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The Baseline
12 Jan 2024, 05:31PM
Five Interesting Stocks Today

1. Titan Company:

This gems and jewellery manufacturer rose by 13.6% in the past quarter and 3% on Monday to touch its new 52-week high of Rs 3,776.8. In its Q3 business update, the firm reported a 23% YoY increase in revenue from the domestic jewellery segment, driven by increased volumes and a marginal increase in average selling prices. The jewellery segment accounts for over 85% of the firm’s revenue. Caratlane, a subsidiary of Titan, saw a 31% YoY revenue increase due to high demand in the wedding segment. 

The watches and wearables division also reported a 23% YoY increase in revenue, led by the wearables segment, which achieved a 64% YoY growth. However, revenue from its eye care and fragrances and fashion accessories segments declines by 3% and 9% YoY, respectively. Margins are expected to remain flat in Q4FY24 due to lower studded jewellery sales and higher discounts.

Titan opened 90 new stores in Q3, including stores in the US and Singapore by its subsidiary, Tanishq, bringing its total store count to  2,949 in 2023. Despite a 15% increase in gold prices in 2023, demand for gold remained stable, supported by the wedding season and its status as an inflation hedge. 

According to Sharekhan, market share gains, high traction on e-commerce platforms, and sustained expansion in its retail space will help the firm post consistent growth in the medium to long term. 

2. Angel One: 

This capital markets stock has risen by 6.5% over three sessions, hitting its all-time high of Rs 3,896 per share following its Q3FY24 business update on January 4. The update showed a 55.5% YoY increase in the company’s overall client base to 1.5 lakh. The stock has risen by 27.4% over the month, appearing in a screener of stocks with improving return on equity (RoE) over the past two years.

The overall client base increased on the back of a 149.1% YoY improvement in gross client acquisition. The company’s average daily turnover (ADTO) in the overall equity and futures & options (FnO) segments grew by 148.5% YoY and 151.3% YoY, respectively. Owing to this, its market shares in these two segments expanded by 529 bps YoY each to 26.8% and 26.9%, during the quarter. Trendlyne’s Forecaster expects a 10.9% YoY increase in the company’s revenue and a 38.5% YoY growth in net profit in Q3FY24.

Motilal Oswal Financial Services maintains its ‘Buy’ rating on the stock post-update with an upgraded target price of Rs 4,100 per share. This implies a potential upside of 8%. The brokerage remains confident in the stock due to the improvement in the number of orders per day and FnO volumes during the quarter. It also expects the recovery in cash volumes to improve the company’s mutual fund book. 

3. FSN E-Commerce Ventures (Nykaa):

This internet and catalogue retail company has risen 10.3% in the past week till Friday following its Q3FY24 business update. It highlighted a 20% YoY growth in net sales value in its beauty and personal care segment during the quarter. As a result, the company features in a screener of companies with prices above their short, medium, and long-term moving averages.

As per the quarterly update, Nykaa’s beauty and personal care (BPC) vertical is expected to report GMV (gross merchandise value) growth of around 24-26% YoY in Q3. In Q2FY24, the beauty segment’s GMV growth was 23% YoY. The company's footprint in the BPC industry is expanding, driven by the growth of its own brands and early success in newer ventures like Superstore By Nykaa.

Meanwhile, the fashion vertical continues the momentum from the previous quarter with around 40% GMV growth. In contrast, according to Nykaa’s management, the broader industry’s growth was muted in Q3 due to lower-than-expected demand during the festive season. Trendlyne’s Forecaster expects the company’s revenue to grow by 21.3% YoY in Q3FY24. 

Post Nykaa’s business update, HSBC Global Research has raised the target price to Rs 250 and maintains its ‘Buy’ rating on the stock. The brokerage says Nykaa is well-positioned to capture long-term value in the beauty and personal care sector, citing its pan-India network, growing portfolio of skin and beauty products, and loyal customer base. 

The stock ranks medium in Trendlyne’s checklist with a score of 39.1%. According to Trendlyne’s Forecaster, Nykaa has a consensus recommendation of ‘Hold’ from 22 analysts, with an average target price of Rs 178 per share. 

4. Lemon Tree Hotels: 

This hotel firm rose by 2% on January 9 after signing a franchisee agreement for the Lemon Tree Hotel in Meerut, which is expected to be opened in FY25. According to Trendlyne’s Technicals, the company has risen by 13% in the past month, outperforming the hotels, restaurants, and tourism sector by 7.7%. This rise can be attributed to the management's optimistic outlook, citing growing occupancy and average room rates (ARR) due to the demand-supply gap in the premium segment in major metro cities.

The company is set to benefit from changing market dynamics in key areas like NCR and Mumbai due to the opening of mega convention centres like the Jio Convention Centre and Bharat Mandapam. Due to this increased demand and a limited supply growth of 2-6% CAGR for FY24 - 28, these cities are expected to contribute around 24% and 17%, respectively, to the company’s consolidated revenue by FY24. Aurika Mumbai Skycity, an upper upscale hotel by Lemon Tree, will benefit from the rising demand in the luxury segment and could contribute 21% to the company’s revenue by FY26. 

Lemon Tree is shifting towards an asset-light model by increasing its share of managed rooms (franchise model) from the current 39% to 55% by the end of FY27. The firm plans to add 3,354 managed rooms and double its operational rooms to 20,000 by FY27. This expansion in management contracts will likely boost margins and drive growth in the company’s management fees. By FY26, management fees are expected to reach Rs 94.3 crore, showcasing a 38% CAGR.

Motilal Oswal expects the addition of Aurika,  room renovations, and expansion through management contracts to further contribute to the company’s growth. The brokerage maintains a ‘Buy’ rating on the stock.

5. Brigade Enterprises:

This realty company has risen by 5.3% in the past week, reaching its all-time high of Rs 1,000 on Tuesday. The surge followed the signing of two memorandums of understanding (MoU) worth over Rs 3,400 crore with the Government of Tamil Nadu to set up two high-rise residential buildings and high-rise commercial and residential developments. The company also signed a lease agreement with Sidvin Core-Tech India to provide 54,300 square feet of office space in Bengaluru.

Trendlyne Forecaster estimates the company to report a net profit of Rs 91.6 crore in Q3FY24, as against the actual profit of Rs 56.9 crore in Q3FY23. It also estimates  revenue at Rs 1,039.7 crore.

