My Newsfeed

1. Bajaj Finance:

HDFC Securities upgrades its rating on this non-banking financial company to a ‘Buy’ with a target price of Rs 8,650, indicating an upside of 11.3%. Analysts Krishnan ASV, Deepak Sinde, and Akshay Badlani note that Bajaj Finance has maintained a robust 26% annual AUM growth from FY22-24E, despite its growing scale and complexity. 

Although the RBI's directive on higher risk weights for consumer credit might impact the near-term capital adequacy ratio, the analysts believe that the recent equity raise of Rs 8,800 crore will cushion the impact and support growth. They express confidence in the company’s new products, such as auto loans and tractor financing, and their potential to boost the top line.

A highlight for the analysts is the rapid growth of Bajaj Housing Finance. In a surprisingly short time - since its inception in 2018 - it has become the second-largest housing finance company, reaching an AUM of approximately Rs 81,200 crore as of September 2023. This represents a 28% CAGR over the past three years, from a mix of B2B channels, their captive customer base, and B2C channels involving builders and open market sourcing.

2. Global Health:

Motilal Oswal maintains its 'Buy' rating on this healthcare facilities company, with a target price of Rs 1,170, indicating a 17.2% upside. Analysts Tushar Manudhane, Sumit Gupta and Akash Dobhada are optimistic about the company's financial transformation, where it turned net cash positive in FY23 from a debt of Rs 300 crore in FY19. Anticipating continued growth, they foresee the company expanding its bed capacity to over 3,500 in the next two to three years.

The analysts project capacity increases in North and Central India. They highlight the significance of the upcoming Noida facility, expected to commence operations by the end of FY25, which is predicted to boost the company's footprint in the Delhi NCR region.

Manudhane, Gupta, and Dobhada forecast robust growth driven by the addition of 552 beds to existing facilities and 1,000 beds to upcoming facilities. They expect a 28% CAGR over FY23-26 due to a faster scale-up of existing hospitals, additional business from new hospitals, and better operating leverage.

3. NTPC:

Axis Direct initiates coverage on this electric utilities company with a ‘buy’ call and a target price of Rs 345, implying a potential upside of 8.4%. Analyst Aditya Welekar says, “The firm benefits from thermal capex revival to meet power demands during non-solar hours, and its thermal capacity is entirely backed by long-term PPAs, providing stable long-term cash flows.” 

Welekar notes the key role of thermal power in providing grid stability due to the seasonality of renewable energy (RE). NTPC has set a target of producing 34 million tonnes of coal in FY24 and scaling up this capacity to 70 million tonnes over the next five years. With domestic renewable energy capacity expected to increase from 172 GW in FY23 to 596 GW by FY36, the firm is set to raise its RE capacity from 3.3 GW in FY23 to 60 GW by FY32. The company’s lower cost of debt compared to its peers, due to its sovereign debt rating, provides a competitive advantage in fundraising for RE projects.

Welekar believes that the firm can use a mix of conventional and renewable energy sources to meet the round-the-clock power needs of corporates, who usually have better credit profiles compared to state distribution companies. Additionally, NTPC’s 10 GW under-construction thermal capacity is expected to be commissioned by FY26, along with its entry into various green energy initiatives like green hydrogen and nuclear power.

4. Affle (India):

Sharekhan maintains a ‘Buy’ call on this internet software and services company with a target price of Rs 1,535, indicating an upside of 18.2%. Analysts from Sharekhan say, “Affle has registered healthy revenue growth despite a high base and industry headwinds, driven by consistent growth across key global emerging markets, including India.” 

The analysts believe that the company is well-positioned to capture a larger market share, benefitting from improving advertising spends in its key markets and also international markets. This growth is aided by the acquisition of Youappi and the firm’s growing investments in AI. They expect sales and profit CAGR of 23% and 22%, respectively, over FY24-26. Affle is also actively expanding its patent portfolio to stay ahead in the data-driven industry. Currently holding 21 patents, the company is pursuing 15 more in advanced AI areas. 

The analysts remain optimistic on the back of Affle’s growth in key global emerging markets and improvements in developed markets, aided by turnaround plans and investments.

