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The Baseline
03 Nov 2023
Seven stocks that beat expectations, despite global worries | Outperformers screener for Q2
By Tejas MD

The earnings season is crunch time for equity markets, as investors and analysts compare the promises CEOs had made to actual results. 

But the Q2 season has been shadowed by concerns beyond balance sheets. Factors like rising oil prices due to the Israel-Hamas conflict, stubborn inflation, and the possibility of high interest rates sticking around for longer, have slowed market momentum. 

These concerns have also spooked foreign institutional investors (FIIs), who, after six consecutive months of net buying, sold a net of Rs 18,893.8 crore in September, and Rs 19,982.6 crore in October in Indian stocks. In contrast, domestic institutional investors (DIIs) have been net buyers since April.

But India still remains the most favoured FII destination among emerging markets.

FIIs will now look at corporate earnings for signals on where markets are headed. Currently, the Nifty 500 index shows a revenue growth of 10.3% YoY in Q2FY24, with operating profits rising by 25.8%. Let’s take a look at the sectors and stocks that are driving the Nifty 500’s overall revenue growth.

In this week’s analytics, 

  • Seven Stars: Seven high-growth stocks from three sectors are beating expectations
  • Outperformers Screener:Companies that beat revenue and net profit estimates, and posted strong Q2 results 

Banking and finance stocks lead the charge in beating Q2 estimates

The banking and finance sector has taken the lead in driving the Nifty 500’s performance in Q2FY24, with several companies beating Forecaster estimates for both revenue and net profit. The other out-performers are consumer durables and , surprisingly, a few companies in the software and services sector.

Banking and finance companies lead YoY revenue and net profit growth in Q2

Key players driving this momentum include CreditAccess Grameen, Canara Bank, Karur Vysya Bank, Cyient, Tanla Platforms, Dixon Technologies (India) and Polycab India.

Except for Polycab India, all the highlighted companies rose in reaction to results, with CreditAccess Grameen rising 8.5%. Over the past quarter, Dixon Technologies has led the pack overall with a 32.7% increase. 

Banking and finance stocks rise post results, and in the past quarter

CreditAccess, Canara Bank and Karur Vysya not only jumped on the day of results but have continued to rise since the result announcements.

Profits roll in: Banking and finance companies build momentum

Companies from the banking and finance (including NBFCs) industries have been resilient in the past few quarters, and posted high revenue and net profit growth in Q2 as well, mirroring positive results from sector front-runners like HDFC Bank and ICICI Bank. Three companies in focus posted a net interest income increase (both YoY and QoQ), helped by strong loan demand:

Net interest income rises YoY and QoQ as loan demand stays strong in Q2

CreditAccess Grameen saw a 53.3% YoY jump in net interest income, thanks to an expanding gross loan portfolio. Canara Bank and Karur Vysya Bank also reported net interest income growth, fuelled by a spike in loans in the retail segment. Karur Vysya’s personal loans jumped 2.2 times YoY, while Canara Bank’s retail loans grew by 10.5%. 

During Karur Vysya Bank's Q2FY24 earnings call, MD and CEO Ramesh Babu said, “Retail growth has remained steady (+17%) compared to the last quarter, with most of the growth coming from mortgages, both residential and non-residential”. 

Karur Vysya and Canara Bank’s deposits also grew at 12.8% and 9% YoY respectively in Q2. However, their deposits grew at a slower pace compared to loans, which can put pressure on margins going forward. 

Falling attrition rates help software & services companies’ margins in Q2

Software and services firms have had some tough times recently – this sector is highly dependent on global customers, and the slowdown internationally has hit both deal wins and margins. In Q2, industry leaders TCS and Infosys saw single-digit revenue growth, and TCS marginally missed revenue estimates. 

However, mid-cap companies like Cyient and Tanla Platforms posted strong results, beating Trendlyne’s Forecaster estimates for revenue and profit.  

Cyient and Tanla showcase rising revenue YoY and QoQ in Q2

Cyient’s digital engineering and technology segment, which saw a 22% YoY increase, has been key to its revenue boost. Meanwhile, Tanla’s enterprise communications segment (SMS and WhatsApp broadcasts) drove its top-line growth. 

While talking about new growth verticals, Cyient’s management said that its automotive segment is gaining traction on autonomous and connectivity solutions, and that the demand trend for these services looks very strong. 

Both companies have reported YoY rises in operating profit margins due to cost optimization measures and lower employee expenses on the back of falling attrition rates. 

Operating profit margin rises sharply YoY but moderates QoQ

Consumer durables companies see margins rise as raw material prices fall

Consumer electronics company Dixon Technologies posted high QoQ and YoY revenue growth in Q2, on the back of a 76.8% YoY rise in its mobile manufacturing segment. Dixon, which operates under various production-linked incentive (PLI) schemes, is set to begin production of Google Pixel 8 phones, according to Bloomberg.

Mobile manufacturing segment drives Dixon Tech’s revenue in Q2FY24

Polycab India, a cable and wire manufacturer, is not far behind in revenue and profit growth, with increases of 26.6% and 58.9% YoY respectively in Q2FY24. In the Q2 earnings call, Chirayu Upadhyaya, Polycab’s Head of Investor Relations, said, “The cables segment grew with rising demand in the defense sector, which accounts for over 21% of revenues in the first half of the year.”

As both companies' top and bottom lines grew, operating profit margins also rose YoY thanks to a fall in raw material prices, and a favourable product mix. 

Operating profit margins rise YoY on better product mix

Screener: Companies that beat revenue and net profit estimates, with strong Q2 results

Oberoi Realty tops Forecaster estimates in revenue surprise % 

This screener shows stocks from the Nifty 500 that have beaten Trendlyne's revenue and net profit Forecaster estimates for Q2FY24. Stocks from Banking and Finance, Software and Services, Consumer durables, Realty and Retailing feature in the screener. 

Major stocks that appear in the screener are Oberoi Realty, ICICI Securities, Nippon Life India Asset Management, PNB Housing Finance, HDFC Asset Management, Central Depository Services (India) and PVR INOX.

Oberoi Realty’s revenue grew by 76.8% YoY to Rs 1,217.4 crore in Q2FY24, aiding it to beat its Forecaster estimates by 28.5%. The realty company’s revenue increased on the back of gains from Oberoi Mall, Commerz and The Westin Mumbai Garden City. Its net profit also expanded by 43.3% YoY, thanks to reduced raw material and operating expenses.

PVR INOX’s revenue grew the most by 191.2% YoY to Rs 1,999.9 crore in Q2FY24. This helped the retailing company outperform Trendlyne’s Forecaster estimates by 7.8%. Its revenue rose on the back of a jump in the average ticket price (ATP) and spend per head (SPH). It posted a net profit of Rs 166.3 crore in Q2FY24 against a net loss of Rs 71.2 crore in Q2FY23.

You can find some popular screenershere.

Signing off this week,

The Trendlyne Team

 
Trendlyne Marketwatch
Trendlyne Marketwatch
03 Nov 2023
Market closes higher, Raymond acquires a 59.2% stake in Maini Precision for Rs 682 crore

Trendlyne Analysis

Nifty 50closed at 19,230.60 (97.4, 0.5%), BSE Sensexclosed at 64,363.78 (282.9, 0.4%) while the broader Nifty 500closed at 17,000.95 (110.2, 0.7%). Market breadth is in the green. Of the 1,995 stocks traded today, 1,265 were on the uptrend, and 674 went down.

Indian indices maintained the gains from the morning session and closed in the green, with the Nifty 50 closing at 19,231. The volatility index, Nifty VIX, dropped by 1.8% and closed at 10.9 points. Zomato’s Q2FY24 net profit stood at Rs 36 crore, compared to a net loss of Rs 251 crore in Q2FY23. Its revenue grew by 71.5% YoY, aided by robust growth in the food ordering & delivery and quick commerce segments.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Realty and Nifty Media closed sharply higher than Thursday’s closing level. According to Trendlyne’s sector dashboard, forest materials emerged as the top-performing sector of the day, with a rise of over 2.2%.

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. According to data released by S&P, the UK’s composite PMI for October increased to 48.7 against estimates of 48.6. UK’s composite PMI for October stood at 48.6.

  • Relative strength index (RSI) indicates that stocks like Angel One, Swan Energy, Multi Commodity Exchange of India and CreditAccess Grameen are in the overbought zone.

  • Zomato rises sharply as its Q2FY24 net profit stands at Rs 36 crore, compared to a net loss of Rs 251 crore in Q2FY23. Its revenue grows by 71.5% YoY, aided by robust growth in the India food ordering & delivery, hyperpure supplies and quick commerce segments. The company appears in a screener of stocks with increasing revenue over the past four quarters.

  • Lupin rises as it enters into a licensing and supply agreement with Zydus Lifesciences to co-market Saroglitazar, a drug used to treat chronic liver diseases in India. It appears in a screener for stocks with strong momentum.

  • Titan is rising as its net profit grows by 10.1% YoY to Rs 915 crore in Q2FY24. Revenue improves by 25% YoY on the back of growth in the watches & wearables, jewellery and eyecare segments. However, its EBITDA margin contracts by 234 bps YoY due to increased raw material, finance, employee benefits and advertising expenses. The company appears in a screener of stocks bought by superstar investors.

  • Bayer Cropscience rises as its Q2FY24 net profit grows by 36.1% YoY to Rs 222.9 crore, aided by lower inventory, employee benefit and finance expenses. Its revenue increases by 11.4% YoY due to growth in the corn seeds and crop protection segments. The company appears in a screener of stocks with high TTM EPS growth.

  • Motilal Oswal says that Q2FY24 earnings of Nifty 50 companies have mostly been in line with its estimates, driven by cyclical sectors like BFSI and auto. The brokerage highlights that companies likeICICI Bank, HDFC Bank, Bajaj Auto and Hero MotoCorp beat its expectations in terms of profit, while UPL, Wipro and SBI Life missed estimates.

  • MRF is falling despite its net profit jumping by 4.5X YoY to Rs 586.7 crore and EBITDA margin sharply expanding by 10.4 percentage points YoY to 18.6%. Its profitability surges on the back of declining raw material costs. On the other hand, its revenue increases by 6.7% YoY. The stock shows up in a screener for companies with declining net cash flows.