Brigade Enterprises has 3.1 million square feet (mnsft) of ongoing projects available for sale and a launch pipeline of  11.1 mnsft in residential properties. Of that, 6.5 mnsft is expected to be launched in H2FY24, which will drive sales momentum. The company has a total land bank of 479 acres, with a development potential of 54.5 mnsft. By FY27, the management aims for an annual pre-sales of 10 mnsft. The company is also looking at expansion into other cities.

Despite the positive growth, Geojit BNP Paribas assigns a ‘Sell’ rating on the stock, citing moderate growth outlook and premium valuation. The brokerage notes the company’s expensive valuation compared to its peers and Nifty Realty. Brigade Enterprises appears in a screener for stocks with broker downgrades in price or recommendation in the past month.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Jan 2024, 03:30PM
Sensex closes at an all time high, Cyient signs an MoU with Japan's SkyDrive for urban air mobility systems
By Trendlyne Analysis

Nifty 50closed at 21,894.55 (247.4, 1.1%), BSE Sensexclosed at 72,568.45 (847.3, 1.2%) while the broader Nifty 500closed at 19,745.60 (161.3, 0.8%). Market breadth is neutral. Of the 2,026 stocks traded today, 1,019 were on the uptrend, and 973 went down.

Indian indices extended the gains from the afternoon session and closed in the green, with the Nifty 50and Sensexclosing at an all-time high of 21,894.5 and 72,568.4 respectively. The volatility index, Nifty VIX, rose by 2.6% and closed at 13.1 points. HDFC Life Insurance ’s net profit rose by 15.8% YoY to Rs 365.1 crore in Q3FY24. Revenue grew by 37% YoY owing to an increase in income from premiums and commissions.

Nifty Midcap 100 and Nifty Smallcap 100 closed higher following the benchmark index. Nifty IT and Nifty PSU Bank closed higher than Thursday’s closing level. According to Trendlyne’s sector dashboard, software & services emerged as the top-performing sector of the day, with a rise of over 4.2%. 

Most European indices trade in the green. US indices futures trade flat, indicating a cautious start. The data released by Great Britain’s Office for National Statistics indicated that the manufacturing production in November increased by 0.4% MoM against estimates of 0.3% growth.

  • Money flow index (MFI) indicates that stocks like Network18 Media & Investments, Just Dial, Kalyan Jewellers India and Hitachi Energy India are in the overbought zone.

  • HDFC Life Insurance is falling despite its net profit rising by 15.8% YoY to Rs 365.1 crore in Q3FY24. Revenue grows by 37% YoY, owing to an increase in income from premiums and commissions. The insurance company's gross non-performing assets (NPAs) contract marginally by 3 bps YoY to 0.1%.

  • Cyient rises as it signs a memorandum of understanding with Japan's SkyDrive for the development of urban air mobility (UAM) systems. The UAM market is expected to grow to around $25 billion by 2030.

  • Veranda Learning rises as its unit, Veranda XL Learning Solutions, plans to acquire Tapasya Educational Institutions for Rs 362 crore in various tranches. This acquisition will mark Veranda Learning's entry into the higher education segment.

  • Citi reduces its brent crude oil price projection by $1 to $74 per barrel in 2024 and by $10 to $60 per barrel for 2025. However, it notes that the recent activity in the Red Sea, which is producing additional tension in the Middle East, might lead to a near-term upside in the risk premium.

  • Nifty 50 hits an all-time high of 21,897.1 today. Indices like Nifty IT, BSE Tech, Nifty Realty and Nifty PSU Bank rise more than 2% in today's trading session.

  • GHCL is rising after signing two MoUs worth Rs 3,450 crore to expand its soda ash plant and set up a vacuum salt plant in Gujrat over four years. The firm also plans to mine bentonite and sand in Saurashtra.

  • IT stocks like Infosys, Coforge, Tech Mahindra and Tata Consultancy Services surge more than 4% in trade today. All constituents of the broader Nifty IT index are also trading in the green, reaching its 52-week high of Rs 36,503.3.

  • Prashant Pitti, co-founder of Easy Trip Planners, outlines plans to raise around Rs 1,000 crore within 3-4 months for inorganic growth, with a portion allocated for acquiring non-air related companies. He adds that the company is on track to achieve a profit before tax of Rs 250 crore.

  • Cyient sees three analyst target price upgrades and one recommendation upgrade in the past month. Varun Beverages, Thermax, and Persistent Systems see two analyst target price downgrades over the same period.

  • Sanghi Industriesrises to an all-time high of Rs 142.9 following its independent directors' approval of Ambuja Cements' Rs 818.7 crore acquisition offer as fair.

  • Foreign institutional investors withdraw Rs 133.9 crore from the equity market over the past week, according to Trendlyne's FII dashboard. Index options witness the highest outflow of Rs 1.6 lakh crore from foreign investors. Meanwhile, mutual funds invest the most in debt securities, injecting Rs 1,747.4 crore in the same period.

  • The Society of Indian Automobile Manufacturers (SIAM) reports a 15.2% YoY increase in two-wheeler sales to 12.1 lakh units in December. Passenger vehicle sales rise 4% YoY to around 2.9 lakh units.

  • 5paisa Capital falls over 5% despite a 37% YoY increase in its Q3FY24 net profit to Rs 15.1 crore. The firm reports a 20% YoY rise in revenue, owing to an 80% YoY growth in average daily turnover during the quarter.

  • Life Insurance Corp of India is falling as the Income Tax Department, Mumbai, issues two tax demands for Rs 3,528.7 crore. It plans to appeal before the Commissioner (Appeals), Mumbai, within the stipulated timeline.

  • Bajel Projectsrises as it bags an order worth Rs 487.6 crore from Tata Power. The order involves the supply of plant and installation services for transmission lines.

  • Jefferies maintains its 'Buy' rating on Macrotech Developers with a target price of Rs 120. he firm anticipates enhanced connectivity and real estate demand from the Mumbai Trans Harbor Link inauguration. It notes Lodha's strategically located land bank near Mumbai is poised to benefit from this development.

  • Tata Powertouches a new 52-week high of Rs 361.9 as it signs a memorandum of understanding (MoU) with the Gujarat government to develop 10,000 MW of renewable energy power projects across Gujarat.

  • HG Infra Engineering rises after securing a Rs 716 crore order from Central Railway for the construction of a 49.4 km railway line in Maharashtra.

  • Infosys surges over 5% even as its revenue remains flat at Rs 38,821 crore in Q3FY24, impacted by the retail, communication, hi-tech and lifesciences segments. Its net profit declines by 1.7% QoQ to Rs 6,106 crore. The company appears in a screener of stocks with zero promoter pledge.

