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Trendlyne Marketwatch
Trendlyne Marketwatch
27 Feb 2024
Market closes higher, DCM Shriram's board approves its entry into the advanced materials business
By Trendlyne Analysis

Nifty 50 closed at 22,198.35 (76.3, 0.3%), BSE Sensex closed at 73,095.22 (305.1, 0.4%) while the broader Nifty 500 closed at 20,292.85 (37.1, 0.2%). Market breadth is in the red. Of the 2,057 stocks traded today, 705 were gainers and 1,325 were losers.

Indian indices maintained the gains from the afternoon session and closed in the green. The volatility index, Nifty VIX, rose by 0.8% and closed at 15.7 points. JSW Energy's arm, JSW Neo Energy, wins an order from SJVN to set up an ISTS-connected solar capacity of 700 MW.

Nifty Midcap 100 closed flat, while Nifty Smallcap 100 closed higher following the benchmark index. Nifty IT and Nifty Realty closed higher than Monday’s closing level. According to Trendlyne’s sector dashboard, healthcare equipment & supplies emerged as the top-performing sector of the day, with a rise of over 2.1%.

Most European indices trade in the green except for Switzerland’s SMI index trading lower. US indices futures trade flat, indicating a cautious start. Zoom Video Communications shares jumped 13% pre-market after it reported earnings per share of $1.22 for the quarter ending January 2024, beating the estimates by 6%.

  • Shriram Finance sees a short buildup in its February 29 future series as its open interest rises 31.5% with a put-call ratio of 0.4.

  • ICICI Direct upgrades Greenply Industries to 'Buy' from 'Hold', with a higher target price of Rs 320. This indicates a potential upside of 16.6%. The brokerage predicts that the completion of a large number of residential real estate projects from FY25 onwards will boost the growth of the building materials segment. It expects the company's revenue to grow at a CAGR of 15.6% over FY23-26.

  • Delhivery is rising as wellness brand Plix extends its partnership with the company for cross-border freight shipping services.

  • The Board of Control for Cricket in India selects Angel One as an Associate Partner for the Indian Premier League for a period of five years ending 2028.

  • Jefferies downgrades its rating on Dixon Technologies (India) and Whirlpool of India to 'Underperform', with a target price of Rs 5,920 and Rs 1,125, respectively. The brokerage expects demand to weaken, affecting the B2C mix of both companies.

  • DCM Shriram is rising as its board of directors approves its entry into the advanced materials business. The company plans to invest a capex of Rs 1,000 crore in the epoxy resins and downstream products businesses.

  • KFIN Technologies, SBI Life Insurance, and Macrotech Developersoutperform the Nifty 50 index over the past month after their Q3FY24 results.

  • Platinum Industries' Rs 235.3 crore IPO gets bids for 4.3X the available 96.3 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 6X the available 48.2 lakh shares on offer.

  • The National Company Law Tribunal (NCLT) approves IndusInd International Holdings' Rs 9,650 crore resolution plan for Reliance Capital. In November 2021, the Reserve Bank of India had superseded Reliance Capital's board due to governance issues and payment defaults.

  • Exicom Tele-Systems' Rs 446.1 crore IPO gets bids for 4.5X the available 1.8 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 13.7X the available 31.4 lakh shares on offer.

  • Andhra Cements falls sharply as its promoter, Sagar Cements, sells a 5% stake (or 46.1 lakh shares) in the company in the open market. This sale takes the promoter's shareholding to 90% from 95%.

  • Mahanagar Gas signs an agreement to acquire a 31% stake in 3ev Industries for Rs 96 crore.

  • Cello World is rising as Motilal Oswal initiates coverage with a ‘Buy’ rating and a target price of Rs 1,100. The brokerage notes the company’s strong brand presence, wide distribution network, and robust manufacturing capability. It expects the company to grow faster than its industry. MOSL also projects Cello to post a revenue CAGR of 18% over FY23-26.

  • Happiest Minds Technologies rises sharply as it plans to set up a new vertical organisation structure comprising six industries – Industrial, manufacturing and energy & utilities, healthcare & life sciences, retail, CPG and logistics, banking, financial services & insurance (BFSI), hi-tech and media & entertainment, and edtech.

  • Reports suggest that a 27% equity stake of CMS Info Systems, amounting to Rs 1,594 crore, has changed hands in a block deal. Promoter Sion Investment Holdings is the likely seller.

  • TCS is rising as UBS Securities reportedly upgrades it to 'Buy' from 'Neutral', with an increased target price of Rs 4,700. This indicates a potential upside of 15.4%. The brokerage believes that the company's large deal momentum and recovery in the BFSI segment will drive revenue growth.

  • Indian Renewable Energy Development Agency (IREDA) rises more than 4% as reports suggest that 5 crore shares (1.9% equity), amounting to Rs 767 crore, change hands in a block deal.

  • JSW Energy's arm, JSW Neo Energy, wins an order from SJVN to set up an ISTS-connected solar capacity of 700 MW.

  • Hind Rectifiers surges to its 10% upper circuit following an order win of over Rs 200 crore from Indian Railways.

  • Exicom Tele-Systems raises Rs 178 crore from anchor investors ahead of its IPO by allotting around 1.3 crore shares at Rs 142 each. Investors include Maybank Asiapac Ex-Japan Equity I Fund, Nepean Long Term Opportunities Fund, JM Financial Mutual Fund, SBI General Insurance, and Abakkus Diversified Alpha Fund. Meanwhile, Platinum Industries raises Rs 70.6 crore from anchor investors.

  • Devyani International is falling as 67.2 lakh shares (0.6% equity), amounting to approximately Rs 106.2 crore, change hands in three large deals.

  • Multi Commodity Exchange of India signs a memorandum of understanding (MoU) with the Jakarta Futures Exchange (JFX). This collaboration aims at knowledge sharing, research, education, and other market development initiatives.

  • Minerva Ventures Fund buys a 0.5% stake in Easy Trip Planners for approx Rs 43.9 crore in a bulk deal on Monday.

  • One97 Communications' (Paytm) Chief Executive Officer Vijay Shekhar Sharma resigns as Chairman and board member of Paytm Payments Bank on Monday.

  • Power Mech Projects bags an order worth Rs 396.3 crore to construct an electrified railway line in Chhattisgarh on an engineering, procurement and construction (EPC) basis.

  • Nifty 50 was trading at 22091.2000 (-30.9, -0.1%) , BSE Sensex was trading at 72723.5300 (-66.6, -0.1%) while the broader Nifty 500 was trading at 20270.0500 (14.3, 0.1%)

  • Market breadth is overwhelmingly positive. Of the 1811 stocks traded today, 1221 were on the uptick, and 527 were down.

Riding High:

Largecap and midcap gainers today include ICICI Lombard General Insurance Company Ltd. (1,726.75, 4.62%), Sona BLW Precision Forgings Ltd. (688.10, 3.61%) and PB Fintech Ltd. (1,135.45, 3.33%).

Downers:

Largecap and midcap losers today include Vodafone Idea Ltd. (15.85, -5.93%), Adani Energy Solutions Ltd. (1,122.70, -4.54%) and Shriram Finance Ltd. (2,372.40, -4.54%).

Volume Shockers

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

Top high volume gainers on BSE included Intellect Design Arena Ltd. (1,058.70, 7.68%), Jamna Auto Industries Ltd. (124.15, 7.44%) and KNR Constructions Ltd. (280.90, 5.15%).

Top high volume losers on BSE were Shriram Finance Ltd. (2,372.40, -4.54%), Akzo Nobel India Ltd. (2,637.30, -1.69%) and Westlife Foodworld Ltd. (790.05, -1.44%).

DCM Shriram Ltd. (1,004.05, 2.79%) was trading at 8.6 times of weekly average. ICICI Lombard General Insurance Company Ltd. (1,726.75, 4.62%) and KEC International Ltd. (697.60, 3.96%) were trading with volumes 7.8 and 7.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

43 stocks overperformed with 52 week highs, while 2 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Astral Ltd. (2,095.25, 0.52%), Bajaj Holdings & Investment Ltd. (8,703.00, -1.13%) and Bharat Electronics Ltd. (205.35, 0.54%).

Stocks making new 52 weeks lows included - Whirlpool of India Ltd. (1,263.20, 0.19%) and TCI Express Ltd. (1,180.20, -1.04%).

5 stocks climbed above their 200 day SMA including Crompton Greaves Consumer Electricals Ltd. (290.80, 0.95%) and Tanla Platforms Ltd. (997.85, 0.94%). 10 stocks slipped below their 200 SMA including JK Paper Ltd. (366.40, -2.25%) and Coromandel International Ltd. (1,039.50, -2.17%).

 
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The Baseline
26 Feb 2024
5 stocks to buy from analysts this week
By Abhiraj Panchal

1. CIE Automotive India:

Axis Direct maintains its ‘Buy’ rating on this auto part and equipment manufacturer with a target price of Rs 565. This indicates an upside of 22.2%. Analysts Shridhar Kallani and Aditya Welekar say, “The company’s Indian operations are likely to outperform underlying industry growth in the medium term.”

