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The Baseline
12 Sep 2024, 12:40PM
Five stocks to buy from analysts this week - September 12, 2024
By Ruchir Sankhla

1. Bajaj Auto:

Sharekhan reiterates its ‘Buy’ rating for this 2/3 wheeler manufacturer, setting a target price of Rs 12,584, a potential upside of 7.8%. The analyst highlights that the company has seen a 9.8% increase in sales in FY25, with domestic volumes rising 12.6% and export volumes up 5.4%. While exports remain modest, recovery in the Nigerian market could drive further growth. Its CNG motorcycle, Freedom 125, is gaining popularity, and production capacity is set to expand to 50,000 units per month by January 2025.

The company is also strengthening its position in the electric vehicle (EV) market, holding a 14% share in the domestic electric 2-wheeler segment and a 36% share in the electric 3-wheeler segment. Upcoming EV product launches are expected to support future growth.

The brokerage expects the company’s volume growth to improve, supported by rural market recovery, strong 125cc sales, and festive season demand, while export recovery and CNG expansion should boost growth. The analysts anticipate a EBITDA CAGR of 19% over FY25-26 and EV/EBITDA to be 22.3 times in FY26.

2. Godrej Consumer Products:

Motilal Oswal maintains a ‘Buy’ rating on this personal products maker with a target price of Rs 1,700. This indicates an upside of 12.7%. Analysts Naveen Trivedi, Pratik Prajapati and Tanu Jindal highlight Godrej Consumer Products’ (GPCL)  strategic moves in FY24 across various geographies. In India, the company launched ‘Project Vistaar’ to improve its rural reach and expand sales channels. In Indonesia, it has adopted a distributor-led model in general trade, which it said lowered its operational costs. Additionally, GCPL’s focus on e-commerce in the US drove 15%+ growth, and now accounts for 8% of its total business.

GCPL aims to drive growth in rural markets by introducing affordable products for price-sensitive consumers. It has set up a transportation management system to streamline its delivery routes, improve demand forecasting, and reduce excess inventory.

Trivedi, Prajapati and Jindal are upbeat about GCPL’s acquisition of Raymond Consumer Care, which has added brands like Park Avenue to its portfolio. The company reduced RCCL’s inventory from 90 to 15-20 days, improving operational efficiency despite a 25% revenue drop in FY24 as it cuts excess stock. The management anticipates that the segment will generate Rs 600 crore in revenue in FY25.

3. AIA Engineering:

Asit C Mehta initiates a ‘Buy’ rating on this other industrial goods company with a target price of Rs 5,106, suggesting a upside potential of 18.2%. Analyst Abhinav Kapadia says that the company sees growth in supplying more advanced materials for mining. These materials are used to grind down gold, copper, and iron ore more efficiently than traditional ones. Currently, less than 15% of the market uses these advanced materials, suggesting a large opportunity to increase usage.

Analysts say AIA Engineering's new mill liner plant improves its products with less wear, better output, and lower costs. AIA is expected to gain a strong position in the global mining industry, similar to its leadership in the cement sector. Its partnerships with EE Milling Solutions and the purchase of MPS Australia have helped improve equipment design and cut costs for customers.

Kapadia highlighted that the company achieved a revenue, EBITDA, and PAT CAGR of 19%, 20%, and 27%, respectively, from FY21 to FY24. He expects EBITDA and PAT margins to remain stable at 29% and 24% in FY25 and FY26, despite export challenges arising from the ongoing Red Sea crisis.

4. Awfis Space Solutions:

Edelweiss maintains ‘Buy’ rating on this consumer services company with a target price of Rs 1,013, indicating a potential upside of 40%. Analysts Amit Agarwal and Rishith Shah point out that the company is set to benefit from favorable market dynamics, including a 25-27% CAGR in demand for flexible office space due to hybrid working models, increased global capability centres (GCCs), and decentralization of office space by larger firms. The company expects the average seat rental to rise by 5-6% annually.

The analysts note that the company plans to add 40,000 seats in FY25, expanding from its current inventory of 95,030 seats, and has a capex budget of around Rs 140 crore for fitouts. Their expansion strategy focuses on Tier I and Tier II cities, targeting smaller 100-200 seat centers for better pricing. The firm uses a capital-light managed aggregation model, sharing fitout costs with landlords to boost returns while maintaining an asset-light approach, without owning properties

Agarwal and Shah forecast a revenue, EBITDA, and PAT CAGR of 40.1%, 68.6%, and 92.3% respectively for FY25-27, excluding Ind AS 116 adjustments.

5. Va Tech Wabag:

ICICI Securities maintains its ‘Buy’ rating on Va Tech Wabag with a target price of Rs 1,541, suggesting an upside of 8.2%. Analysts Mohit Kumar, Abhijeet Singh and Nidhi Shah highlight that this non-electrical utilities company recently secured a contract from the Middle East for a 300 million litre per day (MLD) desalination plant. 

This greenfield project, located on the west coast of Saudi Arabia near Yanbu al-Bahr, is set to be completed in 30 months and is valued at Rs 2700 crore, exceeding FY24 engineering, procurement, and construction (EPC) revenues of Rs 2300 crore.

Analysts say that with this order, Wabag’s EPC order book is expected to rise to Rs 7800 crore, improving the book-to-bill ratio to 3.4 times. The operation and maintenance order book stands at Rs 4500 crore. Revenue growth estimates for FY26 have been increased to 20% from earlier projection of 15%. Wabag also has a strong pipeline in the Middle East, having bid for projects worth $100 crore and pre-qualified for a 1000 MLD desalination project.

Kumar, Singh, and Shah expect revenue and earnings CAGR of 15% and 20%, respectively, along with a 300 basis point expansion in return on equity from FY25 to FY26, driven by order book expansion, improved execution, and enhanced margins.

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

(You can find all analyst picks here)

 
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The Baseline
11 Sep 2024, 05:32PM
Chart of the Week: Crude oil prices at 52-week low boosts prospects for India
By Satyam Kumar

Crude oil prices fell below $70, marking a new 52-week low on September 10 due to oversupply concerns and a weak demand outlook. A week ago, OPEC+ announced it would postpone its planned oil supply increase until the start of 2025.

OPEC, or the Organization of the Petroleum Exporting Countries, was established in 1960 by Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela. The organization has since grown to include 13 member nations. OPEC operates like a cartel, regularly meeting to set oil production targets and coordinate output to manage global oil prices.

In 2016, in response to falling oil prices driven by a surge in United States crude production—also known as shale oil—OPEC signed an agreement with 10 other oil-producing countries, forming OPEC+. Among these countries was Russia, the world’s third-largest oil producer accounting for more than 10% of global production.

This week’s Chart of the Week looks at the reasons behind falling crude oil prices and how these trends may affect India and its equity markets.

Weak demand in the US & China and an increasing supply of US crude led to decline in crude prices

US increases crude production to all-time high levels, while OPEC+ cuts

Oil posted its biggest weekly drop in 11 months as a weak US jobs report added to concerns about tepid demand in the world’s largest consumer of crude. Oil prices have trended lower since early July, with weakness in the economies of China and the US — the top two oil consumers — creating fears about demand.

According to U.S. Energy, the production of crude oil in the United States, also known as shale oil has steadily risen in recent years to all-time high levels, adding supply pressure and messing up OPEC’s calculations as oil demand weakens. 

Falling crude oil prices a boost for the Indian economy

India imports more than 80% of its crude oil needs, so falling oil prices will significantly reduce the country's import bill. This will help narrow the trade deficit and boost foreign exchange reserves. 

High oil prices typically lead to a stronger US dollar against other currencies, which puts downward pressure on the Indian rupee. This is because high oil prices drive up demand for dollars as it is the preferred currency used in oil trade across the globe–so much so that it is referred to as the petrodollar trade. So falling crude oil prices can alleviate the pressure on the rupee.

According to India Today, the government is considering lowering oil prices to reduce inflation by bringing down energy costs. High retail prices for petrol and diesel tend to drive up domestic commodity prices, as increased oil costs raise production and transportation expenses across various sectors, squeezing profit margins. As the world's fourth-largest energy consumer, behind China, the US, and the European Union, India is especially sensitive to shifts in global oil prices.

Indian oil marketing companies & airlines would directly benefit from lower crude oil prices

Oil marketing and distribution companies such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation stand to benefit from falling crude oil prices, as it is a key input material. Despite crude price fluctuations, retail fuel prices have remained near Rs 100 for the past few years. As a result, declining crude prices, coupled with stable retail prices, will significantly enhance their profit margins.

These companies saw their net profit surge nearly tenfold during the Russia-Ukraine war. This was due to US sanctions on Russian crude, which left Russia with limited buyers and forced it to sell at discounted rates. Consequently, India's crude imports from Russia skyrocketed, increasing from $2.3 billion in 2021 to $25.5 billion in 2022, and nearly doubling again to $48.6 billion in 2023. 

Although Russia still supplies 40% of India’s crude oil, the price advantage has lessened due to higher insurance and freight costs.

Similarly, for airlines like InterGlobe Aviation (IndiGo), fuel expenses make up more than 30% of its total expenses. Lower crude oil prices can help reduce operating costs and boost profit margins.

Paint, tyre and lubricant manufacturers that use crude oil derivatives as raw materials would witness higher gross profit

Paint manufacturers such as Asian Paints, Berger Paints (India), and Kansai Nerolac Paints will benefit from lower crude oil prices, as more than 40% of their revenue is spent on raw materials, many of which are crude oil derivatives. Gulf Oil Lubricants India will also see a reduction in operating costs in the coming quarters if crude oil prices remain low.

On the other hand, rubber prices have risen by 24% over the past year, squeezing profit margins for tyre manufacturers. Companies like Balkrishna Industries, MRF, Apollo Tyres, and Ceat have taken price hikes over the past year to offset rising costs. However, as the prices of crude oil derivatives decline with falling oil prices, rubber costs are expected to decrease, which will, in turn, benefit these tyre manufacturers.