  • FSN E-Commerce Ventures (Nykaa) is falling as 2.7 crore shares (0.9% equity), amounting to approximately Rs 516 crore, reportedly change hands in a large trade. 

  • Dolly Khanna cuts her stake in KCP Sugar & Industries Corp to below 1% in Q3FY24. She held a 1.3% stake in Q2FY24.

  • Mohnish Pabrai sells a 2.6% stake in Rain Industries in Q3FY24. He now holds a 4.4% stake in the company.

  • Ashish Kacholia adds Brand Concepts to his portfolio in Q3FY24. He buys a 1.4% stake in the company.

  • Tata Consultancy Servicesis rising despite a 2.5% QoQ dip in net profit to Rs 11,058 crore in Q3FY24. Revenue grows by 1.5% QoQ, driven by gains in the manufacturing, consumer durables, and life sciences & healthcare sectors. The company appears in a screenerfor stocks with increasing revenue over the past eight quarters.

  • Markets opened high. Nifty 50was trading at 21,741.55 (94.4, 0.4%), BSE Sensexwas trading at 72,148.07 (426.9, 0.6%) while the broader Nifty 500was trading at 19,659.75 (75.4, 0.4%).

  • Market breadth is highly positive. Of the 1,828 stocks traded today, 1,343 were on the uptick, and 437 were down.

Riding High:

Largecap and midcap gainers today include Infosys Ltd. (1,612.75, 7.93%), Oracle Financial Services Software Ltd. (4,656.75, 7.62%) and Bank of India (129.10, 6.69%).

Downers:

Largecap and midcap losers today include FSN E-Commerce Ventures Ltd. (187.60, -3.10%), Biocon Ltd. (274.20, -2.80%) and YES Bank Ltd. (24.90, -2.54%).

Volume Rockets

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

Top high volume gainers on BSE included Avanti Feeds Ltd. (545.30, 11.32%), Firstsource Solutions Ltd. (209.90, 10.42%) and Infibeam Avenues Ltd. (26.55, 9.71%).

Top high volume losers on BSE were Metropolis Healthcare Ltd. (1,503.80, -6.34%) and Gillette India Ltd. (6,801.40, -1.80%).

eClerx Services Ltd. (2,732.00, 3.65%) was trading at 12.3 times of weekly average. Shoppers Stop Ltd. (700.10, 1.13%) and Mastek Ltd. (2,867.40, 4.43%) were trading with volumes 9.6 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

71 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Abbott India Ltd. (25,682.10, 1.35%), Alembic Pharmaceuticals Ltd. (880.55, 5.27%) and Apollo Hospitals Enterprise Ltd. (5,807.45, -1.06%).

7 stocks climbed above their 200 day SMA including Cera Sanitaryware Ltd. (8,015.00, 3.25%) and Jamna Auto Industries Ltd. (114.00, 0.62%). 4 stocks slipped below their 200 SMA including Eureka Forbes Ltd. (490.35, -1.77%) and Syngene International Ltd. (731.90, -1.43%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Jan 2024, 03:45PM
Market closes flat, Shyam Metalics' monthly sponge iron volumes increase by 200.1% YoY
By Trendlyne Analysis

Nifty 50 closed at 21,647.20 (28.5, 0.1%), BSE Sensex closed at 71,721.18 (63.5, 0.1%) while the broader Nifty 500 closed at 19,584.35 (66.5, 0.3%), of the 2,030 stocks traded today, 1,243 were gainers and 751 were losers.

Indian indices closed flat, with the benchmark Nifty 50 index closing at 21,647.2 points. The Indian volatility index, Nifty VIX, fell 1.5% and closed at 12.8 points. Bank Of India closed 2.4% higher after its global business increased by 9.9% YoY to Rs 12.8 lakh crore and global deposits grew by 8.7% YoY in Q3FY24.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Energy and Nifty Auto closed higher than their Wednesday close. According to Trendlyne's sector dashboard, Oil & Gas was the top-performing sector of the day as it rose 2.3%.

European indices traded flat or higher amid positive global cues. Major Asian indices closed in the green, except for South Korea’s KOSPI closing flat. US index futures traded higher, indicating a positive start to the trading session. Brent crude oil futures traded in the green after falling 1% on a volatile day on Thursday.

  • Relative strength index (RSI) indicates that stocks like Alok Industries, Gujarat Gas, Olectra Greentech and JBM Auto are in the overbought zone.

  • Mangalore Refinery And Petrochemicals rises 19.2% in trade and reaches a new 52-week high of Rs 161. The company ranks high on Trendlyne’s Checklist, scoring 68.2%. It also features in a screener of companies with strong cash-generating ability from core business.

  • Jindal Saw, Network18 Media & Investment and TV18 Broadcast surge by 9.1%, 44.8% and 23.6%, respectively, ahead of their results on Tuesday.

  • Allied Digital surges to its upper circuit of 20%, as the company is chosen as the master system aggregator (MSA) to integrate CCTV surveillance with the existing ITMS control room for the Ayodhya Smart City Project.

  • HDFC Asset Management is rising as its net profit surges by 32.6% YoY to Rs 489.7 crore in Q3FY24. Its revenue improves by 20% YoY to Rs 671.3 crore during the quarter. It appears in a screener of stocks with increasing revenue for the past two quarters.

  • Vedanta rises as its subsidiary, Cairn Oil & Gas, submits its first plan to start gas production at its onshore rig in Bharuch, Gujarat. The plan involves an initial output of 2,000 barrels of oil equivalent per day.

  • Jyoti CNC Automation's Rs 1,000 crore IPO gets bids for 15.7X the available 1.8 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 21.8X the available 31.6 lakh shares on offer.

  • Auto stocks like Hero MotoCorp, Bajaj Auto, TVS Motor and Eicher Motors are rising in trade. All constituents of the broader Nifty Auto index are also trading in the green, touching its all-time high of Rs 18,817.2.

  • Reports indicate the Centre may reduce import duties on mobile phone components, potentially aiding India's exports and companies like Apple. Current duties on parts like camera modules and chargers are in the range of 2.5-20%, according to the India Cellular and Electronics Association (ICEA).

  • Ajmera Realty & Infra Indiasurges almost 6% to reach its all-time high of Rs 521, as its sales value grows by 98% YoY to Rs 253 crore in Q3FY24. Collections also improve by 30% YoY during the quarter. The company has bagged a redevelopment project in Versova with a gross development value of Rs 360 crore.

  • Unichem Laboratoriesrises to an all-time high of Rs 479 as it receives US FDA approval for its abbreviated new drug application for Doxazosin. The drug is used for the treatment of hypertension.

