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The Baseline
19 Jul 2024
Five Interesting Stocks Today - July 19, 2024

1. Avenue Supermarts (DMart):

This department store company has been rising in the past week after its quarterly results for Q1FY25. The company saw revenue growth of 19% YoY to Rs 14,111 crore, surpassing Trendlyne’s Forecaster estimates by 1.5%. However, its net profit fell short of estimates by 3.8%, despite increasing by 17.5% YoY to Rs 773.8 crore.

The net profit jump was driven by higher revenue from the discretionary segment. DMart’s general merchandise and apparel segment saw an uptick, driven by a growing number of DMart Ready outlets. But high EBITDA margins were offset by higher operating costs, due to investments in service sales and future capacity building. DMart added six new stores in Q1, bringing its total to 371.

The company, like many others, has been facing heat from  quick commerce players like Zepto and Blinkit. Trent’s Zudio  has also emerged as a competitor in the value apparel segment. Neville Noronha, CEO of Avenue Supermarts, said, “We aim to open new stores as quickly as possible, but our main focus remains on how well the newly opened stores are being managed.”

The company currently trades in the PE Neutral Zone. However, even at this neutral level, its PE stands at 123, which is higher than the industry average. The company appears in a screener of stocks with annual profit growth higher than sector growth.

Prabhudas Lilladher downgraded DMart’s rating to ‘Accumulate’ as the company missed net profit and margin estimates. However, the brokerage is upbeat about the company’s sustained focus on tier-2 and tier-3 cities, and further acceleration in store openings in the coming years. They expect addition of 45-50 stores in FY25  to drive a 21% sales growth and anticipate a net profit CAGR of 25% over FY25-26.

2. Asian Paints:

This paint maker fell 1.4% on Thursday after announcing Q1 results. Asian Paints’ net profit surprised investors by declining sharply, down 24.5% YoY to Rs 1,170 crore, and missing Forecaster estimates by 15.6%. Revenue was down 2.3% YoY during the quarter. The weak profit performance was due to previously taken price cuts, higher raw material prices and employee benefit expenses, as well as restricted supply chains due to heatwaves. 

During the quarter, domestic business, contributing around 97% to the revenue, grew by 5.9% YoY. Domestic business includes decorative and industrial segments. The decorative segment was impacted due to raw material price inflation and supply chain challenges. 

Raw material prices were up 1.8% YoY in Q1FY25 and are expected to rise further, around 1.5% in Q2. Asian Paints announced a 0.7-1% price hike on July 10 to offset these costs, and more hikes are likely in the upcoming quarter. The industrial segment, however, outpaced decoratives, led by growth in auto OEM and powder coatings. Meanwhile, international business (constituting over 3% of the revenue) fell by 3.6% YoY due to underperformance in key markets including Nepal, Bangladesh, and Egypt. 

The paint industry faces both cost and competitive pressures and potential market share shifts, especially with the entry of Aditya Birla Group’s Birla Opus. The next few quarters are crucial to assess the impact of Birla Opus on the industry as a whole, and on Asian Paints.

The management highlighted that April and May were challenging months, while June saw some demand recovery, particularly in rural areas. Speaking on the outlook, Amit Syngle, the MD and CEO, said “We are seeing some green shoots in rural areas, and the progression of the monsoon is expected to support this uptick”. He adds that growth in T3 and T4 cities outpaced T1 and T2 cities. Syngle also highlights that the upcoming festive season will drive growth for the company.

Motilal Oswal has a ‘Neutral’ rating with a target price of Rs 3,150. The brokerage expects muted revenue growth due to price cuts and competitive pressure, despite initiatives to improve volumes. The company is in the PE Buy Zone, indicating it is currently trading below its historical PE.

3. Jubilant Ingrevia

This specialty chemicals company fell by 6.6% over the past week and announced its results on Tuesday. For Q1FY25, the company’s net profit declined by double digits, down 15.4% YoY to Rs 48.7 crore, while its revenue fell by 4.6% YoY due to a decline in its chemical intermediaries segment revenue. The firm missed Trendlyne’s forecaster estimates for revenue by 2.2% and for net profit by 0.7%. 

FY24 was a difficult year for the company as well. The firm saw a fall in net profit of 40.5% YoY to Rs 182.9 crore, while the revenue declined by 13.2% YoY due to weaker speciality chemicals and chemical intermediaries segment revenue. While the firm beat the forecaster estimate for revenue in FY24 by 0.9%, hit missed the net profit estimate by 4.4%. The stock shows up in a screener for stocks sold by superstar investors.

Among the better performers this quarter was the company’s specialty chemicals segment, which constitutes 42% in the revenue mix and grew by 8.3% YoY.  EBIT margin improved to 14.5% from 9.5% in Q4FY24 for this segment. However the chemical intermediaries (acetyl) segment which constitutes 40% of the revenue mix struggled, due to lower demand coming from the paracetamol end-use segment and lower acetic acid prices.

Deepak Jain, CEO and Managing Director of the firm highlighted that in the CDMO (contract development and manufacturing organizations) space, the company is in “advanced stage discussions” for multiple projects in pharma, agro and semiconductor end-use. He expects CDMO to grow at 25-30% in FY25. He adds that the specialty segment is expected to have an EBITDA of 20%+ in steady state, and with new launches going forward, EBITDA may reach 23-25% in the next 2-3 years.

Prabhudas Lilladher has maintained its “Hold” rating on Jubilant Ingrevia, with a target price of Rs 592. The brokerage notes that the company has been adding capacities across segments, but challenges are expected to persist due to international pricing pressures and agrochem weakness, which the brokerage expects will only resolve in the later stages of H2FY25.

4. Just Dial:

This internet software company hit a new 52-week high of Rs 1,304 on Friday after surging 26.5% in the past week, following the release of its Q1FY25 results. The company’s net profit grew 69.3% YoY to Rs 141.2 crore, surpassing Trendlyne’s Forecaster estimates by 16.5%.This was helped by lower employee benefit expenses and finance costs, and a deferred tax credit of Rs 3.9 crore. EBITDA margins were up by 13.8 percentage points YoY to 28.7%.

The company has outperformed the internet software industry by 4% over the previous quarter. Just Dial expanded its active business network to 4.5 crore firms during the quarter, and attracted 18.1 crore unique quarterly visitors, with 85.2% accessing the platform via mobile sites and apps.

Commenting on the company’s target, MD & CEO VSS Mani said, “We are targeting 15-17% revenue growth for FY25 and an EBITDA margin over 25%".  He also highlighted the firm’s plans to launch its B2B offerings via the JD Mart app and expand its presence in Tier 2 and Tier 3 cities.

ICICI Direct maintains a "Buy" rating on the stock with a target price of Rs 1,210. The brokerage believes that the company’s focus on Tier 2/3 cities, coupled with price hikes and other initiatives, will drive future growth. It expects revenue and PAT to grow at 15% and 18.9% CAGR respectively over FY25-26.

5. Glenmark Pharmaceuticals:

This pharma company has risen by 13.7% in the past month and hit its all-time high of Rs 1,427 on Tuesday. In the past week, the company announced its exit from its arm Glenmark Life Sciences through an offer for sale. Glenmark Pharmaceuticals and Managing Director Glenn Mario Saldanha will divest their 7.9% stake (approx 96.1 lakh shares) for Rs 779 crore. In March, the firm also sold a 75% stake in Glenmark Life Sciences to Nirma for Rs 5,651 crore. This step was taken to improve its weak balance sheet and high debt position. After the divestment, the company has turned net cash positive.

In the past week, the company also received US FDA approval for topiramate capsules, a bioequivalent to Topamax, used in people with epilepsy to treat and prevent seizures. It has annual sales of $21.9 million.

Trendlyne Forecaster estimates the company’s net profit to grow approx 12X in the upcoming Q1FY25 results. In FY24, the company reported a loss of Rs 1,501.7 crore compared to a profit of Rs 297.2 crore in FY23.

Going forward, the management expects its global brands like Ryaltris and Salmex to drive growth and become worth $300-400 million over the next five years. It expects Ryaltris’ annual sales to double by FY25 from $40 million currently. Speaking about targets, the management stated, “For FY25, our revenue target is Rs 13,500-14,000 crore (up from Rs 12,653.1 crore in FY24) and EBITDA margin target is close to 19%.” The company plans to spend Rs 700 crore in capex, and around 7% of revenue on R&D.

KRChoksey maintains a ‘Buy’ call on the stock and expects revenue to grow at a CAGR of  10% and profit at a CAGR of 41.4% over FY25-26. It believes that the company’s domestic segment has a strong growth trajectory, as it has been able to outperform in key therapy areas such as respiratory, derma and cardiac, and it expects its market share to increase. The company appears in a screener for stocks with increasing shareholding by foreign investors and/or institutions.

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

 
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The Baseline
19 Jul 2024
Rising credit is causing investors worry around bank stocks | Screener: Banking stocks with higher prices, healthier NPAs
By Swapnil Karkare

The Godrej steel almirah, first launched in 1923, came with a sturdy inside locker for storing valuables: jewellery, cash bundles, land deeds, letters from faraway family members. The almirah was just one signifier of a country of savers. Indian households have long been reluctant to take on debt.

That however, is changing fast. India's household debt has grown steadily, hitting new highs of over 39% of India's GDP in FY24. The biggest growth has been in non-housing loans.

With household debt rising and and corporate borrowings also up, banks have seen a big shift over the past two years, with their credit growth surpassing deposit growth. While the credit surge in a typically credit-starved country should be celebrated, the falling savings rates and rising household debt are red flags.  

Banks make money from the difference between the interest they earn on loans, and the interest they pay to depositors. So a rising credit deposit gap should be good news for their profts, right? The reality is more complicated. Let's take a closer look.

In this week's Analyticks:

  • The credit boom for banks: Is rising credit growth turning into a pain point?
  • Screener: Bank stocks with falling non performing assets

Are banks getting stressed with high credit growth?

From April 2022 onwards, banks have seen credit growing at an average rate of 16% YoY, surpassing deposit growth of 11% YoY. The figures exclude the merger of HDFC Ltd. with HDFC Bank.

Credit growth has even outpaced India's nominal GDP growth rate for 7 consecutive quarters. In the June monetary policy statement, RBI governor Shaktikanta Das said that bank management should try to address this persisting gap.