In Q4CY23, the company reported a net profit of Rs 168.9 crore, as against a loss of 657.8 crore in Q4CY22. Meanwhile, its revenue showed only marginal YoY changes. The analysts believe that the subdued revenue growth was due to decreased sales of medium and heavy commercial vehicles and delayed ramp-up of new electric vehicle (EV) export orders.

However, Kallani and Welekar expect growth in the Indian operations to surpass estimates, thanks to increased orders from OEMs (original equipment manufacturers), demand-backed capital expenditure, and overall industry growth. 

The analysts highlight the company’s potential for long-term growth in India and Mexico, led by increased capacities, opportunities for operational efficiency improvements, and a healthy balance sheet. They estimate a revenue CAGR of 9.6% from the Indian operations and 5.7% from European business over CY24-26.

2. Tata Consumer Products:

KRChoksey reiterates its ‘Buy’ rating on this tea and coffee company with a target price of Rs 1,352, indicating an upside of 14.9%. Analyst Unnati Jadhav says, “Tata Consumer’s focus on driving growth through organic and inorganic expansion will lead to double-digit topline growth in the medium-term.” In Q3FY24, the company’s revenue grew 9.7% YoY to Rs 3,863.5 crore, while its net profit decreased 20.7% YoY to Rs 278.9 crore.

Jadhav believes that the decline in net profit was due to exceptional items worth Rs 91.5 crore related to acquisitions and restructuring expenses.

The analyst expects the acquisition of Capital Foods and Organic India to boost profitability, led by superior margins from the acquired business. She foresees revenue growth, backed by distribution expansion, innovation, premiumization and inorganic play. She remains optimistic as the management has indicated current margins of 15% as the new base and expects further expansion. Jadhav forecasts revenue, EBITDA and profit to grow by 13.9%, 21.1% and 24.7% CAGR, respectively, over FY24-26.

3. Va Tech Wabag:

Sharekhan maintains its ‘Buy’ call on this utilities company with a target price of Rs 850, indicating an upside of 6.2%. Analysts at Sharekhan say, “VA Tech Wabag has been exhibiting good operating performance, driven by a better order mix and improved execution efficiencies.” During Q3FY24, the company’s profit improved 33.4% YoY to Rs 62.9 crore. 

Despite divesting two European entities, the company managed to increase its sales by 8.1% YoY to Rs 704 crore, thanks to revenue from new and large projects. 

The analysts remain optimistic about Va Tech Wabag on the back of its robust order book (approx Rs 11,900 crore) and a promising order pipeline. They say, “A well-funded and strong order book with healthy revenue visibility provides comfort in execution and collections going ahead.” They also believe that the company is focused on margin improvement and cash flow generation, which positions it for growth in the medium to long term.

4. Sudarshan Chemical Industries:

ICICI Direct recommends a ‘Buy’ call on this specialty chemicals company with a target price of Rs 705, indicating an upside of 17.1%. In Q3FY24, the company’s profit increased by almost 25x YoY but fell 18.3% QoQ to Rs 14.6 crore, while revenue grew by 7.8% YoY but fell 6% QoQ to Rs 570 crore. Analyst Siddhant Khandekar believes that this YoY growth was led by a 11% increase in domestic pigment sales, which accounts for 49% of total revenues. 

Khandekar is positive about the company due to its “sustained focus on specialty pigments (2/3 of the portfolio), for which it has incurred significant capex”. Sudarshan Chemical has announced the launch of four new pigments in the domestic market and two in export markets. He expects an uptick in margin on the back of improving operating leverage. He also says that the company has visible growth in international markets, especially the US, and opportunities brewing from global consolidations and exits of larger players. 

5. Huhtamaki India:

SBI Securities recommends a ‘Buy’ call on this small-cap containers and packaging company with a target price of Rs 393. This indicates an upside of 11.4%. Analysts from SBI Securities say, “Huhtamaki has an established market position in the premium flexible packaging market, supported by its diversified product range and a strong, diverse customer profile.” They believe that the company has a strong competitive advantage due to its client base, including marquee clients like Colgate Palmolive, GlaxoSmithKline, Pepsico, and Coca-Cola.

The analysts are also optimistic about the company’s move towards sustainable packaging solutions, which is in line with client goals for all packaging to be recyclable by 2030. The analysts like Huhtamaki for its improving financial position, driven by strong operating cash flows. 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
26 Feb 2024
Market closes lower, GPT Healthcare's Rs 525.1 crore IPO gets bids for 2.7X the available 2 crore shares on offer
By Trendlyne Analysis

Nifty 50closed at 22,122.05 (-90.7, -0.4%), BSE Sensex closed at 72,790.13 (-352.7, -0.5%) while the broader Nifty 500closed at 20,255.8000 (-57.7, -0.3%). Market breadth is in the red. Of the 2,089 stocks traded today, 801 were on the uptick, and 1,256 were down.

Indian indices extended their losses from the open and closed in the red. The Indian volatility index, Nifty VIX, rose 4.2% and closed at 15.6 points. Larsen & Toubro closed in the green after its railways business won an order worth Rs 1,000-2,500 crore through its long-term Japanese partner, Sojitz Corp, for the construction of phase 2A of the Jakarta Mass Rapid Transit Project.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, taking cues from the benchmark index. Nifty IT and Nifty Metal closed lower than their Friday close.  According to Trendlyne’s sector dashboard, Forest Materials emerged as the top-performing sector of the day, with a rise of 2.6%. 

Major Asian indices closed in the red, except for Japan’s Nikkei 225 and Taiwan’s SE indices closing in the green. European indices traded flat or lower amid weak global cues. US index futures traded flat, indicating a cautious start to the trading session. Brent crude oil futures traded in the red after closing 2.1% lower on Friday.

  • Money flow index (MFI) indicates that stocks like Thermax, Indian Hotels, Archean Chemical Industries and Varun Beverages are in the overbought zone.

  • Exicom Tele-Systems, a power management solutions provider, will open for IPO subscription tomorrow. The price band for the issue is Rs 135-142 per share. The issue size is Rs 446.1 crore, with a fresh issue of Rs 329 crore and an offer for sale of Rs 95.1 crore. Platinum Industries, a stabilizers manufacturer will also open for subscription tomorrow.

  • Geojit BNP Paribas upgrades Avanti Feeds to 'Accumulate' from 'Hold', raising the target price to Rs 569, an 11.3% potential upside. The brokerage cites an improved shrimp production outlook and expects a correction in excess supply in export markets, helping profitability growth. It forecasts a 23.5% CAGR in net profit over FY23-26.

  • Avantika Saraogi, Executive Director of Balrampur Chini Mills, says that the revenue potential for the company's new 75,000-tonne polylactic acid factory will be Rs 1,500-2,000 crore. She adds that the company will be investing an estimated Rs 2,000 crore over the next 2.5 years.

  • Alkem Laboratories clarifies that the allegations of tax evasion are factually incorrect. The company states that it had cooperated with the IT department during the survey proceedings in September 2023.

  • Transformers & Rectifiers (India)rises sharply as it receives an order worth Rs 232 crore from Power Grid Corp of India. The order is for the design, engineering and supply of five autotransformers.

  • GPT Healthcare's Rs 525.1 crore IPO gets bids for 2.7X the available 2 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 1.9X the available 98.8 lakh shares on offer.

  • Alkem Laboratories plunges as the Income Tax Department reportedly finds substantial tax evasion by the company. The department says that the company has allegedly made excessive deductions, valuing more than Rs 1,000 crore, for its manufacturing units in Sikkim.

  • Dixon Technologies (India)hits an all-time high of Rs 7,048 as its arm Padget Electronics reportedly inks a contract with Compal Smart Device India to manufacture mobile phones. It has also launched a new factory in Dehradun to manufacture washing machines.

  • Max Healthcare Institute'sboard of directors approves the acquisition of a 21,946 square meter land parcel in Lucknow for Rs 167 crore through an e-auction. The board has also approved the construction of a 500-bed hospital with a built-up area of 8 lakh square feet.

  • SJVNis rising as it signs a Power Usage Agreement (PUA) with Jammu & Kashmir Power Corp for the supply of 300 MW solar power.

  • Asian Paints is falling as CLSA downgrades its rating to ‘Sell’ from ‘Underperform’ and lowers the target price to Rs 2,425. The brokerage notes that the paints industry will see a significant increase in competition with the launch of Grasim Industries’ Birla Opus. It believes that the company’s growth and margins may be affected due to the competitive pressure.

  • One97 Communications rises to its 5% upper circuit following the Reserve Bank of India's (RBI) instruction to the National Payments Corporation of India (NPCI) to inspect the company's request to become a third-party application provider (TPAP) for UPI operations.

  • Larsen & Toubro's railways business group wins an order worth Rs 1,000-2,500 crore through its long-term Japanese partner, Sojitz Corp, for the construction of phase 2A of the Jakarta Mass Rapid Transit Project.

  • Piramal Pharma receives two observations after a US FDA inspection for a product expected to be manufactured at its Lexington (USA) facility.

