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Trendlyne Marketwatch
Trendlyne Marketwatch
17 Oct 2024
Market closes lower, Central Bank of India's net profit surges 51% YoY to Rs 912.8 crore in Q2
By Trendlyne Analysis

Nifty 50 closed at 24,749.85 (-221.5, -0.9%) , BSE Sensex closed at 81,006.61 (-494.8, -0.6%) while the broader Nifty 500 closed at 23,377 (-296.2, -1.3%). Market breadth is overwhelmingly negative. Of the 2,291 stocks traded today, 531 showed gains, and 1,731 showed losses.

Indian indices closed in the red after paring gains in the morning session. The Indian volatility index, Nifty VIX, rose 2.6% and closed at around 13.4 points. Hyundai Motor India’s Rs 27,870.1 crore IPO received bids for 2.4X the available 10 crore shares on offer on the last day of bidding. The retail investor quota got bids for 0.5X the available 4.9 crore shares.

Nifty Midcap 100 and Nifty Smallcap 100 closed lower. Nifty Realty and Nifty Auto closed deep in the red. According to Trendlyne’s sector dashboard, Hardware Technology & Equipment emerged as the worst-performing sector of the day, with a fall of 3.5%.

European indices traded higher, except Russia’s RTSI and MOEX indices which closed 0.4% lower each. Major Asian indices closed mixed. US index futures traded higher, indicating a positive start to the trading session as investors gear up for the country’s retail sales data expected to come out later today.

  • Bajaj Auto sees a short buildup in its October 31 futures series, with open interest increasing by 55.7% and a put-call ratio of 0.7.

  • Karur Vysya Bank rises as its net profit grows by 25.1% YoY to Rs 473.6 crore in Q2FY25. Revenue increases 22.3% YoY to Rs 1,324 crore, driven by improvements in the treasury, corporate, and retail banking segments. The bank's asset quality improves as its gross and net NPAs contract by 63 bps and 15 bps YoY, respectively, during the quarter.

  • Central Bank of India rises sharply as its net profit surges by 50.8% YoY to Rs 912.8 crore in Q2FY25, helped by reduced provisions. Revenue increases by 17.1% YoY to Rs 9,849.3 crore, driven by improvements in the treasure, retail, and wholesale banking segments. The bank's asset quality improves as its gross and net NPAs decline by 3 bps YoY and 95 bps YoY, respectively.

  • JSW Energy's subsidiary, JSW Renew Energy Seventeen, signs its first power purchase agreement (PPA) for a wind-solar hybrid project in Gujarat with Gujarat Urja Vikas Nigam (GUVNL). The agreement involves the supply of 192 MW of hybrid energy at Rs 3.3 per kWh for 25 years.

  • Foreign portfolio investors like Societe Generale, UBS Principal Capital Asia, and Tiger Pacific Master reduce their stakes in Paytm to below 1% in the September quarter. This selloff has contributed to a broader decline in foreign institutional ownership, with total foreign portfolio and foreign direct investment decreasing from 58.2% in June to 55.5% by September.

  • Kolte-Patil Developers rises sharply as its Q2FY24 sales value increases by 22% YoY to Rs 770 crore, driven by a 16% YoY growth in realisations to Rs 7,472 per sq ft. Collections rise 16% YoY to Rs 550 crore during the quarter.

  • Hyundai Motor India’s Rs 27,870.1 crore IPO received bids for 2.1X the available 10 crore shares on offer on the last day of bidding. The retail investor quota gets bids for 0.5X the available 4.9 crore shares.

  • KR Choksey initiates coverage on Cyient DLM with a 'Buy' call and a target price of Rs 842 per share. This indicates a potential upside of 21.4%. The brokerage believes the company is well positioned for growth in the next three years owing to strong long-term customer relationships, a strengthening order book, expansion plans in the US, and increased focus on the business-to-supplier (B2S) segments. It expects the firm's revenue to grow at a CAGR of 30.5% over FY25-27.

  • Auto stocks like Bajaj Auto, Hero Moto, and Maruti Suzuki face significant selling pressure. Bajaj Auto, during its September quarter results, expressed concerns about muted demand, lowering its growth guidance to 3-5%. This caution comes despite analysts and investors expecting a strong sales rebound during the festive season, usually a time of increased consumer spending in the auto sector.

  • Tata Power receives a letter of intent (LoI) from REC Power Development to acquire ERES-XXXIX Power Transmission, a project-specific special purpose vehicle (SPV). The project involves constructing a 765/400 kV GIS substation at Gopalpur, ~190 km of transmission lines, and 12 km of 400 kV line. The contract spans 35 years, with annual transmission charges of Rs 289.7 crore.

  • Reliance Industries is rising as its board sets October 28 as the record date for its 1:1 bonus share issue

  • Nestle India is falling as its net profit declines by 0.9% YoY to Rs 899.5 crore in Q2FY25, due to higher raw materials, finance, and corporate social responsibility expenses. However, revenue grows marginally by 0.8% YoY to Rs 5,110.9 crore, owing to improvements in the e-commerce, organised trade, and out-of-home (OOH) segments. It shows up in a screener of stocks with weakening technicals and share price decline.

  • Amit Chadha, Managing Director of L&T Technology Services, highlights the company’s medium-term target to achieve $2 billion in revenues. He also reiterates the FY25 revenue growth guidance of 8-10% and EBIT margin of 16%. Chadha expects the company’s margins will improve over H2FY25.

  • Crisil is rising as its Q2FY25 net profit grows by 12.9% YoY to Rs 171.6 crore. Revenue increases by 10.3% YoY to Rs 811.8 crore, driven by an improvement in the rating services segment. The company appears in a screener for stocks with no debt.

  • Larsen & Toubro's hydrocarbon arm bags an order worth Rs 1,000-2,500 crore to set up a 1,200 million tonnes per day (MTPD) nitrogen, phosphorus, and potassium (NPK) fertiliser plant for Rashtriya Chemicals and Fertilizers in Raigad. The company will carry out the order on a license, engineering, procurement, and construction (L-EPC) basis, and also set up associated utilities and off-site facilities for the plant.

  • Ircon International is rising as it signs a memorandum of understanding (MoU) with Patel Engineering to collaborate on identifying, pursuing, and executing infrastructure projects in India and overseas.

  • UBS downgrades SRF to a 'Sell' rating with a lower target price of Rs 2,100. The brokerage attributes weak demand for agrochemicals and the increasing market share of Chinese companies as the key factors. It also anticipates that refrigerant gas prices will remain low, adding to ongoing growth challenges for the company.

