My Newsfeed

logo
The Baseline
16 Feb 2024
Five Interesting Stocks Today

1. Aster DM Healthcare:

This healthcare facilities company has risen by 6.7% over the past week, touching its all-time high of Rs 478.3 per share on Thursday. The company announced its Q3FY24 results on February 8, with its net profit growing by 28.6% YoY to Rs 179.2 crore due to expanding  EBITDA margin from cost optimisation efforts. This marks a turnaround, as the stock's net profit had been falling YoY for the last five quarters. Its revenue also increased by 16.2% YoY to Rs 3,710.6 crore. This rise in net profit and revenue helped the company beat its Forecaster estimates by 157.5% and 4.4% respectively.

The revenue growth came from  improvements in the hospitals, clinics and retail pharmacies (including optical) segments. The hospitals segment, which contributes to 57.3% of the company’s total revenue, saw a 17.7% YoY growth, owing to an increase in the number of beds in India and the GCC. 

Aster’s board approved the sale of its Gulf business, Aster DM Healthcare FZC, to Alpha GCC Holdings for $1 billion (approximately Rs 8,330.1 crore) on November 28, 2023. Commenting on this in the company’s earnings call, Alisha Moopen, Deputy Managing Director, said, “After closing the deal, we plan to distribute 70% to 80% of the upfront consideration of $903 million as  dividends to shareholders. This dividend is expected to be within the range of Rs 110-120 per share.”

The remaining portion of the sale will be used for expansion into North India. The company aims to add 1,700 beds to bring the total capacity to 6,600 by FY27.

2. PI Industries:

This agrochemicals company has risen by 5.5% over the past week following its results. Its Q3 net profit increased by 27.5% YoY to Rs 448.6 crore, beating Trendlyne’s Forecaster estimates by 22.9%. This was driven by a favourable product mix and a deferred tax credit  of Rs 20.4 crore. Its revenue was up 17.6% YoY, driven by growth in its CSM (custom synthesis business) and pharma segments. Due to the rise in share price, PI Industries features in a screener of companies with prices above their short, medium, and long-term moving averages. 

During the quarter, the CSM segment’s revenue (which accounts for around 93% of its total revenue) increased to Rs 1,770.2 crore (up 9.7% YoY). The segment's export revenue also rose 13% YoY, led by volume growth and new product launches. However, the domestic business saw a 6% YoY decline due to the delayed and erratic monsoon. 

Meanwhile, the firm’s pharma business revenue climbed to Rs 127.3 crore, accounting for around 7% of total revenue, up from 3% in Q2. PI Industries entered the pharma segment in Q1 through acquisitions in the API (active pharmaceutical ingredients) and CDMO (contract development and manufacturing organisation) spaces. According to Mayank Singhal, Vice-Chairman & Managing Director, “In the coming 4-5 years, we expect 20-25% of revenue to come from the non-agchem space, which includes pharma and non-agchem CSM exports.” 

For FY24, the management has maintained its revenue growth guidance of 18-20% YoY. It also plans to add 4-5 products per year. Following the company’s results, Motilal Oswal maintains its ‘Buy’ rating with a target price of 4,350. The brokerage is optimistic about PI Industries’ long-term growth, driven by its product launches and a strong order book.  

3. Tata Power

This electrical utility firm has fallen 7.6% over the past week after reporting tepid earnings. Its revenue increased by 3% YoY to Rs 14,841 crore, while its net profit rose by 2.2% YoY to Rs 1,076 crore. The firm’s Q3 profit was driven by higher realizations in the transmission and distribution business and better capacity utilization at the Mundra thermal power plant. The stock has delivered 45.2% returns in the past quarter and 83.3% in the past year.

The Indian government's recent initiative to launch a rooftop solar scheme for one crore houses is good news for Tata Power’s new solar module manufacturing unit, which has 4.2 GW capacity and is expected to be operational by Q4FY24. IIFL Securities notes that renewable energy capacity additions are likely to pick up, supported by multi-year low solar module prices and the government’s push for rooftop solar installations, in which the firm has a 17% market share

Clean energy constituted 39% of Tata Power's total installed capacity of 14,453 MW in Q3FY24, and the firm aims to produce around 70% of its capacity from renewable sources by 2030. This is in line with the government's aim to boost renewable power generation.

IIFL Securities predicts that the firm’s debt-to-equity ratio may inch up to 1.5x (currently 1x) due to new capacity additions, and expects its borrowing costs to be competitive at 7.8-8%, given the Tata Group parentage. Morgan Stanley has upgraded Indian power utility companies to ‘Overweight’, expecting the country’s energy security to require a capex of over Rs 4,500 crore in the next decade.

4. Birla Corp:

This cement products manufacturer has risen by 15% following its Q3FY24 earnings announcement, reaching a 52-week high of Rs 1,770 on February 9. In Q3FY24, it reported a net profit of Rs 109.1 crore, as against a loss of Rs 49.9 crore in Q3FY23. It beat Trendlyne Forecaster’s net profit estimate by 4.7%. The firm’s revenue grew by 15% YoY to Rs 2,328.3 crore. It achieved 85% capacity utilisation during the quarter, up from 74% last year.

Birla reported a 13% YoY volume growth due to increased real estate and infrastructure activity. Additionally, the Mukutban plant, launched in Q4FY22, has now reached 60% capacity utilisation, contributing to the overall increase. However, unseasonal rains in Uttar Pradesh, Madhya Pradesh, Rajasthan and Maharashtra affected volumes. 

Managing Director and Chief Executive Officer Sandip Ghose says that Mukutban has significantly boosted the company’s profitability, and is expected to increase its capacity going ahead. They are also counting on the plant to give better access to untapped markets in Western India. The company aims to increase its production capacity to 30 mtpa by 2030 from the current 20 mtpa.

EBITDA margin improved by 9.2% points YoY to 16.4%, with EBITDA/tonne rising 132% YoY to Rs 901. The margin improvement was led by better realization and lower operating expenses. Chief Financial Officer Aditya Saraogi says, “We are maintaining our EBITDA per tonne guidance of around Rs 850 for FY24.”  Input cost fell by Rs 140/MT, owing to efficient raw material sourcing. The firm also improved its fuel mix by leveraging renewable sources and waste heat recovery systems.

ICICI Direct recommends a ‘Buy’ for Birla Corp, forecasting significant improvements in margins and profitability over FY24-26. The brokerage estimates the firm’s PAT to grow at a 174% CAGR over the same period, driven by EBITDA expansion. Margins are expected to increase by 300 bps by FY26 from FY24 levels. The company appears in a screener for stocks with recommendations or target price upgrades by brokers in the past three months.

5. Zydus Lifesciences:

This pharma company hit its all-time high of Rs 893.8 on Friday, with a 10.3% rise in the past week. This rise was driven by a 26.8% YoY growth in its Q3FY24 net profit, beating Trendlyne’s Forecaster estimate by 14.5%. Its revenue also increased by 3.2% YoY. Additionally, the company announced a share buyback worth Rs 600 crore, representing 0.59% of total shares at Rs 1,005 per share, with the record date set for February 23, 2024. Zydus Lifesciences appears in a screener for stocks with high EPS growth in the past twelve months.

Zydus’s EBITDA margin improved by 408 bps YoY to 24%, led by a better product mix and higher price realization. A reduction in raw material costs further helped the bottom line. The growth was driven by a 16% rise in the Indian formulations business, which constitutes 29% of its total revenue. The European and emerging markets business, contributing 11% to its total revenue, also grew 30.5%.

Zydus acquired UK-based LiqMeds in Q3FY24 for 68 million euros (approx. Rs 690 crore), aiming to boost its oral liquids portfolio in the UK and other international markets. LiqMeds is a major player in the global oral liquid products market, offering a portfolio of 100+ products.

However, US formulation sales, constituting 43% of the top line, declined by 4.2% due to lower-than-expected sales of Revlimid and a planned inventory reduction. The management expects a rebound in US sales in Q4FY24, led by price stabilization and the launch of new products like Zituvio and  Metformin IR. Zydus is poised for expansion in the next 3-5 years, with the launch of vaccines and biosimilars for emerging markets including India, and complex generics for the US.

HDFC Securities maintains its ‘Buy’ call on Zydus Lifesciences as they expect steady growth in the US and India to improve margins in FY25-26 due to its R&D assets such as injectables, biosimilars and new chemical entities. With a target price of Rs 920, the stock has a potential upside of 4.3%.

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
16 Feb 2024
Market closes higher, HDFC Securities keeps its 'Buy' rating on Prestige Estates Projects
By Trendlyne Analysis

Nifty 50closed at 22,040.70 (130.0, 0.6%), BSE Sensexclosed at 72,426.64 (376.3, 0.5%) while the broader Nifty 500closed at 20,164.90 (127.9, 0.6%). Market breadth is in the green. Of the 2,020 stocks traded today, 1,168 were gainers and 820 were losers.

Indian indices maintained their gains from the afternoon session and closed in the green. The Indian volatility index, Nifty VIX, fell marginally and closed at 15.2 points. Mahindra & Mahindra closed sharply higher after it inked an agreement with Volkswagen. Mahindra will equip a certain range of its electric platform with electric components of Volkswagen´s MEB and unified cells.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, taking cues from the benchmark index. Nifty Energy and Nifty Media closed higher than their Thursday close. According to Trendlyne’s sector dashboard, Healthcare Equipment & Supplies emerged as the top-performing sector of the day, with a rise of 4.4%.

European indices traded higher, following the Asian indices, which closed in the green. US index futures traded higher, indicating a positive start to the trading session. Brent crude oil futures traded in the red after rising 1.6% on a volatile day of trade on Thursday.

  • Money flow index (MFI) indicates that stocks like Swan Energy, Bosch, Bajaj Auto and Varun Beverages are in the overbought zone.

  • Zydus Lifesciences gets US FDA approval to manufacture and market Isosorbide Mononitrate tablet, which is used to prevent chest pain in patients with coronary artery disease.

