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The Baseline
13 Oct 2023
Five Interesting Stocks Today

1. Titan Company

This gems and jewellery major has seen a 2.1% increase in its share price over the past week, trading near its 52-week high of Rs 3,352 with significant volumes. The rise is driven by its recent Q2FY24 business update, where it reported a 20% YoY increase in revenue. As a result, Titan appears in a screener of companies with prices above short, medium and long-term moving averages.

The jewellery segment (which contributes 85% of the total revenue) reported a 19% YoY growth in revenue. Titan says this uptick is from new collection launches, strong gold sales during the harvest season, and a spike in high-value studded purchases during the quarter. According to Trendlyne’s Forecaster, Titan’s revenue is expected to grow by 15.2% YoY in Q2FY24. 

The company also expanded its retail presence by opening 81 new stores this quarter, taking its total store count to 2,859. Currently holding a 7% market share in the Indian jewellery market, Titan is focused on expanding its retail footprint. 

With the festival and wedding seasons ahead, as well as easing gold prices, analysts predict a surge in Titan's Q3 sales. According to Motilal Oswal, earnings growth visibility for the company remains strong. The brokerage has a ‘Buy’ rating, with a target price of Rs 3,570. 

2. Prestige Estates Projects: 

This realty company hit its all-time high of Rs 796.4 on Tuesday. The stock rose by 6.7% over the past week. The price rise follows the company’s announcement of record sales of Rs 11,007.3 crore (up by 69% YoY) during H1FY24, aided by a 30% YoY increase in volume to 10.7 million square feet and a 13% YoY rise in collections to Rs 5,380.6 crore. 

In Q2FY24 alone, Prestige Estates Projects’ sales rose by 102% YoY to Rs 7,092.6 crore, and collections increased by 1% YoY to Rs 2,639.8 crore. Speaking about future prospects, Chairman and Managing Director Irfan Razack said, “With a promising pipeline of projects, we are poised for growth for the rest of the year.” In FY24, the company expects to achieve annual presales of Rs 18,000 crore, led by high-value launches in Mumbai. It will also launch residential/commercial units worth Rs 27,500 crore and spend Rs 4,000 crore annually on land/stake buyout.

In Q1FY24, Prestige Estates Projects’ profit increased by 30.3% YoY to Rs 266.9 crore, beating Trendlyne Forecaster’s estimate by 115%. It also appears in a screener for stocks with improving book value per share for the past two years.

HDFC Securities maintains a ‘Buy’ call on the firm on the back of its robust supply pipeline, a positive outlook due to decreasing recession probabilities and sustained housing demand. According to Trendlyne Forecaster, 16 analysts have a consensus ‘Buy’ recommendation, with 12 of them indicating a ‘Strong Buy’. 

3. PCBL:

This carbon black manufacturer has risen 10.4% over the past week till Friday. This uptrend comes after the firm bagged two patents from the Indian Patent Office on Wednesday, one for specialty-grade and another for surface-modified carbon black. The first patent is for an innovative process of modifying specialty-grade carbon blacks for use in inks and coatings. The second patent focuses on a composition developed by PCBL to improve fuel efficiency and tyre life.

The management has guided its carbon black sales volume to grow by 10-12% YoY in FY24, driven by rising demand for tires. Rising auto sales, the easing of supply chain issues, and an improvement in the tyre replacement market is driving growth. The company estimates tyre demand to grow by 8-9% YoY in FY24. According to Trendlyne’s Forecaster, the firm’s annual net profit is expected to climb by 30.3% YoY in FY24. The company also shows up in a screener of stocks with good valuation, high RoE, and strong momentum scores.  

Although the firm did not see a slowdown in global demand in Q1FY24, it remains cautious about the export market. SBI Securities believes that PCBL is well-placed to benefit from American and European companies diversifying their supply chain away from Russia.

4. Zomato: 

This food delivery services provider touched its 52-week high of Rs 113.2 per share on Thursday after brokerages increased its target price. Kotak Institutional Equities has revised its target price to Rs 125 from Rs 110, citing growing profitability from higher order intensity, improved demand trends in non-metro cities, and better volumes.

However, SoftBank Vision Growth Fund sold a 1.2% stake in the company for Rs 947 crore on August 30, while Tiger Global divested its remaining stake for Rs 1,124 crore on August 28. But the company still appears in a screener of stocks with high FII holdings.

Zomato turned a profit for the first time in Q1FY24 on the back of a 64.2% YoY revenue growth. Although it posted a pre-tax loss, a deferred tax credit of Rs 17 crore resulted in a net profit of Rs 2 crore. For Q2FY24, Forecaster estimates its revenue and net profit to improve by 8.4% and 990% QoQ respectively. In the Q1FY24 earnings call, Chief Financial Officer, Akshant Goyal said, “We expect our business to remain profitable and continue to deliver over 40% YoY top-line growth for at least the next couple of years.” 

ICICI Securities maintains its ‘Buy’ rating on the stock with an upgraded target price of Rs 160 per share. This indicates a potential upside of 43.6%. The brokerage expects its profitability to improve over the next four quarters on the back of increased revenue from advertising, Zomato Gold and the introduction of platform fees. It also projects the company’s revenue to grow at a CAGR of 39.9% over FY22-25.

5. NCC: 

This construction & engineering company’s stock price rose 3.6% on October 3 after winning three orders amounting to Rs 4,200 crore. It includes a major transport order from the Mumbai Municipal Corporation. Additionally, Larsen & Toubro and NCC are competing for the Hyderabad Airport Metro Rail project, having submitted bids for the Rs 5,688 crore tender. According to Trendlyne’s Technicals, the stock has climbed 3.3% in the past week, earning its spot in a screener for affordable stocks with good momentum and RoE.

The company’s Q1FY24 net profit increased by 33.9% YoY to Rs 653.1 crore. Order inflows have also improved by 83% YoY, taking the total order book to an all-time high of Rs 54,110 crore. The management foresees a 20% YoY revenue growth for FY24, driven by strong execution. Also, EBITDA margin is expected to expand by 20 bps in FY24, aided by lower input costs. 

The arbitration with Sembcorp over the construction of a thermal power plant in Telangana has concluded, and NCC foresees a payout of Rs 606.2 crore in Q3FY24. The company’s gross standalone debt rose by 33.7% QoQ in Q1FY24, aided by higher working capital requirements for faster executions.

Geojit has raised its FY24 and FY25 EPS estimates by 5% and 10%, respectively, due to robust order execution, a record-high order book, and improved margins. The broker maintains a ‘Buy’ rating on the stock.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
13 Oct 2023
Market closes lower, HDFC Life Insurance Co's Q2FY24 net profit rises 15.5% YoY

Trendlyne Analysis

Nifty 50 closed at 19,751.05 (-43.0, -0.2%) , BSE Sensex closed at 66,282.74 (-125.7, -0.2%) while the broader Nifty 500 closed at 17,390.35 (-29.4, -0.2%), of the 1,974 stocks traded today, 905 were on the uptrend, and 1015 went down.

Indian indices recovered from their day lows but still closed lower, with the Nifty 50 closing at 19,751.1 points. The Indian volatility index, Nifty VIX, closed flat at 10.6 points. One97 Communications (Paytm) fell 2.6% as RBI imposed a penalty of Rs 5.4 crore on its associate Paytm Payments Bank for non-compliance with know your customer (KYC) norms.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, in line with the benchmark index. Nifty Realty and Nifty FMCG closed higher than their Thursday close. According to Trendlyne's sector dashboard, Telecommunications Equipment was the top-performing sector of the day as it rose 9.9%.

Major European indices traded lower as investors assessed Inflation reports from Spain and France. French CPI rose 4.9% YoY in September, while the Spanish CPI climbed 3.5% YoY. Major Asian indices closed in the red, except for India’s BSE Sensex, which closed flat. Brent crude oil futures traded in the green after rising 0.9% on Thursday.

  • Relative strength index (RSI) indicates that stocks like Nippon Life India Asset Management, Kaynes Technology India, Solar Industries India and Safari Industries (India) are in the overbought zone.

  • ITI and MMTC are trading at Rs 271.1 and Rs 75.3 per share, which are 47.2% and 39.5% higher than their respective week-lows.

  • Ashok Leyland bags an order from the Tamil Nadu Government to supply 1,666 passenger bus chassis. The stock shows up in a screener for companies with declining promoter pledges.

  • HDFC Life Insurance Company rises as its Q2FY24 net profit increases by 15.5% YoY to Rs 376.8 crore. Its revenue remains unchanged at Rs 22,974.3 crore, but the value of new business grows by 4% YoY. The company appears in a screener of stocks with increasing quarterly profits.

  • P. Radhakrishnan, the Whole-time Director & CEO of Kesoram Industries, says the company plans to produce 8 metric tonnes of cement in FY24. They expect the EBITDA per tonne to exceed 700 in H2FY24. He adds that the company has increased cement prices by Rs 30 per bag. Radhakrishnan anticipates that their Rayon business will break even by Q4 and that high-cost debt will be refinanced by then.

  • Foreign institutional investors make the highest investment worth Rs 4,808.8 crore in stock futures over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest outflow of Rs 65,033.6 crore from foreign investors. Mutual Funds invest Rs 3,110 crore in the equity market over the same period.

  • PSU banks like Indian Bank, Indian Overseas Bank, Bank of Baroda, State Bank of India and Punjab & Sind Bank are falling in trade. Barring Bank of Maharashtra, all the other constituents of the broader sectoral index, Nifty PSU Bank, are also trading in the red.

  • One97 Communications (Paytm) falls as RBI imposes a penalty of Rs 5.4 crore on its associate Paytm Payments Bank for non-compliance with know your customer (KYC) norms. The company appears in a screener of stocks with falling book value per share.