  • ICICI Direct retains its 'Buy' call on PVR INOX with a higher target price of Rs 1,960 per share. This indicates a potential upside of 21.3%. The brokerage expects the company's footfall to increase, owing to the upcoming festive quarter and strong content pipeline, which will lead to increased advertisement revenue. It expects the firm's revenue to grow at a CAGR of 11% over FY5-27.

  • MphasiS rises as its net profit grows 4.7% QoQ to Rs 423.3 crore in Q2FY25 owing to lower employee benefits and finance costs. Revenue increases by 2.8% QoQ to Rs 3,594.9 crore, attributed to improvements in the banking & financial services, technology media & telecom, and insurance segments. It features in a screener of stocks near their 52-week highs with significant volumes.

  • Oriana Power surges as it reportedly secures a contract worth Rs 375 crore from Maharashtra State Electricity Distribution Co (MSEDCL) to construct a 75-megawatt alternating current (MW AC) solar power plant.

  • Antique Stock Broking maintains its ‘Sell’ rating on Rallis India with a target price of Rs 310. The brokerage believes that a recovery in the agrochemical industry, new product launch pipeline, and a steady scale-up of the CSM (custom synthesis manufacturing) business will drive long-term growth. It also highlights the company’s premium valuations.

  • Bikaji Foods International's subsidiary, Bikaji Foods Retail, acquires a 53% stake in Hazelnut Factory Food Products for Rs 131 crore.

  • L&T Technology Services is falling as its Q2FY25 net profit misses Forecaster estimates by 4.6% despite growing 1.9% QoQ to Rs 319.6 crore. Revenue rises by 4.5% QoQ to Rs 2,637.9 crore, driven by improvements in the mobility, sustainability, and hi-tech segments. It appears in a screener of stocks with an increasing trend in non-core income.

  • Rail Vikas Nigam is rising as it secures a contract worth Rs 270 crore from Maharashtra Metro Rail Corp to construct ten elevated metro stations under Nagpur Metro Rail Project Phase-2, including seven in Reach 3A and three in Reach 4A.

  • Bajaj Auto's net profit falls by 31.4% YoY to Rs 1,385.4 crore in Q2FY25. Revenue increases by 22.2% YoY to Rs 13,247.3 crore, driven by higher sales from the automotive and financing segments. The company appears in a screener of stocks where mutual funds increased their shareholding over the past two months.

  • Nifty 50 was trading at 24,956.75 (-14.6, -0.1%), BSE Sensex was trading at 81,753.79 (252.4, 0.3%) while the broader Nifty 500 was trading at 23,639.55 (-33.6, -0.1%).

  • Market breadth is even. Of the 1,939 stocks traded today, 943 were on the uptrend, and 938 went down.

Riding High:

Largecap and midcap gainers today include MphasiS Ltd. (3,080.20, 5.8%), Central Bank of India (58.97, 2.7%) and Infosys Ltd. (1,968.10, 2.5%).

Downers:

Largecap and midcap losers today include Bajaj Auto Ltd. (10,119.45, -12.9%), Havells India Ltd. (1,805.55, -6.9%) and Oberoi Realty Ltd. (1,903.70, -6.3%).

Volume Rockets

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

Top high volume gainers on BSE included MphasiS Ltd. (3,080.20, 5.8%), Honasa Consumer Ltd. (424.25, 3.4%) and Titagarh Rail Systems Ltd. (1,170.05, 3.3%).

Top high volume losers on BSE were Bajaj Auto Ltd. (10,119.45, -12.9%), Havells India Ltd. (1,805.55, -6.9%) and Tata Communications Ltd. (1,830.05, -4.8%).

Crisil Ltd. (4,765.05, -0.5%) was trading at 23.0 times of weekly average. Chennai Petroleum Corporation Ltd. (943.40, 1.6%) and Blue Dart Express Ltd. (8,311.20, -2.1%) were trading with volumes 16.3 and 12.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

6 stocks took off, crossing 52 week highs, while 1 stock were underachiever and hit their 52 week lows.

Stocks touching their year highs included - Firstsource Solutions Ltd. (338.20, 0.2%), Oberoi Realty Ltd. (1,903.70, -6.3%) and Tech Mahindra Ltd. (1,699, 2.3%).

Stock making new 52 weeks lows included - Equitas Small Finance Bank Ltd. (71.24, -1.1%).

5 stocks climbed above their 200 day SMA including Sterling and Wilson Renewable Energy Ltd. (621.55, 1.6%) and Chennai Petroleum Corporation Ltd. (943.40, 1.6%). 22 stocks slipped below their 200 SMA including Bharat Heavy Electricals Ltd. (254.20, -5.7%) and Tata Communications Ltd. (1,830.05, -4.8%).

 
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The Baseline
17 Oct 2024
Five stocks to buy from analysts this week - October 17, 2024
By Ruchir Sankhla

1. Escorts Kubota:

Emkay upgrades its rating to ‘Buy’ for this commercial vehicles manufacturer, setting a target price of Rs 4,700, an upside potential of 21.2%. Analysts Chirag Jain, Jaimin Desai, Nandan Pradhan and Omkar Rane highlight that tractors are likely entering an upcycle from the second half of the fiscal year due to healthy monsoons and an increase in Kharif acreage, which is at the highest in four years. The recent monsoon brought about 8% more rainfall than the long-term average, supporting farm incomes.

Analysts note that while industry volumes declined by 8% YoY in FY24, prospects for a cyclical recovery appear strong. Global tractor manufacturers are also increasingly sourcing components from India, creating a potential opportunity of around $500 million for the company as it expands exports and develops new products.

Jain, Desai, Pradhan, and Rane note that the company is pursuing several initiatives across products, channels, and capacity to capture growth opportunities in both Indian and export markets. As a result, they project a revenue CAGR of 23.7% and an EBITDA CAGR of 26% over FY25-27.

2. Blue Dart Express:

Motilal Oswal reiterates a ‘Buy’ rating on Blue Dart Express with a target price of Rs 9,900, indicating an upside of 16.6%. Analysts Alok Deora and Saurabh Dugar cite the strong growth potential of this transportation logistics company, which has seen improved demand and network expansion.

Blue Dart Express has announced a price hike of 9-12%, effective January 2025, to offset inflationary costs and protect margins. Analysts mention that with the festive season approaching, the company expects higher capacity utilization for its new aircraft, leading to improved efficiency and margins. New routes like Guwahati are gaining momentum. Additionally, the company’s surface express segment, which contributes 30% of its revenues, is expected to grow faster than its air segment, supporting overall growth.

