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Trendlyne Marketwatch
Trendlyne Marketwatch
12 Jun 2024
Market closes higher, ICICI Securities keeps its 'Buy' rating on Birla Corp

Nifty 50 closed at 23,322.95 (58.1, 0.3%), BSE Sensex closed at 76,606.57 (150.0, 0.2%) while the broader Nifty 500 closed at 21,960.95 (109.0, 0.5%). Of the 2,168 stocks traded today, 1,426 were gainers and 714 were losers.

Indian indices maintained the gains from the afternoon session and closed in the green. The volatility index, Nifty VIX, dropped by 2.6% and closed at 14.4 points. Tata Communications signs a five-year global broadcasting services deal for the World Athletics Series, including the World Championships in Tokyo in 2025.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher following the benchmark index. Nifty Pharma and Nifty Media closed higher than Tuesday’s closing level. According to Trendlyne’s sector dashboard, telecommunication equipment emerged as the top-performing sector of the day, with a rise of over 2.2%.

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. Britain's GDP in April was stagnant MoM, and grew by 0.6% compared to April 2023.

  • Relative strength index (RSI) indicates that stocks like Emami, Coromandel International, Endurance Technologies, and Bikaji Foods International are in the overbought zone.

  • LTIMindtree rises as it announces the inauguration of its regional headquarters in Riyadh as a part of its expansion in the Kingdon of Saudia Arabia (KSA) and the Middle East.

  • ICICI Securities keeps its 'Buy' rating on Birla Corp with a lower target price of Rs 1,870 per share. This indicates a potential upside of 22.8%. The brokerage expects improved profitability on the back of govt incentives entitled to the Muktaban facility, lower fuel prices, increasing premium products, and improvement in capacity utilisation. It expects the company's net profit to grow at a CAGR of 50.6% over FY25-26.

  • Ola Electric receives SEBI approval for its Rs 7,250 crore IPO, according to reports. The IPO will consist of a fresh issue worth Rs 5,500 and an offer for sale of approx. Rs 1,750 crore. The company plans its stock market debut within a month.

  • Tube Investments of India and Tl Clean Mobility enter into an agreement with South Asia Growth lnvest and South Asia EBT Trust to acquire convertible preference shares for Rs 160 crore in Tl Clean Mobility.

  • Tata Communications rises as it signs a five-year global broadcasting services deal for the World Athletics Series, including the World Championships in Tokyo in 2025. The company will provide customized live content to broadcasters worldwide.

  • LE Travenues Technology's Rs 740.1 crore IPO gets bids for 44.7X the available 4.4 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 40.7X the available 79.6 lakh shares on offer.

  • Haldiram Snacks is reportedly considering an initial public offering (IPO) after its attempt to sell its stake to foreign investors failed due to a valuation mismatch. The IPO discussions are in the early stages, and the controlling shareholders will determine the offer price and proceed with the sale accordingly.

  • Dredging Corp of India` hits an all-time high of Rs 1,129.2 as its bags an order worth Rs 2,015.9 crore from Syama Prasad Mookerjee Port Authority for maintenance dredging of the Hooghly's shipping channel. The contract is for a period of five years.

  • Vodafone Idea gets in-principle approval for a Rs 14,000 crore loan from a State Bank of India-led consortium of banks. The funds will be used to repay operational creditors, roll out the 5G network, and bid for additional spectrum.

  • Brigade Enterprises announces plans to invest Rs 8,000 crore in Chennai by 2030 to expand its business in the city by launching residential, office, retail, and hospitality projects with over 15 million square feet.

  • The World Bank projects India’s GDP to grow at an average of 6.7% from FY25-27, driven by strong domestic demand, and a surge in investment and services activity.

  • Axis Direct upgrades KEC International to 'Buy' from 'Hold' with a higher target price of Rs 845 per share. This indicates a potential upside of 2.7%. The brokerage believes the company's strong order book and L1 position offer healthy revenue visibility for the next two years. It expects the company's revenue to grow at a CAGR of 9% over FY25-26.

  • AGS Transact Technologies rises sharply as it begins deploying 1,350 ATMs from a State Bank of India order won in FY24, with completion expected by H1FY25.

  • Nifty 50 hits an all-time high of 23,442 today. The benchmark index surges 7% over the past week.

  • Union Bank of India is rising as its board of directors approves the fundraising of Rs 10,000 crore via qualified institutional placement (QIP), bonds, and other modes in multiple tranches.

  • Jefferies has a 'Buy' rating on GMR Airports Infrastructure with a target price of Rs 100. The brokerage notes that the expansion of Delhi and Hyderabad airports will aid traffic growth and non-aero revenues. It adds that the company has filed a new tariff application for Delhi International Airport, to be implemented by Q4FY25, and notes the management's focus on developing its airport platform strategy.

  • Rites is rising as it signs a memorandum of understanding (MoU) with Eastern Railway's Andal Diesel Shed, West Bengal, to set up a framework for the repair and maintenance of diesel-electric locomotives.

  • Castrol India’s Managing Director Sandeep Sangwan resigns, effective October 31. The company appoints Kedar Lele as the new MD for five years, effective November 1, 2024.

  • B L Kashyap & Sons wins orders worth Rs 1,021 crore. Orders include the construction of a hotel structure and shell work from Sattva Homes and composite steel structural work from DLF City Centre.

  • VP Nandakumar, MD & CEO of Manappuram Finance, expects to launch the Asirvad MFI IPO in the next 2-3 months. He projects around 10-12% gold loan growth for FY25 and expects the non-gold growth momentum to continue. Nandakumar highlights that AUM growth for Q4FY24 stood at 18.7% YoY, and the calculated net interest margin(NIM) at 15%.

  • Media stocks like Sun TV Network, Zee Entertainment Enterprises, PVR INOX, Network18 Media & Investments, and TV18 Broadcast are rising in trade. The broader sectoral index, Nifty Media, is also trading in the green.

  • TVS Supply Chain Solutions surges as it inks a deal with Daimler Truck AG's arm, Daimler Truck South East Asia, for integrated supply chain solutions service in Singapore.

  • Ashish Kacholia sells a 2.9% stake in Ador Welding for approx Rs 48.7 crore in a bulk deal on Tuesday.

  • HCL Technologies rises sharply as it extends its partnership with Germany's apoBank with an estimated value of $278 million (approx. Rs 2,322.8 crore) for the next 7.5 years. The company also extends its engineering research and development partnership with Olympus.

Riding High:

Largecap and midcap gainers today include Max Healthcare Institute Ltd. (870.50, 8.5%), One97 Communications Ltd. (402.50, 5.8%) and LIC Housing Finance Ltd. (715.40, 5.2%).

Downers:

Largecap and midcap losers today include APL Apollo Tubes Ltd. (1,580.85, -3.2%), Pidilite Industries Ltd. (3,078.50, -3.1%) and Marico Ltd. (629.50, -2.8%).

Movers and Shakers

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

Top high volume gainers on BSE included Sunteck Realty Ltd. (579.15, 9.6%), Max Healthcare Institute Ltd. (870.50, 8.5%) and Privi Speciality Chemicals Ltd. (1,264.10, 7.3%).

Top high volume loser on BSE was Prism Johnson Ltd. (160.82, -2.0%).

Tanla Platforms Ltd. (959.05, 4.0%) was trading at 12.0 times of weekly average. Tata Teleservices (Maharashtra) Ltd. (80.96, 6.2%) and Trident Ltd. (40.48, 7.0%) were trading with volumes 9.1 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

47 stocks overperformed with 52-week highs,

Stocks touching their year highs included - Ashok Leyland Ltd. (238.04, 0.0%), Bajaj Auto Ltd. (9,904.25, 0.9%) and BASF India Ltd. (4849.40, 3.3%).

17 stocks climbed above their 200 day SMA including Privi Speciality Chemicals Ltd. (1,264.10, 7.3%) and Trident Ltd. (40.48, 7.0%). 3 stocks slipped below their 200 SMA including Century Plyboards (India) Ltd. (681.65, -1.3%) and PCBL Ltd. (244.01, -1.0%).

 
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The Baseline
12 Jun 2024
By Satyam Kumar

Both institutional and retail investors rely on analyst forecasts of the future outlook for companies, and the direction of their share prices. But unexpected positive or negative news (such as the June 4 election results) can also cause stock prices to shift. For instance, when ICICI Bank reported a positive revenue surprise of 66.1% on Saturday, April 27, its stock price in the next trading session went up by 4.7%.

Keeping track of predictions by institutional analysts is not easy. This is where Trendlyne’s Forecaster helps – it keeps track of analyst estimates for the company’s financials and target prices, providing a consensus. In case the company reports better or worse financials than expected, Forecaster keeps track of this in the surprises section.

In this Chart of the Week, we look at companies that delivered either positive or negative revenue surprises in FY24. We use a screener for stocks that posted surprises greater than 15% in their FY24 results. In the interactive chart above, green bubbles represent positive surprises, while red bubbles indicate negative surprises.

Financial firms beat revenue estimates, driven by demand for retail loans

ICICI Bank’s revenue for FY24 exceeded estimates, thanks to loan growth from the retail segment over the past year. Revenue from the retail segment surged 29.7% YoY in FY24, and the treasury segment also grew by 34.4% YoY, as demand for treasuries increased with high interest rates. ICICI Bank outperformed estimates by 66.1%.

