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Trendlyne Marketwatch
Trendlyne Marketwatch
18 Aug 2023
Market closes lower, Pyramid Technoplast's IPO gets bids for 0.82X the available 75.6 lakh shares

Trendlyne Analysis

Nifty 50 closed at 19,310.15 (-55.1, -0.3%), BSE Sensex closed at 64,948.66 (-202.4, -0.3%) while the broader Nifty 500 closed at 16,757.70 (-44.6, -0.3%). Of the 1,935 stocks traded today, 745 were gainers and 1,132 were losers.

Indian indices closed in the red, with the Nifty 50 closing just above the 19,300 mark. The Indian volatility index, Nifty VIX, fell 0.8% but still closed above 12 points. Indian indices posted weekly losses for a fourth straight week after hitting their all-time highs on July 20. The RBI, in its August bulletin, stated that the possibility of stagflation in India is low at 3%, despite the recent surge in retail inflation. 

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. However, Nifty Media and Nifty Metal closed higher than their Thursday close. According to Trendlyne's sector dashboard, Transportation was the top-performing sector of the week in a volatile market.

Major European indices traded in the red, in line with the Asian indices. China’s Shanghai SE Composite Index closed 1% lower amid contagion fears of the liquidity crisis in China’s shadow banking industry. US index futures also traded in the red amid weak global cues, indicating a negative start to the trading session.

  • Money flow index (MFI) indicates that stocks like Suven Pharmaceuticals, Emami, KSB and Kalyan Jewellers India are in the overbought zone.

  • New Delhi Television rises as the Ministry of Information & Broadcasting approves uplinking and downlinking for four news and current affairs channels: NDTV Rajasthan, NDTV Madhya Pradesh/Chhattisgarh, NDTV Gujarati and NDTV Marathi.

  • Jio Financial Services (JFSL), demerged from Reliance Industries, is set to go public on Indian stock exchanges on August 21, 2023.

  • Indian Hume Pipe surges over 5% on receiving a letter of award (LOA) worth Rs 639.2 crore from the Rural Water Supply & Sanitation, Odisha. The LOA is for the execution of a rural piped water supply project in the Puri district. The project is expected to be completed in two years and the company will manage the operation and maintenance for five years.

  • BLS International Services and Escorts Kubota touch their all-time highs of Rs 261 and Rs 2,874.3 respectively. The former has risen by 16.4% over the past month, while the latter increased by 20%.

  • Route Mobile's UK arm inks an exclusive partnership with Vodafone Idea for the latter's international application-to-person (A2P) SMS traffic for 24 months. Route will provide comprehensive A2P monetization solutions by deploying its artificial intelligence/machine learning-driven analytical firewall solution.

  • Pyramid Technoplast's Rs 153.1 crore IPO gets bids for 0.82X the available 75.6 lakh shares on offer on the first day of bidding. The retail investor quota gets bids for 1.20X of the available 46.1 lakh shares on offer.

  • Mahindra & Mahindra is falling as it receives a penalty order of Rs 14.3 lakh from the Joint Commissioner, CGST & Central Excise. The order is directed at its merged entity, Mahindra Vehicle Manufacturers, for availing incorrect input tax credit during the transition from the excise regime to the GST regime.

  • Zhongrong International Trust reportedly hires KPMG to audit its balance sheet due to worsening liquidity concerns. The shadow bank has missed payments on numerous wealth management products and plans to undergo debt restructuring and asset sales after the review to repay its investors.

  • ICICI Securities downgrades Glenmark Pharmaceuticals to a 'Sell' from 'Reduce', with a target price of Rs 660 per share due to the stock's high valuation. The brokerage believes that improving demand in India, debt reduction, and increased sales in the Ryaltris segment will aid the company's net profit to grow at a CAGR of 36.5% over FY23-25.

  • Shipping, paper & paper products, plastic products and footwear industries rise more than 3% in the past week.

  • Foreign institutional investors invest Rs 6,108.9 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest investment of Rs 34,465.2 crore from foreign investors.

  • Manappuram Finance is falling as reports suggest that 13 lakh shares of the company have changed hands in pre-market trade. The company features in a screener for stocks that have seen a decrease in Mutual Fund holdings in the past quarter.

  • In its August bulletin, the RBI states that the possibility of stagflation in India is low at 3%, despite the recent surge in retail inflation. This is due to factors like easing financial conditions, stable INR/USD exchange rates, and steady domestic fuel prices.

  • Sula Vineyards rises as visitor attendance surged at the Nashik and Bengaluru wine tourism facilities from August 12-14. During this extended weekend, its wine tourism operations generated revenue of Rs 2.1 crore, marking a 40% increase from the previous three-day record.

  • Adani Green Energy, Adani Power and Adani Transmission are rising as Abu Dhabi International Energy Company (TAQA) plans to invest $2.5 billion (approximately Rs 20,773 crore) in Adani Group's power businesses, according to reports.

  • Yatharth Hospital & Trauma Care Services surges as its Q1FY23 net profit rises by 73.1% YoY to Rs 190.4 crore and revenue increases by 39.1% YoY. Its EBITDA margin also improves by 368 bps YoY to 26.8%. The firm's Whole-Time Director, Yatharth Tyagi, says, "Our ongoing investments reflect a strategic approach to nurturing balanced future growth, exemplified by ongoing expansion efforts, both organic and inorganic."

  • Jefferies maintains a 'Buy' rating on Finolex Cables while increasing the target price to Rs 1,270. The brokerage anticipates the communication industry to benefit from the 5G rollout and suggests a 5-15% import boost could offset optical fiber price erosion.

  • IT stocks like Tata Consultancy Services, Infosys, HCL Technologies, Wipro and LTIMindtree are falling in trade. All constituents of the broader Nifty IT index are also trading in the red.

  • GMM Pfaudler is falling and hits a 52-week low of Rs 1,376 following reports of a 13% stake, equivalent to 58 lakh shares, changing hands in a block deal.

  • Concord Biotech’s shares debut on the bourses at a 21.5% premium to the issue price of Rs 741. The Rs 1,551 crore IPO has received bids for 24.9 times the total shares on offer.

  • Mayank Singhal, Vice-Chairman & MD of PI Industries, says that seasonal delays and irregular rains have caused a drop in domestic business. But he anticipates an improvement by Q2. He adds that the firm aims for double-digit domestic growth in FY24 and assures to maintain margins at the current levels.

  • Pyramid Technoplast raises Rs 27.6 crore from anchor investors ahead of its IPO by allotting 16.6 lakh shares at Rs 166 each. Investors include Carnelian Structural Shift Fund, Alchemie Ventures Fund-Scheme I, Pluris Fund and Resonance Opportunities Fund.

  • Carborundum Universal inks an agreement with ideaForge Technology to jointly develop drone components using nanomaterial-reinforced composite materials such as graphene-reinforced polymers.

  • South Indian Bank receives RBI approval to appoint P R Seshadri as the Managing Director and Chief Financial Officer. His appointment will take effect on October 1, 2023.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (994.75, 6.56%), Adani Power Ltd. (304.60, 6.30%) and Adani Transmission Ltd. (871.90, 6.04%).

Downers:

Largecap and midcap losers today include Gland Pharma Ltd. (1,568.70, -3.02%), Macrotech Developers Ltd. (696.00, -2.86%) and Bajaj Holdings & Investment Ltd. (6,943.20, -2.85%).

Movers and Shakers

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

Top high volume gainers on BSE included Vardhman Textiles Ltd. (362.05, 6.72%), Adani Green Energy Ltd. (994.75, 6.56%) and Lemon Tree Hotels Ltd. (102.15, 6.41%).

Top high volume losers on BSE were Manappuram Finance Ltd. (148.05, -3.89%), Aptus Value Housing Finance India Ltd. (271.20, -2.13%) and United Breweries Ltd. (1,519.30, -1.77%).

CSB Bank Ltd. (315.70, 4.45%) was trading at 14.4 times of weekly average. Aster DM Healthcare Ltd. (319.40, 4.91%) and Finolex Cables Ltd. (1,064.95, 3.57%) were trading with volumes 7.7 and 7.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Bank of Maharashtra (38.45, -0.52%), Dr. Reddy's Laboratories Ltd. (5,874.45, -0.11%) and Emami Ltd. (528.60, 3.83%).

Stocks making new 52 weeks lows included - UPL Ltd. (578.45, -1.11%) and GMM Pfaudler Ltd. (1,509.15, -0.85%).