RBI’s Financial Stability Report (FSR) cautioned that credit growth beyond current levels may not be sustainable. As of 28th June 2024, credit growth slowed to 14% while deposit growth was at 11%. RBI's previous analysis showed that these high-credit cycles usually last for 41 months on average.

Banks’ provisional data and estimates from brokers also suggest that the unwinding of credit growth may have begun from Q1 FY25. But the credit-deposit gap still persists, and public sector banks in particular have been struggling with deposit growth.

Walking the tightrope

The credit-to-deposit (CD ratio) tells us how much money banks have lent out, compared to their deposits. A very low ratio means banks are not lending enough, while too high a ratio could mean that banks have few liquid assets (deposits) left.

The problem with a too-high ratio is also that if depositors suddenly withdraw their funds in large amounts, banks may face liquidity challenges, making it difficult to meet short-term obligations. It's a tightrope that banks need to walk.

The tolerable or 'normal' range for the CD ratio is around 80%. RBI does not prescribe any ideal level. The ratio has been in general, lower for public sector banks indicating better asset-liability management systems, compared to their private counterparts.

The incremental CD ratio - the ratio of additional credit and deposits over a particular period - crossed 100% in FY24, raising eyebrows. While public sector banks have been able to bring it down, private sector banks have pushed it even higher. This indicates aggressive lending techniques in the private sector, and the merger’s impact on HDFC Bank. 

Some banks in the public sector have started raising the term deposit rates they offer to attract depositers. But private banks, on average, have reduced these rates as per the latest available data.

Margins are likely to see a hit if banks are pushing deposit rates higher without changing their lending rates. Brokers estimate that bank net interest margins will take a hit of 10-15 bps in Q1FY25. Although public sector banks fare better in most parameters, NIM compression as they raise deposit rates will hit their profitability.

Right now, public sector banks are at the top 

It is banks with lower CD ratios, higher liquidity coverage (LCR), good fundamentals (higher Durability score) and appropriate valuations (higher Valuation score) will be able to sail through volatile times ahead. 

Our analysis finds public-sector banks such as Bank of Maharashtra and Karur Vysya Bank are in better shape than the private sector. State Bank of India and ICICI Bank, also have a good trajectory.

  1. Bank of Maharashtra:

The bank’s credit growth has been remarkable at 3% QoQ during the quarter ending June 2024. With an ROE of more than 20%, a healthy CD ratio and liquidity (LCR), and favourable Trendlyne scores, BoM emerges as a strong performer compared to its peers. 

  1. Karur Vysya Bank:

A bank that has maintained an LCR of more than 200% for a long time is worth adding to the watchlist. A recent ICICI Securities report highlighted that it has the lowest cost of deposit and net NPAs, compared to its peers. Provisional data for the quarter ended June 2024 showed a 4% QoQ increase in loans and deposits, one of the highest amongst peers. 

Risks are rising, favouring the most cautious bank players

A strong economic outlook, a possible interest rate cut and a good monsoon all point to a booming bank sector. However, we cannot ignore a key risk: rising credit.

Considering over-leveraged households, weak consumption growth and weak rural incomes, the RBI has been taking actions to safeguard the banking system. But risks like seasonal slippages in the agricultural and microfinance sectors, lower recoveries, and NIM compression will haunt banks for at least a couple of quarters.

In such times, investors need to be cautious. Any one or a combination of these factors can shake up the sector. 

Screener: Banking stocks rising over the past quarter with falling NPAs in Q4FY24

PSU and small finance banks see a decline in gross NPAs

With the start of the Q1FY25 results season, we take a look at banks and financial institutions that saw a fall in their non-performing assets (NPAs) YoY in Q4FY24. This screener shows banking and finance companies that rose over the past quarter with a YoY decrease in gross and net non-performing assets (NPAs) in Q4FY24.

The screener primarily consists of PSU and small finance banks. Major stocks that appear in the screener are Jana Small Finance Bank, Federal Bank, Indian Bank, Bank of Maharashtra, Bandhan Bank, Yes Bank, Punjab & Sind Bank and Central Bank of India.

Jana Small Finance Bank has surged 58.1% in the past quarter. Its gross NPAs contracted by 180 bps YoY to 2.1% in Q4FY24, while its net NPAs fell by 208 bps YoY to 0.6% during the quarter. This helped the bank’s provisions to decline by 12.1% YoY to Rs 175.4 crore. The decline in NPAs was helped by a low gross NPA of 0.3% in the affordable housing segment which contributes to 18% of the bank’s total advances. Systematix expects the company’s deposits to grow on the back of its strategy to relocate branches to areas with potential for higher deposits. 

Indian Bank has risen 14.6% over the past quarter on the back of strong Q4FY24 results. Its gross NPAs declined by 200 bps YoY to 4% in Q1FY24, net NPAs also contracted by 47 bs YoY to 0.4% due to a moderation in slippages and a reduction in booking loans. This decline in gross and net NPAs helped the bank’s provisions to reduce by 51.3% to Rs 1,247.8 crore during the quarter. According to ICICI Direct, the company’s focus on improving asset quality, stable margins, healthy fee income, and low operational expenses will help sustain its performance.

You can find more screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
19 Jul 2024
Market closes lower, Infosys' net profit falls by 20.1% QoQ to Rs 6,368 crore while revenue declines by 1.2% QoQ
By Trendlyne Analysis

Market sinks in today's trading. Nifty 50 closed at 24,530.90 (-270.0, -1.1%) , BSE Sensex closed at 80,604.65 (-738.8, -0.9%) while the broader Nifty 500 closed at 22,853.60 (-356.5, -1.5%). Market breadth is sharply down. Of the 2,151 stocks traded today, 328 showed gains, and 1,807 showed losses.

Indian indices closed lower after paring gains throughout the day. The volatility index, Nifty VIX, rose 2.1% and closed at 14.8 points. JSW Infrastructure's Q1FY25 net profit dropped by 9.2% YoY to Rs 292.4 crore, while, revenue rose 15% YoY to Rs 1,009.8 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed lower. Nifty Metal and Nifty Commodities closed more than 3% lower.  According to Trendlyne’s Sector dashboard, Consumer Durables emerged as the worst-performing sector of the day, with a fall of 3.6%.

European indices traded lower, while major Asian indices closed lower. US index futures traded mixed, indicating a cautious start to the trading session. Netflix reported Q2 earnings of $4.9 per share on revenue of $9.56 billion, topping estimates by 4.3% and 0.3%, respectively.

  • Relative strength index (RSI) indicates that stocks like Tata Teleservices (Maharashtra), Oil And Natural Gas Corp, Glenmark Pharmaceuticals, and Infosys are in the overbought zone.

  • GPT Infraprojects secures a Rs 103 crore enhancement to its existing contracts with the National Highways Authority of India (NHAI) and Eastern Railway Kolkata.

  • Axis Direct retains its 'Hold' rating on Bajaj Auto with an upgraded target price of Rs 9,790 per share. This indicates a potential upside of 3.8%. The brokerage believes the company's expansion of the premium electric two-wheeler and three-wheeler portfolio, leveraging new product launches and the gradual export pick-up, will help increase profitability. It expects net profit to grow at a CAGR of 6.9% over FY25-26.

  • Brent futures rises to $85.1 a barrel, while U.S. West Texas Intermediate (WTI) crude increases to $82.9, following gains from the previous session. Pranav Mer, VP - Research at JM Financial notes crude oil prices have rebounded from recent lows. This recovery was driven by a larger-than-expected decline in U.S. weekly oil stocks, signaling increased demand and bolstered by a weaker U.S. dollar.

  • Rail Vikas Nigam surges as it signs a memorandum of understanding (MoU) with United Construction, Israel. The partnership aims to collaborate on projects in railways, MRTS, tunnels, highways, bridges, building works, airports, ports, irrigation, power transmission and distribution, and solar & wind sectors.

  • JSW Infrastructure falls as its Q1FY25 net profit drops by 9.2% YoY to Rs 292.4 crore due to a 40% surge in total expenses. However, revenue rises 15% YoY to Rs 1,009.8 crore during the quarter. The company features in a screener of stocks with zero promoter pledge.

  • Sanstar's Rs 510.2 crore IPO gets bids for 2.5X the available 3.8 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 2.8X the available 1.9 crore shares on offer.

  • Ahead of the 2024 Union Budget, JP Morgan remains ‘Overweight’ on the industrials, financials, healthcare, auto, and real estate sectors. The brokerage believes the budget will likely focus on infrastructure and public investment. It adds that this budget could be a stepping stone towards ‘Viksit Bharat’ by 2047.

  • Power Mech Projects secures a Rs 209.5 crore contract from Hindustan Zinc for the operation and maintenance of three captive power plants (CPP), with a capacity of 91.5 MW each, in Chittorgarh, for four years.

  • Ircon International appoints Chairman and Managing Director (CMD) Shri Hari Mohan Gupta as the Chief Executive Officer (CEO), effective 1 July 2024.

  • Zydus Lifesciences falls after the US FDA classifies its Jarod injectables facility as official action indicated (OAI) following an inspection in April that resulted in ten observations.

  • Arnab Banerjee, MD & CEO of Ceat, expects double-digit revenue growth and improved margins in H2FY25. He highlights that natural rubber has touched a 13-year high within a short period and anticipates an impact if the trend continues. He reports that the company's EBITDA margins have declined to 12% in Q1FY25 from 13.2% in Q1FY24.

  • One97 Communications is falling as its net loss expands by 135% YoY to Rs 838.9 crore in Q1FY25 due to higher software, cloud, and data centre expenses. Revenue plunges by 33.5% YoY to Rs 1,639.1 crore during the quarter. It appears in a screener of stocks with declining net cash flow.

  • Tata Communications' Q1FY25 net profit falls 12.8% YoY to Rs 332.8 crore due to high network and transmission expenses. However, revenue rises 14.1% YoY to Rs 5,633.4 crore during the quarter. The company features in a screener of stocks where mutual funds increased shareholding over the past two months.

  • Caplin Point Laboratories gets US FDA approval for its ephedrine sulfate injection used to treat clinically important hypotension occurring in the setting of anesthesia. Ephedrine sulfate injection has annual sales of approx $36 million in the US.