Deora and Dugar highlight that Blue Dart Express’ standalone EBITDA margin is expanding, driven by improved capacity utilization and the shift of volumes from third-party cargo to its own aircraft. They project a CAGR of 18% in net sales and 33.8% in EBITDA over FY 25-27.

3. Tata Consultancy Services:

Sharekhan maintains a ‘Buy’ rating on this IT consulting and software company with a target price of Rs 5,230 indicating a potential upside of 27.7%. Tata Consultancy Services' net profit fell by 1.1% QoQ to Rs 11,909 crore in Q2FY25 due to higher employee benefits and equipment & software license expenses. However, revenue grew by 2.2% QoQ to Rs 64,988 crore, supported by improvements in the banking, financial services & insurance (BFSI), manufacturing, consumer, and life sciences & healthcare segments.

Analysts note that, energy & utilities grew 7%, while manufacturing rose 5.3% YoY. However, communication & media fell by 10.3% and technology by 1.9%. Analysts highlight that the order book stood at $8.6 billion, with North America contributing $4.2 billion. Growth markets like India surged by 95.2%, while North America saw a 2.1% decline.

Analysts mention that the easing cycle of US Federal Reserve rate cuts and stable macro data, supports a strong growth recovery outlook for the IT sector and TCS. They project a CAGR of 8.2% in sales and 10.3% in profit after tax over FY 25-27.

4. Narayana Hrudayalaya:

ICICI Direct maintains a ‘Buy’ rating on this hospitals player with a target price of Rs 1,485, indicating a potential upside of 15.3%. Despite a slowdown in recent quarters, the company showed signs of recovery in India during Q1FY25, with revenue improving by 8% YoY to Rs 1,341 crore, driven by a 10% growth in India, reaching Rs 1,086 crore. However, growth in the Cayman Islands (a UK overseas territory) was limited, with revenue rising by 5% to Rs 267 crore. The average revenue per occupied bed (ARPOB) for Indian hospitals reached Rs 41,370 during the quarter, reflecting an 11% YoY increase.

Analysts Siddhant Khandekar and Shubh Mehta are upbeat about Narayana Hrudayalaya’s plans for capital expenditure of Rs 3,000 crore over the next 2-3 years, focusing on cities like Bengaluru and Kolkata where it has established strong brand loyalty. They said, "We believe the company is well-positioned to handle the impact on its balance sheet, despite negative free cash flow in FY25-26, as its margins and return ratios are strong."

The company has seen a significant reduction in losses from its new hospitals, which has positively impacted margins. Additionally, a new hospital in the Cayman Islands is set to commence operations in H2FY25. Khandekar and Mehta project a revenue CAGR of 10.2% and a net profit CAGR of 7.6% for FY25-26.

5. Eureka Forbes:

ICICI Securities initiates a ‘Buy’ rating on this consumer electronics company with a target price of Rs 660, indicating an upside of 6.9%. Analysts Aniruddha Joshi and Manoj Menon highlight that Eureka Forbes’ planned phase-1 transformation, focused on expanding its distribution network, is progressing as expected. The company’s investments in this area have started delivering positive results and are expected to drive growth in FY 25-26. Its service network has expanded to 19.5K pin codes in FY24 from 10.5K in FY22, growing at a CAGR of 36.3%.

Joshi and Menon are optimistic about the phase-2 transformation, which is set to revolve around improving the service business. Eureka plans to improve customer service experience through better technology and higher service quality. Its digital-based complaint resolution system has enabled the company to achieve a 33% reduction in quality-related complaints during FY24.

Eureka is also investing heavily to improve its market penetration in India's water purifier industry (currently 6%) by launching affordable products, increasing media campaigns, and expanding its distribution network to attract first-time buyers. The analysts also believe that the company’s investment in the distribution network will drive growth in FY25-26.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
16 Oct 2024
Market closes lower, HSCL's net profit grows 34.7% to Rs 135.4 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 24,971.30 (-86.1, -0.3%) , BSE Sensex closed at 81,501.36 (-318.8, -0.4%) while the broader Nifty 500 closed at 23,673.15 (-62.6, -0.3%). Market breadth is even. Of the 2,307 stocks traded today, 1,176 were on the uptrend, and 1,097 went down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 24,971.3 points.  The Indian volatility index, Nifty VIX, rose 0.4% and closed at around 13.1 points. Hyundai Motor India’s Rs 27,870.1 crore IPO received bids for 0.2X the available 10 crore shares on offer on the second day of bidding. The retail investor quota got bids for 0.3X the available 4.9 crore shares.

Nifty Midcap 100 closed lower, while Nifty Smallcap 100 closed flat.  Nifty FMCG and Nifty Consumer Durables closed in the red. According to Trendlyne’s sector dashboard, Forest Materials emerged as the best-performing sector of the day, with a rise of 2.9%.

European indices traded mixed. Major Asian indices closed mixed. US index futures traded mixed, indicating a cautious start to the trading session. Stellantis announces plans to recall over 20K hybrid crossover SUVs in the US due to concerns over the brake pedal.

  • Relative strength index (RSI) indicates that stocks like Ipca Laboratories, Usha Martin, and Hitachi Energy India are in the overbought zone.

  • Himadri Speciality Chemical is rising as its net profit grows 34.7% YoY to Rs 135.4 crore in Q2FY25. Revenue increases by 13.4% YoY to Rs 1,150.5 crore, driven by higher sales from the carbon materials and chemicals segment. The company appears in a screener of stocks where mutual funds increased their shareholding over the past two months.

  • Ugro Capital is rising as it secures a loan worth $40 million (approx. Rs 330 crore) from the United States International Development Finance Corp (US DFC). The lender will use this loan to invest in small businesses.

  • Wockhardt rises to hit its new 52-week high of Rs 1,126.5 as it files for its fast-acting insulin analog, Aspart injection, with the Drug Controller General of India. The insulin will be available in cartridges, vials, and prefilled disposable pens for diabetes management.

  • Macquarie suggests that Swiggy, gearing up for its IPO, is four to six quarters behind its competitor Zomato. It notes that Swiggy's gross order value (GOV) is about 26.5% lower than Zomato's. Swiggy reported a GOV of $820 million (Rs 6,800 crore) in Q1FY25, compared to Zomato's $1,116 million (Rs 9,300 crore) during the same period in the food delivery sector. In addition, Swiggy has a monthly transacting user base of 14 million, while Zomato leads with 20 million users.

