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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.

04 Sep 2024

Market closes lower, Lupin launches Mirabegron Extended-Release tablets in the US

Nifty 50 closed at 25,198.70 (-81.2, -0.3%) , BSE Sensex closed at 82,352.64 (-202.8, -0.3%) while the broader Nifty 500 closed at 23,748.90 (-39.6, -0.2%). Market breadth is even. Of the 2,237 stocks traded today, 1,086 were in the positive territory and 1,131 were negative.

Indian indices closed in the red, with the benchmark Nifty 50 index closing at 25,198.7 points. The Indian volatility index, Nifty VIX, rose by 3.9% and closed at 14.4 points. India’s IPO fundraising reached a 27-month high in August, with 10 companies collectively raising Rs 17,048 crore. This represents the largest primary market fundraising since May 2022.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red. Nifty MidSmall Healthcare & S&P BSE Midsmallcap were among the top index gainers today. According to Trendlyne’s Sector dashboard, Retailing emerged as the best-performing sector of the day, with a jump of over 1.6%.

Asian indices closed in the red while European indices are trading in the red with an exception of Russia’s MOEX and RTSI which are trading higher. US index futures traded lower, indicating a cautious start to the trading session. Brent crude oil futures are trading in the red. A significant selloff occurred following news about the potential resolution of a dispute in Libya, which had previously halted the country's crude production and exports.

Relative strength index (RSI) indicates that stocks like Gujarat State Petronet, Godrej Industries, Eris Lifesciences, and Bajaj Finserv are in the overbought zone.
Lupin rises to its all-time high of Rs 2,282 per share as it launches Mirabegron Extended-Release tablets in the US, after receiving approval from the US FDA. These tablets are a generic equivalent of Myrbetriq Extended-Release tablets from Astellas Pharma Global Development. According to IQVIA, the market size of the drug was $1.6 billion as of July 2024.
SpiceJet rises as Chairman and MD, Ajay Singh, reportedly considers diluting a 10% stake and raising up to Rs 3,000 crore through qualified institutional placement (QIP). The company plans to conduct QIP roadshows in Mumbai, Hong Kong, and Singapore to attract institutional investors.
RITES signs a memorandum of understanding (MoU) with NBCC (India) to collaborate on consultancy and EPC projects. The partnership will focus on urban energy, water management, transport, infrastructure, and township development, covering all phases from concept to commissioning.
India’s services PMI rises to 60.9 in August, from 60.4 in July. However, Composite PMI remains unchanged at 60.7. The PMI reading stays above the 50 mark for the 37th consecutive month.
#PMIData | ???? August Services PMI At 60.9 Vs 60.4 In July

???? August Composite PMI Unchanged At 60.7 pic.twitter.com/9HcF09Rgcp
— CNBC-TV18 (@CNBCTV18Live) September 4, 2024
GlaxoSmithKline Pharmaceuticals is rising as it receives an income tax refund of Rs 222.2 crore from the Income Tax Department.
Krishna Institute of Medical Sciences rises to hit its all-time high of Rs 2,654 as the board sets September 13 as the record date for its stock split, dividing existing equity shares from one equity share with a face value of Rs 10 into five equity shares with a face value of Rs 2.
Samvardhana Motherson International is reportedly set to launch a share sale this month, raising up to $715 million through a Qualified Institutional Placement. The funds will be used for debt repayment, expansion, and capital expenditure.
Singapore’s CapitaLand Investment plans to more than double its funds under management in India to more than Singapore $14.8 billion (Rs 90,280 crore) by 2028.
#Economy | #Singapore’s CapitaLand Investment has announced plans to more than double its funds under management in #India by 2028, a move that comes alongside #primeministernarendarmodi’s visit to the country.

?? CapitaLand plans to more than double its funds under management… pic.twitter.com/py64lUVIks
— Business Today (@business_today) September 4, 2024
Motilal Oswal maintains its 'Buy' call on VRL Logistics with a higher target price of Rs 660 per share. This indicates a potential upside of 12.5%. The brokerage believes that the company's sales volumes will grow due to the pick-up in agricultural and textile commodity sales driven by strong monsoons. It expects the company's revenue to grow at a CAGR of 14% over FY25-26.
PSU banks like Canara Bank, Indian Bank, Bank of Baroda, and Punjab National Bank fall by more than 1.5% in trading. All constituents of the broader Nifty PSU Bank index trade in the red.
Exicom Tele-Systems falls sharply as Late Rakesh Jhunjhunwala-backed RARE Enterprises offloads 15.9 lakh shares at an average price of Rs 348.6 per share.
Indian Railways launches Vande Bharat Sleeper trains, set to debut by year-end. Kinet Railway Solutions, a joint venture between Russian firm TMH and Rail Vikas Nigam (RVNL), won the international tender to produce 120 trainsets (1,920 coaches) under a contract worth $6.5 billion (Rs 54,576.5 crore).
Vande Bharat Sleeper: USD 6.5 billion contract! India-Russia JV begins production of 1920 coaches https://t.co/LI7fCiybub
— ET NOW (@ETNOWlive) September 4, 2024
IT stocks like Wipro, MphasiS, LTIMindtree, and Infosys fall more than 2% in trade. All constituents of the broader Nifty IT index are trading in the red.
Minda Corp rises as it signs a technology licensing agreement with China's Sanco Connecting to locally develop EV connection systems, including charging gun assemblies, power distribution units, and battery distribution units. This collaboration is expected to strengthen Minda Corp's electrical distribution systems in the growing EV market.
ICICI Securities retains its 'Buy' rating on Tata Technologies with a target price of Rs 1,290 per share, indicating a potential upside of 21.9%. The brokerage remains confident in the firms growth potential, citing the company's emphasis on deepening partnerships with OEM ecosystem stakeholders to accelerate the transition to a software/SDV portfolio. It expects the company's revenue to grow at a CAGR of 15.5% over FY25-27.
Investment banker DAM Capital Advisors submits its draft prospectus to SEBI for an initial public offering (IPO). The IPO will consist solely of an offer-for-sale (OFS) of up to 3.2 crore equity shares, with no fresh issue of shares.
Investment banker #DAMCapitalAdvisors has filed draft papers with capital markets regulator #SEBI to raise funds through an initial public offering (IPO)@senmeghna https://t.co/76HJYdxYpG
— CNBC-TV18 (@CNBCTV18Live) September 4, 2024
Ecos (India) Mobility & Hospitality's shares debut on the bourses at a 16.8% premium to the issue price of Rs 334. The Rs 601.2 crore IPO received bids for 64.3 times the total shares on offer.
General Insurance Corporation of India falls as central government announces plans to sell 6.8% stake worth Rs 4,700 crore. This will be done through an offer for sale at an average price of Rs 395 per share.
VST Industries gets approval from NSE and BSE for a bonus issue of 15.4 crore equity shares with a face value of Rs 10 each. Shareholders to receive 10 new equity shares for each equity share they have in the company.
IPO fundraising surges to a 27-month high in August, with 10 companies raising a total of Rs 17,048 crore. This marks the largest primary market fundraising since May '22. Of the total amount, fresh issues account for 57% of the total amount, or Rs 9,715 crore, while the remaining Rs 7,333 crore was raised via offer for sale (OFS) route.
#Business | August saw a spike in terms of money raised IPOs with the cumulative amount touching a 27-month high. ????@rravindia brings in more ??https://t.co/TUiYrBe2GZ #IPO
— Moneycontrol (@moneycontrolcom) September 4, 2024
Westbridge AIF I sells 1.5% stake (1.1 crore shares) in AU Small Finance Bank at an average price of Rs 676.1 per share, worth approx Rs 736.6 crore, in a bulk deal on Tuesday. AU Small Finance Bank submits an application to the Reserve Bank of India on Tuesday, requesting approval for a voluntary transition from a small finance bank to a universal bank.
Texmaco Rail & Engineering enters an agreement with Jindal Rail Infrastructure to acquire a 100% stake in the company for Rs 614 crore. The acquisition will help Texmaco in the R&D, design, and manufacturing of commodity-specific freight wagons.
Indian Energy Exchange's electricity volume rises 17.1% YoY to 9,914 million units (MU) in August. IEX Green Market achieves a volume growth of 259.5% YoY to 871 MU.
NHPC signs a memorandum of understanding (MoU) with the Department of Energy, Gov. of Maharashtra to set up pumped storage systems and other renewable energy sources (water, solar, wind, and hybrid). The pumped storage systems in Kengadi (1,550 MW), Savitri (2,250 MW), Kalu (1,150 MW), Jalond (2,400 MW) in Maharashtra with a capacity of 7,500 MW.
Market sinks in morning trading. Nifty 50 was trading at 25,089.80 (-190.1, -0.8%), BSE Sensex was trading at 82,023.59 (-531.9, -0.6%) while the broader Nifty 500 was trading at 23,627.40 (-161.1, -0.7%).
Market breadth is moving down. Of the 1,938 stocks traded today, 597 were in the positive territory and 1,309 were negative.