  • Arvind Fashion rises sharply as it enters into a share purchase agreement with Reliance Beauty & Personal Care to sell its entire stake in its subsidiary, Arvind Beauty Brands, for Rs 99 crore. The company appears in a screener of stocks with strong momentum.

  • Adani Ports & Special Economic Zone reports a record-breaking 48% YoY increase in cargo volumes for October, reaching 37 million metric tonnes. In the first seven months of FY24, the company has managed a total of 240 million metric tonnes of cargo, reflecting an 18% YoY growth.

  • Whirpool of India is falling as its Q2FY24 net profit decreases by 23.6% YoY to Rs 36.6 crore due to increasing employee benefit expenses and finance costs. Its revenue also drops by 5.6% YoY to Rs 1,521.6 crore. It features in a screener of companies with a YoY decline in quarterly net profit and profit margin.

  • Raymond is rising as it acquires a 59.2% stake in Maini Precision Products for Rs 682 crore. This acquisition will help the company enter the aerospace, defence and electric vehicles segments.

  • Sanjay Purohit, the CEO and MD of Sapphire Foods, says the quick service restaurant (QSR) space is experiencing demand headwinds, and the pizza category's downturn is temporary. He adds that the company's internal target is 5-7% of same-store-sales growth (SSSG) and the company would double its retail footprint in four years.

  • HDFC Securities upgrades its rating on Ambuja Cements to ‘Buy’ from ‘Add’ and maintains its target price at Rs 480, implying an upside of 14.5%. The brokerage is optimistic about the company’s growth outlook and sees the firm’s plans to double production capacity as a key positive. It expects the firm’s net profit to grow at a CAGR of 17.1% over FY23-25.

  • ESAF Small Finance Bank's Rs 463 crore IPO gets bids for 0.8X the available 5.8 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 1.2X the available 2.8 crore shares on offer.

  • HDFC Mutual Fund acquires a 0.4% stake in Karur Vysya Bank through open markets on Wednesday.

  • Suzlon Energyrises to an all-time high of Rs 34.2 as its Q2FY24 net profit grows by 78.1% YoY to Rs 102.3 crore, aided by falling inventory and finance expenses. However, its revenue declines by 1% YoY due to lower sales in the wind turbine generator segment. The company appears in a screenerof stocks with improving book value per share.

  • Kirloskar Oil Enginesplunges more than 5% as its net profit declines by 6.9% YoY to Rs 78 crore in Q2FY24. However, its revenue grows by 6.2% YoY, aided by gains in B2B and B2C segments. Its EBITDA margin contracts by 110 bps YoY due to rising costs for raw materials, finance and employee benefits. The company appears in a screenerof stocks where mutual funds have decreased their shareholdings over the past quarter.

  • Abhijit Roy, the CEO and MD of Berger paints, reports a 10.9% increase in company volume for Q2, with expectations for continued growth. The company's market share has risen to 20.1% in H1FY24 from 19.3% in FY23. Roy adds that Berger Paints is well-prepared for new industry competition from Grasim. He also highlights ongoing efforts in network expansion and the roll-out of key digital initiatives.

  • Kalpataru Projects International falls despite its Q2FY24 net profit rising 3.5% YoY to Rs 89 crore. Its revenue grows 19% YoY, aided by growth in the engineering, procurement and construction segment. The company appears in a screener of stocks with high momentum scores.

  • Dabur India is rising as its Q2FY24 net profit rises 5.1% YoY to Rs 515 crore and gross margin expands by 295 bps YoY. Its revenue grows by 7.3% YoY, driven by the consumer care segment. The stock shows up in a screener for companies with zero promoter pledges.

  • Auto stocks like Tata Motors, Tube Investments of India, Hero MotoCorp and Eicher Motors are rising in trade. All constituents of the broader Nifty Auto index are also trading in the green.

  • India’s Services PMI drops to 58.4 in October from 61 in September due to a moderation in demand and competitive pressures.

  • Mahindra & Mahindra Financial Services rises as its October disbursements hit around Rs 5,250 crore, mirroring the previous year's figure. The year-to-date disbursements total up to about Rs 30,700 crore, marking a 16% YoY increase. The company also shows a 3% YoY improvement in collection efficiency.

  • Sheela Foam appoints Tushaar Gautam as its Managing Director (MD), effective immediately. It also names Rahul Gautam, former MD, as the Whole-Time Director and Chairman.

  • Ratnamani Metals & Tubes is rising as its Q2FY24 net profit surges 65.9% YoY to Rs 163.9 crore and EBITDA margins expand by 80 bps YoY. Its revenue rises by 25.7% YoY, led by healthy growth in the steel tubes & pipes segment. The stock shows up in a screener for companies with low debt.

  • Citi downgrades its rating on Tata Steel to 'Sell' and lowers the target price to Rs 100. The downgrade reflects concerns over domestic steel prices and potential risks if Chinese steel prices do not pick up . According to the brokerage, there is also concern about the company's restructuring plans and future profitability.

  • Kotak Mahindra Life Insurance buys a 0.6% stake in Minda Corp for approx Rs 45.6 crore in a bulk deal on Thursday.

  • ESAF Small Finance Bank raises Rs 135.2 crore from anchor investors ahead of its IPO by allotting around 2.3 crore shares at Rs 60 each. Investors include Founders Collective Fund, Alchemie Ventures Fund, Copthall Maritius Investment, BNP Artitrage, Kotak Mahindra Life Insurance Co and Edelweiss Tokio Life Insurance Co.

  • JK Lakshmi Cements surges more than 5% as its net profit grows by 51.8% YoY to Rs 92.7 crore in Q2FY24. Revenue increases by 14.6% YoY, aided by higher sales. The company also plans to set up an additional cement grinding unit with a capacity of 13.5 lakh tonnes per annum. The expansion has a capex of Rs 225 crore and is expected to be completed in the next two years.

  • Indian Energy Exchangerises as its Q2FY24 net profit grows by 21.4% YoY to Rs 86.5 crore. Its revenue also increases by 16.9% YoY, aided by higher trading volumes in the conventional power and green power segments. The company appears in a screenerof stocks with growing net profit and margins.

  • Tata Motorsis rising as it posts a net profit of Rs 3,764 crore in Q2FY24, compared to a loss of Rs 944.6 crore in Q2FY23. Its revenue increases by 32% YoY on the back of improved sales from commercial vehicles and Jaguar Land Rover. It appears in a screenerof stocks showing a shift from negative to positive in sales and profit, along with strong price momentum.

Riding High:

Largecap and midcap gainers today include Zomato Ltd. (116.50, 8.32%), Bayer Cropscience Ltd. (5,226.05, 6.54%) and Apollo Hospitals Enterprise Ltd. (5,153.20, 5.45%).

Downers:

Largecap and midcap losers today include Cholamandalam Investment & Finance Company Ltd. (1,134.30, -3.66%), Supreme Industries Ltd. (4,379.45, -2.98%) and MRF Ltd. (1,07,723.25, -2.51%).

Movers and Shakers

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

Top high volume gainers on BSE included JK Lakshmi Cement Ltd. (744.85, 10.48%), Zomato Ltd. (116.50, 8.32%) and JM Financial Ltd. (88.70, 7.13%).

Top high volume losers on BSE were Godfrey Phillips India Ltd. (2,149.00, -8.50%), Cholamandalam Investment & Finance Company Ltd. (1,134.30, -3.66%) and 360 One Wam Ltd. (532.95, -3.37%).

Bayer Cropscience Ltd. (5,226.05, 6.54%) was trading at 41.5 times of weekly average. Orient Electric Ltd. (221.20, 1.96%) and Ratnamani Metals & Tubes Ltd. (2,900.15, 2.64%) were trading with volumes 15.5 and 10.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

26 stocks made 52 week highs, while 2 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Blue Star Ltd. (971.70, 4.81%), Canara Bank (387.50, -0.17%) and DLF Ltd. (595.85, 3.11%).

Stocks making new 52 weeks lows included - Aegis Logistics Ltd. (283.25, -2.16%) and Sumitomo Chemical India Ltd. (372.20, -0.27%).

22 stocks climbed above their 200 day SMA including JK Lakshmi Cement Ltd. (744.85, 10.48%) and Computer Age Management Services Ltd. (2,390.65, 5.62%). 2 stocks slipped below their 200 SMA including Sapphire Foods India Ltd. (1,306.05, -0.96%) and Poonawalla Fincorp Ltd. (347.70, -0.56%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
02 Nov 2023
Market closes higher, GR Infraprojects bags an order worth Rs 1,226.9 crore from NHAI

Trendlyne Analysis

Nifty 50closed at 19,133.25 (144.1, 0.8%), BSE Sensexclosed at 64,080.90 (489.6, 0.8%) while the broader Nifty 500closed at 16,890.80 (157.9, 0.9%). Market breadth is surging up. Of the 1,995 stocks traded today, 1,361 were in the positive territory and 599 were negative.

Indian indices extended their gains from the afternoon session and closed in the green, with the Nifty 50closing at 19,133.3 points. The Indian volatility index, Nifty VIX, fell 8.1% and closed at 11.1 points. Godrej Properties closed 3.1% higher after its Q2FY24 net profit rose by 8.4% YoY to Rs 72.6 crore, while its revenue increased by 107.8% YoY due to robust sales in the NCR region.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green and outperformed the benchmark Nifty 50 index. Nifty IT and Nifty Energy closed higher than their Wednesday close. According to Trendlyne's sector dashboard, Realty was the top-performing sector of the day as it rose 2.1%.

Major European indices traded higher amid positive global cues. Asian indices closed in the green, except for China’s Shanghai SE Composite Index closing lower. US index futures traded higher, indicating a positive start to the trading session. Brent crude oil futures traded in the green after falling 0.8% on a volatile day on Wednesday.Alkem Laboratories sees a long buildup in its November 30 future series as its open interest rises 21% with a put-call ratio of 0.6.

  • Prism Johnson, Godfrey Philips India, Chambal Fertilisers & Chemicals, and MRF rise 16.5%, 14.3%, 3.8%, and 1.6% respectively over the past week, ahead of their Q2FY24 results tomorrow.

