifty 500 closed at 22,518.30 (-305.3, -1.3%). Market breadth is moving down. Of the 2,368 stocks traded today, 557 were in the positive territory and 1,788 were negative.

Indian indices closed in the red ahead of US election results, with the benchmark Nifty 50 index closing at 23,995.4 points. The Indian volatility index, Nifty VIX, rose around 5% and closed at 16.7 points. Afcons Infrastructure’s shares made their debut on the bourses at an 8% discount to the issue price of Rs 463. The Rs 5,430 crore IPO received bids for 2.6 times the total shares on offer. 

Nifty Midcap 100 and Nifty Smallcap 100 closed lower. Nifty Media and Nifty Auto closed in the red. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a rise of 1.7%.

European indices are trading mixed. Major Asian indices closed mixed. US index futures are trading mixed, indicating a cautious start to the trading session. Vertex Pharmaceuticals, Palantir Technologies, Constellation Energy, and Marriott International among others, are set to report their earnings later today.

  • Relative strength index (RSI) indicates that stocks like Poly Medicure, Crisil, and Piramal Pharma are in the overbought zone.

  • VST Tillers Tractors' net profit grows by 22.9% YoY to Rs 44.8 crore in Q2FY25, helped by lower inventory expenses. Revenue increases 6.1% YoY to Rs 310.2 crore, driven by an increase in sales of power tillers, power weeders, and reapers. It features in a screener of stocks with rising net cash flow and cash from operating activities.

  • Solar Industries India bags an order worth Rs 399.4 crore from an international client to supply defence products over the next three years.

  • Tube Investments of India declines as its Q2FY25 net profit falls by 22.3% YoY to Rs 206.8 crore, caused by increased raw materials, inventory, and employee benefits expenses. However, revenue grows by 14.4% YoY to Rs 4,995.2 crore owing to improvements in the engineering, metal-formed products, electric vehicles, gears & gear products, power systems, and industrial systems segments.

  • Niva Bupa Health Insurance Company sets its IPO price band at Rs 70-74 per share. The issue size is Rs 2,200 crore, with a fresh issue worth Rs 800 crore and an offer for sale of around Rs 1,400 crore. The issue opens on November 6.

  • Exide Industries falls sharply as its net profit declines 14.1% YoY to Rs 231.3 crore in Q2FY25 due to higher raw materials, employee benefits, and finance costs. However, revenue increases 1.8% YoY to Rs 4,490.3 crore, driven by improvements in the two-wheeler & four-wheeler replacement and industrial uninterruptible power supply (UPS) & solar segments. It appears in a screener of stocks with increasing trend in non-core income.

  • IDBI Capital upgrades Ami Organics to 'Buy' from 'Hold' with a higher target price of Rs 2,250 per share. This indicates a potential upside of 13.8%. The brokerage expects sustained growth in key molecules, combined with the scale-up of the contract development and manufacturing organization (CDMO) segment, will help improve revenue. It expects the firm's revenue to grow at a CAGR of 31.7% over FY25-27.

  • Bharat Global Developers surges to its 5% upper circuit as it bags an order worth Rs 300 crore from McCain India Agro to supply 2 lakh tonnes of potatoes in the next six months.

  • Umesh Chowdhary, CEO of Titagarh Rail Systems, says the company delivered 900 wagons per month in Q2FY25, and projects it to be over 1,000 wagons/month for FY25. He highlights that the order book stands at Rs 25,000 crore, with 50% coming through JVs. Chowdhary maintains the EBITDA margin guidance at 12% and expects a 300-400 bps jump in the passenger EBITDA.

  • Hatsun Agro Products is falling as its net profit declines by 17.1% YoY to Rs 64.3 crore in Q2FY25, caused by higher employee benefits and finance costs. However, revenue grows by 8.3% YoY to Rs 2,078.7 crore during the quarter. It shows up in a screener of stocks with weak financials.

  • DCM Shriram's Q2FY25 net profit surges 95.2% YoY to Rs 62.9 crore, helped by lower inventory and fuel & power expenses. Revenue increases 11.8% YoY to Rs 3,184 crore driven by improvements in the chloro-vinyl, sugar, Shriram farm solutions, bioseed, and fertilizer segments. It features in a screener of stocks with dividend yield greater than the sector dividend yield.

  • Hero MotoCorp's monthly wholesales rise 18.1% YoY to 6.8 lakh units in October due to higher motorcycle sales and domestic business. Its exports grow by 43% YoY to 21,688 units during the month.

  • Partho Banerjee, Senior Executive Officer, Marketing and Sales at Maruti Suzuki, expects strong sales in November due to “a few lakh” weddings, carrying forward the festive momentum. The company posted retail sales of 2 lakh units in October, driven by festive sales.

  • Bajaj Auto is falling as its domestic wholesales decline by 8% YoY to 3 lakh units in October due to a decrease in two-wheeler and commercial vehicle domestic wholesales by 8% YoY and 6% YoY, respectively. However, the company's exports grow by 24% YoY to 1.8 lakh units during the month.

  • Energy stocks like Indian Oil Corp, Tata Power, Bharat Petroleum Corp, and Coal India fall more than 3% in trade. All constituents of the broader Nifty Energy index are also trading in the red, causing the index to plunge more than 3%.

  • IRB Infrastructure Developers falls sharply as its net profit misses Forecaster estimates by 1.8% despite growing 4.3% YoY to Rs 99.9 crore in Q2FY25. Revenue declines by 6.6% YoY to Rs 1,751.6 crore due to a reduction in the construction segment. It appears in a screener of stocks with high promoter pledges.

  • India’s manufacturing PMI rises to 57.5 in October, compared to the nine-month low of 56.5 in September, driven by robust demand for Indian goods.

  • Biocon falls sharply as it reports a net loss of Rs 16 crore in Q2FY25 compared to a net profit of Rs 125.6 crore in Q2FY24 due to higher inventory, employee benefits, and deferred tax expenses. Revenue remains flat at Rs 3,622.9 crore as gains in the biosimilars segment were offset by declines in the generics and research services segments. It shows up in a screener of stocks with RSI indicating price weakness.

  • Larsen & Toubro's Q2FY25 net profit grows 13% YoY to Rs 703.6 crore. Revenue increases 20.1% YoY to Rs 62,655.9 crore owing to improvements in the infrastructure projects, energy projects, hi-tech manufacturing, IT & technology services, and financial services segments. It features in a screener of stocks with high momentum scores.

  • Tata Power is falling as its net profit misses Forecaster estimates by 12.3% despite growing by 5.8% YoY to Rs 926.5 crore in Q2FY25 owing to lower fuel and raw material costs. Revenue rises by 11.9% YoY to Rs 16,219.8 crore, attributable to the transmission & distribution segments. It appears in a screener of stocks with increasing debt.

  • DAM Capital initiates a ‘Buy’ rating on Bharti Airtel with a target price of Rs 1,907. The brokerage expects strong multi-year growth in the home broadband segment and steady expansion in the B2B business. It projects the company’s wireless subscribers to grow by more than 2% annually, with average revenue per user rising 7% every year for the next decade.

  • Afcons Infrastructure’s shares debut on the bourses at an 8% discount to the issue price of Rs 463. The Rs 5,430 crore IPO received bids for 2.6 times the total shares on offer.

  • Bondada Engineering rises as its Q2FY25 net profit surges by 142.2 % YoY to Rs 36 crore, helped by lower raw material expenses. Revenue jumps by 62.7% YoY to Rs 483.4 crore, driven by the engineering, procurement & construction (EPC) segment. It features in a screener of stocks with improving return on equity (RoE) over the past two years.

  • Narayana Hrudayalaya is falling as its net profit declines by 12.3% YoY to Rs 198.6 crore in Q2FY25 due to higher raw materials and employee benefits expenses. However, revenue grows by 7.6% YoY to Rs 1,423.6 crore, helped by the medical & healthcare-related services segment. It shows up in a screener of stocks with growing costs YoY from long-term projects.

  • Welspun Corp is rising as it bags two orders worth approx. Rs 1,300 crore from the US to supply coated helical submerged arc welding (HSAW) pipes for natural gas pipelines.

  • Nifty 50 was trading at 24,128.25 (-176.1, -0.7%), BSE Sensex was trading at 79,573.72 (-150.4, -0.2%) while the broader Nifty 500 was trading at 22,636.30 (-187.3, -0.8%).

  • Market breadth is overwhelmingly negative. Of the 2,050 stocks traded today, 526 were in the positive territory and 1,468 were negative.

Riding High:

Largecap and midcap gainers today include Info Edge (India) Ltd. (7,722.75, 3.4%), Max Healthcare Institute Ltd. (1,036.60, 2.9%) and Punjab National Bank (103.65, 2.6%).

Downers:

Largecap and midcap losers today include Rail Vikas Nigam Ltd. (446.20, -5.3%), Solar Industries India Ltd. (9,887.65, -4.9%) and Star Health and Allied Insurance Company Ltd. (488.80, -4.5%).

Volume Rockets

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

Top high volume gainers on BSE included Fine Organic Industries Ltd. (5,133.10, 5.8%), Rainbow Childrens Medicare Ltd. (1,630.35, 5.2%) and Galaxy Surfactants Ltd. (3,050, 4.0%).

Top high volume losers on BSE were Sun Pharma Advanced Research Company Ltd. (205.13, -5.0%), PVR INOX Ltd. (1,498, -4.9%) and KIOCL Ltd. (321.50, -4.1%).

Shoppers Stop Ltd. (658.50, -3.5%) was trading at 17.9 times of weekly average. Hatsun Agro Products Ltd. (1,068, -3.8%) and Welspun Corp Ltd. (731.70, -0.2%) were trading with volumes 7.3 and 6.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks hit their 52 week highs, while 2 stocks hit their 52 week lows.

Stocks touching their year highs included - City Union Bank Ltd. (178.45, 0.4%), Crisil Ltd. (5,479.90, 0.3%) and Federal Bank Ltd. (204.29, 0.1%).

Stocks making new 52 weeks lows included - Astral Ltd. (1,750.80, -1.5%) and Birlasoft Ltd. (549.80, -1.3%).

3 stocks climbed above their 200 day SMA including Macrotech Developers Ltd. (1,194.95, -1.0%) and Hatsun Agro Products Ltd. (1,068, -3.8%). 29 stocks slipped below their 200 SMA including Craftsman Automation Ltd. (4,997.60, -4.0%) and Star Cement Ltd. (203.56, -3.9%).

 
logo
The Baseline
31 Oct 2024
Some sectors show positive signs in a downbeat quarter | Screener: Stocks beating their estimates

The CEOs are less bombastic, the analysts are concerned, and the investors are brooding over the red in their portfolios.

Much of the talk in these past few weeks has been around India Inc's disappointing Q2 results. Revenue growth across sectors and industries looks in the range of 5-7% YoY, the slowest in four years. Large bellweather companies like Reliance Industries have reported disappointing numbers, missing estimates.