5. Jio Financial Services:

KRChoksey initiates a ‘Buy’ coverage on this finance company with a target price of Rs 290. This indicates an upside of 19.4%. Analyst Unnati Jadhav says, “Jio Financial Services hopes to democratize financial services across the country by offering innovative products that will be delivered digitally.” She believes that the consumer lending segment in particular will dominate the company’s business profile, driven by robust credit offtake in this segment. Jadhav notes the company’s plans to build an ecosystem to cater to various financial services. It is exploring partnerships to offer co-branded credit cards to its customers.

Jio Financial is still in its infancy with many plans still on paper, but Jadhav believes that Jio Financial Services is well-positioned to gain higher traction across all business segments, given its strong parentage and the existing customer base it can tap into. She adds that the company’s diversified business model is well-suited to meet the financial requirements of its customers. She also expects capital adequacy to remain strong, supporting its growth aspirations.

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

(You can find all analyst picks here)

Every January at the start of the new year, people are reliably infected with a disease we call 'predictionitis', where they fall over each other to predict events for the next year. Sadly, it is an illness with no cure.

This year as well, 2024 has begun with predictions around the Nifty 50, with analysts saying that the index may reach 25,000. India’s strong growth is expected to boost the stock market - the economy is set to outperform other large countries in FY24, with growth estimated at 6.7-7%.

India stood out in 2023, attracting the highest FII inflows among emerging countries. During the latest monetary policy meeting, RBI Governor Shaktikanta Das said, 'Despite challenges in the global economy, India is poised to become the new growth engine of the world.'

However, the landscape isn't all roses and jasmine - some signals are worrying. Foreign direct investment to India has declined, with the usual average of $40 billion in annual FDI sinking to just  $13 billion in 2023.

Private capex by Indian companies is still weak, despite pleas from senior ministers like Nirmala Sitharaman to invest: 'Are you like Hanuman,' she asked Indian CEOs, 'that you do not believe in your own strength, and someone has to stand next to you and say, "you can do it"?'. 

In this week’s Analyticks, we, with our own case of predictionitis, identify sectors that are likely to excel in 2024, helped by macroeconomic tailwinds. We will also check the roadblocks that could ruin the party. 

• 2024’s star sectors: The top four sector picks by analysts for the new year
• Screener: Rising stocks with high average Forecaster target price upside % 

Analysts pick their top sectors for 2024

The Nifty 500 closed in the green for the fifth consecutive year in 2023, with a 25.8% gain. Half of these gains were achieved in the last three months of 2023. Realty, hardware technology & equipment, utilities, transportation and fertilizers sectors played an outsize role in driving the Nifty 500 higher.

Top five sectors driving Nifty 500's growth in October-December 2023

The realty sector led the pack with a 36% gain in the last three months. It is also among the top sectoral picks for 2024 by several brokerages, including ICICI Securities, BOB Capital Markets, and Motilal Oswal Financial Services. 

Banking and finance, infrastructure and general industrials are other sectors that have been favourites in 2023, which analysts believe will continue to outperform in 2024. Sunil Subramaniam, CEO of Sundaram Mutual Fund, says, 'Banking and financial services will be the focus at the beginning of the year. After that infra and capital goods will take over.'

Why are analysts so bullish on these sectors? They are counting on two major factors: likely interest rate cuts, and the Centre’s push on infrastructure development. 

Financial services and realty sectors are counting on rate cuts in 2024

Tomato sellers were hiring bouncers to protect their produce in the first half of 2023, as inflation sent prices up, and the RBI raised interest rates. Now, with inflation cooling and below the RBI’s upper tolerance limit of 6%, analysts are hoping for rate cuts. Deutsche Bank expects the RBI to cut interest rates by 100 bps in FY25, starting in the second half of 2024. 

Lower rates will reduce borrowing costs for companies and consumers. Loan demand in India was strong in 2023 despite high rates, driving the growth of the banking and finance sector. Interest rate cuts will give the sector a further boost.  

Advances growth on a sharp rise since FY20

Banks and NBFCs plan to disburse more loans, as demand grows in 2024. According to IDBI Capital, Federal Bank, ICICI Bank and Shriram Finance will be growth stocks in the sector.

Another sector that is expected to do well due to rate cuts is realty. Housing demand has jumped sharply in the past year, with decade-high sales in the top seven cities, and unsold inventory at record lows. As the realty sector operates on high debt levels, falling interest rates will help both builders and homebuyers. Analysts expectSunteck Realty, Mahindra Lifespace Developers and Macrotech Developers to benefit from the rate cuts.