  • According to Nomura, India Inc delivers strong Q3 earnings with BSE 200 companies recording 30% earnings growth YoY, surpassing estimates. The brokerage notes earnings upgrades in the automobile, transportation, and power sectors. The brokerage recommends State Bank of India, ICICI Bank, Mahindra & Mahindra, Reliance Industries, and Larsen & Toubro as its top stock picks.

  • IT stocks like Persistent Systems, Mphasis, LTIMindtree and Tech Mahindra are falling in trade. The broader sectoral index, Nifty IT, is also trading in the red.

  • Skipper rises sharply as it bags an order worth Rs 737 crore from Power Grid Corp of India to design, supply and construct a 765 kV transmission line.

  • Infibeam Avenues rises as it acquires a 20% stake in XDuce for $10 million. XDuce is an enterprise application and AI development company based in the United States.

  • Rajendra V Gogri, CMD of Aarti Industries, highlights that demand for agrochemicals remains under pressure but is expected to normalise in the coming quarters. He anticipates better performance in Q4FY24 compared to Q3, and EBITDA ranging between Rs 950-1,000 crore in FY24.

  • Shree Cementsis falling as it receives a demand order for Rs 261.9 crore from the Income Tax Department concerning income tax returns in CY22.

  • Ujwal Pagariya sells a 0.7% stake in Olectra Greentechfor approx Rs 115.3 crore in a bulk deal on Friday.

  • Reliance Industriesreportedly signs an agreement with Walt Disney to merge their Indian media businesses. According to the report, Reliance Industries will have the majority stake (61% stake) in the merged entity.

  • Gensol Engineeringsigns two engineering, procurement and construction (EPC) contracts worth Rs 337.7 crore. The contacts include a 250 MWac solar power project in Rajasthan and a 50 MWac solar power plant in Maharashtra.

  • Nifty 50was trading at 22,165.65 (-47.1, -0.2%), BSE Sensexwas trading at 73,044.81 (-98.0, -0.1%) while the broader Nifty 500was trading at 20,301.75 (-11.8, -0.1%).

  • Market breadth is highly positive. Of the 1,891 stocks traded today, 1,250 were on the uptrend, and 576 went down.

Riding High:

Largecap and midcap gainers today include Adani Energy Solutions Ltd. (1,176.15, 8.72%), PB Fintech Ltd. (1,098.85, 7.21%) and One97 Communications Ltd. (428.10, 4.99%).

Downers:

Largecap and midcap losers today include Alkem Laboratories Ltd. (5,061.85, -6.63%), General Insurance Corporation of India (401.90, -4.57%) and Vodafone Idea Ltd. (16.85, -3.99%).

Volume Shockers

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

Top high volume gainers on BSE included Adani Energy Solutions Ltd. (1,176.15, 8.72%), 360 One Wam Ltd. (769.60, 6.64%) and Infibeam Avenues Ltd. (36.75, 6.52%).

Top high volume losers on BSE were Alkem Laboratories Ltd. (5,061.85, -6.63%), Bandhan Bank Ltd. (202.60, -2.71%) and Persistent Systems Ltd. (8,425.40, -2.62%).

Mahindra Holidays & Resorts India Ltd. (431.90, 5.51%) was trading at 9.0 times of weekly average. Capri Global Capital Ltd. (999.10, 3.74%) and Abbott India Ltd. (28,480.00, -0.79%) were trading with volumes 5.3 and 4.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

38 stocks overperformed with 52 week highs, while 2 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (1,338.15, 1.32%), Ambuja Cements Ltd. (608.60, 0.94%) and Astral Ltd. (2,084.45, 0.41%).

Stocks making new 52 weeks lows included - TCI Express Ltd. (1,192.55, -0.37%) and RHI Magnesita India Ltd. (574.75, -3.30%).

7 stocks climbed above their 200 day SMA including KPR Mill Ltd. (779.35, 4.45%) and Adani Wilmar Ltd. (398.70, 2.24%). 6 stocks slipped below their 200 SMA including Shree Renuka Sugars Ltd. (47.35, -2.27%) and Divi's Laboratories Ltd. (3,577.35, -1.94%).

 
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The Baseline
23 Feb 2024
Five Interesting Stocks Today

1. Thermax:

This heavy electrical equipment company hit an all-time high of Rs 3,772.9 per share on Friday, with a 22.3% rise in the past month. This rise followed a licensing and technical assistance deal with South Korea’s Flowtech. The deal enables Thermax to obtain technology to manufacture polycarboxylate ether products known for their water-reducing abilities, and improve concrete setting time. This will also strengthen its construction chemicals business, which currently accounts for 7% of its top line. The company appears in a screener of stocks with rising mutual fund shareholding in the past month.

In Q3FY24, Thermax’s net profit rose 88.9% YoY to Rs 238.3 crore, beating Trendlyne’s Forecaster estimates by 54%, while its revenue grew 13.9% YoY to Rs 2,382.8 crore, slightly missing forecasts by 1.1%. This profit boost was mainly from an exceptional gain of Rs 126 crore, from transferring leasehold rights for a vacant plot. 

The firm's green energy solution contributes 5.1% to revenue, while accounting for 50% of interest payments. This has significantly impacted profitability.

Thermax has not received any significant orders in the past two quarters due to a slowdown in the domestic business. However, its management is optimistic that bidding for domestic power projects will lead to a quarterly order inflow of Rs 2,400 crore for the next three quarters. They expect it to ramp up after Q1FY25, helped by projects in the Middle East.

MD and CEO, Ashish Bhandari, announced plans to invest Rs 1,000 crore in Gujarat to  set up renewable energy capabilities and build-own-operate customer plants for biomass over FY25.

Post-results, HDFC Securities maintains a ‘Buy’ rating on Thermax as they expect the company to benefit from its investments in the clean energy and sustainability sectors. They expect a revenue CAGR of 10.6% and adjusted profit after tax CAGR of 18% over FY24-26.

2. JK Lakshmi Cement:

This cement & cement products manufacturer rose by 3.5% over the past week, as brokerages like HDFC Securities, Axis Securities, and SBI Securities maintain their ‘Buy’ ratings on the stock. Its Q3FY24 net profit has risen by 88.1% YoY to Rs 143.7 crore and revenue increased by 9.1% YoY. It beat Trendlyne Forecaster estimates for net profit by 9.4% but missed revenue estimates by 3.1%. However, its EBITDA margin improved by 588 bps YoY on the back of a decline in fuel expenses and higher price realization. The company appears in a screener of stocks in the Nifty 500 with consistently high returns over five years.

In Q3FY24, JK Lakshmi Cement reported a 7.6% YoY increase in sales volume to 29.6 lakh tonnes. The growth in margin was supported by premium cement sales, which accounted for 25% of trade sales volume. The firm’s fuel expense dropped by 14.7% YoY thanks to enhanced renewable energy use and its waste heat recovery system (WHRS). Due to the imposition of busy season charges by railways, the company moved 90% of its volume by road and the remainder by train, leading to a 5% YoY increase in freight cost per tonne to Rs 1,330. 

The firm’s clinker capacity and grinding capacity utilization stood at 105% and 79% respectively for the quarter. The management has guided capex plans of Rs 2,500 crore for the next 2-3 years. The capex will be used to add 2.3 MT in clinker capacity and another 4.6 MT for the grinding unit.

Management expects a volume growth of 8-10% in Q4FY24 and highlights a reduction in cement costs across most locations, which are currently 2-3% lower than Q3FY24 exit levels.

SBI Securities has given a ‘Buy’ rating to the company, with a target price of Rs 1,090. They say, “The company’s recently announced expansion plans, coupled with its target to reach a full-year EBITDA/Tonne of Rs 1,000 in the next 14-18 months, will aid long-term sustainable growth.” 

3. Quess Corp: 

Thissoftware and services firm rose by 7.8% on Monday following its announcement of a demerger into three entities: Quess Corp (workforce management), Digitide Solutions (insurance technology and human resource organization), and Bluspring Enterprises (facility management and industrial services). These segments currently contribute 68%, 14%, and 18% to the company’s revenue, respectively. The demerger aims to improve valuations and enable a focus on pure-play verticals. It is expected to be completed in 12-15 months, with shareholders getting one share each of Digitide Solutions and Bluspring Enterprises for every share held in Quess Corp.

In  Q3FY24, the company reported a revenue increase of 8.4% YoY and a net profit decline of 27.4%. It missedTrendlyne’s Forecaster estimates by 4.4% and 18.9%, respectively. The decline in profitability was on account of higher employee expenses as the firm added 22,000 employees in the past two quarters. It also reduced spending in Indian IT staffing. Some employees have been placed in the BFSI, manufacturing and telecom segments.  

The firm has reduced marketing expenses and is trying to enhance the client base to increase employee utilization. The firm's CEO, Guruprasad Srinivasan, stated that the firm has been focusing on niche segments like e-commerce, healthcare, FMCG and industrials to offset the spending cuts in the IT sector.

Quess Corp has also cut its gross debt by Rs 110 crore to Rs 400 crore. Margins are expected to expand in FY25, owing to a rebound in India’s IT solutions and increased infrastructure activities like port development, airports, and power plants, which would boost the company’s manpower supply business.