Retail-focused NBFCPoonawala Fincorp saw its total assets under management rise by 55% YoY to Rs 25,003 crore, with disbursements more than doubling in FY24. To further boost growth in the retail segment, the company launched a co-branded credit card in partnership with IndusInd Bank. Similarly, another NBFC, Piramal Enterprises posted a revenue growth of 12% YoY at Rs 10,020.3 crore, beating Forecaster estimates by 31.1%.

Meanwhile, two insurance players, SBI Life Insurance Company and Max Financial Services (MFSL) beat revenue estimates for FY24 by 21.9% and 20.1% respectively. These companies benefited from rising awareness which boosted insurance protection demand.

Holding companies, which derive a major chunk of revenue from their insurance business, also reported estimate-beating revenue. Aditya Birla Capital and Bajaj Finserv posted revenue growth of 14.4% and 34.5% in FY24 beating estimates by 27.9% and 21.9% respectively.

Realty developers see robust growth in presales, but miss estimates due to delayed completions

Real estate developer Sobha saw its presales rise by 28% YoY to Rs 6,600 crore, driven by a 19% improvement in realisation to Rs 11,000 per square foot and a 7% increase in volumes. However, the company’s annual revenue of Rs 3,097 crore in FY24 was 21.9% below Forecaster estimates because of delays in project completion.

Mahindra Lifespace Developers’ revenue in FY24 declined 57.7% YoY to Rs 279.1 crore, missing the Forecaster estimate by 50.8%. The Mahindra Group’s real estate arm witnessed its net profit decline 3.1% YoY due to higher construction expenses and inventory buildup from under-construction projects.

Similarly, realty companies Signatureglobal (India) and Sunteck Realty also missed Forecaster estimates by 38.4% and 51.4% respectively.

Industry outperformer TVS Motors beat Forecaster estimates, while JBM Auto misses as its components business lags

Two-wheeler manufacturer TVS Motor Company saw its annual revenue in FY24 rise by 22.2% YoY, beating Forecaster estimates by 24.2%. The company outperformed its industry with 34% and 17% YoY growth in the domestic motorcycle and scooter segments, respectively, compared to industry growth of 14% and 13% YoY driven by demand for premium vehicles. Analysts at Axis Securities expect this momentum to continue, buoyed by the launch of multiple products across all its segments over the next few quarters.

CEO of TVS Motor Company, K.N. Radhakrishnan, said, "The rural market is slowly and steadily changing; I'm able to see some recovery happening." He expects this recovery because of forecasts of a normal monsoon this year.

Meanwhile, auto components maker JBM Auto fell short of analyst expectations, with annual revenue missing Forecaster estimates by 22.3%. This shortfall was due to a 2.3% YoY decline in revenue from its component division, totalling Rs 2,978.7 crore in FY24. However, the company in the past few years has emerged as a major player in the electric bus domain. Its electric bus segment, which contributed Rs 1,741.2 crore in FY24, witnessed growth of 217% YoY.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Jun 2024
Markets closes flat, NBCC (India) wins multiple orders worth Rs 878.2 crore
By Trendlyne Analysis

Nifty 50 closed at 23,264.85 (5.7, 0.0%), BSE Sensex closed at 76,456.59 (-33.5, 0.0%) while the broader Nifty 500 closed at 21,852 (43.8, 0.2%). Market breadth is in the green. Of the 2,169 stocks traded today, 1,377 showed gains, and 764 showed losses.

Indian indices pared the gains from the afternoon session and closed flat. The volatility index, Nifty VIX, dropped by 9.8% and closed at 14.8 points. Raymond's real estate arm, Raymond Realty, bags a Rs 2,000 crore redevelopment project in Bandra (East), Mumbai. Raymond Realty had also signed three joint development agreements in Bandra, Sion, and Mahim, with an estimated revenue potential of over Rs 5,000 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher with the benchmark index closing flat. Nifty Realty and Nifty Media closed higher than Monday’s closing level. According to Trendlyne’s sector dashboard, telecommunications equipment emerged as the top-performing sector of the day, with a rise of over 4.1%.

Most European indices trade in the red. US indices futures trade lower, indicating a negative start. Global rating agency, Moody’s warned that France’s outlook could be cut to “negative” from “stable” due to potential political instability leading to credit risk. The warning comes after France announced snap elections later this month.

  • GMR Airports Infrastructure sees a short buildup in its June 27 future series as its open interest rises 16.5% with a put-call ratio of 0.6.

  • Edelweiss retains its 'Buy' call on Royal Orchid Hotels with an upgraded target price of Rs 477 per share. This indicates a potential upside of 30.6%. The brokerage anticipates revenue growth driven by improved occupancy, the addition of rooms, expansion in the restaurant & banquet portfolio, and a revival in large-scale weddings. It expects the company's revenue to grow at a CAGR of 16.3% over FY25-26.

  • NBCC (India) surges as it wins multiple orders worth Rs 878.2 crore. The orders include the development of land parcels for Kochi Metro Rail, the construction of a Boys College for Hindu College, an office and training institute for ICSI, and a centralized core repository for Oil India.

  • Persistent Systems enters a partnership with Google Cloud to expand its presence in the US, India, UK, and Australia. The companies will develop industry-specific solutions to promote the adoption of generative AI using Google Cloud's Gemini models and other technologies.

  • Sameer Khetarpal, CEO and MD of Jubilant Foodworks, notes that India has the highest number of Domino's outlets (2,000 outlets) in a country outside of the US. He adds that the company's margins have bottomed out and expects like-for-like growth momentum to continue in Q1. He adds that Jubilant has extended the free delivery option to the World Cup season as well.

  • LE Travenues Technology's Rs 740.1 crore IPO gets bids for 5.9X the available 4.4 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 14.4X the available 79.6 lakh shares on offer.

  • Adani Enterprises rises as its subsidiary, Adani Defence & Aerospace, signs an agreement with EDGE Group to set up research & development (R&D) facilities in India, UAE and other global markets. As per the agreement, the companies will develop missiles, weapons, unmanned platforms and cyber systems.

  • IRB Infrastructure Developers falls sharply as 41.2 crore shares (6.8% stake), amounting to Rs 2,656 crore, reportedly change hands in a block deal. Cintra Investments, an infra subsidiary of Dutch major Ferrovial, is the likely seller in the transaction.

  • According to a poll of economists, India’s retail inflation is expected to remain flat at 4.8% in May. Economists expect food inflation to remain elevated due to higher prices of vegetables, cereals, and pulses.

  • HG Infra Engineering hits an all-time high of Rs 1,768.7 as its arm HG Solar Projects, incorporates a subsidiary HG Jaipur Solar Project to carry out solar power business.

  • PNC Infratech falls as the Central Bureau of Investigation (CBI) conducts searches at the company's corporate office, other offices, and the residences of MD Yogesh Kurnar Jain and Whole-time Director Talluri Raghupati Rao. Jain is also summoned before the CBI Office, details of which are pending.

  • JBM Auto inks an agreement with MUON India (a Macquarie Group company) to deploy over 2,000 electric buses over the next few years.

  • Sanjai Kumar, the Chief Managing Director of RailTel Corp of India, highlights the company's total orderbook of Rs 24,700 crore at the FY24 end, of which Rs 2,000 crore will be executed in FY25. He projects revenue growth of more than 30% for FY25, with margins of around 16%. He adds that the company's Kavach system (a cab signaling train control system with anti-collision features) has a revenue potential of Rs 24,000-5,000 crore over 3-4 years.

  • Raymond's real estate arm, Raymond Realty, bags a Rs 2,000 crore redevelopment project in Bandra (East), Mumbai. Raymond Realty had also signed three joint development agreements in Bandra, Sion, and Mahim, with an estimated revenue potential of over Rs 5,000 crore.

  • Suzlon Energy rises sharply as it bags an order to supply 33 wind turbines with a rated capacity of 3 MW each for a 104 MW wind energy project by AMPIN Energy Transition in Rajasthan.

  • Mahindra & Mahindra's overall auto wholesales rise 16.7% YoY to 71,682 units in May. Domestic passenger vehicle wholesales grow by 17.4% YoY and total exports improve by 2.1% YoY.

  • Monthly net inflows through SIPs surge to a new peak of Rs 20,904 crore in May, marking the 11th consecutive month of record highs, as per data from the Association of Mutual Funds in India (AMFI). However, new SIP accounts registered stood at 49.7 lakh, down from 63.6 lakh recorded the previous month.

  • Realty stocks like Mahindra Lifespace Developers, Prestige Estates Projects, Oberoi Realty and DLF are rising in trade. All constituents of the broader Nifty Realty index are also trading in the green, helping it to touch its 52-week high of 1,104.2.

  • InterGlobe Aviation falls as reports suggest that promoter entity InterGlobe Enterprises, is likely to sell a 2% stake at a minimum price of Rs 4,266 per share, amounting to Rs 3,293.3 crore.

  • PTC Industries surges to its all-time high of Rs 11,753.9 per share as it joins the government's special purpose vehicle (SPV), Advanced Materials (Defence) Testing Foundation, under the Defence Testing Infrastructure Scheme (DTIS).

  • The Indian unit of Hyundai Motor is likely to file a draft prospectus with SEBI in the next two weeks, say reports. The company aims to raise around $2.5 billion (approx. Rs 20,875 crore), with the launch planned for September-October this year.