Among the underperfomers is the cement and construction sector, whose results so far have shown negative average revenue growth and falling margins. One factor here is the strong monsoon, which while great for agriculture, has delayed construction activity across the country.

But a bigger factor, as the Nuvoco Vistas management pointed out, is falling government spending. "Union government capex has dropped 19% YoY, and state governments’ capex declined by 6% YoY in the first five months of FY25, after a 40% surge in the previous year," they noted. "Some states have seen 35%+ drops in state capex spending." 

Construction and cement account for one-fifth of corporate earnings, so weakness here has dragged down overall performance. Sectors such as industrial machinery and plastics are also struggling, and consumer demand remains weak across sectors like FMCG, auto, and retail.

Still, there are some bright spots emerging in the results. In our hunt for silver linings, we take a closer look at these. 

In this week's Analyticks:

It's results season!: In a downbeat quarter, who are the outperformers?

Screener: Rising stocks outperforming Forecaster estimates in revenue and EPS in Q2FY25

Banking and tech are the front-benchers this quarter

As Q2 results have rolled in, one emerging bright spot has been banks. Stronger deposit growth has helped drive net profits up. Net interest income is higher, although it is growing slower than it did over the past two years. Still, steady performances from major banks like ICICI Bank has helped boost sentiment for this part of India Inc. 

Another sector that is emerging from the doldrums, is IT and software. According to tech CEOs, discretionary spending is coming back globally, with Mastek CEO Umang Nahata noting that "sentiment in the market is positive compared to what it was earlier." Infosys has increased its guidance for the second consecutive quarter amid this shift.

A relatively surprising entry here is textiles. The textile sector has struggled for the past several quarters with rising competition from players in Vietnam and Bangladesh, as well as weak demand for intermediary products. This quarter however, there are hints of green shoots, with rising revenues overall. Welspun Group Chairman Balakrishan Goenka has pointed to the growth of the advanced textiles segment and global brands as drivers for Indian players. "Domestic demand," he notes, "has also ramped up." 

Average revenues jump, but companies struggle with margins and profitability

Even in these better performing sectors, there are some concerning trends. Textiles is still struggling with margin growth, despite double digit revenue expansion. Banks while growing, are seeing a more muted result than previous quarters. 

When domestic growth slows, investors and analysts alike look to export-oriented sectors like software and textiles. While the jury is still out on the outlook for the textile sector, IT companies, particularly IT services, are coming out of the doldrums, thanks to drivers like interest rate cuts in the US and EU. Salil Parekh, the Infosys CEO noted, "Typically we have seen that when interest rate cuts begin and inflation is more in control in Western Europe and the US, spending on large technology programs increases". 

But what is driving overall Q2 weakness? Management across sectors point to the slowing Indian economy. There are some clear warning signs: slower credit growth and higher food inflation. FMCG growth,which used to be in the double digits a couple of quarters ago, is now down to 1.5% to 2%.  All of this points to Indians growing more protective of their wallets. 

So even as consumer spending recovers globally,  we need to keep an eye on Indian demand, particularly in urban areas. "The pressure points are coming from mega cities and metros," Nestle India Chairman Suresh Narayanan says. This lack of consumer confidence is set to suppress the performance for much of India Inc. 

Screener: Rising stocks outperforming Forecaster estimates in revenue and EPS in Q2FY25

Banking & finance stocks have the highest positive surprise in Q2FY25

With the result season in full flow, we take a look at companies that have outperformed Trendlyne’s Forecaster estimates. This screener shows stocks rising over the past month while outperforming Forecaster estimates in revenue and earnings per share (EPS) in Q2FY25.

The screener is dominated by stocks from the banking & finance, software & services, and consumer durables sectors. Most notable stocks that feature in the screener are Amber Enterprises, Dixon Technologies, Nippon Life India Asset Management, Aditya Birla Sun Life AMC, Indian Bank, Federal Bank, Great Easter Shipping, Multi Commodity Exchange of India, and City Union Bank.

Amber Enterprises’ revenue and EPS beat Trendlyne’s Forecaster estimates by 44.8% and 1,283.3% in Q2FY25. Revenue beat estimates, helped by the consumer electronics company’s revenue growing by 81.2% YoY on the back of an improvement in the consumer durables (which contributes to 64% of total revenue) and electronic manufacturing services (EMS) (contributes 29%). The company’s EPS outperformance was driven by a net profit of Rs 19.2 crore in Q2FY24 compared to a Rs 6.9 crore loss in Q2FY24.

Nippon Life India Asset Management also shows up in the screener after beating Forecaster estimates for revenue and EPS by 21.2% and 14.3%, respectively in Q2FY25. This asset management company’s revenue beat estimates owing to higher assets under management and improved inflows in the SIP and equity funds segments. EPS beat Forecaster estimates after growing by 47.3% YoY to Rs 360.1 crore during the quarter.

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
30 Oct 2024
Market closes lower, Kaynes Tech's net profit grows 87.5% YoY to Rs 60.2 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 24,340.85 (-126, -0.5%), BSE Sensex closed at 79,942.18 (-426.9, -0.5%) while the broader Nifty 500 closed at 22,749.80 (-45.3, -0.2%). Market breadth is ticking up strongly. Of the 2,308 stocks traded today, 1,801 showed gains, and 483 showed losses.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 24,340.9 points. The Indian volatility index, Nifty VIX, rose 6.9% and closed at 15.5 points. Larsen & Toubro’s transmission and distribution (T&D) business won orders worth Rs 5,000-10,000 crore to expand and strengthen electricity grids in the Middle East and Africa. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green. S&P BSE SME IPO and Nifty Media were among the top index gainers today. According to Trendlyne’s Sector dashboard, Healthcare Equipment & Supplies emerged as the best-performing sector of the day, with a rise of 5.5%.

Asian indices closed mixed while European indices are trading in the red with an exception of the Russian MOEX & RTSI index which is 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 green. Alphabet's Q3 results exceeded Wall Street expectations, primarily driven by robust demand for computing and data services necessary for supporting artificial intelligence models, which are enhancing returns for its cloud computing division.

  • Money flow index (MFI) indicates that stocks like Crisil, Syrma SGS Technology, and Indian Bank are in the overbought zone.

  • Shalby’s net profit declines 43% YoY to Rs 173.4 crore in Q2FY25 attributed to higher employee benefit, depreciation & amortisation expenses and finance costs. Revenue drops 2.2% YoY to Rs 2,122.7 crore during the quarter. The company features in a screener of stocks with declining profits every quarter for the past three quarters.

  • Kaynes Technology's net profit grows by 87.5% YoY to Rs 60.2 crore in Q2FY25 but misses Forecaster estimates by 1.1%. Revenue grows by 63.8% YoY to Rs 605.7 crore during the quarter. It features in a screener of stocks with increasing net profit and profit margin (YoY).

  • Aadhar Housing Finance, Usha Martin, and Apollo Hospitals Enterprise rise by 9%, 5.9%, and 1.3% respectively, ahead of their Q2FY25 results on November 6.

  • According to a report from the World Gold Council, India purchased gold worth Rs 1.7 lakh crore in Q2FY25, despite a 28% increase in global prices. Gold demand rose 18% YoY to 248.3 tonnes in Q2, driven by higher jewellery consumption and increased investment in gold.

  • AIA Engineering's Q2FY25 net profit declines by 21% YoY to Rs 256.7 crore due to higher inventory and employee benefits expenses. Revenue falls 19.4% YoY to Rs 1,044.2 crore during the quarter. It appears in a screener of stocks with declining profits over the past three quarters.

  • Procter & Gamble Hygiene & Healthcare’s Q2FY25 net profit grows marginally by 0.6% YoY to Rs 211.9 crore, missing the Forecaster estimates by 9.4%. Revenue remains flat at Rs 1,132.7 crore. The company shows up in a screener of stocks with declining revenue every quarter for the past three quarters.

  • Sterlite Technologies posts a net loss of Rs 14 crore in Q2FY25 compared to a net profit of Rs 34 crore in Q2FY24 due to higher raw materials costs. Revenue declines by 5.2% YoY to Rs 1,419 crore, caused by a reduction in the optical networking, global services, and digital & technology solutions segments. It appears in a screener with low DVM stocks.

  • Satyanarayana Raju, CEO of Canara Bank, highlights the bank is on track to meet its net interest margin (NIM) guidance for FY25, despite an overall increase in deposit costs within the banking sector. For Q2FY25, the bank's NIM stood at 2.88%, a decline of 2 bps from the previous quarter. At the beginning of the financial year, the bank had aimed for a NIM in the range of 2.9%.

  • Larsen & Toubro’s transmission and distribution (T&D) business bags orders worth Rs 5,000-10,000 crore to expand and strengthen electricity grids at high-voltage levels in the Middle East and Africa. The company will also implement an energy management system for a country-wide electricity network.

  • Geojit BNP Paribas upgrades Bajaj Finance to 'Buy' from 'Hold' with a higher target price of Rs 7,924 per share. This indicates a potential upside of 13.6%. The brokerage believes the lender will benefit from the falling credit costs and potential margin expansion from rate cuts, which could support lower-margin products and new businesses. It expects the company's net interest income (NII) to grow at a CAGR of 20.4% over FY25-26.

  • Redington surges as its net profit beats Forecaster estimates by 12.3% despite falling by 3.5% YoY to Rs 292.9 crore in Q2FY25. However, revenue grows by 11.9% YoY to Rs 24,952.2 crore, helped by improvements in the Singapore, India & South Asia (SISA) and rest of the world (ROW) segments. It features in a screener of stocks with the highest FII holdings.

  • Five-Star Business Finance falls over 11%, but Nuvama Research retains its 'Buy' rating on the stock, with a target price of Rs 1,010. Despite a reduction in growth guidance and lower incremental yield, the brokerage believes the company will outperform its peers in terms of growth and profitability. It highlights that Five-Star's earnings indicate the strength of its business model amid significant stress among many small lenders.

  • GlaxoSmithKline Pharmaceuticals is rising as its net profit grows by 16.1% YoY to Rs 252.2 crore in Q2FY25, helped by lower finance costs and depreciation expenses. Revenue increases 5.6% YoY to Rs 1,010.8 crore during the quarter. It features in a screener of companies where mutual funds increased their shareholding in the last quarter.

  • Media stocks like Sun TV Network, PVR INOX, Network18 Media & Investment, and Zee Entertainment Enterprises are rising in trade. All constituents of the broader Nifty Media index are also trading in the green.

  • Honeywell Automation falls sharply as its net profit declines 5.6% YoY to Rs 115.1 crore in Q2FY25 due to higher cost of raw materials. Revenue decreases by 6.9% YoY to Rs 1,065.1 crore during the quarter. It shows up in a screener of high volume and top losing stocks.