12 stocks climbed above their 200 day SMA including Network 18 Media & Investments Ltd. (63.50, 4.18%) and Ambuja Cements Ltd. (453.05, 1.58%). 10 stocks slipped below their 200 SMA including Page Industries Ltd. (40,106.70, -2.82%) and Aptus Value Housing Finance India Ltd. (271.20, -2.13%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 Aug 2023
Market closes lower, Prabhudas Lilladher keeps its 'Buy' rating on Aster DM Healthcare

Trendlyne Analysis

Nifty 50 closed at 19,365.25 (-99.8, -0.5%), BSE Sensex closed at 65,151.02 (-388.4, -0.6%) while the broader Nifty 500 closed at 16,802.25 (-50.8, -0.3%). Market breadth is holding steady. Of the 1,931 stocks traded today, 952 were on the uptrend, and 933 went down.

Indian indices extended their losses from the afternoon session and closed in the red, with the Nifty 50 closing at 19,365. The volatility index, Nifty VIX, rose by 0.9% and closed at 12.2 points. Bata India rose 6% following reports about a tie-up with sportswear giant Adidas.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, with the benchmark index closing lower. Nifty PSU Bank closed higher, compared to Wednesday’s closing levels. According to Trendlyne’s sector dashboard, transportation emerged as the top-performing sector of the day, with a rise of over 1.9%.

Most European indices trade in the red. US indices futures trade lower, indicating a negative start. Morgan Stanley cuts China’s 2023 GDP growth to 4.7% from an earlier estimate of 5%.

  • Relative strength index (RSI) indicates that stocks like Shyam Metalics and Energy, Kalyan Jewellers India, Indian Railway Finance Corp and Lupin are in the overbought zone.

  • Fine Organic Industries, eClerx Services, and KPR Mill report strong annual return on capital employed (RoCE) of 54.9%, 34.8%, and 27.2% respectively in FY23. The companies outperform their respective sectors by 32.6, 16.1 and 7.3 percentage points.

  • Healthcare equipment & supplies, media and pharmaceuticals & biotechnologysectors rise more than 9% in the past month.

  • Power Finance Corp rises as the Ministry of Power appoints Parminder Chopra as the Chairman and Managing Director of the company. She assumes charge today.

  • Morgan Stanley reduces its forecast for China’s GDP growth in 2023 to 4.7% from the earlier estimate of 5%. The brokerage cites a steep slowdown in investments as a reason for the downgrade, among others.

  • Varun Beverages and Apar Industries touch their all-time highs of Rs 934.6 and Rs 4,453.9 respectively. The former has risen by 10.1% in the past month, while the latter increased by 24.9%.

  • Prabhudas Lilladher keeps its 'Buy' rating on Aster DM Healthcare with an upgraded target price of Rs 345. This indicates a potential upside of 12.8%. The brokerage believes that the company's margins will improve in the Indian market with brownfield expansion and the establishment of new hospitals in the Gulf Cooperation Council (GCC). It expects the healthcare company's revenue to grow at a CAGR of 8.9% over FY22-25.

  • Dr Agarwal's Eye Hospital is rising as its parent company, Dr Agarwal's Health Care, raises $80 million (approximately Rs 6,651.2 crore) from TPG Growth and Temasek. The company plans to invest more than Rs 1,200 crore to establish hospitals in India and Africa over the next three years. Dr Adil Agarwal, the CEO, says, "The investment will be used to support the business through its next phase of growth, including the acquisition of small hospitals and chains, as well as the greenfield expansion of our network."

  • Rashtriya Chemicals & Fertilizers rises as it receives environmental clearance (EC) from the Ministry of Environment, Forest and Climate Change, for its proposed project, installation of a new nano-urea fertilizer plant in Chembur, Mumbai. It appears in a screener of stocks with low debt.

  • Ashish Gaikwad, MD of Honeywell Automation India, says that the company's growth looks robust. He adds that its margins were impacted in Q1FY24 due to factors such as high competition and one-time costs. Gaikwad expects these margins to stabilize at their current levels. He also states that the current order book has increased by 41% YoY.

  • Power Grid Corp of India is falling after receiving a notification to commence operations for assets under the North Eastern Region Strengthening Scheme-VI.

  • CCL Products, Tata Elxsi and Tata Consultancy Services underperform the Nifty 50 index over the past month post their Q1FY24 results.

  • IT stocks like LTIMindtree,Tata Consultancy Services, Coforge and Persistent Systems are falling in trade. The broader sectoral index Nifty IT is also trading in the red.

  • JSW Investments, promoter of JSW Energy offloads a 1.3% stake (2.1 crore shares) worth Rs 718 crore in a block deal on Wednesday. Meanwhile, GQG Partners Emerging Market Fund picks up a 0.6% stake (10.3 lakh shares) in the company for Rs 351 crore.

  • HDFC Securities maintains its 'Buy' rating on Crompton Greaves Consumer Electricals with an unchanged target price of Rs 400. This indicates a potential upside of 39.4%. The brokerage anticipates a short-term margin decline due to cost increases. However,  it expects revenue to grow over the medium to long term, supported by enhanced branding, distribution, and R&D efforts. It expects the company's sales to grow at a CAGR of 9.2% over FY23-26.

  • Garware Technical Fibres' Q1FY24 net profit rises by 52.4% YoY to Rs 42.9 crore due to a fall in inventory cost. Its revenue also increases by 8.4% YoY due to improvement in the fibre and industrial products segment. It appears in a screener of stocks with high momentum scores.

  • Bata India is reportedly in talks with Adidas about a strategic partnership, with a possible tie-up focused towards the Indian market.

  • Glenmark Pharmaceuticals receives final approval from the US FDA for its abbreviated new drug application for tacrolimus ointment, a generic version of Leo Pharma AS' Protopic ointment. The ointment is used for the treatment of eczema and has an estimated annual sales of $15.4 million in the year ended June 2023, according to IQVIA.

  • Cochin Shipyard surges and hits a record high of Rs 904.45 as reports suggest that it may receive contracts worth more than Rs 1.2 lakh crore over the next 2-4 years.

  • Cipla is falling as the Food and Drugs Administration suspends its Patalganga manufacturing unit's licence for 10 days in December 2023. The order has been imposed due to the non-conformance of good manufacturing practices. Cipla is in the process of appealing against the suspension to the state government.

  • Indian Railway Finance Corp is falling as reports suggest that the Centre is considering to sell a part of its stake (11.4%) through an offer for sale. The Centre currently holds an 86.4% stake in the company.

  • Shipping companies like Mazagon Dock Shipbuilders, Great Eastern Shipping, Garden Reach Shipbuilders and Shipping Corp of India are rising in trade. The broader shipping industry is also trading in the green.

  • Shobha Gangwal, promoter of InterGlobe Aviation, sells a 7.1% stake in the company on Wednesday in multiple bulk deals.

  • Alpha Alternatives Msar LLP sells a 0.8% stake in Suven Pharmaceuticals for approx Rs 108.7 crore in a bulk deal on Wednesday.

  • Ramkrishna Forgings is rising as it bags an order worth 16 million Euros (approximately Rs 145 crore) from a European original equipment manufacturer. The order relates to the production and delivery of differential components for a period of four years.

Riding High:

Largecap and midcap gainers today include Indian Bank (409.00, 5.94%), REC Ltd. (235.10, 5.36%) and Bata India Ltd. (1,733.55, 5.25%).

Downers:

Largecap and midcap losers today include Indian Railway Finance Corporation Ltd. (47.65, -7.02%), Indian Overseas Bank (31.20, -4.44%) and JSW Energy Ltd. (352.55, -4.20%).

Movers and Shakers

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

Top high volume gainers on BSE included Apar Industries Ltd. (4,715.90, 9.82%), Amber Enterprises India Ltd. (2,837.20, 8.79%) and Cochin Shipyard Ltd. (875.70, 8.40%).

Top high volume losers on BSE were Eris Lifesciences Ltd. (794.85, -1.87%) and Sapphire Foods India Ltd. (1,325.50, -1.42%).

JM Financial Ltd. (78.25, 7.93%) was trading at 17.1 times of weekly average. Home First Finance Company India Ltd. (867.55, 2.49%) and Bata India Ltd. (1,733.55, 5.25%) were trading with volumes 8.1 and 5.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

26 stocks hit their 52 week highs, while 1 stock hit their 52 week lows.

Stocks touching their year highs included - Ajanta Pharma Ltd. (1,781.55, 0.50%), Akzo Nobel India Ltd. (2,849.25, -0.85%) and Emami Ltd. (509.10, -0.09%).

Stock making new 52 weeks lows included - Easy Trip Planners Ltd. (38.45, -2.90%).

12 stocks climbed above their 200 day SMA including IFB Industries Ltd. (892.80, 5.63%) and Rashtriya Chemicals & Fertilizers Ltd. (111.20, 3.06%). 11 stocks slipped below their 200 SMA including Network 18 Media & Investments Ltd. (60.95, -2.56%) and Aegis Logistics Ltd. (352.00, -1.91%).