  • Rail Vikas Nigam (RVNL) rises as its consortium with Siemens wins an order worth Rs 394.2 crore from Bangalore Metro Rail Corp to develop rail traction electrification, including traction substations, auxiliary substations, and SCADA systems. RVNL also gets a Rs 138.5 crore order from Central Railway to upgrade the electric traction system in the Amla-Nagpur section.

  • The Reserve Bank of India (RBI) reportedly rejects Edelweiss Financial Services' proposal to reappoint Rajkumar Bansal as the Managing Director and Chief Executive Officer (CEO) of its subsidiary, Edelweiss ARC.

  • Transformers & Rectifiers (India) rises as it launches a qualified institution placement to raise Rs 500 crore. The floor price of the issue is Rs 699.9 per share.

  • NLC India rises sharply as its board of directors approves raising a foreign currency loan of $600 million (approx. Rs 5,007.1 crore) through external commercial borrowings (ECB). The board also approves investing Rs 994.5 crore in its subsidiary, NLC India Renewables, in exchange for equity shares.

  • Nifty 50 was trading at 23,247.60 (-11.6, -0.1%), BSE Sensex was trading at 76,680.90 (190.8, 0.3%) while the broader Nifty 500 was trading at 21,824.30 (16.1, 0.1%).

  • Market breadth is highly positive. Of the 1,924 stocks traded today, 1,380 were in the positive territory and 510 were negative.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (648.55, 6.8%), Linde India Ltd. (8,997.15, 6.6%) and Oil And Natural Gas Corporation Ltd. (273.55, 5.6%).

Downers:

Largecap and midcap losers today include InterGlobe Aviation Ltd. (4,369.50, -4.3%), One97 Communications Ltd. (380.55, -2.2%) and ICICI Lombard General Insurance Company Ltd. (1,645.35, -2.1%).

Volume Shockers

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

Top high volume gainers on BSE included NBCC (India) Ltd. (156.58, 9.5%), HFCL Ltd. (107.57, 9.4%) and Jindal Worldwide Ltd. (362.50, 7.3%).

Top high volume losers on BSE were IRB Infrastructure Developers Ltd. (66.12, -5.8%) and Poly Medicure Ltd. (1,831.60, -1.2%).

Varroc Engineering Ltd. (665.50, 7.2%) was trading at 13.7 times of weekly average. Home First Finance Company India Ltd. (924.50, 6.9%) and Aavas Financiers Ltd. (1,847.70, 6.5%) were trading with volumes 8.3 and 7.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

44 stocks hit their 52 week highs,

Stocks touching their year highs included - Ashok Leyland Ltd. (237.96, 2.8%), Balkrishna Industries Ltd. (3,231.20, -0.6%) and BASF India Ltd. (4,694.55, 3.0%).

26 stocks climbed above their 200 day SMA including Jindal Worldwide Ltd. (362.50, 7.3%) and Home First Finance Company India Ltd. (924.50, 6.9%). 7 stocks slipped below their 200 SMA including Cyient Ltd. (1,863.75, -1.3%) and Route Mobile Ltd. (1,564, -0.8%).

 
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The Baseline
11 Jun 2024
5 stocks to buy from analysts this week - June 11, 2024
By Ruchir Sankhla

1. Lemon Tree Hotels:

IDBI Capital upgrades this hotel company  to a ‘Buy’ with a target price of Rs 162, indicating a potential upside of 13.2%. In Q4FY24, the company’s profits increased 52% YoY to Rs 67 crore, while revenue grew 30.3% YoY. The results were in line with the brokerage's estimates for net sales, while net profit was a beat. The company’s EBITDA margin declined 295 basis points YoY. Analysts Archana Gude and Sarthak Awasthi attribute this fall tohigher expenses in renovating existing hotels in order to garner higher average room rates. 

The analysts say “We anticipate robust inventory addition through management contracts and franchises, to drive sustainable margin improvement in the mid-long term.” The company has signed 12 new management and franchise contracts, adding  667 new rooms in Q4 to their pipeline.

Gude and Awasthi see the company as a strong player in mid-scale hotels due to its operations and renovation efforts. They expect the average daily rate (ADR)to get a substantialpush in the mid-term. Additionally, they commend the company's outlook on inventory addition and balance sheet strengthening through debt repayment.

2. HCL Technologies:

Axis Direct recommends a ‘Buy’ rating on this IT consulting & software company with a target price of Rs 1,550, indicating a potential upside of 8.3%. Analyst Omkar Tanksale says, “HCL Technologies’ Q4 results outperformed its Indian counterparts, mainly because of diversified business – IT services contributed 74% of its revenue while engineering and research & development (ER&D) and product & platform contributed 16% and 10% to total revenues respectively.” During Q4FY24, its profit increased marginally YoY to Rs 3,986 crore, while revenue grew 6.8% YoY to Rs 28,915 crore.

Tanksale is optimistic about the deal pipeline and expects the company to sign deals in FY25 as well. The firm’s new deal-wins increased to $2.3 billion in Q4, of which 21 were large deals — 13 in the services vertical and 8 in the software vertical.

The analyst mentions that ER&D has seen strong investment and resilient demand compared to other traditional services during economic uncertainty. He believes this long-term demand will remain strong, and expects the IT sector to regain momentum in H2FY25 and onwards. However, he is cautious of near-term demand amid lower spending and AI headwinds. Tanksale expects revenue to grow in the range of 3%–5% YoY in FY25while the company’s management retains EBIT margin guidance of 18%–19%.

3. Birla Corp:

ICICI Direct gives a ‘Buy’ call to this cement and cement products manufacturer with a target price of Rs 1,870, indicating an upside of 22.3%. Analysts Vijay Goel and Ankit Shah are optimistic about the company’s new cement facility at Muktaban with a 3.9 mtpa capacity. With the new facility giving the company access to newer growth markets in western India, they expect cement volumes to pick up. They estimate a volume CAGR of 8.7% over FY25-26. 

Goel and Shah say, “Focus on operational efficiencies will drive improvement in EBITDA per tonne over FY25-26.” They note that EBITDA per tonne improved sharply – by 66% YoY to Rs 815 in FY24, driven by measures like raw material sourcing and captive coal & power usage.

They believe that with the government’s incentives for the Muktaban facility, lower fuel prices, and an increasing share of premium products, the company’s margins and profitability will improve over FY25-26. They estimate EBITDA per tonne to improve to Rs 925 in FY25 and Rs 1,017 in FY26, and expect revenue to grow at 9% while profit grows at double digits, of  51% CAGR over FY25-26.

4. Supriya Lifescience:

KR Choksey retains a ‘Buy’ rating on this pharma company with a target price of Rs 401, indicating a potential upside of 7.6%. In Q4FY24, the company’s net profit fell 3.4% YoY to Rs 36.9 crore due to an increase in inventory expenses, while its revenue grew 11.1% YoY to Rs 158 crore, beating the brokerage’s estimates by 5.8% due to growth in the vitamin and anti-histamine segment.

Analyst Unnati Jadhav believes that the company’s regulated market share will increase going forward and support its profitability as it will launch new products in FY25 and commercialise contracts in the pipeline in H2FY25.

The analyst is optimistic about the firm’s Ambernath facility (CDMO projects) as it starts production in Q2FY25 and expects it to reach peak capacity in two to three years. She expects this plant to contribute 20% to 25% of total revenue within the next two to three years. Going forward, Jadhav expects the revenue to grow at 20.1% CAGR and profit to grow at 22.3% CAGR over FY25-FY26.

5. Kewal Kiran Clothing:

Anand Rathi upgrades to a ‘Buy’ call on this apparel and accessories manufacturer with a target price of Rs 811, indicating an upside of 17.1%. In Q4FY24, the company’s net profit improved by 20.2% YoY to Rs 37.9 crore, while revenue grew by 10.2% YoY in line with the brokerage’s estimates. Analysts Vaishnavi Mandhaniya and Shreya Baheti note that the company’s efforts to reduce finished goods inventory to align with the fast-changing trends in the fashion industry, and its focus on profitability led to a 75% YoY increase in operating cash flows to Rs 140 crore.

Mandhaniya and Baheti are upbeat on the company and note that it strengthened its presence in women’s wear by acquiring a 50% stake in Kraus Casuals for Rs 170 crore. They believe future growth is promising despite the intense competition in this space, and will be driven by the channel mix, network expansion, and category extensions to kids’ and women’s wear. The analysts estimate sales and profit to grow at a CAGR of 15.9% and 12.6%, respectively, over FY25-26.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Jun 2024, 03:54PM
Market closes lower, GAIL (India) plans to set up a 1,500 KTA ethane cracker project in MP
By Trendlyne Analysis

Nifty 50 closed at 23,259.20 (-31.0, -0.1%), BSE Sensex closed at 76,490.08 (-203.3, -0.3%) while the broader Nifty 500 closed at 21,808.25 (44.1, 0.2%). Market breadth is ticking up strongly. Of the 2,181 stocks traded today, 1,452 were in the positive territory and 713 were negative.

Indian indices pared the gains from the afternoon session and closed in the red. The volatility index, Nifty VIX, dropped by 2.8% and closed at 16.4 points. Adani Green Energy plans to invest over $1 billion in Sri Lanka, making it the country's largest renewable energy project and foreign direct investment to date.