  • Ahead of its Q1FY25 results announcement on July 23, 2024, Hindustan Unilever (HUL) is anticipated to benefit from increased rural demand and heightened summer conditions, which likely boosted demand in seasonal product categories. Analysts also expect HUL to capitalise on a projected 'normal' monsoon and reduced impact from past price adjustments, foreseeing a positive trajectory in revenue momentum.

  • Tata Technologies is falling as its Q1FY25 net profit misses Forecaster estimates by 10.9% despite growing by 3% QoQ to Rs 162 crore. However, revenue declines by 2.5% QoQ to Rs 1,292 crore due to a reduction in the services and technology solutions segments. It features in a screener of stocks with medium to low Trendlyne momentum score.

  • Persistent Systems falls sharply as its net profit declines by 2.8% QoQ to Rs 306.4 crore in Q1FY25 due to high employee benefits and finance costs. However, revenue grows by 5.6% QoQ to Rs 2,767.8 crore, helped by improvements in the banking, financial services & insurance (BFSI) and healthcare & life sciences segments. It shows up in a screener of stocks with PE higher than industry PE.

  • Infosys rises to its 52-week high of Rs 1,844 per share as its Q1FY25 net profit beats Forecaster estimates by 1.3% despite falling by 20.1% QoQ to Rs 6,368 crore. Revenue declines by 1.2% QoQ to Rs 40,153 crore due to a reduction in the retail and hi-tech segments. It features in a screener of stocks which gained more than 20% in the past month.

  • Jefferies maintains its ‘Hold’ rating on Havells India with a higher target price of Rs 1,880. The brokerage highlights that Q1 earnings were in line with estimates, with the Llyod segment outpacing the core segments. It cuts its EPS estimates by 1-2% for FY25-27 due to higher capex in FY26-27.

  • Dolly Khanna sells a 0.7% stake in Deepak Spinners in Q1FY25. She now holds a 1% stake in the company.

  • Radhakishan Damani adds Bhagiradha Chemicals & Industries to his portfolio in Q1FY25. He buys a 3.5% stake in the company.

  • Ashish Kacholia cuts his stake in Barbeque-Nation Hospitality to below 1% in Q1FY25. He held a 1.4% stake in the company in Q4FY24.

  • Dalmia Bharat's Q1FY25 net profit rises 8.5% YoY to Rs 141 crore despite a marginal fall in revenue to Rs 3,671 crore. Profit grows due to lower power & fuel and depreciation & amortization expenses. The company appears in a screener for stocks with low debt.

  • Nifty 50 was trading at 24,742.05 (-58.8, -0.2%), BSE Sensex was trading at 81,367.13 (23.7, 0.0%) while the broader Nifty 500 was trading at 23,108.40 (-101.7, -0.4%).

  • Market breadth is sharply down. Of the 1,903 stocks traded today, 452 were on the uptrend, and 1,424 went down.

Riding High:

Largecap and midcap gainers today include Rail Vikas Nigam Ltd. (613.75, 4.7%), One97 Communications Ltd. (458.75, 3.0%) and Infosys Ltd. (1,792.95, 2.0%).

Downers:

Largecap and midcap losers today include Persistent Systems Ltd. (4,583.45, -6.4%), Jindal Stainless Ltd. (745.30, -6.3%) and Cummins India Ltd. (3,559.45, -6.3%).

Volume Rockets

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

Top high volume gainers on BSE included Tata Teleservices (Maharashtra) Ltd. (102.14, 5.0%), Jubilant Pharmova Ltd. (749.55, 3.1%) and One97 Communications Ltd. (458.75, 3.0%).

Top high volume losers on BSE were Dalmia Bharat Ltd. (1,818.70, -5.1%), Tata Communications Ltd. (1,788.40, -4.4%) and ZF Commercial Vehicle Control Systems India Ltd. (15,171.50, -3.9%).

AIA Engineering Ltd. (4,271, 1.1%) was trading at 17.8 times of weekly average. Sheela Foam Ltd. (1,002.50, -1.6%) and Krishna Institute of Medical Sciences Ltd. (2,120.30, -0.7%) were trading with volumes 6.9 and 5.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

18 stocks made 52 week highs,

Stocks touching their year highs included - AIA Engineering Ltd. (4,271, 1.1%), Indus Towers Ltd. (409.50, -2.3%) and Britannia Industries Ltd. (5,875, 0.1%).

2 stocks climbed above their 200 day SMA including Tata Teleservices (Maharashtra) Ltd. (102.14, 5.0%) and Bajaj Finserv Ltd. (1,640.25, -0.7%). 23 stocks slipped below their 200 SMA including Prism Johnson Ltd. (156.10, -5.6%) and Sonata Software Ltd. (662, -4.7%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
18 Jul 2024
Market closes higher, Tata Power's subsidiary signs an MoU with NHPC RE for the complete solarization of government buildings
By Trendlyne Analysis

Upbeat trading today. Nifty 50 closed at 24,800.85 (187.9, 0.8%) , BSE Sensex closed at 81,343.46 (626.9, 0.8%) while the broader Nifty 500 closed at 23,210.05 (5.8, 0.0%). Market breadth is overwhelmingly negative. Of the 2,160 stocks traded today, 622 were gainers and 1,521 were losers.

Indian indices extended their gains in the afternoon session and closed at their all-time highs. The volatility index, Nifty VIX, rose 2% and closed at 14.5 points. IDBI Bank closed higher after the RBI issued a 'fit and proper' report, advancing its privatisation process.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red. Nifty FMCG and Nifty Auto closed higher. According to Trendlyne’s Sector dashboard, Software & Services emerged as the top-performing sector of the day, with a rise of 2%.

Asian indices closed mixed. European indices traded higher, except Switzerland's SMI and Russia’s RTSI & MOEX, which traded in the red. US index futures traded mixed, indicating a cautious start to the trading session. Warner Bros Discovery reportedly plans to split its digital streaming and studio businesses from its legacy TV networks.

  • India Cements sees a long buildup in its July 25 future series as its open interest rises 38.9% with a put-call ratio of 1.1.

  • Polycab India's Q1FY25 net profit grows marginally by 0.6% YoY to Rs 401.6 crore amid increased expenses on project buyouts and subcontracting costs. Revenue increases 21% YoY to Rs 4,698 crore during the quarter. The company features in a screener of stocks where mutual funds have increased shareholding over the past two months.

  • Grindwell Norton falls as its net profit declines by 3.9% YoY to Rs 93.2 crore in Q1FY25 due to higher inventory and finance costs. However, revenue grows by 5.6% YoY to Rs 721.4 crore, driven by improvements in the abrasives and ceramics & plastics segments. It features in a screener of stocks underperforming their industries in the past quarter.

  • Reports suggest that Aegis Vopak Terminals, a joint venture firm of Aegis Logistics, plans to raise $550-500 million through an initial public offer (IPO) in India. The company is exploring a pre-IPO funding round to set a valuation benchmark.

  • Havells India rises as its net profit surges by 42.1% YoY to Rs 407.9 crore in Q1FY25, helped by lower inventory costs. Revenue grows by 20.1% YoY to Rs 5,883.5 crore, driven by an increase in switchgear, cables, lighting & fixtures, electrical consumer durables, and Lloyd consumer segments. It appears in a screener of stocks with growth in quarterly net profit and profit margin (YoY).

  • Central Bank's Q1FY25 net profit rises 110.3% YoY to Rs 879.9 crore, while net interest income increases by 15.4% YoY to Rs 8,334.8 crore, driven by the treasury and retail banking segments. The company features in a screener of stocks with increasing profits every quarter for the past three quarters.

  • Elecon Engineering's Q1FY25 net profit rises marginally by 0.5% YoY to Rs 73.4 crore. However, revenue declines 3.8% YoY to Rs 406.8 crore during the quarter due to lower sales in the transmission equipment segment. The company appears in a screener of stocks with no debt.

  • Sudipta Roy, MD & CEO of L&T Finance, highlights the company's target to increase assets under management (AUM) by Rs 18,000-20,000 crore in FY25. He projects a return on assets (ROA) of 2.6-2.8% and expects credit costs to remain in the 2-2.5% range over the next 2-3 years.

  • Newgen Software Technologies falls sharply as its net profit plunges by 54.8% QoQ to Rs 47.6 crore in Q1FY25 due to higher employee benefits expenses. Revenue declines by 13.6% QoQ to Rs 337.3 crore, caused by a decrease in the Indian and European, Middle East & African (EMEA) markets. It shows up in a screener of stocks with expensive valuations according to the Trendlyne valuation score.

  • BASF India falls as it sells its flocculants business for mining applications to Solenis, a global specialty chemicals producer based in Delaware, USA. The move is a part of the company's global portfolio optimization plans to focus on core strategic areas.

  • IDBI Bank rises sharply as the RBI issues a 'fit and proper' report on bidders, advancing its privatisation process. This report ensures bidders meet the criteria, moving the long-awaited divestment forward.

  • Rakesh Sharma, Executive Director of Bajaj Auto, highlights that the top players in the industry are witnessing double-digit growth. He expects performance to improve in Q2 compared to Q1FY25, with margins remaining steady due to a better product mix. Sharma also emphasizes the firm’s target to enhance its EV presence.

  • Bondada Engineering wins an order worth Rs 59 crore from KPI Green Energy to supply balance of system (BOS) items and services for engineering, procurement, and construction (EPC) works across two locations in Gujarat.

  • Bajaj Electricals' Managing Director and Chief Executive Officer Anuj Poddar tenders his resignation to explore an external opportunity. His resignation is effective from September 30, 2024.

  • Zensar Technologies rises as its US subsidiary acquires BridgeView Life Sciences for a total deal value of $25 million (approx. Rs 209 crore). This acquisition will strengthen its healthcare and life sciences division.

  • Jefferies initiates a ‘Buy’ rating on Muthoot Finance and Manappuram Finance and sets the target price at Rs 2,220 and Rs 270, respectively. The brokerage believes loan growth of the gold NBFCs will improve with higher gold prices, stable competition from banks, and diversification into non-gold segments.

  • Tata Power's subsidiary, Tata Power Renewable Energy, signs a memorandum of understanding (MoU) with NHPC Renewable Energy for the 100% solarisation of government buildings. The partnership aims to implement rooftop solar projects in the central ministries, states, and union territories.