  • HDFC Securities keeps its 'Buy' rating on Prestige Estates Projects with an upgraded target price of Rs 1,390 per share. This indicates a potential upside of 15.8%. The brokerage expects the realtor's presales to improve on the back of better visibility of its office assets. It expects the company's net sales to grow at a CAGR of 6.9% over FY23-26.

  • Lupin receives US FDA approval to market Minzoya tablets, designed for female contraception. The drug will be manufactured at Lupin’s Pithampur facility and has an estimated annual sales of $42 million in the US.

  • Ashok Atluri, Managing Director of Zen Technologies says, the company will achieve its revenue target of Rs 450 crore in FY24. He adds that it will continue to expand its anti-drone technology. Atluri also highlights that the firm is in a favourable position in the training and counter-drone technology.

  • RattanIndia Enterprises rises as its subsidiary, Neosky India, launches an innovative drone training programme in association with Narayana Health for school students in Bangalore. It appears in a screener for stocks with strong momentum.

  • Mahindra & Mahindra rises to an all-time high of Rs 1,864.7 after it inks an agreement with Volkswagen. Mahindra will equip a certain range of its electric platform with electric components of Volkswagen´s MEB and unified cells.

  • Advertising & media, photographic products, and warehousing & logisticsindustries rise more than 5% in the past week.

  • Santanu Sengupta, Chief India Economist at Goldman Sachs, forecasts India's economic growth to exceed 6% for the rest of the decade, attracting more investments from China. Citing demographics, government spending, and robust domestic demand as key drivers, he predicts a 6.3% GDP growth for FY25, slightly below the RBI's 7% expectation.

  • Foreign institutional investors withdraw Rs 1,844 crore from the equity market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 62,619.8 crore from foreign investors. Meanwhile, mutual funds are net buyers in the equity market, injecting Rs 1,377.5 crore during the same period.

  • JSW Steelplans to invest Rs 65,000 crore in multiple phases in Odisha to develop an integrated green steel manufacturing complex.

  • EPACK Durable rises sharply as it posts a net profit of Rs 4.9 crore in Q3FY24 compared to Rs 6.2 crore in Q3FY23 owing to decreased raw material costs. Revenue grows by 1.2% YoY to Rs 279.1 crore during the quarter. It shows up in a screener of stocks with zero promoter pledge.

  • KPI Green Energy rises sharply as its subsidiary, KPIG Energia, receives a 1.5 MW solar plant project from Pruthvi Textile under the captive power producer segment.

  • Ajit Venkatraman, CEO of Finolex Industries, notes an uptick in volumes compared to December and forecasts double-digit volume growth for FY24. He highlights growth in the company’s non-agri segment, led by the construction industry.
  • Happy Forgingsbags a Rs 400 crore order from a leading Indian automaker to manufacture and supply components for the SUV segment for six years starting from April 2024.

  • Bajaj Autohits a new 52-week high of 8,434.8 as its shareholders approve, through a postal ballot, the buyback of 40 lakh equity shares for Rs 4,000 crore. This buyback represents 1.41% of the total equity shares of the firm.

  • Data Patterns (India) rises more than 7% as reports suggest that, 60 lakh shares, amounting to Rs 1,100 crore, change hands in a block deal.

  • GMR Airports Infrastructure's January 2024 passenger traffic rises 13% YoY to 1.1 crore. Its aircraft movements rise 5% YoY 66,302.

  • Auto stocks like TVS Motor, Bajaj Auto, Maruti Suzuki Indiaand Tata Motorsrise more than 2% in trade. All constituents of the broader Nifty Autoindex are also trading in the green, helping it to touch its all-time high of 20,315.7.

  • Entero Healthcare Solutions’shares debut on the bourses at a 2.3% discount to the issue price of Rs 1,258. The Rs 1,600 crore IPO has received bids for 1.5 times the total shares on offer.

  • The Centre raises the windfall tax on locally produced crude oil to Rs 3,300 per tonne from Rs 3,200 earlier. It also increases the export tax on diesel to Rs 1.5 per litre from ‘Nil’. The tax on aviation turbine fuel (ATF) and petrol will remain ‘Nil’.

  • Ca Basque Investments sells a 1.4% stake in YES Bank for approx Rs 1,737.2 crore in a bulk deal on Thursday.

  • Bharat Petroleum Corp surges to its all-time high of Rs 687.9 per share as it sets up a pilot project to learn more about handling hydrogen for the automobile sector. The company expects a capex of Rs 25 crore.

  • Vedanta's promoter Finsider International sells a 1.8% stake in the company in a bulk deal on Thursday.

  • Dilip Buildcon's joint venture (JV) with Vijay Kumar Mishra Construction bags a Rs 412.9 crore order from the Water Resources Department of Madhya Pradesh. The project involves constructing the Machhrewa Irrigation Project Dam and a pressurized pipe irrigation network on a turnkey basis, with completion expected within 60 months.

  • Nifty 50 was trading at 22,005.45 (94.7, 0.4%), BSE Sensex was trading at 72,406.02 (355.6, 0.5%) while the broader Nifty 500 was trading at 20,135.9000 (98.9, 0.5%)

  • Of the 1,801 stocks traded today, 1,469 showed gains, and 297 showed losses.

Riding High:

Largecap and midcap gainers today include General Insurance Corporation of India (427.20, 10.86%), Ipca Laboratories Ltd. (1,241.45, 7.73%) and UNO Minda Ltd. (654.9500, 7.73%).

Downers:

Largecap and midcap losers today include Gujarat Gas Ltd. (545.05, -6.16%), Torrent Power Ltd. (1,173.50, -2.89%) and Power Grid Corporation of India Ltd. (274.55, -2.52%).

Volume Rockets

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

Top high volume gainers on BSE included Natco Pharma Ltd. (1,026.50, 15.71%), The New India Assurance Company Ltd. (285.85, 15.59%) and Rain Industries Ltd. (201.10, 11.23%).

Top high volume losers on BSE were Gujarat Gas Ltd. (545.05, -6.16%), ICICI Securities Ltd. (786.45, -3.36%) and CSB Bank Ltd. (365.00, -2.41%).

Data Patterns (India) Ltd. (2,019.15, 8.87%) was trading at 16.1 times of weekly average. Mastek Ltd. (3,091.75, 7.98%) and Crisil Ltd. (4,609.20, 0.39%) were trading with volumes 11.6 and 9.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Abbott India Ltd. (29,538.60, 1.22%), ACC Ltd. (2,720.40, 3.14%) and Adani Ports & Special Economic Zone Ltd. (1,306.85, 3.14%).

Stock making new 52 weeks lows included - One97 Communications Ltd. (341.30, 5.00%).

19 stocks climbed above their 200 day SMA including Data Patterns (India) Ltd. (2,019.1500, 8.87%) and UNO Minda Ltd. (654.95, 7.73%). 4 stocks slipped below their 200 SMA including G R Infraprojects Ltd. (1,186.80, -2.16%) and Procter & Gamble Health Ltd. (5,103.60, -0.65%).

Trendlyne Marketwatch
Trendlyne Marketwatch
15 Feb 2024
Market trades higher, Rajesh Exports' net profit plunges by 97% YoY to Rs 12.4 crore in Q3
By Trendlyne Analysis

Nifty 50closed at 21,910.75 (70.7, 0.3%), BSE Sensexclosed at 72,050.38 (227.6, 0.3%) while the broader Nifty 500closed at 20,037.00 (114.7, 0.6%). Market breadth is in the green. Of the 2,013 stocks traded today, 1,277 were gainers and 711 were losers.

Indian indices maintained the gains from the morning session and closed in the green. The volatility index, Nifty VIX, dropped by 1.4% and closed at 15.2 points. The Reserve Bank of India directs commercial card operators Visa and Mastercard to suspend card-based commercial transactions by both small and large businesses, citing lapses in adhering to Know Your Customer (KYC) norms.

Nifty Midcap 100 and Nifty Smallcap 100 closed higher following the benchmark index. Nifty Energy and Nifty PSU Bank 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 3.1%

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. Berkshire Hathway sold a 1.1% stake in Apple valued at around $1.8 billion. Morgan Stanley increased the target price of Nvidia from $603 to $750 ahead of its quarterly earnings release next week. The global brokerage cited booming demand for high-end chips for nascent AI technology to be the major reason.

  • Relative strength index (RSI) indicates that stocks like Zydus Lifesciences, Bosch, Kalpataru Projects International and Bajaj Auto are in the overbought zone.

  • ICICI Lombard General Insurance, HDFC Asset Management Co, and Federal Bank outperform the Nifty 50 index over the past month after their Q3FY24 results.

  • Happiest Minds Technologies is rising as it enters a partnership with Soroco, a US-based AI company, to provide IT solutions to automation discovery using Soroco's Scout AI model.

  • Coal India inks a memorandum of understanding with Haryana Power Purchase Centre for to supply 800 MW of power from its arm, Mahanadi Basin Power.

  • India’s merchandise trade deficit narrows to $17.5 billion in January from $19.8 billion in December. Merchandise exports stand at $36.9 billion in January, and imports at $54.4 billion.

  • Axis Direct reiterates its 'Buy' rating on Hindalco Industries with an upgraded target price of Rs 660. This indicates a potential upside of 28.6%. The brokerage is optimistic about the company's capital allocation, highlighting capex directed towards downstream assets in India and at Novelis. It expects the company's net profit to grow at a CAGR of 10.7% over FY23-26.

  • ABB India launches next-generation compact drive, ACH180, for its HVACR (heating, ventilation, air conditioning, and refrigeration) equipment. The compact drives require lower capital expenditures and are easy to commission.

  • Paytm falls another 5% as the stock exchanges NSE and BSE lower the circuit limits from 10% to 5%.

  • Vibhor Steel Tubes' Rs 72.2 crore IPO gets bids for 206X the available 35.9 lakh shares on offer on the third day of bidding. The retail investor quota gets bids for 152.6X the available 17.8 lakh shares on offer.