  • According to data from the Directorate General of Civil Aviation (DGCA), domestic air traffic in India increased by 18.3% YoY in September. Domestic airlines carried around 1.2 crore passengers last month. IndiGogained 10 bps market share in September to 63.4%. Vistara had a 10% market share in September, while Air India's market share stayed at 9.8%.

  • Indian Oil Corpis rising as it invests Rs 1,660.2 crore in its joint venture (JV), IndianOil NTPC Green Energy. The JV is a 50-50 partnership between IOCL and NTPC.

  • Landmark Cars receives a letter of intent (LoI) from MG Motor India to open a dealership in Goa. The dealer will be established by Landmark's subsidiary, Aeromark Cars, and will be operational by Q3FY24.

  • Motilal Oswal keeps its ‘Buy’ rating on Tata Consultancy Services and raises the target price to Rs 4,060 from Rs 3,790. This implies an upside of 13.9%. Although the brokerage expects the firm to see near-term weakness, it remains optimistic about the company’s long-term prospects given its order book, long-duration projects and healthy margins.

  • India's IIP growth rate increases to a 14-month high of 10.3% in August, up from 6% in July. The expansion was aided by increased output in the mining, manufacturing, and electricity sectors. Mining output increased by 12.3%, while manufacturing and electrical output nearly doubled.

  • IRB Infrastructure Developers is rising as it enters definitive agreements with affiliates of GIC and Samakhiyali Tollway. These agreements aim to implement the Samakhiyali Santalpur BOT Project worth Rs 2,092 crore. IRB Infrastructure Trust will buy a 99.9% stake in Samayakhali Tollway for Rs 116.2 crore.

  • Anand Rathi Wealth falls despite its Q2FY24 net profit rising by 33.9% YoY to Rs 57.5 crore. Its revenue increases by 36.9% YoY, aided by growth in the mutual fund & distribution segment. The company appears in a screener of stocks nearing their 52-week highs with significant volumes.

  • Ircon International and Rites rise sharply as the Department of Public Enterprise grants the 'Navratna' status to both companies.

  • SJVN rises as it wins a Letter of Award (LOA) in a competitive bidding conducted by Rajasthan Urja Vikas Nigam Limited (RUVNL) for the development of a 100MW solar power project on a build, own, and operate (BOO) basis amounting to Rs 600 crore. It appears in a screener for Nifty 500 stocks with consistently high returns over five years.

  • India’s CPI inflation eases to 5% in September compared to 6.8% in August, driven by a moderation in food and vegetable prices. Food and beverage inflation declined to 6.3% from 9.2% in August.

  • Angel One hits its all-time high of Rs 2,249.2 per share as its net profit grows by 43.9% YoY to Rs 305.3 crore in Q2FY24. Revenue improves by 40.6% YoY on the back of higher active clients, average daily turnover and number of orders. It appears in a screener of Trendlyne's high-return technically strong value stocks.

  • Porinju Veliyath sells a 1.3% stake in Shalimar Paints for approx Rs 18.8 crore in a bulk deal on Thursday.

  • Porinju Veliyath adds Singer India to his portfolio in Q2FY24. He buys a 1% stake in the company.

  • HDFC Bank declines as 46.7 lakh shares (0.1% equity), amounting to Rs 719.6 crore, reportedly change hands in a block deal.

  • Dolly Khanna adds KCP Sugar & Industries Corp and Prakash Industries to her portfolio in Q2FY24. She buys 1.3% and 1% stakes in the companies respectively.

  • HCL Technologies is rising as its Q2FY24 net profit rises 8.4% QoQ to Rs 3,832 crore, while its EBIT margin increases by 152 bps QoQ. Its revenue grows 1.4% QoQ led by growth in the IT & business services and engineering and R&D services segments. The company shows up in a screener for stocks with strong momentum.

  • Infosys’ Q2FY24 net profit rises 4.5% QoQ to Rs 6,212 crore as its EBIT margin increases by 40 bps QoQ. Its revenue grows by 2.8% QoQ, driven by growth in the retail, manufacturing and life sciences segments. The stock shows up in a screener for companies with no debt.

Riding High:

Largecap and midcap gainers today include Tata Motors Ltd. (667.10, 4.73%), Tata Motors Limited (DVR) (441.85, 3.81%) and HDFC Asset Management Company Ltd. (2,855.50, 3.63%).

Downers:

Largecap and midcap losers today include Bandhan Bank Ltd. (240.70, -4.10%), MphasiS Ltd. (2,376.20, -3.24%) and One97 Communications Ltd. (933.10, -2.55%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Ircon International Ltd. (149.65, 10.12%), Gujarat State Fertilizer & Chemicals Ltd. (186.85, 6.68%) and MMTC Ltd. (74.60, 5.74%).

Top high volume losers on BSE were Angel One Ltd. (2,069.60, -1.79%), Honeywell Automation India Ltd. (38,051.15, -0.86%) and Mas Financial Services Ltd. (917.10, -0.11%).

Sundram Fasteners Ltd. (1,275.25, 0.60%) was trading at 11.6 times of weekly average. Gujarat Alkalies & Chemicals Ltd. (766.25, 5.09%) and Rites Ltd. (498.45, 5.30%) were trading with volumes 10.2 and 9.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

29 stocks made 52 week highs, while 1 stock tanked below their 52 week lows.

Stocks touching their year highs included - Balkrishna Industries Ltd. (2,585.25, -0.39%), Bosch Ltd. (20,541.80, 0.42%) and Coal India Ltd. (307.95, 0.24%).

Stock making new 52 weeks lows included - Rajesh Exports Ltd. (445.60, -2.22%).

4 stocks climbed above their 200 day SMA including Petronet LNG Ltd. (231.05, 1.18%) and Hindustan Zinc Ltd. (318.60, 0.28%). 6 stocks slipped below their 200 SMA including Elgi Equipments Ltd. (479.00, -2.18%) and Sterlite Technologies Ltd. (159.55, -1.57%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
12 Oct 2023
Market closes flat, HDFC Asset Management's net profit rises 19.9% YoY to Rs 436.5 crore

Trendlyne Analysis

Nifty 50closed at 19,794.00 (-17.4, -0.1%), BSE Sensexclosed at 66,408.39 (-64.7, -0.1%) while the broader Nifty 500closed at 17,419.70 (12.4, 0.1%). Market breadth is in the green. Of the 1,980 stocks traded today, 1,139 were in the positive territory and 802 were negative.

Indian indices pared the gains from the afternoon session and closed flat, with the Nifty 50closing at 19,794. The volatility index, Nifty VIX, dropped by 3.4% and closed at 10.6 points. HDFC Asset Management’s Q2FY24 net profit increased by 19.9% YoY to Rs 436.5 crore beating the forecaster estimates by 2.7% and its revenue grew by 18.1% YoY to Rs 643.1 crore.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, with the benchmark index closing flat. Nifty Media and Nifty Energy closed higher than Wednesday’s closing levels. According to Trendlyne’s sector dashboard, media emerged as the top-performing sector of the day, with a rise of over 3.2%.

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. The data released by the World Bank indicated that the UK’s GDP in August increased by 0.5% YoY against the estimates of a 0.4% growth.

  • Maruti Suzuki India sees a long buildup in its October 26 future series as its open interest rises 14.6% with a put-call ratio of 0.6.

  • Linde India surges over 14% in trade today. The company ranks high on Trendlyne’s Checklist scoring 78.3%. It features in a screenerof companies with prices above short, medium, and long-term moving averages.

  • Telecommunications equipment, coal and realty sectors rise by more than 6.9% over the past week

  • PCBL, Zensar Technologies and L&T Technology Services rise 15.4%, 5.7% and 3.9% respectively over the past week, ahead of their Q2FY24 results on Tuesday.

  • Grasim Industries rises to an all-time high of Rs 2,022 as its board considers fund-raising on October 16. They plan to raise funds through rights issues, qualified institutional placements or preferential issues. The company appears in a screener of stocks with improving book value per share.

  • Hero Motocorp receives a stay order from the Delhi High Court in a cheating case involving the company's MD and CEO, Pawan Munjal. The stay order will remain in force till the next hearing, which will be held on December 6.

  • HDFC Asset Management Co is rising as its Q2FY24 revenue grows by 18.1% YoY to Rs 643.1 crore. Its net profit also increases by 19.9% YoY to Rs 436.5 crore due to reduced depreciation and commission expenses. The stock shows up in the screener for companies with strong momentum.

  • Zomato touches a 20-month high as brokerages raise their target prices in anticipation of high volumes during the holiday season and the ICC Men's Cricket World Cup 2023. Kotak Institutional Equities and ICICI Securities retain their constructive view on Zomato, revising their target prices, implying a potential upside of 14% and 50%, respectively.

  • Sterlite Technologies is rising as it collaborates with Hygenco to supply green hydrogen to its manufacturing plants. According to the agreement, Hygenco will build, own and operate a green hydrogen facility, which will be commissioned in 15 to 18 months and will operate for the next 20 years.

  • Oil & gas stocks like GAIL (India), Indraprastha Gas, Bharat Petroleum Corp, Hindustan Petroleum Corp and Petronet LNG are rising in trade. Barring Adani Total Gas, all the other constituents of the broader sectoral index, BSE Oil & Gas, are trading in the green.

  • Delta Corpis falling as its Q2FY24 revenue marginally grows by 0.2% YoY to Rs 270.6 crore. The growth in the casino gaming division has been offset by a drop in the online skill gaming division. However, its net profit increases by 1.7% YoY to Rs 69.4 crore due to a decline in raw material costs. The stock shows up in the screenerfor companies with declining net cash flow.