  • Motilal Oswal maintains its 'Buy' call on HCL Technologies with a higher target price of Rs 2,300 per share. This indicates a potential upside of 23.1%. The brokerage believes the company's investments in next-gen platforms will help improve client expenses. It expects the firm's revenue to grow at a CAGR of 11.9% over FY25-27.

  • HDFC Life Insurance rises as its net profit grows by 14.8% YoY to Rs 433 crore in Q2FY25. Revenue increases by 23.8% YoY to Rs 28,489.3 crore, owing to improvements in annual premium equivalent (APE) and new business premium. It shows up in a screener of stocks outperforming their industry price change during the quarter.

  • Amber Enterprises India is rising as it enters a joint venture agreement with Korea Circuit to manufacture printed circuit boards (PCBs) in India. Amber, via its subsidiary IL JIN Electronics, will hold a 70% stake, aiming to meet India's growing electronics demand.

  • Nidhu Saxena, MD & CEO of Bank of Maharashtra, says that the cost of deposits has increased by 37 bps YoY. He notes the improved traction in CASA deposits and highlights the bank’s NIM (net interest margin) guidance of 3.7-3.9%.

  • South Indian Bank rises sharply as its net profit grows 18.2% YoY to Rs 324.7 crore in Q2FY25. Revenue increases 12.9% YoY to Rs 2,804.2 crore during the quarter. The bank's asset quality improves as its gross and net NPAs decline by 56 bps YoY and 39 bps YoY, respectively. It shows up in a screener of stocks with increasing revenue for the past eight quarters.

  • Ceigall India emerges as the lowest bidder for a Rs 207 crore project from the State Highway Authority of Jharkhand. The project involves constructing a four-lane elevated road from near Sahajanand Chowk to near Judge Colony in Ranchi.

  • Ashoka Buildon is rising as it bags an order worth Rs 1,126.6 crore from Brihanmumbai Municipal Corporation (BMC) to construct a flyover in Sion, Mumbai.

  • Waaree Energies sets its IPO price band at Rs 1,427-1,503 per share. The issue size is Rs 4,321.4 crore, with a fresh issue worth Rs 3,600 crore and an offer for sale of around Rs 721.4 crore. The issue opens on October 21.

  • Akums Drugs & Pharmaceuticals is rising as it enters a license & distribution agreement with Triple Hair. As per the agreement, Akums Drugs will receive exclusive rights to develop and market products recently innovated by Triple Hair in India.

  • Cochin Shipyard falls sharply as the central government announces plans to sell a 5% stake worth Rs 2,026 crore through an offer for sale at Rs 1,540 per share. The offer includes a base sale of 2.5%, with an option to sell an additional 2.5%.

  • Godrej Properties is rising as it emerges as the highest bidder for three adjoining plots intended for a group housing project in Sector 5-A, Kharghar. The plots cover 6.5 acres and offer a development potential of 2 million square feet. The estimated total revenue potential is Rs 3,500 crore.

  • Reports indicate that Ola Electric has engaged EY India for a project focused on addressing after-sales issues and customer complaints. This initiative follows growing dissatisfaction among customers and a government notice regarding consumer rights violations. EY India is expected to help improve operations, enhance spare parts management, and strengthen customer support in regions with a few service centres.

  • Ambuja Cements falls as nearly 1.5 crore shares (0.6% stake), amounting to Rs 909 crore, reportedly change hands in a block deal at an average price of Rs 586 per share.

  • Larsen & Toubro's heavy civil infrastructure arm bags an order worth Rs 1,000-2,500 crore from Uttar Pradesh Metro Rail Corp (UPMRCL) to design and construct line-2 of Agra Metro Phase-1. The scope of work includes the construction of a 15.1 km elevated viaduct, 14 stations, and a 2.6 km depot.

  • PNC Infratech surges as it secures two orders worth Rs 4,630 crore from Maharashtra State Road Development Corp (MSRDC). The first project involves the construction of the Pune Ring Road, spanning 13.8 km from Indori to Chimbali, valued at Rs 2,268 crore. The second project includes building a 28.9 km expressway connector from Jalna to Nanded, valued at Rs 2,362 crore.

  • Nomura downgrades HDFC Life Insurance Co to a 'Neutral' rating with a target price of Rs 735. The brokerage cites sustained growth and weak margins as key reasons. It believes the company will need to deliver a VNB (value of new business ) margin of approximately 25.4% in H2FY25 to achieve at least 15% YoY growth in VNB in FY25, which seems challenging. Nomura also notes the current valuation adequately reflects the company's positive aspects.

  • Rallis India surges as its net profit beats Forecaster estimates by 32.3% after growing 19.5% YoY to Rs 98 crore in Q2FY25, owing to lower raw material costs. Revenue rises by 12.1% YoY to Rs 938 crore due to an increase in the crop care and seeds segments. It features in a screener of stocks with negative to positive growth in sales and profit with strong price momentum.

  • RailTel Corp of India is rising as it receives a work order worth Rs 79.8 crore from the Maharashtra Housing and Area Development Authority (MHADA). The order involves selecting a service provider to set up, migrate, and manage MHADA's cloud data centre and disaster recovery site.

  • KEI Industries is falling as its Q2FY25 net profit misses Forecaster estimates by 6.4% despite growing by 10.4% YoY to Rs 154.8 crore, helped by inventory destocking. Revenue increases by 17.5% YoY to Rs 2,296.6 crore, driven by the cables & wires and engineering, procurement & construction (EPC) projects segments. The company's board approves a qualified institutional placement (QIP) of equity shares worth Rs 2,000 crore.

  • G R Infraprojects is rising as it secures a contract worth Rs 1,885.6 crore from Maharashtra State Road Development Corporation (MSRDC) to build a section of the Pune Ring Road in Pune District. The project connects Kalyan/Rathwade village to Shivare/Kusgaon village and will be completed on an engineering, procurement, and construction (EPC) basis.

  • Nifty 50 was trading at 25,012.45 (-44.9, -0.2%) , BSE Sensex was trading at 81,663.57 (-156.6, -0.2%) while the broader Nifty 500 was trading at 23,717.40 (-18.3, -0.1%)

  • Market breadth is in the green. Of the 1,908 stocks traded today, 1,111 were on the uptick, and 752 were down.

Riding High:

Largecap and midcap gainers today include HDFC Asset Management Company Ltd. (4,827.90, 6.0%), Tube Investments of India Ltd. (4,510.80, 4.3%) and Voltas Ltd. (1,881.30, 3.9%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (527.20, -5.8%), Polycab India Ltd. (7,181.50, -4.1%) and Trent Ltd. (7,805.80, -3.9%).