  • Sanjay Swarup, CMD of Container Corp of India, projects volume growth of more than 18% and margins at around 25-26% for FY25. He anticipates improved realizations in the second half of the fiscal year and maintains the FY25 export-import (EXIM) volume guidance of 15-25% for the company's domestic business.

  • Voltas is falling as its net profit misses Forecaster estimates by 1.8% despite growing by 265.3% YoY to Rs 134 crore in Q2FY25, helped by inventory destocking. Revenue rises by 15.3% YoY to Rs 2,724.6 crore, driven by improvements in the unitary cooling products and engineering products & services segments. It appears in a screener of stocks with an increasing trend in non-core income.

  • Godrej Agrovet is falling as its Q2FY25 net profit misses Forecaster estimates by 7.3% despite growing by 6.6% YoY to Rs 112.3 crore. Revenue declines 4.7% YoY to Rs 2,461.3 crore due to a reduction in the animal feed, vegetable oil, crop protection, and poultry & processed food segments. It appears in a screener of stocks where RSI indicates price weakness.

  • Godavari Biorefineries’ shares debut on the bourses at a 12.5% discount to the issue price of Rs 352. The Rs 554.8 crore IPO received bids for 1.8 times the total shares on offer.

  • Economists believe the Reserve Bank of India (RBI) will likely cut its key policy rate by a quarter point to 6.25% in December to support slowing economic growth. Despite a surprising rise in inflation to 5.5% in September, it is projected to average 4.9% this quarter and drop to 4.6% in January-March, giving RBI the room to ease policy. The central bank has maintained interest rates at their highest level since early 2019 over the past ten meetings.

  • Shriram Properties is rising as it signs a joint development agreement for a six-acre land in Undri, Pune. The company will develop over 650 apartments and some retail or commercial spaces with an aggregate saleable area of more than 1 million square feet. The project has a revenue potential of approx. Rs 700-750 crore, to be developed over four years.

  • Force Motors surges more than 15% as its net profit grows 43.8% YoY to Rs 135 crore in Q2FY25, helped by lower finance costs. Revenue increases 7.7% YoY to Rs 1,949.9 crore during the quarter. It features in a screener of stocks with improving return on equity (RoE) over the past two years.

  • Marico rises sharply as its net profit grows by 19.8% YoY to Rs 423 crore in Q2FY25. Revenue increases by 9.2% YoY to Rs 2,746 crore, driven by improvements in the Indian and international markets. It appears in a screener of stocks near their 52-week highs.

  • Prestige Estates Projects is falling as its net profit declines by 77.4% YoY to Rs 192.2 crore in Q2FY25 due to higher raw materials, contractor, employee benefits, and finance costs. Revenue decreases by 25.6% YoY to Rs 2,423.8 crore, caused by lower sales and collections. It shows up in a screener of stocks where promoters are decreasing their shareholding.

  • Nifty 50 was trading at 24,365.20 (-101.7, -0.4%), BSE Sensex was trading at 80,237.85 (-131.2, -0.2%) while the broader Nifty 500 was trading at 22,726.55 (-68.5, -0.3%).

  • Market breadth is highly positive. Of the 1,950 stocks traded today, 1,276 were in the positive territory and 632 were negative.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (155.55, 8.4%), Rail Vikas Nigam Ltd. (465.35, 6.0%) and Aditya Birla Capital Ltd. (215.37, 5.3%).

Downers:

Largecap and midcap losers today include Honeywell Automation India Ltd. (45,193.30, -7.7%), Dixon Technologies (India) Ltd. (14,175.60, -5.1%) and Voltas Ltd. (1,697.90, -4.1%).

Movers and Shakers

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

Top high volume gainers on BSE included Capri Global Capital Ltd. (210.68, 14.2%), Data Patterns (India) Ltd. (2,478.50, 12.5%) and Action Construction Equipment Ltd. (1,304.80, 10.1%).

Top high volume losers on BSE were Honeywell Automation India Ltd. (45,193.30, -7.7%), Voltas Ltd. (1,697.90, -4.1%) and Hitachi Energy India Ltd. (13,695.85, -3.9%).

Redington Ltd. (182.77, 9.7%) was trading at 19.2 times of weekly average. Vardhman Textiles Ltd. (458.10, 4.7%) and ITI Ltd. (228.65, 5.2%) were trading with volumes 10.6 and 9.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - City Union Bank Ltd. (174.43, -1.4%), Crisil Ltd. (5,372.30, 3.2%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (1,214.75, -1.4%).

Stocks making new 52 weeks lows included - Astral Ltd. (1,746.90, -0.7%) and Sheela Foam Ltd. (809.45, -1.9%).

28 stocks climbed above their 200 day SMA including Laxmi Organic Industries Ltd. (269.65, 6.9%) and Aditya Birla Capital Ltd. (215.37, 5.3%). 9 stocks slipped below their 200 SMA including Honeywell Automation India Ltd. (45,193.30, -7.7%) and Cipla Ltd. (1,418.25, -4.0%).

 
logo
The Baseline
30 Oct 2024
Five stocks to buy from analysts this week - October 30, 2024
By Divyansh Pokharna

1. Varun Beverages:

KR Choksey maintains a ‘Buy’ call on thisbeverages company with a target price of Rs 738, indicating a potential upside of 21.1%. Varun Beverages reported revenue growth of 24.1% YoY to Rs 4,804.7 crore in Q3CY24, outperforming analyst expectations by 3.6% and Trendlyne’s Forecaster estimates by 4.9%. This growth was primarily fueled by strong performance in its carbonated soft drinks, juices, and water segments.

The company’s net profit grew by 23.7% YoY to Rs 619.6 crore, driven by higher sales and improved margins. The growth was partially offset by an 89.7% increase in finance costs related to the acquisition of BevCo, a Kerala-based beverage company. Analyst Dipak Saha notes that the company’s expansion in India is on track, with new facilities expected to be commissioned before summer next year. With some facilities opening in early 2025 (January-February) and the rest by August, Saha expects this expansion to double the firm’s capacity from current levels.

The company also plans to expand its facilities in Africa to double its capacity there by February 2025. Saha remains optimistic, noting that ongoing expansion in Africa, new facilities in India, and product innovations like an upcoming jeera-based beverage should be the major growth drivers for the company.

2. ICICI Bank:

Edelweiss reiterates its ‘Buy’ rating on this bank with a higher target price of Rs 1,490. This indicates a potential upside of 11.9%. In Q2FY25, the bank's net interest income (NII) increased by 3% QoQ to Rs 20,048 crore, though net interest margin (NIM) fell by 9 bps to below 4.3%. Meanwhile, the cost-to-income (C/I) ratio improved to 38.6%, down 108 bps, as operating expenses remained stable due to lower employee costs.

Analysts Raj Jha, Umang Patil, and Sanjana Faujdar, said, “The contraction in NIM was expected but improved C/I ratio & lower credit cost is a positive. We expect the bank to maintain strong performance due to its digital initiatives and solid balance sheet.” 

ICICI Bank is optimistic about its balance sheet, as it does not anticipate any loan growth challenges in FY25 and is confident in generating sufficient deposits to fund loan growth. The management indicated that there are many opportunities present to drive risk-calibrated growth, particularly in the credit card segment, which currently constitutes 5% of the overall mix and has a minimal impact on credit costs.

Jha, Patil, and Faujdar noted that operating expenses may rise slightly in H1 FY25 due to increased spending related to festive activities and technology investments. They expect the bank’s price-to-earnings (P/E) ratio to decrease from 17.9 in FY24 to 13.4 by FY26.

3. Strides Pharma Science:

Sharekhan reiterates its ‘Buy’ rating on this pharma company with a target price of Rs 1,874, indicating a potential upside of 25.5%. The analysts highlight Strides Pharma’s investment in nasal sprays and other areas, as part of a long-term strategy focused on achieving $400 million plus in revenue from the generics segment. The company has identified three opportunities within the nasal spray market, which they believe will compensate for a decline in soft gelatin volumes.

In Q2FY25, the company reported a 20% YoY revenue growth to Rs 1,201 crore, largely driven by its US business, which achieved record sales of $75 million. EBITDA margin improved by 71 bps YoY to 20%. The company saw unexpectedly high demand for the GLP-1 drug, used in the treatment of diabetes and obesity. The surge was driven by two key factors: the dosage requirement for pens — an injection to deliver insulin into the body, is twice as high, and some customers miscalculated their volume forecasts, resulting in greater demand than initially expected. The company also relaunched products from its inactive portfolio, resulting in a surge in market share and revenue in the US.

The analysts note that cost control measures and a healthy product mix support the 20% annual EBITDA growth guidance for FY25. They expect a revenue CAGR of 12.5% and a net profit CAGR of 33.3% over FY25-27.

4. Can Fin Homes:

Axis Direct maintains a ‘Buy’ rating on this housing finance company, with a target price of Rs 1,000, implying a potential upside of 15.9%. Can Fin Homes has shown strong growth in sanctions and disbursements, with the latter up 30% YoY to Rs 2,617 crore in Q2FY25. The company’s management anticipates this momentum to continue, projecting total disbursements of ~Rs 10,000 crore for FY25.

Analysts Dnyanada Vaidya and Pranav Nawale said, “Driven by positive expectations on NIMs, along with the availability of multiple levers, we anticipate a healthy CAGR of 15% in NII and 17% in earnings over FY25-27.” They believe the cost ratios are expected to remain between 17-18% due to the company’s investment in technology and the establishment of a marketing team.

The company’s management expects assets under management (AUM) growth of 13-14% in FY25, with further acceleration to 15-17% by FY26 onwards. Vaidya and Nawale attribute this growth to the addition of 15-20 branches each year and the company's expansion into North and West India.

5. ICICI Prudential Life Insurance Company:

Motilal Oswal maintains a ‘Buy’ rating on this life insurance firm with a target price of Rs 900, implying a potential upside of 17.1%. The company reported a 13.1% YoY growth in new business premium (NBP) to Rs 4,930 crore in Q2FY25. Value of new business grew 1.6% YoY to Rs 590 crore, but margins declined 460 bps on a YoY basis to 23.4%, missing analysts’ expectations of 25%. This margin decline was due to a shift towards Unit Linked Insurance Plans (ULIPs), which generally have lower margins.

Analysts Prayesh Jain and Nitin Aggarwal are optimistic about the insurer’s strategy to grow its network and introduce new products, which cater to customers seeking investment benefits and greater liquidity. Additionally, to enhance financial stability, the company plans issuance of non-convertible debentures worth Rs 1,400 crore. 

Analysts are optimistic as the company sees strong growth potential in its proprietary channels due to increased investments in expanding its agency network and enhancing the skills of its agents. Jain and Aggarwal expect the firm to deliver a VNB CAGR of 20% over FY25-27.