Nifty Smallcap 100 closed sharply higher, while Nifty Midcap 100 closed flat with the benchmark index closing lower. Nifty Realty and Nifty Media closed higher than Friday’s closing level. According to Trendlyne’s sector dashboard, Fertilizers emerged as the top-performing sector of the day, with a rise of over 8%.

Most European indices trade in the red. US indices futures trade lower, indicating a negative start. France’s CAC 40 plunges 2.2% after the incumbent French President, Emmanuel Macron announced elections as early as later this month. The far-right parties gaining significant vote share in the European Parliamentary Elections has reportedly led to Macron’s decision.

  • Money flow index (MFI) indicates that stocks like KNR Constructions, Avanti Feeds, Emami, and UNO Minda are in the overbought zone.

  • aGAIL (India) plans to set up a 1,500 KTA ethane cracker project in Madhya Pradesh with an estimated capex of Rs 60,000 crore.

  • Havells India partners with UAE-based Jumbo Group to expand its market presence in the United Arab Emirates. The partnership will enable Havells to launch its premier kitchen appliances, starting with online availability on Jumbo’s e-commerce website, followed by retail store distribution.

  • Shyam Metalics and Energy's stainless steel sales rise 34.1% YoY to 4,949 tonnes in May. However, aluminium foil sales decline by 2.7% YoY to 2,058 tonnes. The company's speciality alloys sales fall 0.8% YoY, and carbon sales decrease by 6.5% YoY, while that of pellets increase by 0.3% YoY.

  • According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), cooling appliance sales rose by 25% YoY in the March to May period, driven by air conditioner and cooler sales. The association projects AC sales of around 1.4 crore in 2024. It states that AC segment sales grew by 25-30% YoY, while refrigerator sales increased by 20% YoY.

  • Axis Direct keeps its 'Buy' call on Pitti Engineering with a higher target price of Rs 1,180 per share. This indicates a potential upside of 24.7%. The brokerage remains confident in the stock due to strong order inflow, improvement in the value-added products segment, and the upcoming merger with Pitti Castings. It expects the company's revenue to grow at a CAGR of 20.1% over FY25-26.

  • Adani Green Energy reportedly plans to invest over $1 billion (approx. Rs 8,351 crore) in Sri Lanka, making it the country's largest renewable energy project and foreign direct investment to date. The company will set up two wind farms in Sri Lanka's Mannar town and Pooneryn village.

  • LE Travenues Technology's Rs 740.1 crore IPO gets bids for 1X the available 4.4 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 3.8X the available 79.6 lakh shares on offer.

  • Oil prices stabilize as the market awaits the Federal Reserve's interest rate decision and the International Energy Agency report. Brent hovers around $80 per barrel, recovering from a 2.5% decline last week, after OPEC+ announced plans to increase supply gradually from the third quarter this year. West Texas Intermediate closed near $76 last week.

  • JSW Steel's crude steel production falls 4% YoY to 21 lakh tonnes In May due to a planned maintenance shutdown at one of its blast furnaces in Dolvi.

  • Jubilant Pharmova falls as the US FDA issues Form 483 with three observations after inspecting its US subsidiary, Jubilant HollisterStier LLC's, contract manufacturing facility in Washington.

  • KEC International rises sharply as it receives orders worth Rs 1,061 crore across its transmission & distribution, railways, and cables businesses. The transmission & distribution (T&D) business secures orders for projects in India, East Asia Pacific, and America.

  • Mutual Funds' net equity inflows surge 83.4% YoY to Rs 34,697 crore in May, according to data released by the Association of Mutual Funds in India (AMFI). The industry's total AUM currently stands at Rs 58.9 lakh crore, with equity AUM at Rs 25.4 lakh crore.

  • Dr Reddy's Laboratories receives Form 483 with four observations from the US FDA after conducting a good manufacturing practices (GMP) inspection at the company's API manufacturing facility in Andhra Pradesh.

  • Artson Engineering surges as it bags a Rs 126 crore order from Guwahati International Airport for the engineering and construction of an ATF fuel farm and Hydrant system at Guwahati airport.

  • Mphasis falls sharply as 3 crore shares (15.6% stake), amounting to Rs 7,066 crore, reportedly change hands in a block deal. Blackstone is the likely seller in the transaction.

  • Heritage Foods rises more than 6% as reports suggest that 44 lakh shares (4.8% equity), amounting to Rs 319.6 crore, change hands in a large trade.

  • RailTel Corp of India is rising as it bags a Rs 81.4 crore order from National Informatics Centre Services (NICSI) to supply, install, configure, commission, integrate, operate, and maintain ICT (information & communication technologies) infrastructure in compliance with the service level agreement.

  • Wardwizard Innovations & Mobility surges to its 20% upper circuit as it bags an order worth $1.3 billion (approx. Rs 10,771 crore) from Phillipines-based Beulah International Development Corp. The order is to supply electric two-wheelers and three-wheelers in the commercial and passenger vehicles segment and develop four-wheelers for commercial vehicles for the Philippines market.

  • Gland Pharma is rising as it appoints Srinivas Sadu as the Executive Chairman and Chief Executive Officer (CEO), effective June 10.

  • Retail sales for the automotive industry rise 2.6% YoY to 20.9 lakh units in May, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are up 2.5% YoY, while that of cars decrease by 1% YoY.

  • Kronox Lab Sciences’ shares debut on the bourses at a 21.3% premium to the issue price of Rs 136. The Rs 130.2 crore IPO has received bids for 118.2 times the total shares on offer.

  • Saranya Loka Reddy, promoter of MTAR Technologies, sells a 0.6% stake on Friday. She now holds a 2.6% stake in the company.

  • AXISCADES Technologies rises as it commences delivery of the Rs 100 crore advanced counter-drone systems order from the Indian Army.

  • Borosil Renewables is rising as its board of directors approves issuing equity shares worth Rs 450 crore via a rights issue.

  • Nifty 50 was trading at 23,395.20 (105.1, 0.5%), BSE Sensex was trading at 76,752.94 (59.6, 0.1%) while the broader Nifty 500 was trading at 21,896.90 (132.8, 0.6%)

  • Of the 1,961 stocks traded today, 1,652 were on the uptick, and 266 were down.

Riding High:

Largecap and midcap gainers today include Patanjali Foods Ltd. (1,476.30, 5.4%), Zee Entertainment Enterprises Ltd. (164.41, 5.2%) and Samvardhana Motherson International Ltd. (164.58, 5.0%).

Downers:

Largecap and midcap losers today include Coforge Ltd. (5,220.15, -3.9%), Vedanta Ltd. (444.10, -3.6%) and MphasiS Ltd. (2,394.60, -3.1%).

Volume Shockers

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

Top high volume gainers on BSE included Chemplast Sanmar Ltd. (544.80, 10.9%), Rashtriya Chemicals & Fertilizers Ltd. (168.10, 8.8%) and The New India Assurance Company Ltd. (239.58, 8.4%).

Top high volume losers on BSE were Poonawalla Fincorp Ltd. (426.35, -8.4%), MphasiS Ltd. (2,394.60, -3.1%) and Kajaria Ceramics Ltd. (1,238.55, -0.2%).

Caplin Point Laboratories Ltd. (1,475.90, 8.1%) was trading at 10.1 times of weekly average. Sanofi India Ltd. (9,967.20, 4.1%) and Sheela Foam Ltd. (941.05, 3.1%) were trading with volumes 8.0 and 7.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

57 stocks overperformed with 52 week highs, while 1 stock were underachiever and hit their 52 week lows.

Stocks touching their year highs included - Amara Raja Energy & Mobility Ltd. (1,400.25, -0.1%), Bajaj Auto Ltd. (9,733.05, 0.1%) and Balkrishna Industries Ltd. (3,250.55, 1.5%).

Stock making new 52 weeks lows included - Chemplast Sanmar Ltd. (544.80, 10.9%).

42 stocks climbed above their 200 day SMA including Happiest Minds Technologies Ltd. (908.40, 7.9%) and Gujarat State Fertilizer & Chemicals Ltd. (222.36, 6.0%). 9 stocks slipped below their 200 SMA including Poonawalla Fincorp Ltd. (426.35, -8.4%) and MphasiS Ltd. (2,394.60, -3.1%).

 
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The Baseline
07 Jun 2024
Five Interesting Stocks Today - June 7, 2024

1. Uno Minda:

This auto parts manufacturer hit a new 52-week high of Rs 1,065 on Friday after rising 11.9% in the past week. The rise follows the company’s signing of a licensing agreement with the Chinese firm Suzhou Inovance Automotive, to produce EV powertrain components for passenger vehicles (PV) and commercial vehicles (CV) in India. The Chinese firm is a fixed supplier of powertrains and auto components to major PV & CV manufacturers in China.

Group CFO Sunil Bohra said, “This deal could make us the frontrunner in the four-wheeler EV space, just as we have been in the two-wheeler and three-wheeler EV space.” They have indicated plans to strengthen the partnership by transitioning it into a joint venture.

In Q4FY24, Uno Minda reported an operating revenue growth of 30.8% YoY, surpassing Trendlyne’s Forecaster estimates by 4.1%. Its net profit rose by 58.3% YoY to Rs 289 crore, beating estimates by 22.7%. The profit surge was driven by customers pre-purchasing vehicles on big year-end discounts, ahead of the expiration of the FAME II subsidy on 4W electric vehicles.