  • KR Choksey maintains its 'Buy' call on HDFC Life Insurance with an upgraded target price of Rs 765 per share. This indicates a potential upside of 17.9%. The brokerage believes the company's focus on product innovation and expanding distribution capabilities will drive revenue and profitability growth. It expects gross premiums to grow at a CAGR of 11.1% over FY25-26.

  • Aurobindo Pharma's board approves a buyback of up to 51.4 lakh shares for Rs 750 crore. It sets July 30 as the record date for the buyback.

  • CLSA reiterates its 'Underperform' rating on Eicher Motors, setting a target price of Rs 4,157. The brokerage notes the company is experiencing a decline in market share within its segment while competitors are expanding their presence. It highlights that Eicher Motors' recently introduced new motorcycle, Guerrilla 450, is priced higher than similar variants offered by competitors.

  • Alok Industries falls sharply as it posts a net loss of Rs 206.9 crore in Q1FY25 due to higher finance costs. Revenue declines by 28.7% YoY to Rs 1,012.3 crore during the quarter. It appears in a screener of stocks with high interest payments compared to earnings.

  • Techno Electric & Engineering is rising as its board of directors approves the qualified institutional placement (QIP) of shares at a floor price of Rs 1,506.6 crore per share.

  • Ashish Kacholia cuts his stakes in HLE Glascoat and Gravita India to below 1% in Q1FY25. He held 1.4% and 2.2% stakes in the respective companies in Q4FY24.

  • Indian Renewable Energy Development Agency's board of directors approves investing Rs 290 crore for a 10% stake in Upper Karnali Hydro Power, and Karnali Transmission to set up a 900 MW hydropower project in Nepal.

  • LTI Mindtree's net profit rises 3.1% QoQ to Rs 1,133.8 crore in Q1FY25. Revenue grows by 3% QoQ to Rs 9,369.7 crore, driven by improvements in the banking, financial services & insurance (BFSI), technology, media & communications, and manufacturing & resources segments. It features in a screener of stocks with improving cash flow from operations for the past two years.

  • Nifty 50 was trading at 24,567.85 (-45.2, -0.2%), BSE Sensex was trading at 80,540.39 (-176.2, -0.2%) while the broader Nifty 500 was trading at 23,135.45 (-68.8, -0.3%).

  • Market breadth is horizontal. Of the 1,944 stocks traded today, 906 were on the uptrend, and 983 went down.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (92.20, 4.9%), LTIMindtree Ltd. (5,756.90, 3.5%) and Tata Consultancy Services Ltd. (4,315.55, 3.3%).

Downers:

Largecap and midcap losers today include Trent Ltd. (5,308.50, -6%), Hindustan Aeronautics Ltd. (5,015.75, -5.9%) and CG Power and Industrial Solutions Ltd. (689.30, -5.7%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Just Dial Ltd. (1,242.10, 20%), Tata Teleservices (Maharashtra) Ltd. (97.31, 19.7%) and India Cements Ltd. (344.75, 6.7%).

Top high volume losers on BSE were Hindustan Aeronautics Ltd. (5,015.75, -5.9%), CG Power and Industrial Solutions Ltd. (689.30, -5.7%) and Dixon Technologies (India) Ltd. (11,945.85, -4.8%).

Esab India Ltd. (6,634.50, 5.0%) was trading at 21.8 times of weekly average. Sundram Fasteners Ltd. (1,401.30, 1.4%) and Torrent Power Ltd. (1,542.70, -0.2%) were trading with volumes 13.5 and 10.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

30 stocks made 52 week highs,

Stocks touching their year highs included - BASF India Ltd. (5,500, -2.3%), Indus Towers Ltd. (418.95, 3.0%) and Britannia Industries Ltd. (5,871.50, 0.2%).

6 stocks climbed above their 200 day SMA including Tata Teleservices (Maharashtra) Ltd. (97.31, 19.7%) and Bajaj Finserv Ltd. (1,651.25, 2.6%). 8 stocks slipped below their 200 SMA including Crisil Ltd. (4,314, -3.3%) and Laxmi Organic Industries Ltd. (260.65, -2.0%).

 
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The Baseline
18 Jul 2024
Five stocks to buy from analysts this week - July 18, 2024
By Ruchir Sankhla

1. Varun Beverages:

Motilal Oswal reiterates a ‘Buy’ rating on this non-alcoholic beverages company with a target price of Rs 1,900, indicating a potential upside of 18.8%. Analysts Sumant Kumar, Meet Jain and Omkar Shintre highlight the company's new exclusive snacks deal with PepsiCo for Zimbabwe and Zambia. VBL plans to invest $7 million each in these countries to build snack manufacturing plants capable of producing around 5,000 metric tons annually, with production starting by October 2025 and April 2026, respectively.

The analysts note that the total addressable market (TAM) has expanded by 67% with the addition of these two new geographies (versusMorocco earlier in Feb 2024). They highlight the snack food products market in these regions is valued at approximately $833 million as of CY24.

Kumar, Jain, and Shintre expect a CAGR of 21% in revenue, 22% in EBITDA, and 29% in PAT for CY25-26. They also foresee a potential partnership between VBL and PepsiCo across Africa, where PepsiCo lacks local manufacturing partners and relies on imports.

2. Sky Gold:

Edelweiss maintains a ‘Buy’ rating on this gems & jewellery smallcap company with a target price of Rs 3,204, indicating a potential upside of 68.9%. Sky Gold recently acquired Sparkling Chains for Rs 26 crore, a chain manufacturer accounting for 20% of India's jewellery sales, and Starmangalsutra for Rs 24 crore, which holds a 15% market share in the mangalsutra segment.

Analyst Palash Kawale writes, "These acquisitions will expand Sky Gold’s market in gold jewellery and diversify its product range." Sky Gold's addressable market share in India's jewellery sales has increased to 70%, up from 35%. The analyst also highlights that the management expects the acquired entities to generate sales of more than Rs 600 crore in FY25 and a PAT of more than 15 crore in FY25.

Kawale expects revenue, EBITDA, and PAT to increase by 53%, 56%, and 67%, respectively over FY25–27 and says, “Sky Gold can be a long-term compounding story.” He also mentioned that following these acquisitions, the management has upgraded its FY27 sales guidance to Rs 6,300 crore with over 25% RoCE.

3. National Aluminium Company:

SBI Securities initiates a ‘Buy’ rating on this aluminium and aluminium products company with a target price of Rs 234.6, indicating a potential upside of 22%. Analysts highlight significant developments, including NALCO's acquisition of a mining lease for bauxite mines in Odisha and a strategic MoU with NTPC for uninterrupted 1200 MW power supply. These developments are essential for NALCO's plans to expand the smelter plant capacity in Angul, Odisha.

Analysts note that in FY24, NALCO successfully increased production at its Utkal coal mine to 2 million tonnes per annum (mtpa), resulting in significant reductions in power and fuel costs. The upcoming Utkal Block E expansion to 4 mtpa by FY25 is expected to further enhance cost efficiencies. The brownfield alumina expansion, targeting 1 mtpa, remains on track for commissioning by the second half of FY26, with full production expected to be achieved by FY27, promising expanded revenue streams. Additionally, NALCO plans to expand its aluminum smelter capacity by 0.5 mtpa in the coming years to strengthen operational capabilities.

4. Tata Consultancy Services:

Sharekhan maintains its ‘Buy’ call on this IT consulting and software company with a target price of Rs 4,750, indicating a potential upside of 11.2%. The company’s revenue grew 5.4% YoY to Rs 62,613 crore in Q1FY25, and its net profit rose 8.7% YoY to Rs 12,040 crore, driven by outperformance in manufacturing, energy and healthcare segments.

Tata Consultancy Services plans to expand its digital transformation services and enhance its AI capabilities. The company has established new client partnerships and expects spending on tech modernizing systems to grow. Analysts are upbeat, saying that the company is working to mitigate risks from currency fluctuations and an uncertain global economy by diversifying across markets and investing in technology and talent. The management highlights consistent order bookings of Rs 700-900 crore quarterly, with an all-time high pipeline in Q1, as AI investments doubles to Rs 150 crore.

Sharekhan anticipates TCS to sustain growth despite margin pressure from wage hikes. The firm projects a robust revenue CAGR of 11% and an adjusted PAT CAGR of 15% for FY25-26, buoyed by substantial deal wins and a healthy order pipeline.

5. Indian Bank:

ICICI Direct maintains a ‘Buy’ rating on this bank, raising its target price to Rs 700, indicating a potential upside of 21.6%. This PSU bank has a total business of over Rs 12 lakh crore and a strong presence with 5,847 branches nationwide.

The bank is focused on enhancing its retail, agriculture, and MSME loan segments, which constitute about 62% of its loan book. It aims to maintain a steady CASA ratio of around 40% and expects margins to remain stable at 3.4-3.5% for FY25. Analysts Vishal Narnolia and Krishna Vyas have a positive outlook on the bank as it pursues digital transformation initiatives to improve customer experience and operational efficiency. It targets a 12-13% growth in advances for FY25, supported by new business opportunities in data centres, city gas distribution, and commercial real estate sectors.

Narnolia and Vyas anticipate that the company will achieve a CAGR growth rate of 11% for net interest income and 18% for PAT over FY25-26. They expect Indian Bank to see steady business growth and strong asset quality, projecting an improvement in RoA to 1.2-1.3% by FY25-26.

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
16 Jul 2024
By Satyam Kumar

Investors are always on the lookout for strategies that yield outsize returns, yet the reality is that only a select few manage portfolios that consistently outperform their benchmarks. Legendary investor Warren Buffett once said, "The stock market is designed to transfer money from the active to the patient." Despite the temptation to trade often, its the  long-term perspective that delivers returns, and this calls for a disciplined approach in navigating stocks.

One way to maximise returns is by using screeners that automatically search for stocks that outperform on not one or two but multiple metrics. The DVM score for example, looks at several metrics across management quality, financial health, stock valuation, as well as several dozen technicals, to identify high-scoring stocks. These scores help investors shortlist quality stocks for investing.

In this edition of Chart of the Week, we analyse one particular DVM screener: the ‘DVM - High Performing, Highly Durable Companies’ screener. This screener selects stocks from the Nifty 500 index that have strong financial durability, reasonable valuation, and positive momentum scores. It is optimised to highlight the top five stocks with the highest durability scores. 