  • Consumer durables stocks like Voltas, Havells India, Dixon Technologies (India)and Blues Starare rising in trade. All constituents of the broader Nifty Consumer Durablesindex are also trading in the green, touching its all-time high of Rs 32,033.2.

  • Chetan Ahya, Chief Asia Economist at Morgan Stanley, says India will benefit from the fall in commodity prices. He predicts India’s GDP growth at 6.5% in FY25. Ahya also highlights that central banks will face difficulties in easing monetary policy, and expects the US Fed to begin rate cuts in June.

  • Sundram Fasteners rises on reports of a Rs 1,411 crore investment over four years in its Tamil Nadu factories. The funds will be used to expand the capacity for electric vehicle (EV) components.

  • Maruti Suzuki India rises as reports suggest that the company will start exporting EVs to Europe and Japan. The company plans to export battery packs worth Rs 750 crore to both regions.

  • AXISCADES Technologiessurges over 6%, reaching its all-time highof Rs 850, as its board approves a qualified institutional placement (QIP) of shares worth Rs 500 crore. It has set the floor price at Rs 696.7 per share.

  • HSBC Global Research maintains its 'Buy' rating on Zomato with an upgraded target price of Rs 150. The brokerage expects muted performance in 2024 and a moderation in the gross-order value growth of its food delivery business. It also highlights the possibility of a short-term correction.

  • Shyam Metalics and Energyrises to an all-time high of Rs 683.4 as its monthly sponge iron volumes increase by 200.1% YoY to 1.1 lakh tonnes. Its steel volume also improves by 51.1% YoY.

  • Kalyani Steelssurges over 9% to touch its all-time highof Rs 579 as it successfully bids Rs 450 crore for the assets of Kamineni Steel & Power India, including land, buildings, machinery and plants.

  • Bank Of Indiarises as its global business increases by 9.9% YoY to Rs 12.8 lakh crore and global deposit grows by 8.7% YoY in Q3FY24. The bank's domestic deposit also surges by 7.6% YoY. It appears in a screener of stocks nearing their 52-week high with significant volumes.

  • Rajendra V Gogri, Managing Director of Aarti Industries, says the company expects the company to deliver an EBITDA of roughly Rs 950-1,000 crore in FY24, and Rs 1,400-1,600 crore in FY25. He also states that the non-renewal of the EU contract for S Metolachlor will have a 3-4% impact on intermediate volumes.

  • Polycab India plunges to its 15% lower circuit following reports of the Income Tax Department uncovering unaccounted cash sales of Rs 1,000 crore.

  • Dolly Khanna cuts stake in Nitin Spinners to below 1% in Q3FY24. She held a 1.2% stake in Q2FY24.

  • Sunil Singhania sells a 0.6% stake in Ion Exchange (India) in Q3FY24. He now holds a 2.1% stake in the company.

  • SpiceJet rises as it announces in its annual general meeting (AGM) that it will invest Rs 2,250 crore for network expansion. The airlines has rights to Lakshadweep and plans to launch flights to Agatti Island.

Riding High:

Largecap and midcap gainers today include Solar Industries India Ltd. (7,347.05, 6.85%), Shriram Finance Ltd. (2,279.75, 6.03%) and Gujarat Gas Ltd. (541.10, 5.03%).

Downers:

Largecap and midcap losers today include Polycab India Ltd. (3,878.45, -21.04%), Zee Entertainment Enterprises Ltd. (251.15, -3.33%) and Delhivery Ltd. (412.05, -2.40%).

Volume Rockets

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

Top high volume gainers on BSE included Mangalore Refinery And Petrochemicals Ltd. (160.60, 19.67%), Easy Trip Planners Ltd. (51.80, 17.06%) and Engineers India Ltd. (216.40, 9.82%).

Top high volume losers on BSE were Polycab India Ltd. (3,878.45, -21.04%), KEI Industries Ltd. (2,980.95, -5.31%) and Eureka Forbes Ltd. (498.00, -1.17%).

Just Dial Ltd. (880.70, 4.86%) was trading at 20.0 times of weekly average. Ratnamani Metals & Tubes Ltd. (3,392.00, 1.43%) and Jamna Auto Industries Ltd. (113.30, 5.20%) were trading with volumes 13.7 and 11.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

71 stocks made 52 week highs,

Stocks touching their year highs included - Abbott India Ltd. (25,330.00, 2.93%), Alembic Pharmaceuticals Ltd. (836.50, 4.54%) and Apollo Hospitals Enterprise Ltd. (5869.90, 1.19%).

11 stocks climbed above their 200 day SMA including Jamna Auto Industries Ltd. (113.30, 5.20%) and Aditya Birla Capital Ltd. (180.55, 4.18%). 4 stocks slipped below their 200 SMA including Polycab India Ltd. (3,878.45, -21.04%) and Hindustan Unilever Ltd. (2,536.20, -1.60%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Jan 2024
Market closes higher, Porinju Veliyath cuts his stake in Singer India to below 1% in Q3FY24
By Trendlyne Analysis

Nifty 50 closed at 21,618.70 (73.9, 0.3%), BSE Sensex closed at 71,668.60 (282.4, 0.4%) while the broader Nifty 500 closed at 19,517.85 (58.3, 0.3%), of the 2,028 stocks traded today, 1,041 were gainers and 963 were losers.

Indian indices recovered from their day lows, with the benchmark Nifty 50 index closing at 21,618.7 points. The Indian volatility index, Nifty VIX, closed at 13 points. Infibeam Avenues closed in the green as it reportedly inks a memorandum of understanding with the Gujarat government to invest Rs 2,000 crore in an artificial intelligence hub.

Nifty Midcap 100 closed higher, while the Nifty Smallcap 100 closed in the red. Nifty Media and Nifty IT closed higher than their Tuesday close. According to Trendlyne's sector dashboard, Media was the top-performing sector of the day as it rose 4.1%.

Major Asian indices closed flat or lower, except for Japan’s Nikkei 225 and India’s BSE Sensex closing in the green. European indices traded mixed amid weak global cues. US index futures traded flat, indicating a cautious start to the trading session. Brent crude oil futures traded in the red, after rising 1.6% on a volatile day of trade on Tuesday.

  • Zee Entertainment Enterprises sees a long buildup in its January 25 future series as its open interest rises 17.7% with a put-call ratio of 0.8.

  • Easy Trip Planners falls after announcing the launch of a new subsidiary, EaseMyTrip Insurance Brokers. With this launch, the company plans to enter into the insurance market.