Government capex boosts infra and general industrial sectors, but private capex is still missing in action

On my way to work in Bangalore, I often see earthmovers, men in hard-hats, and construction material piled up on the sidewalks. It feels like there is always construction going on - a new road, flyover, metro line. Most of these new projects are part of the Centre’s infra push, as the government increased the capex allocation in its budget. 

This has led to a sharp increase in order wins for infrastructure companies. According to analysts, NCC and J Kumar Infraprojects are expected to benefit due to their on-time order execution. In Q2FY24, NCC’s order book hit an all-time high of Rs 61,796 crore (up +54% YoY) while J Kumar Infra’s order book rose to 16,447 crore (up 43.7% YoY).

In the general industrials sector, brokerages are positive about Siemens and ABB India on the back of PLI schemes and high capacity utilization. 

But with capex, the active participation of private players is a missing piece.

Alex Travelli of The New York Times says 'Green and red lights are flashing for the Indian economy at the same time. The government will eventually have to reduce its extraordinary spending, which could impact the economy if private sector investment doesn’t pick up.'

The corporate sector is still on the fence. This is likely due to high interest rates, which are expected to fall in 2024. Companies are also looking for political stability, and waiting to see if the ruling party gets re-elected this year. 

The 'joker in the pack': wars are a key risk in 2024 

The problem with war is that it can be contagious. A small war can quickly spiral into a regional crisis, dragging in neighbouring countries. February will mark two years since the beginning of the Russia-Ukraine war, and tensions are igniting elsewhere. The Israel-Gaza war is now seeing conflict spillover into the Red Sea, where Iran-backed Houthi rebels are targeting container ships and oil tankers. The Israel-Lebanon border has also turned violent.

Ranen Banerjee, Partner at PwC India’s Economic Advisory Services, says 'The joker in the pack is geopolitics and conflict hotspots. The trend in current conflicts will determine whether GDP growth rates will bias to the lower or higher end.' 

Screener: Rising stocks with high average Forecaster target price upside %

Godawari Power & Ispat leads in average Forecaster target upside

After a slow start to the year, the Indian market rose sharply in the second half of 2023 with the Nifty 50 index rising by 12.4% over the past six months. This can make it hard for investors to find stocks with more potential to grow. In this screener, we take a look at stocks with high average Forecaster target price upside % despite seeing gains in their prices over the past quarter. The screener is dominated by the software & services, banking & finance and chemicals & petrochemicals sectors.

Major stocks that appear in the screener are Godawari Power & Ispat, RattanIndia Enterprises, EPL, EIH, Adani Energy Solutions, Infibeam Avenues and Tanla Platforms.

Godawari Power & Ispat has the highest average Forecaster target price upside of 28.1%, following a 23.2% rise over the past quarter. This metals & mining stock’s price has increased by 96.9% over the past year. Analysts believe that the company still has room for growth, owing to rising domestic demand for iron ore and increased production of high-grade pellets.

EPL is another player with a 24.5% average Forecaster target price upside. It has also risen 6.1% over the past quarter. ICICI Securities believes that this commercial services & supplies company will see revenue growth as recyclable tubes are expected to account for 60% of its revenue by FY26. The company is also planning to expand its customer base into the Brazil market.

You can find more screenershere.

1. Torrent Power:

This electric utilities company rose by 7.4% to touch its all-time high of Rs 1,071.9 per share on Thursday after signing four memorandums of understanding (MoUs) worth Rs 47,350 crore with the Gujarat Energy Development Agency (GEDA). 

The company is set to receive Rs 47,350 crore under the Gujarat government’s investment promotion initiative. The stock has also risen by 12.9% over the past week, helping it appear in a screener of affordable stocks with high momentum and return on equity (RoE). The largest MoU of the four, worth Rs 30,650 crore, is for setting up 3,450 MW of solar power and 1,045 MW of hybrid power projects in Banaskantha, Jamnagar, Patan and Surendranagar. 

Torrent Power also expects to commission a 300 MW solar power project by the end of FY24. Along with this, the acquisition of Air Power Wind Farm will expand its wind power capacity. The management also plans to enter the hybrid energy segment due to the low return profiles from solar and wind power projects. The higher capacity utilization factor (CUF) of hybrid projects is likely to facilitate increased power generation and ensure a consistent supply.