 
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The Baseline
17 Aug 2023
As Russia and Saudi Arabia cut production, where are oil prices headed?
By Shreesh Biradar

Oil is not a dependable bet. Like other commodities, its price seesaws in unpredictable ways, and many analysts who tried to predict the future price of oil have got their fingers burned (remember the $200 price per barrel predictions in early 2022?)

Oil-producing nations have also taken a hit recently from the price volatility.

For a time, things were good. The OPEC countries saw windfall profits from April 2022 to January 2023 due to the Russia-Ukraine war. But the trend has since reversed. Excess supply is sloshing around in the market, and the unexpected slowdown of China's economy has hit oil prices hard.

in response, OPEC cut oil production, which drove oil prices higher by 18% since June 2023. But the cuts didn't have the full price impact they had hoped for. The S&P had projected that oil prices would be around $90 in 2023, but the ramp-up in Iranian oil production has cut short the rally, pushing prices down to $84 from a recent peak of $88.

In the meantime, India and China have benefited from cheap Russian Ural. But the price gap between Russian Ural and Saudi crude on delivery has narrowed,  from a $20 difference in the first quarter of 2023 to $8 in August. 

In this week’s Analyticks:

  • Oil price dynamics: Oil prices are defying analyst predictions
  • Screener: Commodities stocks with the highest revenue and net profit growth in Q1FY24

Let’s get into it.

As oil consumption slows, OPEC makes production cuts to keep prices up

GDP growth hasslowed down for most countries this year, resulting in lower crude oil consumption. China, the largest crude oil importer, and other developed nations are consuming less oil than expected.  The increasing adoption of electric vehicles across Europe, the US, and China has also limited the demand for crude.

The slowdown in consumption has resulted in higher inventory levels over the past four quarters.


Production cuts will lower inventory levels in the second half of 2023

To improve their revenue streams and get a better price for their oil, the OPEC cartel collectively reduced oil production by 1.2 million barrels per day. They are now looking to extend these cuts beyond September 2023. 

Saudi Arabia faces a potential budget deficit

Saudi Arabia depends on oil and petroleum for nearly 75% of its budget revenue. The surge in oil prices in 2022 gave  the Saudis a fiscal surplus of $27.7 billion. The country used the money to increase its defense spending. It also spent around $6 billion to acquire famous football players for its sports teams - including Portugal's Cristiano Ronaldo and Brazil's Neymar. 

However, with oil prices below $80 in the first half of 2023 and exports falling to a 19-month low, Saudi Arabia has had to pause its spending spree. Now the country is staring at a possible fiscal deficit. It already saw a budgetary deficit of roughly $2.2 billion in the first half of 2023.

Saudi Arabia saw budget surplus in 2022, after eight years of deficit 

According to the IMF, Saudi Arabia needs oil prices to be above $81 in 2023 to break even in its budget spending. TheIMFhas cut the Saudi economy's GDP growth forecast for 2023 from 3.1% to 1.9%, owing to lower oil prices and production cuts.

Saudi Arabia’s breakeven price of crude to meet its expenses stands at $81 per barrel in 2023 

As India and China turn to Russian Ural, Europe has replaced Asia as the top destination for Saudi crude oil. But Europe has not entirely compensated for Asia’s demand decline. To boost oil prices, Saudi Arabia inJune 2023 announced a voluntary production cut of 1 million barrels per day till September, on top of OPEC’s production cut of 1.2 million barrels per day.

Russia's cash crunch is also forcing it to cut oil production

The other big oil producer, Russia finds itself in a tough spot due to its expensive military campaign in Ukraine, and price caps on Ural exports imposed by the US and its allies. The Russian Ural, which is trading at a significant discount to crude, is being snapped up by India and China.

But higher volumes sold have not been able to make up for the revenue loss due to the price cap. This has led to a fiscal deficit of $28.3 billion fir Russia in the first half of 2023.

Russia is expected to have a budget deficit of 2.6% in 2023

Russia sold its oil for around $50-55 per barrel in the first half of 2023, but higher Ural prices in the second half of 2023 (around $60) are expected to reduce its deficit. To increase its revenue, Russia raised taxes on oil exports by 8% in August 2023.

Russia is taking steps to raise its oil price. It has pledged to reduce its crude exports by 5,00,000 barrels per day in August and an additional 3,00,000 barrels per day in September. A recent drone attack by Ukraine on a Russian oil tanker has also raised concerns about Ural supply, causing Ural prices to breach the $60 cap.

India walks the line, buying Russian oil at rates above price caps

China and India have been vocally against the price cap on Russian oil. They argue that since they aren't involved in the Russia-Ukraine conflict, their economies shouldn’t suffer. Finance Minister Nirmala Sitharman insisted that India will buy Russian Ural above the $60 price cap as long as it is cheaper than the market rate.

Right now, there are ways to get around the price cap. Unlike the free on board (FOB) basis, India’s crude import price is decided on a delivery basis (which includes the price of crude, insurance, shipping and other handling charges). This limits the transparency on the final price India is paying to Russia. 

India’s on-delivery price of Russian Ural for June stood at $68.2, while for Saudi crude oil it was $81.8. However, the latest data from Argus Media suggests that August's Ural crude delivered to India’s west coast is around $82. 

Russian Ural prices are at a discount of 16.6% compared to Saudi crude on a delivery basis

With the Ural price now significantly above the $60 per price cap, freight cost adjustments will be too large to go unnoticed. India and Russia need to find financiers, insurance providers, and shipping lines unaffected by Western sanctions. China, on the other hand, can substitute Russian Ural with Iranian oil. For India discounted Russian oil is the only way out to soften the blow of rising crude prices. 

India is now limiting its Russian imports

India depends on imports to fulfill 85% of its crude consumption, with Russian crude accounting for about 45% of these imports. India cannot buy more Russian oil because it has limited storage space (strategic reserves), which can hold only 9.5 days' worth of crude. And due to India's minimum purchase agreements with other traditional suppliers, it can't replace all of them with Russian imports. 

As the discount on Russian oil narrows, it becomes less appealing to export refined oil to Europe. This and India’s limited refining capacity for Russian Ural has restricted Ural imports to 2 million barrels per day.

Russian oil imports to India peak at 2 million barrels per day

While India has maintained a steady supply of refined oil exports to Europe so far, rising Ural prices could pose a challenge in India avoiding sanctions. As Western scrutiny intensifies, it remains to be seen whether India will persist in purchasing Russian Ural above the $60 cap. 


Screener: Oil, cement, utilities stocks with the highest revenue and profit growth in Q1FY24


HPCL shows strong growth in QoQ revenue and operating profit margin

As prices of raw commodities soften, margins for companies in key sectors have improved, resulting in increased profits. This screener shows stocks from the oil & gas, cement & cement products and utilities sectors with the highest growth in revenue and net profit in Q1FY24, along with an expansion in operating profit margin.

Significant stocks that appear in the screener are GMR Airports Infrastructure, Tata Power, Hindustan Petroleum Corp, JSW Energy, Bharat Petroleum Corp and ACC.

Hindustan Petroleum Corp’s revenue grew by 10.3% QoQ to Rs 1.2 lakh crore in Q1FY24, while its net profit improved by 87.5% QoQ to Rs 6,765.5 crore compared to a loss in Q1FY23. The oil & gas company has also posted an operating profit margin of 8.1% during the quarter. This was aided by a decline in the cost of raw materials due to an 8.7% decline in Brent crude oil to $72.7 per barrel.

Another oil & gas company, Bharat Petroleum Corp, also gained from the decline in crude oil prices. Its operating profit margin increased by 17.1% QoQ in Q1FY24. This contributed to a 54.9% YoY increase in net profit to Rs 10,644.3 crore during the quarter.

Cement company ACC’s revenue improved by 8.6% QoQ to Rs 5,278 crore in Q1FY24. Its net profit improved by 97.8% QoQ to Rs 466.1 crore, aided by a reduction in power &  fuel and employee benefit expenses. This led to an improvement in margins, with the operating profit margin rising 5.3 percentage points to 14.8%.

You can find more screeners here.

 
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The Baseline
16 Aug 2023
Five analyst picks with high net profit and revenue growth in Q1FY24
By Abhiraj Panchal

This week’s analyst picks look at stocks with high net profit and revenue growth in the recent Q1FY24 results.

1. Tata Motors: 

Geojit BNP Paribas upgrades its rating on this automobile company to a ‘Buy’ with a target price of Rs 737. This indicates an upside of 19.1%. In Q1FY24, Tata Motors reported a profit of Rs 3,202.8 crore, as against a loss of Rs 5,006.6 crore in Q1FY23. Its revenue has also grown by 42.3% YoY to Rs 1,03,596.6 crore. Analyst Saji John says, “Tata Motors reported strong profitability, driven by robust demand for luxury cars and continued growth in the commercial vehicles and private vehicles segments.”