  • Reliance Industries is reportedly in talks to buy a 29.8% share in Tata Play from Walt Disney. If this deal closes, it will mark the company's entry into the television distribution market, positioning it as a major player in the Indian media space.

  • MIC Electronicsrises sharply following its announcement of a new 42-volt EV battery charger for e-cycles and two-wheelers, set to commercialize in March 2024. The firm is also developing high-power rating EV battery chargers for the same categories.

  • Edelweiss retains its 'Buy' rating on Neogen Chemicalswith a target price of Rs 1,600 per share. This indicates a potential upside of 18.5%. The brokerage remains positive, driven by the company's battery chemical business, which has been allotted significant capex. It expects the company's net profit to grow at a CAGR of 32% over FY23-26.

  • Lupinreceives US FDA approval for Ganirelix Acetate Injection, used for inhibiting premature luteinizing hormone (LH) surges. The injection has estimated annual sales of $87 million.

  • Rajesh Jejurikar, Executive Director and CEO (Auto and Farm Sector) at Mahindra & Mahindra, notes an industry-wide decline in the tractor business. He expects muted performance in Q4 due to a shift in the festive season. Jejurikar foresees a delay in tractor launch in the US market.

  • Fineotex Chemicalhits a new 52-week high of Rs 429 as its net profit increases 46.5% YoY to Rs 32.9 crore in Q3FY24 due to lower employee benefits and finance costs. Its revenue rises 26.7% YoY to Rs 138.4 crore due to a 37.7% YoY increase in the volumes.

  • Star Health and Allied Insurancereceives a Rs 179.3 crore tax demand from the Deputy Commissioner of the Large Tax Unit, Chennai, for non-payment of GST on re-insurance commissions received in FY19.

  • Surya Roshnibags a Rs 94.8 crore order from a domestic entity in Siliguri, West Bengal, for supplying MS Coated Spiral Welded Pipes in six months.

  • KP Mahadevaswamy, CMD of NBCC (India), expects the company’s revenue to reach Rs 10,500-11,000 crore in FY24. He highlights execution challenges in Delhi due to pollution and farmer strikes. Mahadevaswamy forecasts a revenue of over Rs 13,000 crore in FY25, and PAT of more than Rs 600 crore.

  • The Reserve Bank of India directscommercial card operators Visa and Mastercard to suspend card-based commercial transactions by both small and large businesses, citing lapses in adhering to Know Your Customer (KYC) norms.

  • Rajesh Exportsfalls sharply to touch its 52-week low of Rs 300.3 per share as its net profit plunges by 97% YoY to Rs 12.4 crore in Q3FY24. Revenue drops by 30.7% YoY to Rs 65,476.9 crore during the quarter. It appears in a screenerof stocks with medium to low Trendlyne momentum scores.

  • PSP Projects bags a Rs 630.9 crore order from Rail Vikas Nigam to construct Gati Shakti Vishwavidhyalaya in Vadodara within 30 months. The firm's cumulative order inflow in FY24 to date amounts to Rs 2,626.6 crore.

  • Yes Bank is rising as 39 crore shares (around 1.4% equity), amounting to Rs 1,129 crore, reportedly change hands in a large deal.
  • Narayana Hrudayalaya falls sharply as its Q3FY24 net profit grows 22.3% YoY to Rs 188 crore but misses Forecaster estimates by 6.4%. Revenue rises by 6.7% YoY to Rs 1,203.6 crore during the quarter. It features in a screener of stocks with improving cash flow from operations over the past two years.

  • Container Corp of India (CONCOR) and Container Company of Bangladesh (CCBL) renew their memorandum of understanding till April 2027. This agreement focuses on developing the modalities for operating container trains between India and Bangladesh, aiming to boost cross-border trade.

  • Vedantais reportedly negotiating to sell a partial stake to GQG Partners in a $1 billion deal. This is believed to be a part of Vedanta's plans to raise funds to repay debt.

  • NMDCsurges to its all-time high of Rs 248.8 per share as its net profit grows by 62.7% YoY to Rs 1,483.9 crore in Q3FY24. Revenue rises by 45.4% YoY on the back of improvement in the iron ore and pellet, other minerals & services segments. Its EBITDA margin expands by 650 bps YoY, owing to lower raw material costs.

  • Nifty 50was trading at 21,907.95 (67.9, 0.3%), BSE Sensexwas trading at 72,061.47 (238.6, 0.3%) while the broader Nifty 500was trading at 20,036.00 (113.7, 0.6%).

  • Market breadth is ticking up strongly. Of the 1,785 stocks traded today, 1,504 were on the uptrend, and 247 went down.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (563.15, 12.91%), Torrent Power Ltd. (1,208.45, 6.87%) and Mahindra & Mahindra Ltd. (1,765.05, 6.52%).

Downers:

Largecap and midcap losers today include Zee Entertainment Enterprises Ltd. (187.90, -6.14%), One97 Communications Ltd. (325.05, -5.00%) and Vedanta Ltd. (267.95, -4.18%).

Volume Rockets

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

Top high volume gainers on BSE included Mangalore Refinery And Petrochemicals Ltd. (244.40, 19.83%), Oil India Ltd. (563.15, 12.91%) and NMDC Steel Ltd. (65.70, 11.36%).

Top high volume losers on BSE were Rajesh Exports Ltd. (311.45, -7.54%), Vedanta Ltd. (267.95, -4.18%) and Gland Pharma Ltd. (1,897.10, -2.72%).

Aptus Value Housing Finance India Ltd. (359.15, 0.35%) was trading at 8.7 times of weekly average. Muthoot Finance Ltd. (1,343.35, -2.60%) and Jubilant Pharmova Ltd. (610.25, 4.54%) were trading with volumes 5.6 and 4.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

43 stocks took off, crossing 52 week highs, while 3 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Aegis Logistics Ltd. (426.70, 8.87%), Bajaj Auto Ltd. (8,123.05, 0.49%) and Bank of Baroda (275.70, 2.95%).

Stocks making new 52 weeks lows included - Rajesh Exports Ltd. (311.45, -7.54%) and Hindustan Unilever Ltd. (2,350.85, -1.55%).

23 stocks climbed above their 200 day SMA including Polycab India Ltd. (4,564.95, 4.81%) and PI Industries Ltd. (3,567.60, 4.37%). 6 stocks slipped below their 200 SMA including V-Mart Retail Ltd. (1978.30, -3.64%) and UNO Minda Ltd. (607.95, -2.46%).

logo
The Baseline
15 Feb 2024
By Bhavani Eswar

In recent decades, share buybacks have become a more popular way for companies to return value to shareholders, compared to dividends. Unlike dividends, a share buyback can change a company’s capital structure, by altering metrics like the number of shares outstanding, earnings per share (EPS), and debt-to-equity ratio. 

Warren Buffet says, “When stock can be bought below a business’s value, it is probably the best use of cash.” Firms tend to buy back their shares when their shares seem undervalued or when there are no other attractive investment opportunities. 

Another advantage of buybacks is that they incur a flat tax rate of 23.3% on the distributed income, while dividends can be taxed up to 37% for shareholders in higher tax brackets, excluding surcharge. This difference makes buybacks more attractive for distributing cash to shareholders.

Buybacks are also an easy way to increase the earnings per share (EPS of companies, due to the lower number of shares outstanding, making this a key reason for companies to choose buybacks over dividends. 

In 2023, 45 Indian companies bought back shares worth Rs 47,932.27 crore, marking a 4X increase since 2021. In this edition of the chart of the week, we will look at how EPS has changed for companies that have bought back more than 5% of their equity share capital since 2020.

Significant outperformance in growth of EPS vs net profit for MOIL, HGS and Engineers India

Since 2020, three Indian companies have repurchased over 10% of their equity shares. In January 2022, MOILbought back shares worth Rs 693 crore, representing 14.3% of its total paid-up equity share capital. After the buyback, the mining firm’s net profit grew by 5.8%, and its EPS increased by 13.5% in Q4FY22. This shows a clear outperformance of EPS growth over net profit growth by 7.6 percentage points.

Hinduja Global Solutions and Engineers India announced a buyback of 11.4% and 11.1% of their existing equity capital, respectively. Hinduja’s Rs 1,020 crore buyback in May 2023 resulted in EPS outperforming net profit growth by 6.6 percentage points in Q1FY23

Consulting services firm Engineers India completed a Rs 586 crore buyback in June 2021, and its net profit dropped by 71.6% in Q1FY21. However, the fall in its EPS (68.3%) was 3.2 percentage points better than the net profit drop for the same period. 

Triveni Engineering & Industries and HPCL also saw EPS growth outperforming net profit after their buybacks. Triveni’s Rs 800 crore buyback (9.4% equity) in February 2023 led to a 29% and 32.8% growth in net profit and EPS, respectively, in Q4FY23

Oil refining firm HPCL announced an 8.7% equity buyback in November 2020, aiming to “improve return on equity by reducing the equity base.” After the open offer, the firm’s net profit in Q1FY22 fell by 34.5%. But it's EPS decreased by only 32.3%.

IIFL Securities’ open offer to buy back 5.2% of its equity capital in H2FY21 led to a 52.3% and 54.4% increase in net profit and EPS in Q4FY21, with EPS outperforming net profit. Gujarat Narmada Valley Fertilizers & Chemicals’ 5.5% equity buyback in December 2023 also resulted in slightly higher EPS growth (0.5 percentage points). 

Piramal Enterprises reported a 90.5% decrease in net profit after its 5.9% equity buyback in Q2FY24. However, the fall in EPS is marginally lower at 90.4% a slight (0.1 percentage points) outperformance. 