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

(You can find all analyst picks here)

 
logo
The Baseline
29 Oct 2024
By Satyam Kumar

The ongoing correction in the Indian stock market has left many retail investors wondering about the reasons behind the heavy selling. While the Middle East war is an important factor here, the relatively expensive valuations of the Indian firms, downbeat Q2 results, and a slowing Indian economy are other reasons.

Foreign institutional investors (FIIs), who are the most fickle players in a stock market, have according to Trendlyne’s FII & DII dashboard, sold over Rs 90,000 crore worth of equities in the Indian market in October (the highest ever in a single month). This suggests that FIIs are booking profits and reallocating some investments to China, which currently appears to be a more affordable market. As a result, the Nifty50 is trading at a discount of over 7% from its all-time high. Even promoters, who are closely tracked for their long-term bets on their companies, have been cashing out a sizeable chunk of their holdings.

This chart of the week takes a look at promoter activity over the past quarter. Given promoters' significant influence over board selection and key decisions, their trading activity can be a leading indicator that gives insights into the future of the business. According to Trendlyne’s shareholding stock screeners, promoters of 155 of the top 500 firms have reduced their shareholding, while just 23 increased it over the past quarter.

Stocks with expensive PEs see corrections, promoters selling stakes

Many stocks trading at very high price-to-earnings (PE) ratios or with a Trendlyne valuation score of below 35 have seen significant correction over the past month. An easy-to-understand value metric tracked on Trendlyne is the percentage of days the stock has traded below the current PE ratio. If this is more than 80%, it indicates that the stock usually trades below its current PE and is at a relatively high valuation, or in the “Strong Sell Zone”. This could explain why promoters are cutting their stake.

Out of the 155 stocks where promoters decreased their stake in the last quarter, 93, or 60%, are in the Sell Zone or Strong Sell Zone. Firms like Prestige Estates Project, Vedanta, Max Financial Services, KPR Mill, and Adani Energy Solutions are in the Strong Sell Zone. Meanwhile, JK Tyre & Industries, Welspun Living, Patanjali Foods and 33 other firms are in the Sell Zone — which means that stock has traded below the current PE for at least 60% of the days.

Notable sells by promoters

According to a Trendlyne screener that tracks promoter stake cuts of over 2% in Nifty500 firms, 31 companies have witnessed significant promoter selling over the past quarter. Companies appearing in this screener include GE T&D India, Easy Trip Planners, Route Mobile, Sterling and Wilson Renewable Energy, InterGlobe Aviation and Adani Energy Solutions among others.

GE T&D India, an industrial machinery firm, saw its promoter offload a 15.6% stake via an offer for sale priced at Rs 1,400 per share — around Rs 300 below the then trading price. This resulted in stock hitting a lower circuit of 5% the day the offer opened for subscription on September 19.

Meanwhile, Easy Trip Planners’ promoter, Nishant Pitti sold half of his stake in the past quarter and currently holds only 14.2%. This has reduced the cumulative promoter holding from 64.3% a quarter ago to slightly above 50% as of September 2024. The stock currently trades at nearly half its 52-week high of Rs 54.

Similarly, at the end of August 2024, Rakesh Gangwal, co-founder and promoter of airline operator, InterGlobe Aviation (Indigo), sold a 6% equity stake valued at over Rs 10,000 crore. The Gangwal-backed promoter group’s stake has dropped from 36.7% in 2019 to 13.5% as of September 2024. This includes the 8.2% stake of Chinkerpoo Family Trust – whose trustees are Shobha Gangwal and JPMorgan Trust Company of Delaware – and Rakesh Gangwal's personal 5.3% stake.

This all started when the partnership between co-founders Rahul Bhatia and Rakesh Gangwal soured and fell apart in 2019. In February 2022, Gangwal resigned from IndiGo’s board as a non-executive, non-independent director and announced plans to reduce his stake. “I have been a shareholder in the company for more than 15 years, and it's only natural to someday think about diversifying one's holdings,” Gangwal explained in his resignation letter.

Significant corrections have led to stake additions

With the ongoing correction in the Indian stock market, many stocks are trading at a substantial discount from their all-time highs. Promoters are taking this as an opportunity to increase their stakes, though the list of buyers is notably shorter compared to the number of sellers.

While major promoter sells often make news headlines, however, the case is not the same when they increase their stake. This is likely because they don’t want to drive up the price while they are stacking up on those shares. Trendlyne’s screener, however, constantly tracks these activities and currently highlights over 20 stocks where promoters have increased their holdings over the past quarter.

For instance, Maharashtra Seamless, a steel pipe manufacturer, saw its promoter, Jindal Group, add around 2.5 lakh shares year-till-date in 2024. Trendlyne categorises this stock as a “Value Stock, Under Radar”, noting the company’s sound financials, with the stock currently trading at a discount of over 40% from its all-time high.

Similarly, Adani Green Energy, an Adani-Group firm, witnessed stake additions over the past two quarters as the stock currently trades at a discount of around 25% from its 52-week high. Other notable companies where promoters increased their stake over the last quarter include Indus Towers, GMR Airports Infrastructure, and Kalyan Jewellers India, among others.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
29 Oct 2024
Market closes higher, Canara Bank's net profit grows 11.3% YoY to Rs 4,014.5 crore in Q2
By Trendlyne Analysis

Nifty 50 closed at 24,466.85 (127.7, 0.5%), BSE Sensex closed at 80,369.03 (364.0, 0.5%) while the broader Nifty 500 closed at 22,795.05 (145.1, 0.6%). Market breadth is in the green. Of the 2,299 stocks traded today, 1,385 were on the uptrend, and 886 went down.

Indian indices closed in the green after paring their losses in the afternoon session. The Indian volatility index, Nifty VIX, rose 1.6% and closed at around 14.5 points. Maruti Suzuki closed sharply lower as its net profit declined by 18.1% YoY to Rs 3,102.5 crore in Q2FY25. However, revenue grew 1.9% YoY to Rs 38,972.4 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed higher.  Nifty PSU Bank and BSE Realty were among the top-performing indices today. According to Trendlyne’s sector dashboard, Banking & Finance emerged as the best-performing sector of the day, with a rise of 2.2%.

European indices traded higher. Major Asian indices closed in the green. US index futures traded mixed, indicating a cautious start to the trading session in anticipation of results from Alphabet (Google), Visa, Advanced Micro Devices, and Novartis AG.

  • Relative strength index (RSI) indicates that stocks like IndusInd Bank, Indraprastha Gas, and CreditAccess Grameen are in the oversold zone.

  • Ami Organics surges to its all-time high of Rs 1,890 per share as it posts a net profit of Rs 37.3 crore in Q2FY25 compared to a net loss of Rs 18.9 crore in Q2FY24. Revenue grows by 46.8% YoY to Rs 255.2 crore due to improvements in the pharmaceutical intermediates and specialty chemicals segments. It features in a screener of stocks with share prices above the short, medium, and long-term moving averages.

  • Canara Bank's revenue increases 10.3% YoY to Rs 34,721.1 crore in Q2FY25, driven by growth in retail banking, wholesale banking, and treasury operations. Net profit rises 11.3% YoY to Rs 4,014.5 crore, helped by lower provisions. The bank's asset quality also improves, with gross and net NPAs declining by 103 bps and 42 bps YoY, respectively.

  • Cipla's Q2FY25 net profit grows by 15.2% YoY to Rs 1,302.5 crore due to lower finance costs. Revenue rises by 5.6% YoY to Rs 7,241.6 crore, driven by the pharmaceuticals segment. It appears in a screener of stocks with improving return on capital employed (RoCE) over the past two years.

  • Most analysts covering Bharat Heavy Electricals (BHEL) remain cautious to bearish on the stock despite its unexpected net profit in Q2. CLSA maintains its 'underperform' rating with a price target of Rs 189, noting that the key catalyst of its inclusion in global passive indices has passed. Additionally, Larsen & Toubro's recent entry into the thermal power equipment market raises concerns about BHEL's market dominance.

  • Adani Ports' net profit surges 36.9% YoY to Rs 2,412.5 crore in Q2FY25, helped by a deferred tax credit of Rs 132.5 crore. Revenue increases 6.3% YoY to Rs 7,067 crore due to improvements in port and special economic zone activities. It appears in a screener of stocks with improving book value per share over the past two years.

  • Maruti Suzuki falls sharply as its net profit declines by 18.1% YoY to Rs 3,102.5 crore in Q2FY25, caused by higher raw materials, finance, and employee benefits expenses. However, revenue grows by 1.9% YoY to Rs 38,972.4 crore, driven by sales in the international market. It shows up in a screener of stocks with growing costs YoY for long-term projects.

  • Quess Corp falls sharply as its Q2FY25 net profit misses Forecaster estimates by 11.1%, despite rising 32% YoY to Rs 93.6 crore. Revenue grows by 9.1% YoY to Rs 5,179.4 crore, helped by improvements in the workforce & operating asset management and global technology solutions segments. It shows up in a screener of stocks underperforming their industry price change during the quarter.

  • Ramco Cements’ board approves the sale of 1.4 crore shares of Ramco Industries worth approx. Rs 330 crore to Rajapalayam Mills and Ramco Management.

  • Motilal Oswal maintains its 'Buy' call on Bharat Electronics with a target price of Rs 360 per share. This indicates a potential upside of 30.3%. The brokerage believes the company will benefit from the ramp-up in defence orders for naval, electronic warfare (EW) systems, artillery systems, and platforms. It expects the firm's revenue to grow at a CAGR of 19.2% over FY25-27

  • Spandana Sphoorty Financial plunges over 16% to its 52-week low of Rs 375 as it reports a net loss of Rs 216.3 crore in Q2FY25. Net loss is due to higher finance costs, impairment of financial instruments, and employee benefit expenses. However, revenue grows 12.5% YoY to Rs 686.4 crore during the quarter. It features in a screener of stocks with increasing debt.

  • Ajanta Pharma's Q2FY25 revenue rises 15.4% YoY to Rs 1,186.6 crore, beating the Forecaster estimates by 5.3%. Net profit grows 10.8% YoY to Rs 216.5 crore during the quarter. The company appears in a screener for stocks where mutual funds increased their shareholding in the past quarter.

  • India's smaller companies face a downturn as weak earnings and a muted economic outlook affect their shares. Key mid-sized and small-cap stock indices are close to a technical correction due to high valuations. This decline follows investors shifting their focus to cheaper Chinese stocks. The MSCI India Index is valued at around 22 times its one-year forward earnings, nearly double the MSCI China Index.

  • Federal Bank rises sharply as its net profit grows 10.8% YoY to Rs 1,056.7 crore in Q2FY25. Revenue increases 21.9% YoY to Rs 7,541.2 crore owing to improvements in the treasury, corporate, and retail banking segments. The bank's asset quality improves as its gross and net NPAs decline by 17 bps YoY and 7 bps YoY, respectively.