The recent decline in crude oil prices offers significant advantages to various sectors in India. Overall, crude oil prices at or below $70, is good for the Indian economy. However, global economic dynamics, particularly demand trends in the US and China, will be critical in shaping the long-term outlook for crude prices and their impact on India.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Sep 2024, 03:56PM
Market closes lower, Bharat Electronics bags multiple orders worth Rs 1,155 crore
By Trendlyne Analysis

Nifty 50 closed at 24,918.45 (-122.7, -0.5%) , BSE Sensex closed at 81,523.16 (-398.1, -0.5%) while the broader Nifty 500 closed at 23,531.25 (-112.4, -0.5%). Market breadth is in the red. Of the 2,259 stocks traded today, 753 showed gains, and 1,477 showed losses.

Indian indices extended their losses in the afternoon session to close lower. The Indian volatility index, Nifty VIX, rose 2% and closed at 13.6 points. Bharat Electronics closed higher as it secured multiple orders worth Rs 1,155 crore from Cochin Shipyard and other clients for a complex navigational system for ships, thermal imagers, and other equipment.

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

European indices traded mixed. Major Asian indices closed in the red. US index futures traded lower, indicating a cautious start to the trading session in anticipation of the country’s inflation data. Gamestop Corp fell sharply in pre-opening as its board issued new shares.

  • Relative strength index (RSI) indicates that stocks like Godrej Industries, Glenmark Life Sciences, Eris Lifesciences, and Jai Balaji Industries are in the overbought zone.

  • Gravita India's step-down subsidiary Gravita Netherlands BV signs a memorandum of understanding (MoU) to acquire a waste tyre recycling plant with a capacity of 17,000 metric tonnes per annum (mtpa) in Romania.

  • Bharat Electronics rises as it secures multiple orders worth Rs 1,155 crore from Cochin Shipyard and other clients for a multi-function radar in X band, navigational complex system for ships, thermal imagers, and other equipment.

  • According to a report from Nasscom and consulting firm Zinnov, India had over 1,700 global capability centers (GCCs) in FY24, with their export revenue increasing by over 40% to $65 billion. The rapidly expanding sector has employed more than 19 million people during this period. In FY23, GCC revenue was $46 billion, up 11.4% YoY, with an employee count of around 1.7 million.

  • Infibeam Avenues falls sharply as it turns ex-date for the spinoff of its digital marketing arm, Odigma Consultancy Services. The company sets September 11 as the record date for issuing shares of Odigma Consultancy.

  • Strides Pharma Science secures approval from its shareholders and creditors, along with OneSource and SteriScience. This allows the creation of OneSource Specialty Pharma CDMO by combining Strides' soft gelatin capsules business, SteriScience's sterile injectables, and OneSource's Biologics drug device business.

  • Aurionpro Solutions bags a five-year contract worth Rs 200 crore from the Panvel Municipal Corp (PMC), Maharashtra, to upgrade the city's security infrastructure. The company will install advanced surveillance and smart city technologies and set up data centers, control command centers, and video analytics capabilities to enable real-time monitoring and faster response times.

  • Oil companies such as ONGC and Oil India are declining as recent global developments have led to ample supplies and weaker demand prospects, pushing Brent oil prices below $70 per barrel. Although upstream earnings are currently affected, analysts at Prabhudas Lilladher predict oil prices will rebound to $75-80 per barrel in the near term, despite OPEC+ delaying its planned production increase.

  • JSW Infrastructure rises sharply as it reportedly plans to issue shares worth Rs 5,000 crore through a qualified institutional placement (QIP) to meet capex requirements.

  • Astra Microwave Products rises sharply as it signs a memorandum of understanding (MoU) with Premier Explosives to develop and sell products jointly.

  • Inox India rises as it secures patent rights for its cold storage unit. The patent, titled "Cryogenic Liquid Base Variable Temperature Cold Storage Unit and Method," is granted by the Patents Office, Government of India.

  • Dinesh Nolkha, Managing Director of Nitin Spinners, reiterates the volume growth guidance of 12-13% in FY25. However, realisations are expected to remain flat in the next six months due to changing trends in cotton prices. Nolkha highlights that international cotton prices are falling, while domestic cotton prices are rising due to heavy rains and reduced irrigated areas.

  • Aurobindo Pharma rises as its subsidiary, Eugia Pharma Specialities, receives US FDA approval for its Lidocaine Hydrochloride injection, a local anesthetic drug.

  • Ramco Systems rises to its 52-week high of Rs 455 as it launches version 6.0 of its aviation software. The new version enhances maintenance & engineering (M&E) and maintenance, repair, and overhaul (MRO) operations with AI insights, automation, and improved integration.

  • Century Textiles & Industries rises sharply to its all-time high of Rs 2,689 after it acquires ownership rights of a 10-acre land parcel in Mumbai for Rs 1,100 crore from Wadia Group chairman Nusli Wadia. The land, with a booking value potential of Rs 14,000 crore, will be developed by the company's subsidiary, Birla Estates.

  • Morgan Stanley maintains its 'Overweight' rating on Suzlon Energy with a target price of Rs 73. The brokerage notes a major achievement for the company with a 1.17 GW order win from NTPC. This PSU contract is a significant breakthrough, as it was previously ineligible to bid due to its negative net worth.

  • Sharekhan retains its 'Buy' call on Persistent Systems with a higher target price of Rs 6,200 per share. This indicates a potential upside of 17.1%. The brokerage believes that the company is well-placed for further growth in FY25 owing to strong order booking and deal pipeline across all its verticals. It expects the company's revenue to grow at a CAGR of 18.1% over FY25-27.

  • Windsor Machines rises after its promoter, Castle Equipments, sells its entire 53.9% stake (3.5 crore shares) to Plutus Investments and Holding for Rs 350 crore.

  • Rajoo Engineers signs a $15 million (approx Rs 126 crore) agreement to develop innovative plastic extrusion machinery for an overseas customer. This project is expected to advance packaging technology and extend product shelf life.

  • Spain's Zelestra(an energy company) aims to invest $5 billion (Rs 41,978.9 crore) in India to develop 10GW of wind and solar power by the end of the decade, doubling its earlier 5GW target for 2026. Backed by EQT, the company may also explore opportunities in India's commercial and industrial sectors, as indicated by its CEO, Leo Moreno.

  • Tinna Rubber and Infrastructure signs a joint venture (JV) agreement with Lionshare Holdings and Mbodla Investments in Johannesburg, South Africa. This partnership focuses on acquiring and recycling used tyres, either in India or by setting up a recycling plant in South Africa.

  • CESC's subsidiary, Purvah Green Power, plans to set up a 300 MW solar photovoltaic (PV) power project in India. This includes a 150 MW project connected to the inter-state transmission system (ISTS) under competitive bidding, with an extra 150 MW through a greenshoe option.

  • Reliance Industries' subsidiary, Reliance Retail Ventures, forms a 50:50 joint venture (JV) with Delta Galil to set up an apparel innovation platform in India.

  • Gensol Engineering, in partnership with Matrix Gas & Renewables, secures a project to establish a Green Hydrogen Valley in Pune on a build, own, and operate (BOO) basis. The project will supply green hydrogen to the specialty chemical sector.

  • Nifty 50 was trading at 25,025.40 (-15.7, -0.1%) , BSE Sensex was trading at 81,850.52 (-70.8, -0.1%) while the broader Nifty 500 was trading at 23,639.55 (-4.1, 0.0%)

  • Market breadth is in the green. Of the 1,924 stocks traded today, 1,033 were gainers and 851 were losers.

Riding High:

Largecap and midcap gainers today include Suzlon Energy Ltd. (81.95, 5%), JSW Infrastructure Ltd. (330.70, 4.7%) and Bajaj Auto Ltd. (11,420.75, 3.9%).

Downers:

Largecap and midcap losers today include Tata Motors Ltd. (976.30, -5.7%), Oil India Ltd. (581.70, -4.5%) and Oil And Natural Gas Corporation Ltd. (285.30, -3.5%).

Movers and Shakers

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

Top high volume gainers on BSE included Prism Johnson Ltd. (232.61, 11.8%), R R Kabel Ltd. (1,711.75, 8.7%) and Shoppers Stop Ltd. (886, 8.4%).

Top high volume losers on BSE were Tata Motors Ltd. (976.30, -5.7%) and JBM Auto Ltd. (1,926.15, -0.2%).

Olectra Greentech Ltd. (1,617.55, 3.6%) was trading at 9.3 times of weekly average. Procter & Gamble Health Ltd. (5,410, 2.4%) and JSW Infrastructure Ltd. (330.70, 4.7%) were trading with volumes 7.6 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

41 stocks hit their 52 week highs,

Stocks touching their year highs included - Ajanta Pharma Ltd. (3,390.15, -1.1%), Bajaj Auto Ltd. (11,420.75, 3.9%) and Biocon Ltd. (385.30, -0.3%).

10 stocks climbed above their 200 day SMA including R R Kabel Ltd. (1,711.75, 8.7%) and YES Bank Ltd. (23.82, 3.7%). 17 stocks slipped below their 200 SMA including IRB Infrastructure Developers Ltd. (59.85, -4.1%) and The New India Assurance Company Ltd. (237.75, -3.9%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Sep 2024
Market closes higher, Century Textiles acquires approx 10-acre land in Worli, Mumbai
By Trendlyne Analysis

Nifty 50 closed at 25,041.10 (104.7, 0.4%) , BSE Sensex closed at 81,921.29 (361.8, 0.4%) while the broader Nifty 500 closed at 23,643.65 (141.5, 0.6%). Market breadth is ticking up strongly. Of the 2,256 stocks traded today, 1,553 were gainers and 683 were losers.

Indian indices extended their gains in the afternoon session to close higher. The Indian volatility index, Nifty VIX, fell 6.2% and closed at 13.4 points. Century Textiles & Industries touched an all-time high of Rs 2,530 as it acquired approx 10-acre land in Worli, Mumbai, for Rs 1,100 crore, with an estimated booking value potential of Rs 14,000 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green. Nifty Metal and Nifty Media closed higher. According to Trendlyne’s sector dashboard, Hotels Restaurants & Tourism emerged as the best-performing sector of the day, with a rise of 3.2%.

European indices traded mixed. Major Asian indices closed mixed. US index futures traded mixed, indicating a cautious start to the trading session. Apple unveiled the latest version of its iPhone on Monday, with analysts stating that the new, AI-powered features were in line with expectations.