The outperformance in EPS growth compared to net profit growth post-buyback is significant for companies that repurchased more than 5% of their equity shares without issuing any new shares in the period. IT companies like Infosys, Wipro, and TCS have done buybacks of less than 1.5% of their equity capital and have also issued new shares, which partly offsets the EPS growth outperformance

Trendlyne Marketwatch
Trendlyne Marketwatch
14 Feb 2024
Market closes higher, Mahindra & Mahindra's Q3FY24 revenue rises 15.8% YoY to Rs 35,218.3 crore
By Trendlyne Analysis

Nifty 50closed at 21,840.05 (96.8, 0.5%), BSE Sensexclosed at 71,833.17 (278.0, 0.4%) while the broader Nifty 500closed at 19,922.30 (139.4, 0.7%). Market breadth is highly positive. Of the 2,016 stocks traded today, 1,341 showed gains, and 640 showed losses.

Indian indices recovered from their day lows and closed in the green. The Indian volatility index, Nifty VIX, fell 2.3% and closed at 15.4 points. National Aluminiumclosed sharply higher as its net profit surged by 83.6% YoY to Rs 470.6 crore in Q3FY24, helped by lower costs of raw materials, power & fuel and employee benefits.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Realty and Nifty Auto closed higher than their Tuesday close.  According to Trendlyne’s sector dashboard, Media emerged as the top-performing sector of the day, with a rise of 3%.

Asian indices recovered from their day lows and closed mixed on a volatile day of trade. European indices extended their gains from the open and traded in the green. US index futures also traded higher, indicating a positive start to the trading session. Brent crude oil futures traded higher after closing in the green for the past eight trading sessions.

  • Hindustan Copper sees a long buildup in its February 29 future series as its open interest rises 16.1% with a put-call ratio of 0.8.

  • One97 Communications falls as the Enforcement Directorate initiates a preliminary inquiry against Paytm Payments Bank. The Reserve Bank of India rules out any review of its decision to restrict Paytm Payments Bank from accepting new deposits from February 29.

  • Tata Power Renewable Energy, a subsidiary of Tata Power, signs a Rs 105 crore power delivery agreement with Tata Communications to build an 18.7 MW group captive solar power plant. The plant is expected to produce 40 million units of power and reduce 30,000 tonnes of carbon emissions annually.

  • Mahindra & Mahindra's Q3FY24 net profit falls marginally, while revenue rises 15.8% YoY driven by the automotive segment. The stock appears in a screener for top Indian export companies.

  • Reports suggest that 11.3 lakh shares (0.1% equity) of CG Power and Industrial Solutions, amounting to approximately Rs 48.1 crore, change hands in a large deal.

  • SBI Securities keeps a 'Buy' rating on JK Lakshmi Cementwith an upgraded target price to Rs 1,090. This indicates a potential upside of 20.5%. The firm is optimistic about the company's recently announced expansion plans helping long-term sustainable growth. It forecasts a 15.1% CAGR in net profit for FY23-26.

  • Vibhor Steel Tubes' Rs 72.2 crore IPO gets bids for 72X the available 35.9 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 70.8X the available 17.8 lakh shares on offer.

  • National Aluminiumrises sharply as its net profit surges by 83.6% YoY to Rs 470.6 crore in Q3FY24, helped by lower costs of raw materials, power & fuel and employee benefits. Revenue grows by 1.5% YoY, driven by the chemicals segment. It shows up in a screenerof stocks with over a 10% rise in share price in the past three months, with net profit growth.

  • CRISIL Ratings forecasts a significant increase in the operating profit of the domestic airline sector, exceeding 20% in FY25. This growth is driven by a robust return in passenger volume, a stable foreign exchange rate, and the airlines' ability to pass on fluctuating fuel costs to consumers.

  • Technocraft Industries’ net profit falls by 29.4% YoY to Rs 58.3 crore in Q3FY24 due to rising employee benefits and inventory costs. Its revenue increases by 4% YoY to Rs 538.3 crore.

  • JSW Steel'scrude steel production grows by 7% YoY to 23.6 lakh tonne in Q3FY24, helped by increased Indian operations. The company appears in a screenerof stocks with upgraded analyst recommendations or target prices over the past three months.

  • Prestige Estates Projectsfalls sharply as its net profit declines by 9% YoY to Rs 116.3 crore in Q3FY24 due to higher contractor, raw material, land and finance costs. Revenue plunges 22.5% YoY despite its sales rising by 81% YoY. It appears in a screenerof stocks with declining return on equity (RoE) over the past two years.

  • India’s WPI inflation eases to 0.3% in January from 0.7% in December 2023. Wholesale food inflation stands at 3.8%, compared to 5.4% in December.

  • Godrej Properties acquires 12.5 acres in Hyderabad with a revenue potential of Rs 3,500 crore. The planned development is estimated to offer 4 million square feet of saleable area.

  • NODWIN Gaming, a subsidiary of Nazara Technologies, signs an agreement to acquire 100% ownership in Turkey's Ninja Global. The acquisition will help Nazara Technologies expand into Central Asia, where the mobile games market is growing rapidly.

  • Rashi Peripherals’shares debut on the bourses at a 9.2% premium to the issue price of Rs 311. The Rs 600 crore IPO has received bids for 59.7 times the total shares on offer.

  • The Society of Indian Automobile Manufacturers (SIAM) reports a 23.6% YoY increase in two-wheeler sales to around 15 lakh units in January. Passenger vehicle sales also rise 13.6% YoY to 3.9 lakh units.

  • NBCC rises sharply as its net profit rises 58.9% YoY to Rs 113.6 crore in Q3FY24 due to lower land purchase and raw material expenses. Its revenue increases by 12.8% YoY to Rs 2,471.5 crore.

  • Jana Small Finance Bank’s shares debut on the bourses at a 4.3% discount to the issue price of Rs 414. The Rs 570 crore IPO has received bids for 18.5 times the total shares on offer.

  • Capital Small Finance Bank debuts on the bourses at an 8.8% discount to the issue price of Rs 468. The Rs 523.1 crore IPO has received bids for 4 times the total shares on offer.

  • Sanjeev Singhal, Director of Finance at Mazagon Dock Shipbuilders, reaffirms the company's revenue growth forecast of 12-15% for FY24 and around 15% for FY25. He mentions efforts to finalize a submarine order within the year. The firm's Q3FY24 net profit surged 76.9% YoY to Rs 626.8 crore, with revenue increasing by 32.1% YoY.

  • Bharat Electronics signs a Rs 2,167.5 crore contract with the Indian Navy to supply an indigenously designed and developed electronic warfare suite for warships.

  • Zee Entertainment Enterprises' Q3FY24 net profit rises 140.7% YoY to Rs 58.5 crore, while revenue falls 2.5%. The profit boost is attributed to high taxes and high losses from discontinued operations in Q3FY23. The company appears in a screener for stocks with low debt.

  • Wiproacquires a 60% stake in Aggne Global for $66 million (approx. Rs 548.5 crore). This acquisition will strengthen its competitive advantage in the property & casualty insurance segment.

  • IRCTC's net profit grows by 17.4% YoY to Rs 300 crore in Q3FY24 due to reduced raw material and finance costs. Revenue rises by 21.8% YoY to Rs 1,118.3 crore on the back of improvement in the catering, rail neer, internet ticketing and tourism segments. It appears in a screener of stocks with rising net cash flow and cash from operating activities.

  • Nifty 50 was trading at 21,593.65 (-149.6, -0.7%), BSE Sensex was trading at 71,035.25 (-519.9, -0.7%) while the broader Nifty 500 was trading at 19637.60 (-145.3, -0.7%)

  • Of the 1,782 stocks traded today, 403 showed gains, and 1,339 showed losses.

Riding High:

Largecap and midcap gainers today include Hindustan Petroleum Corporation Ltd. (543.30, 8.30%), Bharat Petroleum Corporation Ltd. (623.65, 6.73%) and Indian Bank (525.90, 6.32%).

Downers:

Largecap and midcap losers today include One97 Communications Ltd. (342.15, -10.00%), Info Edge (India) Ltd. (5,112.55, -4.29%) and L&T Technology Services Ltd. (5,402.75, -3.78%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Mangalore Refinery And Petrochemicals Ltd. (203.95, 11.63%), Jyothy Labs Ltd. (481.60, 11.39%) and Kalpataru Projects International Ltd. (991.95, 10.21%).

Top high volume losers on BSE were L&T Technology Services Ltd. (5,402.75, -3.78%), Relaxo Footwears Ltd. (851.00, -1.92%) and Gujarat Gas Ltd. (559.75, -0.35%).

Natco Pharma Ltd. (884.80, 3.26%) was trading at 8.7 times of weekly average. Grindwell Norton Ltd. (2,195.00, -0.23%) and Elgi Equipments Ltd. (668.15, 8.95%) were trading with volumes 4.9 and 4.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

21 stocks made 52 week highs, while 5 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Abbott India Ltd. (29,367.55, 1.67%), Apollo Hospitals Enterprise Ltd. (6,754.10, 0.52%) and Bajaj Auto Ltd. (8,083.30, 2.10%).

Stocks making new 52 weeks lows included - HDFC Bank Ltd. (1,384.05, -0.75%) and Orient Electric Ltd. (192.80, 1.18%).

8 stocks climbed above their 200 day SMA including KNR Constructions Ltd. (270.70, 4.16%) and FSN E-Commerce Ventures Ltd. (153.80, 3.95%). 13 stocks slipped below their 200 SMA including Supreme Industries Ltd. (3,796.80, -3.00%) and Tamilnad Mercantile Bank Ltd. (479.70, -2.70%).

logo
The Baseline
13 Feb 2024
5 analyst picks in the PE buy zone this week
By Abhiraj Panchal

This week, we look at stocks trading in the PE ‘Buy’ zone, as identified by analysts. These stocks are in the 'Buy' zone if their current PE is low compared to the range they have historically traded in.

1. Affle (India):

Axis Direct maintains its ‘Buy’ recommendation on this internet software & services company with a target price of Rs 1,350, indicating an upside of 21.6%. The stock is currently trading in the PE Buy Zone. In Q3FY24, the company’s net profit improved by 11.4% YoY to Rs 76.8 crore, while its revenue increased by 29.6% YoY to Rs 508.9 crore. Analyst Omkar Tanksale believes that the company’s EBITDA improvement was led by a sharp recovery in its international business. 