  • Adani Power is rising as its Q2FY24 net profit jumps by 9.5X YoY to Rs 6,594.2 crore, led by reduced fuel costs, lower import coal prices, and a one-time deferred tax credit of Rs 1,370.6 crore. Revenue surges by 84.4% YoY due to increased sales volume and merchant sales. The stock shows up in a screener for companies with high TTM EPS growth.

  • Godrej Properties rises as its Q2FY24 net profit rises by 21.5% YoY to Rs 66.8 crore, while its revenue increases by 107.8% YoY due to robust sales in the NCR region. The stock shows up in a screener for stocks with strong momentum.

  • According to reports, 1.2 crore shares (0.2% equity) of HDFC Bank, amounting to approximately Rs 1,811.5 crore, have changed hands in a large trade.

  • Sun Pharmaceuticals Industries rises as its Q2FY24 net profit grows by 5% YoY to Rs 2,375.5 crore due to lower raw material expenses. Its revenue improves by 13.1% YoY, aided by growth in India, the rest of the world, and emerging markets. The company appears in a screener of stocks with growing net profit and margin.

  • KRChoksey downgrades its rating on Laxmi Organic Industries to ‘Hold’ from ‘Buy’ and lowers the target price to Rs 258 from Rs 302, implying an upside of 1.5%. The brokerage believes weak global demand for industrial solutions, unfavourable product mix and a lack of visible revenue growth in the specialty segment will impact growth in the near-to-medium term.

  • GR Infraprojects is rising as it bags an order worth Rs 1,226.9 crore from the National Highways Authority of India. The order pertains to the construction of four lanes of NH 530B from Devinagar to Kasganj Bypass.

  • Honasa Consumer's Rs 1,701.4 crore IPO gets bids for 7.6X the available 2.9 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 1.3X the available 52.5 lakh shares on offer.

  • Shashank Srivastava, Senior Executive Officer - Marketing and Sales of Maruti Suzuki India, says that the company's October wholesales have outpaced industry growth. Retail sales also see a strong 9% increase ahead of the festive season. He notes a slight dip in the company's SUV market share in October. Srivastava also claims that demand is robust as the semiconductor supply shortage appears to be over.

  • Triveni Turbinesrises as its Q2FY24 net profit improves by 39% YoY to Rs 64.2 crore due to lower inventory expenses. Its revenue grows by 32.5% YoY, aided by robust demand in the industrial and American Petrol Institute (API) drive turbines segment. The company appears in a screenerof stocks with high TTM EPS growth.

  • LIC Housing Financedeclines despite its Q2FY24 net profit rising by 283.4% YoY to Rs 1,193.5 crore, with revenue also up by 32.6% YoY due to an increase in interest income. The stock shows up in a screenerof volume shockers stocks.

  • Kotak Mahindra Bankis rising as it enters an agreement with Kotak Mahindra General Insurance and Zurich Insurance. According to the agreement, Zurich Insurance will buy a 51% stake in Kotak Mahindra General Insurance for Rs 4,051 crore. The company will have the option to acquire an additional 19% stake within three years of the initial transaction.

  • India's GST collections rise 13% YoY to Rs 1.7 lakh crore in October, driven by increased consumer spending during the festive season and strict anti-evasion measures.

  • Godrej Consumer Products is rising as its Q2FY24 net profit rises 20.6% YoY to Rs 432.8 crore and EBITDA margins expand by 360 bps YoY, driven by a decline in raw material costs. Its revenue also rises by 6.2% YoY to Rs 3,601.9 crore, led by a 10% YoY growth in volumes. The stock shows up in a screener for companies with low debt.

  • Power stocks like JSW Energy, Bharat Heavy Electricals, Tata Powerand Adani Green Energy are rising in trade. All constituents of the broader BSE Power index are also trading in the green.

  • Skipper rises as it bags new orders worth Rs 924 crore, including a Rs 788 crore order from the domestic transmission & distribution (T&D) business of Power Grid Corporation of India and a Rs 136 crore order for several other domestic T&D projects. It appears in a screener for stocks with strong momentum.

  • Sudhir Sitapati, CEO of Godrej Consumer Products, expects H2 earnings to match H1, with a predicted 10% volume growth driven by festive demand. The company's strong pesticide business in Indonesia and upcoming advancements in Africa are set to improve margins. Its Q2FY24 net profit rises by 20.6% YoY to Rs 432.8 crore, while its revenue grows by 6.9% YoY.

  • Tata Steel is falling as it posts a net loss of Rs 6,196.2 crore in Q2FY24, compared to a net profit of Rs 1,514.4 crore in Q2FY23. The loss is due to a Rs 3,255.1 crore impairment provision for non-current assets in Europe and a Rs 3,612 crore provision for restructuring European operations. Revenue drops 7.1% YoY to Rs 55,681.9 crore, with downturns in both European and Indian segments.

  • Telecom stocks like RailTel Corp of India, Indus Towers, Tata Communications, Avantel and OnMobile Global are rising in trade. Barring Optiemus Infracom, all the other constituents of the broader sectoral index, S&P BSE Telecom, are trading in the green.

  • Gujarat Mineral Development Corp plunges more than 8% as its net profit declines by 50.7% YoY to Rs 74.6 crore in Q2FY24. Revenue falls by 29% YoY due to a reduction in revenue from the mining segment. It shows up in a screener of stocks with YoY decline in quarterly net profit and profit margin.

  • India’s manufacturing PMI drops for the second consecutive month to 55.5 in October from 57.5 in September. This is due to weakened demand in the consumer goods segment. The PMI reading, however, stays above 50 for the 28th straight month, indicating an expansion in manufacturing activity.

  • PSU bank stocks like Bank of India, Union Bank of India, Indian Overseas Bank and Bank of Maharashtra are rising in trade. All constituents of the broader Nifty PSU Bank index are also trading in the green.

  • GAIL (India) is rising as it signs an agreement with Bharat Petroleum Crop (BPCL) to procure propane for its petrochemical plant in Maharashtra for the next 15 years. The contract, worth an estimated Rs 63,000 crore, will supply a total of 600 KTPA of propane.

  • Britannia Industries rises as its Q2FY24 net profit improves by 19.1% YoY to Rs 587.6 crore due to lower inventory and employee benefit expenses. Its revenue grows by 1.2% YoY, aided by improved realisations. The company appears in a screenerof stocks with growing net profit and margins.

  • Hero MotoCorpis rising as its net profit surges by 46.2% YoY to Rs 1,006.3 crore in Q2FY24. Its revenue also improves by 4.1% YoY, aided by an increase in two-wheeler sales. EBITDA margin expands by 260 bps YoY due to reduced raw material and finance costs. The company appears in a screenerof stocks near their 52-week highs.

Riding High:

Largecap and midcap gainers today include Vodafone Idea Ltd. (13.75, 7.42%), REC Ltd. (302.40, 6.91%) and Power Finance Corporation Ltd. (257.65, 6.38%).

Downers:

Largecap and midcap losers today include Solar Industries India Ltd. (5,318.50, -3.67%), Schaeffler India Ltd. (2,651.00, -3.22%) and Gland Pharma Ltd. (1,490.75, -2.82%).

Movers and Shakers

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

Top high volume gainers on BSE included Hitachi Energy India Ltd. (4,471.25, 7.63%), REC Ltd. (302.40, 6.91%) and KRBL Ltd. (378.25, 5.95%).

Top high volume losers on BSE were Deepak Fertilisers & Petrochemicals Corporation Ltd. (594.75, -6.95%), Kansai Nerolac Paints Ltd. (310.90, -1.32%) and Hero MotoCorp Ltd. (3,052.10, -1.30%).

Minda Corporation Ltd. (337.40, -0.53%) was trading at 9.1 times of weekly average. Aptus Value Housing Finance India Ltd. (289.80, 1.28%) and Sun Pharma Advanced Research Company Ltd. (237.90, 3.64%) were trading with volumes 9.0 and 5.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

19 stocks overperformed with 52 week highs, while 3 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Canara Bank (388.15, 1.27%), Colgate-Palmolive (India) Ltd. (2,124.65, 1.61%) and Vodafone Idea Ltd. (13.75, 7.42%).

Stocks making new 52 weeks lows included - Aegis Logistics Ltd. (289.50, 2.10%) and Sumitomo Chemical India Ltd. (373.20, -0.16%).

22 stocks climbed above their 200 day SMA including Triveni Turbine Ltd. (391.70, 9.15%) and KRBL Ltd. (378.25, 5.95%). 8 stocks slipped below their 200 SMA including Deepak Fertilisers & Petrochemicals Corporation Ltd. (594.75, -6.95%) and Sapphire Foods India Ltd. (1,319.80, -0.73%).

 
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The Baseline
02 Nov 2023
Chart of the Week: Food and Hotels sectors see big promoter holding changes in Q2
By Akshat Singh

For the average investor, big changes in a company’s promoter holdings  offer crucial signals. When promoters buy shares, it can indicate their confidence in the business, a positive sign for other investors.

But a promoter's sale of shares is not an automatic red flag—it can be due to many reasons, such as realizing profits, regulatory compliance or tax planning. 

In this edition of Chart of the Week, we analyze the top five companies from the Nifty 500 that have seen the biggest QoQ changes in promoter holdings. We will assess two screeners: one for the highest QoQ rises and the other for the highest QoQ falls in promoter holdings over the past quarter. 

Adani group companies see high promoter buying in Q2

We begin with companies where promoters already holding a substantial company stake, have further increased their holdings. Bombay Burmah Trading Corp (BBTC), Adani Enterprises and Adani Energy Solutions stand out here, with promoter holdings increasing by 8.1 percentage points, 500 basis points and 490 basis points to 74.1%, 72.6% and 73.2% respectively in the past quarter. 

BBTC’s stakes were bought by Wallace Brothers Trading & Industrial (8.1%). However, on September 12,  India Ratings, an affiliate of Fitch, downgraded BBTC to India A+ from India AA due to its 33% stake in GoAir, which raised concerns. 

Adani Enterprises' holdings were acquired by promoter Kempas Trade and Investments (2.8%) in the previous quarter, while Adani Energy Solutions' shares were taken up by Gelt Bery Trade and Investment (4.9%) during the same period. These transactions occurred amid allegations of "opaque investments" against Adani, with reports suggesting that the group funneled millions of dollars into publicly traded stocks of its group companies through offshore structures. 