  • Tata Consultancy Services (TCS) secures a 15-year contract with Ireland's Department of Social Protection to implement the 'My Future Fund' auto-enrolment retirement savings scheme. TCS will provide digital solutions for the enrolment, record management, and benefit disbursement of nearly 800K workers.

  • Gillette India rises sharply as its Q2FY25 revenue rises 17.1% YoY to Rs 781.8 crore, driven by an improvement in the grooming segment. Net profit grows 43.5% YoY to Rs 133 crore during the quarter. It appears in a screener of stocks with growing quarterly net profit and profit margin.

  • In its latest monthly economic review, the Finance Ministry highlights growing worries about weakening consumer sentiment and declining demand, especially in urban areas of India. It also reports a slowdown in industrial activity in recent months but expects the economy will grow between 6.5% and 7% during 2024-25.

  • Suzlon Energy's net profit surges by 95.7% YoY to Rs 200.2 crore in Q2FY25, helped by inventory destocking. Revenue increases 48.5% YoY to Rs 2,121.2 crore owing to improvements in the wind turbine generator and operation & maintenance segments. It features in a screener of companies reducing debt.

  • Tata Technologies' Q2FY25 revenue rises 2.1% YoY to Rs 1,296.5 crore, helped by improvement in the services segment. However, net profit falls 1.9% YoY to Rs 157.4 crore due to higher employee benefits costs and tax expenses. The company appears in a screener of stocks with PE higher than industry PE.

  • Indraprastha Gas's Q2FY25 net profit declines by 17.7% YoY to Rs 454.9 crore due to higher raw materials and excise duty costs. However, revenue grows by 7.4% YoY to Rs 4,171.4 crore, driven by increased sales of CNG and PNG. It appears in a screener of stocks which lost more than 20% in the past month.

  • Food and grocery delivery major Swiggy reportedly sets its IPO price band at Rs 371-390 per share. The issue size is Rs 11,300 crore, with a fresh issue worth Rs 4,500 crore and an offer for sale of around Rs 6,800 crore. The issue will likely open on November 6.

  • Tata Power Co acquires a 40% stake in Bhutan-based Khorlochhu Hydro Power (KHPL) for approximately Rs 830 crore. This investment supports Tata Power's clean energy goals, involving the 600 MW Khorlochhu Hydropower Project valued at Rs 6,900 crore.

  • JSW Infrastructure rises sharply as its net profit grows by 46% YoY to Rs 371.5 crore in Q2FY25, owing to lower employee benefits and finance costs. Revenue increases by 21.5% YoY to Rs 1,088.2 crore, attributed to higher handled cargo volumes. It features in a screener of stocks with growth in quarterly net profit and margin (YoY).

  • Bharti Airtel is falling as its net profit misses Forecaster estimates by 14.8% despite surging 168% YoY to Rs 3,593.2 crore in Q2FY25. Revenue grows by 11.6% YoY to Rs 41,728 crore, helped by improvements in the Indian mobile services, Airtel business, and home services segments. It shows up in a screener of stocks with declining net cash flow.

  • Kalpataru Projects is rising as its revenue grows by 9.1% YoY to Rs 4,929.9 crore in Q2FY25, led by improved execution in the transmission & distribution, buildings & factories, oil & gas, and urban infra businesses. Net profit increases 41% YoY to Rs 125.5 crore during the quarter. The company shows up in a screener of stocks where FII / FPI or institutions are increasing their shareholding.

  • Nifty 50 was trading at 24,270.70 (-68.5, -0.3%), BSE Sensex was trading at 80,042.52 (37.5, 0.1%) while the broader Nifty 500 was trading at 22,611.25 (-38.7, -0.2%).

  • Market breadth is in the green. Of the 1,906 stocks traded today, 1,067 were on the uptrend, and 791 went down.

Riding High:

Largecap and midcap gainers today include JSW Infrastructure Ltd. (316, 10.0%), Vedant Fashions Ltd. (1,357.70, 8.5%) and Federal Bank Ltd. (200.70, 8.5%).

Downers:

Largecap and midcap losers today include Tata Motors Ltd. (842.75, -4.1%), Maruti Suzuki India Ltd. (11,046, -3.8%) and Dabur India Ltd. (535.85, -3.2%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Gillette India Ltd. (9,402.50, 10.4%), JSW Infrastructure Ltd. (316, 10.0%) and Vedant Fashions Ltd. (1,357.70, 8.5%).

Top high volume losers on BSE were Sapphire Foods India Ltd. (325.60, -4.9%), KSB Ltd. (792.90, -4.8%) and Maruti Suzuki India Ltd. (11,046, -3.8%).

Kalpataru Projects International Ltd. (1,241.60, 5.4%) was trading at 12.9 times of weekly average. Federal Bank Ltd. (200.70, 8.5%) and Sumitomo Chemical India Ltd. (553.10, 7.5%) were trading with volumes 8.6 and 6.6 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 5 stocks tanked below their 52 week lows.

Stocks touching their year highs included - City Union Bank Ltd. (176.92, 2.9%), Deepak Fertilisers & Petrochemicals Corporation Ltd. (1,231.95, 9.1%) and Gillette India Ltd. (9,402.50, 10.4%).

Stocks making new 52 weeks lows included - Astral Ltd. (1,759.90, -2.0%) and IndusInd Bank Ltd. (1,038.15, -1.6%).

22 stocks climbed above their 200 day SMA including JSW Infrastructure Ltd. (316, 10.0%) and Indian Bank (581, 5.4%). 18 stocks slipped below their 200 SMA including Ashok Leyland Ltd. (208.15, -1.8%) and Cipla Ltd. (1,477.55, -1.7%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
28 Oct 2024
Market closes higher, Sun Pharma's net profit grows 28% YoY to Rs 3,040.2 crore in Q2
By Trendlyne Analysis

Nifty 50 closed at 24,339.15 (158.4, 0.7%), BSE Sensex closed at 80,005.04 (602.8, 0.8%) while the broader Nifty 500 closed at 22,649.95 (150.9, 0.7%). Market breadth is in the green. Of the 2,337 stocks traded today, 1,539 were on the uptick, and 777 were down.

Indian indices closed in the green, with the benchmark Nifty 50 index closing at 24,339.2 points.  The Indian volatility index, Nifty VIX, fell 2.3% and closed at around 14.3 points. Waaree Energies’ shares made their debut on the bourses at a 66.3% premium to the issue price of Rs 1,503. The Rs 4,321.4 crore IPO received bids for 76.3 times the total shares on offer.

Nifty Midcap 100 and Nifty Smallcap 100 closed higher. Nifty FMCG and Nifty Metal closed in the green. According to Trendlyne’s sector dashboard, Consumer Durables emerged as the best-performing sector of the day, with a rise of 3.8%.

European indices traded mixed. Major Asian indices closed mixed. US index futures traded mixed, indicating a cautious start to the trading session. Spirit Airlines reached an agreement to sell 23 older Airbus aircraft worth around $519 million to GA Telesis. The low-cost airline also announced plans to cut about $80 million in annual costs by reducing its workforce as part of its cost-cutting initiatives.

  • Money flow index (MFI) indicates that stocks like IndusInd Bank, Indraprastha Gas, and Nestle India are in the oversold zone.

  • Sun Pharmaceutical Industries' rises as its Q2FY25 net profit grows 28% YoY to Rs 3,040.2 crore, beating the Forecaster estimates by 5.8%. Revenue increases 9% YoY to Rs 13,291.4 crore during the quarter. The company appears in a screener of stocks with increasing profits over the past four quarters.

  • Bharat Heavy Electricals is rising as it posts a net profit of Rs 106.2 crore in Q2FY25 compared to a net loss of Rs 63 crore in Q2FY24. Revenue grows by 26.2% YoY to Rs 6,695.4 crore owing to the power and industry segments. It features in a screener of stock with the highest recovery from their 52-week lows.

  • KR Choksey downgrades IndusInd Bank to 'Hold' from 'Buy' with a lower target price of Rs 1,305 per share. This indicates a potential upside of 22.6%. The brokerage believes the bank's operating growth will slow down with rising credit costs due to concerns in the unsecured loan and microfinance segments. It expects the lender's net interest income (NII) to grow at a CAGR of 11.9% over FY25-26.

  • According to Anarock, the real estate sector has accounted for more than 17% of QIP (qualified institutional placement) issuances across various sectors, making it the second largest contributor after the renewable energy sector. In the first nine months of 2024, developers raised Rs 12,801 crore.

  • Shakti Pumps surges to its 5% upper circuit as its revenue grows 4.2X to Rs 634.6 crore driven by an improvement in the domestic market. Net profit surges 16.6X YoY to Rs 101.2 crore during the quarter. The company appears in a screener of stocks with book value per share improving over the past two years.

  • Ambuja Cements rises sharply as its Q2FY25 revenue beats Forecaster estimates by 10.5% despite remaining flat at Rs 7,890.1 crore. Net profit declines by 42.5% YoY to Rs 456 crore due to higher raw materials, inventory, employee benefits, finance, and freight & forwarding expenses. It features in a screener of stocks with rising net cash flow and cash from operating activities.

  • Torrent Pharmaceuticals' falls as its Q2FY25 revenue misses Forecaster estimates by 2.5% despite rising 8.6% YoY to Rs 2,889 crore. Net profit grows by 17.4% YoY to Rs 453 crore, but misses estimates by 8%. It shows up in a screener for stocks where mutual funds decreased their shareholding in the past quarter.

  • Debadatta Chand, MD of Bank of Baroda, highlights the bank’s asset quality has improved in Q2FY25. He projects deposit growth of 9-10% and credit growth of around 12% for FY25. Chand adds the bank maintains its margin guidance of ~3.1% for the year.

  • Inox Wind is rising as it posts a net profit of Rs 92.9 crore in Q2FY25 compared to a net loss of Rs 24.1 crore in Q2FY24 due to lower finance and EPC, O&M, & common infrastructure facility expenses. Revenue surges by 93% YoY to Rs 741.7 crore, attributed to higher project execution and order wins. It features in a screener of stocks with increasing profits for the past four quarters.

  • NBCC (India) is rising as it bags multiple work orders worth approx. Rs 1,726 crore from the Government of Goa. The orders include the redevelopment of Junta House, Govt. Garage and Circuit House in Panjim, a Mini Convention Centre at Tiswadi, and others.

  • Macrotech Developers is rising as its net profit surges by 109.5% YoY to Rs 422.9 crore in Q2FY25 owing to a tax return of Rs 136.8 crore. Revenue grows by 53% YoY to Rs 2,684.6 crore, driven by higher collections and pre-sales. It appears in a screener of stocks with high trailing twelve-month (TTM) EPS growth.

  • Amit Paithankar, CEO of Waaree Energies, says the company currently operates with a 15% margin, which he expects to improve over the next two years. He expects a boost in margins due to backward integration and strong demand in India and the US. Paithankar also highlights that the current order book totals 16.7 GW.