Motilal Oswal Securities predicts a 50% net profit CAGR over FY24-FY26 on a low base of FY24. Formalization of labour reforms and margin expansion are expected to drive the bottom line. However, due to concerns over taxation, a weak macroeconomic environment, and high valuations, the brokerage maintains a ‘Neutral’ rating on the firm.

4. NBCC (India): 

This construction & engineering company has risen by 4.6% over the past week, after winning multiple orders and signing two memorandums of understanding (MoUs). The company bagged three orders worth Rs 369 crore from multiple clients on Monday. The orders include infrastructure development for Rani Lakshmi Bai Central Agricultural University in Jhansi, a court complex and residential quarters in Telangana, and renovations of Noida’s ICAI Bhavan.

On Tuesday, NBCC won an order worth Rs 560 crore to construct the permanent campus of NIT Sikkim. The company also signed an agreement with the Greater Noida Authority to develop a purchasable floor area ratio (FAR) for five existing Amrapali projects on Thursday, with a total value of Rs 10,000 crore. It also signed two MoUs with Housing and Urban Development Corp to provide consultancy services and asset monetisation activities. 

NBCC released its Q3FY24 results on February 13, reporting a 60.3% YoY increase in net profit to Rs 110.7 crore. Its revenue also grew by 13.7% YoY to Rs 2,405.5 crore, beating Trendlyne’s Forecaster estimates by 10.8%. The revenue boost was on the back of improvement in the PMC, real estate and EPC segments. It appears in a screener of stocks with a 10% increase in share price over three months, with rising net profit growth.

Kellambally Mahadevaswamy, CMD of the company, said, “The company has a robust order backlog, with our consolidated order book reaching Rs 5,300 crore. We have set a target of around Rs 12,000 crore for the next financial year, a significant hike from the current target of Rs 8,000 crore.”

5. Devyani International:

This restaurant chain has fallen by 11.5% over the past month following an 86.6% YoY drop in its Q3FY24 net profit to Rs 9.6 crore. It missed Trendlyne’s Forecaster estimates by 77.4%. The decline was due to increased finance costs, employee benefits and depreciation expenses. A lower deferred tax credit (Rs 1.8 crore) compared to Q3FY23 (Rs 14.3 crore), and an exceptional item worth Rs 8.8 crore also contributed to the decline. In addition, Yum Restaurants India sold its entire 4.4% stake (5.3 crore shares) in Devyani International for approximately Rs 871.1 crore through a block deal on Wednesday.

Despite opening new stores (a 24% increase YoY), its revenue only grew by 6.7% YoY due to subdued same-store sales growth (SSSG) in the KFC and Pizza Hut brands. KFC and Pizza Hut reported SSSG of -4.7% and -13%, driven by falling dine-in sales. The management said that the pizza category remains under pressure due to increasing competition from unorganised players. 

The past quarter has been volatile for QSR (quick services restaurant) companies, with demand dipping after the Cricket World Cup and Diwali seasons. According to Ravi Jaipuria, the Chairman of Devyani International, “Consumer sentiment remains subdued, despite Q3 traditionally being a strong and festive quarter. We have also seen the impact of certain international geopolitical events on the American brands that we deal with.” However, the management is hopeful of a recovery in the next few quarters.

The company added 94 stores in Q3, taking the total to 1,452. It also acquired 283 KFC stores in Thailand. Devyani plans to add 250-275 stores in Q4 and is on track to achieve its target of 2,000 stores in FY24.

Motilal Oswal reiterates its ‘Buy’ rating on the stock with a lower target price of Rs 195. The brokerage remains cautious due to the demand challenges in the near term.

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
23 Feb 2024
Market trades flat, Kalyani Steels signs an MoU with the government of Odisha
By Trendlyne Analysis

Nifty 50closed at 22,212.70 (-4.8, 0.0%), BSE Sensexclosed at 73,059.7400 (-98.5, -0.1%) while the broader Nifty 500closed at 20,313.50 (29.6, 0.2%). Market breadth is in the green. Of the 2,035 stocks traded today, 1,071 were gainers and 932 were losers.

Indian indices pared the gains from the morning session and closed flat. The volatility index, Nifty VIX, dropped by 1.5% and closed at 15 points. Sona BLW Precision Forgings receives certification under the PLI scheme for manufacturing of the hub wheel drive motor for electric two-wheelers.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher with the benchmark index closing flat. Nifty Media and Nifty Pharma closed higher than Thursday’s closing level. According to Trendlyne’s sector dashboard, forest materials emerged as the top-performing sector of the day, with a rise of over 1.4%. 

Most European indices trade mixed. US indices futures trade flat, indicating a cautious start. On Thursday, NVIDIA shares closed 16.4% higher as its earnings beat estimates by 12.2%. Germany slipped into a technical recession after its Q4 2023 GDP contracts by 0.2% YoY.

  • Relative strength index(RSI) indicates that stocks like Indian Hotels, Tata Investment Corp, Varun Beveragesand Zydus Lifesciencesare in the overbought zone.

  • ideaForge Technologyrises as it showcases products in the US market, signalling the firm’s entry into the US market. The drone manufacturer is globally ranked fifth in the dual-use category of civil and defence sectors.

  • Zuari Industriesrises as it enters into a sale deed with Zuari Infinity to sell 2.3 lakh square meters of land parcels in Goa for a consideration of 83.4 crore.

  • Kalyani Steelsrises sharply as it signs a memorandum of understanding (MoU) with the government of Odisha to set up two manufacturing facilities in the state. The company will establish a 0.7 MTPA steel & auto parts manufacturing complex and a 10,000 TPA aero & defence parts plant with a total estimated capex of Rs 11,750 crore.

  • The Board of Cricket Control in India (BCCI) selects Ceatas the official partner to sponsor certain segments of the Indian Premier League. Ceat is to spend an aggregate amount of Rs 240 crore over the next five years.

  • GPT Healthcare's Rs 525.1 crore IPO gets bids for 0.6X the available 2 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 1.1X the available 98.8 lakh shares on offer.

  • Juniper Hotels’ Rs 1,800 crore IPO gets bids for 0.9X the available 2.9 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 1.1X the available 52.6 lakh shares on offer.

  • KR Choksey maintains its 'Accumulate' rating on Glenmark Pharmaceuticalswith a target price of Rs 984. This implies a potential upside of 9.1%. The brokerage believes that the company's injectable portfolio in the US, the launch of Ryaltris in various markets and momentum with key brands in existing geographies will drive growth going forward. It expects the company's revenue to grow at a CAGR of 9.2% over FY23-26.

  • Jio Financial Services rises over 10% today and crosses the Rs 2 lakh crore market capitalization mark for the first time. This comes amid speculations from two weeks ago about the company discussing the acquisition of Paytm's wallet business since November.

  • Foreign institutional investors invest Rs 3,539.9 crore in the equity market over the past week, according to Trendlyne's FII dashboard. On the other hand, index options witness the highest outflow of Rs 65,895.6 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, injecting Rs 3,192.4 crore during the same period.

  • Sona BLW Precision Forgings rises as it receives certification under the PLI scheme for auto and auto components. The certification was awarded for its hub wheel drive motor designed for electric two-wheelers.

  • Goldman Sachs downgrades Yes Bankto 'Sell' from 'Neutral' with an unchanged target price of Rs 16 per share. This indicates a potential downside of 39.9%. The brokerage highlights the bank's contracting margins and bottoming of credit cost improvements.

  • According to Petroleum Planning and Analysis Cell (PPAC) data, India's crude oil imports reached a 21-month high in January, fuelled by a surge in demand caused by robust industrial activity. Crude oil imports increased by 5.7% YoY and 9.5% MoM to 21.4 million metric tonnes in January.

  • Hotels, Education, Electronic Components, and Telecom Cablesindustries rise more than 8% over the past week.

  • Dilip Buildcon'ssubsidiary signs a concession agreement worth Rs 270.1 crore with the Public Works Department, Goa, for the construction of observatory towers, viewing galleries and parking facilities for the new Zuari Bridge.

  • Bharat Forge infuses 15 million euros (approximately Rs 133.6 crore) in its arm, Bharat Forge Global Holding GmbH (BFGH). This amount will then be invested into Bharat Forge Holding (BFH) for further investment in its subsidiary, Bharat Forge Aluminiumtechnik GmbH.

  • Reports suggest that 81.7 lakh shares (0.3% equity) of Federal Bank, amounting to Rs 125.3 crore, change hands in two large trades.

  • IT stocks like L&T Technology Services, MphasiS, Persistent Systemsand Coforgeare rising in trade. All constituents of the broader Nifty IT index are also trading in the green.

  • Vodafone Idea surges as it announces that its board will meet on Tuesday to consider a fundraising proposal. The proposal will involve one or more tranches, including rights issue, further public offer, private placement, or qualified institutional placement (QIPs).

  • Kirloskar Ferrous Industriesis falling as it temporarily suspends operations of its mini blast furnace at the Hiriyur plant due to poor market conditions.

  • Citi initiates coverage on Honasa Consumer with a 'Buy' rating and a target price of Rs 550. The brokerage expects its company-specific initiatives to drive growth. It notes that the company's moderate margin expansion and entry into new subcategories will benefit the business in the long run.