Turning to companies with relatively lower promoter holdings that have seen an uptick in the past quarter, we have Rallis India and Piramal Enterprises. Their promoter holdings rose by 500 basis points and 270 basis points, respectively, to 55.1% and 46.2%. On July 18, Tata Chemicals acquired a 5% stake in Rallis India to strengthen its position in the company. 

Meanwhile, Piramal Enterprises’ promoters, V3 Designs (0.3%) and PRL Realtors (0.2%), picked up stakes in the company during the same quarter.

MFs and FIIs compensate for high promoter selling

We now focus on firms with significant promoter holdings that have seen a sell-off by promoters in the past quarter. This includes Shyam Metalics and Energy, Patanjali Foods and Sheela Foam, where promoters reduced their holdings by 6.7 percentage points, 7 percentage points, and 7.5 percentage points respectively, leading to adjusted promoter stakes of 81.6%, 73.8%, and 65.5%.

Shyam Metalics and Energy's promoters, Narantak Dealcomm and Shubham Buildwell, sold a 5.1% stake through an offer for sale on September 11 to comply with SEBI's minimum public shareholding norms. Domestic institutional investor (DII) Tata AIA Life Insurance Company offset the divestment by purchasing a 1.3% stake. 

Patanjali Foods' majority promoter, Patanjali Ayurved, divested 7% of its stake in the company through a Rs 2,533.9 crore offer for sale on July 14. This offering attracted the FPI, GQG partners, which acquired 2% of the company's stake for its Emerging Markets funds, along with a 1.3% purchase by other investors. 

Sheela Foam's Q2 promoter divestment included CEO Tushaar Gautam (3.6%), and Rangoli Resorts (1.4%). These sales were offset by purchases by mutual funds (MFs) such as SBI Small Cap Fund (0.4%), Nippon Life India Trustee (1.8%), Kotak Funds (2.5%), and the insurance company SBI Life Insurance (1.8%).

Now, let's shift our focus to companies where already low promoter holdings have been pared down further. GMM Pfaudler and Restaurant Brands Asia stand out here, with promoters divesting 13.6 percentage points and 25.4 percentage points, respectively, in the last quarter. Consequently, their ownership has dwindled to 25.2% and 15.4%, respectively. Promoter Pfaudler sold a 13.6% stake in GMM Pfaudler on August 18, of which 9.9% was acquired by private equity (PE) investor Chrys Capital, while the remaining shares were purchased by Canara Robeco Mutual Fund (1.5%). Additionally, foreign portfolio investors (FPIs) like Taiyo Greater India Fund (0.4%) and First Sentier Investors (1.3%) bought stakes in the company.

Restaurant Brands Asia's promoter, QSR Asia, divested 25.4% of its holdings in the last quarter, making it the highest promoter sell-off QoQ in the Nifty 500. This divestment was purchased by mutual funds (MFs) such as Quant Small Cap Fund (2.8%) and Tata Mutual Fund (2.8%). FPIs alo participated, with Goldman Sachs Funds (1.2%) and Franklin Templeton Investment Funds (1%), and the insurance company ICICI Prudential Life Insurance (6.9%) acquiring shares.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
31 Oct 2023
Market closes lower, GAIL's Q2FY24 net profit increases 85.8% YoY to Rs 2,444 crore

Trendlyne Analysis

Nifty 50 closed at 19,079.60 (-61.3, -0.3%) , BSE Sensex closed at 63,874.93 (-237.7, -0.4%) while the broader Nifty 500 closed at 16,801.10 (-25, -0.2%), of the 1,982 stocks traded today, 989 were on the uptick, and 944 were down.

Indian indices extended the losses from the afternoon session and closed in the red, with the Nifty 50 closing at 19,080. The volatility index, Nifty VIX, rose by 3% and closed at 11.8 points. GAIL’s (India) Q2FY24 net profit increased by 85.8% YoY to Rs 2,444 crore due to lower raw material and inventory expenses. Its revenue dropped by 14.7% YoY on the back of a downturn in its natural gas marketing and LPG & liquid hydrocarbons segments.

Nifty Midcap 100 closed in the green, while Nifty Smallcap 100 closed flat, with the benchmark index closing lower. Nifty Realty and Nifty Media closed higher than Monday’s closing level. According to Trendlyne’s sector dashboard, fertilizer emerged as the top-performing sector of the day, with a rise of over 4.3%.

Most European indices are trading in the green. US indices futures trade higher, indicating a positive start. According to data released by Eurostat, the Eurozone’s GDP for Q3 increased by 0.1% YoY, against estimates of 0.2% growth.

  • Relative strength index (RSI) indicates that stocks like Angel One, Swan Energy and CreditAccess Grameen are in the overbought zone.

  • GE T&D India is rising as it bags orders worth approximately Rs 500 crore from Power Grid Corp of India (PGCIL). The contract involves the supply of power transformers and shunt reactors for PGCIL’s transmission system projects in India. The company shows up in a screener for stocks with the highest recoveries from their 52-week lows.

  • Indian Oil Corporation rises as it reports a Q2FY24 net profit of Rs 13,114.3 crore, compared to a net loss of Rs 991.6 crore in Q2FY23, aided by lower raw material and inventory expenses. However, its revenue falls by 11.9% YoY due to lower realisation in the petroleum products segment. The company appears in a screener of stocks with increasing quarterly profits for the past three quarters.

  • DCX Systems surges more than 8% as its net profit grows by 159.3% YoY to Rs 20.4 crore in Q2FY24. Revenue improves by 77.8% YoY, owing to an increased order book from the cables and wire harness segment. Its EBITDA margin expands by 16 bps YoY, aided by reduced finance and other expenses. The company appears in a screener of stocks with the highest recovery from their 52-week lows.

  • Shalabh Saxena, CEO & MD of Spandana Sphoorty Financial, says the company's AUM could reach Rs 12,000 crore by the end of FY24. He also mentions that they have been producing 5.5-5.8% RoA (Return on Assets), against a forecasted 4.5%. He adds that the company targets an AUM of Rs 15,000 crore by FY25, as stated in their Vision 2025 plan.

  • GAIL (India) rises as its Q2FY24 net profit increases 85.8% YoY to Rs 2,444 crore due to lower raw material and inventory expenses. However, its revenue drops by 14.7% YoY on the back of a downturn in its natural gas marketing and LPG & liquid hydrocarbons segments. The company appears in a screener of stocks with growing net profit and margins.

  • Honasa Consumer's Rs 1,701.4 crore IPO gets bids for 0.1X the available 2.9 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 0.3X the available 52.5 lakh shares on offer.

  • Cello World's Rs 1,900 crore IPO gets bids for 1.4X the available 2.2 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 1X the available 1.1 crore shares on offer.

  • V Vaidyanathan, the MD and CEO of IDFC First Bank, says the bank targets a 24-25% credit growth and over 40% deposit growth in the remaining two quarters of FY24. He also highlights that the bank is set to prioritise deposit over advance growth to repay legacy infrastructure bonds. He also affirms that the IDFC First Bank-IDFC merger is on track.

  • HDFC Securities upgrades its rating on Ujjivan Small Finance Bank to ‘Buy’ from ‘Add’ and raises the target price to Rs 75 from Rs 50. This implies an upside of 43.3%. The brokerage is positive about the bank’s growth prospects due to its rising disbursements, healthy collections and lower credit costs.

  • Castrol Indiadeclines despite its Q3CY23(July-September) net profit rising by 3.9% YoY to Rs 194.4 crore due to a fall in raw material costs. Revenue also increases by 5.6% YoY. The stock shows up in a screenerfor companies with a decline in net profit.

  • GMR Airports Infrastructure is rising despite reporting a net loss of Rs 91 crore in Q2FY24, compared to a net profit of Rs 207.8 crore in Q2FY23. This is due to higher depreciation and interest charges. However, its EBITDA margin has improved to 53% (up 400 bps YoY). The company's revenue has risen 30% YoY, led by strong growth in passenger traffic.

  • Filatex Indiais falling despite its board of directors approving an expansion of the manufacturing capacity of recycling chips from polyester and textile waste to 20,000 MTPA. The company estimates a capex of Rs 150 crore for the expansion.

  • Pidilite Industries surges as Goldman Sachs upgrades its rating to 'Buy' from 'Sell' and raises the target price to Rs 2,725. According to the brokerage, the earnings downgrade cycle is now concluded, and the company is witnessing the emergence of new growth opportunities. However, it cautions that a slowdown in housing construction and rising input costs could impact margins.

  • PSP Projects is rising as it bags multiple construction orders worth Rs 200.3 crore in Gujarat. This takes the total order inflow in FY24 to Rs 958.6 crore. The stock shows up in a screener for companies with improving cash flows and high durability scores.

  • Blue Star surges to its all-time high of Rs 955 per share as its net profit grows by 66.1% YoY to Rs 70.7 crore in Q2FY24. Revenue expands by 19.5% YoY on the back of the electro-mechanical projects, air conditioning systems and unitary products segments. It features in a screener of stocks with YoY growth in quarterly net profit and profit margin.

  • Larsen & Toubro's hydrocarbon business bags a contract worth more than Rs 15,000 crore from a Middle Eastern client to set up a gas compression plant.

  • Sivaramakrishnan Ganapathi, Vice-Chairman & MD of Gokaldas Exports, anticipates a robust H2FY24 after a challenging H1, aided by a large order book. He says the company has added manpower to improve operations. He highlights the acquisition of Atraco Group (a Middle Eastern apparel company) and expects it to contribute to incremental revenue in Q4. Gokaldas Exports' Q2FY24 net profit fell by 48.2% YoY to Rs 23.7 crore, while revenue was down 11.7% YoY.

  • Honasa Consumer raises Rs 765.2 crore from anchor investors ahead of its IPO by allotting around 2.4 crore shares at Rs 324 each. Investors include Abu Dhabi Investment Authority, Government Pension Fund Global, Goldman Sachs, Smallcap World Inc, Carmignac Portfolio, Franklin Templeton, Invesco, Whiteoak Capital MF, and Nippon Life India.

  • PSU banks like Union Bank of India, Bank of India, UCO Bank, Indian Bank and Punjab & Sind Bank are rising in trade. Barring Bank of Baroda, all the other constituents of the broader sectoral index, Nifty PSU Bank, are also trading in the green.