  • Money flow index (MFI) indicates that stocks like SBI Card and Payment Services, Bajaj Finserv, Suven Pharmaceuticals, and Medplus Health Services are in the overbought zone.

  • Media stocks like Zee Entertainment Enterprises, Hathway Cable & Datacom, Nazara Technologies, and Saregama India rise more than 3% in trade. All constituents of the broader Nifty Media index are trading in the green, helping it to surge more than 2%.

  • Century Textiles & Industries surges to its all-time high of Rs 2,530 as it acquires approximately 10-acre land in Worli, Mumbai, for Rs 1,100 crore from Nusli Wadia. This land adds an estimated booking value potential of Rs 14,000 crore.

  • ICICI Securities maintains its 'Buy' call on Va Tech Wabag with an upgraded target price of Rs 1,541 per share. This indicates a potential upside of 12.9%. The brokerage believes the company is well positioned to capture the increasing capex in the water segment due to its end-to-end solutions platform, strong brand, and asset-light business mode. It expects the firm's revenue to grow at a CAGR of 19.2% over FY25-26.

  • The Competition Commission of India (CCI) introduces stricter regulations for global mergers and acquisitions in the digital sector. Companies with significant Indian operations now require CCI approval for deals where the target firm has over 10% of its global customers in India and transactions valued at Rs 2,000 crore (about $240 million) or more.

  • Action Construction Equipment rises as it receives an order from the Ministry of Defence (MoD) to supply 99 forklifts.

  • LE Travenues Technology (Ixigo) rises sharply as its bus business, AbhiBus, partners with European bus services provider FlixBus. This partnership will help FlixBus to expand its services in South India. FlixBus tickets will now be available on AbhiBus at a starting price of Rs 99.

  • Lemon Tree Hotels surges as it signs a license agreement for a new hotel in Nashik, Maharashtra, set to open in FY26. The property will be managed by Lemon Tree's wholly-owned subsidiary, Carnation Hotels. It will feature 57 rooms, a restaurant, a banquet hall, a meeting room, a swimming pool, and a spa.

  • Mutual Funds' net equity inflows grow 3% MoM to Rs 38,239 crore in August, according to data released by the Association of Mutual Funds in India (AMFI). However, debt inflows decline 62% YoY. The total AUM of the industry stands at 66.4 lakh crore.

  • SEPC surges to its 5-year high of Rs 32.2 per share as it bags an order worth Rs 182.6 crore from the Irrigation Division, Gov. of Bihar to supply, install, test, operate, and maintain irrigation equipment for drinking water.

  • Zaggle Prepaid Ocean Services surges as it signs an agreement with HDFC ERGO General Insurance to provide its Zaggle Propel reward platform, which includes channel rewards and recognition.

  • ITI rises sharply as it bags an order worth Rs 300 crore from the Bihar Renewable Energy Development Authority (BREDA) to supply and install 1 lakh solar street light systems in the state.

  • Saurabh Gadgil, Managing Director of P N Gadgil Jewellers, forecasts a revenue of Rs 10,000 crore with double-digit margins for FY27. He expects 15% of this revenue to come from studded jewellery. Gadgil highlights the company's goal to reach 60 stores by FY27 and expand to 100-120 stores over the following six years. The bidding process for the company's IPO started today.

  • India Opportunities Growth fund sells 1.1 crore shares (1.7% stake) in Electrosteel Castings, worth approximately Rs 219.5 crore, at an average price of Rs 7,020 per share in a block deal.

  • Ecos (India) Mobility & Hospitality surges to its all-time high of Rs 524.7 as 4 lakh shares (0.7% stake), worth approximately Rs 18.4 crore, change hands in a block deal on Monday at an average price of Rs 460.3 per share. Plutus Wealth Management is the buyer in the transaction.

  • JTL Industries rises after expanding the capacity of its galvanised iron (GI) plant in Maharashtra by 5,000 MT per quarter.

  • Goldman Sachs maintains its ‘Buy’ rating with a target price of Rs 715. The brokerage expects the India business to grow in double digits from FY25. It also projects the foods and premium personal care businesses to grow by 2X in the next three years.

  • Dodona Holdings sells 10.2 crore shares (0.3% stake) in Trent, worth approximately Rs 716 crore, at average price of Rs 7,020 per share in a block deal. Siddharth Yog is the buyer in the transaction.

  • JSW Energy is rising as its subsidiary, JSW Neo Energy, bags an order from Maharashtra State Electricity Distribution (MSEDCL) for a 600 MW wind-solar hybrid project with a 400 MW greenshoe option.

  • HG Infra Engineering surges as it receives a letter of award worth Rs 781.1 crore from the Ministry of Road Transport & Highways (MoRTH) to upgrade the existing 6-lane road, including an elevated corridor, on NH 47 in Gujarat.

  • Prataap Snacks, Gopal Snacks, and Bikaji Foods rise as the Union Finance Minister, Nirmala Sitharaman, announces a GST rate cut from 18% to 12% for namkeens and savoury items at the 54th GST Council meeting.

  • Indian Renewable Energy Development Agency rises sharply as it reportedly signs a memorandum of understanding (MoU) with SJVN and GMR Energy to set up the Karnali hydro-electric project in Nepal with a capacity of 900 MW.

  • GMR Airports Infrastructure is rising as it acquires an additional 10% stake in Delhi International Airport (DIAL) for $126 million (approx. Rs 1,057.9 crore) from Fraport AG Frankfurt Airport Services Worldwide. The acquisition will take GMR Airports' holding in DIAL to 74%.

  • Dixon Technologies (India) rises as its wholly-owned subsidiary, Padget Electronics, signs a memorandum of understanding (MoU) with HP India Sales to manufacture notebooks, desktops, and all-in-one PCs.

  • Ahluwalia Contracts rises sharply as it bags two orders worth Rs 1,307 crore from Signatureglobal Business Park and Signatureglobal Homes for civil structure and finishing works for the Project De-luxe DXP and Iconic Tower in Gurugram.

  • Nifty 50 was trading at 24,974.05 (37.7, 0.2%), BSE Sensex was trading at 81,768.72 (209.2, 0.3%) while the broader Nifty 500 was trading at 23,593.05 (90.9, 0.4%).

  • Market breadth is ticking up strongly. Of the 1,937 stocks traded today, 1,607 were on the uptrend, and 289 went down.

Riding High:

Largecap and midcap gainers today include Tata Power Company Ltd. (445.35, 6.6%), Linde India Ltd. (7,789.95, 5.6%) and Suzlon Energy Ltd. (78.05, 5.0%).

Downers:

Largecap and midcap losers today include HDFC Life Insurance Company Ltd. (702.90, -4.5%), Vedanta Ltd. (440, -4.4%) and Oil India Ltd. (608.90, -4.0%).

Volume Shockers

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

Top high volume gainers on BSE included Prism Johnson Ltd. (208.10, 19.6%), Sumitomo Chemical India Ltd. (608.85, 14.5%) and Aether Industries Ltd. (1,059.35, 8.7%).

ITI Ltd. (300.40, 6.1%) was trading at 14.8 times of weekly average. Atul Ltd. (8,000, 0.6%) and Divi's Laboratories Ltd. (5,426.45, 4.9%) were trading with volumes 4.6 and 4.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

34 stocks overperformed with 52 week highs,

Stocks touching their year highs included - Ajanta Pharma Ltd. (3,426.50, 3.9%), Akzo Nobel India Ltd. (3,847.75, 1.9%) and Britannia Industries Ltd. (5,969.90, 0.5%).

22 stocks climbed above their 200 day SMA including Latent View Analytics Ltd. (492.95, 6.3%) and ITI Ltd. (300.40, 6.1%). 4 stocks slipped below their 200 SMA including Alok Industries Ltd. (26.62, -0.3%) and Westlife Foodworld Ltd. (799.45, 0.0%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Sep 2024
Market closes higher, LIC faces Rs 230 crore GST penalties from Telangana and Tamil Nadu
By Trendlyne Analysis

Nifty 50 closed at 24,936.40 (84.3, 0.3%) , BSE Sensex closed at 81,559.54 (375.6, 0.5%) while the broader Nifty 500 closed at 23,502.15 (24.5, 0.1%). Market breadth is in the red. Of the 2,291 stocks traded today, 825 showed gains, and 1,440 showed losses.

Indian indices closed in the green, with the benchmark Nifty 50 index closing at 24,936.4 points. The Indian volatility index, Nifty VIX, declined by 6.4% and closed at 14.2 points. Hindustan Unilever formed a committee of independent directors to evaluate the prospects of its ice cream business. This move follows Unilever PLC’s plan to separate its global ice cream operations.

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

Asian indices closed mixed while European indices are trading in the green. US index futures traded higher, indicating a positive start to the trading session. Brent crude oil futures are trading in the green. Boeing's stock increased by 3% in U.S. premarket trading following a tentative agreement with a union in the U.S. Pacific Northwest, potentially averting a major strike later this week.

  • Relative strength index (RSI) indicates that stocks like Godrej Industries, Piramal Pharma, ICICI Lombard General Insurance, and Eris Lifesciences are in the overbought zone.

  • Life Insurance Corp of India falls after facing Rs 230 crore in GST penalties from Telangana and Tamil Nadu. Telangana's Rs 113.7 crore penalty is for FY19-20, comprising GST, interest, and penalties, while Tamil Nadu's Rs 116.6 crore for FY20-21 with similar charges.

  • JSW Infrastructure rises as it approves a capex of Rs 2,359 crore for the capacity expansion of its Jaigarh and Dharamtar ports. This comes as part of the company's plans to expand capacity to 400 million tonnes (MT) in FY30 from its existing capacity of 170 MT.

  • Thomas Cook (India) and its group company, SOTC Travel, sign a 24-month strategic partnership memorandum of understanding (MOU) with Malaysia Airlines. This partnership aims to capitalize on the growing interest of Indian travelers in Malaysia and other destinations.

  • Union Minister for Heavy Industries, HD Kumaraswamy, announces the extension of the Electric Mobility Promotion Scheme (EMPS) until the launch of the third phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME-III). The EMPS, set to expire on September 30, will likely be extended for an additional two months.