The analyst believes that Tata Motors’ Indian business is steadily recovering, and anticipates sustained growth in the near term. He expects the company’s continuous efforts to minimise cost, especially in the Jaguar-Land Rover (JLR) division, and the favourable product mix to drive margin expansion in the coming quarters. John is optimistic on the stock, given JLR’s robust order backlog, rising demand, awareness of electric vehicles and favourable industry trends.

2. Maruti Suzuki India: 

KRChoksey maintains its ‘Buy’ call on this vehicle manufacturer with a target price of Rs 11,170, indicating an upside of 18.6%. In Q1FY24, the company’s net profit grew by 143.7% YoY to Rs 2,525.2 crore, while its revenue increased by 25.3% YoY to Rs 33,316.9 crore. Analyst Ashvath Rajan says, “Maruti Suzuki  outperformed the industry and the management expects the demand momentum to continue on the back of a good model lineup.”

The analyst believes that the growth in Q2FY24 will be impacted due to a high base effect, but absolute sales will continue. He also believes that the company has seen consistent improvement in its product mix due to the growing share of utility vehicles and new launches, which has led to better realizations. Rajan expects margin expansion to be led by stable commodity costs, a better product mix, better realizations and cost-saving efforts. He expects the company’s revenue and profit to achieve a CAGR of 14.9% and 25.7%, respectively, over FY24-25.

3. APL Apollo Tubes: 

ICICI Securities maintains its 'Buy' rating on this iron & steel products company with a target price of Rs 1,740, indicating an upside of 10.4%. Analysts Aman Dixit, Mohit Lohia and Pritish Urumkar hold a positive outlook due to the management's commitment to achieving a capacity of four metric tonnes per annum (MTPA) by the end of FY24 and five MTPA by the close of FY25. In Q1FY24, the company's profit surged by 80.8% YoY to Rs 193.6 crore, while revenue witnessed a 32.2% YoY increase.

The analysts believe that the company is resolute in its growth trajectory, focusing on capacity expansion, geographical diversification, and enriching the product mix. They project the company achieving a 10 MTPA capacity by FY30. Additionally, the management plans to raise the share of value-added sales to 70% by the end of FY25, compared to 57% in Q1FY24. The analysts see potential for a stock rally, given the management's growth plans and the expectation of improved profitability through value-added products and the advantages of scale in the short term.

4. Indigo Paints: 

Sharekhan maintains its ‘Buy’ rating on this paint manufacturer with a target price of Rs 1,850. This implies an upside of 21.8%. In Q1FY24, the company’s net profit surged by 57.2% YoY to Rs 31.3 crore and revenue grew by 23.7% YoY. Analysts at Sharekhan point out that the firm’s YoY revenue growth rate has outperformed the industry rate by nearly three times. They attribute this to “the company’s special focus on Tier-1 and 2 cities, along with various initiatives. Growth in Tier-1 and 2 cities is ahead of Tier-3 and 4, and rural areas. The management expects the trend to continue”

The analysts believe that the company’s strategy of focusing on Tier 1 & 2 cities will help it outperform the industry’s growth rate over the next 2-3 years. They also view  Indigo’s entry into the construction chemicals and waterproofing segments as an additional growth driver. Also, the analysts see the firm’s capacity expansion in water-based paints as a positive indicator for the coming quarters. They expect the company’s revenue to grow at a CAGR of 21.7% over FY23-25. 

5. Max Healthcare Institute: 

Edelweiss keeps its ‘Buy’ rating on this healthcare facilities company with a target price of Rs 680, implying an upside of 27.8%. In Q1FY24, the firm’s net profit grew by 38.9% YoY to Rs 240.1 crore and revenue increased by 20.5% YoY to Rs 1,285 crore. 

Analysts Thakur Ranvir Singh and Harsh Shah say that the company’s healthy Q1FY24 performance was “driven by higher average revenue per operating bed (ARPOB), healthy occupancy, increased revenue from international patients, and a rise in operating beds.” They add that the firm’s ARPOB grew by 13% YoY. 

The analysts are optimistic about the stock, given its focus on capacity expansion, scaling up in its asset-light business, and scouting for potential acquisitions. They also highlight the firm’s healthy balance sheet, which positions it to expand organically and inorganically without taking on too much debt. The analysts expect the hospital chain’s revenue to grow at a CAGR of 19.9% over FY23-25.

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

(You can find all analyst picks here)

 
Trendlyne Marketwatch
Trendlyne Marketwatch
16 Aug 2023
Market closes flat, HDFC Sec downgrades its rating on Bata India to ‘Reduce’ from ‘Add’

Trendlyne Analysis

Nifty 50 closed at 19,465.00 (30.5, 0.2%), BSE Sensex closed at 65,539.42 (137.5, 0.2%) while the broader Nifty 500 closed at 16,853.05 (27.5, 0.2%). Market breadth is in the green. Of the 1,933 stocks traded today, 993 were gainers and 894 were losers.

Indian indices recovered from their day lows and closed marginally higher, with the Nifty 50 closing above the 19,450 mark. UNO Minda closed 5.3% higher after it announced the commissioning of two manufacturing plants in Haryana, dedicated to electric vehicle (EV) components and systems.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Energy closed higher than Monday’s levels. According to Trendlyne's sector dashboard, Fertilizers was the top-performing sector of the day. Major Asian indices closed in the red, except for India’s BSE Sensex, which closed marginally higher.

European indices traded flat to lower, in line with the US index futures. Brent crude oil futures extended their losses from Tuesday and traded in the red for a third consecutive trading session.

  • Escorts Kubota sees a long buildup in its August 31 future series as its open interest rises 15.6% with a put-call ratio of 0.84.

  • Metal stocks like Steel Authority of India, Jindal Steel & Power, Tata Steel, National Aluminium Co and Hindalco Industries are falling in trade. Barring Vedanta, all the other constituents of the broader sectoral index, BSE Metal, are trading in the red.

  • GMR Airports Infrastructure falls despite its Q1FY24 net loss decreasing by 78.2% YoY to Rs 29.8 crore. Meanwhile, its EBITDA margin improves by 6.6 percentage points YoY and revenue grows by 30.6% YoY. The company appears in a screener of stocks with increasing quarterly revenue.

  • Safari Industries (India) and Zen Technologies touch their 52-week highs of Rs 3,590.05 and Rs 868 respectively. The former has risen 18.7% over the past month, while the latter increased by 40.9%.

  • Resurgent Trade and Investments and Emerging Market Investment DMCC, promoter groups of Adani Ports & Special Economic Zone, buy a 1.5% and a 0.5% stake in the company respectively.

  • Easy Trip Planners falls as its Q1FY24 net profit decreases by 21.5% YoY to Rs 26 crore. However, its revenue grows by 38.5% YoY aided by rising demand for air travel. The company appears in a screener of stocks with declining net profit and margins.

  • Kulin Lalbhai, Vice-Chairman and Non-Executive Director at Arvind Fashions, says the company maintains its revenue growth guidance of 10-15% in FY24. He adds that consumer sentiment has been muted, but believes it will improve during the festive season. He also expects the footwear segment to drive growth for the company.

  • HDFC Securities downgrades its rating on Bata India to ‘Reduce’ from ‘Add’ and lowers the target price to Rs 1,500 from Rs 1,650. This implies a downside of 8.3%. The revision is due to its weak top-line growth and margin contraction. It adds that the revenue growth in Q1 has been subdued despite the early launch of the end-of-season sale and Floatz (its sneaker brand) registering healthy traction.

  • Divi's Laboratories is falling as its net profit plunges by 49.3% YoY to Rs 356 crore in Q1FY24. Its revenue also decreases by 21.2% YoY due to a drop in sales in the European market and a decline in revenue from the custom synthesis segment. Its EBITDA margin contracts by 9.2 percentage points on the back of pricing pressure in Europe, growing raw material costs and employee benefit expenses. The company shows up in a screener of stocks with decreasing promoter holding.

  • The Managing Director and CEO of Aptech, Anil Pant, passes away on August 15. This comes after he took an indefinite leave on June 19 citing deteriorating health.

  • UNO Minda is rising as it announces the commissioning of two manufacturing plants in Haryana, dedicated to electric vehicle (EV) components and systems. The company’s aggregate order book for EV components and systems stands at Rs 2,500 crore, and it plans to achieve Rs 1,500 crore in revenue from its EV operations by FY26. The stock shows up in a screener for companies with high TTM EPS growth.

  • Aurobindo Pharma rises as its subsidiary, Eugia Pharma, gets final US FDA approval for its single-dose prefilled syringe, which is equivalent to FIRAZYR. The drug is used for the treatment of acute attacks of hereditary angioedema (HAE) in adults aged 18 and above. The company appears in a screener of stocks with strong momentum.

  • Rajesh Jejurika, the Executive Director and CEO (Auto and Farm Sector) at Mahindra & Mahindra, says there are significant opportunities in the lightweight tractor market. He adds that the company has invested $1,200 million on four Oja platforms and it will boost its presence in the US and Japan.