  • DLF rises as its Q2FY24 net profit increases by 30.6% YoY to Rs 622.8 crore due to decreased employee expenses and finance costs. Its revenue also grows by 8.5% YoY. The stock shows up in a screener for companies with strong momentum.

  • Jefferies maintains its 'Buy' rating on UPL but cuts the target price to Rs 675. The brokerage cites the company's Q2 sales shortfall, attributing it to global channel destocking and increased pricing pressures. It reduces the FY24-26 EPS estimates by 9-10% but sees an improvement in H2.

  • APL Apollo Tubes falls despite its net profit growing by 35.1% YoY to Rs 202.9 crore in Q2FY24. Revenue improves by 16.7% YoY, aided by increased sales volumes of Apollo Structural, Apollo Z and Apollo Galv. It appears in a screener of stocks with high FII holdings.

  • Marico is falling despite its Q2FY24 net profit rising 17.3% YoY to Rs 353 crore, led by lower raw material costs. Its revenue falls by 0.8% YoY on the back of price cuts and a sluggish pace of recovery in rural demand. The stock shows up in a screener for companies with high promoter stock pledges.

  • Tata Motors rises as it wins an arbitration case to recover Rs 766 crore from West Bengal Industrial Development Corp for their Sinur Nano Project. The company appears in a screener of stocks with strong annual EPS growth.

  • TVS Motor Co’s Q2FY24 net profit remains flat YoY at Rs 386.3 crore due to higher cost of materials and employee expenses. Its revenue rises 16% YoY to Rs 9,932.8 crore, led by a 5% YoY growth in overall sales volume. The stock shows up in a screener for companies with declining cash flows from operations over the past two years.

Riding High:

Largecap and midcap gainers today include Pidilite Industries Ltd. (2,458.00, 6.31%), Procter & Gamble Hygiene & Healthcare Ltd. (17,500.00, 4.90%) and Patanjali Foods Ltd. (1,367.90, 4.52%).

Downers:

Largecap and midcap losers today include Supreme Industries Ltd. (4,329.25, -4.26%), Siemens Ltd. (3,330.95, -2.90%) and Mahindra & Mahindra Ltd. (1,458.60, -2.62%).

Volume Shockers

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

Top high volume gainers on BSE included Piramal Pharma Ltd. (104.50, 9.48%), Pidilite Industries Ltd. (2,458.00, 6.31%) and Nippon Life India Asset Management Ltd. (391.45, 5.54%).

Top high volume losers on BSE were DCM Shriram Ltd. (926.50, -4.88%), CCL Products India Ltd. (590.15, -4.53%) and Fine Organic Industries Ltd. (4,419.70, -3.67%).

Blue Star Ltd. (884.65, 1.43%) was trading at 21.1 times of weekly average. Galaxy Surfactants Ltd. (2729.75, 4.74%) and V-Guard Industries Ltd. (297.55, -1.81%) were trading with volumes 13.7 and 5.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Blue Star Ltd. (884.65, 1.43%), Canara Bank (384.35, 0.46%) and Motilal Oswal Financial Services Ltd. (1,038.05, 2.28%).

Stocks making new 52 weeks lows included - Petronet LNG Ltd. (199.60, -1.04%) and UPL Ltd. (540.50, 0.34%).

14 stocks climbed above their 200 day SMA including Triveni Turbine Ltd. (359.20, 6.05%) and City Union Bank Ltd. (138.10, 3.33%). 15 stocks slipped below their 200 SMA including CCL Products India Ltd. (590.15, -4.53%) and TeamLease Services Ltd. (2,346.20, -3.71%).

 
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The Baseline
31 Oct 2023
Five analyst picks with profit growth in Q2
By Abhiraj Panchal

Five analyst picks with profit growth in Q2

This week, we take a look at five analyst picks with YoY profit and revenue growth in Q2FY24.

1. ACC: 

Axis Direct maintains its ‘Buy’ call on this cement manufacturer with a target price of Rs 2,460. This indicates an upside of 29.7%, with analyst optimism driven by strong Q2 results. In Q2FY24, the company reported a net profit of Rs 387.9 crore, against a loss of 87.3 crore in Q2FY23. Its revenue has grown by 14.5% YoY to Rs 4,644.8 crore. Analysts Uttam K Srimal and Shikha Doshi attribute ACC’s 18% volume growth to an increase in blended cement and improvements in efficiency parameters.

The analysts say, “The recent commercialization of the Ametha integrated unit in the demand-accretive central region will support volume growth moving forward.” They expect a 13% CAGR in volume growth over FY24-FY25 for the company.

Srimal and Doshi are positive about ACC’s various cost optimization drives, which have led to a 17% YoY reduction in overall costs per tonne. Consequently, this has increased the EBITDA margins to 12.4% in Q2FY24 from 0.4% in Q2FY23. They expect the company’s ongoing business initiatives to further bring down operating costs. They say that initiatives such as reducing the clinker factor and logistics costs, increasing sales of premium products, a higher share of green energy, and the recent hike in cement prices will expand the company’s EBITDA margins.

2. Sona BLW Precision Forgings: 

ICICI Securities upgrades its rating on this auto parts and equipment manufacturer to ‘Buy’ from ‘Add’, but lowers its target price to Rs 598 from Rs 630. This implies an upside of 10%. In Q2FY24, the company’s net profit rose by 33.8% YoY to Rs 123.8 crore and revenue increased by 20.3% YoY to Rs 790.8 crore. 

Analysts Basudeb Banerjee and Vishakha Maliwal attribute the revenue growth to the battery electric vehicles (BEV) segment, a focus for Sona BLW. Segment revenue surged by 58% YoY, contributing 27% to the total revenue in Q2. They add that the firm’s profitability has improved on the back of a favourable product mix and normalising raw material prices. 

The analysts expect Sona BLW to maintain its EBITDA margin at 28% in FY24 and FY25. They note that the management aims to keep margins at healthy levels with the help of “the production linked incentive (PLI) scheme, product breakthroughs with better pricing power and enhanced operating leverage”. Banerjee and Maliwal expect the firm’s net profit to grow at a CAGR of 42.1% over FY23-25. 

3. Dixon Technologies (India): 

BOB Capital Markets upgrades its rating on this consumer electronics company to 'Buy' with a target price of Rs 6,000, implying an upside of 22.5%. Analysts Vinod Chari, Arshia Khosla, and Swati Jhunjhunwala are optimistic about the company due to its remarkable revenue growth of 28% YoY, driven by the mobiles segment, which accounts for 50% of the revenue. In Q2FY24, the company reported a net profit of Rs 107.32 crore, an increase of 38.9% YoY.

The analysts note that the company, which operates under various production-linked incentive (PLI) schemes, is in discussions with global brands for production under the IT hardware PLI scheme. They anticipate that new customers, such as Xiaomi onboarded in Q1FY24, Voltas Beko, and Itel in H2FY23, will act as growth catalysts. They also expect Dixon Technologies to start designing its own products, which will contribute to improved margins.

Chari, Khosla, and Jhunjhunwala believe that the company is exploring product categories with high margins, including electric vehicles, defense, drones, medical electronics, and telecom infrastructure, which are expected to enhance profitability.

4. Chalet Hotels: 

Prabhudas Lilladher keeps its ‘Buy’ rating on this hotel chain but lowers its target price to Rs 650 from Rs 656, implying an upside of 17.1%. In Q2FY24, the firm’s net profit surged by 131.6% YoY to Rs 36.4 crore and revenue increased by 26.9% YoY to Rs 314.5 crore. 

Analysts Jinesh Joshi and Stuti Beria credit the company’s revenue and profit growth to a 24.5% YoY increase in revenue per available room (RevPAR) and a 21.2% YoY hike in the average room rate (ARR). 

The analysts expect “H2FY24 to be much better, aided by the ongoing Cricket World Cup and the revival in foreign tourist arrivals”. Joshi and Beria note that the addition of 168 rooms in Hyderabad and 88 in Pune during Q2, along with a significant portion of the company’s leasing portfolio in Bengaluru and Mumbai, set to be handed over from Q3FY24, bodes well for future growth. They expect the hotel’s revenue to grow at a CAGR of 21% over FY23-26, driven by robust RevPAR growth and the operationalisation of its hospitality and commercial assets. 

5. Shriram Finance: 

IDBI Capital maintains a 'Buy' rating on this non-banking financial company with a target price of Rs 2,230, implying an upside of 18.6%. Analyst Bunty Chawla holds an optimistic outlook on the company, citing a rise in net interest margins to 8.9% and strong growth guidance in Assets under Management (AUM). In Q2FY24, the company reported revenue growth of 66% YoY and net profit increase of  67% YoY to Rs 1,786.1 crore.

Chawla foresees robust AUM growth, with management revising its guidance upward to 18-20% from the previous 15% for FY24, thanks to the expansion in the passenger vehicle and MSME segments. The company has also reported a 14% QoQ increase in disbursements to Rs 34,600 crore. Stable costs of funds, improved liquidity utilization, and enhanced product mix are expected to boost yields.

Chawla also notes an improvement in asset quality, as GS3 stands at 5.8% compared to the previous 6.0%, largely due to increased write-offs. He expects credit costs to remain within 1.5-2% for FY24, contributing to better yields. 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
30 Oct 2023
Market closes higher, ICICI Sec downgrades rating on Home First Finance Co to ‘Add’ from ‘Buy’

Trendlyne Analysis

Nifty 50 closed at 19,140.90 (93.7, 0.5%) , BSE Sensex closed at 64,112.65 (329.9, 0.5%) while the broader Nifty 500 closed at 16826.10 (60.7, 0.4%), of the 2,005 stocks traded today, 1,008 were on the uptick, and 941 were down.

Indian indices maintained their gains from the afternoon session and closed in the green, with the Nifty 50 closing at 19,140.9 points. The Indian volatility index, Nifty VIX, rose 5.3% and closed at 11.5 points. Bharat Petroleum Corp closed 3.6% higher after it reported a Q2FY24 net profit of Rs 8,243.5 crore, a turnaround from a net loss of Rs 338.5 crore in Q2FY23.

Nifty Smallcap 100 and Nifty Midcap 100 closed flat, underperforming the benchmark index. Nifty Energy and Nifty Realty closed higher than their Friday levels. According to Trendlyne's sector dashboard, Hardware Technology & Equipment was the top-performing sector of the day as it rose 2.1%.