  • Hindustan Unilever rises sharply to hit a new all-time high of Rs 2,938.2 as it forms a committee of independent directors to evaluate the prospects of its ice cream business. This move follows Unilever PLC’s plan to separate its global ice cream operations.

  • FMCG stocks like Hindustan Unilever, United Breweries, United Spirits, and Dabur India rise more than 2% in trade, helping the broader Nifty FMCG index to surge to its all-time high of 64,466.1.

  • Nibe surges to its 5% upper circuit as its subsidiary, Nibe Space, signs a memorandum of understanding (MoU) with Indian defense, infrastructure companies, and startups to build and operate a private Earth observation constellation, offering images and analytics as a service. Nibe Defence and Aerospace wins four orders worth Rs 50.1 crore from Indian defense companies for supplying and integrating electronic equipment.

  • Crisil Ratings projects jewellery retailers’ revenue to increase by 22-25% YoY in FY25, compared to its previous estimates of 17-19%. The rating agency attributes this growth to higher volumes, driven by a decline in retail gold prices following the announcement of the customs duty cut to 6% in the Union Budget.

  • RBM Infracon surges to its 5% upper circuit as it bags a Rs 3,498 crore order from Oil and Natural Gas Corp (ONGC). The contract covers Rs 3,371 crore for crude and Rs 127 crore for gas at Nandej, valid for 15 years.

  • Minda Corp rises as its board of directors schedules to meet on Thursday to consider raising funds by issuing equity shares through a preferential issue, qualified institutional placement (QIP), rights issue, or other modes.

  • Suzlon Energy is rising as it secures a 1,166 megawatt (MW) order from NTPC's arm, NTPC Green Energy, to install a total of 370 wind turbine generators (WTGs), making it the largest wind energy order in India.

  • Electric two-wheeler manufacturer Ather Energy plans to go public with an initial public offering (IPO) that features a fresh issue of shares valued at Rs 3,100 crore. The IPO also includes an offer for sale of up to 22 million shares by investors and promoters. As part of the offer for sale, Tarun Sanjay Mehta and Swapnil Babanlal Jain will each sell 1 million equity shares.

  • SpiceJet rises sharply after announcing plans to issue shares to Carlyle Aviation in a restructuring deal. The deal will convert Rs 335.8 crore from Carlyle’s total dues of Rs 1,155.7 crore into equity, reducing SpiceJet's debt to Rs 818.5 crore.

  • Mangalore Chemicals & Fertilizers falls after temporarily shutting down operations at its ammonia and urea plants to replace the reformer catalyst.

  • Metro Brands' promoters, Farah Malik Bhanji, Alisha Rafique Malik, and Zia Malik Lalji, among others, sell a 2.2% stake in the company for Rs 750 crore in a bulk deal on Friday.

  • Suvankar Sen, Managing Director & CEO of Senco Gold, highlights the company’s plans to invest Rs 50-60 crore in its non-jewellery business, and Rs 25-30 crore annually thereafter. He notes that the non-jewellery segment currently accounts for about 4-5% of total revenue, with gross margins ranging from 30-35%. Sen adds that September has been a strong month for both the industry and the company.

  • Gala Precision Engineering's shares debut on the bourses at a 36.3% premium to the issue price of Rs 529. The Rs 167.9 crore IPO has received bids for 201.4 times the total shares on offer.

  • Nazara Technologies is rising as it acquires a 48.4% stake (or 5,157 shares) in Paper Boat Apps for a total cash consideration of Rs 300 crore. The company has completed the first tranche of payment of RS 225 crore.

  • Oriana Power rises sharply as its subsidiary, Truere Surya, bags a contract worth Rs 520 crore from Dalmia Cement to set up a 128 MW solar power plant in Tamil Nadu. Dalmia Cement also acquires a 26% stake in Truere Surya for Rs 44.8 crore to source solar power as a captive consumer.

  • UBS maintains a 'Buy' rating on Shriram Finance with a higher target price of Rs 3,850. The brokerage notes the merger synergies continue to support growth. It believes the net interest margin (NIM) compression is temporary and highlights that expanding into new segments will be crucial for growth. The brokerage expects asset quality to remain stable and has kept its credit cost guidance unchanged.

  • Granules India falls as it receives six observations from the US FDA following an inspection at its Gagillapur facility in Hyderabad, Telangana.

  • Godfrey Phillips India's board of directors approves the appointment of Bina Modi as its Managing Director for the next five years, effective November 14.

  • Ion Exchange (India) rises as it secures a contract worth Rs 168 crore from Tecnimont SpA, Italy, for de-oiling, demineralization, and condensate poly unit packages for the Abu Dhabi National Oil Company Hail & Ghasha development project.

  • Mazagon Dock Shipbuilders is rising as it bags an order worth Rs 1,486.4 crore from Oil & Natural Gas Corp (ONGC) for a subsea pipeline replacement on an engineering, procurement, and construction (EPC) basis.

  • Nifty 50 was trading at 24,800.50 (-51.7, -0.2%), BSE Sensex was trading at 80,961.66 (-222.3, -0.3%) while the broader Nifty 500 was trading at 23,371.75 (-106.0, -0.5%).

  • Market breadth is overwhelmingly negative. Of the 2,015 stocks traded today, 468 were in the positive territory and 1,495 were negative.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (402.65, 5.0%), Gujarat Fluorochemicals Ltd. (3,976.50, 4.4%) and One97 Communications Ltd. (627.65, 4.0%).

Downers:

Largecap and midcap losers today include Power Finance Corporation Ltd. (523.60, -4.0%), Oil And Natural Gas Corporation Ltd. (298.90, -3.2%) and Bajaj Holdings & Investment Ltd. (10,357.10, -3.1%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Alembic Pharmaceuticals Ltd. (1,203.35, 8.8%), Jubilant Pharmova Ltd. (1,031.20, 8.4%) and The New India Assurance Company Ltd. (257.05, 3.0%).

Top high volume losers on BSE were Jupiter Wagons Ltd. (508.50, -7.1%), Granules India Ltd. (666.85, -3.1%) and R R Kabel Ltd. (1,528.55, -3.0%).

Anand Rathi Wealth Ltd. (3,840, -2.0%) was trading at 4.2 times of weekly average. Dabur India Ltd. (662.35, 2.8%) and Narayana Hrudayalaya Ltd. (1,377, 2.3%) were trading with volumes 3.2 and 3.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Dabur India Ltd. (662.35, 2.8%), Divi's Laboratories Ltd. (5,170, 0.6%) and FDC Ltd. (562.10, -1.6%).

Stock making new 52 weeks lows included - CSB Bank Ltd. (310.80, -1.2%).

8 stocks climbed above their 200 day SMA including Usha Martin Ltd. (363.30, 3.5%) and Tata Elxsi Ltd. (7,839.05, 3.3%). 23 stocks slipped below their 200 SMA including Sonata Software Ltd. (660.50, -4.2%) and Mangalore Refinery And Petrochemicals Ltd. (189.76, -3.8%).

 
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The Baseline
06 Sep 2024
Five Interesting Stocks Today - September 06, 2024

1. Medplus Health Services:

This healthcare supplies company rose by over 8% in the past week. The firm recently obtained a stay order on the suspension of its Vikhroli, Maharashtra store. In the past week, ICICI Prudential India Opportunities Fund acquired 18.1 lakh shares of the company for Rs 111.6 crore, while ICICI Prudential Pharma Healthcare & Diagnostics purchased a 1.4% stake. Additionally, the Government of Singapore bought 11.5 lakh shares.

For Q1FY25, the company’s net profit had surged by 279.4% YoY to 14.4 crore, while its revenue rose by 15.8% YoY on the back of 15.3% YoY rise in its retail segment revenue. The firm beat trendlyne’s Forecaster estimates for net profit by 16.5%, but missed the revenue estimate by 0.5%. The stock appears in a screener for stocks with strong momentum.

At its recent Annual General Meeting (AGM), the firm's management emphasized their strategy to deepen market penetration in core areas, particularly in tier-2 and smaller locations, which now account for approximately 50% of their stores. They also outlined plans to open over 600 new stores in FY25. Currently, the company is the second-largest organized retail pharmacy network, with 4,444 physical stores as of Q1FY25, trailing only Apollo Pharmacy, which has 6,074 stores.

In June, the company introduced Medplus brand generics, offering discounts of 50-80%. In FY24, these products generated revenues of Rs 747 crore on a gross merchandise value (GMV) basis, accounting for 8.3% of net revenue. For FY25, Sujit Mahato, CFO of the firm maintained previously guided revenue growth of 20%. He adds that, “Given that a significant portion of our sales is now coming from MedPlus private label, and these are all selling at half the price of our regular brands. This will affect our overall top line.”

Analysts note that major organized retail companies are significantly impacting the pharma retail sector by expanding market reach and intensifying competition. These chains bring advanced supply chains, extensive distribution networks, and strong marketing power, leading to increased consumer access and higher sales volumes. They project India’s retail pharmacy market to grow at ~10% CAGR from 2022-30, with organized pharmacy penetration reaching ~23% by FY27.

HDFC Securities has maintained a “Buy” rating on Medplus Health Services, with a target price of Rs 820. The brokerage anticipates gradual margin improvement, driven by a favorable mix of factors: consistent growth in mature stores (2+ years, with ~9-10% margin), a rising share of margin-enhancing private-label and Medplus-brand generics, and an efficient supply chain.

2. AU Small Finance Bank:

This banking firm surged 9.8% over the past week as it submitted an application to the RBI for a voluntary transition into a universal bank. This shift could benefit AU Small Finance Bank (SFB) by allowing it less stringent regulatory norms. Analysts predict the transition will broaden its target market and enhance visibility among depositors.

In April, the central bank had announced guidelines related to the eligibility criteria for small finance banks seeking a voluntary transition to a universal bank. The RBI stated that only profitable and listed small finance banks with a minimum net worth of Rs 1,000 crore and a gross non-performing assets (NPA) ratio of less than 3% for the last two fiscal years are eligible to apply for the transition.