Riding High:

Largecap and midcap gainers today include Biocon Ltd. (379.40, 4.8%), Hindustan Petroleum Corporation Ltd. (445.10, 4.5%) and Berger Paints (India) Ltd. (597.70, 3.6%).

Downers:

Largecap and midcap losers today include Oil India Ltd. (682.25, -6.5%), General Insurance Corporation of India (397.85, -5.6%) and Federal Bank Ltd. (187.87, -3.5%).

Volume Shockers

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

Top high volume gainers on BSE included CCL Products India Ltd. (832, 15.3%), Piramal Pharma Ltd. (213.03, 10.3%) and Jubilant Ingrevia Ltd. (742.35, 10.2%).

Top high volume losers on BSE were General Insurance Corporation of India (397.85, -5.6%), KSB Ltd. (880.15, -5.1%) and Mastek Ltd. (2,829.80, -2.6%).

Indigo Paints Ltd. (1,539.75, 6.2%) was trading at 19.4 times of weekly average. Aether Industries Ltd. (931.50, 4.6%) and BEML Ltd. (4,106.70, 6.7%) were trading with volumes 16.4 and 10.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

33 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Akzo Nobel India Ltd. (3,570, 1.7%), Bajaj Finserv Ltd. (1,871.90, 0.3%) and Bajaj Holdings & Investment Ltd. (11,067.70, 1.5%).

12 stocks climbed above their 200 day SMA including Prism Johnson Ltd. (182.32, 3.8%) and Medplus Health Services Ltd. (719, 2.9%). 11 stocks slipped below their 200 SMA including Punjab National Bank (112.94, -2.3%) and C.E. Info Systems Ltd. (2,025.20, -2.1%).

04 Sep 2024

Chart of the Week: Fertilizers and software & services sector emerge as top gainers over the past quarter

By Satyam Kumar

For the first time in six quarters, India’s quarterly GDP growth on a YoY basis came in below estimates at 6.7% for Q1FY25. This was primarily due to subdued government spending and a decline in manufacturing activity. Despite this slight moderation in short-term growth, the World Bank remains optimistic about India’s long-term growth outlook. They revised their growth projection for the current fiscal upward to 7%, from the previous estimate of 6.6%.

If we look at the equity markets, India’s influence in the MSCI Global Standard Index, also known as the World Index, has been growing rapidly. India currently holds a weightage of around 18%, second only to China, which has a weightage of approximately 25%. This marks a significant increase from levels below 10% at the end of 2020.

In this week’s Chart of the Week, we take a look at Trendlyne’s Sector Dashboard to identify the top-performing sectors over the past quarter. We focus on the top eight sectors that have delivered maximum gains, highlighting the stocks and underlying factors that have contributed the most.

Early signs of growth propel the fertilizers and software & services sectors

The fertilizers sector emerged as the best-performing sector, posting 34.1% gains over the past quarter. Average net profit growth more than doubled on a YoY basis in Q1FY25. This growth was driven by a good monsoon and initiatives taken by the government to boost the sector. For instance, the government is developing a national policy to boost local fertilizer manufacturing. The Fertilisers and Chemicals Travancore, Coromandel International and Chambal Fertilisers & Chemicals were the highest contributing stocks as they rose 41.8%, 36.6% and 28.6% respectively over the past quarter.

The software and services sector also saw significant growth, soaring 30.8% over the past quarter, driven by early signs of recovery in the IT industry. This was buoyed by demand for emerging technologies like Generative AI, machine learning and cloud transformation. Tata Consultancy Services (TCS) rose 19.7% over the past quarter driven by positive sequential growth among all verticals except media and communication. Q1FY25 marked the first positive revenue growth on a QoQ basis after four quarters of sequential decline.

IT consulting & software company Infosys saw a 34% uptick in its share price over the past quarter, accounting for 20% of the sector’s overall gain during the period. The company’s financial services segment, which contributes around 27% to the overall revenue, reported positive growth on a YoY basis after six quarters.

Retailing & consumer durables companies witness growth driven by rising demand for their products

The retailing sector has risen 29.5% over the past quarter, with Trent alone contributing 67.3% to the sector’s gains, as it surged 53.2%. Avenue Supermarts contributed 16% to the overall sector gains.

Trent posted revenue growth of 54.8% YoY to Rs 4,150 crore in Q1FY25, with net profit rising 126.3% YoY to Rs 393 crore. The company’s strategy to focus on its affordable, trend-led fashion retail store, Zudio, has been a key driver of revenue growth as consumers gravitate toward value products amid high inflation.

The consumer durables sector also recorded a 20% gain over the past quarter, supported by the “Make in India” initiative amid growing demand for electronics goods. The industry saw an average net profit growth of 45% YoY in Q1FY25. Electronics manufacturer, Dixon Technologies (India), contributed 18.4% to the overall sectoral gains after rising 42.6% over the past quarter. Similarly, Voltas, an air conditioner (AC) manufacturer gained 26.8% over the past quarter, contributing 8.5% to sectoral gains. This rise came on the back of high demand for ACs in the peak summer months from April to June.

Uptick in exports drives the pharmaceuticals & chemicals sector higher

The pharmaceuticals & biotechnology sector gained 26.7% over the past quarter. Pharmaceutical firms like Sun Pharmaceutical Industries and Lupin were the major contributors as they gained 23% and 40% respectively over the past quarter. Growth in Sun Pharma was led by global specialty sales and emerging market segments. Lupin, on the other hand, witnessed its net profit rise by 77% on a YoY basis to Rs 801 crore in Q1, driven by new product launches and improved product mix.

The chemicals and petrochemicals sector surged by 24.3% over the past quarter, as India strengthened its position in the global chemicals market. This growth was driven by increasing interest from global companies looking to source from India in a bid to de-risk their supply chains.