  • NBCC (India) rises to an all-time high of Rs 93.6 as it bags an order worth Rs 218 crore from National Institute of Fashion Technology. The order involves the modification of the existing trade facilitation centre on the campus in Varanasi, Uttar Pradesh.

  • Tanla Platformssurges more than 9% as it signs its first commercial agreement with an Indian bank for its anti-phishing platform (ATP), Wisely ATP.

  • The World Bank maintains India's FY25 GDP growth projection at 6.4%, driven by robust domestic demand, increased state infrastructure spending, and strong private-sector credit growth. The growth projection for FY24 stands at 6.3%. However, it expects private consumption growth to slow down due to persistent high food inflation.

  • Edelweiss initiates its coverage on Arvind Fashionswith a 'Buy' rating and target price of Rs 660 per share. This implies a potential upside of 39%. The brokerage believes that the premiumisation drive in India, portfolio extension and expansion into adjacent categories will help revenue growth. It expects the company's revenue to grow at a CAGR of 13.2% over FY22-26.

  • Jyoti CNC Automation's Rs 1,000 crore IPO gets bids for 3.3X the available 1.8 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 10.1X the available 31.6 lakh shares on offer.

  • Shakti Pumps (India)rises as it receives the 10th patent for its surface helical pipe construction. The patent is valid for 20 years from the date of issue. The company appears in a screenerof stocks with strong momentum.

  • According to a poll of economists, India's retail inflation is expected to rise to 5.9% in December from 5.6% in November, mainly due to higher vegetable inflation.

  • Zee Entertainment Enterprisesrises as reports suggest that Sony is still in talks with the company over the merger. The company appears in a screenerof stocks with increasing quarterly profits.

  • Media stocks like Network18 Media & Investment, TV18 Broadcast, Dish TV India and Hathway Cable & Datacom surge more than 4% in trade. The broader Nifty Media index is also trading more than 3% higher.

  • RailTel Corporation receives an order worth Rs 29.5 crore from the Center for Development of Telematics (C-DoT) to install multi-protocol label switching (MPLS)-based VPNs at 26 sites across India.

  • Network18 Media & Investments hits the upper circuit and reaches an all-time high of Rs 119.4. Reports suggest that 1.3 crore shares (1.3% equity), amounting to Rs 155.5 crore, change hands in a large trade.

  • Infibeam Avenues surges as it reportedly inks a memorandum of understanding with the Gujarat government to invest Rs 2,000 crore in an artificial intelligence hub to develop payment technologies and platforms tailored for retailers.

  • Mahindra & Mahindra falls despite partnering with US-based MobilEye to implement artificial intelligence in the driver assistance system of its cars. The company appears in a screener of stocks with improving RoA.

  • One97 Communicationsis rising as it plans to invest Rs 100 crore in Gujarat International Finance Tec-City (GIFT City). The company will provide its AI-driven cross-border remittance and set up a development centre for innovation in the city.

  • BofA Securities upgrades its rating on Bharti Airtel to ‘Neutral’ from ‘Underperform’, and raises the target price to Rs 1,145. The brokerage anticipates a significant tariff hike in the next 12 months, but remains concerned about capex, particularly if fixed wireless access gains traction. It also notes that broadband business will pick up as net adds are improving.

  • Puravankarasurges more than 8% to touch its all-time high of Rs 244.1 as its sales value grows by 56% YoY to Rs 1,241 crore in Q3FY24. Its customer collections improve by 52% YoY to Rs 941 crore, however, its price realisation falls by 2% YoY during the quarter.

  • KIOCLplunges almost 3% as it temporarily suspends operations at its pellet plant in Mangalore due to a lack of iron ore fines.

  • Lupin trades flat despite receiving US FDA approval for Bromfenac ophthalmic solution, a drug used to treat inflammation after cataract surgery. It has a market size of $128 million (approx Rs 1,064.7 crore).

  • UBS downgrades Indraprastha Gas (IGL) to 'Sell' and cuts the target price to Rs 400. The brokerage cites short-term poor volume growth and long-term risks to IGL's core business. It notes that infrastructure expansion and policy support have not yet impacted IGL's CNG volume growth.

  • Porinju Veliyath cuts his stake in Singer India to below 1% in Q3FY24. He held 1% in Q2FY24.

  • Steel Strips Wheels is rising as the National Company Law Tribunal (NCLT) approves the company's plan to acquire AMW Autocomponent (AACL). The company has also invested Rs 138.1 crore in AACL through a mix of equity and intercorporate loans.

  • Ashish Kacholia cuts his stake in SJS Enterprises to below 1% in Q3FY24. He held 3.2% in Q2FY24.

  • Delta Corp falls as its Q3FY24 net profit declines by 59.3% YoY to Rs 34.5 crore due to rising employee benefit and inventory expenses. Its revenue decreases by 15.2% YoY, aided by a downturn in its gaming operations segment.

Riding High:

Largecap and midcap gainers today include Delhivery Ltd. (422.20, 5.96%), GlaxoSmithKline Pharmaceuticals Ltd. (2,201.75, 5.51%) and YES Bank Ltd. (25.50, 5.37%).

Downers:

Largecap and midcap losers today include Sona BLW Precision Forgings Ltd. (614.70, -3.58%), NMDC Ltd. (210.85, -3.06%) and Honeywell Automation India Ltd. (36,815.40, -2.63%).

Movers and Shakers

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

Top high volume gainers on BSE included Cochin Shipyard Ltd. (802.80, 20.00%), Network18 Media & Investments Ltd. (119.40, 20.00%) and AstraZeneca Pharma India Ltd. (6,641.15, 17.49%).

Tanla Platforms Ltd. (1,196.75, 10.16%) was trading at 15.1 times of weekly average. PNC Infratech Ltd. (368.05, 5.94%) and NCC Ltd. (193.25, 9.52%) were trading with volumes 11.9 and 6.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

42 stocks hit their 52 week highs,

Stocks touching their year highs included - AIA Engineering Ltd. (3,755.85, 3.58%), Bayer Cropscience Ltd. (5,952.75, 1.97%) and Bharti Airtel Ltd. (1,064.00, -0.05%).

2 stocks climbed above their 200 day SMA including Aegis Logistics Ltd. (355.10, 2.82%) and TTK Prestige Ltd. (754.10, 0.66%). 14 stocks slipped below their 200 SMA including Anupam Rasayan India Ltd. (958.90, -5.84%) and Sumitomo Chemical India Ltd. (408.20, -2.22%).

 
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The Baseline
10 Jan 2024
By Bhavani Eswar

In 2023, major global equity indices delivered double-digit returns as inflation cooled and central banks signalled likely interest rate cuts in 2024. Developed markets like the US, UK, and Japan, which faced difficult economic conditions in 2022, saw a turnaround. 