Uno Minda’s net debt as of Q4 increased by 22.2% YoY to Rs 1,318 crore, due to expansion capex and land purchases in Pune and Hosur for Rs 220 crore. The company plans to invest Rs 850 crore in capex and Rs 350 crore in maintenance capex in FY25. CFO Sunil Bohra said, “In the long-term, the company is poised to grow 1.5 times the industry growth rate, with even higher growth in the near term.”

Axis Direct maintains a ‘Buy’ rating on Uno Minda as its Q4 financials exceeded their estimates on all fronts. The brokerage expects growth momentum to continue over the medium term, driven by positive signals from 2W rural demand, new launches in the PV segment, and a recovery in the export market, which contributed 14% to total revenue in Q4.

2. Suzlon Energy:

This heavy electrical equipment company touched its all-time high of Rs 52.1 on June 4 after Morgan Stanley initiated coverage with an ‘Overweight’ rating and a target price of Rs 58.5, an upside of 17.2%. The brokerage believes that the company is poised to benefit from India's renewable energy transition. This is the highest target in the consensus – the average target from analysts on Suzlon Energy according to Trendlyne’s Forecaster is Rs. 56. 

Suzlon Energy has risen by 9.9% over the past week, driven by recent order wins in its wind energy business. Due to the rise in share price, it features in a screener of companies with strong momentum. On May 31, it won an order from Oyster Green Hybrid One to develop an 81.9 MW wind energy project. In May, the company received an order to supply 175 wind turbines, totaling 551.3 MW, for Aditya Birla Group's sites in Rajasthan and Gujarat. Suzlon also won an order to supply 134 wind turbines for a 402 MW project by Juniper Green Energy in Rajasthan.

The company is primarily engaged in the wind turbine generator (WTG) business but also provides end-to-end solutions in wind-solar hybrid power projects. In Q4FY24, Suzlon’s net profit declined 9.2% YoY to Rs 254.1 crore due to higher employee benefits and other expenses. However, revenue was up 29.6% YoY, led by growth in the wind turbine generator segment. The WTG segment (which contributes 62% to the revenue) grew by 37.1% YoY during the quarter. 

As of March 31, 2024, Suzlon’s order book stands at 3.3GW, with over 83% of orders from its newly launched 3.xMW S144 series. According to Himanshu Mody, group CFO of Suzlon Energy, “With an order book of 3.3GW, the company has the potential to generate Rs 19,986 crore in revenue over the next two years”. Suzlon’s TTM revenue stands at Rs 6,529.1 crore, up 9.4% YoY.  

After a slowdown from April 2016 to March 2023, India's wind energy sector is seeing a recovery in demand, driven by rising evening power needs, a shift towards wind-focused renewable tenders, and higher industrial demand. This presents significant opportunities for domestic players like Suzlon Energy.

3. Jyothy Labs:

This personal products company rose by 8.4% over the past week. It announced its Q4FY24 results on May 15, and missed Trendlyne Forecaster estimates for revenue by 1.6% and net profit by 8.8% due to increase in competitive intensity and a 10% YoY decline in the household insecticides segment. 

The company’ net profit improved by 32.4% YoY to Rs 78.2 crore on the back of decline in inventory costs. Revenue growth was mainly driven by an improvement in fabric care segment revenue. The stock shows up in a screener for stocks with annual profit growth higher than sector profit growth.

The company's fabric care segment, which accounts for 43% of sales, grew its revenue by 10% in the quarter by addressing detergent product gaps in its economy and premium ranges. It has secured a 20% market share in Kerala with this strategy, and aims to replicate this effort in West Bengal. The company is promoting Henko, its largest premium detergent brand, and Is introducing  Rs 10 low unit packs (LUPs) under the Henko brand.

The company says it is implementing strategic changes to boost its FMCG market share. One initiative was the "moped" model, where salespersons use mopeds to directly service wholesale outlets. This has led to a 6% increase in LUP sales for the Dishwash segment in Q4FY24 and 8.3% in FY24. The overall dishwashing segment saw a revenue rise of 5.9% with EBIT margins rising to 19% from an average of 13-14% in previous quarters.

Sanjay Agarwal, Chief Financial Officer of the company said: ”Commodity prices have been volatile. Our target is to have our EBITDA in the range of 16-17% for the full year. ” He added “We are increasing our advertising spend because we know we have a good product on the liquid side. ” Ad spending (% of sales) by the company has considerably increased from an average of roughly 6.9% of sales between FY21-23 to 8.3% of sales in FY24.

HDFC Securities analysts consider the stock as “Sarva Gunn Sampann” – an all-season winner – and has initiated Jyothy Labs with a “Buy” rating and a target price of Rs 575. The brokerage guides a revenue/EBITDA/PAT CAGR of 12/16/17% over FY25-27, the second highest in its coverage of consumer staple companies. 

4. Vedanta: 

This aluminium & aluminium products company rose by 3.2% in the last two sessions after the State Bank of India reportedly approved its demerger plan  separating its existing businesses into six independent entities. The majority of lenders have agreed, with approval pending from a few.The company’s stock price has increased by 12.2% over the past month, despite the plunge in markets on Tuesday due to the BJP falling short of a single party majority in the Lok Sabha elections. The company features in a screener of stocks outperforming their industries in the last month.

Vedanta had previously approved the demerger of its metals, power, aluminium, and oil and gas businesses in September 2023. The demerger will form  six separate listed entities, Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta. The company’s debt will be distributed across the six companies in the ratio of the assets allocated to each. Analysts at Motilal Oswal said, “The demerger is expected to simplify the corporate structure, enhance risk mitigation, and improve transparency and autonomy.”

Earlier, on April 25, the company posted a 27.4% YoY decrease in net profit to Rs 2,275 crore in Q4FY24. It still beat Trendlyne’s Forecaster profit estimates by 13.8% but revenue fell by 6.1% YoY to Rs 34,937 crore, missing estimates by 5.6%. Revenue declined on the back of a reduction in sales of aluminium and zinc due to a fall in production of zinc due to difficulties in mining, as well as lower zinc and lead grades. 

Post results, Arun Misra, Executive Director of the company, said, “We continue to see an increase in demand in double digits across our portfolio, especially in domestic markets and in aluminium, where the likely growth may cross 15%. We are also planning to focus on cost optimisation and expect to optimise cost across our portfolio by 10-20%.”

Geojit BNP Paribas has upgraded the stock to a ‘Hold’ rating from ‘Sell’. The brokerage rerates Vedanta on the back of its aluminium and zinc’s cost of production (CoP) falling for the seven and five consecutive quarters, respectively, and an improvement in EBITDA margins. It expects the company’s revenue to grow at a CAGR of 4% over FY25-27. 

5. Ashok Leyland:

This commercial vehicles manufacturer rose by 15.2% in the past month and hit an all-time high on Monday after announcing a 12% YoY growth in its May 2024 wholesales to 14,682 units, led by a 14% growth in total domestic medium and heavy commercial vehicles (MHCV).

In Q4FY24, the company’s profit improved by 13.3% YoY to Rs 853.4 crore while revenue grew by 2.9% YoY. It beat Trendlyne Forecaster’s net profit estimate by 25.9%. Revenue growth was marginal due to muted sales in FY24. However, the company’s EBITDA margin expanded 310 bps YoY due to lower raw material costs and softening commodity costs. Speaking about growth, Executive Chairman Dheeraj Hinduja says, “FY24 has been a year of record cost savings for us. Our raw material cost as a percentage of revenue fell by 4.3% YoY. Another factor for profitability was impressive growth in our high-margin business in spare parts, defense and power solutions.” 

He added, “Going forward, our objective is to retain our EBITDA margin in the current range (12-16%).” The company is targeting a 35% market share in the medium term in the MHCV segment (currently 31.5%), and a 25% market share in the small commercial vehicles segment (currently 20%). The management is confident about the company’s financial health due to replacement demand and the government's vehicle scrappage policy. It expects replacement demand to get stronger with time, as 70% of vehicles are BS-IV and will eventually get replaced with the latest technology vehicles.

Ashok Leyland is showcasing a lineup of electric vehicle (EV) vehicles in Q4FY24 including buses, tractors and LCVs, and plans to launch 16 new models in FY25. It has invested around Rs 1,500 crore in its arms Switch Mobility (electric buses and vans manufacture) and OHM Global Mobility (electric mobility solutions provider). Switch India has turned EBITDA positive in Q4 and currently has an order book of 1,300 e-buses, to be supplied to Delhi and Bangalore. For FY25, the company has planned an overall capex of Rs 500-700 crore. 

Bob Capital Markets retains its ‘Buy’ call on Ashok Leyland and estimates its EBITDA and profit to grow at  12.6% and 14.7% CAGR over FY25-FY26. The brokerage believes the firm will beat industry growth in commercial vehicles and maintain its leadership in buses. 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.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
07 Jun 2024
Market trades higher, Rail Vikas Nigam bags an order worth Rs 495 crore
By Trendlyne Analysis

Nifty 50 closed at 23,290.15 (468.8, 2.1%), BSE Sensex closed at 76,693.36 (1,618.9, 2.2%) while the broader Nifty 500 closed at 21,764.15 (399.2, 1.9%). Market breadth is highly positive. Of the 2,153 stocks traded today, 1,777 were on the uptick, and 348 were down.

Indian indices extended the gains from the afternoon session and closed in the green. The volatility index, Nifty VIX, rose by 0.5% and closed at 16.9 points. Wipro bagged an order worth $500 million from a US-based communication service provider to supply managed services solutions for the next five years.