The stock ranks high in Trendlyne’s checklist with a score of 73.9%. It also has good Trendlyne Durability and Momentum scores. According to Trendlyne’s Forecaster, Torrent Power has a consensus recommendation of ‘Sell’ from 10 analysts tracking the stock with an average target price of Rs 776.9 per share. This indicates a potential downside of 25.2%.

2. Sobha: 

This realty firm rose 15.7% on Thursday after being chosen as one of the top picks for 2024 by Motilal Oswal, with a target price of Rs 1,400. According to Trendlyne’s Technicals, the stock has risen by 31.1% in the past month, outperforming the Nifty Realty Index by 16.7%. This surge can be attributed to the company maintaining a pre-sales revenue of Rs 2,500 crore for 9MFY24.

Sobha has long been seen as primarily a Bengaluru company, with the tech city accounting for 70% of its sales until FY20. However, with the introduction of projects in Kerala, Delhi NCR, and Hyderabad, Bengaluru's sales share dropped to 54% (from 65%) in H1FY24. Despite Bengaluru remaining a crucial geo, the company aims to expand in NCR, Pune, and Hyderabad. It's working on a 15 million square feet (msf) project pipeline, with 8 msf outside Bengaluru. Higher price realisations across major cities have also helped in margin expansion. 

Sobha plans to launch 12 msf of projects in the next 15 months. With over 200 msf of land holdings,  there is potential to increase its launches to 9-10 msf by FY26.

The firm, in its Q3FY24 update this week, reported a 37% YoY increase in total sales value to Rs 1,952 crore, with revenue realisation growing by 21.5% YoY. After declining for two consecutive quarters, Trendlyne’s Forecaster projects that the company’s net income will rebound to match Q3FY23 levels. Based on these estimates, Sobha is currently trading at a PE of 43.9 for  FY24E and at 24.2 of FY25E.

Motilal Oswal says that initiating projects on significant land parcels in Bengaluru and Tamil Nadu is a key driver for higher land valuations. Sobha's land, valued at Rs 3,800 crore (CMP), is assessed by Motilal Oswal at Rs 6,000 crore. The broker upgrades the firm to a ‘Buy’ rating. 

3. NMDC:

This mining company has risen by 7.5% in the past week and touched a 52-week high of Rs 227.3 per share today after announcing price hikes for its products. The company has raised the prices of lump and fine ores by Rs 200 and Rs 250 per tonne, respectively. Since September 2023, the prices of both lump and fine ores have cumulatively increased by Rs 750 per tonne. 

Global iron ore prices have been rising recently due to expectations of economic growth in China, the world’s largest iron ore importer. This increase comes after China implemented major economic stimulus measures. Even after the latest price hikes, NMDC’s prices are still 60% lower than international rates, which crossed $135 per tonne in January from $105 per tonne in August last year. This gives the firm room to increase prices further.

Domestic steel demand is expected to increase at a CAGR of 8% till FY25, as both government and private capex in infrastructure is set to rise. Additionally, all domestic tier-1 steel manufacturers are expanding their capacities to meet domestic demand. According to NMDC’s management, capex for FY24 will exceed the initial target of Rs 1,600 crore and reach Rs 2,000 crore.

Motilal Oswal says, “The firm is set to produce 46 million tonnes of iron ore in FY24, and likely to produce more than 50 million tonnes by FY25 on the back of improved capacity and strong domestic demand”. However, only 36 of 110 iron blocks auctioned since FY16 are operational, which could result in intense competition if the remaining mines become operational.

4. Tata Motors: 

This automobiles & auto components company touched a new 52-week high of Rs 805.9 today. This comes after it reported that its total domestic wholesales rose by 4% YoY to 76,138 units in December. In Q3FY24, Tata Motors’ passenger vehicle (PV) wholesales grew by 5% YoY, while that of commercial vehicles (CV) improved marginally by 1% YoY. Girish Wagh, the Executive Director, said, “The rise in CV sales is due to demand from government infrastructure initiatives, expansion in core industries, and sustained growth in e-commerce.”

According to N Chandrasekaran, Chairman of Tata Motors, it is focused on increasing the profitability of JLR (Jaguar Land Rover) rather than boosting volumes. The firm is improving earnings per vehicle while reducing its debt levels. Domestic PV sales are seeing traction in its electric vehicle and SUV segments. The company expects improved demand in Q4FY24 across most CV segments, from a pick-up in infrastructure and mining activities, and the harvesting season. 

The automobile major has risen by 4.9% over the past week till Thursday. As a result, it features in a screener of companies with strong momentum.