  • Retail sales for the automotive industry rise around 9% YoY to 1.1 crore units in H1FY24, as per data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are up 7% YoY, while cars increase by 6.2% YoY.

  • BoB Capital Markets maintains its ‘Hold’ rating on Siemens Indiawith a target price of Rs 3,900. This implies an upside of 8.9%. The brokerage points out that the company expects rising domestic public capex will create a healthy capex environment for private companies in India in the medium term. The management is optimistic that this will lead to a surge in orders from private companies in the medium-to-long term.

  • Sula Vineyards is rising as its revenue from sales grows by 14% YoY to Rs 116.2 crore in Q2FY24. Revenue from the wine tourism segment also improves by 26% YoY to Rs 12.1 crore. It features in a screener of stocks with rising return on capital employed (RoCE) over the past two years.

  • Sunil Singhania buys a 0.1% stake in Rupa & Co in Q2FY24. He now holds a 4.2% stake in the company.

  • G Shivakumar, the CFO of Great Eastern Shipping Co, says that shipments have remained unaffected by geopolitical tensions. He highlights that Israel isn't a significant trade route for the company and adds that dry bulk costs for larger vessels have risen to $25,000.

  • Ashish Kacholia sells a 0.2% stake in Safari Industries in Q2FY24. He now holds a 2.1% stake in the company.

  • Glenmark Pharmaceuticals rises as its wholly owned subsidiary, Ichnos Sciences, enters into a licensing agreement with Astria Therapeutics for the development of OX40 Antagonist Monoclonal Antibody Portfolio. These antibodies are used to treat inflammatory and immune diseases. The company appears in a screener of Nifty 500 stocks with consistently high returns over five years.

  • Media stocks like Network18 Media & Investments, TV18 Broadcast, Hathway Cable & Datacom, PVR Inox and Sun TV Network are rising in trade. The broader sectoral index, Nifty Media, is also trading in the green.

  • Morgan Stanley notes that steel companies have performed well in recent months. However, they remain cautious due to a less favourable global macro environment and unattractive valuations. The brokerage expects no material expansion in spreads over the next few months. It maintains an 'Equal-weight' rating on SAIL and Tata Steel but 'Underperform' on JSW Steeland JSPL.

  • Aster DM Healthcare rises amid reports of the potential sale of its India business for an estimated valuation of $1.9 billion. Private equity firms like BPEA EQT, Ontario Teachers' Pension Plan Board, Blackstone Inc and KKR & Co have shown interest in the acquisition. The company appears in a screener of stocks nearing their 52-week highs with significant volumes.

  • Plaza Wires’ shares debut on the bourses at a 40.7% premium to the issue price of Rs 54. The Rs 71.3 crore IPO has received bids for 161 times the total shares on offer.

  • EMSrises to its all-time highof Rs 334.4 per share as it bags an order worth Rs 270.8 crore to build, commission and maintain a sewerage system in Jaipur.

  • IndusInd Bankrises as the RBI approves SBI Mutual Fund to acquire a 10% stake in the bank. The acquisition will be completed in one year. The company appears in a screenerof stocks with improving RoE.

  • Tata Consultancy Services falls despite its net profit growing by 2.4% QoQ to Rs 11,342 crore in Q2FY24. Revenue remains flat at Rs 59,692 crore on the back of the communication, media & technology, and life sciences & healthcare segments. The company has also announced to buy back 4.1 crore shares worth approximately Rs 17,000 crore.

  • Nifty 50was trading at 19,829.85 (18.5, 0.1%), BSE Sensexwas trading at 66,525.54 (52.5, 0.1%) while the broader Nifty 500was trading at 17,447.65 (40.3, 0.2%)

  • Market breadth is surging up. Of the 1,752 stocks traded today, 1,390 were in the positive territory and 305 were negative.

Riding High:

Largecap and midcap gainers today include NMDC Ltd. (159.00, 5.79%), GAIL (India) Ltd. (129.35, 4.69%) and Indraprastha Gas Ltd. (478.20, 3.87%).

Downers:

Largecap and midcap losers today include Tech Mahindra Ltd. (1,198.75, -2.67%), Delhivery Ltd. (428.85, -2.33%) and Gujarat Fluorochemicals Ltd. (2,820.75, -2.05%).

Volume Rockets

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

Top high volume gainers on BSE included MMTC Ltd. (70.55, 19.88%), Linde India Ltd. (6,654.10, 13.80%) and Network18 Media & Investments Ltd. (80.55, 11.57%).

Top high volume losers on BSE were Sterling and Wilson Renewable Energy Ltd. (304.85, -2.85%), Apollo Hospitals Enterprise Ltd. (4,993.85, -1.94%) and Rajesh Exports Ltd. (455.70, -1.80%).

Eureka Forbes Ltd. (502.40, 2.03%) was trading at 37.2 times of weekly average. Aster DM Healthcare Ltd. (339.20, 4.97%) and Computer Age Management Services Ltd. (2,562.90, 6.12%) were trading with volumes 21.5 and 11.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

35 stocks hit their 52 week highs, while 2 stocks hit their 52 week lows.

Stocks touching their year highs included - Bharti Airtel Ltd. (950.35, -0.55%), Bosch Ltd. (20,435.00, 3.74%) and Caplin Point Laboratories Ltd. (1113.05, 3.87%).

Stocks making new 52 weeks lows included - Rajesh Exports Ltd. (455.70, -1.80%) and V-Mart Retail Ltd. (1,945.00, -0.26%).

8 stocks climbed above their 200 day SMA including NOCIL Ltd. (236.20, 4.68%) and Sterlite Technologies Ltd. (162.10, 2.99%). 2 stocks slipped below their 200 SMA including Bharat Dynamics Ltd. (1,006.40, -2.58%) and Godrej Consumer Products Ltd. (977.00, -0.90%).

 
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The Baseline
12 Oct 2023
The big winners: Five stocks expected to stand out in the Q2FY24 results season
By Tejas MD

People woke up to shocking headlines on Saturday - an attack by Hamas within Israel that left more than a thousand people dead and several thousand wounded. It has led Israel to declare war on Gaza and cut off food, electricity and water supplies to the Palestinian region. The spiralling tensions have pushed oil prices higher, reminding us how interconnected global markets are. 

The conflict has also raised fresh concerns about US and Iran being pulled into a Middle East fight, especially when the world is already struggling with rising interest rates and sticky inflation. Brent crude oil futures soared by over 4.5% on Monday on the news, with fears about potential disruptions to Iran's oil supply.

The surge in crude oil prices comes even as inflation has been more stubborn than expected globally. This has revived worries of a recession in the US, and Bloomberg Economics has predicted a 100% chance of an American recession in the next twelve months.

And when the US sneezes, the world catches a cold.

Neelkanth Mishra, Axis Bank’s chief economist, highlighted this link in an October 7 interview,saying, “If the US sees a recession, India’s IT services industry and business services exports could be hit. Services make up 10% of India's exports. If they fall by a lot, we could lose 1% in GDP growth."

But in the near term, analysts are positive about India’s growth story as we head into the Q2FY24 results. According to a report by Motilal Oswal, Nifty 50 companies’ net profit is set to rise 21% YoY on average in Q2FY24. 

In this week’s Analyticks,

  • Q2FY24 pre-results special: Five companies set to zoom with high revenue growth
  • Screener: Companies expected to post the highest revenue and net profit growth for Q2FY24

The big winners: Five stocks expected to stand out in the Q2FY24 results season

Heading into the Q2FY24 results, we shortlisted five stocks from the Nifty 500 that are predicted to post the highest revenue and net profit growth YoY in Q2FY24, according to Trendlyne’s Forecaster. What’s more? These companies already set the bar high with strong results in Q1FY24. 

Growth stocks in focus are from five different industries


All five stocks in focus, Godrej Properties, KPIT Technologies, Craftsman Automation, Angel One and CCL Products India, are from different industries. They have not only risen sharply over the past year but have also outperformed the Nifty 50. 

Godrej Properties, KPIT Tech and Angel One trade near their 52-week highs

Trendlyne’s Momentum scores for these companies range from neutral to high, indicating buying interest in the market. However, low Valuation scores for Godrej Properties, KPIT Technologies and CCL Products India are a signal that they may be expensively priced. 

Angel One leads with ‘Good’ Durability and Momentum scores

These companies have high durability scores, thanks to strong financials and management stability.

Godrej Properties surges amid a revival in residential real estate 

The realty industry has had a pretty good year. Nifty Realty went up by 34.9% in 2023, driven by companies posting record pre-sales and rising realisations, mainly in the residential segment. 

Indians are snapping up homes at an impressive rate - consulting firm CBRE says that residential sales grew 4% YoY (6% HoH) to over 150,000 units in H1CY23. By the end of 2023, they expect this number to cross 300,000, which would be the highest sales in 10 years. 

Godrej Properties is riding this wave, and its Q2FY24 revenue is expected to jump 141.5% YoY, and net profit by 163.8%.

Godrej Properties’ Q2FY24 revenue expected to jump 141.5% YoY

In the Q1FY24 earnings call, Gaurav Pandey, MD and CEO of Godrej Properties, had said that they plan to achieve pre-sales of Rs 15,000 crore in FY24E.

Godrej Properties’ pre-sales to grow at a CAGR of 23% over FY23-25E

Motilal Oswal expects the company’s pre-sales to rise by 18,900 by FY25. After the acquisition of multiple projects over the last few quarters, the management’s focus will now shift towards execution.

Outperformer in a weak sector: KPIT Tech to shine despite muted outlook for tech

This IT consulting and software company has risen by around 66.3% in the past year, outperforming the Nifty IT by 47 percentage points. KPIT Technologies provides engineering solutions for firms in the CASE (Connected Autonomous Shared and Electric) auto segment. KPIT Tech’s revenue and net profit are expected to rise both YoY and QoQ in Q2FY24.