  • Morepen Laboratories is rising as its board of directors approves the issue of equity shares worth Rs 350 crore through a qualified institutional placement (QIP).

  • Ramkrishna Forgingsrises as its board approves the initiation of manufacturing and supply operations from its Mexico facility., backed by a $3.5 million per annum (approx Rs 29 crore per annum) agreement with a North American client. This will also help the board approve a Rs 90 crore investment to set up a facility to manufacture passenger vehicle components.

  • Angel Oneis rising as its board of directors approves raising Rs 2,000 crore in multiple tranches by issuing equity shares via preferential issue, follow-on public offer (FPO) or qualified institutional placement (QIP).

  • Eureka Forbes’promoter, Lunolux, sells a 10% stake (1.9 crore shares) in the company for approximately Rs 976.7 crore in a block deal on Thursday. Meanwhile, Goldman Sachs and Morgan Stanley Asia buy 1.2% and 1% stakes in the company.

  • Nifty 50was trading at 22,256.05 (38.6, 0.2%), BSE Sensexwas trading at 73,358.74 (200.5, 0.3%) while the broader Nifty 500was trading at 20,339.80 (55.9, 0.3%).

  • Market breadth is highly positive. Of the 1,800 stocks traded today, 1,428 were on the uptrend, and 325 went down.

Riding High:

Largecap and midcap gainers today include Adani Wilmar Ltd. (389.95, 8.12%), Vodafone Idea Ltd. (17.55, 7.67%) and Indus Towers Ltd. (241.15, 7.11%).

Downers:

Largecap and midcap losers today include YES Bank Ltd. (26.20, -3.50%), NHPC Ltd. (91.65, -2.60%) and Indian Overseas Bank (67.5000, -2.53%).

Movers and Shakers

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

Top high volume gainers on BSE included Usha Martin Ltd. (333.45, 9.98%), Indiabulls Housing Finance Ltd. (207.00, 9.67%) and Adani Wilmar Ltd. (389.95, 8.12%).

Top high volume losers on BSE were Ratnamani Metals & Tubes Ltd. (2,976.55, -3.26%), Galaxy Surfactants Ltd. (2,475.45, -1.14%) and G R Infraprojects Ltd. (1,268.05, -0.04%).

Zydus Wellness Ltd. (1,595.70, 0.33%) was trading at 22.7 times of weekly average. Welspun Living Ltd. (161.20, 3.97%) and Gujarat Alkalies & Chemicals Ltd. (821.60, -0.04%) were trading with volumes 12.9 and 11.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

42 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (1,320.70, 0.74%), Ambuja Cements Ltd. (602.95, 1.72%) and Astral Ltd. (2,075.90, 5.64%).

12 stocks climbed above their 200 day SMA including Usha Martin Ltd. (333.45, 9.98%) and Adani Wilmar Ltd. (389.95, 8.12%). 8 stocks slipped below their 200 SMA including Eureka Forbes Ltd. (482.10, -2.00%) and Balaji Amines Ltd. (2,238.05, -1.31%).

 
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The Baseline
23 Feb 2024
By Bhavani Eswar

The global economy's fragile state in 2023, shaped by rising geopolitical tensions, high interest rates, and elevated inflation, has led major institutions such as the IMF and OECD to project a bleak outlook for global growth in 2024. 

Key economies, including Japan and the United Kingdom, have already slipped into technical recessions – defined as GDP contraction for at least two successive quarters – during the September-December quarter of 2023. This is troubling for India, as six major countries that are facing recession (Germany, Japan, Thailand, Malaysia, South Africa, and the UK) are key trading partners, making up 10% of its total trade.

Another factor impacting world trade is the Houthi rebels’ presence on the crucial Red Sea trade route, which is responsible for 12% of global trade. The rebel attacks have forced exporters to reroute a major share of their shipments away from the Suez, significantly increasing travel distances and costs. Going around the Cape of Good Hope adds around 6,000 km to trips connecting Europe and Asia, leading to increased freight and fuel costs for exporters.

In this edition of the Chart of the Week, we examine the trends in countries’ trade balances and assess their trade surplus/deficit. Emerging economies like India and China have witnessed sharp changes in their trade balances in 2023. 

Emerging markets see steep monthly fall in trade balances in 2023

China, the world’s largest exporter, saw its trade surplus fall by 18.7% YoY to $264.2 billion in 2023 due to weak global and domestic demand for Chinese goods. Its trade surplus slumped the most in February 2023 by 87% MoM to $11.8 billion, following a 6.8% YoY decline in exports during January and February 2023. 

Meanwhile, the US trade deficit increased by 11.1% in 2023. It widened by 24.5% MoM to $74.6 billion in April 2023, reaching its highest level since October 2022. According to the US Commerce Department, this marked the largest MoM increase in the trade deficit since April 2015, driven by a fall in the value of goods exports like crude oil. 

As trade balances in China and the US moved negatively, India’s trade deficit expanded to an all-time high of $31.5 billion in October 2023. This surge was due to a 70% increase in oil, gold, and silver imports during the period. 

From April 2023 to January 2024, India’s merchandise exports decreased by 4.5% YoY to $353.9 billion and imports declined by 6.7% YoY to $561.1 billion. 

In January 2024 however, India’s trade deficit fell to $17.5 billion, an 11% improvement from December. This was due to a 6.9% MoM decrease in imports and a 4% MoM fall in exports. The export decline was driven by a rise in freight charges due to disruptions along the Red Sea trade route, which handles 30% of Indian exports.

Russia remained a major trading partner, accounting for 44.8% of Indian imports during the same period. India’s primary export destinations included Australia, Singapore, the United Kingdom, China, and the UAE. Rating agency ICRA expects India’s trade deficit to be between $20 billion and $25 billion in the remaining months of FY24, resulting in a current account deficit (CAD) of around 1.7% of GDP in Q4FY24.

Germany’s trade surplus increased by 41.5% in 2023, with the December trade surplus reaching its highest since January 2021 at $24.2 billion. This growth was driven by increased demand for German manufactured goods in the US, UK, and China. 

Vietnam has emerged as a success story in global trade, posting a trade surplus for the eighth consecutive year. The country reported a trade surplus of $28 billion for 2023 as imports in 2023 fell 8.9% to $327.5 billion. Although exports also declined by 4.4% YoY to $355.5 billion, this was due to an 8.3% drop in smartphone shipments, its largest export item. To compensate for the fall in exports, Vietnam extended a value-added tax cut to boost domestic consumption. 

 
Trendlyne Marketwatch
Trendlyne Marketwatch
22 Feb 2024
Market closes higher, Titagarh Rail Wagons invests Rs 100 crore in its SPV-JV, Shivaliks Mercantile
By Trendlyne Analysis

Nifty 50closed at 22,217.45 (162.4, 0.7%), BSE Sensexclosed at 73,158.24 (535.2, 0.7%) while the broader Nifty 500closed at 20,283.95 (155.7, 0.8%). Market breadth is in the green. Of the 2,034 stocks traded today, 1,078 were gainers and 915 were losers.

Indian indices recovered from their day lows and closed in the green. The Indian volatility index, Nifty VIX, fell 4.6% and closed at 15.2 points. ICRA projected a sequential slowdown in India's GDP growth to 6% in Q3FY24 from 7.6% in Q2, with Gross Value Added (GVA) growth also expected to decelerate to 6% QoQ in the same quarter. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Media closed higher than their Wednesday levels.  According to Trendlyne’s sector dashboard, Software & Services emerged as the top-performing sector of the day, with a rise of 1.9%.

Major European indices closed in the green, taking cues from the Asian indices. US index futures traded sharply higher, indicating a positive start to the trading session. Brent crude oil futures traded in the green after closing higher on a volatile day of trade on Wednesday.

  • Indian Hotelssees a long buildup in its February 29 future series as its open interest rises 12.5% with a put-call ratio of 0.9.

  • KR Choksey retains its 'Buy' rating on Tata Consumer Productswith an upgraded target price of Rs 1,352. This indicates a potential upside of 16.8%. The brokerage believes that the company's focus on driving growth through organic and inorganic expansion will help top-line growth in the medium term. It expects a revenue CAGR of 13.9% over FY23-26.

  • Mangalore Refinery and Petrochemicals, Central Bank of India, IDBI Bank, and Ciplaoutperform the Nifty 50 index over the past month after their Q3FY24 results.

  • Titagarh Rail Wagonsis rising as it invests Rs 100 crore in its special purpose vehicle (SPV) joint venture (JV), Shivaliks Mercantile. The SPV-JV then acquired an additional 28.2% stake in Titagarh Firema S.p.A, an Italian subsidiary of Titagarh Rail, for Euro 20.2 million (approx. Rs 182.1 crore).

  • Prataap Snacks surges to an all-time high of Rs 1,344.7 amid reports that ITC is considering buying a 47% stake in the company from venture capital firm Peak XV Partners (originally Sequoia Capital).

  • GPT Healthcare's Rs 525.1 crore IPO gets bids for 0.3X the available 2 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 0.5X the available 98.8 lakh shares on offer.