  • VIP Industries' Managing Director (MD) Anindya Dutta tenders his resignation on Monday. His resignation will be in effect from November 13, 2023. The company has appointed Neetu Kashiramka as the MD Designate and Chief Financial Officer, with effect from August 15.

  • SBFC Finance’s shares debut on the bourses at a 43.9% premium to the issue price of Rs 57. The Rs 1,025 crore IPO has received bids for 70.2 times the total shares on offer.

  • SRF falls as the GST department conducts a search on its factory premises in Bhiwadi, Rajasthan. The search has been ordered by the office of the Additional Commissioner, GST, Bhiwadi Zone, to obtain documents related to a claim of GST credit. The company appears in a screener of stocks with declining net cash flow.

  • Aster DM Healthcare’s Q1FY24 net profit drops by 92.9% YoY to Rs 4.9 crore despite its revenue rising by 20.8% YoY to Rs 3,215.4 crore. This decline in profitability is due to a sharp one-time increase in deferred tax. However, its EBITDA margins expand by 109 bps YoY to 12.1%, driven by improved realisations across its business verticals.

  • Tejas Networks is rising as it bags an order worth Rs 7,492 crore from Tata Consultancy Services (TCS) for the supply, support and maintenance services for BSNL's 4G/5G services. As per the order, the company will supply 4G/5G radio access network (RAN) equipment for 1 lakh sites under BSNL.

  • Economists raise their FY24 inflation forecasts for India following the surge in CPI inflation to a 15-month high in July, surpassing market estimates. This increase is due to a rise in food costs. Food inflation reached 11.51% in July, with vegetable inflation soaring to 37.34%. Citigroup revises its consumer price outlook to 5.7% in FY24 from the earlier 5.3%.

  • ITC rises as its Q1FY24 net profit increases by 16.3% YoY to Rs 5,104.9 crore. However, its revenue falls by 3.9% YoY due to declines in the agri business and paperboards, paper & packaging segments. Its EBITDA margin grows by 6.4 percentage points, aided by inventory expenses. The company appears in a screener of stocks with increasing net profit and margins.

  • InterGlobe Aviation's co-founder Rakesh Gangwal plans to sell a 4% stake worth Rs 3,730 crore through a block deal today, reports suggest.

  • Ashish Kacholia buys a 5.1% stake in Dhabriya Polywood for approx Rs 15.3 crore in a bulk deal on Monday.

  • India’s CPI inflation rises to a 15-month high of 7.4% in July, compared to 4.8% in June, due to a surge in food and vegetable prices. Food inflation increases to 11.5% from 4.5% in June.

  • Sunil Singhania's Abakkus Fund buys a 1% stake in Ujjivan Financial Services for approx Rs 56.9 crore in a bulk deal on Monday.

  • Infosys rises as it bags a deal worth €1.5 billion (Rs 13,624 crore) from Liberty Global for an initial five-year period. The agreement involves Infosys to evolve and scale up Liberty Global's digital entertainment and connectivity platforms. The deal can further be extended to eight years for €2.3 billion (Rs 20,891 crore). The company appears in a screener of stocks with improving RoA.

  • Vodafone Idea is falling as its net loss expands by 7.4% YoY to Rs 7,840 crore in Q1FY24. However, its revenue increases by 2.4% YoY owing to an improvement in subscriber mix and 4G subscriber additions. Its average revenue per user (ARPU) improves to Rs 139 during the quarter. The company appears in a screener of stocks with high interest payments compared to earnings.

Riding High:

Largecap and midcap gainers today include Indian Overseas Bank (32.65, 7.58%), JSW Energy Ltd. (368.00, 5.98%) and UNO Minda Ltd. (613.80, 5.08%).

Downers:

Largecap and midcap losers today include Crompton Greaves Consumer Electricals Ltd. (282.70, -5.88%), Indus Towers Ltd. (160.50, -5.81%) and Coforge Ltd. (5,075.95, -3.81%).

Volume Rockets

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

Top high volume gainers on BSE included Cochin Shipyard Ltd. (807.85, 17.44%), Mishra Dhatu Nigam Ltd. (384.70, 10.61%) and JBM Auto Ltd. (1,443.85, 10.13%).

Top high volume losers on BSE were Uflex Ltd. (376.60, -6.70%), InterGlobe Aviation Ltd. (2,458.65, -3.55%) and Balaji Amines Ltd. (2,107.10, -3.43%).

Oracle Financial Services Software Ltd. (4,099.05, 2.85%) was trading at 8.8 times of weekly average. UNO Minda Ltd. (613.80, 5.08%) and JK Paper Ltd. (352.35, 5.75%) were trading with volumes 8.6 and 8.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

30 stocks overperformed with 52 week highs, while 3 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Ajanta Pharma Ltd. (1,768.85, 1.74%), Ashok Leyland Ltd. (188.60, 0.94%) and Bank of Maharashtra (38.40, -1.16%).

Stocks making new 52 weeks lows included - UPL Ltd. (589.80, -0.08%) and Vedanta Ltd. (236.50, 1.07%).

7 stocks climbed above their 200 day SMA including Piramal Pharma Ltd. (101.10, 4.77%) and Network 18 Media & Investments Ltd. (62.55, 2.12%). 24 stocks slipped below their 200 SMA including Indus Towers Ltd. (160.50, -5.81%) and KNR Constructions Ltd. (242.60, -3.60%).

 
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The Baseline
14 Aug 2023
Which stocks did superstar investors sell in Q1FY24?
By Suhas Reddy

Investors pay close attention to the changes in superstar investors’ portfolios, as they provide valuable insights into which stocks and sectors the big guns are bullish and bearish on. 

Previously, we looked at the key superstar buys in Q1FY24. Now, let's analyse their sells. 

Rakesh Jhunjhunwala/RARE Enterprises reduces stakes in BFSI and pharma stocks

Rakesh Jhunjhunwala’s portfolio, which is currently managed by Rekha Jhunjhunwala (his wife) and Rare Enterprises, cut its stake in 15 companies in Q1FY24. The late big bull’s portfolio grew by 21.6% QoQ to Rs 38,885.3 crore.

The portfolio scaled down its holdings below 1% in three companies - Prozone Realty, a small-cap realty firm, (from 2.1%), Karur Vysya Bank (from 4.7%) and Edelweiss Financial Services (from 1.3%).

However, the biggest sell in the late Big Bull’s portfolio was in Metro Brands, where the stake in the footwear retailer was lowered by 4.8% from 14.4% to 9.6%, reducing its holding value in the firm from Rs 3,111.3 crore in Q4FY23 (March 31 closing price) to Rs 2,859.3 crore in Q1FY24. In the April-June quarter, the stock gained 17.9%. 

The Rare Enterprises managed portfolio also sold 2.55% and 1.44% stakes respectively in Rallis India (an agrochemicals company) and Autoline Industries (an auto parts & equipment maker), bringing its holdings in the companies down to 7.75% and 2.52% respectively. The portfolio also sold a 0.2% stake in Geojit Financial Services, bringing its holding to 8.2%.

It cut a 0.1% stake each in Raghav Productivity Enhancers, Jubilant Pharmova and Agro Tech Foods, reducing its holdings in these companies to 5.1%, 6.7% and 8.1% respectively. The investment company also made minor stake cuts in Wockhardt, Jubilant Ingrevia, Aptech, Star Health & Allied Insurance Co and Federal Bank bringing the holdings to 2.04%, 3.12%, 43.7%, 17.3% and 3.5% respectively. 

Sunil Singhania drops stake in a microcap company to below 1%

Sunil Singhania’s Abakkus Fund pared stake in nine companies in Q1FY24. The Fund’s net worth fell 2.3% QoQ to Rs 2,115.6 crore in Q1. It sold its stake in Tracxn Technologies, an IT platform, to below 1%. It held a 1.3% stake in the company in the previous quarter. The fund also sold 1.3% and 0.4% stakes respectively in Rajshree Polypack and Technocraft Industries (India), both commercial services and supplies companies. It now holds 6.2% and 2.8% stakes in the respective companies.

Over the past year, Abakkus has gradually reduced its stake in The Anup Engineering, an industrial machinery company. It now holds a 3.8% stake, against 5.7% in Q1FY23. It sold a 0.2% stake in the latest quarter. Similarly, it cut 0.2% stake each in Carysil (consumer durables manufacturer) and Siyaram Silk Mills (textile company) to now hold 5.9% and 1.9% respectively. 

The fund now holds a 1.7% stake in AGI Greenpac and a 1.5% stake in HG Infra Engineering after selling a 0.1% stake in both. It also cut a minor stake in Dreamfolks Services and now holds 1.8%.