KPIT Tech to post QoQ revenue growth for the 11th consecutive quarter 

A report by HDFC Securities suggests diverging revenue trends among IT companies for Q2FY24. While tier-1 IT firms might see sequential growth ranging from -1.4% to +2.2%, mid-tier companies like KPIT are likely to register a more positive 0.9% to 3.8% growth. 

Notably, KPIT Tech’s top line has been rising QoQ for the past 10 quarters, and is expected to rise 5.5% in Q2FY24 despite the tech slowdown. This is because of a 20% surge in engineering spending by auto OEMs over the past year. KPIT’s heavy investments in autonomous and electric technologies have cemented its leadership position in this segment. 

Craftsman Automation’s aluminum push to boost Q2 results

Thisauto parts and equipment manufacturer’s revenue and net profit is projected to rise an impressive 44.3% and 58.9% YoY, respectively,  in Q2FY24. 

Revenue from auto-aluminum products to drive Craftsman’s top line in Q2 


Sometimes, a new product segment significantly alters a company’s fortunes. Over the past two years, Craftsman has strategically diversified its revenue sources - while it previously manufactured ferrous casting products like cylinder blocks and cylinder heads for commercial vehicle powertrains, the company has been expanding aggressively into the more profitable passenger vehicle and two-wheeler industry since FY22. The entry point was through the aluminum products segment. 

ICICI Securities expects revenue contribution from aluminum products to rise from 25% in FY22 to 48% by FY26, while powertrain revenue share should fall from 52% to 35%. 

Craftsman Automation to significantly expand aluminium products revenue share by FY26E

The brokerage has a positive outlook on Craftsman on the back of continued growth in the passenger vehicles (PV) market, especially utility vehicles  (UVs), a revival in two-wheeler production, and an improved focus on the industrial and farm equipment segments.

Angel One’s market share in NSE active clients continues to rise

With the Nifty 50’s bullish trend in 2023, the number of demat accounts added has increased for the fourth consecutive month in August.

Number of demat accounts added rises for four months straight

Angel One enjoys the third-highest market share among brokerages, with 4.7 million active clients, after Zerodha and Groww. Angel One’s broker market share rose by 3.3 percentage points YoY to 14.2% in August. 

The company is expected to post strong results in Q2FY24, aided by healthy growth in net broking revenues and net interest income. Trendyne’s Forecaster estimates the broker’s revenue to rise 43.7% YoY, while its net profit is projected to grow by 32.6% YoY in Q2. 

However, HDFC Securities expects staff costs to stay elevated due to the company's effort to invest in more tech talent, leading to margin pressure. Notably, the stock hit a new 52-week high last week, ahead of its results announcement on October 12.  

Growth is brewing for CCL Products, as it boosts capacity

CCL Products India is engaged in the production, trading and distribution of coffee, mainly in India, Vietnam and Switzerland. Its Q2FY24 revenue and net profit are expected to rise by 34% YoY and 42.2%, respectively. 

CCL Products India’s net profit to rise by 42.2% YoY in Q2

The company posted strong revenue growth in Q1FY24 as well, on the back of 18-20% volume growth, driven by an additional 16,000 metric tonnes capacity expansion in its Vietnam plant end-FY23. The management expects the volume growth trend to continue for the next 3-4 years. However, high coffee bean prices are a major risk to the company’s profitability.

The management has also increased its debt guidance to Rs 2,000 crore for FY25, due to rising capex, with plans to expand the production capacity to approx 77,000 metric tonnes (MT) by FY25 in Vietnam and India.

Screener: Companies expected to post the highest YoY revenue and net profit growth for Q2FY24

Jindal Stainless, MTAR Tech among the highest revenue growth estimates in Q2FY24

In the earlier section, we covered five of the stocks which are likely to outperform in Q2FY24. The relevant screener tracking these companies has a full list of 99 stocks from the Nifty 500. These stocks are expected to have the highest YoY revenue growth and QoQ net profit growth % in Q2FY24. These stocks have already delivered YoY growth in both revenue and net profit in Q1FY24.

The list is diverse, featuring stocks from several sectors, including auto parts & equipment, IT consulting & software, pharmaceuticals and packaged goods sectors. Major stocks in the screener are Jindal Stainless, MTAR Technologies, Central Depository Services India, Tata Motors and CE Infosystems.

Jindal Stainless’ revenue grew by 86% YoY to Rs 10,227.2 crore in Q1FY24, aided by improved sales volumes of stainless and carbon steel. Trendlyne’s Forecaster estimates its revenue to rise by 83.4% YoY in Q2FY24. ICICI Securities believes that the acquisition of Jindal United Steel will aid the iron & steel producer’s revenue and profitability.

MTAR Technologies’ Q2FY24 revenue is expected to improve by 49.7% YoY, according to Trendlyne’s Forecaster. Its revenue grew by 67.6% YoY to Rs 156.7 crore in Q1FY24. According to Edelweiss, the defence company’s revenue is expected to grow in line with the management’s guidance of 45-50% in FY24 on the back of a strong order book and client additions in the global aerospace and clean energy segments. 

Trendlyne’s Forecaster estimates Central Depository Services of India’s revenue to grow by 38.2% YoY in Q2FY24. This is an improvement from the 6.8% YoY increase in revenue in Q1FY24. HDFC Securities expects a recovery in the investment company’s revenue growth, aided by recovery in the beneficiary owner (BO) account addition, higher revenue from the transactions segment and growth in revenue from the annuity segment.

You can find more screeners here.

 
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The Baseline
11 Oct 2023
By Akshat Singh

In this edition of Chart of the Week, we look at the top 15 stocks that drove the Nifty 500’s rise in the past year. These stocks were responsible for 25.3% of the Nifty 500’s 14% gain. This translated to an overall 3.6 percentage point contribution.

Over the past year, the Nifty 500 has risen 14%. To understand which were the top stocks that drove this surge, we analysed the change in market capitalisation for stocks in the index, and divided it by the total change in market cap across all index members.

NBFCs and public sector banks lead gains in banking & finance 

Six of the 15 stocks in our list are from the banking & finance sector. Within the sector, the non-banking financial company (NBFC) industry is represented by Indian Railways Finance Corp, Power Finance Corp, and REC. These three stocks drove 3.5%, 2.2%, and 2.2% of the Nifty 500’s gains, registering impressive one year returns  of 250%, 191%, and 199%, respectively.  

The top public sector banks in the list include Indian Overseas Bank, UCO Bank and Union Bank of India, contributing Nifty500 gains of 2%, 2%, and 0.2% respectively. They delivered  multibagger returns of 161%, 262%, and 135% in the past year. 

The public banking sector’s PE  TTM ratio stands at 8, compared to the overall banking industry's 19.2, indicating potential for further growth in PSU bank stocks. Several growth drivers like the RBI's decision to remove the incremental CRR (Cash Reserve Ratio) mandate of 10% for scheduled banks and the inclusion of Indian sovereign bonds in the JP Morgan Government Bond Index are at play.

Engineering stocks surge on budget boost and lower input costs 

Larsen & Toubro and Rail Vikas Nigam from the cement & construction sector have contributed 3.9% and 1.9% respectively to Nifty 500’s yearly gain. Their performance got a lift from the government’s 33% capex hike to Rs 10 trillion in the FY24 budget. The sector's growth can also be attributed to the declining prices of input materials like steel, which have fallen by 22% since their peak in Q4FY22. These prices are further expected to drop by 9-11% in FY24. This decline is expected to have a positive impact on operating profitability, especially for companies with fixed-price contracts, which typically constitute 25-30% of their total revenue. 

Larsen & Toubro’s stock price rose by 62% in the past year. According to the company's Chief Financial Officer, R Shankar Raman, its order book increased by 57% YoY to Rs 65,000 crore in Q1FY24. The management expects it to surge to Rs 2 lakh crore by Q4FY24. 

Rail Vikas Nigam, with a 368% rise in the past year, has reaped the benefits of the government’s Rs 2.4 lakh crore allocation to the railways in the FY24 budget. As of Q1FY24, the company's order book is at Rs 65,000 crore, including Rs 30,000 crore from the railways. The management aims to grow it to Rs 75,000-1 lakh crore by the end of the fiscal year.

Meanwhile, IT major Tata Consultancy Services contributed 3.3% to Nifty 500’s gains, thanks to a 17% annual share price growth. The company has multiple transformational deals in its pipeline, including projects with NEST for digital scheme administration services. According to Sharekhan, TCS sustains strong deal momentum, averaging $8.9 billion from Q1FY23 to Q1FY24. Notably, contracts with JLR (Jaguar-Land Rover)/NEST and BSNL, valued at $1 billion, $1.1 billion, and $1.8 billion, are expected to boost revenue growth estimates.

Strong order books and inflows drive general industrials and shipping stocks 

Suzlon Energy, a heavy electrical equipment company, added 1.5% to the gains of Nifty 500, thanks to a 280% rise in its stock price in the past year. The company currently holds a 33% market share in the wind energy space, with an order book of 1.5 GW in the domestic market. According to ICICI Securities, its revenues are expected to achieve a CAGR of 37% during FY23-25.

Mazagon Dock Shipbuilders, a shipping company, contributed 1.6% to Nifty 500’s gains. With multibagger returns of 261% in the past year, the company’s order book consists of defence orders amounting to Rs 50,000 crore as of August 2023. The firm is also competing with a joint venture of Larsen & Toubro and Thyssenkrupp, Germany, in the bidding of P75 submarines. 