Leading carbon black producer, PCBL saw its stock price double over the past quarter, contributing 8% of the overall sectoral gains. This rise followed the company’s announcement to increase its global presence with capacity additions via brownfield and greenfield expansions, taking the total capacity to 10 lakh tonnes (currently, 7.7 lakh tonnes). Similarly, agrochemicals company PI Industries and specialty chemicals firm BASF India also contributed 7.7% and 6.4% to the sectoral gains over the past quarter.

Food, beverages & tobacco and FMCG companies capitalise on shifting consumption trends

The food, beverages and tobacco sector gained 21.6% over the past quarter. Cigarettes and tobacco manufacturers like ITC and Godfrey Phillips India accounted for around 50% of the sector’s gains. This growth was driven by stable cigarette taxes and enforcement against illegal trade, which helped the legal cigarette industry recover volumes. Breweries & distilleries company United Spirits also gained 25% over the past quarter driven by its premium products, and contributed over 10% to the overall sectoral gains.

Likewise, the FMCG sector gained 20.3% over the past quarter, led by moderation in raw material prices and an uptick in rural consumption. Personal products companies Hindustan Unilever and Colgate-Palmolive (India) gained significantly over the past quarter contributing over 40% to the sectoral gains.

03 Sep 2024

Market closes flat, KPI Green's subsidiary secures an order for multiple solar projects

Nifty 50 closed at 25,279.85 (1.2, 0%) , BSE Sensex closed at 82,537.44 (-22.4, 0.0%) while the broader Nifty 500 closed at 23,788.45 (27.8, 0.1%). Market breadth is even. Of the 2,242 stocks traded today, 1,123 were in the positive territory and 1,095 were negative.

Indian indices closed flat after switching between losses and gains throughout the day. The Indian volatility index, Nifty VIX, fell 1.6% and closed at 13.8 points. Adani Green Energy (AGEL) has entered into a 50:50 joint venture with TotalEnergies to manage 1,150 MW of solar projects at Khavda, Gujarat.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green. Nifty Consumer Durables and Nifty Financial Services 25/50 Index were among the top index gainers today. According to Trendlyne’s Sector dashboard, Consumer Durables emerged as the best-performing sector of the day, with a rise of 4.3%.

Asian indices closed mixed, influenced by China’s manufacturing activity, which slumped to a six-month low of 49.1. This decline also led to the CSI 300 hitting a seven-month low. European indices are trading in the red, except for Russia’s RTSI and MOEX which are trading in the green. US index futures are trading in the red, indicating a negative start to the trading session. Brent crude oil futures are trading lower.

Money flow index (MFI) indicates that stocks like Godrej Industries, Bajaj Auto, Gujarat State Petronet, and Radico Khaitan are in the overbought zone.
Maruti Suzuki India's wholesales increase 2.1% YoY to 1.7 lakh units in August due to a 1.4% YoY and 70.8% YoY growth in passenger and commercial vehicle wholesales, respectively.
Emkay reiterates its 'Sell' rating on Go Digit General Insurance with a target price of Rs 230 per share, indicating an upside of 41.7%. The brokerage cites concerns over achieving both growth and profitability, a muted tariff outlook on motor third-party insurance, competitive intensity in motor own damage insurance, and the company's high valuation.
The World Bank revises its growth estimate for India's GDP to 7% from 6.6% for FY25. Auguste Tano Kouame, the World Bank's Country Director for India, highlights that India was the fastest-growing economy in FY24 with an 8.2% growth rate and is currently maintaining strong growth. He emphasizes the need for India to diversify its export basket and tap into global value chains to achieve $1 trillion in merchandise exports by 2030.
#BREAKING | ???? World Bank upgraded its estimate of India's growth to 7% from 6.6% for financial year 2024-25.@Meghnamittal23 brings in more updates ????https://t.co/8j2EzhkFZF #WorldBank #GDP #India #FY25 pic.twitter.com/l9xgUFuPcE
— Moneycontrol (@moneycontrolcom) September 3, 2024
Lemon Tree Hotels rises as it signs a license agreement for a new hotel in Gir, Gujarat, set to open in FY30. The property will be managed by Lemon Tree's wholly-owned subsidiary, Carnation Hotels. It will feature 80 well-appointed rooms, a restaurant, a banquet hall, a meeting room, a swimming pool and a spa.
HDFC Bank, Bharti Airtel, Maruti Suzuki India and Bajaj Finance outperform their respective industries over 10 years in terms of price change.
KPI Green Energy rises as its subsidiary, Sun Drops Energia receives a letter of intent (LoI) to set up multiple solar power projects with a total capacity of 7 MW under the company's captive power producer (CPP) segment.
Signatureglobal falls sharply as nearly 57.2 lakh shares (4.1% stake), amounting to Rs 828.2 crore, reportedly change hands in a block deal at an average price of Rs 1,449 per share.
Crude oil futures are trading lower despite concerns about supply disruptions from Libya. Brent oil futures are trading at $76.3, down 1.6% today, while WTI (West Texas Intermediate) futures stand at $72.9, down 0.8% today.
#Libya’s #Crudeoil production dropped to below half of its usual level after the UN Support Mission in Libya held talks on Monday to resolve a dispute over control of the central bank.https://t.co/W2xWoa6Cpf
— businessline (@businessline) September 3, 2024
Motilal Oswal retains its 'Buy' call on Cummins India with a target price of Rs 4,300 per share. This indicates a potential upside of 12.3%. The brokerage remains confident on the stock due to its industrial segment benefitting from a strong construction cycle, and the distribution segment gaining from better market reach. It expects the company's revenue to grow at a CAGR of 18% over FY25-27.
Tata Consultancy Services expands its partnership with Google Cloud to strengthen cyber resilience for enterprises across industries by combining TCS' expertise with Google Cloud's advanced technologies. The TCS Managed Detection and Response (MDR) solution, powered by Google's Security Operations platform, enables security teams to quickly detect and respond to threats.
Adani Green Energy (AGEL) enters a 50:50 joint venture with TotalEnergies to manage 1,150 MW of solar projects at Khavda, Gujarat. AGEL will contribute its existing assets to the JV, while TotalEnergies will invest $444 million (approx. Rs 3,727 crore) to accelerate project development.
Mahindra & Mahindra offers a Rs 1.5 lakh discount on its three-door Thar SUV, shortly after launching the larger five-door TharRoxx. The company seeks to maintain Thar's sales momentum amid overlapping price points. Nalinikanth Gollagunta, CEO of M&M’s automotive division, states that festive season adjustments to their portfolio are based on market feedback and customer preferences.
#Mahindra has introduced a significant discount of up to ?1.5 lakh on its popular three-door Thar SUV model, just weeks after the launch of its larger sibling, the five-door #TharRoxx.