The EV segment is gaining ground in JLR and Tata Motors India. JLR plans to invest £15 billion in electric vehicle development in the next 5 years. Tata Motors India sold 69,173 EVs in 2023, which is a 59% YoY increase. This is expected to further grow by 35% in 2024.

Post Tata Motors’ business update announcement, JP Morgan has upgraded its rating to ‘Overweight’ and revised the target price to Rs 925. This upgrade is driven by better-than-expected margins and cash flow for JLR. The brokerage also highlighted that the company has maintained its market share in the PV space, despite new launches by competitors.  

5. Zomato:

This food delivery company’s stock price hit its 52-week high of Rs 134.4 on Friday and rose by 8.2% in the past week after increasing its platform fee from Rs 3 to Rs 4 per order in its key markets. This marks a 33.3% hike, effective from January 1. This is expected to improve the firm’s EBITDA by 5%. 

During the month, Zomato received a show cause notice (SCN) from the Directorate General of GST Intelligence for an alleged tax liability of Rs 401.7 crore. This includes interest and a penalty for the period from October 2019 to March 2022. The demand relates to GST not levied on delivery charges collected from customers, on behalf of delivery partners. 

The company said it will be filing an appropriate response to the SCN. Zomato has denied the correctness of the tax claim, stating that delivery services were provided by partners directly to customers, not by the company and do not require GST. However, service aggregators like Uber charge 5% GST on driver charges and 18% on comfort charges. 

Zomato reported profits for the first time in Q1FY24, followed by a second consecutive time in Q2. However, the tax liability may affect the company’s profitability in Q3FY24. Trendlyne Forecaster estimates Zomato to report a net profit of Rs 97.5 crore in Q3FY24, as against a loss of Rs 346.6 crore in Q3FY23. The company also appears in a screener for stocks with increasing quarterly net profit and profit margin.

CLSA maintains its ‘Buy’ call on Zomato, despite the SCN. The brokerage believes the increase in platform fee could partially offset (about 25%) the impact of GST on its delivery charge, in case the company is liable.

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

In India, the investment landscape has shifted. While FIIs were net sellers in 2022, they were net buyers in Indian equities in 2023, contributing a total inflow of Rs 1.58 lakh crore. MFs were also net buyers, injecting nearly the same amount (Rs 1.57 lakh crore) as FIIs into Indian stocks. MFs were able to catch up to FIIs in terms of equity investments in 2023 as they were more consistent, and divested in only one month compared to a four-month outflow by FIIs. 

Sunil Singhania, a superstar investor and founder of Abakkus Asset Manager, says “When it comes to FII flows my views are very positive. In the next two to three years, FII flows into India will be very high.”

In the equity market, FIIs’ cash segment activity was a major factor, influencing index movements. Of the four months that Nifty 50 went lower, three had FIIs withdrawing from the equity market. 

When it came to futures and options, FIIs were net sellers with an outflow of Rs 6,319.8 crore and Rs 8.5 lakh crore, respectively. 

FIIs divested in three of four months that Nifty 50 declined

In this edition of Chart of the Week, we take a look at the monthly FII/DII data on Trendlyne’s FII/DII dashboard and identify major trends. 

Jan and Feb 2023 saw high FII outflows in equities

The equity markets began 2023 on a sour note, with FIIs taking out Rs 25,292 crore in January. This led to a 2.4% fall in the Nifty 50. However, a substantial Rs 1.2 lakh crore inflow into the options segment by FIIs led them to be buyers at Rs 91,618.4 crore. MFs were net buyers of equities with a total inflow of Rs Rs 21,353.2 crore in January 2023.

Equities overall saw major outflows in January, particularly in the financials and IT sectors, with consumer services, oil & gas, telecommunications, and auto sectors also seeing significant declines. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed to profit booking as the key driver here. “The simple logic behind FII selling in January is that India is the only large market where FIIs are still sitting on good profits after the disastrous 2022 performance in most global markets.” 

In February 2023, FIIs divested Rs 636.4 crore from the equities. This month also saw FIIs return to index options, buying Rs 65,336.3 crore expecting market volatility. Sector-wise, FIIs reduced their stakes in metals, power and oil & gas, while investing in the capex-heavy capital goods sector, motivated by the Rs 10 lakh crore capex investment announced in the union budget 2023. This was followed by a 2% fall in the Nifty 50. MFs were net sellers, with an outflow of Rs 515.1 crore in February 2023. This selling was partly induced by the Adani-Hindenburg case.