Tanksale says, “From a long-term perspective, Affle has strong device and client additions. We also believe that the company has superior penetration in the international business and strong revenue growth potential going ahead.” The management is confident that demand will increase in the medium-term due to deals secured in previous quarters. The analyst expects margin improvement and forecasts net sales and profit of Rs 2,118 crore and Rs 599 crore for FY24. 

2. Lemon Tree Hotels:

HDFC Securities maintains a 'Buy' rating on this hotel company with a target price of Rs 152, indicating an upside of 15.2%. The stock is currently trading in the PE Buy Zone. In Q3FY24, the company's revenue improved by 24.3% YoY to Rs 290.9 crore, though net profit dipped by 11.4% YoY to Rs 35.4 crore. Analyst Amit Kumar attributes the profit decline to lower occupancy at Aurika, Mumbai, (opened in October 2023) and ongoing renovations in the Keys portfolio. 

Despite a drop in occupancy by 163 bps YoY to 65.9%, Kumar remains positive due to a 10% growth in average room rate (ARR). He expects the company to reduce its Rs 1,950 crore debt periodically to become debt-free in the next four years. 

Kumar says, “Lemon Tree has a strong expansion plan to build a portfolio of 13,433 rooms in 155 hotels by FY27.” He sees growth in ARR from renovations in the Keys portfolio and increased occupancy at Aurika as key growth drivers. He expects an EBITDA CAGR of 20%, supported by an increase in occupancy to 73-75% over FY24-26.

3. Manappuram Finance:

Motilal Oswal maintains its ‘Buy’ call on this finance company with a target price of Rs 230, indicating an upside of 31.4%. The stock is currently trading in the PE Buy Zone. In Q3FY24, its net profit grew by 34.7% YoY to Rs 428.6 crore. Analysts Abhijit Tibrewal, Nitin Aggarwal, and Gautam Rawtani see profitability in the gold and microfinance businesses as the major driver of the firm's net interest income growth. NII grew 33% YoY to Rs 1,450 crore. They say, “Despite a 20bps increase in the cost of borrowings in Q3, the consolidated Net interest margin (NIM) expanded by 35bps to 15.3% due to healthy expansion in yields across product segments.”

The analysts are positive about the company's future, highlighting its active diversification into non-gold segments to reduce its cyclical dependency on gold loans. In Q3FY24, non-gold products accounted for 49% of the AUM mix, a 7% point YoY increase. They forecast a 9% CAGR in gold loan AUM over FY24-26 and expect net profit to grow at a 27% CAGR over the same period, leading to a consolidated RoE of 20% by FY26.

4. InterGlobe Aviation (Indigo):

Geojit BNP Paribas maintains a ‘Buy’ rating on this airline company with a target price of Rs 3,624, indicating an upside of 18.3%. The stock is currently trading in the PE Buy Zone. Analyst Anil R says, “Healthy demand from leisure and corporate travel continues to aid revenue growth. Average aircraft utilization was healthy at 85.8%.” 

In Q3FY24, Indigo’s net profit jumped 110.8% YoY to Rs 2,998.1 crore, while revenue increased by 30.3% YoY to Rs 19,452.2 crore. The analyst believes that Indigo was able to beat revenue estimates due to a 23.7% YoY surge in the number of passengers and a strong pricing environment. 

Anil expects the phased removal of Pratt & Whitneyengines in 2024 to impact operations. However, he is upbeat about the management’s risk mitigation plans through secondary market leasing. With a market share of 63.4%, he foresees the earnings momentum to continue, led by strong demand and cost efficiencies.

5. State Bank of India:

Bob Capital Markets maintains its ‘Buy’ call on this bank with a target price of Rs 842, indicating an upside of 19.1%. The stock is currently trading in the PE Buy Zone. In Q3FY24, the bank’s net profit fell by 28.5% YoY to Rs 11,064.1 crore, while its net interest income grew by 5% YoY. Analyst Ajit Agrawal attributes the fall in net profit to a one-off pension and ex-gratia provision totalling Rs 7,100 crore. 

The analyst believes that the 14% YoY growth in advances was enabled by robust growth in SME loans, retail book, and express credit. Meanwhile, deposits grew 13% YoY, driven by term deposits. He says, “We pencil in a credit and deposit CAGR of 15% and 13%, respectively, over FY24-FY26.” Agrawal expects the bank’s healthy business growth, stable margins, and asset quality to boost profitability. He forecasts the bank to maintain its NIM at 3% and deliver an RoE of 17% by FY26.

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

(You can find all analyst picks here)

Trendlyne Marketwatch
Trendlyne Marketwatch
13 Feb 2024
Market closes higher, Siemens' Q3FY24 net profit grows by 9.2% YoY to Rs 505.4 crore
By Trendlyne Analysis

Nifty 50closed at 21,743.25 (127.2, 0.6%), BSE Sensexclosed at 71,555.19 (482.7, 0.7%) while the broader Nifty 500closed at 19,782.90 (107.7, 0.6%). Market breadth is in the red. Of the 2,017 stocks traded today, 892 were on the uptick, and 1,102 were down.

Indian indices extended the gains from the afternoon session and closed in the green. The volatility index, Nifty VIX, dropped by 1.4% and closed at 15.8 points. Steel Authority of India's (SAIL) net profit drops by 22% YoY to Rs 422.9 crore in Q3FY24 due to higher employee benefit expenses. Revenue also decreases by 6.8% YoY to Rs 23,348.6 crore on reduced revenue from the Bhilai, Durgapur, Rourkela and Bokaro steel plants.

Nifty Midcap 100 and Nifty Smallcap 100 closed higher following the benchmark index. Nifty IT and Nifty PSU Bank closed higher than Monday’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 2.8%. 

Most European indices trade lower except for Switzerland’s SMI index trading in the green. US indices futures trade flat, indicating a cautious start. Brent crude prices trade higher around $81.6 per barrel, as Israel prepares for an offensive in Rafah amidst US and Jordan pressuring for an Israel-Hamas truce.

  • Money flow index (MFI) indicates that stocks like Olectra Greentech, EIH, Dr. Reddy's Laboratories and Sun Pharmaceutical Industries are in the overbought zone.

  • Siemens' Q3FY24 net profit grows by 9.2% YoY to Rs 505.4 crore on lower inventory and finance expenses. Its revenue increases by 20% YoY, helped by growing income from mobility, digital industries and smart infrastructures. The company appears in a screener of stocks with improving RoA for the past two years.

  • HPL Electric & Power rises sharply as it bags an order worth Rs 181 crore from a leading advanced metering infrastructure service provider (AMISP) to supply smart meters.

  • Vibhor Steel Tubes' Rs 72.2 crore IPO gets bids for 15X the available 35.9 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 20.3X the available 17.8 lakh shares on offer.

  • Saurabh Gupta, CFO of Dixon Technologies, identifies the mobile segment as a key growth driver in FY25, expecting it to contribute over 50% of revenue. He also mentions plans to onboard new clients in the IT hardware sector.

  • Entero Healthcare Solutions' Rs 1,600 crore IPO gets bids for 1.3X the available 71.5 lakh shares on offer on the third day of bidding. The retail investor quota gets bids for 1.2X the available 13.1 lakh shares on offer.

  • Surya Roshniwins orders worth Rs 214.5 crore during the week for the supply of MS-coated pipes to a domestic entity over the week.

  • Larsen & Toubrorises as it bags orders worth Rs 1,000-2,500 crore for its hydrocarbon business in the Middle East and India. The orders involve the engineering, procurement, and construction of an enclosed ground flare system in India and a brownfield upgrade of shutdown systems in the Middle East.

  • Retail sales in the automotive industry rise 15% YoY to 21.3 lakh units in January, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are up around 15% YoY, while car sales increase by 13.3% YoY.

  • Metal stocks like Hindalco Industries, Steel Authority of India (SAIL), National Aluminiumand NMDCfall more than 2% in trade. The broader Nifty Metalindex also falls more than 3% in trade.

  • KIOCL rises sharply as it reports a net profit of Rs 39 crore in Q3FY24 as compared to a net loss of Rs 33.9 crore in Q3FY23. This rise is due to lower inventory, employee benefit, and service contract expenses. Its revenue also increases by 90.9% YoY, helped by growing income from pellet plants.

  • KR Choksey maintains its 'Buy' rating on Tata Motors with an upgraded target price of Rs 1,060 per share. This indicates a potential upside of 17.2%. The firm predicts medium-term growth driven by robust infrastructure initiatives and enhanced industry profitability. It expects the company's revenue to grow at a CAGR of 12.6% over FY23-26.

  • Punjab National Bank (PNB), NMDC, BHEL, Union Bank of India, GMR Airports, and others have been added to the MSCI Global Standard Index during its February review. It has also added 27 stocks like Swan Energy, Honasa Consumer, Ethos, Cello World, and DB Realty to the Small Cap index, while removing six others.
  • GlaxoSmithKline Pharmaceuticals falls as its Q3FY24 net profit declines by 72.2% YoY to Rs 45.7 crore. Its revenue rises by 0.9% YoY. Its EBITDA margin contracts by 142 bps YoY due to higher raw material, inventory, employee benefits, and finance expenses.

  • Krsnaa Diagnostics' Managing Director Pallavi Shantilal Bhatevara steps down to the position of Executive Director, effective March 31, 2024.

  • Hindalco Industries falls sharply amid reports that its Atlanta-based subsidiary, Novalis, has raised the Bay Minette Project's capital cost from $2.5 billion to $4.1 billion and postponed its commissioning by a year. The project involves the construction of an aluminum rolling and recycling plant in the USA.