Ashish Kacholia reduces stakes in five companies to below 1%

Ashish Kacholia sold stake in 11 companies in Q1FY24. During the quarter, his net worth increased by 22.4% QoQ to Rs 2,028.4 crore. He reduced his stakes in Creative Newtech (internet catalogue company), Megastar Foods (food products manufacturer), United Drilling Tools (industrial goods company), Goldiam International (apparels and accessories manufacturer) and D-Link (India) (IT company) to below 1%. He held 2.7%, 1.1%, 2.8%, 1% and 2.1% in them respectively in the previous quarter.

The next biggest sell Kacholia made was in plastic products company Shaily Engineering Plastics. He sold 1% and now holds 9.6%. He cut his stake in Likhitha Infrastructure (engineering company) to 1.8% by selling a 0.2% stake. 

The ace investor also trimmed 0.1% stake each in Repro India and SJS Enterprises (auto parts manufacturers) and now holds 3.5% and 4.3% respectively. He also slightly reduced his stake in Safari Industries (India) to 2.3% and in Carysil to 3.7%.

Vijay Kedia cuts stake in loss-making company to below 1%

Vijay Kedia cuts stake in five companies in Q1FY24. His net worth increased by 65.3% QoQ to Rs 985 crore. He has been reducing his stake in Ramco Systems for six consecutive quarters and now holds below 1% of the company. The IT company has reported losses for nine consecutive quarters. 

Kedia cut his stake in Repro India to 6.8% by selling 0.3% in the publishing company. He sold 0.2% and 0.1% stakes in Elecon Engineering and Talbros Automotive Components, respectively. He now holds 1.8% and 1.2% in them respectively. He also cut his stake in Tejas Networks (a telecom company) to 2%. 

Dolly Khanna slows down after heavy offloading in the previous quarters

In Q1FY24, Dolly Khanna reduced her stakes in only five companies and the value of her portfolio increased by 37.1% QoQ to Rs 308.9 crore. Among her sells, she took her holdings below 1% in only Ajanta Soya (from 1.3%), an edible oils company. The stock fell by 4.2% in Q1FY24. 

She trimmed a 0.6% stake in KCP, a cement manufacturer, taking it to 1.7%. The ace investor also pared her stake in Chennai Petroleum Corp by 0.3% to 1.8%. She sold 0.16% and 0.1% stakes in Simran Farms and Tinna Rubber and Infrastructure, respectively, reducing her holdings in them to 1.88% and 1.3%.  

Porinju V Veliyath pares holding in only one stock in Q1FY24

Porinju V Veliyath sold his stake in only one company in Q1FY24, while the value of his portfolio grew by 9.7% QoQ to 151.3 crore. He reduced his holding in TCM, a micro-cap agrochemicals company, from 1% to below 1%. The company gained 17.2% during Q1FY24.

This analysis by Trendlyne is meant for investor education - to help understand companies and make informed investment decisions on their own. It should not be considered an investment recommendation.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
14 Aug 2023
Market closes flat, Divi's Laboratories' Q1 net profit down 49.3% YoY to Rs 356 crore

Trendlyne Analysis 

Nifty 50 closed at 19,434.55 (6.3, 0.0%), BSE Sensex closed at 65,401.92 (79.3, 0.1%) while the broader Nifty 500 closed at 16,825.55 (-34.6, -0.2%). Market breadth is in the red. Of the 1953 stocks traded today, 707 were on the uptrend, and 1207 went down.

Indian indices recovered from the losses from the afternoon session and close flat, with the Nifty 50 closing at 19,435. The volatility index, Nifty VIX, rose by 4.2% and closed at 12 points. India’s trade deficit in July rose to $20.7 billion against $20.1 billion in June. India’s imports in July contracted by 17% YoY, while exports shrank by 16% YoY.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red following the benchmark. Nifty Media and Nifty IT closed higher, compared to Friday’s closing levels. According to Trendlyne’s sector dashboard, healthcare equipment & supplies emerged as the top-performing sector of the day, with a rise of over 0.9%.

Most European indices trade in the green except for England’s FTSE 100 trading lower. US indices futures trade higher, indicating a positive start. Germany’s July wholesale price index (WPI) data indicated wholesale inflation dropping by 2.8% YoY against the estimates of a 2.6% decline. The WPI for June fell by 2.9% YoY.

  • Relative strength index (RSI) indicates that stocks like Shyam Metalics and Energy, Gland Pharma, GMR Airports Infrastructure and REC are in the overbought zone.

  • JK Cement falls as its Q1FY24 net profit decreases by 29.5% YoY to Rs 114.7 crore. The decline is due to higher raw material, finance, power & fuel and freight & forwarding expenses. However, its revenue grows by 22.2% YoY, aided by cement and cement-related products. The company appears in a screener of stocks with declining net profit and margins.

  • India’s merchandise exports stand at $32.3 billion in July and imports at $52.9 billion, while the trade deficit narrows YoY to $20.7 billion.

  • Spicejet surges more than 9% as it posts a net profit of Rs 197.6 crore in Q1FY24 compared to a loss in Q1FY23. However, its revenue declines by 18.5% YoY to Rs 2,003.6 crore due to the air transport and freighter & logistics services. The company shows up in a screener of stocks with high interest payments compared to earnings.

  • Patanjali Foods falls as its Q1FY24 net profit decreases by 63.6% YoY to Rs 87.8 crore. However, its revenue grows by 6% YoY, aided by the edible oils and wind turbine power generation segments. The company appears in a screener of stocks with declining RoA.

  • AstraZeneca Pharma India is rising as its Q1FY24 net profit jumps 167.3% YoY to Rs 53.9 crore, while its revenue increases by 27.2% YoY. The stock shows up in a screener for companies with revenues increasing sequentially over the past four quarters.

  • PR Hari, CMD of Garden Reach Shipbuilders & Engineers, believes that they will be able to continue similar levels of growth for the remainder of the fiscal year. He adds that it has executed orders worth Rs 750 crore during the quarter. Its Q1FY24 net profit rises by 52.8% YoY to Rs 76.7 crore and revenue increases by 33.2% YoY.

  • Adani Group stocks fall as reports suggest that the Securities and Exchange Board of India (SEBI) has filed an application before the Supreme Court seeking 15 more days to submit its report on the Adani-Hindenburg case. SEBI states that it has examined a total of 24 matters, of which investigation into 17 have been completed.

  • Divi's Laboratories falls as its Q1FY24 net profit decreases by 49.3% YoY to Rs 356 crore. Its revenue and EBITDA margin drop by 20.6% YoY and 8.5 percentage points respectively, aided by raw material and employee benefit expenses. The company appears in a screener of stocks with a major fall in TTM net profit.

  • Adani Ports & Special Economic Zone falls as Deloitte Haskins & Sells resigns as the statutory auditor of the company. The company has appointed MSKA & Associates as its new statutory auditor. Adani Ports appears in a screener of stocks with high promoter stock pledges.

  • TVS Supply Chain Solutions' Rs 880 crore IPO gets bids for 2.78X the available 2.5 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 7.61X of the available 46.3 lakh shares on offer.

  • Sterling and Wilson Renewable Energy is rising as it bags an order worth Rs 1,130 crore from Gujarat Industries Power Co for the construction of a solar power project in Khavda, Gujarat. The company shows up in a screener for stocks that have gained more than 20% over a month.

  • India’s WPI inflation contracts to -1.4% in July. Food inflation surges to 7.8%, while prices of mineral oils, basic metals, textiles, and chemicals & chemical products decline.

  • Ramkrishna Forgings is rising as it bags an order worth $13.6 million (approximately Rs 113.2 crore) per year from a North American client. The contract is for the production and supply of rear axle and transmission components for class 5, 6 and 7 vehicles.

  • Jindal Steel & Power is falling as its Q1FY24 net profit declines 15.4% YoY to 1,686.9 crore, while its revenue dips by 3.5% YoY to Rs 12,588.3 crore due to a fall in steel prices. Its EBITDA margin contracts by 5.6 percentage points YoY to 20.8%. The stock shows up in ascreener for companies with high promoter stock pledges.

  • Redington is falling as Managing Director Rajiv Srivastava resigns on Friday due to personal reasons.

  • ITC appoints Hemant Malik as Wholetime Director of the company with effect from August 12, 2023. It also re-appoints Sanjiv Puri as Managing Director and Chairman with effect from July 22, 2024.

  • CLSA maintains its ‘Buy’ rating on Voltas with a target price of Rs 1,000. The brokerage notes a 16% growth in revenue from the company's unitary cooling products segment in Q1FY24. It adds that the firm's volumes have increased by 15%, while its market share declined. It also highlights the weak quarter reported by the electro-mechanical projects & services segment.

  • NMDC rises as its Q1FY24 net profit increases by 12.9% YoY to Rs 1,661 crore. Its revenue also grows by 15.8% YoY, aided by the iron ore, pellet and other mineral & services segments. The company appears in a screener of stocks with strong momentum.