? Subscribe to #MintPremium: https://t.co/EzGgtveGp3 https://t.co/VSVJ63OEht
— Mint (@livemint) September 3, 2024
Brigade Enterprises is rising as its board of directors approves the qualified institutional placement (QIP) of equity shares at a floor price of Rs 1,164.7 per share.
Premier Energies' shares debut on the bourses at a 120% premium to the issue price of Rs 450. The Rs 2,830.4 crore IPO received bids for 74.4 times the total shares on offer.
PTC Industries' board approves the issuance of 5.3 lakh equity shares worth Rs 700 crore through a qualified institutional placement (QIP). The board sets a floor price of Rs 13,894.4 per share for the QIP.
Samvardhana Motherson International is reportedly planning to raise up to $1 billion through a Qualified Institutional Placement (QIP). The funds raised may be allocated towards an acquisition or used to reduce debt. Bankers for the QIP have already been appointed, and the share sale along with the roadshows is expected to start soon.
#CNBCTV18Exclusive | Samvardhana Motherson is likely to raise up to $1 billion via qip. Bankers for QIP appointed, roadshow may begin soon: Sources to @sudarshankr

Alert: Co looks to reduce debt to 1x EBITDA vs 1.5x now

Here's more pic.twitter.com/M3uMyFbLhg
— CNBC-TV18 (@CNBCTV18Live) September 3, 2024
Matrimony.com surges to a new 52-week high of Rs 846.9 per share as the company is set to consider and approve a share buyback proposal in its board meeting scheduled for September 5.
Welspun Corp's board of directors approves a $100 million (approx. Rs 839.5 crore) investment by its subsidiary, Welspun Pipes to upgrade its high-frequency induction welding (HFIW) pipes manufacturing and coating capacity in the USA.
Medi Assist Healthcare Services surges to its all-time high of Rs 647.8 as 95 lakh shares (13.5% stake), amounting to Rs 580.5 crore, reportedly change hands in a block deal. Promoter Bessemer India is a likely seller in the transaction.
Girish Kousgi, Managing Director & CEO of PNB Housing Finance, guides a retail growth of over 17% with net interest margins (NIMs) of around 3.5% & credit cost at 25 bps for FY25. He also forecasts that the company's retail book will reach Rs 1 lakh crore by FY27 and anticipates that NIMs will improve as the affordable housing and emerging segments grow at a faster rate.
PNB Housing Finance says

FY25 Guidance ???? Retail growth +17% with NIMs around 3.5% & credit cost at 25 bps

Vision for coming years
????? Retail book at Rs.1 lakh cr by FY27
????? NIMs to improve as Affordable housing & Emerging segments grow at faster cliphttps://t.co/oFVJIQtJJs
— Nigel D'Souza (@Nigel__DSouza) September 3, 2024
NMDC is falling as it receives a Rs 1,620.5 crore fine from the District Collector, Dantewada for allegedly transporting iron ore without a railway transit pass (RTP). The company's monthly iron ore production declines 10% YoY to 3.1 million tonnes (MT) during August 2024.
Gensol Engineering rises as its consortium with Matrix Gas & Renewables emerges as the lowest bidder for the EPC contract of India's first Biomass-to-Green Hydrogen project, valued at Rs 164 crore. The project aims to convert 25 tons of bio-waste into 1 ton of hydrogen per day.
Kaynes Technology India rises sharply as its subsidiary, Kaynes Semicon, receives approval from the Indian government to set up a semiconductor manufacturing unit in Gujarat with a capex of Rs 3,307 crore.
Hindustan Aeronautics rises sharply as it reportedly bags an order worth Rs 26,000 crore from the Cabinet Committee on Security for 240 aero engines for the Indian Air Force's Su-30 MKI aircraft.
Nifty 50 was trading at 25,273.10 (-5.6, 0.0%), BSE Sensex was trading at 82,524 (-35.8, 0.0%) while the broader Nifty 500 was trading at 23,800.60 (39.9, 0.2%).
Market breadth is overwhelmingly positive. Of the 1,929 stocks traded today, 1,300 were on the uptick, and 584 were down.

Riding High:

Largecap and midcap gainers today include Oracle Financial Services Software Ltd. (11,455.25, 4.7%), Gland Pharma Ltd. (1,893.35, 3.3%) and Hindustan Aeronautics Ltd. (4,832.35, 3.1%).

Downers:

Largecap and midcap losers today include Torrent Power Ltd. (1,712.85, -3.0%), Adani Green Energy Ltd. (1,897.90, -2.5%) and One97 Communications Ltd. (595.60, -2.0%).

Volume Shockers

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

Top high volume gainers on BSE included Godrej Industries Ltd. (1,211.40, 14.1%), Bombay Burmah Trading Corporation Ltd. (2,673.75, 8.8%) and Quess Corp Ltd. (832.55, 7.9%).

Top high volume losers on BSE were Signatureglobal (India) Ltd. (1,410.05, -5.7%), Cera Sanitaryware Ltd. (9,050, -2.7%) and Jindal Stainless Ltd. (726.30, -1.8%).

Prism Johnson Ltd. (175.70, 6.3%) was trading at 14.1 times of weekly average. Poly Medicure Ltd. (2,503.05, 5.3%) and Kaynes Technology India Ltd. (4,839.25, 3.8%) were trading with volumes 6.7 and 6.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

39 stocks overperformed with 52 week highs,

Stocks touching their year highs included - Bajaj Finserv Ltd. (1,865.60, 1.4%), Bajaj Holdings & Investment Ltd. (10,903.90, 2.6%) and Bombay Burmah Trading Corporation Ltd. (2,673.75, 8.8%).

15 stocks climbed above their 200 day SMA including Prism Johnson Ltd. (175.70, 6.3%) and Jai Balaji Industries Ltd. (1,000.25, 5%). 7 stocks slipped below their 200 SMA including R R Kabel Ltd. (1,605.90, -0.9%) and YES Bank Ltd. (23.71, -0.7%).

02 Sep 2024

Market closes higher, Tata Motors' total wholesales decline by 8% YoY in August

Nifty 50 closed at 25,278.70 (42.8, 0.2%) , BSE Sensex closed at 82,559.84 (194.1, 0.2%) while the broader Nifty 500 closed at 23,760.70 (26.2, 0.1%). Market breadth is in the red. Of the 2,278 stocks traded today, 881 were gainers and 1,363 were losers.

Indian indices closed higher but erased much of the gains from the morning session. The Indian volatility index, Nifty VIX, rose 5% and closed at 14.1 points. Varun Beverages surged as its board set September 12 as the record date for its stock split, dividing existing equity shares from a face value of Rs 5 into shares with a face value of Rs 2.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red. S&P BSE SME IPO and Nifty FMCG Index were among the top index gainers today. According to Trendlyne’s Sector dashboard, Diversified emerged as the best-performing sector of the day, with a rise of 3.1%.

Asian indices closed mixed. European indices are trading in the red, except for Netherlands AEX which is trading flat. US index futures are trading in the red, indicating a negative start to the trading session. Brent crude oil futures are trading lower.

Relative strength index (RSI) indicates that stocks like Bajaj Auto, Glenmark Pharmaceuticals, Alkem Laboratories, and Gujarat State Petronet are in the overbought zone.
Maithan Alloys announces that its subsidiary, Maithan Ferrous, has activated two 16.5 MVA submerged arc furnaces at its new Ferro Alloy Plant in Bankura, West Bengal. The plant will begin production next week.
Tata Motors falls as its total wholesales decline by 8% YoY to 71,693 units in August, due to a 15% YoY and 3% YoY decrease in commercial vehicle and passenger vehicle wholesales, respectively.
Hero MotoCorp rises as its monthly wholesales rise 4.8% YoY to 5.1 lakh units in August due to higher motorcycle sales and domestic business. However, its exports grow by 27.4% YoY to 20,097 units during the month.
Rajan Venkatesh, Managing Director & CEO of Laxmi Organic Industries, projects the revenue to double by 2028, with margins of 13-14% and a return on capital employed (ROCE) at 20%. He expects the company to be debt-free by 2028 and adds that they are focusing on delivering profitable volume growth in the coming quarters.
Laxmi Organic - LXCHEM says

???? Focus is on delivering profitable volume growth

Vision 2028
???? Revenues to double
???? Margins at 13% - 14%
???? ROCE at 20%
???? Will be debt free#StockMarket https://t.co/hxBuijEtRm
— Nigel D'Souza (@Nigel__DSouza) September 2, 2024
Adani Energy Solutions rises as it secures a letter of intent for the Khavda Phase IV Part-A project, which involves evacuating 7 GW of renewable energy to the National Grid.
Globus Spirits rises to hit its all-time high of Rs 1,154 as Motilal Oswal Mutual Fund acquires 2 lakh shares (0.7% stake) through block deal at an average price of Rs 1,071.5 per unit.
Godrej Properties secures a letter of intent (LOI) to develop two premium group housing plots in Gurugram from Haryana Shehri Vikas Pradhikaran (HSVP), with a total bid amount of Rs 515 crore. The plots offer a development potential of over 1 million sq ft and could generate revenue of over Rs 3,400 crore.
Larsen & Toubro creates a new business vertical for renewable energy within its infrastructure projects segment, separating it from power transmission and distribution. A Ravindran, Senior Vice President, will lead this vertical.
#Larsen & Toubro carves a separate business vertical for renewable energy.