  • Juniper Hotels’ Rs 1,800 crore IPO gets bids for 0.2X the available 2.9 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 0.8X the available 52.6 lakh shares on offer.

  • Rail Vikas Nigam'sjoint venture (JV) with Salasar Techno Engineering bags an order worth Rs 174 crore from Madhya Pradesh Power Transmission for the construction of 132 kV and 220 kV transmission lines on a turnkey basis.

  • ICRA projects a sequential slowdown in India's GDP growth to 6% in Q3FY24 from 7.6% in Q2, with Gross Value Added (GVA) growth also expected to decelerate to 6% QoQ in the same quarter. This slowdown is primarily attributed to the industrial sector (slowing to +8.8% from +13.2%) and the agricultural sector (to +0.5% from +1.2%).

  • Olectra Greentech rises to an all-time high of Rs 2,215 as its consortium with Evey Trans bags an order worth Rs 4,000 crore from Brihan Mumbai Electric Supply & Transport Undertaking for the supply of 2,400 electric buses.

  • Larsen & Toubro'sconstruction arm bags an order worth Rs 1,000-2,500 crore from a domestic real estate developer to construct residential towers in Thane, Mumbai.

  • Axis Direct reiterates its 'Buy' rating on CIE Automotive Indiawith a target price of Rs 565. This indicates a potential upside of 21.2%. The brokerage remains positive on the back of its long-term growth potential in Indian and Mexican operations, owing to increased capacity and a healthy balance sheet. It expects the company's net profit to grow at a CAGR of 11.6% over CY23-26.

  • Companies like Hindustan Aeronautics, Data Patterns (India) and MTAR Technologies are rising as the Union Cabinet modifies the foreign direct investment (FDI) policy in the space sector. This could lead to increased foreign investment in satellite development & launch and ground infrastructure.

  • Grasim Industries touches an all-time high of Rs 2,244 as it launches the Birla Opus Paints Business and inaugurates three Birla Opus Paints plants in Haryana, Punjab, and Tamil Nadu.

  • Paisalo Digital'sboard of directors approves the issue of equity shares worth Rs 1,260 crore through a qualified institutional placement (QIP).

  • SpiceJet is rising in trade as it raises an additional Rs 316 crore via preferential issue, allotting 4 crore shares to two investors, including Aries Opportunities Fund. The company received the first tranche of Rs 744 crore in January, taking the total funds raised to Rs 1,060 crore.

  • Sugar stocks like Dhampur Sugar Mills, Balrampur Chini, and Shree Renuka Sugars are falling as the Cabinet Committee on Economic Affairs raises the fair and remunerative price (FRP) of sugarcane by 8% for the 2024–25 season. The revised FRP will be Rs 340 per quintal, at a sugar recovery rate of 10.25%.

  • PSU bank stocks like Bank of India, Punjab & Sind Bank, Indian Bank and Bank of Baroda are falling in trade. All constituents of the broader Nifty PSU Bank are also trading in the red.

  • Yum Restaurants India sells its entire 4.4% stake (5.3 crore shares) in Devyani International for approximately Rs 871.1 crore in a block deal on Wednesday. Meanwhile, Nippon India Mutual Fund and Societe Generale buy 0.7% and 0.4% stakes, respectively, in the company.

  • LTIMindtreesigns a memorandum of understanding (MoU) with Eurolife FFH, a Greek insurance provider, to establish a Gen AI and digital hub in Athens, along with dedicated facilities in Europe and Mumbai.

  • Reports suggest that 1.8 crore shares (9.3% equity) of Eureka Forbes, amounting to Rs 975 crore, change hands in a block deal. Its promoter Lunolux will reportedly sell up to 12% stake (2.3 crore shares).

  • GPT Healthcare raises Rs 157.5 crore from anchor investors ahead of its IPO by allotting around 84.7 lakh shares at Rs 186 each. Investors include Societe Generale, Copthall Mauritius, Bandhan Mutual Fund, India Capital Growth Fund, Kotak Mutual Fund and Axis Mutual Fund.

  • Brigade Enterprisesis rising as it signs a joint development agreement (JDA) with PVP Ventures to develop a 2.5 million sq ft residential project in Chennai with a revenue potential of Rs 2,000 crore. Brigade Enterprises also signs a 45-year lease agreement to establish a 250-room resort on the East Coast Road in Chennai.

  • South Indian Bankrises sharply as its board of directors approves the rights issue of 52.3 crore equity shares for Rs 1,151 crore. The board has set the issue price at Rs 22 per share and record date on Tuesday. Shareholders will receive one share for every four shares held in the company.

  • NBCCsigns an agreement with the Greater Noida Authority to develop purchasable floor area ratio (FAR) for five existing Amrapali projects. They have a total value of Rs 10,000 crore.

  • Nifty 50was trading at 22,051.15 (-3.9, 0.0%), BSE Sensexwas trading at 72,677.51 (54.4, 0.1%) while the broader Nifty 500was trading at 20,151.95 (23.7, 0.1%).

  • Market breadth is highly positive. Of the 1,802 stocks traded today, 1,205 were in the positive territory and 522 were negative.

Riding High:

Largecap and midcap gainers today include ABB India Ltd. (5,425.00, 8.83%), YES Bank Ltd. (27.15, 6.26%) and Vodafone Idea Ltd. (16.30, 6.19%).

Downers:

Largecap and midcap losers today include GlaxoSmithKline Pharmaceuticals Ltd. (2,159.30, -3.53%), Supreme Industries Ltd. (3,830.95, -3.21%) and Gland Pharma Ltd. (1,898.65, -2.77%).

Volume Shockers

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

Top high volume gainers on BSE included Graphite India Ltd. (607.85, 11.43%), Mishra Dhatu Nigam Ltd. (441.80, 9.40%) and ABB India Ltd. (5,425.00, 8.83%).

Top high volume losers on BSE were Eureka Forbes Ltd. (494.20, -3.11%), One97 Communications Ltd. (388.35, -1.70%) and Brigade Enterprises Ltd. (1,003.90, -0.11%).

Mas Financial Services Ltd. (338.35, 3.19%) was trading at 9.7 times of weekly average. HEG Ltd. (1,731.75, 6.52%) and NCC Ltd. (243.05, 7.28%) were trading with volumes 5.2 and 4.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Apollo Hospitals Enterprise Ltd. (6,769.20, 0.13%), Bharat Electronics Ltd. (194.75, 3.21%) and Cummins India Ltd. (2,760.85, 5.86%).

Stock making new 52 weeks lows included - Whirlpool of India Ltd. (1,266.65, 0.62%).

9 stocks climbed above their 200 day SMA including G R Infraprojects Ltd. (1,268.60, 7.27%) and HEG Ltd. (1,731.75, 6.52%). 12 stocks slipped below their 200 SMA including Supreme Industries Ltd. (3,830.95, -3.21%) and Eureka Forbes Ltd. (494.20, -3.11%).

 
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The Baseline
22 Feb 2024
Indian exporters worry about rising shipping costs | Screener: Q3 winners that beat estimates for revenue and net profit

Just as the Red Sea started to look calm, the waters churned again. After a few quiet weeks, Yemen's Houthi rebels attacked a Belize-flag transport ship on Monday, forcing the crew to abandon the vessel. The attacks have continued despite the United States using its considerable firepower to hit Houthi bases with airstrikes. 

The Houthi rebels walk around with oversized jambiya daggers around their waists, but their real weapons are the anti-ship cruise missiles and drones they use to target ships.

Now, other gangs are joining the action. Pirates linked to Somalia's al-Shabab terror group have been inactive for nearly a decade. But since November, nearly 20 ships have been attacked by Somali pirates in the Gulf of Aden, next to the Red Sea. 

As many as 19,000 ships cross the Suez Canal and Red Sea every year, making this strait a critical point for energy and freight movement. To avoid attacks, ships are now taking the longer route around Africa, to move goods between Europe, US and Asia. The higher time spent on the water is requiring an extra 20% of global fleet capacity.

Major shipping companies –  BP, Equinor, Maersk, Evergreen Line – warn that the security situation in the Red Sea is getting worse, not better in the near-term. This means higher insurance rates and more travel time for exporters. 

These costs are hitting some Indian companies especially hard. The Indian think-tank Research and Information Systems, estimates that higher container shipping rates and delayed shipments could cause a 6.7% drop in Indian exports in FY24, from FY23’s $451 billion total. This puts around $30 billion on the line.

In this week's Analyticks:

  • Rebels in the Red Sea raise risks for Indian exporters
  • Winners of Q3 screener: Stocks which beat Forecaster analyst estimates in both revenue and net profit

Let's take a look. 

CEOs are keeping a close eye on rising shipping costs

Sometimes, CEOs are able to take control and steer their companies through a crisis. Other times, they can only wait and watch. This has been the case with the Red Sea attacks, where Houthi rebels, shipping companies and insurance players are dictating terms to Indian exporters.

For India, the Red Sea is a major shipping route to Europe, the US East coast, the Middle East and Africa. And costs here are rising. Nilima Divi, Director of Divi's Laboratories for example, points to the "mandatory war risk insurance" exporters have to now take due to the attacks. Freight costs for Asia-Europe as well as Asia-US routes are near record levels.