Volume Rockets

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

Top high volume gainers on BSE included Aditya Birla Sun Life AMC Ltd. (779.05, 11.6%), UTI Asset Management Company Ltd. (1,329, 7.8%) and Amber Enterprises India Ltd. (5,491.65, 6.3%).

Top high volume losers on BSE were KEI Industries Ltd. (4,384.80, -6.5%), Oil India Ltd. (527.20, -5.8%) and Zydus Lifesciences Ltd. (1,020.10, -3.6%).

Nuvoco Vistas Corporation Ltd. (362.55, 3.8%) was trading at 43.3 times of weekly average. DCM Shriram Ltd. (1,121.75, 6.0%) and Grindwell Norton Ltd. (2,511.35, 1.8%) were trading with volumes 9.3 and 9.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - HCL Technologies Ltd. (1,865.25, -0.3%), Motilal Oswal Financial Services Ltd. (962.05, 4.1%) and Multi Commodity Exchange of India Ltd. (6,428.30, -1.3%).

Stocks making new 52 weeks lows included - CreditAccess Grameen Ltd. (1,024.10, -2.9%) and CSB Bank Ltd. (309.30, 1%).

14 stocks climbed above their 200 day SMA including PNC Infratech Ltd. (466, 4.4%) and Chennai Petroleum Corporation Ltd. (928.95, 4.1%). 12 stocks slipped below their 200 SMA including ZF Commercial Vehicle Control Systems India Ltd. (14,900, -4.9%) and Bata India Ltd. (1,422, -2.0%).

 
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The Baseline
15 Oct 2024
By Aditi Priya

The Indian stock market has been highly volatile over the past month, with the Nifty 50 slipping approximately 1% while struggling to stay above the 25,000 mark. This was mainly due to the geopolitical tensions in the Middle East, uncertainty around US interest rate cuts and expensive valuations. Additionally, the recent stimulus measures in China have drawn global investor attention, leading to a shift in focus from Indian equities to Chinese markets, further contributing to the pressure on Indian stocks. 

Many high-beta stocks, known for their greater volatility, saw negative returns over the past month. Beta is a measure of a stock's volatility in relation to a benchmark index like the Nifty50 or the BSE Sensex. A beta of 1 means the stock moves with the market, while a beta higher than 1 indicates greater volatility, implying higher risk. Stocks with a beta lower than 1 are less volatile than the market. High beta stocks can be good investments for traders who don’t mind risk and a little bit of worry with their breakfast, since these can deliver higher returns. 

In this edition of Chart of the Week, we analyze the top eight companies with the highest beta within the Nifty500 universe, over the past month and past year. These stocks have been impacted by a variety of factors, ranging from market expansion to financial performance.

Kaynes Technology leads high-beta stocks with 20% monthly gains

Kaynes Technology has the highest beta value of 2.8 over the past month and 1.4 over the past year with its stock posting 20% gains in the past month. The major reason behind this is that the company is expanding into new markets, including automotive, industrial, and medical electronics. Kaynes recently opened a manufacturing facility in Hyderabad to enhance its global competitiveness. Additionally, the company secured approval to build an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, which will produce 6.3 million chips per day for various applications. On a YoY basis, Kaynes has posted impressive gains of 110.9%.

The next highest beta stock is engineering consultancy company, Engineers India Ltd. with a beta value of 2.5 over the past month and 2 over the past year. The stock has fallen almost 3% over the past month. The share price of the company has been falling after it posted weak results in Q1FY25 with falling net profit on YoY and QoQ basis on August 9, 2024. On a YoY basis, Engineers India has posted gains of 44.8% with the beta value of 2.

HFCL, a leading player in the telecommunication equipment industry, also makes the list, posting 9.1% losses over the past month with the beta value of 2.4. Despite this, the stock is still performing well over the past year, posting gains of over 93% with the one year beta value of 2.

Construction stocks see short-term decline, but long-term growth looks strong

Construction and engineering companiesSterling and Wilson Renewable Energy and Rites Ltd. have also witnessed volatility in the past month with beta values at 2.2 and 2.3, respectively. Both companies have seen a fall in their share price over the past month. However, one-year returns of these companies have increased by a significant amount.

Housing and Urban Development Corp (HUDCO), a housing finance company, has also been very volatile in the past month with the one month beta value of 2.3 and one year beta value of nearly 2. Weak Q1FY25 results with a 27.4% fall in net profit has caused the share price to fall. However, the stock has performed well over the past year, posting gains of over 158%.

Electric utilities company Inox Wind has been one of the top performers among high-beta stocks, delivering remarkable gains of 321.6% over the past year with the beta value of the stock being nearly 1.5. However, in the past month, the stock has experienced notable volatility, with a beta value rising to 2.2, and its price declined by 6.2%. This drop followed a significant block trade in which approximately 2.75 crore shares, or 5% of the company's total equity, were traded on the exchanges. The trade occurred as Inox Wind's promoter, Inox Wind Energy Ltd. (IWEL), planned to sell up to 5% of the company's equity in a block deal.

In summary, while these stocks have high-risk profiles, they also offer the potential for significant returns, attracting investors willing to brave the volatility. High-beta stocks remain a popular choice for traders seeking opportunities to capitalize on short-term price fluctuations in a volatile market. This data reveals that while some high-beta stocks have managed to outperform, others have succumbed to the market’s turbulence, underscoring the dual nature of high-risk investments.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
15 Oct 2024
Market closes lower, Newgen Software's profit surges 47.8% QoQ to Rs 70.3 crore in Q2FY25
By Trendlyne Analysis

Nifty 50 closed at 25,057.35 (-70.6, -0.3%) , BSE Sensex closed at 81,820.12 (-152.9, -0.2%) while the broader Nifty 500 closed at 23,735.70 (8.7, 0.0%). Market breadth is neutral. Of the 2,310 stocks traded today, 1,120 showed gains, and 1,154 showed losses.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 25,057.4 points. The Indian volatility index, Nifty VIX, rose 0.1% and closed at 13 points. Reliance Industries’ net profit declined by 4.8% YoY to Rs 16,563 crore in Q2FY25. The stock declined by over 2% post results.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green. BSE Realty index and Nifty Realty were among the top index gainers today. According to Trendlyne’s Sector dashboard, Healthcare Equipment & Supplies emerged as the best-performing sector of the day, with a jump of over 2.9%.