Other significant contributors to Nifty 500’s gains are ITC, NTPC and The Fertilisers and Chemicals Travancore. ITC, with a 31% annual growth, contributed 2.5%, while NTPC’s 45% annual stock price increase added another 1.5%. The Fertilisers and Chemicals Travancore contributed 1.8%, with a remarkable 366% rise in its share price over the same period

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Oct 2023
Market closes higher, Motilal Oswal maintains ‘Buy’ on PI Industries

Trendlyne Analysis

Nifty 50 closed at 19,811.35 (121.5, 0.6%) , BSE Sensex closed at 66,473.05 (393.7, 0.6%) while the broader Nifty 500 closed at 17,407.35 (104, 0.6%), of the 1,985 stocks traded today, 1,269 were on the uptick, and 670 were down.

Indian indices extended their gains from the afternoon session and closed in the green, with the Nifty 50 closing at 19,811.4 points. The Indian volatility index, Nifty VIX, fell 2.5% and closed at 11 points. Larsen & Toubro’s hydrocarbon business bagged a contract worth more than Rs 7,000 crore from a client in the Middle East.    

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, taking cues from the benchmark index. Nifty Realty and Nifty Infra closed higher than their Tuesday close. According to Trendlyne's sector dashboard, Telecommunications Equipment was the top-performing sector of the day as it rose 2.1%.

Major European indices traded flat or lower, except for Switzerland Swiss Market Index trading in the green. However, Asian indices closed higher than their Tuesday levels. US index futures traded in the green, indicating a positive start to the trading session. Brent crude oil futures traded in the red for a second straight session after rising 4.6% on Monday.

  • Money flow index (MFI) indicates that stocks like PCBL, Prestige Estates Projects, Safari Industries (India) and Solar Industries India are in the overbought zone.

  • Tanla Platforms surges more than 7%, ahead of its earnings announcement on October 20. Trendlyne's Forecaster estimates its revenue to grow by 35.9% and 34.5% in FY24. It has a Trendlyne Momentum score of 64, aiding it to appear in a screener of stocks with high momentum scores.

  • HDFC Securities initiates coverage on Stylam Industries with a ‘Buy’ rating and a target price of Rs 2,300. This indicates an upside of 30.2%. The brokerage is optimistic about the firm due to its industry-leading EBITDA margins, healthy balance sheet and potential for domestic and global expansion. It expects the company’s net profit to grow at a CAGR of 26% over FY23-26.

  • The International Energy Agency (IEA) forecasts that India's natural gas demand will increase by 4% in 2023 and grow by over 8% annually until 2026. Despite a 6% fall in 2022, India's LNG imports rose 8% in the first eight months of 2023 compared to the same period last year.

  • Hindustan Zinc falls following reports indicating a potential 3.5% stake sale by the government through an offer for sale. The company appears in a screener of stocks with increasing promoter pledge.

  • PSU Banks like Bank of Baroda, Central Bank of India, UCO Bank, Indian Overseas Bank and Bank of Maharashtra are falling in trade. Barring Indian Bank and Punjab National Bank, all other constituents of the broader sectoral index, Nifty PSU Bank, are trading in the red.

  • Satia Industries is rising as it bags multiple orders worth Rs 340 crore from Text Book Production and Marketing, M.P. Text Book Corp, Rajasthan State Textbook Corp and State Bureau of Textbook Production & Curriculum Research. The orders relate to the supply of 34,000 MT of paper for printing textbooks.

  • Equity Mutual Funds' net inflow declines marginally MoM to Rs 13,857 crore in August, according to data released by the Association of Mutual Funds in India (AMFI). Meanwhile, SIP contributions and ETF investments surge during the month.

  • Oil & gas stocks like Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Reliance Industries are rising in trade. All constituents of the broader BSE Oil & Gas are trading in the green.

  • Motilal Oswal maintains its ‘Buy’ rating on PI Industries and raises the target price to Rs 4,560 from Rs 4,450. This implies an upside of 29.9%. The brokerage remains positive about the firm’s growth prospects due to its robust order book, new product launches and the recent acquisitions in the pharmaceuticals space.

  • Info Edge (India)'s arm Redstart Labs (India) agrees to invest $4,00,000 in Ray IOT Solutions, a healthcare company engaged in developing a non-contact breathing and sleep tracker for babies.

  • Larsen & Toubrois rising as its hydrocarbon business bags a contract worth more than Rs 7,000 crore from a client in the Middle East. The contract is for the engineering, procurement and construction of gas compression facilities.

  • Boman Rustom Irani, CMD of Keystone Realtors, says that H1FY24 has been favourable for the company and highlights that it has achieved 45% of the FY24 pre-sales guidance of Rs 1,800 crore. He believes that the firm may surpass the FY24 guidance in H2, driven by new launches. He adds that the company's major focus remains on volumes, followed by pricing.

  • Wiprorises as it signs a definitive agreement to acquire 10% equity shares of FPEL Ujwal, amounting to Rs 6.3 crore. With this acquisition, the company plans to increase the use of renewable energy across its offices in Karnataka. It appears in a screenerof stocks nearing their 52-week highs, with significant volumes.

  • Multi Commodity Exchange of Indiarises to its all-time highof Rs 2,179.4 per share as it announces its plans to launch a commodity derivatives platform on Monday. A mock trading exercise will be held on Sunday to test the platform.

  • JK Tyre & Industries is rising as Emkay reportedly initiates coverage on it with a ‘Buy’ rating. The brokerage believes the stock price can double over the next three years, led by growth in its high-margin segment and declining debt. It adds that the company has outperformed its peers over the past 12 quarters.

  • CLSA reportedly upgrades India to ‘Overweight’ and increases its portfolio allocation to 20% over the MSCI benchmark. The brokerage believes that India has a substantial potential for credit growth.

  • Laxmi Organic Industries surges more than 11% as its fundraising committee approves a QIP issue and the allotment of 96.3 lakh equity shares worth Rs 259.1 crore. It appears in a screener for stocks with strong momentum.

  • IT stocks like Wipro, Mphasis, Persistent Systems, LTIMindtree and L&T Technology Services are rising in trade. All the constituents of the broader sectoral index, Nifty IT, are trading in the green.

  • Ugro Capital rises following a 73% YoY growth in its Q2FY24 assets under management, reaching Rs 7,590 crore. The company's overall efficiency improves by 80 bps to 97.6%. The company appears in a screener of stocks with increasing net profit and margin.

  • DAM Capital maintains its 'Buy' rating on TVS Motor Co with an upgraded target price of Rs 3,051. The brokerage forecasts a robust recovery in the company's export markets starting from H2FY24. It expects TVS to register a solid double-digit volume growth of over 30% in H2FY24, as well as margin expansion.

  • Anil Kumar Goel and Associates cuts its stake in LG Balakrishnan & Bros to below 1% in Q2FY24. It held a 1.3% stake in Q1.

  • Porinju Veliyath cuts his stake in Taneja Aerospace & Aviation to below 1% in Q2FY24. He held a 1.2% stake in Q1.

  • Bank of Baroda falls as the RBI directs it to suspend the onboarding of new customers to its 'BOB World' mobile application. This move comes as the regulator noted supervisory concerns related to the customer onboarding process on the app. The company appears in a screener of stocks with declining net cash flow.

  • Zee Entertainment Enterprises faces an appeal lodged by IDBI Trusteeship Services at the National Company Law Appellate Tribunal (NCLAT) in Delhi. This appeal challenges the National Company Law Tribunal’s (NCLT) approval of the Zee Entertainment and Sony Pictures merger.

Riding High:

Largecap and midcap gainers today include Vodafone Idea Ltd. (11.85, 7.24%), Hero MotoCorp Ltd. (3,100.85, 4.17%) and Max Healthcare Institute Ltd. (575.00, 3.60%).

Downers:

Largecap and midcap losers today include Bank of Baroda (207.20, -3.31%), ICICI Prudential Life Insurance Company Ltd. (524.90, -2.82%) and JSW Energy Ltd. (397.35, -2.74%).

Movers and Shakers

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

Top high volume gainers on BSE included Mishra Dhatu Nigam Ltd. (456.90, 12.03%), Laxmi Organic Industries Ltd. (302.20, 11.43%) and Tanla Platforms Ltd. (1,104.10, 7.10%).

Top high volume losers on BSE were Sterling and Wilson Renewable Energy Ltd. (313.80, -5.00%), Poly Medicure Ltd. (1,369.90, -2.54%) and Abbott India Ltd. (22,430.25, -1.40%).

JK Paper Ltd. (400.30, 3.54%) was trading at 10.0 times of weekly average. Welspun India Ltd. (124.35, 6.06%) and Welspun Corp Ltd. (410.30, 5.04%) were trading with volumes 9.7 and 8.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

35 stocks overperformed with 52 week highs, while 1 stock tanked below their 52 week lows.

Stocks touching their year highs included - Bharti Airtel Ltd. (955.60, 0.76%), Cholamandalam Investment & Finance Company Ltd. (1,259.70, 0.04%) and Coal India Ltd. (301.85, -0.46%).

Stock making new 52 weeks lows included - Rajesh Exports Ltd. (464.05, -1.11%).

10 stocks climbed above their 200 day SMA including City Union Bank Ltd. (140.80, 4.49%) and Rallis India Ltd. (217.15, 2.57%).

 
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The Baseline
10 Oct 2023
Five analyst picks this week
By Abhiraj Panchal

1. Birla Corp: 

ICICI Direct maintains a 'Buy' rating on this cement manufacturing company with a target price of Rs 1,540, indicating an upside of 23.2%. Analyst Vijay Goel is optimistic about the company's efforts to enhance capacity utilisation and operational efficiency, which are expected to boost margins and profitability.