The US market had fallen by 19% in 2022, underperforming India’s Nifty 50, which rose by 4.3%. However, 2023 saw a reversal, where developed markets outperformed the broader indices of major emerging markets. However JP Morgan believes that in 2024, “Demand for diversification away from developed countries and GDP growth divergence will make emerging markets attractive.”

We explore the valuation perspective of major emerging market indices after their positive run in 2023.

Even after a rally in 2023, major emerging markets are still trading near or below their historical P/E levels. China is the largest economy in Asia accounting for one-fourth of the MSCI EM index, a benchmark for global fund flows into emerging markets. The market was rattled by public property busts in 2023 that led to the defaults of many prominent developers like Country Garden. Stimulus measures by the Chinese central bank have not had a significant effect on economic recovery, leaving the growth outlook grim. As a result, the Chinese benchmark index, Shanghai Composite (SCI), fell 3% in 2023 and is currently valued at 8.4 times its earnings. 

Countries like China, South Korea, and Brazil are trading below their historical P/E, making their valuations justifiable. Trading at less than 10 times their earnings, China and Brazil could be undervalued by global fund managers.

Mexico’s MEXBOL, on the other hand, delivered strong returns of 18% with a P/E of 12.1 but still trades below its historical average P/E of 15. Similarly, Brazil’s IBOV has delivered high returns in 2023. South Korea’s KOSPI index recorded a 14% rise. The contagious effect of the showdown in China is visible on Hong Kong’s HSI, which dropped by more than 13% in 2023 but is still valued fairly at a P/E of 15, its 10-year average. 

Indian indices valued at a premium, while other major emerging markets fairly valued

India (Sensex) and Taiwan (TWSE) rose 18% and 26%, respectively, in 2023. As a result, India and Taiwan’s benchmark indices are trading above their historical averages. The global chip manufacturing boom has benefitted TWSE, as the index is dominated by tech stocks. It is trading at a premium of over 15%. 

The Indian benchmark has a price-to-earnings ratio of 24, which indicates that it is overvalued compared to the 10-year average P/E of 18.9, implying a 26% premium. High tax collections and huge government spending have helped Indian markets grow, especially the small and mid-caps. The BSEMidcap and BSE Smallcap indices shot up by 44% and 47%, respectively in 2023, taking Indian indices’ valuation above the average. However, India’s Nifty 50 is trading at a 12-month forward P/E of 19, which is slightly lower than its 10-year average of 20.  In contrast, the MSCI EM index, a benchmark index for emerging markets, is trading at 11.2 P/E. 

Emerging markets well positioned to attract global fund flows

Emerging markets come with unique political and economic challenges. As 2024 is expected to bring interest rate cuts around the world, emerging markets are likely to attract huge inflows from developed markets. This year, asset allocators must pay attention not only to economic indicators of countries but also to political stability, especially with many emerging markets like India and Taiwan facing elections in 2024. The result of the US presidential elections in November will also have an impact on global markets. In India, a strong win for the BJP government at the center could be seen positively. The Reserve Bank of India has also kept a steady hand on inflation, another positive sign for global fund managers.

Indian markets are bracing for volatility in this election year, and its premium valuation hinges on strong corporate earnings in Q3FY24. Chris Wood, the global head of equity strategy at Jefferies LLC, says, “If the ruling BJP faces a surprise defeat in the parliament elections, as happened in 2004, then I would expect a 25% correction if not more.”

Currently trading at 24x its earnings, India is one of the highly valued major equity markets. Despite this overvaluation, expansionary monetary policies in developed countries will reap the benefits of falling interest rates, lower borrowing costs, and higher economic growth. 

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Jan 2024
Market closes higher, L&T Construction bags an order worth Rs 1,000-2,000 crore to construct AIIMS in Haryana
By Trendlyne Analysis

Nifty 50 closed at 21,544.85 (31.9, 0.2%), BSE Sensex closed at 71,386.21 (31.0, 0.0%) while the broader Nifty 500 closed at 19,459.55 (41.9, 0.2%), of the 2,042 stocks traded today, 1,107 showed gains, and 902 showed losses.

Indian indices pared gains from the afternoon session and closed in the green, with the benchmark Nifty 50 closing at 21,545 points. The Indian volatility index, Nifty VIX, dropped by 1.5% and closed at 13.3 points. L&T Construction bagged an order worth Rs 1000 crore to Rs 2000 crore from the Ministry of Health and Family Welfare to construct AIIMS at Rewari, Haryana.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green following the benchmark index. Nifty Realty and Nifty Metal closed higher than Monday’s close. According to Trendlyne's sector dashboard, realty was the top-performing sector of the day as it rose 2.3%.

Major European indices trade in the red. US index futures trade lower, indicating a negative start to the trading session. Eurozone’s unemployment rate in November expands to 6.4% against estimates of 6.5%.

  • Money flow index (MFI) indicates that stocks like Trident, Godrej Industries, Alok Industries and Gujarat Gas are in the overbought zone.

  • Kalyan Jewellers India, Ircon International, and Prestige Estate Projects' stock prices increase 217.9%, 209.2% and 186.1% respectively over the past year.

  • Tata Power rises as it signs a memorandum of understanding with the Tamil Nadu government to invest Rs 70,000 crore in the state. With this investment, the company plans to explore options to develop 10,000 MW renewable energy projects in the next seven years.

  • Bharti Airtel is rising as its subsidiary, Airtel Business, plans to power 2 lakh smart meters for Adani Energy Solutions (AESL). The company will provide secure connectivity for AESL's smart meter deployments using Airtel's Internet of Things (IoT) Hub.

  • Polycab India falls sharply as reports suggest that the Income Tax Department has claimed a tax evasion of Rs 200 crore by the company.

  • Jyoti CNC Automation's Rs 1,000 crore IPO gets bids for 1.8X the available 1.8 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 6X the available 31.6 lakh shares on offer.

  • Realty stocks like Godrej Properties, DLF, Oberoi Realty and Brigade Enterprises surge more than 2% in trade. This helps the broader Nifty Realty index to rise more than 2%, touching its 52-week high of Rs 865.

  • Infibeam Avenues rises to a new 52-week high of Rs 24.5 as it reportedly enters into a pact with the Gujarat government to invest Rs 2,000 crore in the state. It appears in a screener of stocks with strong momentum.

  • AU Small Finance Bank is falling as around 13.2 lakh shares (0.2% equity), amounting to Rs 102.6 crore, change hands, according to reports.