Major Asian indices recovered from their day lows and closed in the green, except for Japan’s Nikkei 225 closing lower. European indices traded higher, in line with Asian indices. US index futures traded in the green, indicating a positive start to the trading session. Brent crude oil futures traded in the red after rising 1.8% on Friday.

  • Money flow index (MFI) indicates that stocks like Angel One, BSE, Bombay Burmah Trading Corp and CreditAccess Grameen are in the overbought zone.

  • UPL touches a new 52-week low as it reports a net loss of Rs 189 crore in Q2FY24, as against a net profit of Rs 814 in Q2FY23, on account of muted global demand. Its revenue also declines 18.7% to Rs 10,170 crore due to weakness in its crop protection and non-agro segments. It features in a screener of companies with weak momentum.

  • Adani Green Energy rises as its Q2FY24 net profit rises by 149% YoY to Rs 371 crore due to a fall in equipment costs and foreign exchange expenses. Its revenue also increases by 53.7% YoY. The stock shows up in a screener for companies with improving net cash flow for the past two years.

  • ICICI Securities lowers its rating on Home First Finance Co to ‘Add’ from ‘Buy’ and keeps its target price unchanged at Rs 1,030. This implies an upside of 9.7%. The brokerage is positive about the firm’s prospects given the healthy growth of its assets under management, stable asset quality and lower subsidy repayments. However, it cites the company’s expensive valuation for lowering its recommendation.

  • UltraTech Cements rises as its board approves a capex of Rs 13,000 crore to boost capacity by 21.9 mtpa. The expansion will be a mix of brown field and green field projects. The company appears in a screener of stocks nearing their 52-week highs with significant volumes.

  • Reliance Industries anticipates global oil demand to stay strong, driven by transportation fuel consumption, and believes it will settle at 102.7 million barrels per day (bpd) in 2024. The company has stated that global oil demand would average at 101.8 bpd in 2023.

  • Supreme Industries is rising as its Q2FY24 net profit jumps by 196.5% YoY to Rs 243.2 crore, while its EBITDA margin expands by 8.3 percentage points YoY to 15.4%. Its revenue rises by 10.6% YoY. The stock shows up in a screener for companies with boom value per share improving over the past two years.

  • Cello World's Rs 1,900 crore IPO gets bids for 0.4X the available 2.2 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 0.4X the available 1.1 crore shares on offer.

  • Dr. Reddy's Laboratories falls as the US FDA issues 10 Form 483 observations for its manufacturing facility in Bachupally, Hyderabad. The inspections were conducted between October 19 and 27. The company appears in a screener of stocks with declining net cash flow.

  • Ittira Davis, MD & CEO of Ujjivan Small Finance Bank, says the bank's net interest margins (NIMs) have declined during the quarter due to higher cost of funds. Ujivan SFB's NIMs dropped to 8.8% in Q2FY24 from 9.2% in Q1. He believes that NIMs have bottomed out and it will improve to 9% in FY24. He also anticpates an improvement in the asset quality of the bank.

  • KPIT Technologies touches a new 52-week high as its Q2 net profit grows 5.1% QoQ to Rs 140.9 crore on the back of improving realisations. Its revenue rises 9.3% QoQ, led by healthy growth in the UK & Europe segment. The company features in a screener of companies with increasing revenue for the past eight quarters.

  • SBI Cards and Payment Servicesdeclines despite its Q2FY24 net profit rising by 14.7% YoY to Rs 603 crore. Its revenue also rises by 22.2% YoY due to higher fees and commission income. The stock shows up in a screener for companies with weak momentum.

  • Zee Entertainment Enterprises rises as SAT lifts the ban on Punit Goenka from holding a key managerial post. The company appears in a screener of stocks with low debt.

  • According to reports, the International Monetary Fund (IMF) expects global growth to remain at 3% in 2023 before falling to 2.9% in 2024. The IMF also forecasts a slowdown in advanced economies to 1.5% in 2023, driven by policy tightening measures to curb inflation.

  • IDFC First Bank is falling despite its Q2FY24 net profit rising by 35.2% YoY to Rs 751.3 crore, while its net interest income increases by 32% YoY. Its net interest margin expands by 49 bps YoY to 6.3%. The bank shows up in a screener for stocks with consistently high returns over the past five years. 

  • Bharat Petroleum Corp rises as it reports a Q2FY24 net profit of Rs 8,243.5 crore, a turnaround from a net loss of Rs 338.5 crore in Q2FY23. The rise can be attributed to the falling raw material and inventory expenses. However, its revenue drops by 9.1% YoY due to a fall in the downstream petroleum segment.

  • Carborundum Universal declines despite its Q2FY24 net profit rising by 14.8% YoY to Rs 101.8 crore due to a fall in raw material costs. Its revenue rises by 2.7% YoY. The stock shows up in a screener for companies with low debt.

  • AU Small Finance Bank's board approves its merger with Fincare Small Finance Bank, set for February 1, 2024. According to the terms of the merger, Fincare SFB's shareholders will receive 579 shares of AU SFB for every 2,000 shares held in Fincare SFB. The merger allows AU SFB to diversify its portfolio and expand AU SFB's deposit and asset franchise.

  • Larsen & Toubro bags orders worth Rs 2,500-5,000 crore from India and overseas. Domestically, the company wins a project to construct transmission lines in Chhattisgarh. Internationally, it gains contracts for constructing substations in Saudi Arabia, Kuwait and Qatar, along with an order to establish an underground cable system in Malaysia.

  • JSL Overseas, promoter of Jindal Stainless, buys a 0.2% stake in the company in a bulk deal on Friday.

  • Cello World raises Rs 567 crore from anchor investors ahead of its IPO by allotting around 87.5 lakh shares at Rs 648 each. Investors include Goldman Sachs, Nomura, HSBC, Morgan Stanley, CLSA Global, Quant Mutual Fund, HDFC Mutual Fund, Edelweiss Trusteeship, and ICICI Prudential Mutual Fund.

  • Jefferies downgrades its rating on Cipla to 'Hold' and hikes the target price to Rs 1,230. The brokerage says that lower operational expenditure (OPEX) by the company led to the Q2 beat. It adds that Cipla's US revenues have grown by 4% QoQ, exceeding projections. Jefferies expects the company's India business to grow at a 12% CAGR over the next five years but sees limited upside following the current rise.

  • Mahindra & Mahindra Financial Services falls as its Q2FY24 net profit decreases by 47.5% YoY to Rs 235.2 crore. However, its net interest income grows by 9% YoY. The company appears in a screener of stocks with declining net profit and margins.

  • Automobile stocks like Maruti Suzuki India, Tata Motors, Mahindra & Mahindra, Bajaj Auto, Eicher Motors, TVS Motor Co, and Samvardhana Motherson International are falling in trade. The broader sectoral index, Nifty Auto, also trades in the red.

  • Macrotech Developers is rising as it reports a net profit of Rs 201.9 crore in Q2FY24, as against a net loss of Rs 940.3 crore in Q2FY23. However, its revenue declines marginally YoY to Rs 1,749.6 crore. The company's pre-sales increases by 12% YoY to Rs 3,530 crore during the quarter.

  • Reliance Industries rises as its Q2FY24 net profit grows 296.8% YoY to Rs 16,251 crore due to reduced employee benefit and raw material expenses. Its revenue increases by 1.3% YoY, aided by growth in the oil & gas and retail segments. The company appears in a screener of stocks with improving net profit.

Riding High:

Largecap and midcap gainers today include Supreme Industries Ltd. (4,552.30, 8.19%), Vodafone Idea Ltd. (11.65, 6.88%) and Adani Green Energy Ltd. (915.25, 5.09%).

Downers:

Largecap and midcap losers today include Mahindra & Mahindra Financial Services Ltd. (245.50, -11.47%), Petronet LNG Ltd. (201.70, -8.42%) and SBI Cards and Payment Services Ltd. (750.35, -5.07%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included EIH Ltd. (227.90, 7.83%), Intellect Design Arena Ltd. (679.45, 5.48%) and KPIT Technologies Ltd. (1,185.40, 5.04%).

Top high volume losers on BSE were Mahindra & Mahindra Financial Services Ltd. (245.50, -11.47%), Petronet LNG Ltd. (201.70, -8.42%) and V-Mart Retail Ltd. (1,625.30, -6.87%).

SBI Cards and Payment Services Ltd. (750.35, -5.07%) was trading at 9.0 times of weekly average. Piramal Pharma Ltd. (95.45, 3.19%) and Craftsman Automation Ltd. (4,791.55, 2.90%) were trading with volumes 6.4 and 5.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

4 stocks made 52 week highs, while 6 stocks tanked below their 52 week lows.

Stocks touching their year highs included - KPR Mill Ltd. (828.30, 2.44%), Swan Energy Ltd. (390.30, 5.72%) and Welspun India Ltd. (153.20, 5.15%).

Stocks making new 52 weeks lows included - Indraprastha Gas Ltd. (385.55, 0.88%) and Petronet LNG Ltd. (201.70, -8.42%).

21 stocks climbed above their 200 day SMA including Finolex Cables Ltd. (921.30, 5.78%) and Elgi Equipments Ltd. (500.00, 3.92%). 12 stocks slipped below their 200 SMA including IndiaMART InterMESH Ltd. (2,634.40, -4.95%) and Schaeffler India Ltd. (2,887.00, -3.53%).

 
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The Baseline
27 Oct 2023
Chart of the week: India’s Nifty500 outperforms global indices in the past quarter despite recent weakness
By Abdullah Shah

2023 started off on a strong note for global equities, as inflation moderated and investors looked forward to a pause in interest rates globally. Indian indices followed the global trend, and sector indices like the Nifty Auto, Nifty Bank and Nifty PSU Bank hit their all-time highs. 

However, the uptrend in global equities quickly turned sour as inflation proved to be pretty sticky. The recent fighting between Israel and Hamas in the Middle East is also spooking markets, as analysts worry that US, Iran and other countries will get pulled into the conflict. Central banks around the world have continued with their hawkish stance, and have suggested holding interest rates higher for a longer period. The Indian indices started falling in the past month as foreign investors began a sell-off in indian equities. This fall came after indices hit record highs in September. 