Goel is upbeat about the recently commissioned 3.9 million-tonne cement facility in Muktaban, Maharashtra. He foresees robust sales volume growth as Birla Corp expands in the west while maintaining a strong footprint in the northern, central, and eastern parts of India. He projects a strong CAGR of 8.2% in sales volume over FY23-25.

The analyst notes the company's efforts to improve operational efficiency through streamlined raw material sourcing, increased utilisation of coal from its captive mines, and a shift towards captive power, including solar and waste heat recovery. Goel also highlights government incentives for the Muktaban facility, lower fuel costs, and a strategic focus on premium product sales as key contributors to potential margin and profit growth in FY24-25.

2. Federal Bank: 

Sharekhan maintains its ‘Buy’ rating on this private bank with a target price of Rs 170, implying an upside of 14.8%. Analysts at the brokerage expect the bank to sustain its healthy operational performance, with strong loan growth, healthy fee income, and lower credit costs, despite net interest margin (NIM) pressure in the near term. They add, “The bank saw an impressive loan growth of 20% YoY and 5% QoQ in Q2FY24. This growth was broad-based across retail (22% YoY) and wholesale (17% YoY) segments.”

The analysts highlight the management’s optimistic outlook on credit growth, which is guided to be 18-20% in FY24, with broad-based traction across asset classes. Federal Bank plans to scale up the share of high-yielding assets in its loan book. The analysts also expect NIMs to bottom out in H1FY24 and gradually pick up in H2FY24. They forecast the bank’s standalone net profit to grow at a CAGR of 17.5% over FY23-25.

3. APL Apollo Tubes: 

Motilal Oswal maintains a 'Buy' rating on this iron and steel products company with a target price of Rs 1,930, indicating an upside of 22.6%. Analysts Sumant Kumar, Meet Jain, and Omkar Shintre hold a positive outlook due to the company's well-distributed manufacturing plants, giving it a robust geographic presence and keeping it close to customers.

Analysts at Motilal Oswal see the company's focus on value-added products as a big plus, especially with the addition of the Raipur plant, which has a capacity of 1.2 million tonnes per annum (MTPA). They expect the Raipur unit to produce innovative roofing products designed for better corrosion protection and durability. They believe that these value-added products will boost margins.

Kumar, Jain and Shintre expect that increased capacity, debottlenecking, and the addition of high-margin products from the Raipur unit, will drive volume growth and margin expansion in the future.

4. Navin Fluorine International: 

HDFC Securities maintains its ‘Buy’ rating on this commodity chemicals manufacturer with a target price of Rs 5,368, implying an upside of 44.6%. Analysts Nilesh Ghuge, Harshad Katkar and Akshay Mane are optimistic about the firm’s growth prospects despite the resignation of its Managing Director, Radhesh Welling. Their positive outlook is on the back of the firm’s strong earnings visibility, given its long-term contracts, increasing share of high-margin segments in total sales, and rising production capacity. They also add, “The company’s operating model, with individual CEOs leading each business vertical, supported by senior management teams from various departments, will help it maintain its growth strategy.”

Ghuge, Katkar and Mane are positive about the management’s focus on  maintaining capex spending, and research & development investments. They believe the company’s focus on expanding its existing capacity will enable it to win bigger projects in the future, thus maintaining the growth momentum. The analysts expect the firm’s revenue to grow at a CAGR of 27.7% over FY23-26.  

5. Ujjivan Small Finance Bank:

Axis Direct reiterates its ‘Buy’ call on this bank with a target price of Rs 64, indicating an upside of 9.9%. Analysts Dnyanada Vaidya, Prathamesh Sawant and Bhavya Shah say, “FY23 was characterised by a sharp rebound in the MFI business and a gradual pick up in the non-microfinance book.” The bank’s disbursements have grown by 42% YoY. As the challenges posed by the pandemic fade, the analysts highlight improvements in both asset quality and profitability metrics. 

Vaidya, Sawant and Shah expect Ujjivan Small Finance Bank to grow rapidly with these building blocks in place. They are optimistic that the bank will now focus on sustaining growth momentum and improving efficiency. They believe that the bank is well-poised to deliver robust RoA and RoE of 3-3.1% and 25-27%, respectively, supported by improving cost ratios and consistent credit costs. 

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
10 Oct 2023
Market closes higher, Dolly Khanna sells a 0.3% stake in KCP, now holds a 1.4% stake

Trendlyne Analysis

Nifty 50closed at 19,689.85 (177.5, 0.9%), BSE Sensexclosed at 66,079.36 (567.0, 0.9%) while the broader Nifty 500closed at 17,303.35 (175.7, 1.0%). Market breadth is highly positive. Of the 1,982 stocks traded today, 1,508 were gainers and 436 were losers.

Indian indices extended the gains from the afternoon session and closed in the green, with the Nifty 50closing at 19,690. The volatility index, Nifty VIX, dropped by 1.1% and closed at 11.3 points. The International Monetary Fund (IMF) has revised India’s FY24 GDP growth forecast to 6.3% from an earlier estimate of 6.1%.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, following the benchmark index. Nifty Realty and Nifty Metal closed higher than Monday’s closing levels. According to Trendlyne’s sector dashboard, coal emerged as the top-performing sector of the day, with a rise of over 6%.

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. The data released by the Italian National Institute of Statistics indicated that Italy’s industrial production in August increased by 0.2% MoM against the estimates of a 0% growth. Brent crude oil prices have increased by 4% since the conflict in Israel and hovering around $88 per barrel.

  • Relative strength index (RSI) indicates that stocks like Kaynes Technology India, Safari Industries (India), PCBL and Solar Industries India are in the overbought zone.

  • Prestige Estates Projects surges more than 9% to touch its all-time high of Rs 796.4 per share. It ranks high on Trendlyne's checklist with a score of 63.6%. The stock has a 'Buy' consensus from 14 out of 16 analysts. Its revenue is expected to grow by 25.7% in Q2FY24, according to Trendlyne's Forecaster.

  • Coal India rises over 5% to touch its 52-week high of Rs 303.7, following Nuvama Institutional Equities' projection of a record dividend payout of Rs 30 in H2FY24. The brokerage keeps a ‘Buy’ rating on the stock and raises the target price to Rs 389 from Rs 361, citing the firm's potential for volume growth, improved e-auction prices, and the possibility of high dividends.

  • Shyam Metalics and Energy rises as its Q2FY24 sponge iron sales volume increases by 3.1% YoY to 1.8 lakh tonnes and steel sales volume grows by 8.3% YoY to 50.8 lakh tonnes. The company appears in a screener of stocks with improving book value per share.

  • Anil Yadav, CFO at IRB Infrastructure Developers, says the company targets its Hyderabad business to generate an EBITDA of Rs 600-650 crore. He adds that its construction margins are expected to improve by 100-200 bps.

  • JSW Steel is rising as its crude steel production grows by 13% YoY to 6.4 million tonnes in Q2FY24, helped by increased Indian operations. The company appears in a screener of stocks with upgraded analyst recommendations or target prices over the past three months.

  • Solar Industries India rises as it receives its biggest-ever order worth Rs 1,853 crore from Coal India for the supply of bulk explosives, which it will supply in a span of two years. It appears in a screener for stocks with strong momentum.

  • HCL Technologies and Angel One's weekly average delivery volumes rise ahead of their Q2FY24 results on Thursday.

  • The International Monetary Fund (IMF) raises India’s GDP growth forecast for FY24 by 20 bps to 6.3%, while it maintains its FY25 projection of 6.3%. The IMF also projects India’s CPI inflation for FY24 at 5.5%.

  • GM Breweries is falling as its Q2FY24 net profit declines 1.4% YoY to Rs 22.4 crore despite its revenue rising by 5.8% YoY. The drop in profitability is due to higher raw material costs and excise duty. Its EBITDA margin falls by 2.1 percentage points YoY to 19.6%.

  • Vascon Engineers rises as it receives a Letter of Acceptance(LOA) worth Rs 352.9 crore from Jharkhand State Building Construction Corporation for the completion of remaining work for a medical college and the upgradation of a district hospital in Koderma. It appears in a screener for stocks with strong momentum.

  • Ajmera Realty & Infra India is rising as its sales value surges by 52% YoY to Rs 252 crore in Q2FY24 and collections increase by 8% YoY. The company also acquired three projects with a gross development value of Rs 800 crore.

  • IDFC First Bank sells its office premises in BKC, Mumbai, for Rs 198 crore to the National Securities Depository.

  • Global crude oil prices decline after rising over 4% in the previous sessions. Analysts believe that prices may continue to rise amid concerns over supply shortages caused by the Israel-Hamas conflict. Brent crude is currently trading at around $87.9 per barrel.

  • Media stocks like DB Corp, Saregama India, TV18 Broadcast, Network18 Media & Investments and Dish TV India are rising in trade. All the constituents of the broader sectoral index, Nifty Media, are also trading in the green.

  • Realty stocks like Prestige Estates Projects, Godrej Properties, DLF and Oberio Realty rise more than 2% in trade. All constituents of the broader Nifty Realty index are also trading in the green.

  • HDFC Securities maintains its ‘Sell’ rating on Trent with a target price of Rs 1,370. This implies a downside of 33.6%. The brokerage believes the stock is trading at an expensive valuation and expects the revenue per store to decline if the company continues its store expansion beyond two years. It adds that a huge share of FY22 and FY23 net profits came from dividends and mark-ups on fixed assets sold, which is unlikely to sustain bottom-line growth in the medium-to-long term.

  • According to a poll of economists, India's retail inflation is expected to fall to a three-month low of 5.4% in September from 6.8% in August, re-entering the RBI's tolerance range of 2-6% after two months. Economists also anticipate India’s IIP (Index of Industrial Production) to grow by 9.1% in August.