The screener backtest, which ran from March 2013 to June 2024, evaluated this strategy’s quarterly performance against the Nifty 500 benchmark. The screener delivered cumulative returns of 3,676.3% over 11 years and 4 months, with a CAGR of 37.7%. In contrast, the benchmark’s CAGR stands at 16.1%. The portfolio review frequency chosen for this backtest is quarterly.

The heatmap presents a period analysis, showcasing the strategy's quarterly returns from Q1FY14 to Q1FY25. The data reveals that this approach delivered positive returns in 31 out of 45 quarters. It also outperformed the Nifty 500 index in 29 of these 45 quarters. 

The strategy experienced a maximum drawdown of 28.4% in Q1FY23. The term "maximum drawdown" represents the largest observed loss from a portfolio’s peak to its lowest point before a new peak is attained. This strategy is automated and did not have a set stop loss, so the drawdowns show the maximum loss potential under this approach. Introducing a stop loss can reduce periods of negative returns and lower maximum drawdowns.

The screener currently has stocks such as Bombay Burmah Trading Corporation, Adani Ports & Special Economic Zone, Jindal Saw, Ambuja Cements, and Apollo Tyres.

In the course of the backtest,Ceat gave the highest returns of 428.8%. On the other hand,Triveni Engineering & Industries’ stock price had the highest fall of 48.8%.  

Apar Industries and EIH performs the best in the DVM screener over the past two years

Here, we look at stocks with the highest returns over the past two years from the DVM screener’s backtest. Electrical equipments maker Apar Industries was part of the screener from March 31, 2023, to June 28, 2024. During this period, it delivered a return of 238.3%.

Similarly, EIH, a hotel company belonging to the Oberoi Group, was active in the screener a quarter ago from December 29, 2023, to March 28, 2024. In these three months, the company gave a return of 80.2%.  The jump came as the hotel stock saw its financials improve as domestic tourism boomed. In FY24, EIH witnessed a  103% YoY rise in its net profit to Rs 639 crore, aided by growth in the luxury hotel segment, which boosted average room rates.

Great Eastern Shipping Company, which provides shipping and offshore business services to primarily oil & gas companies, was active in the screener for a year. The stock delivered returns of 65% during the period starting June 30, 2023, to June 28, 2024.

The tobacco major, Godfrey Phillips remained in the screener for two quarters, from September 30, 2022, to March 31, 2023. During this period, the company gave 58.5% returns. The company's decision in October 2022 to sell its chewing tobacco business and other trademarks allowed it to concentrate on the cigarette business. Consequently, its net profit surged by 57.6% YoY in FY23 to Rs 690.5 crore.

Lastly, Kalyan Jewellers India, active in the screener from June 30, 2023, to September 29, 2023, delivered a return of 46.7%. The rise came after the company’s net profit surged by 33.3% in Q1FY24 to Rs 143.9 crore, aided by expansions in northern regions of India and the UAE.

Adani Ports leads in one-year gain among active stocks

Let’s now focus on the quarterly and yearly price change percentages of stocks currently active in the screener. Packaged foods company Bombay Burmah Trading Corporation’s stock price rose by 46.2% in the past quarter and 104.3% in the past year. The company’s net profit increased by 189.6% YoY in Q3FY24, followed by a surge of 116.1% in Q4FY24.

Marine port & services company, Adani Ports & SEZ witnessed its share price surge by 14% in the past quarter and 106.5% in the past year. The company delivered a volume CAGR of 15% over FY19-24 outperforming volume CAGR of 4% for all ports in India.

Meanwhile, industrial products manufacturerJindal Saw’s share price soared by 13.7% in the past quarter with gains of 78.4% in the past year. Ambuja Cement, on the other hand, witnessed a 12.9% uptick in its stock price in the past quarter and 64.5% in the past year.

Lastly, Apollo Tyres saw its share price surge by 16.3% in the past quarter, with over 32.4% gains in the past year. In FY24, this tyre manufacturer brought down its debt significantly by Rs 1,646 crore to Rs 3,942 crore due to 61.2% higher cash from operations on a YoY basis.

In summary, the screening criteria results in stocks that can potentially deliver medium to long-term gains with moderate risk, as suggested by the max drawdown of 29.9%. Despite uncertainties like the Covid pandemic and highly volatile election periods, this screener gave a mean quarterly return of 9.7%. It also consistently held an average stock count of 4.7, implying diversified investment, except for Q1FY21 when it had no stocks.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
16 Jul 2024
Market closes higher, Bajaj Auto's net profit grows 18.1% YoY to Rs 1,941.8 crore in Q1FY25
By Trendlyne Analysis

Nifty 50 closed at 24,613 (26.3, 0.1%) , BSE Sensex closed at 80,716.55 (51.7, 0.1%) while the broader Nifty 500 closed at 23,204.25 (-5.6, 0.0%). Market breadth is neutral. Of the 2,160 stocks traded today, 1,061 were on the uptrend, and 1,080 went down.

Indian indices closed in the green, after paring gains in the afternoon session. The Indian volatility index, Nifty VIX, rose 0.3% and closed at 14.2 points. Bajaj Auto’s net profit grew 18.1% YoY to Rs 1,941.8 crore in Q1FY25. Revenue increases by 15% YoY to Rs 12,267.4 crore, helped by improvements in the automotive and financing segments. 

Nifty midcap 100 closed in red, however Nifty Smallcap 100 closed in the green taking cues from the benchmark index. BSE Realty Index and S&P BSE Midsmallcap were among the top index gainers today. According to Trendlyne’s Sector dashboard, Telecom Services emerged as the best-performing sector of the day, with a jump of over 1.9%.

Asian indices closed in the green while European indices are trading lower. US index futures traded higher, indicating a positive start to the trading session. Brent crude oil futures are trading down by 0.7%. Investment Bank, Roth MKM reduced its 2024 oil price forecast due to increased geopolitical risks and decreasing global oil inventories.

  • Money flow index (MFI) indicates that stocks like Lupin, Rail Vikas Nigam, Dr. Reddy's Laboratories, and ITC are in the overbought zone.

  • Tanla Platforms, Central Bank of India, Persistent Systems, and Infosys rise by 6%, 5.3%,5.1% and 3.8% respectively over the past week, ahead of their Q1FY25 results on Thursday.

  • Hatsun Agro rises sharply as its Q1FY25 net profit rises 62.9% YoY to Rs 130.5 crore, helped by lower expenses. Revenue increases 10.4% YoY to Rs 2,375.1 crore during the quarter. The company appears in a screener of stocks with new 52-week highs today.

  • Tamil Nadu Newsprint And Papers appoints Sandeep Saxena as Chairman and Managing Director of the company, effective July 3, 2024.

  • Ahead of the FY25 Budget, the Defence Ministry takes a significant step towards achieving self-reliance in the industry by unveiling a fifth positive indigenisation list (PIL) for Defence Public Sector Undertakings (DPSUs). This list, exclusively sourced from Indian industries, aims to substitute imports valued at Rs 1,048 crore. Key DPSUs participating in this initiative include Hindustan Aeronautics, Bharat Electronics, Bharat Dynamics, and BEML.

  • DB Corp rises as its net profit grows by 49% YoY to Rs 118 crore in Q1FY25. Revenue increases by 6.5% YoY to Rs 590 crore during the quarter, driven by strong performance in advertising segment. It shows up in a screener of stocks where mutual funds increased their shareholding in the last quarter.

  • Bajaj Auto is rising as its net profit grows 18.1% YoY to Rs 1,941.8 crore in Q1FY25. Revenue increases by 15% YoY to Rs 12,267.4 crore, helped by improvements in the automotive and financing segments. It appears in a screener of stocks with increasing return on capital employed (RoCE) over the last two years.

  • Franklin Templeton MF buys 11 lakh shares in Eris Lifesciences for Rs 109 crore at an average price of Rs 1,000 per share. Meanwhile, individual investor Rakesh Shah sells 20 lakh shares in a block deal, reducing his stake from 4.9% to 3.4%.

  • Bharti Hexacom rises sharply as JP Morgan initiates coverage with an ’Overweight’ rating and a target price of Rs 1,280. It notes the company operates in the underpenetrated regions of Rajasthan and Northeast, with lower teledensity, internet penetration, and postpaid usage. This is positive for the company in terms of stronger subscriber numbers and ARPU (average revenue per user) expansion. The brokerage also expects a 15% tariff hike each in FY25 and FY26 to drive revenue growth.

  • One97 Communications is falling as it gets an administrative warning from the Securities Exchange Board of India (SEBI) for related party transactions entered by the company or its subsidiaries with Paytm Payments Bank for FY22.

  • RateGain Travel Technologies partners with Hahnair to improve their airline distribution. This partnership integrates RateGain’s AirGain pricing intelligence with 100 Hahnair partners using H1-Air and X1-Air products.

  • Angel One's net profit grows by 32.6% YoY to Rs 292.7 crore in Q1FY25. Revenue surges by 73.8% YoY to Rs 1,410.1 crore, helped by an improvement in total client base and average daily turnover (ADTO). It appears in a screener of stocks with improving book value per share over the past two years.

  • Indian government bonds (IGBs) see monthly net inflows into the fully accessible route (FAR) securities surge to Rs 90,000 crore since October 2023 after JPMorgan adds it to the Emerging-market Index Global Diversified index on June 28. SBI research forecasts monthly inflows to reach approximately $2 billion over the next nine months, potentially bolstering India’s balance of payment (BoP) surplus.

  • Vodafone Idea surges as the Supreme Court of India agrees to consider a plea seeking correction of alleged errors in the computation of adjusted gross revenue (AGR) dues.

  • Unichem Laboratories receives five observations from the US FDA's inspection conducted at its Goa formulation facility.

  • Century Textiles & Industries rises sharply as its subsidiary, Birla Estates, acquires a 5-acre land in Sector 71, Gurugram. The land has a development potential of 10 lakh square feet with an expected revenue of Rs 1,400 crore.

  • According to data from the Commerce Department, India's merchandise exports growth drops to a seven-month low of 2.6% YoY in June, totaling $35.2 billion, reflecting subdued demand abroad. Commerce Secretary Sunil Barthwal, highlights that sustained global growth and a decrease in inflation would support continued trade. However, he cautions that India must remain vigilant against current geopolitical tensions and potential new conflicts.