Read more ??https://t.co/0MymVZM2pQ
— NDTV Profit (@NDTVProfitIndia) September 2, 2024
Ramkrishna Forgings divests its wholly-owned subsidiary, Globe All India Services, to Yatra Online for Rs 128 crore. This move allows the company to focus on its core business and also strengthen its balance sheet.
NCC surges as it announces receiving orders worth Rs 1,236 crore in August from state government agencies for its irrigation division and other projects.
Techno Electric & Engineering surges as it secures a contract to design, build, finance, operate, and transfer Edge Data Centers (EDCs) for RailTel Corporation of India. The company will manage these tasks across 102 cities in India over a twenty-year period, extendable by five years.
India’s manufacturing PMI moderates to 57.5 in August, down from 58.1 in July, as output and sales grow at their slowest pace since January, with competitive pressures and inflation concerns dampening business confidence.
Domestic manufacturers saw softer increases in new business and output in August, according to the latest PMI survey ????????#manufacturing #PMI #BusinessTrends https://t.co/XGX99uxp3A
— Zee Business (@ZeeBusiness) September 2, 2024
Dynacons Systems & Solutions rises as it secures a Rs 142.6 crore project from Bank of Maharashtra to supply, install, and maintain Hyper Converged Infrastructure for the Nakshatra-2 private cloud initiative, including five years of maintenance and support.
Varun Beverages rises sharply as its board sets September 12 as the record date for its stock split, dividing existing equity shares from a face value of Rs 5 into shares with a face value of Rs 2.
Adani Ports & Special Economic Zone's cargo volumes rise 5% YoY to 36.1 million metric tonnes in August. The rise in cargo was primarily driven by containers (11% YoY).
DAM Capital predicts that the government's move to lift restrictions on ethanol production from sugarcane juice and B-heavy molasses will likely lead to higher ethanol prices ahead of the new season. The brokerage anticipates that this policy change will boost earnings growth for sugar companies starting in Q3FY25 and contribute to a sector re-rating.
#MarketsWithMC | ???? Ethanol policy shift are expected to drive strong earnings growth for sugar companies from Q3FY25.

Read ??https://t.co/BcQUud0utm #Ethanol #FY25 #Earnings
— Moneycontrol (@moneycontrolcom) September 2, 2024
Oriana Power surges as it receives a order worth Rs 247.9 crore from Bharat Petroleum Corporation (BPCL) for a 52-MW solar project. The deal includes building transmission lines, obtaining CTU approval, and providing five years of maintenance.
Rossell India surges as it completes the demerger of its aerospace and defense units into Rossell Techsys, with the scheme of amalgamation taking effect on August 30.
Bajaj Auto is rising as its wholesales grow 16% to 3.9 lakh units in August. Two-wheeler wholesales increase by 18% YoY, while commercial vehicle wholesales improve by 11% YoY.
MOIL's stock falls over 3% after the company announces a 20% price reduction for Ferro grades containing 44% manganese. Additionally, Ferro grades with lower manganese content, as well as SMGR (Mn-30% and Mn-25%), Fines, and Chemical grades, will see their prices cut by 15%.
#MarketsWithBS | Shares of #MOIL dropped as much as 3.2% at Rs 387.05 per share on the #BSE in Monday’s intraday deals.#markets #sharemarket #StockMarket #buzzingstocks https://t.co/MXy8tZwTXW
— Business Standard (@bsindia) September 2, 2024
Indian Hume Pipe surges to its all-time high of Rs 613.7 as it receives a letter of intent (LOI) for an order worth Rs 858.9 crore from Tapi Irrigation Development Corp, Jalgaon. The project includes building and commissioning a piped distribution network to irrigate 26,907 hectares under the Sulwade Jamphal Kanoli Lift Irrigation project in Dhule district, along with five years of system maintenance.
NBCC (India) rises as its board of directors approves a bonus issue of shares to equity holders in the ratio of 1:2. The record date for the issue is October 7.
TVS Motor’s wholesales rise 13% YoY to 3.9 lakh units in August, driven by a 14% YoY increase in two-wheelers and a 4% YoY growth in electric vehicles. Exports surge 14% YoY during the same period.
Rites rises as it emerges as the lowest bidder for a Rs 224.3 crore order from Tanzania Railways to supply, test, and commission four diesel multiple units for a meter gauge railway (MGR).
Nifty 50 was trading at 25,303.50 (67.6, 0.3%), BSE Sensex was trading at 82,725.28 (359.5, 0.4%) while the broader Nifty 500 was trading at 23,795.60 (61.1, 0.3%).
Market breadth is in the green. Of the 2,005 stocks traded today, 1,238 were in the positive territory and 724 were negative.

Riding High:

Largecap and midcap gainers today include Gujarat Gas Ltd. (680, 12.0%), Jio Financial Services Ltd. (344.90, 7.2%) and Adani Power Ltd. (670.20, 6.0%).

Downers:

Largecap and midcap losers today include Jindal Stainless Ltd. (739.35, -6.8%), Indus Towers Ltd. (438.95, -4.3%) and Dixon Technologies (India) Ltd. (12,614.45, -4.2%).

Volume Rockets

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

Top high volume gainers on BSE included Gujarat Gas Ltd. (680, 12.0%), Aegis Logistics Ltd. (803.60, 6.8%) and Adani Power Ltd. (670.20, 6.0%).

Top high volume losers on BSE were Archean Chemical Industries Ltd. (707.80, -4.7%) and UNO Minda Ltd. (1,168.30, -0.5%).

Godrej Agrovet Ltd. (813.80, 3.8%) was trading at 9.5 times of weekly average. UTI Asset Management Company Ltd. (1,192.20, 4.0%) and Adani Green Energy Ltd. (1,945.70, 5.9%) were trading with volumes 6.1 and 5.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

51 stocks hit their 52 week highs,

Stocks touching their year highs included - Apollo Hospitals Enterprise Ltd. (6,892.50, -0.5%), Aurobindo Pharma Ltd. (1,553.95, -1.0%) and Bajaj Auto Ltd. (11,126.10, 2.2%).

17 stocks climbed above their 200 day SMA including Gujarat State Fertilizer & Chemicals Ltd. (239.16, 4.0%) and SBI Cards and Payment Services Ltd. (744.35, 2.9%). 10 stocks slipped below their 200 SMA including Alok Industries Ltd. (26.63, -2.5%) and Aptus Value Housing Finance India Ltd. (321.50, -2.0%).