  • Larsen & Toubro wins a contract worth Rs 1,000-2,500 crore for the construction of a water supply project in Rajasthan. The stock shows up in a screener for companies with consistently high returns over the past five years.

  • Mazagon Dock Shipbuilders surges over 5% as it signs a letter of intent (LoI) with a European client to construct six firm and four optional units of 7,500 DWT multi-purpose hybrid power vessels.

  • Genus Power Infrastructures rises sharply as its subsidiary bags orders worth Rs 3,115 crore. The order involves the design of an advanced metering system and the installation of 34.8 lakh smart prepaid meters. The company appears in a screenerof stocks with improving quarterly revenue.

  • Dolly Khanna sells a 0.3% stake in KCP in Q2FY24. She now holds a 1.4% stake in the company.

  • DAM Capital maintains its ‘Buy’ rating on Escorts Kubota, with an upgraded target price of Rs 5,100. It expects increased export growth to boost the company’s overall volume growth. The brokerage predicts revenue and PAT CAGR of 17% and 41%, respectively, over FY23-26.

  • Ashish Kacholia buys a 3.5% stake in Saakshi Medtech & Panels in a bulk deal on Monday.

  • Ashish Kacholiaadds Aeroflex Industries to his portfolio in Q2FY24, buys a 1.8% stake in the company.

  • Dilip Buildconis rising as it receives a letter of acceptance (LoA) worth Rs 396.9 crore from the Water Resources Zone, Udaipur. The LoA is for an engineering, procurement and construction (EPC) contract to build the Dewas III and IV dams in Rajasthan, with a completion timeline of 44 months.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (75.65, 6.32%), Delhivery Ltd. (433.60, 5.91%) and Godrej Properties Ltd. (1,722.75, 5.65%).

Downers:

Largecap and midcap losers today include Max Healthcare Institute Ltd. (555.00, -2.39%), Bayer Cropscience Ltd. (5,285.00, -1.97%) and Trent Ltd. (2,050.80, -1.36%).

Movers and Shakers

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

Top high volume gainers on BSE included Prestige Estates Projects Ltd. (727.50, 8.50%), Godfrey Phillips India Ltd. (2,263.70, 7.25%) and City Union Bank Ltd. (134.75, 7.16%).

Top high volume losers on BSE were Triveni Turbine Ltd. (384.80, -4.27%) and Honeywell Automation India Ltd. (38,433.55, -0.05%).

Vaibhav Global Ltd. (436.70, 6.60%) was trading at 8.3 times of weekly average. Chambal Fertilisers & Chemicals Ltd. (284.20, 4.14%) and Godrej Properties Ltd. (1,722.75, 5.65%) were trading with volumes 4.7 and 4.4 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

27 stocks took off, crossing 52 week highs, while 1 stock hit their 52 week lows.

Stocks touching their year highs included - Bharti Airtel Ltd. (948.35, 2.57%), Cholamandalam Investment & Finance Company Ltd. (1,259.15, 3.25%) and Coal India Ltd. (303.25, 5.37%).

Stock making new 52 weeks lows included - Rajesh Exports Ltd. (469.25, -1.87%).

8 stocks climbed above their 200 day SMA including Chambal Fertilisers & Chemicals Ltd. (284.20, 4.14%) and Steel Authority of India (SAIL) Ltd. (88.80, 2.84%). 8 stocks slipped below their 200 SMA including Star Health and Allied Insurance Company Ltd. (575.20, -1.24%) and Sumitomo Chemical India Ltd. (422.35, -0.72%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
09 Oct 2023
Market closes lower, KPI Green Energy bags three orders for 4.2 MW solar power projects

Trendlyne Analysis

Nifty 50closed at 19,512.35 (-141.2, -0.7%), BSE Sensexclosed at 65,512.39 (-483.2, -0.7%) while the broader Nifty 500closed at 17127.70 (-165.9, -1.0%). Market breadth is moving down. Of the 1,993 stocks traded today, 368 were in the positive territory and 1,594 were negative.

Indian indices closed in the red, with the Nifty Nifty 50 closing at 19,512.4 points. The Indian volatility index, Nifty VIX, rose 10.7% and closed at 11.4 points. Hero MotoCorp closed 2.5% lower after reports of an FIR registered against Pawan Munjal, MD & CEO, by the Vasant Kunj Police station. The FIR relates to a fake invoice case of Rs 5.9 crore registered by Brains Logistics in 2009-10.

Nifty Smallcap 100 and Nifty Midcap 100 closed lower, taking cues from the benchmark index. Nifty Media closed 2.2% lower while Nifty IT closed flat. According to Trendlyne's sector dashboard, Telecommunications Equipment was the top-performing sector of the day as it rose 3.6% in a weak market.

Major European indices recovered from their day lows and traded flat or marginally higher, except for Germany's DAX index trading in the red. Asian indices closed mixed amid weak global cues. US index futures traded lower, indicating a negative start to the trading session. Brent crude oil futures fell from their day highs but still traded 3% higher on fears of crude oil supply disruption from Iran.

  • Multi Commodity Exchange of India sees a long buildup in its October 26 future series as its open interest rises 19.2% with a put-call ratio of 0.6.

  • HDFC Bank, Alkem Laboratories and GMM Pfaudler see their mutual fund holdings rise by 2.1%, 1.6% and 1.5% respectively.

  • CG Power and Industrial Solutions, BSE, and Varun Beverages’ stock prices increase 259.7%, 231.5%, and 211% respectively over the past two years.

  • Metal & mining stocks like Jindal Stainless, Welspun Corp, Hindustan Copper, APL Apollo Tubes and Steel Authority of India are falling in trade. Barring Hindustan Zinc, all the other constituents of the broader sectoral index, Nifty Metal, are trading in the red.

  • Vascon Engineers rises to an all-time high of Rs 78.5 as it bags an order worth Rs 262.2 crore from a Government of India enterprise, Bridge and Roof Co India. The project involves the development of the Government Medical College in Kanker, Chhattisgarh. The company appears in a screener of stocks with strong momentum.

  • KPI Green Energy is rising as it bags three orders for 4.2 MW solar power projects under its captive power producer segment. The projects are expected to be completed in FY24.

  • NLC India is falling despite bagging an 810 MW grid-connected solar power project from Rajasthan Rajya Vidyut Utpadan Nigam. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Adani Ports & Special Economic Zone declines by over 4% due to concerns over the Haifa port in northern Israel. The company assures that it has contingency plans to ensure business continuity. It adds that Hafia contributes only 3% of the total cargo volumes. For FY24, the firm expects Haifa's cargo volumes to be in the range of 10-12 MMT.

  • Hero MotoCorp is falling following reports of an FIR registered against Pawan Munjal, MD & CEO, by the Vasant Kunj Police station. The FIR relates to a fake invoice case of Rs 5.9 crore registered by Brains Logistics in 2009-10.

  • PSU Banks like Central Bank of India, Bank of Maharashtra, Punjab & Sind Bank, Indian Overseas Bank and Punjab National Bankare falling in trade. The broader sectoral index, Nifty PSU Bank, is also trading in the red.

  • Shree Renuka Sugarsacquires a 100% stake (5 crore shares) in Anamika Sugar Mills for Rs 235.5 crore to establish its presence in Uttar Pradesh. It appears in a screenerfor stocks in the Nifty 500 with consistent high returns over five years.

  • Morgan Stanley maintains its ‘Equal-weight’ rating on Titan Co with a target price of Rs 3,190. The brokerage highlights that the company achieved a 20% YoY revenue growth in Q2FY24, despite the general weakness in discretionary demand.

  • Sharekhan maintains its ‘Buy’ rating on The Ramco Cements and raises the target price to Rs 1,130 from Rs 1,010. This implies an upside of 21%. The brokerage is optimistic about the company’s growth prospects on the back of rising sales volumes, focus on premiumisation and improving cost efficiencies.

  • Metropolis Healthcare rises as its Q2FY24 core business revenue grows by 13% YoY. The company's B2C revenue increases by 15% YoY. The company appears in a screener of stocks with strong momentum.

  • Global oil prices surge following an attack on Israel by Hamas, raising concerns over possible supply shocks from the region.

  • R C Bhargava, Chairman of Maruti Suzuki India, announces that the company plans to invest over Rs 50,000 crore by FY31. He adds that a significant portion of this investment, amounting to Rs 45,000 crore, is dedicated to expanding the production capacity to 4 million vehicles annually. Investments will also be utilised to improve the supply chain and to develop the export infrastructure, with an aim to export 7,50,000 vehicles by FY31.

  • Som Distilleries & Breweries declines as its board decides not to proceed with the proposed QIP issue due to the limited number of bids received. The company says it will evaluate the viability of raising funds at a suitable time. It appears in a screener for stocks in the 'Sell' zone.

  • Rail Vikas Nigam is falling despite it bagging an order worth Rs 394.8 crore from Maharashtra Metro Rail Corp. The project involves the design and construction of an elevated metro viaduct and is expected to be completed in 30 months.

  • Multi Commodity Exchange of India is rising as SEBI's Technical Advisory Committee grants approval for the launch of its commodity derivative platform (CDP).

  • Prestige Estates Projects hits an all-time high of Rs 700.9 following a 102% YoY increase in Q2FY24 net sales to Rs 7092.6 crore. The group sold 3,659 units during the quarter. The company appears in a screener of stocks with improving book value per share.

  • Retail sales for the automotive industry rise 20.4% YoY to 18.8 lakh units in September, shows data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales are up 21.7% YoY, while cars increase by 19% YoY. FADA anticipates an upbeat festive season for auto retail and has changed its outlook for the festive season from cautiously optimistic to optimistic.

  • Dolly Khanna buys a 0.5% stake in Prakash Pipes in Q2FY24. She now holds a 3.2% stake in the company.