  • Lupin divests its US Commercial Women's Health Specialty business to Evofem Biosciences for $84 million (approx. Rs 702.2 crore).

  • SpiceJet posts a net loss of Rs 298.6 crore in Q1FY25, compared to a net profit of Rs 110.5 crore in Q1FY24, due to higher aircraft lease rentals and finance costs. Revenue declines by 23.6% YoY to Rs 2,156.6 crore, impacted by the air transport services, and freighter & logistics services segments. It appears in a screener of stocks where promoter holding has reduced by more than 2% QoQ.

  • Zee Entertainment Enterprises' board approves raising Rs 2,000 crore from the market via various routes, including issuing equity shares and qualified institutional placement.

  • Morgan Stanley maintains its ‘Overweight’ rating on Varun Beverages with a target price of Rs 1,701. The brokerage believes an expansion of products and attaining additional rights from PepsiCo are key growth drivers for the company. It highlights that adding a food portfolio in Africa will increase its incremental revenues.

  • Hindustan Unilever rises as it sells its water purification business, Pureit, to AO Smith India Water Products at an enterprise value of $72 million (approx. Rs 601 crore).

  • Dolly Khanna adds Ujjivan Small Finance Bank to her portfolio in Q1FY25. She buys a 1.1% stake in the company.

  • Vijay Kedia buys a 1.9% stake in Global Vectra Helicorp in Q1FY25. He now holds a 4.9% stake in the company.

  • Jio Financial Services is falling as its net profit declines by 5.8% YoY to Rs 312.6 crore in Q1FY25 due to higher employee benefits expenses. However, revenue grows marginally by 0.9% YoY to Rs 417.8 crore during the quarter. It shows up in a screener of stocks where mutual funds decreased their shareholding in the past quarter.

  • Nifty 50 was trading at 24,612.75 (26.1, 0.1%), BSE Sensex was trading at 80,846.06 (181.2, 0.2%) while the broader Nifty 500 was trading at 23,266.85 (57, 0.3%).

  • Market breadth is surging up. Of the 1,901 stocks traded today, 1,528 showed gains, and 352 showed losses.

Riding High:

Largecap and midcap gainers today include Life Insurance Corporation of India (1,108.45, 4.5%), Coal India Ltd. (512.45, 3.0%) and Hindustan Petroleum Corporation Ltd. (358.20, 2.9%).

Downers:

Largecap and midcap losers today include Zomato Ltd. (217.49, -5.1%), IDBI Bank Ltd. (87.88, -3.9%) and Hindustan Aeronautics Ltd. (5,329.40, -3.2%).

Movers and Shakers

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

Top high volume gainers on BSE included Chennai Petroleum Corporation Ltd. (1,212.10, 11.8%), Alembic Pharmaceuticals Ltd. (1,083.45, 10.4%) and Natco Pharma Ltd. (1,281.45, 6.1%).

Top high volume losers on BSE were Krishna Institute of Medical Sciences Ltd. (2,123.05, -0.6%) and Century Plyboards (India) Ltd. (701.70, -0.1%).

Jindal Worldwide Ltd. (351.40, 2.2%) was trading at 28.6 times of weekly average. Hatsun Agro Products Ltd. (1,234.45, 4.0%) and Century Textiles & Industries Ltd. (2,218.50, 5.6%) were trading with volumes 15.4 and 9.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

37 stocks overperformed with 52 week highs,

Stocks touching their year highs included - Alembic Pharmaceuticals Ltd. (1,083.45, 10.4%), Blue Dart Express Ltd. (8,950, 5.0%) and Britannia Industries Ltd. (5,864.50, 0.9%).

10 stocks climbed above their 200 day SMA including Devyani International Ltd. (174.37, 2.5%) and Jindal Worldwide Ltd. (351.40, 2.2%). 2 stocks slipped below their 200 SMA including L&T Technology Services Ltd. (4,867.40, -2.5%) and SBI Cards and Payment Services Ltd. (730.90, -1.0%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
15 Jul 2024
Market closes higher, Ashok Leyland bags an order worth Rs 981.5 crore from MSRTC
By Trendlyne Analysis

Nifty 50 closed at 24,586.70 (84.6, 0.4%) , BSE Sensex closed at 80,664.86 (145.5, 0.2%) while the broader Nifty 500 closed at 23,209.85 (114.4, 0.5%). Market breadth is balanced. Of the 2,199 stocks traded today, 1,119 were on the uptick, and 1,057 were down.

Market closed higher after paring gains in the afternoon session. The Indian volatility index, Nifty VIX, rose 3.4% and closed at 14.2 points. Indian Renewable Energy Development Agency (IREDA) surges to its all-time high as its Q1FY25 net profit grows 30.2% YoY to Rs 383.7 crore and revenue rises 32.1% YoY to Rs 1,510.7 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, taking cues from the benchmark index. Nifty PSU Bank and Nifty Media were among the top index gainers today. According to Trendlyne’s Sector dashboard, Media emerged as the best-performing sector of the day, with a rise of 1.5%.

Asian indices closed mixed. European indices are trading red except Amsterdam’s AEX and Switzerland's SMI. US index futures are trading in green, indicating a positive start to the trading session. Brent crude oil futures are trading flat.

  • Relative strength index (RSI) indicates that stocks like Oil India, Rail Vikas Nigam, Grasim Industries, and Infosys are in the overbought zone.

  • Bank of Maharashtra rises sharply as its net profit surges by 46.6% YoY to Rs 1,293.5 crore in Q1FY25. Revenue grows by 24.9% YoY to Rs 6,768.6 crore, helped by an improvement in gross advances and deposits. The bank's asset quality improves as its gross and net NPAs decline by 43 bps YoY and 4 bps YoY, respectively. It features in a screener of stocks with rising net cash flow and cash from operating activities.

  • SRM Contractors rises sharply as it signs a Rs 278.5 crore agreement with the National Highways Authority of India (NHAI) to upgrade and strengthen the Nashri-Chenani section of NH-244 via Patnitop in Jammu and Kashmir.

  • Waaree Renewable Technologies rises as it wins an engineering, procurement, and construction work order worth Rs 90.3 crore for a solar power project of 30 MW DC capacity.

  • Zomato rises over 2% following its decision to raise the platform fee per order to Rs 6, a Rs 1 increase. The fee hike will be initially implemented in select regions - Bengaluru and Delhi and is expected to improve the company's profitability.

  • PSU bank stocks like Indian Overseas Bank, Bank of Maharashtra, Punjab & Sind Bank, and UCO Bank are rising in trade. The broader sectoral index, Nifty PSU Bank, is also trading in the green.

  • Avenue Supermarts rises as its net profit grows by 17.5% YoY to Rs 773.8 crore in Q1FY25. Revenue increases by 18.5% YoY to Rs 14,110.7 crore during the quarter. It shows up in a screener of stocks with zero promoter pledges.

  • Suven Pharmaceuticals receives Form 483 with two observations from the US FDA following an inspection at its wholly-owned subsidiary, Casper Pharma's facility in Hyderabad.

  • Investec initiates a 'Buy' rating on VIP Industries and Safari Industries (India), setting target prices at Rs 560 and Rs 2,800, respectively. The brokerage predicts robust growth for India's luggage sector, driven by favorable demographics, changing lifestyles, and increased travel emphasizing style and utility. It notes the industry is currently valued at Rs 10,000 crore and is expected to expand by more than 50% to Rs 15,000 crore.

  • Axis Securities maintains its 'Hold' rating on Tata Consultancy Services with a target price of Rs 4,250 per share. This indicates a potential upside of 1.2%. The brokerage sees strong growth in the long term but anticipates headwinds in H1FY25 due to uncertainties in large economies. It expects the company's revenue to grow at a CAGR of 6% over FY25-26.

  • Hindalco rises as its board approves the sale of its land in Kalwa, Maharashtra, to Birla Estates' wholly-owned subsidiary, Ekamaya Properties. The company will receive Rs 595 crore in multiple tranches over time, along with 1.5% of the sales revenue.

  • Mahanagar Telephone Nigam appoints Ravi A Robert as Chief Managing Director (CMD) of the company, effective today. PK Purwar ceases to be CMD on account of the non-extension of his tenure.

  • India’s WPI inflation jumps to a 16-month high of 3.4% in June, up from 2.6% in May, driven by higher prices of food articles, crude petroleum & natural gas, and mineral oils. Primary articles inflation rises to 8.8%, while fuel & power inflation moderates slightly.

  • Tanla Platforms surges as it signs a commercial agreement with a global tech major to combat scams on its messaging platform using its AI-driven anti-phishing solution, Wisely ATP. Reports suggest the deal has been signed with Meta Platforms-owned WhatsApp.

  • Ashok Leyland is rising as it bags an order worth Rs 981.5 crore from Maharashtra State Transport Corp (MSRTC) to supply 2,104 Viking passenger buses by August 2025.

  • Zen Technologies rises sharply and hits a 5% upper circuit as it launches four AI-powered robots for the global defense market. The IP-owned innovative products are Hawkeye, Barbarik-URCWS (Ultralight Remote Control Weapon Station), Prahasta, and Sthir Stab 640.

  • India’s CPI inflation rises to a 4-month high of 5.1% in June from 4.8% in May. Consumer food price index rises to 9.4%, while fuel and light inflation contracts to 3.7%.

  • GE T&D India wins a Rs 490 crore order from Power Grid Corp of India to implement unified load dispatch and communication ULDC Phase-III.

  • Indian Renewable Energy Development Agency surges to its all-time high of Rs 310 per share as its net profit grows 30.2% YoY to Rs 383.7 crore in Q1FY25. Revenue increases by 32.1% YoY to Rs 1,510.7 crore during the quarter. It shows up in a screener of stocks with increasing revenue for the past four quarters.

  • Porinju Veliyath buys a 0.2% stake in TAAL Enterprises in Q1FY25. He now holds a 1.3% stake in the company.

  • India’s Index of Industrial Production or IIP grows by 5.9% in May, compared to 5% in April, led by growth in the mining, manufacturing, and electricity sectors.

  • Anil Kumar Goel sells a 4.7% stake in Dhampur Sugar Mills in Q1FY25. He now holds an 8% stake in the company.