Asian indices closed in the red while European indices are trading mixed. US index futures traded in the red, indicating a cautious start to the trading session. Brent crude oil futures are trading in the red. Nvidia mentioned that its customers are still purchasing its current range of chips. However, it also noted that the production of its next-generation Blackwell chips has been postponed until the fourth quarter.

  • Money flow index (MFI) indicates that stocks like Usha Martin, Hitachi Energy India, Ipca Laboratories, and National Aluminium are in the overbought zone.

  • Newgen Software Technologies' net profit surges by 47.8% QoQ to Rs 70.3 crore in Q2FY25. Revenue grows by 12.6% QoQ to Rs 379.7 crore, driven by improvements in the Indian, Europe, the Middle East and Africa (EMEA), Asia-Pacific (APAC), and USA markets. It features in a screener of stocks with growth in quarterly net profit and profit margin.

  • Bank of Maharashtra is rising as its net profit surges 44.2% YoY to Rs 1,326.8 crore in Q2FY25. Revenue grows 18.7% YoY to Rs 6,017.4 crore, driven by improvements in the treasury operations, corporate, and retail banking segments. The bank's asset quality improves as its gross and net NPAs contract by 35 bps and 3 bps YoY, respectively, during the quarter.

  • PVR Inox is rising as its revenue beats Forecaster estimates by 4.8%, despite declining 19% YoY to Rs 1,622 crore in Q2FY25. The company reports a net loss of 11.8 crore during the quarter, compared to a profit of Rs 166.3 crore in Q2FY24. It appears in a screener of stocks where FIIs and institutions have increased their shareholding.

  • Economists believe the Reserve Bank of India is unlikely to cut interest rates in December after September's inflation hit a nine-month high. Goldman Sachs Group and Deutsche Bank AG still anticipate an easing by the RBI in December but acknowledge the likelihood has increased that any potential cut may be delayed until next year.

  • RPP Infra Projects surges to its 5% upper circuit as it secures an order worth Rs 217.6 crore from the Chief Engineer & Project Director (EAP), Mumbai. The project involves improving the Kothore Digar Satana Malegaon Chalisgaon Pachora Shendurni Pahur Wakadi Road in Jalgaon District, Maharashtra.

  • Motilal Oswal upgrades Ipca Laboratories to 'Buy' from 'Neutral' with a higher target price of Rs 1,950 per share. This indicates a potential upside of 15%. The brokerage is positive on the stock, driven by a strong domestic brand franchise, improved US FDA compliance, US business revival, and synergic benefits of the Unichem acquisition. It expects the company's revenue to grow at a CAGR of 16.1% over FY25-27.

  • Exxaro Tiles is rising as its board of directors approves the sub-division/split of one equity share of the company having a face value of Rs 10 each, into ten equity shares with a face value of Rs 1 each.

  • Ahead of Nestle India’s earnings on Thursday, brokerages project net profit growth of 7-8% YoY for Q2FY25. Revenue is expected to grow by 5-7% YoY driven by price hikes taken by the company and believes sales growth momentum will continue.

  • BEML secures a contract worth Rs 866.9 crore from Integral Coach Factory (ICF), Chennai, to design, manufacture, and commission two high-speed trainsets, each comprising eight cars worth Rs 27.9 crore.

  • IFGL Refractories is rising as it forms a 51:49 joint venture (JV) with Seychelles-based Marvels International Group (MIG) to manufacture bricks in India.

  • KPI Green Energy is rising as it signs power purchase agreements (PPAs) with Gujarat Urja Vikas Nigam (GUVNL) for 620 megawatts alternating current (MWAC) of renewable energy projects. This includes a 250 MWAC grid-connected solar photovoltaic power project and a 370 MWAC grid-connected hybrid renewable energy project.

  • HSBC maintains its ‘Buy’ rating on Maruti Suzuki with a target price of Rs 14,500. The brokerage notes higher inventory levels amid a decline in sales of cars in Q2FY25. It expects weak dispatches in Q3 but bets on new launches lined up for 2025.

  • Lyka Labs is rising as it receives approval from the Central Drugs Standard Control Organisation (CDSCO) to manufacture and market Pregabalin Gel 8% w/w, used to treat diabetic neuropathic pain.

  • Sunteck Realty rises sharply as its pre-sales grow 32.7% YoY to Rs 524 crore in Q2FY25, helped by a 24.8% YoY increase in collections to Rs 267 crore. It appears in a screener of stocks with zero promoter pledge.

  • Garuda Construction and Engineering’s shares debut on the bourses at a 10.5% premium to the issue price of Rs 95. The Rs 264.1 crore IPO received bids for 7.5 times the total shares on offer.

  • SpiceJet resolves a $23.4 million (Rs 196.7 crore) dispute with Aircastle (Ireland) Designated Activity Co and Wilmington Trust SP Services (Dublin) outside of court for a total of $5 million (Rs 42 crore). The settlement also includes agreements regarding the handling of specific aircraft engines.

  • Angel One surges as its net profit grows by 39.1% YoY to Rs 423.4 crore in Q2FY25. Revenue increases by 44.5% YoY to Rs 1,516 crore, driven by improving client base, number of orders, and average daily turnover. It shows up in a screener of stocks that have gained over 20% in the past month.

  • TD Power Systems is rising as it secures two large orders worth Rs 142 crore from two international gas engine original equipment manufacturers (OEM) to supply gas engine generators.

  • HCL Technologies rises to its all-time high of Rs 1,882.8 per share as its Q2FY25 net profit beats Forecaster estimates by 5.6% despite staying flat at Rs 4,235 crore. Revenue grows by 0.5% QoQ to Rs 29,381 crore, helped by improvements in the IT & business services, engineering & R&D services, and HCL Software segments. It appears in a screener of stocks outperforming their industries over the past month.

  • India’s CPI inflation rises to a nine-month high of 5.5% in September. Food inflation rises to 9.2%, compared to 5.7% in August. Rural inflation is up at 5.9%, while urban inflation increases to 5.1% in September.

  • JSW Infrastructure is rising as it receives a letter of intent from the Maharashtra Maritime Board to develop, operate, manage, and maintain an all-weather multipurpose port in Murbe village, Palghar District, Maharashtra, under a Public Private Partnership (PPP) model.

  • Reliance Industries is falling as its net profit declines by 4.8% YoY to Rs 16,563 crore in Q2FY25 due to higher raw materials, excise, employee benefits, and finance costs. However, revenue grows 0.7% YoY to Rs 2.4 lakh crore, driven by improvements in the oil to chemicals (O2C) and digital services segments. It features in a screener of stocks with declining net cash flow.