  • Capacit'e Infraprojectsrises to an all-time high of Rs 291 as its board approves raising Rs 200 crore through qualified institutional placements. The company has set the floor price at Rs 264.9 per share.

  • L&T Constructionhits an all-time highof Rs 3,593.7 after bagging an order worth Rs 1,000-2,000 crore from the Ministry of Health and Family Welfare to construct AIIMS at Rewari, Haryana.

  • Fino Payments Bank rises following reports of its application for a small finance bank license with the Reserve Bank of India. It appears in a screener of stocks with increasing quarterly revenue.

  • Goldman Sachs predicts robust Q3FY24 earnings for auto OEMs, driven by string two-wheeler and passenger vehicle sales during the festive and wedding seasons. The brokerage has increased its target prices for Bajaj Auto and TVS Motors by 14%.

  • Brigade Enterprises rises over 3% to touch its all-time high of Rs 1,000 after signing two memorandums of understanding (MoUs) worth Rs 3,400 crore with the Tamil Nadu government. The MoUs relate to the development of high-rise commercial and residential buildings.

  • IRB Infrastructure hits a new 52-week high of Rs 46.8 after reporting a 26% YoY increase in toll collections, which stood at Rs 488 crore in December 2023 compared to Rs 388 crore in December 2022.

  • Gensol Engineering rises more than 4% as it signs an MoU with the Gujarat government to invest Rs 2,000 crore in EV manufacturing. The company expects to generate around 1,500 jobs in the region's EV ecosystem. It appears in a screener for stocks with strong momentum.

  • JPMorgan maintains an 'Overweight' rating on Tata Motors with a target price of Rs 925, after JLR wholesales grow 27% YoY to 1,01,043 units in Q3FY24. The brokerage expects continued strong profitability in JLR and India businesses. It adds that the company's model mix remains robust.

  • Caplin Point Laboratories rises to an all-time high of Rs 1,470 as it signs a memorandum of understanding with the Tamil Nadu government to invest Rs 700 crore in the state. The company appears in a screener of stocks with low debt.

  • Jyoti CNC Automation raises Rs 448 crore from anchor investors ahead of its IPO by allotting around 1.4 crore shares at Rs 331 each. Investors include Goldman Sachs, Nomura, Eastspring Investments India Fund, The Master Trust Bank of Japan, HDFC Life Insurance Co, ICICI Prudential Life, Edelweiss Mutual Fund, and Axis Mutual Fund.

  • BEML is rising as it bags an order worth Rs 329.9 crore from the Ministry of Defence to supply mechanical minefield marking equipment.

  • Abhay Baijal, MD of Chambal Fertilisers & Chemicals, highlights the promoters’ participation in a Rs 700 crore buyback which was approved by the company's board on Monday. Baijal notes steady demand for fertilizers and potential long-term impacts on producers due to the ongoing Red Sea issue.

  • Zee Entertainment Enterprises falls sharply amid reports that Sony Entertainment may call off the $10 billion merger over doubts about ZEEL's CEO Punit Goenka leading the merged entity.

  • Vijay Kedia sells a 0.3% stake in Talbros Automotive Components in Q3FY24. He now holds a 1% stake in the company.

  • Ashish Kacholia sells a 0.9% stake in Best Agrolife in Q3FY24. He now holds a 1.4% stake in the company.

  • Bajaj Autois rising as its board of directors approves the buyback of 40 lakh shares (a 1.4% stake) worth Rs 4,000 crore at Rs 10,000 each.

Riding High:

Largecap and midcap gainers today include JSW Energy Ltd. (454.85, 8.44%), FSN E-Commerce Ventures Ltd. (187.50, 5.99%) and Patanjali Foods Ltd. (1,684.40, 5.32%).

Downers:

Largecap and midcap losers today include Polycab India Ltd. (4,867.10, -8.93%), Zee Entertainment Enterprises Ltd. (256.30, -7.86%) and Vodafone Idea Ltd. (16.20, -5.54%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Borosil Renewables Ltd. (508.60, 9.47%), IRB Infrastructure Developers Ltd. (46.00, 9.13%) and JSW Energy Ltd. (454.85, 8.44%).

Top high volume losers on BSE were Polycab India Ltd. (4,867.10, -8.93%), Zee Entertainment Enterprises Ltd. (256.30, -7.86%) and Page Industries Ltd. (36,452.65, -3.29%).

Galaxy Surfactants Ltd. (2,790.00, 1.08%) was trading at 12.4 times of weekly average. Ingersoll-Rand (India) Ltd. (3,100.50, 0.74%) and Minda Corporation Ltd. (388.45, 3.34%) were trading with volumes 10.2 and 6.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

56 stocks made 52 week highs,

Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (1,197.10, 2.42%), Apollo Hospitals Enterprise Ltd. (5,800.00, 2.08%) and Bajaj Auto Ltd. (7,093.90, 1.58%).

9 stocks climbed above their 200 day SMA including Easy Trip Planners Ltd. (45.80, 5.65%) and Carborundum Universal Ltd. (1,142.50, 0.97%). 7 stocks slipped below their 200 SMA including SRF Ltd. (2,311.35, -3.52%) and Page Industries Ltd. (36,452.65, -3.29%).

 
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The Baseline
09 Jan 2024
5 stocks to buy from analysts this week
By Bhavani Eswar

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)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
08 Jan 2024
Market closes lower, DLF's new luxury residential project pre-sells for Rs 7,200 crore
By Trendlyne Analysis

Nifty 50closed at 21,513.00 (-197.8, -0.9%), BSE Sensexclosed at 71,355.22 (-670.9, -0.9%) while the broader Nifty 500closed at 19,417.70 (-172.9, -0.9%). Market breadth is in the red. Of the 2,066 stocks traded today, 800 were on the uptrend, and 1,237 went down.

Indian indices extended the losses from the afternoon session and closed in the red, with the benchmark Nifty 50closing at 21,513 points. The Indian volatility index, Nifty VIX, rose 6.6% and closed at 13.5 points. BGR Energy Systems defaulted on working capital loans totaling Rs 631 crore from ICICI Bank, Indian Bank and Bank of India.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red following the benchmark index. Nifty Realty and Nifty Media closed marginally higher than their Friday’s close. According to Trendlyne's sector dashboard, media was the top-performing sector of the day as it rose 2.6%. 

Major European indices trade in the red. US index futures trade lower, indicating a negative start to the trading session. Germany’s trade surplus for November expands to $20.4 billion against estimates of $17.9 billion.