30 Aug 2024

Five Interesting Stocks Today - August 30, 2024

1. Honasa Consumer:

This personal products company has risen by 7% over the past week. This comes after the NCLT (National Company Law Tribunal) approved its amalgamation with two of its subsidiary companies, Just4Kids and Fusion Cosmeceutics. This amalgamation is expected to help prevent cost duplication and enhance financial efficiencies, making the combined operations more cost-effective.

Just4Kids Services is a platform that gives access to information about playschools and schools, sports classes, and similar events for kids across Delhi, Gurgaon, Noida, Faridabad, and Ghaziabad. Meanwhile, Fusion Cosmeceutics is engaged in the formulation and trading of skin care products.

Over the past three months, Mamaearth’s parent company has risen by over 18.1%. During Q1FY25, the firm’s net profit grew by 40.3% YoY to Rs 40.3 crore, beating Trendlyne’s Forecaster estimates by 11.3%. Revenue was up 19.3% YoY at Rs 554.1 crore, led by faster growth in emerging brands, market share gains (in face wash and shampoo), and aggressive distribution expansion (30% YoY).

Honasa Consumer is currently focusing on expanding its offline distribution, under a project called ‘Neev’. During Q1, the company’s offline distribution increased by 30% YoY, reaching 2 lakh retail outlets. Commenting on this, Ghazal Alaghh, the Co-founder said, “Our target is to double the offline distribution to 4 lakh retail outlets by FY27”.

Goldman Sachs recently initiated coverage on the stock with a ‘Buy’ rating and a target price of Rs 570. The brokerage highlights that the transformation of India's beauty industry presents a multi-year growth opportunity. Goldman Sachs also notes the significant growth opportunity as Honasa plans to double its offline distribution, driving growth in urban and rural markets.

2. One97 Communications (PayTM):

This digital payment player saw its parent company, One97 Communications’ share price rise 12.2% on Friday as it got approval from the Ministry of Finance for foreign direct investment (FDI) into its payment arm. With this approval, the company can re-apply for its payment aggregator license, which was rejected about two years ago due to compliance issues.

The company aims to refocus on its core business as it sells its ticketing arm to Zomato for Rs 2,048 crore. This move will enable PayTM to strengthen its core payments and financial services distribution business. The decision follows a more than 30% drop in PayTM's share price after the RBI cracked down on its payments bank arm due to irregularities in KYC (know your customer) norms and compliance issues. Currently, more than two years after listing at an issue price of Rs 2,150, the company is trading at a discount of about 70%.

As of July 2024, the company’s UPI market share was 7.8% by volume and 6% by value, according to the data released by the National Payments Corporation of India (NPCI). The RBI's action against Paytm Payments Bank has reignited discussions about capping UPI app market share at 30% to prevent any single platform from becoming too dominant. However, the NPCI postponed this proposal until December 31, 2024. If implemented in the end-of-year review, this proposal could significantly boost PayTM's market share.

Founder and CEO Vijay Shekhar Sharma, said, “The company aims to deliver at least one profitable quarter this financial year.” He emphasises that the company’s focus is returning to payments and cross-selling of financial services as its core business. Sharma also notes that the migration (from Paytm Payments Bank to payment service provider banks - Yes Bank, Axis Bank, HDFC Bank and SBI) of its technology and customers is nearing completion, after which the company can request NPCI’s permission to add new and incremental customers.

Motilal Oswal maintains a ‘Neutral’ rating on PayTM as it expects the sale of its entertainment business to strengthen its balance sheet. This transaction is expected to generate significant profits for PayTM, allowing it to reinvest in other high-potential areas. The firm forecasts that the company's EBITDA will turn positive by FY27.

3. Zee Entertainment Enterprises:

This broadcasting & cable TV company rose 11.6% on August 27 as it resolved disputes related to the scrapped $10 billion merger with Culver Max Entertainment (CMEPL) operating as Sony Pictures Networks India (SPNI). ZEE Entertainment Enterprises (ZEEL) and SPNI, along with Bangla Entertainment, agreed to a non-cash settlement, withdrawing all claims, including the $90 million termination fee for the merger.

The merger failed due to disagreements over valuation, control, and governance. ZEEL and SPNI had differing valuations for their companies, leading to conflicts over merger terms. Disputes also rose over how control would be divided in the merged entity, including decision-making authority and board composition. Questions over Zee’s corporate governance practices further complicated the merger.

This resolution ends the Singapore International Arbitration Centre arbitration and legal proceedings at the National Company Law Tribunal (NCLT). ZEEL’s management stated that the settlement allows both companies to independently pursue future growth in the evolving media and entertainment sector.

In Q1FY25 the company reported a net profit of Rs 118.1 crore compared to a loss of Rs 53.4 crore in Q1FY24, surpassing Trendlyne's Forecaster estimates by 24.3%. The surge in profit was driven by lower finance cost and employee benefit expenses. Revenue grew 7.6% YoY to Rs 2,149.5 crore during the quarter, driven by higher sales from subscription and movie releases. However, the company only released 13 titles, a 60% YoY fall.

ZEEL's total ad revenue decreased by 17.9% QoQ and 3.1% YoY to Rs 910 crore. Post results, MD and CEO Punit Goenka noted Q1FY25 ad revenue was low due to cricket and elections. He expects ad revenue to improve in H2FY25 driven by rural demand recovery, supported by a good monsoon and festive season.

ICICI Securities had retained its 'Buy' rating despite persistent concerns about financial weakness, governance challenges, and unresolved litigation. The brokerage is optimistic due to the improving balance sheet, which is a potential boost to investor confidence.

4. Sonata Software:

This IT solutions provider rose over 5% on Thursday after it won a multi-million-dollar IT outsourcing deal with a US-based healthcare provider. The AI-powered deal is to upgrade the client’s technology through better IT budget management, and the use of automation and cloud services. Commenting on this, MD & CEO Samir Dhir said, “The deal will impact short-term margins for the next two to four quarters due to the upfront AI investment, but won’t dilute long-term profitability. We expect AI services to account for 20% of our revenue over the next three years.”

Sonata Software won two more large deals in Q1FY25. The company was chosen as a partner to modernize outdated systems to the latest Microsoft technology for a client in Australia. The other cloud deal is with a major US financial firm.

In Q1FY25, the company reported a net profit decline of 12.1% YoY to Rs 105.6 crore due to higher raw material costs. Revenue grew 24.6% YoY to Rs 2,527 crore, surpassing Forecaster estimates by 56.1%. The company generated 27% of its revenue from overseas markets, with 7.5% YoY revenue growth in the International business.

Sonata’s share price has risen by 30.9% over the past year. The company has pushed its $1.5 billion revenue target for its international business to FY27, extending the timeline by two to four quarters due to the macro-economic slowdown. Dhir highlights that the company is “focused on modernization”, noting that cloud and data segments now make up 52% of Sonata's pipeline, up from 15% two years ago. The company also experienced growth in its partnership with Microsoft Fabric, which generated a pipeline of 385 crore across 80 clients.

Post results, KR Choksey downgraded its rating to ‘Accumulate’ as the stock surged 23% since the last rating, limiting further upside. However, it raised the target price to Rs 694, highlighting the company's focus on large deals and AI investments. The brokerage expects long-term growth to be driven by progress with Microsoft Fabric and effective client management.