The unpredictable global environment has in recent weeks, triggered a global sell-off across indices as people hunt for less risky options like bonds. This has put world indices under pressure.

The Nifty 500 index has hung on to some of its early gains - it’s up by 8% in 2023 overall, as of October 25. However, it has lost 0.8% in the past three months. Despite the marginal fall, and journalists announcing that it’s dark days on Dalal Street, the Nifty 500 has still outperformed most global indices over the past quarter. The index also outperformed the US Tech 100 (Nasdaq 100) and S&P 500 in 2022. However, over the past two months, foreign investors have offloaded equities worth Rs 25,960.9 crore, causing Indian indices to fall.

The US’s US Tech 100 and S&P 500 indices have risen the most by 33.9% and 10% respectively in 2023. However, these indices have fallen by 8.1% and 6.3% over the past quarter. It is important to note that US indices fell significantly in 2022. The tech-heavy Nasdaq 100 fell 32.7% while the S&P 500 lost 18.1%. 

With inflation remaining sticky, US indices are facing worries of a recession, even as the US economy delivered a strong quarterly performance. The banking crisis and the worsening situation in the Middle East have added to its woes. US Tech 100 suffered its worst month of 2023 in September as it fell 5.1% due to fears of the interest rates rising or staying higher for a longer period of time.  

Japan's Nikkie 225 index has the second highest rise of 21.6% in 2023. This rise helped the index to touch its all-time high of 33,772.9 on June 20. However, it has fallen 3.8% in the last three months. This fall can be attributed to the sticky inflation in the country and the Bank of Japan’s refusal to raise interest rates, citing domestic and global uncertainties. 

England’s FTSE 100 is down 1.8% and 2.1% in 2023 and the recent quarter, respectively. The country is facing a persistent rise in inflation and weakening consumer sentiment. Its retail sales have fallen in September after a marginal rise in August. 

China’s Shanghai Composite index has fallen 4.3% over the last year and 5.9% in the past quarter. The country is facing a property crisis as its largest private sector developer, Country Garden, faces a default on payment of a foreign bond. The realtor has international debts aggregating at $11 billion while it has liabilities worth Rs 200 billion. 

The Hang Seng from Hong Kong has fallen the most (both YTD and quarter) among the major global indices. It has fallen by 14.8% in 2023 while it declined by 9.3% over the past quarter. The index is facing a sell-off after foreign investors divest their stakes in the Chinese market.

Other notable indices are the DAX (Germany), Taiwan Weighted (Taiwan) and S&P ASX 200 (Australia). The DAX and Taiwan Weighted rose by 5.3% and 15% respectively in 2023. However, they declined by 7.8% and 4.2% respectively over the last three months. 

 
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The Baseline
27 Oct 2023
Five Interesting Stocks Today

1. Amber Enterprises India:

This consumer electronics company closed 6.5% higher in intraday trade on Wednesday. This uptrend was led by its revenue increasing by 23.5% YoY and EBITDA margin expanding by 154 bps YoY due to lower input costs. This rise comes despite its net loss widening by 130% YoY to Rs 6.9 crore in Q2FY24. It also missed Trendlyne Forecaster’s net loss estimates of Rs 3.2 crore. The firm’s bottom line was impacted by higher finance costs and depreciation expenses, which rose by 49.3% and 42.2% YoY, respectively. The stock shows up in a screener for companies with cash flows from operations improving over the past two years.

Also, the street’s expectation of healthy growth from H2FY24 onwards pushed up the stock’s prices. According to reports, several analysts retained their ratings, while some raised the target price of the consumer electronics manufacturer. For instance, Jefferies India kept its ‘Buy’ rating on the company and raised its target price to Rs 3,990, implying an upside of 37.2% from the closing price on Friday. The brokerage expects the firm’s sales in the electronics and mobility divisions to double over the next two years.

The management’s focus is on increasing revenue contribution from the non-room air conditioners (non-RAC) segments, such as the electronics and mobility segments. Jasbir Singh, the CEO of Amber Enterprises said, “We've guided that the electronics division and the mobility division, which is the railway subsystem division, are likely to double their revenues in the next two years”. He expects this growth to be driven by new client additions, new product launches and rising order books. 

The firm expects its overall margins to improve as commodity costs have started to normalize. It plans to reduce its net debt to Rs 650-680 crore by the end of FY24, from its current levels of Rs 960 crore in Q2FY24.

2. CreditAccess Grameen: 

This financial services stock has outperformed the Nifty Financial Services index by 21.5% in the past month. The stock rose 18.1% in the past month according to Trendlyne’s Technical. The stock is trading at a 52-week high. 

In Q2FY24, the firm's AUM grew by 36% YoY to 22,438 crores. The disbursements in the quarter grew by 13.5% YoY to Rs 4,966 crore. The growth in AUM was led by the new customer addition and higher ticket size. The NIM of the bank is one of the highest among its peers at 13.1%. However, the margins are expected to compress owing to an increased cost of funds and limited scope to raise interest rates. The bottom line was also aided by lower provisioning. The gross NPA remains at 0.8% backed by high-rated customers. 

The bank is also rapidly expanding and investing in newer product lines like loan against property (LAP), two-wheeler loans, and housing loans. This stock shows up in a screener for companies with consistently high return stocks for five years in the Nifty 500.

In its future outlook, CreditAccess Grameen Managing Director, Udaya Kumar Hebbar has indicated that “CreditAccess Grameen will focus on geographical expansion along with building a non-micro finance (MFI) loan book. The AUM growth is expected to be at 24-25% and NIMs at 12.7% for FY24. Most of the growth would be from newly launched non-MFI verticals and geographical expansion”.

According to Axis Securities, healthy NIMs and a strong rural presence will help in maintaining the MFI loan book, while expansion into the retail side will be an added advantage. Also, the lower NPAs will result in lower credit costs. The brokerage has maintained a ‘Buy’ rating on the stock.

3. BSE: 

This stock exchange company hit an all-time high of Rs 1,912.8 on Friday and grew 20.8% in the past week. The rise comes after the company announced a hike in transaction costs for equity derivatives, effective November 1. Under the new transaction fee structure Rs 500 per crore will be charged for transactions with a turnover of less than Rs 3 crore. Whereas Rs 3,750 per crore will be charged for transactions with a turnover between Rs 3-100 crore. Rs 3,500 per crore for transactions with a turnover between Rs 100-750 crore, going up to Rs 2,000 per crore for transactions above Rs 2,000 crore.

BSE’s derivatives market share has also grown to 7.4% by September 2023 from 0% in April 2023. Its average daily trading volume in options, which were non-existent between January-May 2023, has risen above Rs 26 lakh crore in September 2023. The Sensex contract is currently catering to 40% of the NSE’s derivatives volume but with the launch of the Bankex contract, BSE will address 95% of NSE’s derivative volume. The launch of Bankex (Monday expiry) will cater to a larger addressable volume and there is a possibility of further gain in market share. The company’s premium market share is 3.3%, which is also expected to rise further with the launch of new contracts and trading on non-expiry days.

In Q1FY24, the company reported a 10x YoY growth in the net profit to Rs 442.7 crore (beating Trendlyne Forecaster's estimate by 94%) while its revenue grew by 37.2% YoY. The company also features in screener for stocks with increasing profits every quarter for the past three quarters. BSE will tentatively announce its Q2FY24 results on November 10.

ICICI Securities downgraded from 'Buy' to 'Add’ on BSE due to higher current valuation but maintains a positive outlook on the back of stellar growth in Q2FY24 and improved pricing. The brokerage expects the company to witness traction in new products like Bankex and expects large brokerages to add BSE product offerings in H2FY24.

4. Tanla Platforms:

This internet & software services stock rose 4% on October 20 as its net profit grew by 5.3% QoQ to Rs 142.5 crore in Q2FY24. Due to this, the company appears in a screener of stocks with increasing profit for the past four quarters.

The company provides services like application-to-person messaging (A2P), WhatsApp, email and chatbots for broadcasting. In Q2FY24, Tanla Platform’s revenue increased by 10.7% QoQ to Rs 1,008.6 crore. This helped the company to beat Trendlyne’s Forecaster estimates for net profit and revenue by 17.9% and 3.3% respectively. However, its EBITDA margin declined by 40 bps QoQ due to increase in cost of services, employee benefits and finance costs.

Revenue rose on the back of improvement in revenue from the digital platforms and enterprise communications segments and also the acquisition of ValueFirst India. The enterprise communications segment (SMS and WhatsApp broadcasts), which contributes to 90% of total revenue, rose by 8.4% QoQ owing to an improvement in revenue from WhatsApp, UPI, OTP SMS broadcast and a hike in National Long Distance Connection (NLD) rates. 

Uday Kumar Reddy, Founder and CEO of the company commented, “We expect to complete the ValueFirst overseas acquisition in Q3 subject to regulatory approvals in local geographies which would add around Rs 60-70 crore to the revenue on a quarterly basis.”

Post results, HDFC Securities maintained its ‘Buy’ rating on the stock with a target price of Rs 1,440 per share. This implies a potential upside of 47%. The brokerage expects its volumes to improve, driven by growth in transactional SMS traffic, NLD price hikes and market share gains with ValueFirst acquisition. It expects the company’s revenue to grow at a CAGR of 16.1% over FY23-26.

5. Jubilant Foodworks

This restaurant major has fallen over 4.5% in the past two consecutive sessions, from Thursday. This comes after it reported a fall in its Q2FY24 net profit, down 26.1% YoY to Rs 97.2 crore. This was due to factors including higher finance costs and employee benefit expenses, as well as muted demand and heightened competition. However, its revenue rose by 4.9% YoY to Rs 1,368.6 crore, in line with Trendlyne’s Forecaster estimates, led by Domino’s delivery channel sales. As a result of the revenue rise, it features in a screener of companies with increasing revenue every quarter for the past two quarters.

During the quarter, Domino’s Pizza’s like-for-like or LFL sales growth (which is the YoY growth in sales for non-split restaurants opened before the previous financial year) contracted by 1.3% YoY, therefore, remaining in the negative territory for three consecutive quarters. However, the LFL ADS (average daily sales per store) for matured stores grew 1.4% QoQ. Domino’s Pizza's ‘Cheesy Rewards’ continue to gain traction, with its membership base reaching around 2 crore (up 16% QoQ). Initiatives like 20-minute delivery and discounts on combo offers by the company are expected to aid in improving its sales. 