  • Relative strength index (RSI) indicates that stocks like Godrej Consumer Products, GlaxoSmithKline Pharmaceuticals, Sun Pharma Advanced Research and MRF are in the overbought zone.

  • India overtakes Taiwan to become second in the MSCI Emerging Markets index. Its participation has increased significantly over the past eight years from 7% to 17.1%. Nuvama Institutional Equities expects it to reach 20% by mid-2024.

  • Capri Global Capital surges over 15% in trade and reaches a new 52-week high of Rs 920. The company ranks medium on Trendlyne’s Checklist, scoring 47.8%. It also features in a screener of companies with strong momentum.

  • HDFC Asset Management and Angel One surge by 4.5% and 10.1% respectively, ahead of their results on January 11 and 15.

  • BGR Energy Systems falls due to defaults on working capital loans totalling Rs 631 crore from ICICI Bank, Indian Bank and Bank of India.

  • Power Mech Projects wins an order worth Rs 825 crore from Mahan Energen for civil and mechanical works in Madhya Pradesh thermal power projects.

  • Solar Industries is rising as it bags an order worth Rs 994 crore from an international client to supply products for defensive application for the next three years.

  • Phoenix Mills rises to an all-time high of Rs 2,598 as its board approves the incorporation of its wholly owned subsidiary Astrea Realty. It appears in a screener of stocks with improving RoA.

  • Reports suggest that 32.6 lakh shares (1% equity) of Honasa Consumer, amounting to approximately Rs 142.4 crore, change hands in a large trade.

  • Chambal Fertilisers & Chemicalsrises as its board approves a Rs 700 crore buyback of up to 1.6 crore fully paid-up equity shares (a 3.7% stake) at Rs 450 each.

  • Private bank stocks like Bandhan Bank, Federal Bank, City Union Bankand Kotak Mahindra Bankare falling in trade. All constituents of the broader Nifty Private Bankindex are also trading in the red.

  • ONGCrises to an all-time high of Rs 220.8 as it begins oil production from the KG Deep Basin block in West Bengal. The company appears in a screenerof stocks with improving cash flow from operations.

  • Mutual Funds' net equity inflow rises 9.4% MoM to Rs 16,997 crore in December, according to data released by the Association of Mutual Funds in India (AMFI). Total AUM stands at Rs 50.8 lakh crore during the same period.

  • HDFC Securities upgrades V-Mart Retailto 'Buy' from 'Sell', with an improved target price of Rs 2,550 per share. This implies a potential upside of 19.6%. The upgrade follows strong festive sales and streamlined merchandising, expected to boost profit margins. The brokerage forecasts the company's revenue to grow at a CAGR of 11.8% over FY23-26.

  • Jupiter Wagons rises sharply as it bags an order worth Rs 100 crore from an automobile manufacturer. The order involves manufacturing and supplying four rakes of double-decker automobile carriers.

  • Sula Vineyards surges over 14% and reaches a new 52-week high of Rs 650, as CLSA upgrades its rating to ‘Buy’ and raises the target price to Rs 863. The upgrade follows the Maharashtra government's decision to reintroduce its wine promotion scheme for five years. The brokerage believes the company is placed to benefit the most, being the market leader.

  • Godrej Industriesrises to an all-time high of Rs 898 as it signs a memorandum of understanding (MoU) with the Gujarat government. Under the MoU, the company's chemical division plans to invest Rs 600 crore to expand its operations in the state over the next four years.

  • ACCacquires a 55% stake in Asian Concretes and Cements for Rs 755 crore, boosting its cement capacity to 38.6 MTPA. It appears in a screenerfor stocks with strong momentum.

  • DLFrises to an all-time high of Rs 773.4 with its new luxury residential project pre-sold for Rs 7,200 crore. The company appears in a screenerof stocks with strong momentum.

  • Retail sales for the automotive industry rise 21.1% YoY to 19.9 lakh units in December, according to data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are up 27.6% YoY, and car sales increase by 2.6% YoY.

  • Tata Steel rises as its India steel production increases by 6% YoY to 5.3 million tonnes in Q3FY24. The company's delivery volumes improve by 10% YoY. It appears in a screener of stocks nearing their 52-week high with significant volumes

  • Porinju Veliyath's wife, Litty Thomas, sells a 0.6% stake in Ansal Buildwell in a bulk deal on Friday.

  • Titan is rising as its revenue grows by 22% YoY in Q3FY24, owing to improvement in the jewellery, watches & wearables, emerging businesses and CaratLane segments. It appears in a screener of stocks where FIIs have increased their shareholdings.

  • TVS Motorrises as it signs a memorandum of understanding (MoU) with the government of Tamil Nadu to invest Rs 5,000 crore in the state over the next five years.

Riding High:

Largecap and midcap gainers today include Macrotech Developers Ltd. (1,123.80, 3.05%), TVS Motor Company Ltd. (2,037.80, 2.96%) and PB Fintech Ltd. (817.00, 2.28%).

Downers:

Largecap and midcap losers today include Bandhan Bank Ltd. (233.10, -7.39%), Bank of Baroda (223.45, -4.77%) and Marico Ltd. (523.75, -4.08%).

Movers and Shakers

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

Top high volume gainers on BSE included Trident Ltd. (48.20, 17.85%), Capri Global Capital Ltd. (889.75, 14.61%) and Garware Technical Fibres Ltd. (3,707.95, 9.55%).

Top high volume losers on BSE were Bandhan Bank Ltd. (233.10, -7.39%), Navin Fluorine International Ltd. (3,609.70, -5.57%) and Marico Ltd. (523.75, -4.08%).

Tata Teleservices (Maharashtra) Ltd. (94.80, 3.49%) was trading at 7.9 times of weekly average. Network18 Media & Investments Ltd. (100.55, 8.06%) and Atul Ltd. (6,855.00, -2.47%) were trading with volumes 5.5 and 5.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

50 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (1,168.85, 1.26%), Aurobindo Pharma Ltd. (1,114.85, -0.81%) and Bharat Forge Ltd. (1,256.05, -0.87%).

4 stocks climbed above their 200 day SMA including Easy Trip Planners Ltd. (43.35, 4.71%) and Data Patterns (India) Ltd. (1,978.55, 3.95%). 11 stocks slipped below their 200 SMA including Marico Ltd. (523.75, -4.08%) and Page Industries Ltd. (37,693.40, -3.12%).

 
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The Baseline
06 Jan 2024
Analysts pick their top sectors for 2024 | Screener: stocks with high target price upside
By Tejas MD

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.

 
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The Baseline
05 Jan 2024
Five Interesting Stocks Today

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.