5. Aether Industries:

This specialty chemicals company rose by 1.2% today and announced its results on July 19th. For Q1FY25, the company’s net profit increased by 0.4% YoY to Rs 29.9 crore, while its revenue rose by 17.5% YoY on the back of a 16.2% YoY rise in revenue in the large scale manufacturing vertical. The firm beat Trendlyne’s forecaster estimates for revenue by 14.7%. It appears in a screener for stocks with improving net cash flow for the last 2 years.

The firm has recently entered into an Exclusive Manufacturing Agreement with Chemoxy International, a subsidiary of the SEQENS group from France, which specializes in Health, Personal Care, and Specialty Ingredients. This three-year contract involves Aether supplying raw materials to Chemoxy, with production starting in 10 months and a volume of over 100 MT per year. Last month, Aether also commissioned site 4 for a strategic supply agreement with Baker Hughes (an energy technology firm). This deal includes six products to be manufactured in India for the first time and supplied globally, with a notable portion allocated for the Indian domestic oil and gas sector.

The company holds an estimated market share of 8-10% in the speciality chemicals space in India.Faiz Nagariya, CFO of the firm, guides the capex run rate of around Rs 300-350 crore for both FY25 and FY26.

Rohan Desai, whole time Director of the firm said: “During the quarter under review, we witnessed growth in overall volumes, but the prices have been impacted due to China's dumping. We feel the prices have already bottomed out and we are optimistic for an upswing in the business scenario. “

He added, With respect to Aether's business model, we have seen 66% contribution of the total top line coming from large scale manufacturing, 18% coming from contract/exclusive manufacturing, and 14% coming from contract research and manufacturing services business model during Q1FY25. Our export revenues stood at 42% of the total revenue and domestic sales stood at 58%.”

HDFC Securities has maintained a “Buy” rating on Aether Industries, with a target price of Rs 1,117. The brokerage notes that the company’s strategic capital investments are being fuelled by internal accruals and money raised (Rs 750 crore) through QIP. It expects a revenue CAGR of ~43% and an earnings CAGR of ~58% over FY25-27E.

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

30 Aug 2024

As China slows down, it is spreading the pain | Screener: Stocks with rising FII holdings and revenue forecast

Imports falling. IBM's research team shutting shop. China's most popular consumer companies like Temu seeing revenue misses. Nepal asking China to wipe out a $216 million loan.

In 2004, it felt like China was doing everything right. It was rising fast as a manufacturing powerhouse, and seeing GDP growth rates of 10-12%. In 2024 however, it feels like everything is going wrong. China's growth has slowed down quite dramatically, and it is facing multiple global crises - chip sanctions from the US, new tariffs and taxes from the EU and other trading partners.

China's real estate is struggling while unemployment is up. The country's two-decade long strategy of spending heavily on infrastructure and real estate to boost growth, has hit a wall. This kind of spending has a natural limit: what do you do when you have built all the revenue generating airports and flyovers you need? China's local governments have now started building highways and airports in small towns and villages - such as one in Zhangbei, a rural town of 65,000 people. This infrastructure spending, unlike in the past, is not generating growth.

China's slowdown may feel like an opportunity for other countries like India to step in. In reality though, there is both promise and danger. China has been so closely tied into India's and the world's supply chains, that bad news for China is impacting countries worldwide. Especially in the short term.

In this week's Analyticks:

A weaker China changes calculations: India and other countries are rethinking policies as China struggles

Screener: Stocks where FIIs are increasing their shareholding, with high future estimates for revenue growth

As China's own market weakens, it has turned to exports. Not everyone is happy

Even as China overtook the US to become India's top trading partner in FY24, India has also passed the maximum number of anti-dumping orders against China, across sectors like steel, plastic and chemicals. India's anti-dumping orders have also become highly targeted - on items like include printed circuit boards, industrial machinery, and even niche products like telescopic drawer sliders.

China's worsening domestic market has forced Chinese companies to shift their focus to exports. And thanks to heavy subsidies, Chinese companies are often able to manufacture below cost and export to international markets.

Consider steel. China is easily the world's biggest steel producer, producing more than 1 billion tons a year, over half the world’s output.The decline of China's massive real estate sector however, has resulted in a lot of steel inventory with no buyers.

Domestic demand in China has fallen over 10%, but exports are ballooning as China's producers look desperately for other markets. Chinese steel exports have jumped 20% YoY and are at the highest level since 2016.

This problem of excess is not just in the steel sector. Consider the beleaguered European auto sector, where Volkswagen, Mercedes etc are facing imports of high numbers of low-cost, high quality Chinese electric vehicles. EU has responded with heavy tariffs on Chinese EVs - MG maker SAIC, and BYD face additional duties of 36.3% and 17% on their exports to the EU.

But for European auto manufacturers, that was not enough. So EU has also now imposed a 9% duty on Chinese-made Teslas. Turkey is also planning tariffs on Chinese EVs, while Indonesia is set to impose import duties of up to 200% on textile products, which are mainly from China.

Countries exporting China's domestic market struggle

Over the past decade, many countries started to export heavily to China's massive domestic market, which welcomed them with open arms. Chinese consumers wanted Audis, BMWs, Prada bags. Now Chinese purses, Prada or otherwise, are zipping shut, and trading partners are feeling the pain. China's imports are declining and are at a four month low. Germany's exports to China fell by nearly 10% last year, and its economy shrunk.

American companies like Apple, Nike, and Starbucks are all similarly losing steam in China. India's gems and jewellery industry had dismal results in the most recent quarter - China accounts for a third of India's cut and polished diamond exports, and demand has weakened.

Another factor with falling imports is cultural. Under Xi Jinping, China is increasingly, turning inward. Consider the movies that the Chinese are watching. China is typically a major market for US studios, but this summer, ticket sales fell by 50% year on year. More than 80% of box office revenues this year was instead, from local releases. Hollywood movie Deadpool & Wolverine opened at No. 1 in most countries, but in China it opened at No. 2, behind a Chinese comedy, Successor.

Now, China wants its money back

The diminishing of China is visible in one other area - lending. China was the world's biggest bilateral lender in 2017. Now as its economy has slowed, it trying to get its money back.

Developing countries around the world owe China around $1.5 trillion. Thanks to projects like the $3.7 billion hydropower station that China funded in Angola, the country's debt to China is nearly 4% of the country's GDP.

One of the countries that is on the hook for billions of dollars in Chinese loans, is Pakistan. Pakistan has laid off an estimated seven million textile workers as it struggles with debt. The government says it cannot afford to keep the textile factories running as it tries to deal with soaring interest payments.

Many of these economies who borrowed from China are now in financial distress: Chinese government loans have a 2% interest rate compared with the 1.54% norm from the World Bank. On top of this, Chinese lenders also have a penalty interest rate of 8.7% for late payments. The World Bank says that the total value of interest payments of the 75 poorest countries in the world has jumped 4X, and will exceed their combined annual spending on health, education and infrastructure.

From 2008-2021, China accounted for over 40% of global GDP growth. The way China now handles its trade and lending relationships as it slows down, is going to be key, so that it doesn't drag the world economy down with it.

Screener: Stocks where FIIs are increasing their shareholding with high Trendlyne Forecaster estimates for YoY revenue growth

FIIs increase stake in the banking and software sectors

As Q1FY25 results season has ended, we take a look at the stocks that were the top picks for foreign institutional investors (FIIs), which also have strong YoY growth estimates for revenue in Q2FY25. This screener shows companies increasing FII holding QoQ in Q1FY25 and high Trendlyne Forecaster estimates for revenue YoY growth in Q2FY25.