  • Larsen & Toubro wins orders worth Rs 1,000-2,500 crore in India and Bangladesh. The projects include the construction of a cricket stadium in Uttar Pradesh, India and four Hi-Tech IT parks in Bangladesh. The stock shows up in a screener for companies with high TTM EPS growth.

  • Societe Generale buys a 0.5% stake in Rites for approx Rs 58 crore in a bulk deal on Friday.

  • Indian rupee depreciates 16 paise and opens at a 10-month low of 83.01, from the previous close of 82.85 against the US dollar. The fall is on the back of a surge in US Treasury yields and sells by FIIs in the domestic equity market.

  • Metal stocks like Adani Enterprises, Jindal Steel & Power,National Aluminium and Steel Authority of India (SAIL) are falling in trade. The broader sectoral indices Nifty Metal and BSE Metal are also trading in the red.

  • Oil and Natural Gas Corp (ONGC) rises to a new 52-week of Rs 180.5 as its Q1Y24 net profit increases by 18.4% YoY to Rs 14,133.9 crore. This growth is due to reduced expenses on raw materials, inventory, and statutory levies. However, its revenue falls by 9.7% YoY, aided by its refining & marketing and exploration & production segments. The company appears in a screener of stocks with strong momentum.

  • FSN E-Commerce Ventures is falling as its net profit declines by 27.4% YoY to Rs 3.3 crore in Q1FY24 due to increased costs of raw materials, finance, and employee benefits. However, its revenue improves by 23.8% YoY, owing to an increase in revenue from the beauty & personal care and fashion segments. The company appears in a screener of stocks with return on equity (RoE) declining over the past two years.

Riding High:

Largecap and midcap gainers today include NMDC Ltd. (118.70, 4.35%), Indian Railway Finance Corporation Ltd. (50.85, 3.99%) and Bank of India (89.70, 2.81%).

Downers:

Largecap and midcap losers today include FSN E-Commerce Ventures Ltd. (134.30, -8.14%), Jindal Steel & Power Ltd. (662.25, -5.15%) and Muthoot Finance Ltd. (1,282.20, -5.03%).

Movers and Shakers

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

Top high volume gainers on BSE included Mazagon Dock Shipbuilders Ltd. (1,863.10, 6.99%), JBM Auto Ltd. (1,311.10, 6.69%) and Cochin Shipyard Ltd. (687.90, 6.51%).

Top high volume losers on BSE were FSN E-Commerce Ventures Ltd. (134.30, -8.14%), City Union Bank Ltd. (121.50, -5.85%) and Timken India Ltd. (3,218.75, -5.38%).

AstraZeneca Pharma India Ltd. (3,958.75, 1.81%) was trading at 27.1 times of weekly average. Muthoot Finance Ltd. (1,282.20, -5.03%) and PVR INOX Ltd. (1,713.55, 4.56%) were trading with volumes 7.6 and 4.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

15 stocks overperformed with 52 week highs, while 2 stocks hit their 52 week lows.

Stocks touching their year highs included - AIA Engineering Ltd. (3,624.30, 0.66%), Alembic Pharmaceuticals Ltd. (790.60, 0.22%) and Aurobindo Pharma Ltd. (871.65, 0.98%).

Stocks making new 52 weeks lows included - UPL Ltd. (590.30, -1.57%) and Vedanta Ltd. (234.00, -1.76%).

4 stocks climbed above their 200 day SMA including NMDC Ltd. (118.70, 4.35%) and Tamilnad Mercantile Bank Ltd. (475.70, 3.31%). 30 stocks slipped below their 200 SMA including Rashtriya Chemicals & Fertilizers Ltd. (106.80, -5.36%) and GMM Pfaudler Ltd. (1,522.60, -4.25%).

 
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The Baseline
11 Aug 2023
Five Interesting Stocks Today
  1. Dixon Technologies (India) Ltd: Thisconsumer electronics manufacturer is expected to sign new contracts following new government restrictions on importing laptops, tablets, and servers. The stock rose 7.5% on the day of the announcement. Dixon Technologies’ CFO, Saurabh Gupta, commenting onthe news, said, “The company’s IT hardware segment turnover could rise by Rs 3,000-4,000 crore in the next two years due to the government policy.”

In Q1FY24, Dixon’s revenue increased by 14.6% YoY, driven by higher sales in the mobile division. However, TV and LED light sales have been muted. Lower raw material costs led to a 55 bps expansion in gross margins. Dixon’s EBITDA margin improved by 53 bps YoY and is projected to increase by another 30 bps in FY24. New client acquisitions in mobile manufacturing, as well as incremental orders from existing clients are expected to drive revenue growth. The firm aims to improve margins by adding more products through original design manufacturing and backward integration, with a  planned capex of Rs 400 crore for FY24. The stock shows up in thescreener for growth in quarterly net profit and profit margin.

Dixon has partnered with China-based mobile companies Xiaomi and Itel to manufacture smartphones in India. Production is expected to start in September 2023. There are also recentreports that Dixon is in talks with Google to produce Google Pixel Phones in India. Dixon started the production of 4G phones for Jio in May 2023.

BOB Capitals says Dixon Technologies has the ability to deliver revenue and PAT growth of 45% and 60% respectively in FY24. However, the stock’s recent run-up discounts the near-term positive outlook. The brokerage has revised its rating from ‘Buy’ to ‘Hold’. 

  1. Samvardhana Motherson International: This auto parts & equipment manufacturer fell 2.9% on Thursday as its revenue marginally missed Trendlyne’s Forecaster estimates by 0.9% in Q1FY24. However, its net profit jumped 2.3x YoY to Rs 600.9 crore in Q1 but fell 8.1% QoQ. 

Despite the initial fall in share price after the result announcement, it recovered on Friday and closed 1.9% higher. The company's Q1 revenue improved by 27.7% YoY to Rs 22,280.3 crore, aided by an increase in revenue from the wiring harness, modules & polymer products, vision systems and emerging businesses segments. The rise in net profit and revenue helps the company show up in a screener of stocks with good quarterly growth in the recent results.

In terms of geography mix, sales in North America, Europe and China have witnessed YoY growth, but North American and European sales dipped QoQ due to declining demand. According to the management, “Macroeconomic factors are stabilising at elevated levels, while wage bills and interest rates continue to pressure profitability on a QoQ basis.” 

Post results, Motilal Oswal maintains its ‘Buy’ rating on the stock with an upgraded target price of Rs 115 per share. This indicates a potential upside of 17.8%. The brokerage remains positive about the company’s future based on the overall recovery of the industry, , strong order book execution for Samvardhana Motherson Automotive Systems Group BV (SMRPBV), receding cost inflation, and capacities in place for growth. 

The stock has a consensus estimate of ‘Buy’ from 13 out of 18 analysts. However, it is in ‘the Sell’ zone based on the time it has spent below its current PE.

  1. Trent: This retailer rose by over 6% in trade on Thursday and touched its all-time high of Rs 1,915. This uptrend follows the release of its Q1FY24 results on Wednesday. The company’s net profit has risen by 32.9% YoY to Rs 173.5 crore and revenue grew by 45.8% YoY, beating Trendlyne’s Forecaster estimates by 19.7% and 14.7% respectively. This growth comes despite a slowdown in discretionary spending, and subdued market conditions. In addition to exceeding Forecaster estimates, Trent has also outperformed its peers. For instance, Aditya Birla Fashion & Retail posted a net loss of Rs 141.4 crore in Q1FY24, while Shoppers Stop’s net profit fell by 36.5% YoY to 14.5 crore. 

The company’s progress was driven by a 40% YoY growth in store count, reaching a total of 609 fashion stores. The company added seven Westside stores in Q1, taking the total to 221, and added 40 Zudio stores (also closed 4 stores), bringing the total to 388. The firm plans to add 200 Zudio stores in FY24. Noel N Tata, Chairman of Trent, says, “We will further expand our reach, aiming to be even closer  and more convenient for  customers, reinforcing our brand commitment.”

Despite its healthy performance, the fashion retailer’s gross margins have contracted by 479 bps YoY to 44.5%. According to ICICI Securities, the fall in margins is due to an increasing mix of Zudio, which has a relatively lower margin profile. While Westside serves as the company’s flagship brand, Zudio represents its value-fashion brand. Also, a 70.2% YoY rise in rental expenses increased pressure on its margins. 

Overall, the company’s balance sheet is healthy despite its expansion strategy. Trent plans to aggressively increase its store count in key markets and expand its digital presence to drive growth in the coming quarters.

  1. Zomato: This food delivery services provider reported its first-ever profit in Q1FY24 on the back of  a 64.2% YoY revenue growth. Despite a loss before tax, a deferred tax credit of Rs 17 crore has resulted in a net profit of Rs 2 crore, beating Trendlyne Forecaster’s estimated loss of Rs 168.5 crore. Post results, Zomato touched a 52-week high of Rs 102.9 on Monday and has risen by 7.9% in the past week. It also features in a screener for stocks with the highest recovery from 52-week lows.