  • India’s Index of Industrial Production (IIP) grows by 3.8% in December 2023, compared to 2.4% in November, led by growth in the mining, manufacturing and electricity sectors.
  • JSW Steel forms a 50:50 joint venture (JV), JSW JFE Electrical Steel, with JFE Steel Corp, Japan, to produce grain-oriented electrical steel in India. The company will set up the manufacturing base in Bellary, with an expected investment of Rs 5,500 crore.

  • Rail Vikas Nigam rises sharply as it bags a Rs 106.4 crore order from Madhya Pradesh Paschim Kshetra Vidyut Vitran Co. The order involves the supply, installation, testing, and commissioning of a new 11 kV line in Jhabua, MP, and it is expected to be completed in two years.

  • HFCL bags a Rs 141 crore order from Bharat Sanchar Nigam (BSNL) to supply unlicensed band radios (UBRs) and related services. The deal also includes providing products and services to support BSNL's 4G network.

  • India’s CPI inflation eases to 5.1% in January from 5.7% in December 2023, driven by decreasing food prices. Food inflation stands at 8.3%, down from 9.5% in December 2023.

  • Coal India's Q3FY24 net profit rises by 17.8% YoY to Rs 9,093.7 crore due to lower raw material and inventory expenses. Its revenue increases by 2.8% YoY and EBITDA margin expands by 191 bps YoY. The company appears in a screener of stocks with improving book value per share over the past two years.

  • JSW Energy's subsidiary, JSW Neo Energy, receives a letter of award (LoA) from Solar Energy Corp of India (SECI) to construct a 500 MW wind power plant. The company expects its installed generation capacity to reach 9.8 GW by the end of 2024.

  • Mohnish Pabraisells a 2% stake in Edelweiss Financial Serviceson Friday. He now holds a 7.1% stake in the company.

  • Steel Authority of India (SAIL) falls sharply as its net profit drops by 22% YoY to Rs 422.9 crore in Q3FY24 due to higher employee benefit expenses. Revenue also decreases by 6.8% YoY to Rs 23,348.6 crore on reduced revenue from the Bhilai, Durgapur, Rourkela and Bokaro steel plants. It appears in a screener of stocks with declining net profit YoY or QoQ.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (153.45, 15.42%), Oracle Financial Services Software Ltd. (7,700.85, 6.97%) and NHPC Ltd. (85.80, 5.93%).

Downers:

Largecap and midcap losers today include Hindalco Industries Ltd. (510.10, -12.42%), One97 Communications Ltd. (380.15, -9.96%) and GlaxoSmithKline Pharmaceuticals Ltd. (2179.65, -6.86%).

Movers and Shakers

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

Top high volume gainers on BSE included Indian Railway Finance Corporation Ltd. (153.45, 15.42%), Borosil Renewables Ltd. (540.10, 10.11%) and Aegis Logistics Ltd. (398.90, 9.12%).

Top high volume losers on BSE were Hindalco Industries Ltd. (510.10, -12.42%), GlaxoSmithKline Pharmaceuticals Ltd. (2,179.65, -6.86%) and KRBL Ltd. (338.50, -4.46%).

Kajaria Ceramics Ltd. (1,218.70, 1.96%) was trading at 4.3 times of weekly average. ITI Ltd. (292.65, 4.05%) and Redington Ltd. (199.05, 8.98%) were trading with volumes 4.0 and 3.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

18 stocks made 52 week highs, while 9 stocks hit their 52 week lows.

Stocks touching their year highs included - Abbott India Ltd. (28,900.00, 1.48%), Apollo Hospitals Enterprise Ltd. (6.718.90, 1.58%) and Bajaj Auto Ltd. (7,917.40, 1.12%).

Stocks making new 52 weeks lows included - Deepak Fertilisers & Petrochemicals Corporation Ltd. (495.05, -1.00%) and Rajesh Exports Ltd. (333.85, -2.55%).

11 stocks climbed above their 200 day SMA including Cholamandalam Investment & Finance Company Ltd. (1,141.70, 3.64%) and Jindal Worldwide Ltd. (355.65, 3.63%). 17 stocks slipped below their 200 SMA including Emami Ltd. (470.00, -2.66%) and Chemplast Sanmar Ltd. (446.50, -2.40%).

Trendlyne Marketwatch
Trendlyne Marketwatch
12 Feb 2024
Market closes lower, NHPC's Q3FY24 net profit declines by 26.8% YoY to Rs 491.9 crore
By Trendlyne Analysis

Nifty 50closed at 21,616.05 (-166.5, -0.8%), BSE Sensexclosed at 71,072.4900 (-523, -0.7%) while the broader Nifty 500closed at 19,675.20 (-286.3, -1.4%). Market breadth is moving down. Of the 2,044 stocks traded today, 323 were gainers and 1,701 were losers.

Indian indices closed in the red after opening marginally higher on a volatile day of trade. The Indian volatility index, Nifty VIX, rose 4% and closed at 16.1 points. Zydus Lifesciences rose 6.4% as its board approved a buyback of 59.7 lakh shares for Rs 1,005 each, capping the total buyback amount at Rs 600 crore. 

Nifty Smallcap 100 and Nifty Midcap 100 closed sharply lower, underperforming the benchmark index. Nifty Metal and Nifty Media closed lower than their Friday close. According to Trendlyne’s industry dashboard, Auto Tyres & Rubber Products emerged as the top-performing industry of the day, with a rise of 1.7%.

Major European indices trade in the green except for England’s FTSE 100 trading flat. Asian indices closed mixed with a majority of Asian markets closed for the Chinese New Year. US index futures traded flat, indicating a cautious start to the trading session. Brent crude oil futures traded lower after rising for five consecutive trading sessions.

  • Relative strength index(RSI) indicates that stocks like Cummins India, Life Insurance Corp of India, EIHand Multi Commodity Exchange of Indiaare in the overbought zone.

  • PSU bank stocks like Central Bank of India, Indian Overseas Bank, Punjab & Sind Bankand Bank of Maharashtraplunge more than 9% in trade. All constituents of the broader Nifty PSU Bankindex are also trading in the red, causing it to fall more than 4%.

  • NHPC falls sharply as its Q3FY24 net profit declines by 26.8% YoY to Rs 491.9 crore due to higher generation, and employee benefit expenses. Its revenue also decreases by 20.4% YoY on lower income from the electricity generation segment. The company appears in a screener of stocks with declining net cash flow.

  • Zydus Lifesciences rises to an all-time high of Rs 863.4 as its board approves a buyback of 59.7 lakh shares for Rs 1,005 each, capping the total buyback amount at Rs 600 crore. The company appears in a screener of stocks with high TTM EPS growth.

  • Ramanpreet Sohi, CFO of Honasa Consumer, reports business value growth in double-digits and volume growth in teens in Q3. He expects a margin expansion of roughly 100-150 basis points from the current levels. The company's Q3FY24 net profit falls by 12% QoQ to Rs 25.9 crore, while its revenue falls by 0.8% QoQ.

  • Hindustan Aeronautics' Q3FY24 net profit rises by 9.2% YoY to Rs 1,261.5 crore. Its revenue increases by 7% YoY and its EBITDA margin improves by 629 bps YoY due to lower finance, inventory, provisions, and impairment expenses. The company appears in a screener of stocks nearing 52-week high with significant volumes.

  • Entero Healthcare Solutions' Rs 1,600 crore IPO gets bids for 0.2X the available 71.5 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 0.8X the available 13.1 lakh shares on offer.

  • SBI Securities keeps its 'Accumulate' rating on Star Cement with an upgraded target price of Rs 240. This indicates a potential upside of 13.8%. The brokerage remains confident owing to the firm's established track record in the rapidly growing cement markets of North-East and East India. It expects the company's revenue to grow at a CAGR of 13% over FY23-26.

  • Hemant Jalan, CMD of Indigo Paints, projects revenue targets of Rs 1,300-1,400 crore for FY24 and Rs 2,000 crore for FY25. He forecasts an improvement in EBITDA margins by 100-150 basis points, focusing on expansion into Tier 1 and 2 cities.

  • Cera Sanitaryware falls sharply as its Q3FY24 net profit declines by 9.4% YoY to Rs 51.5 crore. Its revenue also decreases by 4.1% YoY and its EBITDA margin drops by 360 bps YoY on higher raw material, employee benefits, and finance expenses. The company appears in a screener of stocks with declining net cash flow.

  • Anupam Rasayan India falls sharply as its Q3FY24 net profit declines by 57.1% YoY to Rs 18.4 crore. Its revenue also decreases by 23.4% YoY on lower income from specialty chemicals segment. Its EBITDA margin contracts by 158 bps YoY due to higher raw material and finance expenses. The company appears in a screener of stocks with declining net profit and margins.

  • Amber Enterprises falls sharply as it reports a net loss of Rs 0.5 crore in Q3FY24 as compared to a net profit of Rs 14.2 crore in Q3FY23. The fall in net profit is due to higher raw material, inventory, employee benefits, and finance expenses. Its revenue decreases by 4.2% YoY.

  • SpiceJet is falling in trade following reports of plans to lay off around 1,400 employees (which constitutes around 15% of its total workforce) to reduce costs. The airline currently has around 9,000-9,500 employees.

  • Shares of Apeejay Surrendra Park Hotel debut on the bourses at a 20% premium to the issue price of Rs 155. The Rs 970.6 crore IPO has received bids for 59.7 times the total shares on offer.

  • Oil and Natural Gas Corp falls as its Q3FY24 net profit decreases by 9.9% YoY to Rs 10,356.4 crore on higher inventory, employee benefits, exploratory wells, and finance expenses. Its revenue declines by 0.8% YoY due to lower income from offshore exploration and onshore exploration, and refining & marketing segments.

  • Bandhan Bank falls as its Q3FY24 net profit misses estimates by 9.2% despite growing by 152.1% YoY to Rs 732.7 crore. Net interest income increases by 21% YoY, helped by the treasury, retail banking and wholesale banking segments. Its asset quality declines as net NPA margin rises by 35 bps YoY.