Further, the company continued to expand its store network in Q2FY24, and opened 60 new outlets across various brands, taking the total to 1,949 stores in India. Sameer Khetarpal, the CEO and MD said, “We are on track to meet our guidance of opening 200- 225 Domino’s stores and 30-35 Popeyes stores for FY24”.

Post results, Prabhudas Lilladher maintains its ‘Hold’ rating on the restaurant major, with a target price of Rs 505. The brokerage expects an increase in demand led by the festival season and World Cup. It also has a positive outlook on the company considering its focus on long-term growth. 

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
27 Oct 2023
Market closes higher, Cipla's Q2FY24 net profit jumps 44.9% YoY

Trendlyne Analysis

Nifty 50closed at 19,047.25 (190, 1.0%), BSE Sensexclosed at 63,782.80 (634.7, 1.0%) while the broader Nifty 500closed at 16,765.45 (210, 1.3%). Market breadth is surging up. Of the 1,947 stocks traded today, 1,616 were on the uptrend, and 293 went down.

Indian indices extended the gains from the afternoon session and closed in the green, with the Nifty 50closing at 19,047. The volatility index, Nifty VIX, dropped by 7% and closed at 10.9 points. Cipla’s Q2FY24 net profit jumps 44.9% YoY to Rs 1,155 crore due to a fall in inventory expenses, while its revenue increased by 14.6% YoY.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. All major sectoral indices closed lower than Monday’s closing levels. According to Trendlyne’s sector dashboard, hardware technology & equipment emerged as the top-performing sector of the day, with a rise of over 3.7%.

Most European indices trade in the green except for France’s CAC 40 trading lower. US indices futures trade higher, indicating a positive start. Intel shares rose 8% pre-market on the back of strong profit guidance for Q4 from management. The guidance included a 33% increase in net profit from previous estimates due to demand uptick in personal computers. Crude prices rose by 1% as the US launched airstrikes on Syria.

  • Relative strength index (RSI) indicates that stocks like BSE, Angel One, Prestige Estates Projects and CreditAccess Grameen are in the overbought zone.

  • Indian Hotels Co is falling despite its Q2FY24 net profit rising 37.3% YoY to Rs 166.9 crore, while its EBITDA margin expands by 180 bps YoY to 27.2%. Its revenue increases by 16.3% YoY driven by higher room rates and healthy occupancy rates.

  • Axis Direct keeps its ‘Buy’ rating on Welspun India and raises the target price to Rs 160 from Rs 125, implying an upside of 11.8%. The brokerage is positive about the firm’s prospects on the back of improving demand, moderating commodity costs and inventory pressures subsiding. It expects the company’s revenue to grow at a CAGR of 17.4% over FY23-25.

  • Cipla rises as its Q2FY24 net profit jumps 44.9% YoY to Rs 1,155.4 crore due to a fall in inventory expenses, while its revenue increased by 14.6% YoY. The stock shows up in a screener for companies that are effectively using their capital to generate profit.

  • The Reserve Bank of India (RBI) raises the threshold limit for non-callable deposits from Rs 15 lakh to Rs 1 crore. This means that any domestic term deposits accepted from individuals for Rs 1 crore or less will be eligible for early withdrawal.

  • Happiest Minds Technologies sees four analyst target price downgrades and two recommendation downgrades in the past three months. Bata India, Tanla Platforms, Tech Mahindra and ICICI Bank see two analyst target price downgrades over the same time period.

  • Maruti Suzuki India is rising as its Q2FY24 net profit surges by 78.2% YoY to Rs 3,764.3 crore driven by lower commodity costs and cost reduction initiatives. Revenue grows by 23.8% YoY led by higher sales volumes and a healthy product mix. The company shows up in a screener for stocks in the PE Buy zone a high durability score and rising momentum score.

  • Blue Jet Healthcare's Rs 840.3 crore IPO gets bids for 7.9X the available 1.7 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 2.2X the available 85 lakh shares on offer.

  • CLSA maintains its 'Outperform' rating on Shriram Finance with a target price of Rs 2,050. The brokerage highlights that the company's loan growth momentum has been healthy during the quarter. It anticipates the firm to deliver healthy AUM growth in H2FY24.

  • ZF Commercial Vehicle Control Systems is rising as its net profit grows by 54% YoY to Rs 105.7 crore in Q2FY24. Revenue expands by 25.1% YoY to Rs 991.7 crore. It appears in a screener of stocks with improving return on capital employed (RoCE) over the past two years.

  • Power stocks like Adani Power, Adani Green Energy, CG Power and Industrial Solutions, Adani Energy Solutions and NHPC are rising in trade. All the constituents of the broader sectoral index, BSE Power, are trading in the green.

  • Karnataka Bankis rising after its board approves the allotment of 3.3 crore shares, on a preferential basis, amounting to Rs 800 crore. The company will allot the shares to HDFC Life Insurance Co, Bajaj Allianz General Insurance, and Quant Mutual Fund, among others.

  • Reports suggest that, 10 lakh shares (0.01% equity), of HDFC Bank, amounting to Rs 147.1 crore, change hands in a large trade.

  • Foreign institutional investors have withdrawn Rs 1,813.7 crore from the equity market in the past week, according to Trendlyne's FII dashboard. Meanwhile, there has been a significant outflow of Rs 24,117.8 crore from index options by foreign investors.

  • ACC reports a net profit of Rs 387.8 crore in Q2FY24 compared to a loss of Rs 87.3 crore in Q2FY23. Revenue grows by 11.2% YoY on the back of improvement in clinker and cement sales. It features in a screener of stocks with declining net cash flow.

  • Axis Bank appoints Munish Sharda as Whole-time Director, designated as Executive Director of the Bank, effective from November 1, 2023.

  • JPMorgan upgrades its rating on India equities to "Overweight" from "Neutral." According to the broker, India has the best emerging market (EM) nominal GDP compounding, driven by demographic trends and infrastructure investment needs. Additionally, India offers competitive risk-adjusted returns compared to developed market (DM) equities. SunPharmaceuticals Industries, Bank of Baroda, and Hindustan Unilever have been added to its EM model portfolio.

  • Colgate-Palmolive (India) is falling despite its Q2FY24 net profit rising by 22.3% YoY to Rs 340.1 crore led by cost efficiencies and lower raw material costs. Its revenue grows 6% YoY to Rs 1,471.1 crore driven by price hikes. However, the firm’s sales volume remains flat in Q2. The stock shows up in a screener for companies with zero promoter pledges.

  • Suzlon Energy rises more than 3% as it bags an order from Juniper Green Energy to set up a wind power project with a capacity of 50.4 MW. The order is to install 16 wind turbines with generators with a capacity of 3.1 MW and is expected to be completed in 2025.

  • Westlife Foodworld is falling as its Q2FY24 net profit falls 31.6% YoY to Rs 21.9 crore despite revenue rising 7.4% YoY. Profit falls due to increase in occupancy and operating expenses. The company features on a screener for stocks with low debt.

  • Sanjay Sethi, CEO & MD of Chalet Hotels, notes that in Q2, the company witnessed a significant increase in margins and revenue, with revenue per available room (RevPAR) rising by 24% YoY. He anticipates that their Q3 results will outperform those of the previous quarter, and he expects annual recurring revenue (ARR) in larger cities to increase by double digits.

  • Media stocks like Zee Entertainment Enterprises, Saregama India, Dish TV India, TV18 Broadcast and PVR INOX are rising in trade. The broader sectoral index, Nifty Media, is also trading in the green.

  • PSU bank stocks like Bank of India, Canara Bank, Union Bank of Indiaand Punjab National Bankrise more than 3% in trade. All constituents of the broader Nifty PSU Bankindex are also trading in the green.

  • Vodafone Idearises despite its net loss expanding by 15% YoY to Rs 8,737.9 crore in Q2FY24. Revenue increases by 1% YoY aided by an improvement in average revenue per unit (ARPU) and growth in 4G subscriber base. It shows up in a screener of stocks with high interest payments compared to earnings.

  • Dixon Technologies is rising as its net profit surges by 38.9% YoY to Rs 107.3 crore in Q2FY24. Revenue jumps by 27.8% YoY while its EBITDA margin expands by 27 bps YoY to 4%. It features in a screener of stocks with improving cash flow from operations in the last two years.

Riding High:

Largecap and midcap gainers today include Adani Power Ltd. (354.15, 8.19%), Shriram Finance Ltd. (1,935.20, 7.65%) and Bank of India (96.80, 7.26%).

Downers:

Largecap and midcap losers today include Indraprastha Gas Ltd. (382.20, -1.20%), ACC Ltd. (1,878.00, -1.15%) and Crompton Greaves Consumer Electricals Ltd. (284.80, -0.99%).

Volume Rockets

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

Top high volume gainers on BSE included Jubilant Pharmova Ltd. (397.25, 16.94%), Swan Energy Ltd. (369.20, 12.20%) and Shriram Finance Ltd. (1,935.20, 7.65%).

Top high volume losers on BSE were Sterlite Technologies Ltd. (135.90, -9.25%), Westlife Foodworld Ltd. (820.25, -7.09%) and Carborundum Universal Ltd. (1,085.95, -1.99%).

Blue Dart Express Ltd. (6,376.40, -1.14%) was trading at 5.8 times of weekly average. Torrent Power Ltd. (719.00, -0.79%) and Jubilant Ingrevia Ltd. (434.40, 1.34%) were trading with volumes 4.7 and 4.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks made 52 week highs, while 5 stocks hit their 52 week lows.

Stocks touching their year highs included - Canara Bank (380.80, 5.97%), Maruti Suzuki India Ltd. (10,560.70, 1.31%) and Persistent Systems Ltd. (6,083.75, 3.70%).

Stocks making new 52 weeks lows included - Atul Ltd. (6,249.10, 0.15%) and Indraprastha Gas Ltd. (382.20, -1.20%).

33 stocks climbed above their 200 day SMA including Jubilant Pharmova Ltd. (397.25, 16.94%) and Kajaria Ceramics Ltd. (1,290.00, 5.70%). 9 stocks slipped below their 200 SMA including Sapphire Foods India Ltd. (1,291.40, -4.26%) and Carborundum Universal Ltd. (1,085.95, -1.99%).