Chart: WCI (World Container Index) prices for key routes from Asia to US and Europe

On earnings calls, Indian exporters say that they are currently paying 30% more on average in shipping freight. Major exports through the Red Sea from India include petroleum products, chemicals and cereals, according to the Indian Trade Ministry.

Chemicals stocks, which have been struggling with muted demand, China dumping and tight margins, have been hard hit by the additional freight costs. And while pharma companies are in recovery mode, with growth rising in the key markets of US and Europe, price pressures have only recently eased up. Rising shipping costs would renew the pressure. Lupin's Managing Director Ramesh Swaminathan called  the Red Sea "the dark cloud on the horizon."

Rashesh Gogri, MD of Aarti Industries notes two main challenges for chemical exporters, "The pricing of containers has definitely gone up, and we will have a quarter lag or in some cases a month lag to push these prices up with the customers," indicating that Aarti will in the meantime, take a hit to their margins in Q4. Tha second challenge is rising shipping times, which have increased by two weeks when ships are avoiding the Red Sea. These factors impact 30% of Aarti Industries' exports.

Auto component players are upbeat, thanks to strong demand in Europe

One set of exporters that are relatively less impacted by the Red Sea crisis (so far) is India's auto component industry, thanks to stronger demand outlook and margin growth. Auto component players in India have benefited from vendor diversification by global vehicle manufacturers, and the demand recovery in key markets like Europe.

  Chart: Europe sees car sales recover in January 2024

ICRA estimates that operating margins for auto component manufacturers are set to rise 50-100 bps YoY in FY24, reaching pre-Covid levels of 11.0-11.5%, and will continue to improve in FY25 by another 50-100 bps.

Vivek Vikram Singh, CEO of Sona BLW (Sona Comstar) notes that advance reservations have helped limit higher freight costs for now. "If you don't go on winter break and you're actually in office on 2nd January, it's easier to get containers booked," he says, "So the impact is not much right now. But if prices keep rising for a substantial time, we will see a significant impact."

The long-term cost outlook for exporters is actually pretty optimistic. According to logistics company Flexport, "There is so much new shipping capacity coming onstream in the next two years, that it can absorb the cost of long journeys around the cape of Africa, if trouble in the Red Sea persists." But in the short term, the rebels and the pirates are the ones holding the cards.

Screener: Stocks which beat Trendlyne's Forecaster estimates for revenue and net profit in Q3FY24

Natco Pharma, Adani Enterprises lead in positive estimates surprises in Q3FY24

As the Q3FY24 results season concludes, we take a look at companies that have outperformed their estimates. This screener shows stocks which beat Trendlyne's Forecaster estimates for revenue and net profit in Q3FY24 by over 5 %. 

The screener is dominated by stocks from the banking & finance, cement & construction, oil & gas and pharma & biotech sectors. Major stocks that appear in the screener are Natco Pharma, Macrotech Developers, UTI Asset Management, Mazagon Dock Shipbuilders, Archean Chemical, Adani Enterprises, Nippon Life India Asset Management and Avanti Feeds. 

Natco Pharma beat its Forecaster estimates for revenue and net profit by 32.1% and 155.3%, respectively, in Q3FY24. Its revenue grew by 54% YoY to Rs 758.6 crore, while its net profit jumped 2.4x to Rs 212.7 crore. The revenue growth was driven by an improvement in the pharma and agrochem segments. The company’s operating profit margin also expanded by 13.8 percentage points, owing to reduced raw material costs.

Macrotech Developers also beat Forecaster estimates for revenue and net profit by 24.8% and 51.2%, respectively, during the quarter. The realtor’s revenue surged by 65.2% YoY to Rs 2,930.6 crore in Q3FY24, helped by enhanced pre-sales and average price realisation. Its net profit increased by 24.4% YoY to Rs 503.3 crore, while its operating profit margin expanded by 736 bps YoY to 30.1%, thanks to lower finance costs. 

You can find more screenershere,

 
Trendlyne Marketwatch
Trendlyne Marketwatch
21 Feb 2024
Market closes lower, Zaggle Prepaid Ocean Services signs an agreement with Wipro
By Trendlyne Analysis

Nifty 50closed at 22,055.05 (-141.9, -0.6%), BSE Sensexclosed at 72,623.09 (-434.3, -0.6%) while the broader Nifty 500closed at 20,128.30 (-143.6, -0.7%). Market breadth is highly negative. Of the 2,045 stocks traded today, 624 were gainers and 1,398 were losers.

Indian indices pared the gains from the morning session and closed in the red. The volatility index, Nifty VIX, dropped by 0.9% and closed at 15.9 points. ABB India's net profit grows by 10.9% YoY to Rs 338.7 crore in Q3FY24. Revenue increases by 13.3% YoY to Rs 2,728.2 crore on the back of improvement in the robotics & discrete automation, motion, electrification and process automation segments.

Nifty Smallcap 100 and Nifty Midcap 100 closed lower following the benchmark index. Nifty Realty and Nifty PSU Bank closed higher than Tuesday’s closing level. According to Trendlyne’s sector dashboard, realty emerged as the top-performing sector of the day, with a rise of over 1.4%. 

Most European indices trade mixed. US indices futures trade lower indicating a negative start. Union Bank of Switzerland’s (UBS) investment banking division predicts the Fed to start cutting rates by June 2024. UK’s largest lender HSBC Bank traded 5% lower after it reported a $3 billion impairment due to investments in China’s Bank of Communication.

  • Money flow index (MFI) indicates that stocks like Oil India, Trent, and Indian Hotels Co are in the overbought zone.

  • UltraTech Cement announces the commissioning of a 1.8 MTPA brownfield cement capacity expansion in Rajasthan. The company appears in a screener of stocks with improving book value per share.

  • Zaggle Prepaid Ocean Servicessigns an agreement with Wipro to offer its Zaggle save proposition and its benefits & expense management platforms.

  • Juniper Hotels’ Rs 1,800 crore IPO gets bids for 0.1X the available 2.9 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 0.4X the available 52.6 lakh shares on offer

  • ICRA forecasts that the operating profit margins of hospitality firms will remain steady from FY24 to FY25. Robust revenue growth is expected to offset the increasing expenses of refurbishment, maintenance, and salaries. However, there might be a slowdown in revenue growth, with an anticipated growth rate of 7-9% in FY25, based on a high base of 14-16% growth in FY24.

  • HFCLrises sharply as it plans to expand into Europe with an optical fiber cable (OFC) plant in Poland. The plant will have an initial capacity of 3.3 million fkm per annum, with the ability to scale up to 7 million fkm per annum. The projected capex for setting up the plant is Rs 100 crore.

  • Tata Power'ssubsidiary, Tata Power Trading, signs a power purchase agreement (PPA) with BluSmart to supply 30 MW of power from its solar plant in Rajasthan.

  • Navin Fluorine International, Chambal Fertilisers & Chemicals, Indian Energy Exchange, and VIP Industrieswitness a decrease in mutual fund holdings in the past month.

  • Medplus Health Services board decides against proceeding with its fund-raising plans, leading to a deferral of expansion plans for its Diagnostics Division beyond Hyderabad until the profitability of the pilot project is confirmed.

  • Varun Beveragesis rising as its Moroccan subsidiary signs an exclusive snacks appointment with PepsiCo to manufacture and package Cheetos in Morocco. The production is expected to start with a capex of Rs 100 crore.

  • Patel Engineering rises as it emerges as the lowest bidder, along with its joint venture partner, for a Rs 525.4 crore irrigation project in Telangana. The project involves the construction of an RCC (reinforced cement concrete) protection wall along river Munneru, within two years.

  • DLFsurges to its all-time highof Rs 894.5 per share as it acquires 28.5 acres in Haryana, with 19.3 acres registered for Rs 858 crore. The remainder will be bought by its subsidiary DHDL for Rs 50 crore, facilitating the partial bond redemption worth Rs 775 crore.

  • Hindalco Industries is rising as its wholly owned subsidiary, Novelis Inc, files draft initial share offering documents with the US Securities and Exchange Commission (SEC) for an initial public offering (IPO).

  • ABB Indiarises sharply as its net profit grows by 10.9% YoY to Rs 338.7 crore in Q3FY24. Revenue increases by 13.3% YoY to Rs 2,728.2 crore on the back of improvement in the robotics & discrete automation, motion, electrification and process automation segments. It appears in a screener of stocks with consistent share price growth.

  • Realty stocks like DLF, Macrotech Developers, Godrej Properties, and Phoenix Mills are rising in trade. The broader Nifty Realty index also trades in the green and has reached its all-time high of Rs 912.2.

  • NTPC'ssubsidiary, NTPC Green Energy, reportedly signs a land lease agreement with Andhra Pradesh Industrial Infrastructure Corp to develop an integrated green hydrogen hub. The project will have a daily green hydrogen production capacity of 1,200 tonnes per day.

  • Campus Activewear rises more than 6% as reports suggest that 40.7 lakh shares (1.3% equity), amounting to Rs 99.7 crore, change hands in a large trade.