Adani stocks attract 25% of March 2023’s total FII inflow

In March 2023, FIIs invested Rs 12,578.2 crore in equities and MFs invested Rs 20,764.3 crore surpassing FIIs investment. The major chunk of FII buying, amounting to Rs 15,446 crore, was made by GQG Partners in four Adani Group stocks. This also led to a 31% sequential rise in MF inflows, according to AMFI. 

FII investments continued in April 2023, with an inflow of Rs 15,733.4 crore in equities. FIIs turned overweight on the financials and automotive sectors, which constituted 50% and 14% of their total investment, respectively. On the other hand, MFs turned net sellers, with a total outflow of Rs 6,766.7 crore attributable to an outflow of Rs 4532.6 crore from the equity market. 

In May, FIIs had an inflow of Rs 37,369.3 crore in equities and an outflow of Rs  40,036.6 crore in index options. MFs invested Rs 2,446.5 crore into the equities market and had an overall outflow of Rs 2,359.6 crore.

Financials sector sees fluctuating investment patterns 

In June, FIIs invested Rs 43,310.8 crore in stocks, providing a positive boost to the market. MFs invested Rs 5,664 crore into the equities market. Mutual funds ended their two-month selling streak and re-emerged as overall net buyers with a total investment of Rs 514.6 crore. Most of the FII investment was done in the financial services, capital goods, and automobile sectors. According to Nirav Karkera, Head of Research at Fisdom, “The banking and financial services segment is large and fairly diversified into smaller, specific sectors. It saw FIIs and MFs reallocate funds from heavyweight banks to smaller banks and NBFCs.” 

 After significant inflows in previous months, FIIs turned sellers in the financial services and FMCG sectors. Their net purchases decreased in sectors like IT and capital goods, potentially influenced by rising bond yields, higher oil prices, and inflation concerns.

FIIs execute major sell-offs in options starting September

FIIs sold off Rs 18,893.8 crore in equities in September, driven by concerns over potential US Federal Reserve interest rate hikes to curb high inflation. The FIIs also began their options selling spree with a divestment of Rs 2.4 lakh crore. This sell-off was offset by MFs buying Rs 18,512.4 crore in equities. 

In addition, Chinese stocks showed an uptick due to their previous market decline and government efforts like interest rate cuts. This drew FII focus from India to China. 

FIIs continued their selling streak with a Rs 21,679.9 crore of shares divestment in October 2023. This led to a fall of 2.8% in the Nifty 50. But mutual funds invested Rs 16,916 crore in equities. The FII outflow was because of rising US treasury yields due to the Federal Reserve's hawkish interest rate stance, and market volatility from the Israel-Hamas conflict. 

Both FIIs and MFs were net buyers of equity in November, with inflows of Rs 9,433.8 crore and Rs 17,654.3 crore, respectively. This led to FII holdings in Indian equities dropping to a 10-year low, due to the mass selling from August to October. 

MFs, however, came to the rescue of Indian markets. According to ICICI Securities, MFs have adopted a more careful and focused strategy, favouring stable and promising sectors amid uncertainty. Healthcare, private banks, and auto saw substantial MF inflows, with multi-cap and mid-cap funds attracting the most attention.

In December 2023, FIIs were net equity buyers with an inflow of Rs 56,390.6 crore while MFs invested Rs 23,894.7 crore in equities. 

The influx of funds into equities was on the back of record highs in major indices and a pause in Fed rate hikes. However, FIIs were net sellers overall with an outflow of Rs 2.9 lakh crore due to selling in index options. Mutual funds also broke their two-month selling spree and became net buyers, with an inflow of Rs 412.3 crore.

1. Amber Enterprises India:

Axis Direct maintains its ‘Buy’ call on this consumer electronics manufacturer with a target price of Rs 3,700, indicating an upside of 19.1%. Analyst Akshay Mokashe says, “The company reported robust growth outlook across all segments, resulting in strong earnings visibility from FY23 to FY26.” He notes rising contribution from the railway and mobility (R&M) division, which yields higher operating margins, and expects it to help improve operating profits in the coming quarters. 