  • Va Tech Wabag rises to a new all-time high of Rs 1,744.2 as it secures an order worth Rs 1,000 crore from Indosol Solar. The contract covers the design, engineering, supply, installation, testing, and commissioning of a 100 MLD desalination plant for Indosol Solar's solar PV manufacturing unit in Andhra Pradesh.

  • J Kumar Infraprojects is rising as it receives a work order worth Rs 297.8 crore from the Pune Municipal Corporation to develop the Mula River from Wakad Bypass to Sangvi Bridge.

  • Nifty 50 was trading at 25,198.50 (70.6, 0.3%), BSE Sensex was trading at 82,101.86 (128.8, 0.2%) while the broader Nifty 500 was trading at 23,796.75 (69.7, 0.3%).

  • Market breadth is in the green. Of the 1,933 stocks traded today, 1,184 were gainers and 690 were losers.

Riding High:

Largecap and midcap gainers today include Hindustan Petroleum Corporation Ltd. (422.90, 4.2%), Varun Beverages Ltd. (611.05, 3.3%) and Deepak Nitrite Ltd. (2,932.60, 3.0%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (559.45, -4.6%), HDFC Life Insurance Company Ltd. (714.25, -3.6%) and Bajaj Auto Ltd. (11,521.50, -3.2%).

Volume Rockets

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

Top high volume gainers on BSE included Angel One Ltd. (3,224.55, 18.4%), Motilal Oswal Financial Services Ltd. (924.45, 11.8%) and Network18 Media & Investments Ltd. (87.09, 10.1%).

Top high volume losers on BSE were Jindal Steel & Power Ltd. (968.70, -2.5%), Mahindra Holidays & Resorts India Ltd. (386.10, -1.3%) and Motherson Sumi Wiring India Ltd. (64.38, -0.9%).

Aether Industries Ltd. (937.25, -0.8%) was trading at 53.3 times of weekly average. Five-Star Business Finance Ltd. (894.75, 8.6%) and Sunteck Realty Ltd. (596.35, 7.6%) were trading with volumes 16.0 and 13.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Divi's Laboratories Ltd. (6,106.70, -1.7%), Glenmark Pharmaceuticals Ltd. (1,804.90, -0.7%) and HCL Technologies Ltd. (1,870.10, 0.8%).

Stock making new 52 weeks lows included - CSB Bank Ltd. (306, 0.3%).

12 stocks climbed above their 200 day SMA including Angel One Ltd. (3,224.55, 18.4%) and Mastek Ltd. (2,908.25, 4.9%). 10 stocks slipped below their 200 SMA including NMDC Ltd. (232.08, -2.1%) and Tata Steel Ltd. (155.63, -1.7%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
14 Oct 2024
Market closes higher, HCC wins an order worth Rs 1,031.6 crore from MSRDC
By Trendlyne Analysis

Nifty 50 closed at 25,127.95 (163.7, 0.7%) , BSE Sensex closed at 81,973.05 (591.7, 0.7%) while the broader Nifty 500 closed at 23,727.05 (115.8, 0.5%). Market breadth is in the red. Of the 2,345 stocks traded today, 1,080 were on the uptick, and 1,224 were down.

Nifty 50 closed higher after rising in the morning session. The Indian volatility index, Nifty VIX, fell 1.7% and closed at 13 points. Wipro's board of directors scheduled to meet on October 16-17 to consider a proposal for a bonus issue.

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

Asian indices closed in the green, except for China’s Hang Seng and FTSE China 50 index which closed in the red. European indices are trading mixed. US index futures are trading mixed, indicating a positive start to the trading session. Brent crude oil futures are trading lower as China's stimulus plans failed to inspire confidence among investors.

  • Relative strength index (RSI) indicates that stocks like Divi's Laboratories, Ipca Laboratories, and Hitachi Energy India are in the overbought zone.

  • Alok Industries falls as its net loss widens by 49.9% YoY to Rs 262.1 crore in Q2FY25, due to higher finance costs. Revenue decreases 35% YoY to Rs 898.8 crore during the quarter. It appears in a screener of stocks with book value per share deteriorating over the past two years.

  • Hindustan Construction Co is rising as it receives a letter of acceptance (LoA) worth Rs 1,031.6 crore from Maharashtra State Road Development Corporation. The project involves building a two-lane bridge over Agardanda Creek, connecting Tokekhar and Turumbadi in Raigad District, as part of the Revas-Reddi Coastal Highway (MSH-04).

  • Reports suggest that 10.4 lakh shares (0.3% equity) of Trent, amounting to Rs 846.1 crore have changed hands in a block deal.

  • Sharekhan maintains its 'Buy' call on Tata Motors with a higher target price fo Rs 1,319 per share. This indicates a potential upside of 41.9%. The brokerage believes the company's sales will improve on the back of a recovery in sales of Jaguar Land Rover in H2FY25. It expects the firm's revenue to grow at CAGR of 11.2% over FY25-26.

  • Vascon Engineers surges as it receives a letter of acceptance (LoA) worth Rs 57.2 crore from Mumbai Metro Rail Corporation, Government of Maharashtra. The LoA involves building a commercial structure at Kalbadevi (K2) on specific land parcels in the Bhuleshwar Division. The project aims to support the rehabilitation of people affected by the Metro Line 2/3 in Kalbadevi Girgaon.

  • Hathway Cable & Datacom rises sharply as its net profit grows 28.6% YoY to Rs 25.8 crore in Q2FY25. Revenue increases by 6% YoY to Rs 512.7 crore, helped by improvements in the cable television and securities trading segments. It shows up in a screener of stocks with increasing revenue for the past two quarters.

  • The Society of Indian Automobile Manufacturers (SIAM) reports a 1.4% YoY decline in overall PV sales to 3.56 lakh units in September. Two-wheeler and three-wheeler sales increase 15.8% YoY and 6.7% YoY to 20.3 lakh and 79,683 units, respectively.

  • Eraaya Lifespaces is rising as its board of directors schedules a meeting for October 19 to consider a proposal for a stock split.

  • PNC Infratech is rising as it receives an order worth Rs 2,039.6 crore from the City & Industrial Development Corporation of Maharashtra (CIDCO) to develop over 20-meter-wide roads, build major and minor structures, and complete electrical works.

  • Oil & Natural Gas Corp reportedly plans to set up mini-LNG plants to transport natural gas from wells in areas without pipelines. The company plans to set up these plants in five locations in Andhra Pradesh, Jharkhand, and Gujarat.