  • Nuvama Research predicts that the domestic market may see FPI inflows of around $1 billion in the MSCI February review. India's participation in the MSCI EM Index, currently at 17.8%, is expected to exceed 18.5% post-rejig. According to the brokerage, Jindal Stainless, NMDC, and Oberoi Realty, among others, are likely to be included in the index.

  • Easy Trip Planners ventures into the hospitality sector, with its board approving a joint venture, Jeewani Hospitality, to establish a 5-star hotel in Ayodhya. The company commits a Rs 100 crore investment in the JV.

  • SJVN falls sharply as its Q3FY24 net profit decreases by 51.6% YoY to Rs 139 crore. Its revenue declines by 1.6% YoY and EBITDA margin contracts by 112 bps YoY on higher electricity trading and finance expenses. It appears in a screener of stocks with declining RoA for the past two years.

  • Gensol Engineering is surging as its consortium with Matrix Gas & Renewables bags a PLI bid to manufacture an electrolyser plant with a 63 MW per annum capacity under the Sustainable Hydrogen Innovation & Green Hydrogen Technologies (SIGHT) programme.

  • Bharat Madan, CFO of Escorts Kubota, indicates a muted Q4 performance owing to the festive season moving to April. He notes a downturn in overseas volumes, projecting a recovery by Q2FY25. Madan also forecasts a 20-25% growth in exports for FY25.

  • Tata Power Company falls as its Q3FY24 net profit, up by 0.8% YoY to Rs 953 crore, misses estimates by 3.5%. Revenue increases by 6.2% YoY, helped by the renewables and transmission & distribution segments.

  • Minda Corp rises sharply as it bags an order to supply smart key systems to a leading Japanese two-wheeler original equipment manufacturer. These systems will be manufactured at its subsidiary, Spark Minda's plant in Pune.

  • Promoters of Mankind Pharma, Arjun Juneja, Puja Juneja and Sheetal Arora, sell 0.6%, 0.6% and 0.5% stakes in the company, respectively, in a block deal on Friday.

  • Hero MotoCorp'snet profit surges by 50.6% YoY to Rs 1,093.4 crore in Q3FY24. Revenue grows by 20.6% YoY to Rs 9,787.9 crore, helped by improved two-wheeler sales and a hike in its prices. It appears in a screenerof stocks where mutual funds have increased their shareholding in the past quarter.

Riding High:

Largecap and midcap gainers today include Zydus Lifesciences Ltd. (856.65, 6.41%), MRF Ltd. (1,43,802.75, 4.90%) and Astral Ltd. (1,938.40, 4.64%).

Downers:

Largecap and midcap losers today include NHPC Ltd. (81.00, -15.84%), General Insurance Corporation of India (346.60, -14.42%) and Bharat Forge Ltd. (1,130.95, -13.93%).

Volume Rockets

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

Top high volume gainers on BSE included Jubilant Ingrevia Ltd. (483.20, 12.11%), Godfrey Phillips India Ltd. (2,581.80, 8.73%) and Star Cement Ltd. (208.35, 6.74%).

Top high volume losers on BSE were Bharat Forge Ltd. (1,130.95, -13.93%), Amber Enterprises India Ltd. (3,696.60, -11.09%) and Anupam Rasayan India Ltd. (830.45, -9.98%).

BASF India Ltd. (3,392.85, 5.59%) was trading at 8.2 times of weekly average. Global Health Ltd. (1,346.50, 6.07%) and Cera Sanitaryware Ltd. (7,706.00, -4.14%) were trading with volumes 5.4 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

32 stocks took off, crossing 52 week highs, while 5 stocks tanked below their 52 week lows.

Stocks touching their year highs included - ACC Ltd. (2,636.35, 0.32%), Ambuja Cements Ltd. (563.50, -2.20%) and Apollo Hospitals Enterprise Ltd. (6,614.45, 2.75%).

Stocks making new 52 weeks lows included - Deepak Fertilisers & Petrochemicals Corporation Ltd. (500.05, -2.96%) and Vinati Organics Ltd. (1,613.40, -1.38%).

10 stocks climbed above their 200 day SMA including Jubilant Ingrevia Ltd. (483.20, 12.11%) and Jindal Worldwide Ltd. (343.20, 5.99%). 16 stocks slipped below their 200 SMA including Shree Renuka Sugars Ltd. (46.10, -6.77%) and Asahi India Glass Ltd. (520.30, -4.82%).

logo
The Baseline
11 Feb 2024, 12:08PM
The sector winners of the FY25 Budget | Screener: stocks FIIs and MFs bought more of
By Shreesh Biradar

One expects an election year budget to focus on sops for key vote banks, rather than on long-term thinking. But Finance Minister Nirmala Sitharaman surprised everyone by going the other way.

The subsidy cuts and lower fiscal deficit emphasis in the “Viksit Bharat (Developed India)" Budget, suggests that the Finance Minister was not paying attention to the usual crowd. Sitharaman seemed to be talking to international investors rather than Indian voters, when she emphasized spending discipline.

The message was happily received: the yield on India's 10 year bond immediately dropped by 11 bps, lowering borrowing costs. A lower deficit and debt level will boost India’s credit rating outlook, and make Indian bonds a lot more attractive to foreign investors ahead of India’s inclusion in global bond indexes in June.

So June is what seems to be on the FM's mind, rather than the election months of April/May.

The government has also focused on capital expenditure, particularly on manufacturing and infrastructure, by raising the capex allotment by 11.1% to Rs 11.1 lakh crore for FY25. This budget aims for short-term utilization, a shift from the previous 2-3 year long capex plan.

Half of FY25 budget capex dedicated to railways and roads

Although the capex increase has been criticized as being too modest, especially when compared to the substantial hikes in FY22 (40%), FY23 (24%), and FY24 (37%), Sitharaman pushed back, stating that capex levels are already high, and that the current increase was generous.

Despite the upcoming elections, the government has chosen not to open its wallet to please key vote constituencies. The government seems confident about retaining power without the usual populist measures like tax breaks for the middle class, or schemes for the rural economy.  The budget instead focuses on boosting important sectors.

In this week’s Analyticks:

  • Budget impact: FY25 Budget focuses benefits on key sectors
  • Screener: MFs and FIIs buying stocks that got a Budget boost in auto parts, pharma, oil, defence and electric utilities sectors

Let’s jump in.


Government wants to get out of the red zone, with an eye on cutting deficits

This government is not a fan of debt. A focus on reducing the fiscal deficit has become a hallmark of the Modi years (except for the Covid-19 period). The government has targeted the fiscal gap by limiting budgetary spending.

For FY25, the fiscal deficit is expected to decrease to 5.1% of GDP (FY24RE at 5.8%) and drop further to 4.5% in FY26. 

India’s fiscal deficit narrows in post-Covid recovery

The budget estimates for FY25 predict an 11.7% increase in total receipts to Rs 30.8 lakh crore, with spending set to rise by 6.1% to Rs 47.6 lakh crore. A lower increase in spending will reduce the deficit.

The government has scaled back spending in areas like fertilisers (-13.1%), education & literacy (-7%), food and public distribution (-3.4%), and roads & bridges (-1.6%). Most of the budgetary cuts have targeted departments that provide subsidies, but generate low revenue. 

Traditional sectors have seen lower allocation in FY25

Emerging sectors like semiconductors, telecommunications, renewable energy, defence and EV manufacturing have been rewarded, and received significant investment. The manufacturing sector overall is expected to boost the economy and create more jobs.

Sectors like automobiles, defence, telecom, oil & gas, utilities and pharmaceuticals have seen increased allocation. 

Increased allocation to PLI scheme to benefit Auto and Auto OEMs

The government has cut FAME subsidies for electric vehicles (EVs), and instead increased allocation to the EV ecosystem, favoring EV batteries and auto OEMs. The government has been vocal about the benefits of the production-linked incentive (PLI) scheme and has increased allocation for it by Rs 3,500 crore.

To date, auto and auto component manufacturers have been allocated Rs 25,938 crore (FY23-27) under the PLI Scheme. The increased PLI spending by the government has attracted investments of around Rs 67,390 crore in the sector till December 2023.

Tata Motors jumps in week post-budget

Firms like Motherson Sumi Wiring, Exide Industries and Hero MotoCorp are  in line to benefit from the PLI Scheme. Despite delays in  shortlisting, these firms are likely to gain post-allotment. Tata Motors, for instance, received the eligibility certificate for the PLI scheme only in December 2023. This comes at a time when auto sales have been encouraging. Meanwhile, smaller firms are postponing their capex plans to  maximise their benefits from the scheme post-approval.

Defence sees higher budgetary allocation

The defence industry’s allocation has increased by 9% in the FY25 budget, with nearly 23% (Rs 40,777 crore) earmarked for aircraft and aero engines. While most of this spending will be in buying foreign-manufactured fighter aircraft, the defence-offset policy requires foreign firms to invest a portion of their deal value within India, a boost for domestic manufacturers.

Domestic firms often establish joint ventures (JVs) with these foreign counterparts to manufacture parts for these systems. These JV firms also export parts to foreign buyers.

Astra Microwave Products has formed a JV with Israel’s Rafael Defence to manufacture communication systems, and has won orders for satellite sub-systems, airborne radar, etc from DRDO, ISRO and Defence PSUs.

Astra Microwave sees sharp gains post-budget

Bharat Dynamics has also inked pacts with Thales to manufacture 70 mm laser-guided rockets in India. India is pursuing the sale of Tejas aircraft (developed by HAL) to smaller nations like Cairo, Egypt and Argentina.

Energy stocks rise with increased support for OMCs and renewable energy

The oil & gas industry has been taking advantage of  Russian sanctions and India’s strategic shifts in oil procurement. However, with the volatile global scenario and tensions in the Suez Canal, the government has increased capital support for oil marketing companies by Rs 15,000 crore. 

This move has led to significant gains for Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation post-budget.