  • Shriram Finance rises sharply as its Q2FY25 revenue grows 17.9% YoY to Rs 10,089 crore, helped by higher interest and fees & commission income. Net profit increases by 20.6% YoY to Rs 2,153.3 crore during the quarter. It shows up in a screener of stocks outperforming their industry price change during the quarter.

  • KRN Heat Exchanger and Refrigeration's wholly owned subsidiary, KRN HVAC Products, signs an MoU with the Government of Rajasthan to invest Rs 1,000 crore in a heat exchanger plant in Kotputli-Behror.

  • Bank of Baroda is rising as its net profit grows by 23.2% YoY to Rs 5,237.9 crore in Q2FY25. Revenue increases by 10.7% YoY to Rs 35,444.7 crore, attributed to improvements in the treasury, retail, and wholesale banking segments. The bank's asset quality improves as its gross and net NPAs decline by 82 bps YoY and 16 bps YoY, respectively.

  • HSBC lowers its target price for Ola Electric Mobility to Rs 110, from Rs 140 earlier, while retaining a ‘Buy’ rating. The brokerage cites slowing two-wheeler penetration, tight competition from low-cost models like Bajaj Auto's Chetak 2903 and TVS Motor's iQube 2.2kWh, and ongoing service issues.

  • Coal India is falling as its net profit declines by 21.9% YoY to Rs 6,289.1 crore in Q2FY25 due to higher raw materials, employee benefits, and finance costs. Revenue falls by 7.4% YoY to Rs 32,177.9 crore, caused by lower production and offtake of raw coal. It features in a screener of stocks with declining cash flow from operations in the past two years.

  • Deepak Builders & Engineers’ shares debut on the bourses at a 1.5% discount to the issue price of Rs 203. The Rs 260 crore IPO received bids for 41.5 times the total shares on offer.

  • Waaree Energies' shares debut on the bourses at a 66.3% premium to the issue price of Rs 1,503. The Rs 4,321.4 crore IPO received bids for 76.3 times the total shares on offer.

  • HSBC maintains its 'Buy' rating on Shriram Finance with a higher target price of Rs 3,725. The brokerage cites strong Q2 performance, noting that the firm is experiencing its most convincing operational period since 2010. It highlights all metrics were robust, with no weakness in asset quality or growth. Shriram Finance's net profit increased by 20.6% YoY to Rs 2,153.3 crore, while its revenue grew by 13.5% YoY.

  • Titagrah Rail Systems' Q2FY25 revenue rises by 13% YoY to Rs 1,057 crore, helped by an improvement in the freight rail segment. Net profit grows by 14.1% YoY to Rs 79.9 crore during the quarter. It features in a screener of stocks with growing quarterly net profit and profit margin (YoY).

  • DLF rises sharply as its net profit surges by 121.8% YoY to Rs 1,381.1 crore in Q2FY25, helped by a deferred tax return of Rs 504.7 crore. Revenue grows by 47.7% YoY to Rs 2,180.8 crore during the quarter. It features a screener of stocks with dividend yields higher than sector dividend yields.

  • Bandhan Bank surges as its Q2FY25 net profit grows 30% YoY to Rs 937.4 crore, helped by lower provisions. Revenue rises by 21.1% YoY to Rs 6,094.5 crore, owing to improvements in the treasury, retail, and wholesale banking segments. The bank's asset quality improves as its gross and net NPAs decline by 264 bps YoY and 103 bps YoY, respectively.

  • InterGlobe Aviation falls sharply as it posts a net loss of Rs 986.7 crore in Q2FY25 compared to a net profit of Rs 188.9 crore in Q2FY24 due to higher aircraft fuel, aircraft & engine rental, airport charges, employee benefits, and finance costs. However, revenue grows by 14.6% YoY to Rs 17,759 crore, driven by higher capacity and passengers carried. It shows up in a screener of stocks linked to ongoing regulatory investigations or legal cases.

  • Markets are up today morning. Nifty 50 was trading at 24,243.05 (62.3, 0.3%), BSE Sensex was trading at 79,815.18 (412.9, 0.5%) while the broader Nifty 500 was trading at 22,515.50 (16.5, 0.1%).

  • Market breadth is in the red. Of the 1,976 stocks traded today, 871 were on the uptrend, and 1,048 went down.

Riding High:

Largecap and midcap gainers today include Indian Bank (551.45, 10.6%), Bandhan Bank Ltd. (184.81, 9.9%) and Canara Bank (100.69, 6.8%).

Downers:

Largecap and midcap losers today include InterGlobe Aviation Ltd. (4,015.45, -8.0%), Cholamandalam Investment & Finance Company Ltd. (1,280.35, -6.7%) and Torrent Power Ltd. (1,829.05, -4.9%).

Volume Rockets

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

Top high volume gainers on BSE included Indian Bank (551.45, 10.6%), Archean Chemical Industries Ltd. (651.80, 9.2%) and Poonawalla Fincorp Ltd. (319.65, 7.6%).

Top high volume losers on BSE were InterGlobe Aviation Ltd. (4,015.45, -8.0%), Cholamandalam Investment & Finance Company Ltd. (1,280.35, -6.7%) and JBM Auto Ltd. (1,506.65, -4.1%).

Zydus Wellness Ltd. (1842.65, 2.4%) was trading at 9.6 times of weekly average. Rainbow Childrens Medicare Ltd. (1,495, 5.2%) and CreditAccess Grameen Ltd. (957.45, -2.5%) were trading with volumes 7.7 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

3 stocks made 52 week highs, while 12 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Deepak Fertilisers & Petrochemicals Corporation Ltd. (1,129.20, -0.4%), Firstsource Solutions Ltd. (372.55, 12.0%) and Coforge Ltd. (7,705.35, -0.5%).

Stocks making new 52 weeks lows included - IDFC First Bank Ltd. (67.13, 2.5%) and Mahindra Lifespace Developers Ltd. (490.05, -0.9%).

26 stocks climbed above their 200 day SMA including Indian Bank (551.45, 10.6%) and Archean Chemical Industries Ltd. (651.80, 9.2%). 21 stocks slipped below their 200 SMA including InterGlobe Aviation Ltd. (4,015.45, -8.0%) and Cholamandalam Investment & Finance Company Ltd. (1,280.35, -6.7%).

 
logo
The Baseline
25 Oct 2024
Five Interesting Stocks Today - October 25, 2024

1. Sona BLW Precision Forgings:

This auto parts and equipment company surged 13.3% to Rs 730 per share on Thursday, following its strong second-quarter results. The company has also signed an agreement to acquire the Railway Equipment Division (RED) of Escorts Kubota (EKL) for Rs 1,600 crore in cash. RED is a key supplier of essential components for railways, such as brakes and suspension systems for rolling stock.

For the quarter ending September 30, 2024 (Q2FY25), Sona BLW (Sona Comstar) posted a 16.2% YoY rise in net profit, to Rs 143.9 crore. Revenue from operations increased by 18.7% to Rs 946.1 crore, up from Rs 796.9 crore in Q2FY24. Both revenue and net profit exceeded Trendlyne’s Forecaster estimates by 4.5% and 2.4%, respectively. At the operating level, EBITDA rose by 14.2% YoY to Rs 254.9 crore, while the EBITDA margin narrowed slightly by 33 basis points YoY to 28%. 

Battery electric vehicles (BEVs) contributed 36% of the company’s revenue, with BEV revenue increasing by 53% YoY in the July-September period. The company also reported a net order book of Rs 23,100 crore as of September 30, 2024. Vivek Vikram Singh, the MD & Group CEO commented, "We are cautiously optimistic about our growth prospects, especially in the EV sector, even though there are slowdowns in specific markets like Europe and Indian two-wheelers." The company has intensified its focus on the electric vehicle (EV) market, with significant order wins including a driveline program for a class-5 electric truck and an in-cabin sensing product, signalling expansion and diversification of its product portfolio.

Following the two developments, the Hong Kong-based brokerage CLSA upgraded Sona BLW to ‘Outperform,’ raising the target price to Rs 712 from Rs 690. The company’s operating performance met expectations, and its acquisition of EKL’s railway component business is seen as a key driver for future profitable growth.

However, CLSA highlighted a potential slowdown in Sona BLW’s core business, and the importance of exploring inorganic growth opportunities. Revenue from the newly acquired railway division is expected to start contributing from FY26.

2. Persistent Systems:

This IT software company surged 10.9% on October 23, reaching an all-time high of Rs 5,798.7 after announcing its Q2FY25 results. The company’s net profit grew by 6.1% QoQ to Rs 325 crore in Q2FY25, while its revenue increased by 5.8% to Rs 2,897.2 crore, driven by strong growth in the BFSI (which constitutes ~32% of total revenue) and healthcare & life sciences (28% of the revenue) segments. However, the software, hi-tech & emerging industries segment (which constitutes 40% of the revenue) saw a muted growth of 1.4% during the quarter. Both net profit and revenue beat estimates by 4%  and 1.2% respectively.

In terms of geographies, North Americas and Europe revenue grew by 6.4% and 6% QoQ, respectively, while India revenue grew by 1%. During the quarter, Persistent's total contract value (TCV) stood at Rs 4,400 crore ($529 mn), with Rs 2,574 crore from new deal wins.

The company has outperformed its larger IT peers in profit growth. For instance, TCS reported a 1.1% QoQ decline in net profit during the quarter, while Infosys saw a 2.2%increase. Persistent has also outperformed its industry price change by 15.8% during the quarter.

The company plans to acquire Arrka Solutions, a data privacy management firm, to enhance its offerings in data privacy, AI governance and cybersecurity. In FY24, Arrka reported Rs 2.9 crore in revenue.

Persistent Systems maintained a flat EBIT margin of 14% from the previous quarter. CEO Sandeep Kalra said, “With the growth and cost-saving programs at Persistent, we are sticking to our target of expanding margins by 200-300 basis points over the next two years, and expect all three verticals to contribute as growth enablers.”

Post-results, Axis Direct assigns a ‘Buy’ rating to Persistent, citing strong long-term growth potential due to multiple contracts with leading brands and improved revenue visibility. However, the brokerage also mentions worries about global growth, and supply issues that could affect the company's short-term prospects.

3. Havells India:

This electrical equipment maker has declined by 6.1% in the past week following the announcement of its Q2FY25 results on October 17. During the quarter, net profit missed Trendlyne’s Forecaster estimates by 15.2% despite growing by 7.7% YoY to Rs 268.2 crore. The company’s EBITDA margins contracted by 131bps to 8.3% mainly due to a sharp increase in ad-spends, and volatility in raw material prices. 

The management expects margins to normalize in the upcoming quarters, reaching 13-14%, excluding Lloyd in Q3 and Q4. Anil Rai Gupta, the CMD said, “As the festival season is slightly earlier this year, we witnessed higher advertising spends, moderating margins across categories. We expect normalization over subsequent quarters”. EBITDA margins have witnessed a sequential decline, and stood at 9.9% in Q1, and 11.7% in Q4FY24, lower than analysts' estimates. Gupta highlighted that the company has experienced lower margins due to fluctuating raw material prices.