Nifty Midcap 100 and Nifty Smallcap 100 closed sharply higher following the benchmark index. All major sectoral indices closed higher than Thursday’s closing level. According to Trendlyne’s sector dashboard, telecom services emerged as the top-performing sector of the day, with a rise of over 4.1%.

Most European indices trade in the red. US indices futures trade flat, indicating a cautious start. Eurozone’s GDP in Q1 2024 expands by 0.4% YoY from 0.2% growth in Q4 2023.

  • Relative strength index (RSI) indicates that stocks like Emami, KNR Constructions, UNO Minda, and Bikaji Foods International are in the overbought zone.

  • Rites bags an order worth Rs 39.6 crore from Tata Steel for loco hiring along with operation and maintenance

  • India Pesticides surges as it commissions an intermediate plant for one of the fungicides, previously imported, as part of backward integration.

  • Energy stocks like Power Grid Corp of India, Adani Energy Solutions, ONGC and Tata Power rise more than 3% in trade. All constituents of the broader Nifty Energy index are also trading in the green, helping it to surge more than 2%.

  • Consumer electronics, specialty retail, construction materials, roads & highways, personal products, and breweries & distilleriesindustries surge more than 7% over the past week.

  • Great Eastern Shipping rises sharply as it announces the purchase of a 49,990 dwt medium-range product tanker built in 2013.

  • Foreign institutional investors divest Rs 10,201.2 crore from the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest inflow of Rs 15,159.9 crore from foreign investors. Mutual funds are net sellers in the equity market, pulling out Rs 147.9 crore during the same period.

  • Tata Consultancy Services launches its GenAI Aggregation Platform, 'WisdomNext'. This platform can provide multiple GenAI services in a single interface and facilitate the adoption of technologies with scale and lower costs.

  • Adani Port receives a letter of intent from Kolkata Port for operations and maintenance of the container facility in the Netaji Subhas Dock at the Syama Prasad Mookerjee Port in Kolkata for five years.

  • Bajaj Finance approves the sale of shares worth Rs 3,000 crore in its arm, Bajaj Housing Finance, through an offer for sale.

  • Axis Direct upgrades HCL Technologies to 'Buy' from 'Hold' with a higher target price of Rs 1,550 per share. This indicates a potential upside of 8.4%. The brokerage believes the company is well-placed for growth in the long term, given its multiple long-term contracts. It expects the company's revenue to grow at a CAGR of 4.4% over FY25-26.

  • Economists believe that the RBI will likely start lowering interest rates from October. According to Gaura Sen Gupta from IDFC First Bank, heatwave conditions have added to the near-term upside risks to food inflation, but monsoon will ease it. He adds that core inflation is also easing, and as a result, sees rate cuts beginning in October.

  • Dixon Technologies (India) rises as it forms a joint venture with HKC Corp to manufacture liquid crystal modules, thin film transistor liquid crystal display modules, assemble end products including smartphones, TVs, monitors, and auto displays, and sell HKC branded end products in India.

  • Mastek surges as it plans to upgrade its icxPro platform with NVIDIA's accelerated computing to provide advanced AI-powered customer experience (CX) solutions. This will improve CX management for the manufacturing, healthcare, banking, financial services, and insurance (BFSI) sectors.

  • Rail Vikas Nigam rises sharply as it bags an order worth Rs 495 crore from National Thermal Power Corp to construct and install a barrage complex and head race tunnel at the Rammam hydroelectric project in West Bengal.

  • The RBI raises its projection for India's GDP growth for FY25 to 7.2% from 7%. RBI's MPC forecasts CPI inflation at 4.5% for FY25 and 4.9% for Q1FY25.

  • IT stocks like Wipro, Mphasis, Coforge, and Persistent Systems are rising in trade. The broader sectoral index, Nifty IT, is also trading in the green.

  • Hindustan Unilever appoints Arun Neelakantan as the new Executive Director (ED), with effect from July 1.

  • Garden Reach Shipbuilders & Engineers surges as it receives an order worth Rs 500 crore from the Defence Research and Development Organisation to construct a research vessel. The contract is yet to be signed.

  • The RBI decides to keep the policy repo rate unchanged at 6.5% during the Monetary Policy Committee meeting.

  • IRB Infrastructure Developers is rising as its total toll collection increases by 30.3% YoY to Rs 535.5 crore in May.

  • Hero MotoCorp rises as it buys an additional 2.2% stake in Ather Energy for Rs 124 crore.

  • Ashish Kacholia buys a 3.9% stake in Aimtron Electronics for approx Rs 19.3 crore in a bulk deal on Thursday.

  • Wipro is rising as it bags an order worth $500 million (approx. Rs 4,175 crore) from a US-based communication service provider to supply managed Services for some products and industry-specific solutions for the next five years.

  • Nifty 50 was trading at 22,822.15 (0.8, 0%) , BSE Sensex was trading at 75,061.53 (-13.0, 0.0%) while the broader Nifty 500 was trading at 21,408.75 (43.8, 0.2%)

  • Of the 1,886 stocks traded today, 1,384 were on the uptrend, and 445 went down.

Riding High:

Largecap and midcap gainers today include One97 Communications Ltd. (381.30, 10%), Vedant Fashions Ltd. (1,114.50, 6%) and Mahindra & Mahindra Ltd. (2,857.45, 5.8%).

Downers:

Largecap and midcap losers today include Schaeffler India Ltd. (4,153.90, -2.7%), Linde India Ltd. (8,512.95, -2.0%) and Indian Bank (534.70, -1.5%).

Volume Rockets

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

Top high volume gainers on BSE included IIFL Finance Ltd. (470.50, 13.6%), Garware Technical Fibres Ltd. (4,062.80, 10.9%) and Tejas Networks Ltd. (1,284.85, 10.7%).

Top high volume loser on BSE was JBM Auto Ltd. (2,024.75, -5.7%).

Mastek Ltd. (2,790.50, 8.2%) was trading at 22.8 times of weekly average. Avanti Feeds Ltd. (615.40, 8.9%) and Gujarat Ambuja Exports Ltd. (152.70, 8.6%) were trading with volumes 17.3 and 5.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

42 stocks made 52 week highs,

Stocks touching their year highs included - Aegis Logistics Ltd. (777.85, -1.7%), Amara Raja Energy & Mobility Ltd. (1,401.15, 9.7%) and Aurobindo Pharma Ltd. (1,265.15, 1.1%).

55 stocks climbed above their 200 day SMA including Praj Industries Ltd. (590.40, 10.3%) and Mastek Ltd. (2,790.50, 8.2%). 1 stock slipped below their 200 SMA including Tata Chemicals Ltd. (1,056.15, -0.7%).

 
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The Baseline
07 Jun 2024
2024 is set to be a strong year for IPOs | The biggest IPOs of 2024 so far, and their listing gains
By Swapnil Karkare

What a difference a day makes.

Tuesday started with exit polls predicting that the current government would return with a huge majority; on Wednesday we were in the reality of a BJP-led coalition government. But either way, the economy will stay strong, analysts say. “The Indian economy is on course to more than double in size over the next decade,” economist Shilan Shah notes. 

And despite the many challenges in 2024 – the Red Sea crisis, dollar appreciation, FII sell-off etc – India's stock markets have also been remarkably resilient. 374 stocks surpassed analyst estimates of earnings per share in FY24.

The upbeat mood and strong earnings performance have fueled an IPO surge. The optimism comes after a sluggish 2022 and 2023. 

28 companies debuted on the Indian bourses upto May 15 this year, compared to just seven in the same period last year. The trend is likely to continue, with big names like Hyundai, Ola Cabs, FirstCry, NSDL, and Tata Capital coming up. 

So, let's explore the performance of the newly listed companies. Will the momentum continue?

In this week's Analyticks,

  • A bullish season for IPOs: Companies are queuing up to list in Indian markets
  • IPO dashboard: 2024's most successful IPOs (so far)

Let's jump in,

Indian IPOs are gaining momentum after a muted two years

2021 was a landmark year for Indian IPOs. Low interest rates and frothy valuations triggered listings for as many as 65 companies. Their combined issue size crossed Rs. 1.2 trillion. Start-ups like Paytm, Zomato, MapmyIndia and Nykaa went public. One 97 Communications, Paytm’s parent company, became the year's biggest IPO.

The euphoria dampened a bit in 2022 due to the Russia-Ukraine war. The tepid response continued in 2023. While the number of listings increased by 40%, total issue size declined by more than 10%. 

Despite this, Delhivery, Adani Wilmar, Mankind Pharma and Tata Technologies together mobilised more than Rs. 16,000 crore in those two years. The undisputed champion of the Indian IPO market – LIC of India – also hit the exchanges in 2022, with an eye-watering issue size of Rs. 21,000 crore.

2024: the year Indian IPOs are making a comeback

We can sense a change in the mood as we enter 2024. IPO transactions and size have both jumped. The combined issue size has already surpassed half the total amount raised last year. 


IPO issue sizes have zoomed up, as companies sense that stock markets have the appetite for larger listings. 

Among 2024 issues,Bharti Hexacom and Aadhar Housing Finance are the top performers to date. We see healthcare followed by financials dominating this year so far with four and three listings, respectively.