  • India’s WPI inflation rises to 1.8% in September from 1.3% in August, driven by a sharp increase in the prices of food items. Food articles inflation surged to 11.5% during the month, up from 3.1% in August.

  • Adani Energy Solutions enters an agreement with Kenya Electricity Transmission Co (Ketraco) to develop, finance, and manage transmission infrastructure in Kenya. The project is estimated to cost $736 million and involves constructing transmission lines and substations.

  • Sudarshan Chemical Industries' board of directors schedules a meeting on Wednesday to consider raising funds by issuing equity shares through a preferential issue, qualified institutional placement (QIP), rights issue, or other modes.

  • Valor Estate secures a letter of acceptance from the Municipal Corporation of Greater Mumbai (MCGM) to construct 13,374 affordable housing units under the project-affected persons (PAP) Scheme. The project has a completion timeline of 60 months.

  • Mutual funds increase their stake in One97 Communications (Paytm) by 15% in Q2FY25, compared to 6.8% in Q1FY25. Mutual funds raised their holdings in the company significantly between July and September, as it achieved a 70% return.

  • KR Choksey retains its 'Accumulate' call on Tata Consultancy Services with a target price of Rs 4,587 per share. This indicates a potential upside of 11.1%. The brokerage expects the company's revenue to grow, driven by expectations of increased discretionary spending due to interest rate cuts. It expects the firm's revenue to grow at a CAGR of 8.5% over FY25-27.

  • Gensol Engineering surges as it secures an order worth AED 81.6 million (Rs 186 crore) from UAE’s leading sustainable development and clean energy development company. The project involves designing, constructing, and providing long-term operation and maintenance for 23 megawatt peak (MWp) rooftop solar photovoltaic (PV) systems in Dubai.

  • JSW Energy is rising as it enters an energy storage facility agreement (ESFA) with the Maharashtra State Electricity Distribution Company (MSEDCL) to procure 1,500 MW or 12,000 megawatt-hours (MWh) of pumped hydro energy storage. As per the agreement, JSW will supply energy storage capacity for 40 years at a fixed capacity charge of Rs 84.7 lakh per MW per annum.

  • JP Morgan initiates coverage on Larsen & Toubro with an ‘Overweight’ rating and target price of Rs 4,360. The brokerage believes the company is well-positioned to navigate the capex cycle in India and the Middle East. It also highlights the attractive valuations and strong earnings growth.

  • Wipro rises as its board of directors schedules to meet on October 16-17 to consider a proposal for a bonus issue.

  • Ashoka Buildcon is rising as it bags orders worth Rs 2,000 crore from Maharashtra State Road Development Corp (MSRDCL) for the engineering, procurement, and construction work of two bridges in Ratnagiri, Maharashtra.

  • Premier Energies is rising as its subsidiaries, Premier Energies International and Premier Energies Photovoltaic, receive orders worth Rs 765 crore from various customers to supply solar PV cells and modules.

  • Avenue Supermarts falls sharply as its Q2FY25 net profit misses Forecaster estimates by 4.6% despite growing 5.8% YoY to Rs 659.6 crore, helped by inventory destocking. Revenue increases by 14.3% YoY to Rs 14,478 crore during the quarter. It shows up in a screener of stocks where mutual funds have decreased their shareholding in the last quarter.

  • Nifty 50 was trading at 25,055.95 (91.7, 0.4%), BSE Sensex was trading at 81,647.90 (266.5, 0.3%) while the broader Nifty 500 was trading at 23,686.65 (75.4, 0.3%).

  • Market breadth is ticking up strongly. Of the 2,009 stocks traded today, 1,301 showed gains, and 642 showed losses.

Riding High:

Largecap and midcap gainers today include Federal Bank Ltd. (196.74, 4.9%), Oberoi Realty Ltd. (1,997.80, 4.1%) and Wipro Ltd. (549.55, 4.0%).

Downers:

Largecap and midcap losers today include Avenue Supermarts Ltd. (4,183.60, -8.5%), Bandhan Bank Ltd. (200.06, -4.9%) and Colgate-Palmolive (India) Ltd. (3,522.45, -4.5%).

Volume Rockets

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

Top high volume gainers on BSE included Aptus Value Housing Finance India Ltd. (389.65, 8%), Esab India Ltd. (6,463, 5.1%) and Oberoi Realty Ltd. (1,997.80, 4.1%).

Top high volume losers on BSE were Avenue Supermarts Ltd. (4,183.60, -8.5%), Colgate-Palmolive (India) Ltd. (3,522.45, -4.5%) and Procter & Gamble Hygiene & Healthcare Ltd. (16,526.85, -0.7%).

Poly Medicure Ltd. (2,387.50, 1.9%) was trading at 13.7 times of weekly average. KSB Ltd. (914.15, 0.9%) and JK Cement Ltd. (4,310, 1.7%) were trading with volumes 6.6 and 6.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

18 stocks made 52 week highs, while 2 stocks hit their 52 week lows.

Stocks touching their year highs included - Divi's Laboratories Ltd. (6,207, 1.1%), Glenmark Pharmaceuticals Ltd. (1,818.15, 1.5%) and HCL Technologies Ltd. (1,855.90, 0.9%).

Stocks making new 52 weeks lows included - CreditAccess Grameen Ltd. (1,055, -1.9%) and CSB Bank Ltd. (305.90, -0.5%).

6 stocks climbed above their 200 day SMA including Narayana Hrudayalaya Ltd. (1,268.80, 3.9%) and Mastek Ltd. (2,776, 2.4%). 12 stocks slipped below their 200 SMA including Avenue Supermarts Ltd. (4,183.60, -8.5%) and Bandhan Bank Ltd. (200.06, -4.9%).

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

1. Transformers & Rectifiers (India):

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

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

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

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

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

2. Bharat Electronics:

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

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

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

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

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

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

3. Godrej Properties:

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

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

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

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

4. Amber Enterprises:

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

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

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

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

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

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

5. Tata Motors:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Riding High:

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

Downers:

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

Movers and Shakers

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

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

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

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

BSE 500: highs, lows and moving averages

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

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

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

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

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

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

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

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

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

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

In this week's Analyticks:

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

Rubber prices jump, as supply tightens

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

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

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

For tyre companies, margins are at risk

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

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

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

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

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

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

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

A silver lining for tyre companies

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

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

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

The trees grow slowly, limiting supply

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

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

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

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

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

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

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

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

You can find some popular screeners here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Riding High:

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

Downers:

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

Volume Rockets

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

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

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

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

BSE 500: highs, lows and moving averages

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

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

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

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