  • Radhakishan Damanisells a 0.3% stake in Andhra Paperin Q2FY24. He now holds a 1% stake in the company.

  • Mohnish Pabraisells a 1.9% stake in Rain Industriesin Q2FY24. He now holds a 7% stake in the company.

  • Kaynes Technologyis rising as the company plans to set up a semiconductor OSAT (outsourced semiconductor assembly and testing) and compound semiconductor facility in Telangana. The company has estimated a capex of Rs 2,800 crore for the facility.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (311.25, 5.24%), Supreme Industries Ltd. (4,000.00, 2.24%) and Hindustan Zinc Ltd. (311.80, 2.05%).

Downers:

Largecap and midcap losers today include Indian Overseas Bank (43.30, -6.38%), Adani Power Ltd. (342.00, -6.12%) and Union Bank of India (99.35, -5.65%).

Movers and Shakers

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

Top high volume gainers on BSE included ITI Ltd. (215.00, 11.98%), Oil India Ltd. (311.25, 5.24%) and Archean Chemical Industries Ltd. (602.25, 2.51%).

Top high volume losers on BSE were Rashtriya Chemicals & Fertilizers Ltd. (120.90, -2.54%) and Elgi Equipments Ltd. (494.00, -0.15%).

United Breweries Ltd. (1,561.40, 0.04%) was trading at 5.8 times of weekly average. Crisil Ltd. (3,917.65, 1.94%) and Metropolis Healthcare Ltd. (1,501.10, 2.04%) were trading with volumes 4.4 and 4.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

17 stocks overperformed with 52 week highs, while 4 stocks hit their 52 week lows.

Stocks touching their year highs included - Coromandel International Ltd. (1,162.00, -0.81%), Godrej Industries Ltd. (678.25, -5.68%) and Ipca Laboratories Ltd. (936.10, 0.24%).

Stocks making new 52 weeks lows included - Rajesh Exports Ltd. (478.20, -3.77%) and Adani Total Gas Ltd. (590.30, -2.37%).

16 stocks slipped below their 200 SMA including Petronet LNG Ltd. (223.20, -3.12%) and Sumitomo Chemical India Ltd. (425.10, -3.04%).

 
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The Baseline
06 Oct 2023
Five Interesting Stocks Today

1. Bajaj Finance: 

This NBFC touched its 52-week high of Rs 8,192 per share and closed 4.1% higher on Friday, a day after announcing its Q2FY24 business update.  The company’s board of directors approved the raising of Rs 8,800 crore through qualified institutional placement (QIP) on Thursday, subject to approval from shareholders. Funds from the QIP will be used to reduce the company’s cost of capital and increase its AUM growth, and is a response to rising competition in the sector.

The stock has risen by 11.2% over the past month, outperforming the Nifty 50 index by 10.8 percentage points. This helped the company appear in a screener of stocks with high momentum scores.

The NBFC’s assets under management (AUM) improved by 33% YoY to Rs 2.9 lakh crore for the quarter, aided by increased deposits and new loans. This growth beat Jefferies’ estimates by 300 bps. The company’s customer franchise increased by 3.6 million YoY to 76.6 million, and remains on track to achieve its guidance for 12-13 million growth in users during FY24. Trendlyne’s Forecaster predicts revenue growth of 26.8% YoY in Q2 and 24.8% YoY in FY24. 

Post the business update, BOB Capital Markets maintains its ‘Buy’ rating on the stock with a target price of Rs 9,105 per share. This indicates a potential upside of 16%. The brokerage believes that the company’s strong AUM growth, diverse product mix and efficient execution will help it keep up with competitors and improve its asset quality. It expects the company’s net interest income to grow at a CAGR of 20% over FY22-25. 

2. Kaynes Technology India:

This electronics manufacturing services (EMS) company has risen 13.6% over the past week till Friday, riding on the back of a healthy business outlook. The Indian EMS industry is expected to benefit from the global shift in supply chains, positioning Kaynes to profit from its presence across various industrial segments. The company provides manufacturing services to firms in the automotive, railways, aerospace, defence, medical and information technology sectors.

As the company mostly caters to other industrial businesses, its primary exposure is to the business-to-business (B2B) segment. According to reports, Morgan Stanley expects EMS companies with high B2B exposure to outperform their peers due to reduced competition and higher margins. It adds that this will enable companies to spend more on research & development and increase the scope for backward integration.

The management states that the firm has a low customer concentration, with the top five clients making up 44% of the total revenue. Kaynes also added one large multinational client in Q1FY24. 

Trendlyne's Forecaster estimates the firm’s revenue to surge by 33.5% QoQ and 99% YoY to Rs 396.7 crore in Q2FY24. It shows up in a screener for companies with net cash flows improving over the past two years.

With ambitions to foray into semiconductor manufacturing, Kaynes signed an MoU with the Karnataka Government on August 24. The agreement involves an investment of Rs 3,750 crore to set up a Semiconductor Assembly and Testing (OSAT) facility and a Printed Circuit Board (PCB) manufacturing plant. The management plans to start production in both plants by the end of 2024 and expects the benefit to flow in from H2FY25. 

3. South Indian Bank: 

This bank’s stock price fell by 1.5% on Thursday, following its business update. The decline was likely due to the rising cost of funds for the bank, due to a falling CASA (current account savings account) ratio and slowing credit growth. The stock had jumped by 11.2% over the past month, according to Trendlyne’s Technicals. The company was also recently in the news for the appointment of P R Seshadri as its new CEO & MD following RBI’s approval.

SIB’s provisional Q2FY24 update has recorded a 10.3% YoY surge in gross advances to Rs 74,975 crore. Similarly, total deposits climbed by 9.8% YoY. By the end of Q2FY24, CASA deposits stood at Rs 31,162 crore. The bank's credit growth in FY24-25E is expected to be around 12-13%. Moves to stabilise the liability mix, adjust interest rates on 65% of deposits, launch new retail products, and improve yields are expected to boost profits by 10-20 basis points. The stock appears in a screener of companies with high interest payments compared to earnings.

The management expects net interest margins to rise by 20 bps to 3.5% by Q4FY24, partly from growth in high-yielding loans. The bank also aims for a 1% return on assets (RoA) by the end of FY24.

ICICI Securities says that the qualification of the new MD & CEO will be critical to the stock’s rerating. They see RBI’s approval for the appointment of P R Seshadri as a key positive for the bank. According to the brokerage, he played a crucial role in improving risk management at Karur Vysya Bank and achieving credit growth despite profitability pressures from rising NPAs. The broker maintains a ‘Buy’ rating on the stock.

4. TVS Motor: 

This two/three-wheeler manufacturer has fallen by 2.3% since announcing its September business update on Tuesday. The decline is on account of lower quarterly three-wheeler wholesales, which contracted by 15.7% YoY in Q2FY24. 

In September 2023, the company’s total wholesales rose by 6% YoY to 4 lakh units, and its electric vehicle (EV) wholesales surged 4X YoY to 20,356 units. TVS has also been seeing an increase in exports, registering an 8% growth in September despite a high base.

Taking note of the healthy response to EVs, TVS Motor launched its second electric scooter, TVS-X, for Rs 2.5 lakh. The recent launch of Apache RTR 310, priced at Rs 2.4-2.6 lakh, also indicates the company’s interest in catering to the premium lifestyle segment market. The company aims to gain market share by introducing multiple products in numerous segments. It is also expected to launch electric three-wheelers in the coming quarters, and has started exporting EVs to Nepal with plans to expand to other markets.

In Q1FY24, the automobile manufacturer’s net profit grew by 42.2% YoY to Rs 434.3 crore, beating Trendlyne Forecaster’s estimate by 6.9%. Its revenue also increased by 24.4% YoY. Even though TVS’ EBITDA margin has been in the range of 10% for the past eight quarters, the management hopes to improve it further through a better product mix, price hikes, and a focus on premiumization. The company features in a screener for stocks with improving cash flow and good durability.

Sharekhan maintains a ‘Buy’ call on TVS on the back of new launches and a gradual revival in export volumes. Analysts expect a healthy festive season and believe that the company will see robust traction in volumes, backed by its product portfolio.

5. Marico

This FMCG company has fallen by over 5.9% since the announcement of its business update on Thursday. Marico reported a low single-digit YoY volume growth in Q2FY24. It’s domestic volumes grew by 3% YoY in Q1FY24. The company attributed weak rural demand as the reason for this muted volume growth. Parachute Coconut Oil and Saffola Edible Oils’ volumes (contributing to around 37% and 31% of the total revenue) also grew in the low-single digits. 

Marico highlighted that its consolidated revenue has moderated during the quarter due to price corrections in its key domestic portfolio. In Q1FY24, the company’s revenue dropped by 2.1% YoY to Rs 2,523 crore, driven by price cuts taken in its Saffola Edible Oils segment. According to Trendlyne’s Forecaster, its revenue is expected to grow 3.4% YoY in Q2FY24. The company is set to declare its Q2 results on October 30.

The FMCG company’s management said that the recent surge in food prices and below-normal rainfall in some regions have dampened rural demand. According to Saugata Gupta, the MD and CEO of the firm, “Factors such as retail inflation dropping to sub-5% levels, late pickup in monsoons, hike in kharif crop MSPs (minimum support price) and higher government spending give us hope for a gradual recovery in rural sentiment”. He added that Marico targets a volume growth of around 8% in the medium term. 

The company’s share price touched a new 52-week high on Tuesday after ICICI Securities upgraded its rating to ‘Buy’ and raised the target price to Rs 670. The brokerage is optimistic about the company's efforts to accelerate expansion while maintaining its market share. As a result, Marico features in a screener of stocks where brokers have upgraded recommendations or target prices in the past three months.

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