An increase in retail participation has led to a jump in average IPO subscriptions, from 43x in 2023 to 56x in 2024. Mutual funds have also emerged as key investors in these capital issues, reports Bloomberg.


Markets have been picky in rewarding IPOs

Markets have been strong but picky in rewarding new listings. Of 28 IPOs, one-third of companies (nine, to be exact) registered negative listing gains like JG Chemicals (-16%) and Jana Small Finance Bank (-11%). Only two companies, Vibhor Steel Tubes (+196%) and BLS E-Services (+171%) recorded triple-digit bumper listings. 

This trend mirrors the pre-pandemic behaviour of 2019. This suggest that the recent interest in listings with frothy valuations has subsided.

IPO Activity has been muted globally

The global market presents a contrasting picture to India’s. The Russia-Ukraine war hit market sentiment and continues to be a big drag. IPO transactions fell dramatically after the war broke out in Jan-March 2022, as can be seen in the figure below. 

Even two years after the Russia-Ukraine war that began in February 2022, the global IPO market sentiment remains subdued. The number of transactions is down to less than 300 with its value below $25 billion. However, if we compare Q1 2023 with Q1 2024, we can see a slight increase in the average size.

An EY report strikes an optimistic note. It points to stable valuations and pricing levels in the US, ASEAN, and Indian markets compared to the previous year, and an upward trend in Japan, Europe, and the Middle East. “Despite restrained market activity in previous years, there’s new enthusiasm from both IPO issuers and investors," the analysts note.

India's IPO lineup is set to double in FY25

Analysts anticipate a robust IPO market for India this year, with new listings likely to double in FY25 compared to FY24. There is a strong pipeline of companies planning their public debuts in the coming months. 

According to Prime Database, 40 companies have filed their offer documents with SEBI. Their combined issue size is Rs. 53,515 crore (more than $6 billion). As of 10th May, 19 companies have received the green light.

India’s resilience and optimism around IPOs stands out in the current global environment. Experts believe that Hyundai’s listing can prod other MNCs to list their India operations. It has already tickled the top minds in Korean electronics company LG, if reports are to be believed. 

With several high-profile IPOs in the queue, India is a shiny spot in the global IPO market right now.

IPO Dashboard: The biggest IPOs posted listing gains in 2024

Nine out of ten of the biggest IPOs in 2024 saw listing gain

With the Nifty 50 index rising 1.4% in 2024 (accounting for Nifty 50’s 5.9% decline on Tuesday with election results), India’s markets remain conducive to IPOs. This week, we check Trendlyne’s IPO dashboard to see how the Indian market has treated new public offerings in the stock market.

31 mainline IPOs have been released so far in the year. Major IPOs with large issue size that went public in 2024 are Bharti Hexacom, Aadhar Housing Finance, Go Digit General Insurance, Bharat Highways InviT, Indegene, Juniper Hotels, Entero Healthcare Solutions, TBO Tek, Medi Assist Healthcare Services and Jyoti CNC Auto. Out of these major IPOs, only Entero Healthcare Solutions posted an 8.6% listing loss.

Bharti Hexacom, an arm of Bharti Airtel, is the largest IPO with an issue size of Rs 4,275 crore, which went live on April 12. This telecom services company offers consumer mobile services, fixed-line telephone, and broadband services in Rajasthan and North East India. The IPO posted a listing gain of 42.7% and was subscribed for 29.9x of the available shares. The stock rose by 27.5% post listing, taking its current gains since listing to 68.5% on the back of a 7.9% YoY and 10.3% YoY growth in its revenue and net profit in Q4FY24.

TBO Tek also features in the list with the highest listing gains of 52.9% after listing on May 15. This travel support services company is a travel distribution platform in the global travel and tourism industry. It filed for an IPO for investments in technology data solutions, sales, marketing, and infrastructure with an issue size of Rs 1,551 crore and was subscribed for 86.7x of the available shares. The IPO, however, declined by 3.9% since its listing leading to a lower current gain of 48.9%.

The 2024 list of best and worst performing IPOs is here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
06 Jun 2024
Market closes higher, Zee Entertainment's board approves raising Rs 2,000 crore
By Trendlyne Analysis

Nifty 50 closed at 22,821.40 (201.1, 0.9%), BSE Sensex closed at 75,074.51 (692.3, 0.9%) while the broader Nifty 500 closed at 21,365 (310.6, 1.5%). Market breadth is highly positive. Of the 2,152 stocks traded today, 1,829 showed gains, and 287 showed losses.

Indian indices maintained the gains from the afternoon session and closed in the green. The volatility index, Nifty VIX, dropped by 11.1% and closed at 16.8 points. Zee Entertainment Enterprises board approved raising Rs 2,000 crore through the issue of equity shares.

Nifty Midcap 100 and Nifty Smallcap 100 closed sharply higher following the benchmark index.Nifty Realty and Nifty Media closed higher than Wednesday’s closing level. According to Trendlyne’s sector dashboard, telecommunication equipment emerged as the top-performing sector of the day, with a rise of over 5%.

Most European indices trade in the green. US indices futures trade flat, indicating a cautious start. German factory orders in April contract by 0.2% MoM against estimates of 0.6% growth.

  • Aditya Birla Fashion and Retail sees a short buildup in its June 27 future series as its open interest rises 16.9% with a put-call ratio of 0.8.

  • Indoco Remedies is rising as it receives US FDA approval for an abbreviated new drug application for Canagliflozin and Metformin Hydrochloride tablets. The tablets, a generic equivalent of Ivokamet, are used to treat type 2 diabetes.

  • Realty stocks like Brigade Enterprises, Macrotech Developers, Sobha and Mahindra Lifespace Developers rise more than 4% in trade. All constituents of the the broader Nifty Realty index are also trading in the green, helping it to touch its 52-week high of Rs 1,085.6.

  • Zee Entertainment Enterprises rises as its board approves raising Rs 2,000 crore through the issue of equity shares or any other eligible securities.

  • According to Morgan Stanley, the Indian equity market is experiencing its longest and most robust bull market in history. The brokerage anticipates the S&P BSE Sensex to reach 82,000 by June 2025. It believes the election outcome will likely lead to further structural reforms, supporting its 20% annual earnings growth projection over the next five years.

  • Ventura retains its 'Buy' call on Piramal Pharma with an upgraded target price of Rs 248 per share. This indicates a potential upside of 68.1%. The brokerage believes the company's strategic position across business verticals will drive robust revenue growth and enhance profitability. It expects the company's revenue to grow at a CAGR of 10.2% over FY25-27.

  • Torrent Pharmaceuticals surges to its new all-time high of Rs 2,830.9 per share as it enters a patent licensing agreement with Takeda Pharmaceuticals to commercialize Vonoprazan, a novel gastrointestinal drug, in India.

  • Vedanta surges after the State Bank of India approves its demerger plan, allowing the separation of its existing businesses into six independent entities. The majority of lenders have agreed, with approval pending from a few.

  • According to a poll of economists, the RBI’s monetary policy committee is expected to maintain its status quo on the repo rate at 6.5%, given the recent inflation data and the outlook for food and commodity prices. They believe the central bank will likely start cutting interest rates in the October-December quarter or by H1CY25.

  • Nazara Technologies surges as its arm, Absolute Sports, acquires all assets of SoapCentral for $1.4 million with plans to expand in the entertainment publishing sector in the US.

  • Reports suggest that 33 lakh shares (0.7% equity) of PB Fintech, worth Rs 428.1 crore, change hands in a block deal. The transaction was executed at an average of Rs 1,297 per share.

  • ICIC Securities upgrades Indian Hotels to 'Buy' and sets a higher target price of Rs 640 per share. This indicates a potential upside of 10.6%. The brokerage expects revenue growth driven by an improvement in the new businesses, and an increase in profitability, helped by product premiumisation and cost optimisation. It expects the company's revenue to grow at a CAGR of 10.2% over FY25-27.

  • According to data from Grid India, India's gas-fired power generation experiences a YoY doubling in April and May, reaching 8.9 billion kilowatt-hours (kWh). The data indicates a decline in the share of coal in May to 74% YoY from 75.2%, while the share of gas nearly doubled to 3.1% from 1.6%. Independent Commodity Intelligence Services (ICIS) predicts a 19% increase in LNG demand in India for 2024, with imports projected to surpass 28 million metric tons by 2025.

  • Century Textiles & Industries rises sharply as its subsidiary, Birla Estates, enters into a joint venture with Barmalt India for a luxury residential housing development in Gurugram. The project has a potential development area of 2.4 million sq. ft., with a revenue potential of approx Rs 5,000 crore.

  • Aurionpro Solutions rises as its arm, Integro Technologies, partners with Yoma Bank in Myanmar to explore SME lending operations.

  • Power stocks like NTPC, Adani Power, Power Grid Corp, ABB India, Tata Power, and JSW Energy are surging in trade. All constituents of the broader sectoral index BSE Power are also trading in the green, helping it to rise more than 4%.

  • CK Venkataraman, the Managing Director of Titan Co, notes that the company holds an 8% market share in the jewellery business. However, he anticipates that the margin within this segment will not exceed 12% in the medium term. Venkataraman projects double-digit growth in the wearables segment, with the overall watch portfolio expected to expand by 15-20%. He adds that Titan's emerging businesses will turn EBIT break-even by the end of FY27.