In Q1FY25, the bank reported net interest income growth of 54.1% YoY to Rs 1,920 crore. Gross NPA on loans disbursed stayed constant at 1.8%, well below RBI’s requirement for a universal bank transition. If granted this status, its capital adequacy ratio (buffer capital it is required to hold) requirement would decrease from the current level of 15% to 11.5%. In addition to that, the bank would no longer be required to keep at least half of its loan portfolio in loans worth less than Rs 25 lakh.

MD and CEO Sanjay Agarwal said, "We don’t have to do anything extra in terms of balance-sheet build-up to get the license. So, there won’t be any extra cost for this." He also emphasized that the transition should be smooth as the bank is already governed under Schedule Commercial Bank regulations, meaning no additional costs are expected.

NDTV Profit reports that Goldman Sachs initiates coverage on AU SFB with a ‘Buy’ rating, and sets the highest target price of Rs 831 among analysts tracking the bank. With the lender’s growing market share in deposits, the brokerage forecasts an EPS CAGR of 27% over FY25-27.

3. Radico Khaitan:

This breweries and distilleries company saw a 10% increase in its stock price in the past week. This followed the government's decision on August 29 to remove the cap on the amount of sugarcane that can be used for ethanol production. Ethanol is a key ingredient in alcoholic beverages, and removing the cap on sugar diversion is expected to increase the supply of ethanol. This, in turn, could benefit companies involved in the alcoholic beverage industry by reducing the cost of raw materials. 

The changes will become more significant once the next sugarcane-crushing season begins. Crushing season in India is typically from October to March or April.

The price rise is also supported by positive Q1FY25 results. Radico’s revenue and net profit grew by 19.3% YoY and 20.6% YoY, respectively, reaching Rs 1,140.2 crore and Rs 76.3 crore. Despite the temporary closure of liquor shops due to elections, Radico Khaitan's volume remained unaffected, and revenue exceededTrendlyne's Forecaster estimates by 0.6%. The major contributor to this was the Prestige & Above brands category, where volume increased by 14.3% YoY. The revenue of this category alone reached Rs 499.5 crores, a 19.1% YoY increase.

Dilip Banthiya, Chief Financial Officer, commented on the results and performance: "Going forward, our focus will be on improving our profitability along with the cash flow generation and more efficient working capital management, resulting in debt reduction.” 

Sharekhan maintains a Buy rating with a target price of Rs 1,995 per share. According to the brokerage, the company’s focus on high-end products and backward integration is expected to drive strong double-digit earnings growth in FY25-26. It expects the company’s revenue to grow at a CAGR of 18.6% over FY25-26.

4. Hindustan Petroleum Corporation: 

This oil exploration and production company has risen 4.4% over the past week to touch its all-time high of Rs 457.2, after crude oil prices fell over 4% amid concerns over lower global demand growth, particularly from the two largest economies of the world - the US and China. This surge in stock price has placed the company in a screener of stocks with strong momentum.

In Q1FY25, Hindustan Petroleum Corp (HPCL) reported a net profit decline of 90.6% YoY to Rs 633.9 crore, missing Trendlyne Forecaster estimates by 55.3%. This decline was attributed to weak gross refining margins and rising crude oil costs, with total expenses increasing by 8.6% YoY to Rs 1.21 lakh crore during the quarter. However, the company achieved its highest-ever quarterly sales volume of 12.6 million metric tonnes (MMT), marking a 6% YoY increase.

The earnings of oil marketing companies (OMCs) usually rely on refining and marketing margins. OMCs have kept retail prices largely unchanged for the past 28 months which has led to significant losses. HPCL’s marketing loss on LPG stood at Rs 2,540 crore. Bharat Petroleum Corp (BPCL) and Indian Oil Corp (IOCL) also reported similar losses, amounting to Rs 2,300 crore and Rs 5,200 crore, respectively.

The  Rajasthan refinery, starting in FY26, is a joint venture between HPCL (74%) and the government of Rajasthan (26%) with a capacity of 9 MMTPA. The project has a total estimated cost of Rs 72,937 crore, with Rs 48,001 crore already invested by the end of Q1FY25. The management is confident, noting that 80% of the project has been completed. This refinery will boost HPCL's refining capacity by 30% and is projected to contribute 37% to FY26 EBITDA.

HPCL has increased its Russian crude usage to 30-35% with the expansion of the Vizag refinery and anticipates greater benefits from this crude along with a faster ramp-up at Vizag. Commenting on this, Chairman and MD Pushp Kumar Joshi stated, “We aim to reach 3.5 MMT per quarter by the second half of FY25, up from the current production of 3 MMT, and increase refinery capacity to 15 MMT by FY28.”

Motilal Oswal has maintained a “Buy” rating on HPCL, with a target price of Rs 460. The brokerage highlights that separating and listing the company’s lubricant business might increase the stock’s value by up to Rs 33 per share. Additionally, upgradation of the Vizag unit and the start of the Rajasthan refinery at the end of Q4FY25 are expected to drive growth.

5. Gujarat Gas:

This non-utility electrical company surged 12% on Monday after its board approved a major restructuring. Gujarat State Petroleum Corporation (GSPC), Gujarat State Petronet, and Gujarat State Petroleum Corporation Energy will merge into India’s largest city gas distribution company, Gujarat Gas (GGL). The newly formed company will then separate its transmission business into a new entity, GSPL Transmission Limited (GTL).

The merger will combine the operations of Gujarat State Petroleum Corporation and Gujarat Gas to simplify processes and improve organizational structure. This will reduce internal transactions, leading to higher earnings for Gujarat Gas. It isl also expected to help expand their gas trading market and strengthen competitiveness. 

Post merger, Gujarat Gas is likely to have better profit margins, returns, and cash flow. Shareholders of Gujarat State Petronet will get shares in both Gujarat Gas and the new GSPL Transmission Limited.

Milind Torawane, Managing Director of Gujarat Gas and also MD of Gujarat State Petroleum Corporation Limited, said, ”The board has approved the scheme to simplify the structure, enabling GGL and GTL to pursue their growth strategies more effectively and expand their operations.” According to the management's growth projections, Gujarat Gas is expected to become one of India’s largest integrated players in the gas trading and city gas distribution sectors.

In Q1FY25 the company reported a net profit increase of 53.1% YoY to Rs 330.7 crore due to reduction in spot gas prices and increase in volumes. Revenue grew 17.7% YoY to Rs 4,450.3 crore during the quarter. The company appears in a screener of stocks where mutual funds increased their shareholding over the past two months.

Nirmal Bang upgrades Gujarat Gas to ‘Buy’ from ‘Sell,’ with a new target price of Rs 702, up from Rs 552. The upgrade is driven by expected gains from gas sourcing benefits post-merger, and a favorable tax shield. Key factors include new earnings from GSPC’s gas trading, potential value-added tax (VAT) savings, and improved competitiveness in Industrial piped natural gas. EBITDA is projected to grow at a CAGR of 17.5% over FY 25-27.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
06 Sep 2024
Market closes lower, Pidilite Industries signs a partnership agreement with CollTech Group
By Trendlyne Analysis

Market sinks in today's trading. Nifty 50 closed at 24,852.15 (-293.0, -1.2%) , BSE Sensex closed at 81,183.93 (-1,017.2, -1.2%) while the broader Nifty 500 closed at 23,477.70 (-285.1, -1.2%). Market breadth is highly negative. Of the 2,238 stocks traded today, 625 were gainers and 1,592 were losers.

Indian indices closed lower after falling throughout the day. The Indian volatility index, Nifty VIX, rose 7.1% and closed at 15.2 points. VA Tech Wabag secured an approximately Rs 2,700 crore order from the Saudi Water Authority for a 300 million litre per day (MLD) seawater desalination plant in Saudi Arabia.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, taking cues from the benchmark index. Nifty PSU Bank and S&P BSE Telecom Index were among the biggest index losers today. According to Trendlyne’s Sector dashboard, Fertilizers emerged as the worst-performing sector of the day, with a fall of 2.5%.

Asian indices closed mixed. European indices are trading in the red. US index futures are trading in the red as investors awaited job data, which will impact the Federal Reserve's decision on an interest rate cut later this month. Brent crude oil futures are trading higher.

  • Money flow index (MFI) indicates that stocks like Bajaj Finserv, Eris Lifesciences, KEC International, and Chalet Hotels are in the overbought zone.

  • Synergy Green Industries surges to its all-time high of Rs 469 as it receives orders worth Rs 163.7 crore from Vestas Wind Systems for 2 megawatt (MW) and 4 MW parts, split equally between domestic and export requirements.

  • Sansera Engineering signs a long-term deal with Dynamatic Technologies to produce complex components for the Airbus A220 door program.

  • Godfrey Phillips India surges to its all-time high of Rs 7,095 per share as its board of directors schedules a meeting on September 20 to consider a share buyback.

  • RITES emerges as the lowest bidder for a major infrastructure project by the UP State Bridge Corporation. The project involves supervising, monitoring, and ensuring the quality and safety of bridges, rail overpasses/underpasses, flyovers, and elevated roads across multiple districts in Uttar Pradesh. If awarded, the contract will last 36 months from the date of the letter of award.

  • Pidilite Industries rises as it signs a partnership agreement with CollTech Group to serve as the exclusive distributor of CollTech’s extensive range of products in India.

  • Shyam Metalics and Energy's stainless steel sales rise 91% YoY to 7,060 million tonnes (MT) in August. Aluminium foil sales increase by 23% YoY to 1,561 MT. The company's speciality alloys sales grows 29% YoY, and carbon sales rise by 25% YoY.

  • Gujarat Mineral Development Corporation (GMDC) rises after the coal ministry reportedly allocates the Kudanali Lubri coal mine to the company.

  • Peak XV Partners Investments (formerly Sequoia India) reportedly increased the size of its block deal for Indigo Paints, launched on September 5, from Rs 750-800 crore to Rs 1,550 crore due to strong demand. As a result, the firm has sold 22% of its stake, doubling the initially planned dilution of 11%.

  • KPI Green Energy receives approval for 12.72 MW wind-solar hybrid power projects under its captive power producer (CPP) segment.

  • Foreign institutional investors buy equity worth Rs 11,885.5 crore in the market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 56,340.2 crore from foreign investors. Meanwhile, mutual funds are net sellers in the equity market, divesting Rs 1,753.5 crore during the same period.