Revenue from Amber Enterprises’ electronics division grew at a 48% CAGR over H1FY21-H1FY24. Mokashe believes this was backed by its strategic JV with NOISE, which helped the company expand its market reach in the wearables segment and other smart electronics categories. He remains optimistic about the company on the back of a robust order book in the R&M division, increasing value-added products, and improving operating leverage, which he expects to drive higher ROE, ROCE and operating margins by FY26. He projects a revenue and PAT CAGR of 15% and 34%, respectively, over FY24-26.

2. Siemens:

BOB Capital Markets maintains its 'Buy' rating on this heavy electrical equipment company with a target price of Rs 4,600, indicating an upside of 13.8%. Analysts Vinod Chari, Arshia Khosla, and Swati Jhunjhunwala are optimistic as the company's order backlog increased by 165% YoY to Rs 45,520 crore at the end of Q2FY24. They expect Siemens to benefit from a Rs 26,310 crore order for 1,200 electric locomotives from the Indian Railways.

Chari, Khosla, and Jhunjhunwala forecast a surge in incoming orders/tenders from private companies, as the capacity utilization in the private sector has reached 75% (the point at which companies make new capex plans). They note that margins have expanded across segments as Siemens was able to negotiate better prices, except in the mobility segment due to factory ramp-up costs and R&D expenses for the new rail order. The analysts are also closely monitoring the demerger of its energy business, which is expected by 2025. They believe that Siemens, with its strong order book and diverse customer base, is well-positioned to sustain different capex cycles.

3. Coal India:

Motilal Oswal reiterates its ‘Buy’ call on this coal company with a target price of Rs 430. This indicates an upside of 9.5%.  According to analysts Alok Deora and Parthiv Jhonsa, Coal India has made a long-term commitment through FSA agreements to meet the increasing demand in the power sector amid government push for reliable 24x7 electricity supply.” They say that the company aims to increase production to 780 mt in FY24 and 850 mt in FY25. 

They also note that the revival in demand and rise in international prices have led to e-auction premiums of 80-100% over the past few months. 

Deora and Jhonsa say that Coal India has intensified its focus on capex to improve its evacuation infrastructure. Its capex has tripled from FY20 to Rs 18,600 crore in FY23, and analysts expect it to surpass the budgeted target for FY24. They conclude, “Considering the limitations of renewable energy, the dependence on thermal power plants is expected to grow in the coming years. This will likely increase the demand for thermal coal from Coal India.”

4. Bata India:

Geojit Financial Services maintains its 'Buy' rating on this footwear company with a target price of Rs 1,870, indicating an upside of 17.1%. Analyst Vincent Andrews holds a positive outlook due to margin improvements backed by growth in the premium segment and an asset-light expansion model. 

In Q2FY24, the company’s revenue had declined by 1.3% YoY to Rs 834.6 crore, driven by a shift in festive season buying, weaker demand in the mass category due to inflationary pressure, and increased GST rates.

With the premium segment growing at 1.5 times the overall rate, Andrews forecasts an improvement in gross margins. He believes that the recent licensing and manufacturing agreement with the globally renowned fashion brand Nine West will contribute to Bata’s top line, leveraging the company's strong brand recall and reach.  

Bata India added 28 stores in Q2FY24, taking the total to 476. It aims to reach 500 franchise stores by 2024. Andrews believes that the company's asset-light, franchise-based expansion model will help in controlling fixed costs and contribute to a gradual improvement in margins. As of December 2023, Bata India has 2,150 stores in 725 cities.

5. Saregama India:

ICICI Direct assigns a ‘Buy’ rating on this movies and entertainment company with a target price of Rs 445. This implies a 19.2% upside. Analyst Bhupendra Tiwary believes its “B2B licensing revenue will grow at 24% CAGR over FY23-25 to Rs 692 crore, supported by monetization of existing music copyrights and new music acquisitions”. 

Tiwary believes that growth in licensing revenue will be further aided by the transition into a subscription model, which could increase revenue by 150% to 300% as the industry moves towards a paid subscription model. According to the management, increasing their share of new content across regional languages and acquiring minority stakes in regional music companies will raise licensing revenue by 22%-25% in FY24.

Recently, the company acquired Pocket Aces, a digital entertainment firm with access to more than nine crore digital followers. Analysts expect revenues from TV, films, and events to grow at a 33% CAGR between FY23 and FY25, thanks to Pocket Aces’ digital presence and distribution strength. The management also expects the combined revenues to grow at 27% in the medium term.

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

(You can find all analyst picks here)