  • UNO Minda surges to its all-time high of Rs 1,016 per share as it signs a technical license agreement (TLA) with China's Suzhou lnovance Automotive. The agreement is to manufacture and supply high-voltage category electric vehicle products for passenger and commercial vehicles in India.

  • Indian Energy Exchange rises as its volumes grow 28.9% YoY to 10,633 MU in May. The company's electricity volumes increase by 21% YoY to 9,568 MU, and the renewable energy certificates surge by 640.3% YoY to 1,055 MU.

  • Rail Vikas Nigam rises sharply as it bags a Rs 391 crore order from the Eastern Railway to construct the Sitarampur bypass line under the Ansol Division.

  • Citigroup lists Hindustan Unilever, Godrej Consumer Products, Britannia, and Honasa Consumer as its ‘Top Buys’, and Colgate, Dabur, and United Breweries as ‘Top Sells’ in the consumer staples space. The brokerage expects volume growth for these companies driven by improvement in consumption and self-help initiatives.

  • KPI Green Energy rises as its arm, Sun Drops Energia, wins orders of 26.2 MW for executing solar power projects.

  • NBCC India rises sharply as it wins multiple orders worth Rs 491.5 crore from the government for construction work.

  • Radhakishan Damani buys a 3.5% stake in Bhagiradha Chemicals & Industries for approx Rs 81.2 crore in a bulk deal on Wednesday.

  • Bharat Heavy Electricals rises sharply as it bags an order worth more than Rs 3,500 crore from Mirzapur Thermal Energy (UP) to set up two 800 MW thermal power projects. As per the contract, BHEL will supply equipment, and set up and commission the projects.

  • Upbeat trading today, as Nifty 50 was trading at 22,719.65 (99.3, 0.4%), BSE Sensex was trading at 75,078.70 (696.5, 0.9%) while the broader Nifty 500 was trading at 21,262.90 (208.5, 1.0%).

  • Market breadth is highly positive. Of the 1,878 stocks traded today, 1,672 were gainers and 169 were losers.

Riding High:

Largecap and midcap gainers today include UNO Minda Ltd. (974.20, 13.1%), Biocon Ltd. (332.75, 9.0%) and Bharat Heavy Electricals Ltd. (277.95, 8.9%).

Downers:

Largecap and midcap losers today include Avenue Supermarts Ltd. (4,687.05, -3.6%), Hindalco Industries Ltd. (677.50, -2.6%) and Pidilite Industries Ltd. (3,089.20, -2.4%).

Movers and Shakers

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

Top high volume gainers on BSE included Century Textiles & Industries Ltd. (2,105.70, 14.3%), UNO Minda Ltd. (974.20, 13.1%) and Aegis Logistics Ltd. (791.15, 12.2%).

Top high volume loser on BSE was Anupam Rasayan India Ltd. (771.70, -0.4%).

Elgi Equipments Ltd. (609.90, 3.4%) was trading at 8.4 times of weekly average. Avanti Feeds Ltd. (565.35, 8.1%) and Eris Lifesciences Ltd. (977.85, 6.6%) were trading with volumes 6.6 and 4.8 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 - Aegis Logistics Ltd. (791.15, 12.2%), Amara Raja Energy & Mobility Ltd. (1,277.50, 4.9%) and Bajaj Auto Ltd. (9,701.45, 1.0%).

65 stocks climbed above their 200 day SMA including CreditAccess Grameen Ltd. (1,500.30, 6.8%) and APL Apollo Tubes Ltd. (1,572.10, 6.8%). 1 stock slipped below their 200 SMA including IndusInd Bank Ltd. (1,481.10, -1.3%).

 
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The Baseline
05 Jun 2024
Chart of the Week: Financial firms witness growth in Q4, while chemical industries suffer
By Satyam Kumar

By Sunday last week, exit polls almost unanimously predicted that the Bharatiya Janata Party (BJP) would win the 2024 Lok Sabha elections with a clear majority. This sent the Nifty 50 up by 3.3% and to an all-time high of 23,338.7 on Monday. 

But the forecasts turned out to be pretty hollow when actual vote counting began, with the BJP losing 63 seats to end up with a total of  240, failing to secure a single-party majority. This led to the most volatile day for Indian equity markets since the pandemic, with indices falling sharply. However, the Nifty and Sensex recovered some of its losses by market close on June 5.

A coalition government can impact some industries as capital allocation can change due to differences in investment preferences between coalition parties. We look at Trendlyne’s Q4FY24 results dashboard to identify industries that have been top performers, as well as those who struggled. We also examine the drivers of positive or negative industry sentiment. 

This edition of Chart of the Week looks at YoY growth in net profit and revenue for Q4FY24 across industries, and the biggest contributors to this industry growth.

Rising investor interest drives revenue growth for exchanges and capital markets

The capital markets industry registered an overall net profit and revenue growth of 123.2% YoY and 75.4% YoY, respectively, in Q4FY24. Companies such as Motilal Oswal Financial Services (MOFSL), ICICI Securities, Angel One, and IIFL Securities contributed significantly to this surge.

MOFSL’s capital markets segment rose 74% YoY, while its asset and wealth management segment grew by 55.3% YoY in Q4FY24. The treasury investments segment witnessed a turnaround amid high interest rates, with the company reporting a net profit of Rs 285.7 crore compared to a loss of Rs 146.4 crore in Q4FY23.

Angel One’s revenue grew 64.4% in Q4. However, this did not fully translate into net profit growth, where there was a moderate gain of 27.4%. This was because the company ventured into the asset management and insurance businesses which led to higher employee costs, coupled with expenses of Rs 22.7 crore for sponsoring IPL in March quarter. Angel One’s CFO Vineet Agarwal in Q4 earnings call said that the company’s committed cost for IPL for the next four years is Rs 82.5 crore annually, excluding advertisement cost. He added that for the IPL season gone by, the company spent around Rs 143 crore, out of which Rs 23 crore was accounted for in Q4, and the remaining Rs 120 crore will be accounted for in the current quarter.

The Bombay Stock Exchange (BSE) and Multi Commodity Exchange of India (MCX) were significant contributors of the exchange industry with average net profit rising by 57.6% YoY and revenue growth of 69.5% YoY in Q4.

MCX India posted a net profit of Rs 87.9 crore in Q4FY24, a 16x increase compared to the same quarter the previous year, driven by the launch of its commodity derivatives platform in October last year. Meanwhile, BSE’s revenue doubled YoY in Q4 to Rs 548.4 crore, following the relaunch of Sensex and Bankex derivative contracts, and increased transaction charges on Sensex near-expiry options.

Realty firms get a boost from luxury real estate, while demand for loans drove banking firms higher

Realty companies saw an average revenue growth of 25.3% YoY in Q4, with net profit growth of 18.6%. Key contributors included DLF, Oberoi Realty, and Brigade Enterprises, with their net profits up 61.5%, 64.1%, and 197.6% YoY respectively. This was fueled by demand for luxury residential properties. For example, DLF announced that its luxury residential project, 'DLF Privana West,' valued at approximately Rs 5,590 crore, was sold out within just three days.

Meanwhile, the banking industry posted revenue growth of 25.9% and net profit growth of 45.2% YoY in Q4FY24. All 41 banks reported positive revenue growth, thanks to rapid growth in loans, stable margins, and lower provisions. According to Trendlyne’s Bank Operations Report, banks in Q4 saw a loan growth of 28.5% YoY, which outpaced deposit growth of 20.6% showing higher spending by Indians which boosted demand.

Two Tata Group firms, Titan and Tata Steel saw revenues moderate in Q4

The gems and jewellery industry saw a net profit decline of 5.5% YoY in Q4, with revenue down 14.7% YoY. Gold and synthetic diamonds player Rajesh Exports was a major laggard, with revenue declining 20.6% YoY to Rs 91,649.3 crore and a net loss of Rs 31.6 crore compared to a profit of Rs 366 crore a year ago. The company has struggled with high operating costs. Meanwhile, Titan’s revenue grew 20.6% in Q4, with a moderate net profit growth of 5.6% YoY. Its jewellery segment, contributing 87% of Q4 revenue, saw margins decline due to higher consumer discounts and an 11% YoY surge in gold prices.

The iron and steel industry on the other hand, saw a sharp decline of 39.3% YoY in net profit, while revenue fell 2.7% YoY. This was driven by Tata Steel and JSW Steel, whose net profits declined 64.1% and 64.5% YoY respectively in Q4 owing to their ongoing expansion plans.

Agrochemicals & commodity chemicals industry suffer due to weak monsoon and Chinese dumping across the globe

In Q4FY24, the agrochemical industry’s revenue declined 12.5% YoY with net profit declining 52.7% YoY. UPL and Bayer CropScience saw their net profit decline 95% and 39.4% respectively in Q4FY24 due to a slump in demand for agrochemicals, as monsoons grew erratic in the past year. Another contributing factor was a sharp decrease in price realisation because of higher supplies from Chinese competitors. 

Meanwhile, the commodity chemicals industry, which was impacted the most, saw its average net profit plunge 96% YoY with an 11.2% YoY fall in revenue during the quarter. Industry leader, Tata Chemicals was hit by  quarterly revenue decline of 21.2% YoY, with a net loss of Rs 850 crore compared to a profit of Rs 709 crore in the same period last year. The company faced challenges due to the weak demand-supply scenario for soda ash in Europe which led to lower realisations. This can be attributed to inventory destocking, coupled with an oversupply situation in the European markets.