The screener is dominated by stocks from the banking & finance, software & services, pharmaceuticals & biotechnology, consumer durables, and automobiles & auto components sectors. Major stocks that appear in the screener are Indus Towers, Coforge, KFIN Technologies, Yes Bank, MphasiS, RBL Bank, Gland Pharma, and Craftsman Automation.

Coforge shows up in the screener with its FII holding increasing by 6.4 percentage points QoQ in Q1FY25. Major funds which bought stake in the company are New World Fund (bought a 1.5% stake), and Smallcap World Fund (bought a 0.4% stake). The company also has a Forecaster estimated revenue growth of 24.9% YoY for Q2FY25. Dolat Capital believes that the IT company is well positioned for revenue growth owing to its multiple contract wins in the breadth-first search algorithm (BFS) and insurance segments, and increased contribution from its acquisitions of Cigniti and OptML.

KFIN Technologies’ FII holding grew by 6.1 percentage points QoQ in the past quarter. The most notable buyers of the company’s stock were Employees Provident Fund Board (bought 1.5% stake), The India Fund (bought 1.2% stake), and Aberdeen New India Investment Trust (bought 1.1% stake). Trendlyne’s Forecaster expects the company’s revenue to grow by 27% YoY in Q2FY25. ICICI Securities expects the company’s revenue to grow on the back of improving equity mix in mutual funds assets under management (AUM), market share expansion, a strong new listing pipeline in the issuer solutions business, and client wins in its international business. The issuer solutions business provides banking solutions to corporates like banks, mutual funds, and PSUs.

You can find some popular screeners here.

30 Aug 2024

Five stocks to buy from analysts this week - August 29, 2024

By Ruchir Sankhla

1. Karur Vysya Bank:

Asit C Mehta initiates a ‘Buy’ rating on this bank with a target price of Rs 265 implying a 18.6% upside. The bank reported net profit growth of 18.9% YoY to Rs 458.7 crore in Q1FY25 while its operating revenue grew 21.3% YoY to Rs 2,284.5 crore. Analyst Akshay Tiwari and Shweta Upadhyay highlight that the gross non-performing assets (GNPA) and net non-performing assets (NNPA) declined from 8.7% and 3.9% in FY20 to 1.3% and 0.4% respectively in Q1FY25.

The analysts expect the bank to see growth in its retail and MSME loan portfolios, while corporate lending growth may remain subdued. The bank's initiatives to attract retail customers should lead to an increase in retail deposits, thereby improving its CASA ratio and driving higher net interest margins. Asset quality continues to improve, supported by healthy recoveries and lower loan defaults.

Tiwari and Upadhyay project the bank's loan book will grow at a CAGR of 16.3% over FY 25-27 (CAGR of 19.7% excluding corporate loans). Margins are expected to improve to 4.4% by FY27. Additionally, they anticipate the bank's net interest income (NII) and PAT to increase at CAGRs of 18% and 25%, respectively, over the same period.

2. Royal Orchid Hotels:

Edelweiss maintains its ‘Buy’ rating on this hotels company with a target price of Rs 477. This indicates a potential upside of 29.4%. Royal Orchid’s revenue grew 6% YoY to Rs 73 crore in Q1FY25, driven by strong room additions (up 13.7% YoY). However, the EBITDA margin declined by 347 bps YoY to 22.8%. Analysts Amit Agarwal and Rishith Shah predict, “Margins will face pressure in FY25, declining to 23.8% due to higher fixed costs to aid its property expansion.”

The analysts are still bullish, due to the company’s expansion plans. The company plans to add 1,900 rooms across 26 hotels in FY25, expanding its total inventory to nearly 7,826 rooms. It aims to drive growth through new management contracts and revenue-sharing agreements. The company also recently opened a new five-star hotel in Mumbai with 300 rooms, expecting an average room rate (ARR) of Rs 9,000–11,000 and approximately Rs 120 crore in revenue at an 80% occupancy rate.

Agarwal and Shah expect a 16.3% revenue CAGR over FY25-26, driven by a 5% ARR growth from improved occupancy, over 1,200 new rooms, increased food & beverages income, and higher in-resort spending.

3. Kalpataru Projects International:

Emkay reiterates its ‘Buy’ rating on Kalpataru Projects International (KPIL), setting a target price of Rs 1,550, indicating a potential upside of 15.9%. This construction and engineering company reported a 19.1% YoY decline in net profit to Rs 93 crore in Q1FY25, while revenue grew by 8.2% YoY to Rs 4,609 crore.

Analysts Ashwani Sharma and Chinmay Kabra noted that KPIL’s order inflow for the year stands at Rs 7,000 crore, down 5% YoY due to a higher base, despite strong growth in the power transmission & distribution (T&D) and water segments. The company has a robust order backlog of Rs 57,100 crore, with FY25 order inflow guidance set at Rs 23,000 crore.

A key positive for KPIL is its recent arbitration win against the National Highways Authority of India (NHAI) for two road projects. The company is also progressing with the divestment of Vindhyachal Expressway and Indore Real Estate, and expects to generate Rs 550 crore in cash flow from these two assets by FY25.

Sharma and Kabra project a 20% CAGR in revenue, 27% in EBITDA, and 38% in PAT over FY 25-27. The company’s strong order book and favorable industry conditions support a one-year forward PE ratio of 20 times.

4. Mankind Pharma:

Motilal Oswal maintains a ‘Buy’ rating on this pharmaceutical company with a target price of Rs 2,760, indicating a 13.7% upside. Analyst Tushar Manudhane notes that Mankind is focused on launching innovative products in the high-barrier chronic and consumer segments. The recent launch of Nimulid, a consumer wellness product, generated Rs 13.3 crore in revenue for FY24. Additionally, the company is expanding its presence in Tier I and metro cities through hospital partnerships.

Mankind’s acquisition of Bharat Serums and Vaccines (BSV) has enhanced its R&D, manufacturing, and institutional capabilities while gaining access to a specialty portfolio and a new distribution channel. BSV’s strong presence in women’s healthcare includes unique drugs with no direct competitors.

Manudhane is upbeat about Mankind’s expansion into new sectors such as pet food, agritech, and ayurveda (following the acquisition of Upakarma). He anticipates a 14% CAGR in earnings and a 180 bps margin expansion over FY25-26, driven by increased footprint in metro and Tier-I cities and expanding the number of brands in the Rs 50-100 crore range.

5. EFC:

Khambatta Securities gives a ‘Buy’ rating to small cap company EFC, setting a target price of Rs 863, which suggests a potential upside of 72.3%.This realty firm reported a net profit increase of 190.5% YoY to Rs 15.1 crore in Q1FY25 and its revenue grew 84.6% YoY to Rs 105.3 crore during the quarter. The company is in a PE buy zone.

The analyst notes that flexible office spaces have transformed India's commercial real estate sector, doubling from 29.3 million sq ft (MSF) in 2019 to 61 MSF in 2023, making it the fastest-growing market.The sector is projected to reach 126 MSF by 2028, absorbing over 40 MSF annually as companies return to office. EFC has established a strong market presence, delivering projects for major clients including Conneqt and Tech Mahindra, and securing its largest contract with Coforge to develop 100,000 square feet of commercial space.

The analyst expects revenue to grow at an annualized average rate of 77% over the next few years while forecasting a PAT CAGR of 105%, driven by profitability gains and adds that at a FY26 forward PE of 11.2 times, the EFC stock looks attractive.

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

(You can find all analyst picks here)

30 Aug 2024

Market closes higher, Technocraft's board approves buyback worth Rs 130 crore