  • Media stocks like Zee Entertainment Enterprises, Nazara Technologies, Dish TV Indiaand Hathway Cable & Datacomare falling in trade. The broader Nifty Mediaindex also falls more than 2%.

  • Tourism Finance Corp rises as investor Aditya Kumar Halwasiya buys a 13% stake (around 1.2 crore shares), amounting to Rs 247.5 crore, in a block deal on Tuesday. However, promoters Pransatree Holdings Pte and Koppara Sajeeve Thomas sell 4.7% and 3.8% stakes, respectively, in the company. Foreign investor Varanium India has also exited the company.

  • Union Bank of Indiarises sharply as its board of directors approves issuing equity shares worth Rs 3,000 crore via a qualified institutional placement (QIP). The board has set the floor price at Rs 142.8 per share.

  • Devyani International rises more than 2% as reports suggest that 5.3 crore shares (4.4% equity), amounting to Rs 871 crore, change hands in a block deal.

  • Swan Energy'sboard of directors approves issuing equity shares, reportedly worth Rs 4,000 crore, through a qualified institutional placement (QIP). The board has set the floor price at Rs 703.3 per share for the issue.

  • Juniper Hotels raises Rs 810 crore from anchor investors ahead of its IPO by allotting around 2.3 crore shares at Rs 360 each. Investors include Government Pension Fund Global, Fidelity Funds, Goldman Sachs, Societe Generale, Baroda BNP Paribas Mutual Fund, Quant Mutual Fund, and Invesco India Equity Fund.

  • Zee Entertainment Enterprises plunges in trade as SEBI reportedly finds a financial discrepancy amounting to approximately Rs 2,000 crore ( $241 million) in the company’s accounts.

  • Whirlpool India'spromoter, Whirlpool Mauritius, sells around 24% stake (3 crore shares) for roughly Rs 3,831.01 crore in a bulk deal on Tuesday. Meanwhile, SBI Mutual Fund and Aditya Birla Sunlife Mutual Fund buy 7.2% and 0.7% stakes, respectively, in the company.

  • Nifty 50was trading at 22,218.95 (22, 0.1%), BSE Sensexwas trading at 73,110.92 (53.5, 0.1%) while the broader Nifty 500was trading at 20,319.85 (48.0, 0.2%).

  • Market breadth is surging up. Of the 1,822 stocks traded today, 1,352 were in the positive territory and 421 were negative.

Riding High:

Largecap and midcap gainers today include ABB India Ltd. (4,984.70, 10.17%), One97 Communications Ltd. (395.05, 5.00%) and General Insurance Corporation of India (425.20, 4.33%).

Downers:

Largecap and midcap losers today include Zee Entertainment Enterprises Ltd. (164.60, -14.56%), Sona BLW Precision Forgings Ltd. (612.30, -4.31%) and MphasiS Ltd. (2,654.35, -4.00%).

Volume Rockets

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

Top high volume gainers on BSE included Tata Investment Corporation Ltd. (6,474.70, 10.64%), ABB India Ltd. (4,984.70, 10.17%) and Sterlite Technologies Ltd. (144.85, 7.74%).

Top high volume losers on BSE were Ashok Leyland Ltd. (171.30, -0.95%) and Lemon Tree Hotels Ltd. (137.45, -0.76%).

Campus Activewear Ltd. (252.00, 2.84%) was trading at 29.8 times of weekly average. Poly Medicure Ltd. (1,613.40, 1.39%) and Raymond Ltd. (1,873.70, 5.79%) were trading with volumes 17.2 and 16.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Alembic Pharmaceuticals Ltd. (1,075.15, 2.59%), Ambuja Cements Ltd. (587.80, -0.17%) and Apollo Hospitals Enterprise Ltd. (6,760.15, 0.01%).

Stock making new 52 weeks lows included - Whirlpool of India Ltd. (1,258.80, -2.17%).

12 stocks climbed above their 200 day SMA including Raymond Ltd. (1,873.70, 5.79%) and Chemplast Sanmar Ltd. (477.10, 4.85%). 8 stocks slipped below their 200 SMA including Metro Brands Ltd. (1,118.85, -2.78%) and SIS Ltd. (440.10, -2.74%).

 
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The Baseline
20 Feb 2024
5 stocks to buy from analysts this week with high upsides
By Satyam Kumar

1. Royal Orchid Hotels:

Edelweiss maintains its ‘Buy’ rating on this hotel company with a target price of Rs 535. This indicates an upside of 26.4%. Analysts Amit Agarwal and Rishith Shah say, “Given the traction from domestic demand, the revival in meetings, conferences and exhibition activity, and constrained supply additions in the industry, we expect average room rate to trend upwards, with occupancy at near-optimal levels.” In Q3FY24, Royal Orchid’s revenue grew by 13.2% YoY to Rs 86.6 crore, while its net profit increased by 1.1% YoY to Rs 15.4 crore.

The analysts note that the company added 990 rooms in the past year, taking the total to 5,795. They expect the company to add around 2,300 rooms across 38-40 hotels by the end of FY25. As a large part of these room additions are under the asset-light model, Agarwal and Shah project the firm’s RoCE (Return on Capital Employed) to improve from 25.6% in FY23 to 28.8% in FY26. Benefiting from sectoral tailwinds, they predict a CAGR of 21% for revenue and 20% for profit after tax over FY23-26.

2. NTPC:

ICICI Direct maintains its ‘Buy’ rating on this electric utilities company with a target price of Rs 400. This implies an upside of 15.7%. In Q3FY24, its net profit grew 7.9% YoY to Rs 5,155.3 crore. Analyst Chirag J Shah says, “The company’s vision is to become a 130 GW+ company by 2032, with 60 GW expected from renewable energy.”

Shah is optimistic about NTPC – it is the only company that has added coal-based capacities over the past five years, reaching an installed base of 73,000 MW on a consolidated basis. NTPC has 9,300 MW of coal-based plants under construction. The analyst expects them to be commissioned by FY25-26. This will lead to an 11% growth in generation, supported by strong power load factors.

NTPC aims to produce 45-50% of its capacity from non-fossil fuels by 2030, and is targeting 60 GW of renewable capacity by 2032, according to Shah. He points out that the management is confident about reaching 20,000 MW of renewable capacity by FY26. He notes that the company is trying to diversify into green hydrogen and nuclear power through a joint venture with Nuclear Power Corporation of India. 

3. Prestige Estates Projects:

HDFC Securities maintains its ‘Buy’ rating on this realty company with a target price of Rs 1,390, indicating an upside of 19.4%. Analyst Parikshit D Kandpal is upbeat about Prestige Estates registering its second-highest-ever presales by value and volume in Q3FY24, at Rs 5,320 crore, up 111% YoY, and 5.5 million square feet (msf), up 88% YoY, respectively. But, its revenue fell 16.1% YoY to Rs 1,970.5 crore, while net profit dropped by 9% YoY to Rs 116.3 crore in the quarter, mainly due to a decline in completions.

Kandpal believes that presales were supported by launches being at the highest ever, with new projects totalling 14.6 msf. This included Prestige City Hyderabad, which contributed Rs 2,400 crore to presales with its 12.6msf saleable area. He expects the company to launch its first project in NCR, Prestige Bougainvillea Gardens, in Q1FY25, with a saleable area of 3.1 msf. With Rs 16,330 crore in presales achieved in 9MFY24, the analyst forecasts that the company will surpass Rs 20,000 crore in presales in FY24.

4. Ashok Leyland:

KR Choksey maintains its ‘Buy’ rating on this commercial vehicles company with a target price of Rs 221. This indicates a potential upside of 27.8%. Analyst Unnati Jadhav believes that Ashok Leyland will continue to benefit from the government’s focus on infrastructure, replacement demand, improved freight demand, and a shift towards higher tonnage vehicles. The company’s revenue grew by 6.6% YoY to Rs 11,119.5 crore in Q3FY24, while its net profit increased by 75.6% YoY to Rs 560.2 crore.

Jadhav notes that elections in major states during Q3FY24 led to a slowdown in the company's revenue growth by affecting sales volumes. However, she adds that the gross margin for the quarter expanded by 403 bps YoY and 130 bps QoQ to 27.8%, helped by softening steel prices and pricing discipline leading to improved realizations. She forecasts a revenue CAGR of 8.2% and an adjusted net profit CAGR of 37.3% over FY23-26.

5. HG Infra Engineering:

Geojit BNP Paribas maintains its ‘Buy’ rating on this construction and engineering company with a target price of Rs 1,120, indicating an upside of 19.5%. Analyst Antu Eapen Thomas is upbeat about the company’s growing opportunities in road projects and its significant order book of Rs 9,626 crore, which is twice its trailing twelve month revenue. 

In Q3FY24, its revenue grew by 15.1% YoY to Rs 1,368.4 crore, while net profit declined by 22% YoY to Rs 102 crore, mainly due to increased input costs and employee expenses.

Thomas notes the company’s well-diversified order book: 51% from EPC orders, 37% from hybrid-annuity model projects, and 12% from railway projects. He expects a dip in order inflow in Q4FY24 due to the upcoming general elections but expects any shortfall to be compensated in FY25.

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

(You can find all analyst picks here)