  • Motilal Oswal maintains its 'Buy' call on Coal India with an upgraded target price of Rs 600 per share. This indicates a potential upside of 22.7%. The brokerage remains positive on the stock due to its strong volume outlook, healthy e-auction premiums, and lower costs. It expects the company's revenue to grow at a CAGR of 9.1% over FY25-26.

  • Reports indicate that the Securities and Exchange Board of India (SEBI) plans to tighten derivative rules to raise entry barriers and make trading more costly, aiming to curb retail investors' speculation on risky contracts. The regulator will restrict options contract expiries to one per exchange per week and nearly triple the minimum trading amount.

  • Phoenix Mills rises as it announces September 21 as the record date for its 1:1 bonus share issue, pending shareholders' approval at the annual general meeting (AGM) on September 13.

  • Reliance Industries' board of directors approves a bonus issue of shares to equity holders in the ratio of 1:1. This means that each shareholder will receive one fully paid-up equity share, with a face value of Rs 10, for every share they hold on the record date.

  • Baazar Style Retail’s shares make a flat debut on the bourses at Rs 389. The Rs 834.7 crore IPO received bids for 40.7 times the total shares on offer.

  • Morgan Stanley notes that while the Indian IT sector has seen a significant rally, there is still potential for further gains. This is attributed to an ongoing revenue upgrade cycle that is likely to maintain high valuations. The brokerage expects this cycle, which started in Q1FY25, to continue for at least one to two more quarters, supporting sustained high multiples. 

  • Matrimony.com rises as its board approves a Rs 72 crore buyback of approximately 7 lakh equity shares at Rs 1,025 per share.

  • Strides Pharma rises sharply as its subsidiary, Strides Pharma Global, gets US FDA approval for a generic version of Theophylline extended-release tablets. According to IQVIA, the tablets, used for treating chronic asthma and other lung diseases, have a market size of $22.3 million.

  • VA Tech Wabag surges after winning a $317 million (approximately Rs 2,700 crore) order from the Saudi Water Authority for a 300 million litre per day (MLD) mega seawater desalination plant in Saudi Arabia.

  • Nuvama maintains its 'Buy' rating on Jubilant Ingrevia, and sets a higher target price of Rs 849. The brokerage expects the company's EBITDA contribution from its specialty chemicals business to grow from 48% in FY24 to 65% by FY27. They also anticipate a recovery in the agrochemicals sector and early progress in the diketene business, which are expected to boost margins.

  • Angel One's average daily turnover (ADTO) grows by 57.9% YoY to Rs 44.9 lakh crore in August. Its client base also improves by 62.9% YoY to 2.7 crore, with total order numbers rising by 40.8% YoY in the same month.

  • Mrs. Bectors Food Specialities' surges as it reportedly plans to issue shares worth Rs 400 crore through a qualified institutional placement (QIP) with an indicative price of Rs 1,550 per share.

  • Ashoka Builldcon surges to its all-time high of Rs 284.7 per share as its subsidiary, Viva Highways, sells its land in Pune for a consideration of Rs 453 crore.

  • KEC International surges to its all-time high of Rs 1,037.1 per share as it bags an order worth Rs 1,423 crore to design, supply, and install 380 kV transmission lines in Saudi Arabia.

  • Nifty 50 was trading at 25,088.80 (-56.3, -0.2%) , BSE Sensex was trading at 82,080.74 (-120.4, -0.2%) while the broader Nifty 500 was trading at 23,742.70 (-20.1, -0.1%)

  • Market breadth is ticking up strongly. Of the 1,921 stocks traded today, 1,363 showed gains, and 520 showed losses.

Riding High:

Largecap and midcap gainers today include Gujarat Fluorochemicals Ltd. (3,808.90, 8.1%), SBI Cards and Payment Services Ltd. (800.65, 4.3%) and Marico Ltd. (665.25, 3.3%).

Downers:

Largecap and midcap losers today include Vodafone Idea Ltd. (13.35, -11.5%), Indian Bank (523.45, -5%) and Indus Towers Ltd. (423.10, -4.5%).

Volume Rockets

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

Top high volume gainers on BSE included Godfrey Phillips India Ltd. (7,205.85, 12.4%), Gujarat Fluorochemicals Ltd. (3,808.90, 8.1%) and Galaxy Surfactants Ltd. (3,056.15, 4.8%).

Top high volume losers on BSE were IDBI Bank Ltd. (88.33, -4.5%), State Bank of India (782.50, -4.4%) and NLC India Ltd. (269.15, -4.2%).

Indigo Paints Ltd. (1,479.35, -4.0%) was trading at 90.6 times of weekly average. Gujarat Mineral Development Corporation Ltd. (370.90, 1.8%) and Aavas Financiers Ltd. (1,875.85, 3.3%) were trading with volumes 6.9 and 6.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Ajanta Pharma Ltd. (3,350.35, 0.6%), Akzo Nobel India Ltd. (3,760, 2.0%) and Bajaj Finserv Ltd. (1,857.15, -0.4%).

Stock making new 52 weeks lows included - CSB Bank Ltd. (314.50, -1.3%).

16 stocks climbed above their 200 day SMA including Gujarat Fluorochemicals Ltd. (3,808.90, 8.1%) and GMM Pfaudler Ltd. (1,409.10, 3.5%). 20 stocks slipped below their 200 SMA including Vodafone Idea Ltd. (13.35, -11.5%) and Canara Bank (103.38, -4.5%).

 
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The Baseline
05 Sep 2024
Five stocks to buy from analysts this week - September 5, 2024
By Divyansh Pokharna

1. Tata Technologies:

ICICI Securities reiterates its ‘Buy’ rating on this software and services company with a target price of Rs 1,290, implying an upside of 22.1%. Tata Technologies has recently expanded its capabilities in internal combustion engine (ICE) to EV conversions, validated by its work in converting the Tata Tigor and Tiago models. Analysts Ruchi Mukhija, Seema Nayak, and Aditi Patil are upbeat about the company’s growth prospects, supported by its partnerships with OEMs like Agratas in the evolving EV market.

The company is shifting from a hardware-focused portfolio to one centered on software, which aims to improve the car user experience. It has formed a joint venture with BMW to set up a center in India, with a software team of 4,000-5,000 people. Mukhija, Nayak, and Patil said, “The company’s focus on AI-driven solutions should boost the productivity of its engineers and planners across product design, digital modelling, and sales processes.”

Tata Technologies has also started developing battery solutions for 2-3 wheelers, giving it a competitive edge as batteries make up about 50% of EV costs. The analyst expects revenue and net profit CAGR of 13.7% and 16% respectively over FY25-27.

2. Nippon Life India Asset Management:

Sharekhan maintains a ‘Buy’ rating on this asset management company with a target price of Rs 840, indicating an upside of 22.2%. The company saw strong growth across all its segments, with equity asset under management (AUM) now contributing 50% of total AUM compared to 45% in FY24. Nippon Life Asset Management (NAM) is working on growing its market share and boosting SIP flows. Its SIP market share has risen to 11% from 8% in FY24. Recently, the company launched a new fund offer (NFO) for the Nifty 500 Equal Weight Index Fund, which is gaining attention.

Analysts are positive about NAM’s prospects, expecting AUM growth of 22-24% over FY25-27. In Q1FY25, the company’s revenue grew 35% YoY to Rs 635.8 crore, surpassing the Trendlyne Forecaster estimates by 23.5%. The firm has managed the expected drop in revenue from SEBI’s pricing changes by growing its AUM and increasing its market share. It is focused on improving the efficiency of existing branches rather than opening new branches. 

Analysts are confident that strong retail flows and innovative passive schemes will drive NAM India's growth. They also highlighted that NAM India’s equity funds have consistently outperformed those of its peers, leading to stronger net inflows and market share gains.

3. L&T Technological Services:

Motilal Oswal maintains a ‘Buy’ rating on this IT consulting & software firm with a target price of Rs 6,300, indicating a 10.8% upside. L&T Technology Services (LTTS) has updated its go-to-market approach by focusing on fast-growing areas like mobility, sustainability, and tech, aiming to take advantage of new opportunities in these sectors.

Mobility margins increased from 14.7% in FY21 to 19.6% in FY24, while sustainability margins rose by 400 basis points, reaching 28.2% over the same period. Analysts Abhishek Pathak and Keval Bhagat said, “Margins may stay steady in the short term, but growth in mobility and sustainability could push them to the higher end of the target range over the next three years”. The company also highlighted increased  growth in the oil and energy markets, with the shift from engineering, procurement, and construction (EPC) to EPC management (EPCM) to boost industrial growth.

Pathak and Bhagat are optimistic about LTTS’s expansion into AI and embedded systems, which are expected to drive future growth and enhance innovation across its business. They project a 10.6% revenue CAGR and 12.6% PAT CAGR over FY25-26.

4. Arvind Fashions:

Anand Rathi maintains a ‘Buy’ rating on this apparels and accessories company with a target price of Rs 689, indicating a potential upside of 18.7%. Arvind Fashions reported a net profit rise of 119.7% to Rs 80 crore in FY24 while its revenue fell 4% YoY to Rs 4,472.6 crore during the year.

Analysts Vaishnavi Mandhaniya and Shreya Baheti indicate that for FY25, the company will prioritize increasing brand value through product innovation and strategic advertising. They will also focus on expanding and updating their retail network, while improving profitability by maximizing full-price sales and optimizing costs. Additionally, the company aims to become debt-free by leveraging surplus cash generated from enhanced operational efficiencies.

Mandhaniya and Baheti are optimistic about the company's prospects, anticipating 12% and 22% CAGR in sales and EBITDA, respectively, over FY25-26. They expect the RoCE to increase to 20.2% by FY26. Reflecting these improved operations, they have raised the target multiple to 13 times FY26 EV/EBITDA, up from 12 times.

5. Emami:

Khambatta Securities maintains a ‘Buy’ rating on Emami with a target price of Rs 943, suggesting a 14.4% upside. This personal products company reported a net profit rise of 10.8% YoY to Rs 152.6 crore in Q1FY25. Operating revenue increased 9.7% YoY to Rs 906.1 crore during the quarter. Analysts noted that the 8.7% YoY domestic volume growth, contributing 85% of sales, was a key driver of overall growth. Emami’s personal care brands Navratna & Dermicool saw a  27% YoY increase, while the Healthcare range grew 11% YoY due to new products and strong digital sales. However, hair care brand Kesh King experienced a 15% YoY decline.