Meanwhile, revenue increased by 16.4% YoY to Rs 4,539.3 crore, driven by the cables & wires (C&W), switchgear, and electrical consumer durables segments. The cables and switchgear segments (constituting over half of the revenue) witnessed healthy growth led by a pick-up in demand ahead of the festive season. 

During the quarter, revenue in the Llyod Consumer segment (~13% of the revenue) also saw healthy growth, led by the non-RAC segment, which includes LED panels, refrigerators, and washing machines. The management aims for the Lloyd segment to contribute around 20% to Havells’ India revenue. 

Going forward, the management expects revenue growth to be driven by residential demand and festive demand. The CMD highlighted that channel expansion and product addition by the company are also likely to contribute to revenue growth. In Q2, Havells India commissioned a new cable plant in Tumkur for the production of higher-sized cable. Due to the higher demand for the product, the company has committed an additional capex of Rs 450 crore to expand the facility. The capex planned for H2FY25 is Rs1,000 crore. 

ICICI Securities remains positive on Havells due to its established competitive advantages and growth opportunities in white goods and durables. The brokerage maintains its ‘Buy’ rating with a target price of Rs 2,120.

4. Dalmia Bharat:

This cement & cement products company rose by over 3% on 24th October, as its wholly owned subsidiary Dalmia Cement (Bharat) (DCBL) signed a Share Purchase & Shareholders Agreement (“SPSA”), to acquire a 5.4% stake in Atria Wind Power (Basavana Begawadi, Karnataka) to source wind power as a captive consumer for its capacity of 6 MW located in Karnataka.

The company declared its Q2FY25 results on 21st October. Its net profit declined by 61% YoY to Rs 46 crore due to lower realization, along with plant maintenance & shutdowns, while its revenue declined by 2.3%. The firm missed Trendlyne’s Forecaster estimates for revenue by 1.4% and the net profit estimate by 41.2%. Despite the weak result, the stock appears in a screener for stocks showing relative outperformance versus industry over 1 month period.

In Q2FY25, the company was impacted by a 9% YoY decline in realization, down to Rs 4,607/tonne, which negatively affected its EBITDA margin, which at 14.1%, was the lowest in several years.  The company’s cost/tonne decreased by 4% YoY to Rs 3,960, driven by lower freight and inventory adjustments. Its volume growth was 8%, which was better than expected owing to a lower base last year and the commissioning of new capacity in H1FY25.

Analysts remain optimistic about the company despite these speedbumps, noting that the market share of major cement players has risen from 46% in 2013 to 55% in 2024, with projections suggesting it could reach 60% by FY26-27. As top companies continue to consolidate and expand their capacities, their overall market share is expected to grow, positively impacting cement pricing, economies of scale, and supply chain efficiency. Being among the top five players in the country, the company is well-positioned to capitalize on this consolidation in the medium to long term. But the competition in the sector is intense.

The company’s CEO and Managing Director Puneet Dalmia guides a 9% volume growth, with EBITDA/tonne in the range of Rs 900-950 in H2FY25. He projects cement prices to trend slightly higher, while expecting operating efficiency to contribute Rs 150-200 in cost savings over the next three years. The company management plans to improve EBITDA margins to 18.5% by enhancing operating efficiency and clinker capacity from the current 22.4 mtpa to 27.1 mtpa, which is expected to be commissioned in FY26. 

Axis Securities has retained a ‘Buy’ rating on Dalmia Bharat with a target price of Rs 2,040. The brokerage projects the company will grow its Volume/Revenue/EBITDA at a CAGR of 9%, 7%, 9% respectively over FY25-FY26. It adds that with the current capacity utilisation at 58%, there is substantial scope for the company to increase its utilisation levels.

5. Kajaria Ceramics:

Thisfurnishing company fell 5% on October 22 after announcing itsQ2FY25 results. The company’s net profit declined 22.8% YoY to Rs 85.5 crore, missingTrendlyne’s Forecaster estimates by 20.2%. However, revenue rose by 5.1% to Rs 1,179.3 crore. Demand for tiles was subdued in Q2FY25 due to excessive rainfall in August and September across India. Despite the weak demand environment, Kajaria's tile volumegrew by 8.5% to 28.7 million square meters (MSM).

Kajaria Ceramics generates most of its revenue from tiles, which accounts for 88% to 93% of total revenue. In Q2FY25, tiles accounted for approximately 88% of the total revenue. The remaining revenue comes from non-tiles segments, which include bathware (Rs 90.1 crore, 8% of total revenue), adhesives (Rs 18.2 crore), and plywood (Rs 17.5 crore).

Ashok Kajaria, Chairman and Managing Director of the companysaid, “The second half will be better than quarter one and quarter two. So we are looking at a 9-10% volume growth for the full year (FY25) and margin guidance would be 15-17% this year.” Over the longer term, management believes they can achieve a CAGR of 11.5% for tile volumes from FY25 to FY27, leading to a total volume of 150 MSM. As part of their three-year vision, Kajaria Ceramics aims to expand its reach to over 2,000 towns across India, up from the current presence in 1,000 towns.

Post results, ICICI Directmaintains its ‘Buy’ rating with a target price of Rs 1,500. The brokerage expects the company’s tile volume and revenue to grow at around 10% annually between FY25 and FY27. EBITDA margins are projected to be 15% in FY25, and 15.8% in FY26.

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
25 Oct 2024
Market closes lower, HPCL's net profit falls 97.6% YoY to Rs 142.7 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 24,180.80 (-218.6, -0.9%) , BSE Sensex closed at 79,402.29 (-662.9, -0.8%) while the broader Nifty 500 closed at 22,499.05 (-288.8, -1.3%). Market breadth is highly negative. Of the 2,304 stocks traded today, 358 were on the uptick, and 1,921 were down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 24,180.8 points. The Indian volatility index, Nifty VIX, rose 4.7% and closed at 14.6 points. Hindustan Petroleum Corp's net profit plunged by 97.6% YoY to Rs 142.7 crore in Q2FY25 due to higher raw material, inventory, excise duty, and finance costs. However, revenue grew by 5.6% YoY to Rs 1.1 lakh crore.

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, Food Beverages & Tobacco emerged as the best-performing sector of the day, with a rise of 0.5%.

Asian indices closed mixed 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 green. Crude prices are recovering from two weeks of significant losses due to rising concerns over slowing demand. Macquarie observes that weak supply and demand fundamentals are likely to diminish any positive effects stemming from stimulus measures from China.

  • Relative strength index (RSI) indicates that stocks like Indraprastha Gas, Hindustan Unilever, and Nestle India are in the oversold zone.

  • Hindustan Petroleum Corp's net profit plunges by 97.6% YoY to Rs 142.7 crore in Q2FY25 due to higher raw material, inventory, excise duty, and finance costs. However, revenue grows by 5.6% YoY to Rs 1.1 lakh crore, helped by an improvement in the downstream petroleum segment. It features in a screener for stocks where mutual funds increased their shareholding in the past quarter.

  • Patanjali Foods' Q2FY25 net profit grows 21.4% YoY to Rs 309 crore, helped by lower raw materials and finance costs. Revenue increases by 4.5% YoY to Rs 8,198.5 crore during the quarter, attributed to the edible oils segment. It features in a screener of stocks with rising net profit margins (QoQ and TTM).

  • Finolex Industries is falling as its net profit misses Forecaster estimates by 65.7% as it declines 58.5% YoY to Rs 40.7 crore in Q2FY25. Revenue decreases 6.2% YoY to Rs 828.4 crore due to volatility in PVC price, and prolonged monsoon during the quarter. The company appears in a screener of stocks with increasing profits every quarter for the past two quarters.

  • The Reserve Bank of India (RBI) approves the re-appointment of Amitabh Chaudhry as the Managing Director & CEO of Axis Bank for three more years, effective January 1. The bank's shareholders had approved Chaudhry’s re-appointment at the 30th Annual General Meeting on July 26.

  • Atul's Q2FY25 revenue grows 16.7% YoY to Rs 1,392.8 crore, driven by improvements in life science chemicals and performance & other chemicals segments. Net profit increases 51.5% YoY to Rs 136.8 crore during the quarter. The company features in a screener of stocks with growing quarterly net profit and profit margin (QoQ).

  • Indian Energy Exchange's net profit grows by 25.3% YoY to Rs 108.3 crore in Q2FY25. Revenue rises by 26.2% YoY to Rs 167.8 crore, helped by higher industrialization and consumer demand. It features in a screener of stocks with increasing revenue for the past four quarters.

  • Oracle Financial Services Software's net profit fell 6.3% QoQ to Rs 577.7 crore. Revenue declines 3.9% QoQ to Rs 1,673.9 crore, driven by lower sales from product licenses and related activities segments during the quarter. The company appears in a screener of stocks where mutual funds increased their shareholding in the last month.

  • Reliance Jio reports a reduction of 40.2 lakh wireless subscribers on a net basis in August, while Bharti Airtel loses 24.1 lakh. Vodafone Idea’s subscribers also decline, with a loss of 18.7 lakh on a net basis.

  • Petronet LNG's revenue grows 3.9% YoY to Rs 13,024.3 crore, missing Trendlyne's Forecaster estimates by 1.6%. Net profit rises by 1.4% YoY to Rs 863.2 crore during the quarter. The company appears in a screener of stocks with revenue declining over the past two quarters.

  • CIE Automotive India is falling as its net profit declines by 48% YoY to Rs 195.2 crore in Q2FY25 due to higher profit in Q2FY24 from discontinued operations. Revenue declines by 6.1% to Rs 2,158.9 crore due to a reduction in the Indian and European markets. It shows up in a screener of stocks with high market cap and lower public shareholding.

  • Bikaji Foods International rises sharply as its net profit grows 13% YoY to Rs 69.2 crore in Q2FY25, helped by inventory destocking. Revenue increases 15.8% YoY to Rs 704 crore during the quarter. However, EBITDA margin declines by 150 bps. The company appears in a screener of stocks with book value per share improving over the past two years.

  • Grain-based distilleries are urging the Centre to instruct oil marketing companies (OMCs) to raise the procurement price of ethanol made from maize and damaged food grains to prevent heavy losses. CK Jain, President of the Grain Ethanol Manufacturers Association, notes current maize prices have led to losses of about Rs 10.3 per litre for dedicated ethanol plants, with damaged food grains at around Rs 10.2 per litre. He called for an immediate price increase for ethanol procurement by Rs 4-5 per litre.

  • Larsen & Toubro secures an order worth Rs 1,000-2,500 crore from the ITER Organisation, an intergovernmental body headquartered in France. The contract involves deploying advanced technologies to assemble ports and complex components with the Vacuum Vessel at the world’s largest nuclear fusion project in Cadarache, Southern France.