Oil marketing companies rise post-budget

The index of industrial production (IIP) for electricity has increased by 6.9% YoY from April to December 2023, a figure expected to double by 2045. Previous budgets increased allocations for thermal projects to ensure  24-hour electricity supply. However, many projects are still being implemented.

To meet India’s growing energy needs and fast-track energy generation, the FY25 budget has raised the allocation for renewable energy like solar from Rs 7,623 crore to Rs 12,602 crore.

This budgetary focus is set to benefit electrical utilities and allied firms. Major beneficiaries include electricity producers like Adani Green, NTPC, and Coal India; transmission and distribution firms like Power Grid Corporation of India); and finance firms like Power Finance Corporation.


Screener: Stocks bought by MFs and FIIs, that got a Budget boost in the auto parts, pharma, oil, defence and electric utilities sectors

Mankind Pharma, Inox Wind lead in MF and FII holding QoQ change

Here we take a look at companies that mutual fund and foreign institutional investors (FIIs) bought in the latest quarter. These companies are also from five industries that should benefit from the FY25 budget –auto parts & equipment, pharmaceuticals, electric utilities, refineries/petro-products and defence

Major stocks that appear in the screener are Mankind Pharma, Inox Wind, Lupin, KPI Green Energy, Pricol and Ami Organics.

Mankind Pharma leads with a 3.7 percentage point QoQ rise in MF holdings to 9.8% in Q3FY24.Invesco India Focused Fund Regular Growth bought a 4.2% stake in the company during the quarter. FIIs also bought a 2.6% stake in the company during the same period. 

Inox Wind comes next with a mutual fund holding increase of 2.9 percentage points to 10% in Q3FY24. The electric utilities company’s FII holding also grew by 6 percentage points during the quarter. Smallcap World Fund bought a 2.3% stake in the company over the past quarter, while East Bridge Capital Master Fund I Ltd bought a 1.5% stake.

You can find more screenershere,

Signing off this week,

The Trendlyne Team

logo
The Baseline
09 Feb 2024
Five Interesting Stocks Today

1. Can Fin Homes:

This housing finance company has risen by 1.8% in the past week, following the Finance Minister’s announcement to build two crore homes under the PM Awas Yojana and introduce a scheme for middle-class home buyers. In Q3FY24, the firm’s net profit increased by 32% YoY to Rs 2,001 crore due to a 236 bps YoY decrease in operating margin to 14.7%. The transition to centralized disbursement in October 2023, prompted by fraud detection at its Ambala Branch in Haryana, led to a 23% YoY fall in Q3 disbursements to Rs 1,879 crore and moderate AUM growth of 13% YoY to Rs 34,053 crore.

The outlook for FY25 is positivefor housing financiers due to potential rate cuts and strong GDP growth. The management aims to double the loan book size (currently Rs 34,000 crore) over the next four years, expecting monthly disbursements to shoot up to Rs 1,000 crore by Q4FY25 from Rs 700 crore currently.

The firm’s Net Interest Income (NII) grew by 30.6% YoY to Rs 329 crore, and its Net Interest Margin (NIM) expanded 30bps YoY to 3.9% in Q3. The gross NPA ratio worsened by 31bps YoY to 0.91% in Q3 due to one-time loan restructuring of around Rs 90 crore. However, asset quality is expected to improve by FY24, thanks to the financier’s low-risk customer profile (72% salaried professionals and 26% self-employed).

Axis Securities foresees high margins in the near term, as they expect reduced loan refinancing rates from the National Housing Bank. A recent credit rating upgrade by ICRA is also expected to benefit the firm's cost of funds.

2. Bharat Petroleum Corp

This refineries/petro-products stock has surged by 20.8% over the past week, touching its all-time high of Rs 635.3 per share on Thursday. This rise comes after the company posted a 82.1% YoY growth in net profit to Rs 3,181.4 crore for Q3FY24 on January 29. Despite a 2.5% YoY decrease in revenue to Rs 1.3 lakh crore, it beat Trendlyne’s Forecaster estimates by 14.3%. Its net profit also exceeded Forecaster estimates by 5.5%. The company shows up in a screener of Trendlyne’s high-return, technically strong value stocks.

The decline in revenue is on account of lower demand, despite a 5% YoY increase in crude oil production volume to 9.9 MMT during the quarter. Its EBITDA margin has expanded by 170 bps YoY to 5.1%, owing to lower raw materials and finance costs. Brent crude prices fell by 10.4% in 2023, helping margin expansion and boosting the company’s stock prices. The company has given a dividend yield of 5.5% over the past year. 

The government has allotted Rs 15,000 crore to oil marketing companies in the FY25budget. The oil refiner and marketer has also planned a capex of Rs 1.5 lakh crore for the next five years. G Krishnakumar, the Chairman and Managing Director, said, “Of this Rs 1.5 lakh crore, we have earmarked Rs 75,000 crore for refineries and Petchem ventures, about Rs 32,000 crore in the upstream business (oil exploration and production), and Rs 25,000 crore each in gas and marketing infrastructures.”

Post-results, Yes Securities maintains its ‘Buy’ rating on the stock with a target price of Rs 620 per share. The brokerage is optimistic about BPCL's strategic debt reduction, its targeted capex and enhanced refining efficiency. 

3. Trent

This retailing company has risen by 23% in the past three days, touching an all-time high of Rs 3,937.4 on Thursday following strong Q3 results. Trent’s net profit more than doubled by 152.3% YoY to Rs 374.4 crore, beating Trendlyne’s Forecaster estimates by 41.7%. As a result, it features in a screener of stocks with consistently increasing profits for the past three quarters.

Revenue grew by 50.5% YoY, led by store expansion and increased footfall. During the quarter, it opened five Westside stores and 50 Zudio stores, taking the total store count to 227 and 460 respectively. 

The company’s Star business (which contributes around 19% to total revenue) reported a 26% YoY revenue increase, led by strong LFL (like-for-like) growth of 24% and volume growth.  Noel N Tata, Chairman of the company, said, “Star business is attracting more customers, becoming an essential growth driver.”

Additionally, the share of Trent’s own brand in Star's sales increased from 57% in Q3FY23 to 69%, driving margin growth. Trent’s EBITDA margin expanded by 336 bps to 18.8% during the quarter.

After the company’s earnings announcement, Motilal Oswal reiterates its ‘Buy’ rating on Trent with an upgraded target price of Rs 4,200. The brokerage is optimistic about the company’s long-term growth prospects, driven by LFL growth, retail expansion, and scale-up within Zudio.

4. Cipla:

This pharma company hit its all-time high of Rs 1,457.7 on Thursday, with a 13.2% increase in the past month. This rise was driven by a 31.8% YoY growth in its Q3FY24 net profit to Rs 1,055.9 crore. Cipla’s  revenue also increased by 14.6% YoY, aligning with Trendlyne Forecaster estimates. The company appears in a screener for stocks with improving RoCE over the past two years. 

Cipla’s EBITDA margin improved by 225 bps to 26.5%, led by a better product mix, price hikes in the US, and easing of cost inflation. The North American market led this growth, reporting a 19.8% YoY increase in revenue on the back of high volume in Lanreotide, which holds a 20% market share in the US. The drug is used to treat patients with endocrine and gastric tumors. Lanreotide’s US sales, around $470 million, are projected to grow at a CAGR of 4.1% by 2032.

Despite price hikes by Indian manufacturers in the US, Indian drugs remain cheaper than their US counterparts, leading to higher purchases by US distributors. Also, drug shortages in segments like asthma, cancer and chronic diseases have seen higher price realisation. The company’s 9MFY24 EBITDA margin stands at 25.4%. Chief Financial Officer Ashish Adukia said, “FY24 EBITDA margin is expected to be higher than the earlier guidance of 23-24%.” 

Going forward, the management plans to prioritize the Indian market, which accounts for 44% of its total revenue, by strengthening its portfolio offerings. Meanwhile, the North American vertical will focus on executing the existing portfolio. According to the management, “Research and development spending is largely directed toward the US market and could represent around 6% of revenue in the near to medium term.”

BoB Capital Markets retains its ‘Buy’ call on Cipla. It expects strong margins and a healthy profit CAGR of 20% over FY24-FY26 on the back of new launches in North America, a recovery in Africa and the API business, and ongoing momentum in the Indian market.

5. Varun Beverages:

This non-alcoholic beverage firm rose by 3.4% on Tuesday after its Q4CY23 earnings announcement, where net profit surged by 76.5% YoY to Rs 132 crore on increased sales volumes. The company’s EBITDA margin also improved by 180 bps YoY due to lower raw material expenses. The company appears in a screener of stocks with improving return on equity over the past two years. According to Trendlyne’s Technicals, the stock has risen by 7.9% in the past month, outperforming the food and beverage sector, which fell 3%. 

In Q4CY23, revenue increased by 21% YoY to Rs 2,670 crore, driven by an 18% YoY growth in volume and a 2% YoY hike in realization per case to Rs 171. The volume growth in soft drinks and juices was at 25% and 14% YoY, respectively. However, net debt increased by 38.7% YoY to  Rs 4,730 crore by the end of Q4CY23. 

The management anticipates robust growth in Gatorade (sports drink), juice, and value-added dairy segments, with plans to increase production capacity by 200%. The energy drink market in India, led by Sting, now accounts for 15% of the company's volume mix, well above the industry average of 6%. The India business saw a 13% YoY increase in sales volumes, thanks to an improved sales mix. 

International markets, on the other hand, had a revenue growth of 16% YoY in Q4CY23, benefitting from better realization. The company plans to boost its capex by 71.4% to Rs 3,600 crore in 2024 and expand the number of outlets in India by 14.3% to 40 lakh by Q4CY24. 

Motilal Oswal foresees a 23% CAGR in revenue, EBITDA, and PAT until 2025, driven by increased market penetration in India and Africa, higher product acceptance, ongoing capacity and distribution expansion, rural refrigeration growth, and scaling up of international operations. The brokerage maintains its ‘Buy’ rating on the stock.

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