The analysts note that despite geopolitical challenges and currency depreciation in key markets, the international business grew 10.2% YoY in Q1FY25. The strong international performance was primarily driven by double-digit growth in the MENA and South Asian Association for Regional Cooperation (SAARC) regions. 

The analysts anticipate that the company’s ongoing investment in its brands will position it favorably for the mid-to-long term. They project EBITDA margins to reach 26.7% in FY25 and 27.2% in FY26, with PAT margins expected to be 20.6% and 21.4% for the same periods, respectively.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
05 Sep 2024
Market closes flat, Alembic Pharma gets USFDA nod for Albendazole Tablets
By Trendlyne Analysis

Nifty 50 closed at 25,145.10 (-53.6, -0.2%) , BSE Sensex closed at 82,201.16 (-151.5, -0.2%) while the broader Nifty 500 closed at 23,762.80 (13.9, 0.1%). Market breadth is in the green. Of the 2,239 stocks traded today, 1,315 were on the uptick, and 904 were down.

Indian indices closed in the red after erasing its gains from the morning session. The Indian volatility index, Nifty VIX, fell by 1.2% and closed at 14.2 points. Data from Prime Database shows that Indian domestic companies are expected to raise over Rs 1.2 lakh crore through initial public offerings (IPOs) in the coming year. At least 22 IPOs, totaling Rs 15,530 crore, have already been approved by the market regulator SEBI.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green. Nifty Media and BSE Consumer Durables were among the top index gainers today. According to Trendlyne’s Sector dashboard, Hardware Technology & Equipment emerged as the best-performing sector of the day, with a jump of 2.7%.

Asian indices closed in mixed while European indices are trading mixed. US index futures traded lower, indicating a cautious start to the trading session. The artificial intelligence giant, NVIDIA Corp denied reports about receiving a subpoena from the US Department of Justice (DoJ) as part of an antitrust probe in its AI business.

  • Max Financial Services sees a short buildup in its September 26 futures series, with open interest increasing by 57% and a put-call ratio of 0.5.

  • PTC Industries is rising as its subsidiary, Aerolloy Technologies bags an order from Israel Aerospace Industries (IAI) for the supply of titanium cast components for aerospace applications.

  • Meghna Infracon Infrastructure rises sharply to an all-time high of Rs 568.4 as it announces the launch of “Manju Villa,” a new luxury residential project in Goregaon, Mumbai. The project is expected to generate Rs 37 crore in revenue.

  • Premier Energies surges as it receives an order worth Rs 215 crore from the Uttar Pradesh Department of Agriculture to supply, install, and commission 8,085 solar water pumping systems, along with a 5-year comprehensive warranty.

  • Easy Trip Planners surges over 10% following the board's approval to set up a wholly-owned subsidiary for manufacturing electric buses. This move is pending necessary approvals from the Ministry of Corporate Affairs.

  • Alembic Pharma rises sharply as it recieves USFDA approval for Albendazole Tablets USP, 200 mg. These tablets are used to treat neurocysticercosis created by the pork tapeworm and cystic hydatid disease of the liver, lung and peritoneum caused by the dog tapeworm.

  • Rama Steel Tubes is surging as it enters a partnership with Onix Renewable to provide steel structures and single-axis trackers for solar projects undertaken by Onix.

  • Nazara Technologies rises as it signs a memorandum of understanding (MoU) with the Government of Telangana to establish an AI Center of Excellence (AI CoE), focusing on innovation in gaming and digital entertainment.

  • Data from Prime Database shows that Indian domestic companies are expected to raise over Rs 1.2 lakh crore through initial public offerings (IPOs) in the coming year. At least 22 IPOs, totaling Rs 15,530 crore, have already been approved by the market regulator SEBI. Notable among them are SK Finance and Asirvad Micro Finance, which are projected to raise Rs 2,200 crore and Rs 1,500 crore, respectively.

  • Goldiam International surges to its all-time high of Rs 355 per share as it bags an export order worth Rs 70 crore from retailers in the US for diamond-studded gold jewellery.

  • Sapphire Foods India surges to its new all-time high of Rs 364.4 as it trades on its record date for stock split. The company subdivides its existing equity shares, with a face value of Rs 10 each, into five new shares with a face value of Rs 2.

  • Dilip Buildcon rises sharply as it emerges as the lowest bidder for a Rs 1,341 crore project by Konkan Railway Corp. The project involves constructing a twin tube unidirectional tunnel and a four-lane approach road in Kerala, on an engineering, procurement & construction (EPC) basis.

  • Arnab Banerjee, MD & CEO of Ceat, forecasts double-digit growth with margin improvement in H2FY25. He adds that the company has already raised prices by 3-4% in FY25 and plans another price hike in September due to a 50% rise in rubber prices in 2024.

  • Mahanagar Telephone Nigam (MTNL) is falling as it defaults on a Rs 5,625.5 crore payment to a consortium of banks including Union Bank of India, State Bank of India, and Punjab & Sind Bank, among others.

  • Sharekhan retains its 'Buy' call on IndusInd Bank with a target price of Rs 1,750 per share. This indicates a potential upside of 22.2%. The brokerage believes that the company's near-term business outlook remains stable, except for increased slippage in the credit card and microfinance institution (MFI) businesses, which is expected to normalise in H2FY25. It expects the bank's net interest income (NII) to grow at a CAGR of 8.3% over FY25-26.

  • Century Textiles & Industries rises as it purchases land in Kalwa, Thane, from Hindalco Industries with a Rs 400 crore corporate guarantee. This guarantee supports the acquisition, which will be paid in multiple installments.

  • The Federation of Automobile Dealers Associations (FADA) reports that the inventory of passenger vehicles (PV) has reached concerning levels. FADA President Manish Raj Singhania notes that instead of addressing the issue, PV manufacturers are increasing monthly dispatches to dealers, worsening the situation.

  • Max Financial Services falls as nearly 1.5 crore shares (4.3% stake), amounting to Rs 1,637 crore, reportedly change hands in a block deal on Thursday.

  • Sona BLW Precision Forgings is rising as its board of directors approves raising Rs 2,400 crore through a qualified institutional placement (QIP) of shares at a floor price of Rs 699 per share.

  • Zaggle Prepaid Ocean Services surges as it enters into an agreement with Blue Star to provide its Zaggle Save platform, which handles expense management and employee benefits, for Blue Star's workforce.

  • Anand Roy, Managing Director of Star Health and Allied Insurance, states that the company is exploring collaborations with insurers in Africa and West Asia for inward reinsurance opportunities via GIFT City. He adds that many customers come to India for treatment, so the firm is working on positioning the company to serve as both an inward reinsurance provider and a concierge for claim services.

  • Linde India rises sharply as it enters an agreement with Tata Steel to acquire two 1,800 tonnes per day air suppression units (ASU) for its Kalinganagar Phase 2 expansion project.

  • Glenmark Pharmaceuticals' US arm enters a settlement worth $25 million (approx. Rs 209.9 crore) with the US Department of Justice (DoJ) after conducting a False Claims Act and Anti-Kickback Statute investigation.

  • RailTel Corporation of India rises as it receives a work order worth Rs 11 crore from Northern Railways for a telecom project.

  • Suzlon Energy enters a property sale and leaseback agreement for its headquarters, One Earth, in Pune. The company sells the property to 360 ONE Alternates Asset Management for Rs 440 crore. Suzlon will lease it back for up to five years, with the option to sub-lease or license the property.

  • Nifty 50 was trading at 25,237.80 (39.1, 0.2%), BSE Sensex was trading at 82,469.79 (117.2, 0.1%) while the broader Nifty 500 was trading at 23,815.30 (66.4, 0.3%).

  • Market breadth is highly positive. Of the 1,911 stocks traded today, 1,532 showed gains, and 344 showed losses.

Riding High:

Largecap and midcap gainers today include Gujarat Fluorochemicals Ltd. (3,475.10, 9.7%), Zomato Ltd. (254.85, 4.9%) and Bosch Ltd. (34,015.05, 4.8%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (658.45, -3.5%), Torrent Power Ltd. (1,689.30, -2.6%) and Dixon Technologies (India) Ltd. (12,451.15, -2.6%).

Volume Shockers

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

Top high volume gainers on BSE included Gujarat Fluorochemicals Ltd. (3,475.10, 9.7%), Caplin Point Laboratories Ltd. (2,129.70, 8.2%) and Craftsman Automation Ltd. (6,338.70, 5.3%).

Top high volume losers on BSE were Amara Raja Energy & Mobility Ltd. (1,449, -2.6%) and Max Financial Services Ltd. (1,123.80, -0.8%).

Linde India Ltd. (7,464.95, 3.7%) was trading at 7.6 times of weekly average. Sunteck Realty Ltd. (595.70, 4.5%) and PVR INOX Ltd. (1,572.80, 3.0%) were trading with volumes 5.3 and 4.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

46 stocks made 52 week highs,

Stocks touching their year highs included - Akzo Nobel India Ltd. (3,689.65, 3.6%), Apollo Hospitals Enterprise Ltd. (6,987.10, 0.8%) and Biocon Ltd. (386.15, 1.8%).

14 stocks climbed above their 200 day SMA including Gujarat Fluorochemicals Ltd. (3,475.10, 9.7%) and EIH Ltd. (388.80, 4.1%). 4 stocks slipped below their 200 SMA including Nestle India Ltd. (2,506.95, -1.1%) and Engineers India Ltd. (217.36, -0.5%).

Riding High:

Largecap and midcap gainers today include Gujarat Fluorochemicals Ltd. (3,524.30, 11.3%), Zomato Ltd. (254.85, 4.9%) and Avenue Supermarts Ltd. (5,308.15, 4.1%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (654.90, -4.0%), Torrent Power Ltd. (1,673.40, -3.5%) and UNO Minda Ltd. (1,132.90, -3.0%).