  • Ashish Kacholia sells a 0.7% stake in Shaily Engineering Plastics in Q1FY25. He now holds a 9% stake in the company.

  • Sunteck Realty's pre-sales grow 29.7% YoY to Rs 502 crore in Q1FY25, helped by an 18.8% YoY increase in collections to Rs 342 crore. It appears in a screener of stocks with increasing mutual fund holding over the past two months.

  • HCL Technologies rises as its net profit grows by 6.8% QoQ to Rs 4,257 crore in Q1FY25, helped by lower inventory and outsourcing costs. Revenue increases by 0.8% QoQ to Rs 29,160 crore on the back of an improvement in the HCL Software segment. It shows up in a screener of stocks with increasing cash flow from operations for the past two years.

  • Nifty 50 was trading at 24,569.25 (67.1, 0.3%), BSE Sensex was trading at 80,686.54 (167.2, 0.2%) while the broader Nifty 500 was trading at 23,146.55 (51.1, 0.2%).

  • Market breadth is in the green. Of the 1,980 stocks traded today, 1,115 were on the uptick, and 819 were down.

Riding High:

Largecap and midcap gainers today include Indian Overseas Bank (68.42, 7.5%), IDBI Bank Ltd. (91.48, 6.4%) and Oil And Natural Gas Corporation Ltd. (322.50, 5.0%).

Downers:

Largecap and midcap losers today include Patanjali Foods Ltd. (1,559.85, -2.1%), Tube Investments of India Ltd. (4,072, -2.0%) and Astral Ltd. (2,262.60, -1.7%).

Movers and Shakers

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

Top high volume gainers on BSE included Godfrey Phillips India Ltd. (4,734.25, 16.7%), HBL Power Systems Ltd. (629.35, 10.0%) and Indian Overseas Bank (68.42, 7.5%).

Top high volume losers on BSE were Chalet Hotels Ltd. (789.90, -3.9%), Eris Lifesciences Ltd. (1,015.30, -2.7%) and KPR Mill Ltd. (834.05, -2.6%).

Tanla Platforms Ltd. (998, 4.7%) was trading at 44.6 times of weekly average. KSB Ltd. (5,036.70, 6.8%) and C.E. Info Systems Ltd. (2,508.55, 3.5%) were trading with volumes 17.0 and 10.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

42 stocks overperformed with 52 week highs,

Stocks touching their year highs included - Aurobindo Pharma Ltd. (1,374.85, 3.6%), Britannia Industries Ltd. (5,809.70, 0.4%) and Castrol India Ltd. (267.32, 6.3%).

9 stocks climbed above their 200 day SMA including Tanla Platforms Ltd. (998, 4.7%) and Crisil Ltd. (4,517.90, 4.4%). 6 stocks slipped below their 200 SMA including Jai Balaji Industries Ltd. (852, -2.0%) and Rainbow Childrens Medicare Ltd. (1,209.50, -1.7%).

 
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The Baseline
12 Jul 2024
Five Interesting Stocks Today - July 12, 2024

1. Rail Vikas Nigam (RVNL):

This railway construction firm surged to a new 52-week high of Rs 645 on Friday after rising 49.7% in the past week. RVNL is engaged in the complete life cycle of projects in railway track construction, railway electrification, and signalling solutions. The surge followed the company's receipt of a LoA from Maharashtra Metro Rail Corp. for the construction of six new elevated metro stations in Nagpur, worth Rs 187.3 crore. The company also emerged as the lowest bidder for a South Eastern Railway contract worth Rs 202.9 crore. 

All major railway stocks, IRFC, RVNL, and IRCON International, have risen sharply in the past week after Railway Minister Ashwini Vaishnaw announced plans to introduce 2,500 new general passenger coaches and 10,000 non-AC coaches. He also announced the production of fifty new Amrit Bharat trains, known for their high-speed and luxury services. RVNL stands to benefit from these plans as it is involved in the construction and maintenance of coach manufacturing factories.

RVNL reported an 8.4% YoY revenue growth to Rs 23,075 crore in FY24, with net profit increasing by 10.8% YoY to Rs 1,574 crore. The company’s order book at the end of FY24 stood at Rs 85,000 crore, with around 40-45% coming from bidding orders, which have margins higher than 10%, while the rest is from nomination projects.

Director of Operations, Rajesh Prasad, said, “The India-Middle East-Europe Economic Corridor announced in the G20 summit has got big opportunities for RVNL basically in the railway segment.” He highlights that the project is still in the concept stage and RVNL is certainly going to benefit when execution starts.

IDBI Capital maintains a ‘Hold’ rating on RVNL as the company plans bids for high-speed rail projects under the Viksit Bharat 2047 scheme (currently, they have no exposure to this segment). The brokerage is optimistic given the company’s guidance for net profit growth of 10-15% in FY25, and its focus on improving EBITDA margins by targeting bidding projects.

2. NBCC (India):

This construction and engineering company has risen 20.9% in the past month and hit its all-time high of Rs 198.3 on Tuesday. The surge came after the company secured multiple orders worth Rs 1,120.3 crore, including major projects in urban development, educational institutions, and infrastructure.

NBCC witnessed strong growth in FY24, with a 50.6% YoY increase in net profit to Rs 401.6 crore and a 19% rise in revenue to Rs 10,666.7 crore. This was driven by growth in its project management consultancy (PMC) and engineering, procurement & construction (EPC) segments. The company has underperformed the booming construction industry by 321.8% over the past five years, despite rising by 246%. NBCC aims to overcome this by focusing on redevelopment and real estate sectors.

The company plans to sustain growth momentum by focusing on its order book, and expects to secure Rs 25,000 crore in new orders in FY25 across housing, railway, metro, and renewable energy sectors. The company holds a current under-execution order book of Rs 20,000 crore and intends to tender projects worth Rs 15,000 crore, aiming to achieve Rs 13,000 crore in revenue for FY25.

Commenting on the new orders, Chairman and MD, K. P. Mahadeva Swamysaid, "We have won a record new business worth Rs 23,500 crore, which is more than 250% of the previous year. Our order book stands at Rs 64,900 crore, and we expect to achieve a top line of Rs 12,350 - 13,000 crore in FY25, driven by our focus on real estate and infrastructure projects."

Geojit BNP Paribas has upgraded the stock to a ‘Hold’ rating from ‘Sell’, with a target price of Rs 176. The brokerage expects FY25 and FY26 EPS to rise by 10% and 6%, respectively, driven by robust tendering and execution. However, the firm is in the PE Sell Zone, currently trading above its historical PE.

3. Tata Elxsi:

This IT software & services company fell over 2.2% on Thursday as its net profit declined by 6.5% QoQ (-2.5% YoY) to Rs 184.1 crore in Q1FY25, missing Forecaster estimates by 6.3%. The fall was due to higher employee benefits expenses and raw material costs. In addition, EBITDA margins contracted 160 bps QoQ to 27.2% during the quarter. However, on Friday, the stock recovered its previous day’s losses and was up 1.6%, with the broader IT industry rising 4.9% on the back of positive results by heavyweight TCS. 

Tata Elxsi’s revenue grew by 2.3% QoQ (9% YoY) to Rs 926.5 crore, due to growth in the software development & services or SDS segment, which contributes 97% of the total revenue. The SDS segment consists of transportation, media & communication, and healthcare verticals. 

During the quarter, the transportation vertical’s revenue grew 5.3% QoQ driven by deal wins, while that of the media vertical rose marginally by 0.5% QoQ. Meanwhile, the healthcare vertical remained muted, as its revenue fell by 4.3% QoQ.  This was due to delayed renewals of some projects by a large US client.

Commenting on the outlook, CEO & MD Manoj Raghavan said, “We expect continued growth in the transportation segment, led by a strong deal pipeline, particularly in the OEM space”. He sees green shots in the media & communication vertical and highlights the company’s M&A plans going ahead. For FY25, Raghavan projects EBITDA margins in the range of 28-29%.

JPMorgan retains its ‘Underweight’ call on Tata Elxsi, with a price target of Rs 5,800. It believes the positive surprise in the transport vertical will be offset by headwinds persisting in the healthcare business. The brokerage cuts its earnings estimate by 2-4% over FY25-27 due to higher tax rates. The company is in the PE Sell Zone, indicating it is currently trading above its historical PE.

4. Indigo Paints:

This paints company rose by 10.2% over the past week as major industry players, Asian Paints and Berger Paints are expected to hike prices by 0.7-1%. Nuvama stated that the price increase is a proactive measure to compete against Birla Opus, a newcomer, and maintain healthy profit margins. For FY24, the company’s net profit increased by 11.7% YoY to Rs 147.3 crore, while its revenue rose by 21.7% YoY. The stock shows up in a screener for stocks with strong momentum.

In the past five years, the company’s revenue grew by 20% CAGR, the highest among its peers. It currently ranks as the fifth-largest producer of decorative paints in the country. Recently, it acquired a 51% stake in Apple Chemie India (ACIL) to enter the Waterproofing and Construction Chemicals (WPCC) segment whose FY24 market size was expected to be Rs 20,105.6 crore with a CAGR growth of 13.9% over 2025-33.

The company also launched a new water-based paint facility in Tamil Nadu and is expanding its capacities for both solvent-based and water-based paints in Rajasthan. The company currently operates five manufacturing units and its production volumes have risen in key segments like cement paints and putty.

Analysts expect the Indian paint industry to grow at a CAGR of ~12.7% from FY25 to FY27, reaching a market size of ~Rs 1 lakh crore. They highlight that the frequency of home repainting has improved, from every 7-8 years in FY13 to 4-5 years in FY23, indicating a growing paint consumption trend in India. Additionally, the Indian government has raised its infrastructure budget by 11% for FY25. These factors are expected to be key growth catalysts for the company.

Keynote Capital has given Indigo Paints a “Buy” rating, with a target price of Rs 1,594. The brokerage notes that the company has consistently achieved growth rates of 2-2.5X compared to its peers. We expect IPL to grow its revenue by 18% in FY25 and, due to operating leverage, expect margin to improve further.

5. Zydus Lifesciences:

This pharma company rose by 3.4% in the past week and hit an all-time high of Rs 1,203 on Thursday. The company also appears in a screener for stocks outperforming their respective industry over the last quarter.