  • Cyient rises sharply as its Q2FY25 net profit grows 24.5% QoQ to Rs 179.1 crore. Revenue increases 12% QoQ to Rs 1,900.2 crore, helped by improvements in the digital, engineering & technology (DET) and design-led manufacturing (DLM) segments. It shows up in a screener of stocks with rising net cash flow and cash from operating activity.

  • Insolation Energy’s subsidiary, Insolation Green Energy, secures a Rs 208.3 crore order from Zetwerk Manufacturing to supply 550 Wp solar PV modules for NTPC’s Khavada site in Gujarat, to be completed by FY25.

  • Radico Khaitan delivers strong performance in the Prestige & Above (P&A) segment, with volumes rising by 12.6% to 3.2 million cases in Q2FY25. P&A net sales increased 18% to Rs 578 crore, contributing 75.7% to overall sales, up from 70%. However, the company's total Indian Made Foreign Liquor (IMFL) volumes declined by 2.5%, totaling 6.78 million cases in Q2.

  • PNB Housing Finance is rising as its net profit grows 22.6% YoY to Rs 469.7 crore in Q2FY25, driven by better management of financial losses and write-offs. Revenue increases 5.7% YoY to Rs 1,878.7 crore during the quarter. It features in a screener of stocks with zero promoter pledge.

  • Adani Ports & Special Economic Zone's subsidiary, The Adani Harbour International DMCC, acquires an 80% stake in Astro Offshore group for a consideration of $194.8 million (approx. Rs 1,637.6 crore).

  • DCB Bank is rising as its net profit grows 22.6% YoY to Rs 155.5 crore in Q2FY25. Revenue increases 20.1% YoY to Rs 1,568.4 crore, driven by improvements in the treasury, corporate, and retail banking segments during the quarter. The bank's asset quality improves as its gross and net NPAs contract by 7 bps and 11 bps YoY, respectively.

  • Investec maintains its ‘Hold’ rating on IndusInd Bank with a target price of Rs 1,410. The brokerage highlights that muted growth in MFI and stress in credit cards impacted NIMs (net interest margins) and fee income. Investec believes the bank may need a few more quarters to improve its fundamentals. The next key trigger will be the CEO decision from RBI.

  • Dixon Technologies rises to its all-time high of Rs 15,900 per share as its net profit surges by 3.6x YoY to Rs 389.9 crore in Q2FY25. Revenue grows by 2.3x YoY to Rs 11,528.4 crore during the quarter. It features in a screener of stocks with book value per share improving over the past two years.

  • NTPC is falling as its revenue misses Forecaster estimates by 5.1% after declining marginally to Rs 44,696.3 crore in Q2FY25. However, net profit increases 14.3% YoY to Rs 5,274.6, driven by lower fuel costs and electricity purchases during the quarter. The company appears in a screener of stocks outperforming their industry price change in the quarter.

  • Coromandel International is falling as its net profit declines by 12.3% YoY to Rs 664.1 crore in Q2FY25 due to higher raw materials, employee benefits, and freight & distribution expenses. However, revenue grows by 6.6% YoY to Rs 7,497.8 crore, driven by the nutrient & other allied businesses and crop protection segments. It appears in a screener of stocks where promoters are decreasing their shareholding.

  • Godrej Consumer Products' net profit grows 13.5% YoY to Rs 491.3 crore in Q2FY25, attributed to inventory destocking and lower raw material costs. Revenue increases 1.8% YoY to Rs 3,666.3 crore, driven by higher sales from India and Indonesia during the quarter. The company appears in a screener of stocks where mutual funds increased their shareholding over the past two months.

  • Nifty 50 was trading at 24,412.95 (13.6, 0.1%) , BSE Sensex was trading at 80,187.34 (122.2, 0.2%) while the broader Nifty 500 was trading at 22,782.85 (-5, 0.0%)

  • Market breadth is in the red. Of the 1,894 stocks traded today, 758 were in the positive territory and 1,084 were negative.

Riding High:

Largecap and midcap gainers today include Indian Hotels Company Ltd. (691.25, 3.6%), Max Healthcare Institute Ltd. (938, 3.5%) and Torrent Pharmaceuticals Ltd. (3,432.85, 3.4%).

Downers:

Largecap and midcap losers today include IndusInd Bank Ltd. (1,041.60, -18.6%), Hindustan Petroleum Corporation Ltd. (372.40, -8.0%) and Dixon Technologies (India) Ltd. (13,937.20, -7.4%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Thermax Ltd. (5,431.15, 4.8%), Laurus Labs Ltd. (465.80, 4.1%) and Jammu & Kashmir Bank Ltd. (97.63, 4.0%).

Top high volume losers on BSE were IndusInd Bank Ltd. (1,041.60, -18.6%), Poonawalla Fincorp Ltd. (297.05, -17.2%) and Dixon Technologies (India) Ltd. (13,937.20, -7.4%).

Chalet Hotels Ltd. (842.80, 0.8%) was trading at 21.2 times of weekly average. Home First Finance Company India Ltd. (1,102, -1.0%) and Radico Khaitan Ltd. (2,268.50, -1.2%) were trading with volumes 17.0 and 8.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

5 stocks made 52 week highs, while 20 stocks hit their 52 week lows.

Stocks touching their year highs included - Deepak Fertilisers & Petrochemicals Corporation Ltd. (1,133.70, 0.7%), Coforge Ltd. (7,739.85, 0.5%) and Radico Khaitan Ltd. (2,268.50, -1.2%).

Stocks making new 52 weeks lows included - IDFC First Bank Ltd. (65.50, -3.8%) and IndusInd Bank Ltd. (1,041.60, -18.6%).

4 stocks climbed above their 200 day SMA including Kotak Mahindra Bank Ltd. (1,768.85, 0.4%) and Asian Paints Ltd. (2,958, -0.5%). 52 stocks slipped below their 200 SMA including Au Small Finance Bank Ltd. (604.50, -6.4%) and Finolex Cables Ltd. (1,189.55, -5.6%).

 
logo
The Baseline
24 Oct 2024
By Aditi Priya

Most governments have some level of debt spending, which is often necessary for economies to invest in their people, finance critical expenditures, and fund infrastructure. However, when public debt rises too quickly or by too much, it becomes a burden. Today, as global debt levels climb to record highs, analysts are sounding the alarm. The debt to GDP ratio is a key indicator of a country's fiscal health, with higher ratios signaling more money spent on interest payments on debt. .

Global public debt is projected to cross $100 trillion by 2025. After a brief decline in 2021-22, it rose again in 2023 and is expected to reach nearly 100% of global GDP by 2030, led primarily by China and the US.

In this edition of Chart of the Week, we take a look at the government debt-to-GDP ratios of various countries.

India’s debt to GDP improves from its pandemic peak

India's debt to GDP ratio surged to nearly 88% in 2020-21 from around 74% in 2019-20, due to the economic fallout from the COVID-19 pandemic. The nationwide lockdowns led to a recession, with two consecutive quarters of negative growth. However, debt levels have since declined to 82% in 2024. Finance Minister Nirmala Sitharaman emphasized that India’s debt-to-GDP ratio is now below that of many other emerging markets.

The United States, in January 2023, exceeded its debt limit of $31 trillion, with the debt to GDP ratio reaching 122.3%, up from 108.1% in March 2020. The pandemic played a major role in this increase, with the ratio peaking at 133.8% in March 2021 due to extensive government spending on stimulus packages and addressing the public health crisis. 

US debt exceeded $31 trillion in January 2023, raising concerns about breaching the $31.4 trillion ceiling. However, a new debt limit bill passed in June 2023, raised the ceiling and prevented a default. The debt ceiling is the maximum amount of debt the US government can borrow. Since 1960, the US government has increased the ceiling seventy-nine times, most recently in 2023. Forty-nine of these increases were implemented under Republican presidents, and twenty-nine under Democratic presidents. Both political parties in the US, the Democrats and the Republicans, have got into the habit of promising heavy spending and more tax cuts to win elections. This may please voters, but it has resulted in the US being increasingly unable to have a balanced budget. In the current presidential election race, Harris has made commitments that would add $3.5 trillion to the US debt, while Trump’s promises would increase it by $7.5 trillion. 

Japan, US and UK see soaring debt levels 

The United Kingdom recently rejoined the unfortunate “100% debt to GDP ratio club” after 60 years, with a ratio of 100.1% as of August 2024. The UK’s debt has been increasing since the pandemic due to rising costs post-Brexit, energy subsidy schemes, inflation-linked benefit payments and interest payments on debt. 

In contrast, France has experienced a downward trend in debt since the pandemic, despite rising social security costs and an aging population. However, public debt approached 112% of GDP between April and June, leading to a credit downgrade from S&P earlier this year. This rise in debt is due to lower-than-expected tax revenues and delayed hiring and investment by companies, along with local and regional administrations exceeding their spending plans.

Moving on to Asian countries. Japan has the highest debt in the world at over 250% of GDP, especially worrying considering its slow growth and a declining population. However, Japan’s situation is less dire than it appears because the public sector holds substantial assets. The Bank of Japan owns domestic government bonds amounting to about 100% of GDP, effectively reducing the country’s net liabilities. This internal borrowing makes the debt more stable, as Japan doesn’t rely as heavily on foreign creditors. By early 2024, Japan's net debt excluding its internal debt, was around 119% of GDP, making it comparable to US debt levels when considering this asset ownership.

China's debt to GDP ratio among the lowest

China’s yearly debt to GDP ratio is at 83.6%, one of the lowest among the countries in focus. However, the debt to GDP ratio has been rising since the pandemic, as local authorities have borrowed heavily to boost a slowing economy. As a result, the economy's debt to GDP ratio has increased steadily over the last four years. 

Turning to countries with lower debt to GDP ratios, Brazil's ratio reached 78.5% in August 2024, surpassing the threshold limit of 77%. This increase could lead to a 1.7 basis point decline in annual real growth for each percentage point of debt. However, Brazil has decreased its debt to GDP ratio by about 12.2 percentage points since the pandemic, thanks to stronger-than-expected economic growth (2.9%) in 2023, the appreciation of the Brazilian currency against the U.S. dollar, and net debt redemption.

As of March 2024, Germany's debt to GDP ratio stands at 63.6%, having remained stable over the years. However, the pandemic led to a sudden increase of 9 percentage points. The finance ministry anticipates a slight rise this year, with the ratio projected to reach 64% by the end of this year, before gradually declining until 2028. This increase is attributed to the planned Generational Capital, a new pension scheme aimed at maintaining pensions in line with wage trends.

While many governments rely on debt for development, rising debt levels pose significant challenges. Countries like the US and Japan are facing high debt-to-GDP ratios, raising concerns about fiscal sustainability. As global public debt is projected to exceed $100 trillion by 2025, monitoring these trends is crucial for the stability of the global economy.