Volume Rockets

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

Top high volume gainers on BSE included Gujarat Fluorochemicals Ltd. (3,524.30, 11.3%), Easy Trip Planners Ltd. (43.07, 10.8%) and Caplin Point Laboratories Ltd. (2,101.10, 6.7%).

Top high volume losers on BSE were Amara Raja Energy & Mobility Ltd. (1,447.50, -2.7%), Cera Sanitaryware Ltd. (9,200, -1.7%) and Max Financial Services Ltd. (1,117.25, -1.4%).

Linde India Ltd. (7,430, 3.2%) was trading at 9.0 times of weekly average. GMR Airports Infrastructure Ltd. (95.77, 2.5%) and PVR INOX Ltd. (1,580.15, 3.5%) were trading with volumes 7.3 and 7.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

48 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Akzo Nobel India Ltd. (3,665, 2.9%), Apollo Hospitals Enterprise Ltd. (6,934.30, 0.1%) and Biocon Ltd. (382.85, 0.9%).

17 stocks climbed above their 200 day SMA including Gujarat Fluorochemicals Ltd. (3,524.30, 11.3%) and Easy Trip Planners Ltd. (43.07, 10.8%). 4 stocks slipped below their 200 SMA including Nestle India Ltd. (2,504.90, -1.2%) and Engineers India Ltd. (217.03, -0.7%).

 
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The Baseline
05 Sep 2024
A rising preference for pricey goods among Indian customers
By Swapnil Karkare

I don’t want to sound like that building uncle (I haven’t reached the ‘uncle’ age yet) who complains about the modern world and “kids these days”.

But I have to say, life was a lot simpler for Indian consumers a few years ago. At least, it felt that way. Let's take this cup of tea, simmering by my side while I type. A cup of tea was black tea powder, milk and sugar. Dessert meant a sizzling brownie or gajar halwa. “Skincare? What’s that?”men would ask. But in the last few years, and especially after Covid, things have changed.

Now, tea can be green, fifty kinds of herbal, black, iced. Milk can be low-fat, lactose-free, A2, or oat and nut-based varieties. In addition to the usual Indian desserts, we have to resist gelato, baklava, tiramisu, parfait. And skincare? It’s a full-blown daily routine with people casually dropping names like paraben, niacinamide, and hyaluronic as if they are talking about apples, mangoes and bananas. Every decision feels complicated.

The market is all about wellness, quality and experimentation. Whether it’s food, clothes, cars, or home décor, we’re seeking premium and niche products and services.

Remember when Uber offered its ill-fated Mercedes taxi rides in India, via Uber Black? It didn’t appeal to enough customers, and Uber discontinued it in 2014. Earlier this year, Dara Khosrowshahi, the company’s CEO said, 'Indians are extremely demanding, but are not willing to pay for anything'.

But now, Uber’s premium service is growing at a much faster rate than its budget rides. That has prompted the company to bring Uber Black back. So perhaps enough Indians are willing to pay.

As India gets wealthier, a significant number of people are upgrading their lifestyle,  and firms are getting on board fast to cater to them.

In this week's Analyticks:

Going premium: The rise of the 'discerning' Indian customer

Screener: Rising stocks where Forecaster expects a high target price upside in the next 12 months

Indian pockets are getting deeper

Goldman Sachs recently noted that India’s affluent class–people earning above $10,000 (equivalent to Rs. 8.3 lakhs) per annum–rose in the last couple of decades. It jumped from 20 million in 2011 to 60 million in 2023, and accounts for 4.1% of the total population. GS expects this to reach 100 million by 2027.


People Research on India’s Consumer Economy (PRICE) expects the middle-class to increase to 61% of the total population by 2047, from 31% in 2021. The combo of upward income mobility, more choices, better tech and economic growth has already upgraded the lives of many Indians. It's visible across different pockets of the country, including smaller towns and villages. 

Plus, we have access to global trends, thanks to the internet. We are not just comparing our house to the people next door. Instead we are discussing the viral kitchen renovation we saw online.

Food brands react to premiumisation and rising health awareness

A positive fallout from Covid, if any, has been rising health awareness. It started with at-home workouts and better food habits. Consumers are now spending more on healthier options, and companies have noticed. 

Parag Milk Foods which owns a popular dairy products brand, Govardhan, also operates a premium brand called ‘Pride of Cows’, known for single-source and organic dairy products. In 2020, it forayed into premium curd and ghee. 

Tata Consumer acquired Soulfull, a health-focused millet cereals company, in 2021, and Organic India, Fabindia’s herbal tea brand, in 2024. Amul has launched a high-protein segment selling milk at Rs. 396 a litre, which is seven times the price of the Amul Taaza pouch. 

Hindustan Unilever (HUL) has launched over 70% of its new products in the premium segment in the last two years while Parle has shifted 60-65% of its new launches to the premium segment, up from 40% pre-Covid. Premium products now account for 25% of total sales for HUL, up by 300 basis points (bps) in the last three years and 12% for Nestle, up by 150 bps over last five years.

Tapping high-end consumers in fashion

“Premiumisation gives us better realisation,” Shailesh Chaturvedi, Arvind Fashions’ MD & CEO says. That’s how the company managed to improve its gross margins by 80 bps last quarter. In the previous quarter, sales of Aditya Birla Fashion & Retail (ABFRL)’s luxury segment and AjioLuxe, Reliance Retail’s online luxury shopping platform, jumped 18% and 39% YoY, respectively. Shoppers Stop’s premium brands now account for 57% of total sales, up from 54% last year.

People are becoming picky about the labels they wear, thanks to influencer marketing, global exposure and rising aspirations. Google Trends shows folks getting increasingly curious about premium products – checking out reviews, buying something because their friends or colleagues have it.


Brands are figuring out how to market high-end products to mid-premium customers. This is especially crucial in a weak season, as these consumers are less sensitive to downturns, and companies can offset lower sales in the budget segment with higher margins on premium items. India’s luxury fashion revenue is projected to cross $1.5 billion in 2024, compared to $11 billion in China and $28 billion in the US.

'Premium' is becoming a whole lifestyle

Once we have fancier clothes, taking care of them means more spending. We switch from semi-automatic machines to fully automatic, from powder soap to liquids, and fabric conditioner. This has benefited the likes of P&G and HUL. India's Electronic stores are complaining that semi-automatic washing machines have become a slow-moving inventory.

It doesn’t stop here. We need everything a notch up: accessories, skincare, shoes, phones, homes, cars and so on. Surveys shows that more Indians especially prefer buying premium in 'visible luxury' categories like smartphones, clothes, shoes, and laptops.


Banks vie for affluent customers

Recently, SBI announced it would hire 2000 executives to revive its wealth management arm and attract wealthy clients. Similarly, Axis Bank has expanded its wealth management business Burgundy Private, to Tier II and III cities.

HDFC Bank has launched the BizBlack Metal Edition Credit Card this year to tap self-employed and business people. Such premium metal credit cards have become a status symbol. A few years ago, only a few big banks offered them. But in the last few years, IndusInd Bank, IDFC First Bank, Yes Bank and AU Small Finance Bank have entered this segment.

Credit cards in general are gaining popularity as more Indians indulge in high-end shopping and air travel. The allure of loyalty points, deep discounts, and lounge access is driving growth. As of July 2024, Indians hold around 10.5 crore credit cards. In the last one year, the number of outstanding cards have increased by 16%, the transaction value has jumped 19% while the number of transactions have spiked by 38%. 

Impact on industrial goods

The rise of luxury products has also affected other sectors, boosting the demand for better-quality raw materials and intermediary products. For example, rising sales of sports utility vehicles (SUVs), electric vehicles (EVs) and luxury cars have benefitted the auto components industry. 

Strong demand for 3BHK, 4BHK and luxury homes means better quality cement and construction materials. Cement companies data reinforce this trend. Star Cement registered its highest-ever sales of premium cement in Q1 FY25 (9% of total sales). Dalmia Bharat continues to improve its premium share from 11% in FY19 to 21% in FY24 while that of Nuvoco Vistas from 34% in FY22 to 37% in FY24.

Take Apar Industries, the world’s largest aluminium and alloy conductor manufacturer. The company leads in premium quality conductors and cables used in various sectors like renewables, power, railways, EVs, etc. In the last three years, the volume of those conductors has grown by 37% CAGR while that of cables by 48%. That’s because its clients are shifting to better quality products. 

At the end, consumers are better taken care of

While I may complain about having to take so many decisions about the smallest things, it's clear that premiumization helps both businesses and consumers. But going back into 'uncle' mode - the trend also highlights the widening gap between the rich and the poor. The premium segment is still very small, even if it's fast growing.

There is an expectation however, that India's GDP growth, combined with more effective social programs, will bring more Indians into this aspirational demographic. As India continues to grow, we can expect this trend to gain ground across industries.

Screener: Rising stocks where Forecaster expects a high target price upside in the next 12 months

Fashion & lifestyle stocks see high target price upside by Forecaster

The Indian markets have been trading flat over the past week, with the Nifty 50 index rising by just 0.5%. In this environment, we look at FMCG, consumer durables, food and fashion & lifestyle stocks which have risen over the past month with a high target price upside by Trendlyne’s Forecaster. This screener shows rising stocks where Forecaster expects stock prices to gain in the next 12 months.

Notable stocks that appear in the screener are Sai Silks (Kalamandir), Raymond, Electronics Mart India, Eureka Forbes, La Opala RG, Pitti Engineering, EID Parry (India), and Arvind. 

Raymond features in the screener due to its 53.3% target price upside expected by Trendlyne’s Forecaster in the next 12 months. Analysts like Motilal Oswal believe that the textile company’s de-merger of its real estate and engineering businesses will help carve out individual growth strategies for both businesses. According to the broker, the company has created strong value by selling its FMCG business, demerging the lifestyle business, and setting up an engineering unit ‘Newco’ after the MPPL acquisition. The demerger of the lifestyle business has also helped the company’s stock price to rise by 7.9% over the past month.

Electronics Mart India comes next with a Forecaster estimated target price upside of 25% in the next 12 months. According to Anand Rathi, this specialty retail company’s revenue will grow on the back of volume growth. It expects the company to increase its profitability, driven by optimising store operations and improving inventory management.

You can find some popular screeners here.