The price rise followed multiple approvals by the US FDA. The firm won approval for Sacubitril and Valsartan, used to treat chronic heart failure. These tablets have annual sales of $5.5 billion. In the past week, it also received US FDA approval to market diroximel fumarate delayed-release capsules, a treatment for multiple sclerosis, which has annual sales of $847.4 million. 

Zydus Lifesciences has been busy over the past month – it received approval for azilsartan, indicated for the treatment of hypertension to lower blood pressure. Azilsartan has annual sales of $89 million. Zydus and Dr. Reddy's Laboratories also announced a licensing agreement for the co-marketing of a pertuzumab biosimilar, a critical treatment for breast cancer patients in India.

Trendlyne Forecaster estimates Zydus Lifesciences’ net profit to rise 5.5% YoY in Q1FY25. In FY24, the company’s profit grew by 102.3% YoY to Rs 3,972.8 crore, while its revenue improved by 13.8% YoY. It also beat Trendlyne Forecaster’s net profit estimate by 7.8%. Speaking about the growth outlook, Managing Director Sharvil Patel says, “We expect all our businesses to register high-teen growth. We also expect to comfortably maintain FY24 margins of 27.5% in the coming year, and we will do our best to improve those margins.”

Geojit BNP Paribas is positive about Zydus Lifesciences due to new drug launches and its existing portfolio. However, the brokerage states that the company’s valuations are looking expensive. The firm is trading in the PE Sell Zone.

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
12 Jul 2024
Market closes higher, Jio Financial Services receives approval from the RBI to convert into a core investment company
By Trendlyne Analysis

Markets rose in today's trading. Nifty 50 closed at 24,502.15 (186.2, 0.8%) , BSE Sensex closed at 80,519.34 (622, 0.8%) while the broader Nifty 500 closed at 23,095.45 (90.2, 0.4%). Market breadth is in the red. Of the 2,159 stocks traded today, 803 were on the uptrend, and 1,337 went down.

Indian indices closed higher after after extending gains throughout the day. The volatility index, Nifty VIX, fell 2% and closed at 13.7 points. Tata Consultancy Services' Q1FY25 net profit fell 3.2% QoQ to Rs 12,040 crore, while revenue rose 1.9% QoQ during the quarter.

Nifty Smallcap 100 and Nifty Midcap 100 closed flat. Nifty IT and Nifty Media closed higher. According to Trendlyne’s Sector dashboard, Software & Services emerged as the top-performing sector of the day, with a rise of 4.4%.

European indices traded flat or higher, while major Asian indices closed mixed. Most US index futures traded flat, indicating a mixed start to the trading session. US CPI inflation lowers to 3%in June compared to 3.3% in May. Markets expect a interest rate cut in September by the Federal Reserve, following this reduction in inflation.

  • Manappuram Finance sees a long buildup in its July 25 future series as its open interest rises 16.5% with a put-call ratio of 0.6.

  • IT stocks like Coforge, Tata Consultancy Services, MphasiS, and Wipro rise more than 5% in trade. All constituents of the broader Nifty IT index are also trading in the green, helping it to surge to its all-time high of 39,237.7.

  • Sterlite Technologies secures creditors' and shareholders' approval to demerge its global services business, paving the way for separate entity listing and independent growth opportunities.

  • Foreign institutional investors invest Rs 7,043.3 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 37,046.8 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, injecting Rs 1,897.5 crore during the same period.

  • Nomura expects the Centre will lower its FY25 fiscal deficit target to 5% of GDP from 5.1% announced in the interim budget. Despite additional financial demands from key allies (estimated at around 0.2% of GDP), the Centre will likely manage its fiscal space effectively with a higher RBI dividend (~0.4% of GDP) and a lower FY24 fiscal deficit (~0.2% of GDP). Nomura anticipates no reduction in market borrowing despite the potential fiscal deficit cut.

  • Motilal Oswal retains its 'Buy' call on Hindalco Industries with an upgraded target price of Rs 800 per share. This indicates a potential upside of 15.5%. The brokerage expects revenue growth due to increased volumes across geographies and long-term contracts from marquee customers. It expects the company's revenue to grow at a CAGR of 4.4% over FY25-26.

  • Puravankara's Q1FY25 customer collections from the real estate business rise 39% YoY to Rs 965 crore. The company achieves pre-sales of Rs 1,128 crore, marginally higher than Q1FY24.

  • Cyient surges as it establishes a wholly-owned subsidiary to expand its semiconductor business, strengthening its decades of expertise in turnkey Application Specific Integrated Circuits (ASICs).

  • The Society of Indian Automobile Manufacturers (SIAM) reports a 21.3% YoY increase in two-wheeler sales to 16.1 lakh units in June. Passenger vehicle sales rise by 3% YoY to 3.4 lakh units.

  • Prestige Estates Projects' Q1FY25 sales decline by 22.6% YoY to Rs 3,029.5 crore due to delays in approvals and project launches. However, its collections grow by 6% YoY to Rs 2,916.2 crore, helped by a 16% YoY improvement in average realisation. It appears in a screener of stocks with falling cash flow from operations over the past two years.

  • Utkarsh Small Finance Bank rises as the Reserve Bank of India approves Mirae Asset Mutual Fund to acquire up to 9.9% of the bank's paid-up share capital or voting rights.

  • Anand Rathi Wealth's Q1FY25 net profit rises by 37.9% YoY to Rs 73.2 crore. Its revenue increases by 35.8% YoY to Rs 237.6 crore, helped by strong mutual fund inflows and client additions. The company appears in a screener of stocks with growth in quarterly net profit with increasing profit margin.

  • Adani Ports and Special Economic Zone reportedly plans to increase its investment in Vizhinjam, Kerala, to Rs 10,000 crore ($1.2 billion) to enhance the transshipment container port. The company is actively pursuing major container lines like MSC Mediterranean Shipping Co., A.P. Moller-Maersk A/S, and Hapag-Lloyd to utilize the port facilities.

  • Prakash Industries surges as the Ministry of Environment, Forest and Climate Change grants Stage-II approval for the Bhaskarpara coal mine in Chhattisgarh.

  • LT Foods rises to its all-time high of Rs 297.5 per share as it sets up a new manufacturing facility in the United Kingdom (UK). The company commissions this facility to meet the growing demand for premium rice and rice-based food products.

  • Bondada Engineering hits an upper circuit as its arm, Bondada Managed Services, wins an operations and maintenance work order worth Rs 316.8 crore from Reliance Projects & Property Management Service.

  • Vodafone Idea receives shareholders' approval to issue preferential shares valued at Rs 2,458 crore to Nokia and Ericsson. This transaction will grant Nokia a 1.5% stake and Ericsson a 0.9% stake in VIL. The financially constrained telecom company aims to settle vendor payments and strengthen its 5G and 4G network expansion efforts.

  • Jio Financial Services receives approval from the Reserve Bank of India to convert into a core investment company from a non-banking financial company.

  • Rashtriya Chemicals surges to its all-time high of Rs 244.9 per share as it places a purchase order worth Rs 514.6 crore with Topsoe A/s to procure a basic engineering design package (BEDP) and supply equipment to expand its Ammonia plant.

  • Dolly Khanna adds Super Sales India to her portfolio in Q1FY25. She buys a 1.1% stake in the company.

  • Investec initiates a ‘Buy’ on Bharti Hexacom and keeps its ‘Hold’ on Bharti Airtel. The brokerage expects annual tariff hikes over the next few years. It believes Bharti Hexacom will benefit from tariff hikes. Investec also notes that telco players need to improve ARPU (average revenue per user) to reduce debt and enhance RoCE.

  • Vijay Kedia cuts his stake in Talbros Automotive Components to below 1% in Q1FY25. He held a 1% stake in the company in Q4FY24.

  • Ashish Kacholia cuts his stake in Vaibhav Global to below 1% in Q1FY25. He held a 1.1% stake in the company in Q4FY24.

  • Oriental Rail Infrastructure surges to its all-time high of Rs 397.5 per share as its subsidiary, Oriental Foundry, bags an order worth Rs 432.2 crore from Indian Railways for 1,200 wagons.

  • Tata Consultancy Services' Q1FY25 net profit falls 3.2% QoQ to Rs 12,040 crore, in line with Forecaster estimates. Its revenue rises 1.9% QoQ during the quarter. The company appears in a screener for stocks with no debt.

  • Nifty 50 was trading at 24,354.95 (39, 0.2%), BSE Sensex was trading at 80,122.91 (225.6, 0.3%) while the broader Nifty 500 was trading at 23,057.10 (51.9, 0.2%).

  • Market breadth is surging up. Of the 1,932 stocks traded today, 1,435 were on the uptick, and 455 were down.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (614.45, 11.5%), Coforge Ltd. (5,977.65, 7.4%) and Tata Consultancy Services Ltd. (4,183.95, 6.6%).

Downers:

Largecap and midcap losers today include Macrotech Developers Ltd. (1,395.80, -5.2%), Indian Oil Corporation Ltd. (167.04, -4.2%) and Schaeffler India Ltd. (3,995.10, -3.6%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Sonata Software Ltd. (710.50, 13.8%), Oil India Ltd. (614.45, 11.5%) and KPIT Technologies Ltd. (1,865.55, 9.1%).

Top high volume losers on BSE were Aegis Logistics Ltd. (845.85, -4.0%), Anand Rathi Wealth Ltd. (3,995.50, -3.5%) and RHI Magnesita India Ltd. (582.40, -2.8%).

ITI Ltd. (319.10, 3.4%) was trading at 12.1 times of weekly average. Vinati Organics Ltd. (1,905, 0.3%) and Zensar Technologies Ltd. (769.70, 7.2%) were trading with volumes 9.6 and 8.0 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 - Axis Bank Ltd. (1,317.30, 1.6%), Britannia Industries Ltd. (5,787.05, 0.5%) and Dr. Reddy's Laboratories Ltd. (6,719.45, 1.9%).

6 stocks climbed above their 200 day SMA including Sonata Software Ltd. (710.50, 13.8%) and Coforge Ltd. (5,977.65, 7.4%). 3 stocks slipped below their 200 SMA including Kama Holdings Ltd. (2,730.50, -1.8%) and CSB Bank Ltd. (363.95, -0.8%).