Temporary store closures in Delhi and reduced traffic of delivery partners in April-May (summer season) impacted Blinkit’s (quick commerce segment) gross order value, resulting in muted growth. Yet, its average order value improved. On the other hand, the Hyperpure platform saw a 27% YoY growth in revenue as Zomato increased the minimum order value. 

Easing competitive pressures in the quick commerce segment, driven by a lack of funding for smaller players, is expected to contribute to future growth. Zomato dominates the food delivery market and boasts an increasing user base. Chief Financial Officer Akshant Goyal says, “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.”

Given improved visibility of profitability and sustained improvement in underlying operating metrics, ICICI Securities maintains a ‘Buy’ call on Zomato, and expects Blinkit to turn profitable by FY25 and Hyperpure by FY26. According to Trendlyne’s Forecaster, the company has a consensus recommendation of ‘Buy’ from 25 analysts, of which 17 are ‘Strong Buy’.

  1. Emami: This personal products company has risen around 15% since Monday and is trading near its 52-week high of Rs 524 after reporting healthy Q1FY24 results. As a result, the company’s share price has outperformed its sector by 21.7% in the past month and features in a screener of stocks with strong momentum.

The company’s net profit surged by 86.5% YoY to Rs 137.7 crore, driven by a fall in the cost of inventory, and beat Trendlyne’s Forecaster estimates by 12.3%. Its revenue also rose by 6.8% YoY, due to healthy growth in both domestic and international businesses. Its gross margins also improved by 240 bps on the back of easing input costs and a better product mix. 

In Q1FY24, FMCG companies saw their operating margins expand YoY, thanks to the cooling of inflation over the past few months and a gradual recovery in rural demand. Mohan Goenka, Vice-Chairman and Whole-Time Director of the company, says, "Going forward, we expect a steady recovery in rural demand, led by the easing of liquidity pressure, forecast of near normal monsoon and moderation of inflation.”

Despite a rise in revenue, the company’s summer product segment has witnessed a 5% decline in sales due to erratic summer and monsoon conditions across the country. Meanwhile, sales across the non-summer portfolio (which consists of Zandu pain management, BoroPlus and Kesh King ranges) grew by 16%.

ICICI Securities maintains its ‘Add’ rating post Emami’s Q1 results, but raises the target price to Rs 520. The brokerage has a positive outlook on the FMCG company, noting its distribution expansion plans and new product launches. Emami makes it to a screener of stocks where brokers have upgraded recommendations or target prices in the past month.

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

 
Trendlyne Marketwatch
Trendlyne Marketwatch
11 Aug 2023
Market closes lower, Allcargo Logistics' Q1 net profit down 53.7% YoY to Rs 122.6 crore

Trendlyne Analysis

Nifty 50 closed at 19,428.30 (-114.8, -0.6%), BSE Sensex closed at 65,322.65 (-365.5, -0.6%) while the broader Nifty 500 closed at 16,860.15 (-79.7, -0.5%). Of the 1,924 stocks traded today, 739 were on the uptick, and 1,133 were down.

Indian indices extended their losses from the afternoon session and closed in the red, with the Nifty 50 closing below the 19,450 mark. Indian indices posted weekly losses for a third straight week after hitting their all-time high on July 20. HCL Technologies closed over 2.9% higher after it signed a deal worth $2.1 billion with Verizon Business to provide managed network solutions to its global enterprise customers.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, following the benchmark index. Nifty Media and Nifty Pharma closed sharply lower than their Thursday’s close. According to Trendlyne's sector dashboard, Media was the top-performing sector of the week as it rose over 6.9%.

European indices traded in the red, in line with most major Asian indices. US index futures traded flat or lower, indicating a cautious start to the trading session. Brent crude oil futures traded flat after falling over 1.3% on Thursday.

  • Money flow index (MFI) indicates that stocks like Gland Pharma, Cipla, FDC and Indian Railway Finance Corp are in the overbought zone.

  • 3M India and Force Motors touch their 52-week highs of Rs 29,310 and Rs 3,342.7 respectively. The former has risen 4.5% over the past month, while the latter increased by 29.1%.

  • Apollo Hospitals Enterprise falls as its Q1FY24 net profit decreases by 47.5% YoY to Rs 166.6 crore due to higher inventory and employee benefit expenses. However, its revenue rises by 16.6% YoY, aided by healthcare services and digital health & pharmacy distribution. The company appears in a screener of stocks with declining quarterly profits.

  • Apollo Tyres plunges more than 7% despite its net profit surging by 123.8% YoY to Rs 396.9 crore in Q1FY24. Its revenue improves by 5.1% YoY, aided by the Asia Pacific Middle East and Africa (APMEA) and Europe segments. However, the revenue misses Trendlyne's Forecaster estimates by 1.4%. It appears in a screener of stocks where mutual funds have decreased their holdings.

  • Baba Kalyani, CMD of Bharat Forge, says 80% of the company’s defence business is exports, with a strong demand for defence products across different countries. He adds that it targets Rs 12,000 crore in revenue from the defence vertical in FY24.

  • Raymond touches a 52-week high as its Q1FY24 net profit rises by 1,216.8% YoY to Rs 1,065.3 crore due to gains from the complete shareholding acquisition of Castello Italia, ltaly. Its revenue also increases by 2.5% YoY. The company appears in a screener of stocks with strong momentum.

  • Info Edge (India) falls despite posting a Q1FY24 net profit of Rs 158.6 crore, compared to a net loss of Rs 272.8 crore in Q4FY23. The profit rise is aided by reduced advertising and promotion expenses. However, its revenue grows by 4.1X YoY on the back of growth in the recruitment solutions and real estate segments. The company appears in a screener of stocks with MACD crossover above the signal line.

  • TVS Supply Chain Solutions' Rs 880 crore IPO gets bids for 1.03X the available 2.5 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 3.62X of the available 46.3 lakh shares on offer.

  • Axis Direct downgrades its rating on UNO Minda to ‘Hold’ from ‘Buy’ but raises the target price to Rs 620 from Rs 600. This implies an upside of 5.2%. The brokerage cites the stock’s recent run-up in the market for lowering its rating. However, it believes the firm will continue its operational outperformance on the back of its EV product portfolio, robust order book and capacity expansion projects.

  • Lemon Tree Hotels falls despite its Q1FY24 net profit rising 69.4% YoY to Rs 23.5 crore. Its revenue grows by 16.8% YoY, aided by average room rent and occupancy. The company appears in a screener of stocks with improving RoA.

  • Allcargo Logistics falls as its Q1FY24 net profit decreases by 53.7% YoY to Rs 122.6 crore due to higher employee benefits and finance expenses. Its revenue drops by 42.2% YoY, aided by international supply chain and express distribution. The company appears in a screener of stocks with declining quarterly revenues.

  • Foreign institutional investors invest Rs 3,256.9 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest outflow of Rs 16,074.1 crore from foreign investors.

  • Zydus Lifesciences' Q1FY24 net profit jumps 109.7% YoY to Rs 1,086.9 crore as EBITDA margins expand by 8.3 percentage points YoY. Its revenue rises by 28.4% YoY, led by robust growth in the US formulations segment. The stock shows up in a screener for companies with revenue increasing sequentially for the past four quarters.

  • Anuj Poddar, MD & CEO of Bajaj Electricals, reports a 6% growth in appliance segment volumes during Q1, with the fans segment declining around 10-11%. He says that achieving a double-digit EBITDA margin for FY24 is not feasible, but remains optimistic and assures that the trajectory will be upward.

  • Tilaknagar Industries is rising as it prepays a restructured debt amounting to Rs 176.2 crore to Edelweiss Asset Reconstruction. The company has funded the prepayment through a loan of Rs 130 crore from Kotak Mahindra Bank and utilizing internal accruals.

  • Torrent Power is falling despite its net profit growing by 3% YoY to Rs 517.3 crore in Q1FY24. Revenue also improves by 12.6% YoY, aided by the generation, transmission & distribution and renewables segments. The company appears in ascreener of affordable stocks with high return on equity and momentum.

  • Citibank sells a 1.1% stake in Tata Motors for approx Rs 2,089.2 crore in a bulk deal on Thursday.

  • The MSCI Global Standard Index adds eight companies, including Ashok Leyland, Astral, Cummins India, and Supreme Industries, to its list during its August review. Meanwhile,ACC has been excluded from the MSCI Global Standard India Index, while the MSCI India SmallCap index has seen 41 new additions.

  • K P R Developers, promoter of KPR Mill, sells a 0.5% stake in the company for approx Rs 114.1 crore in a bulk deal on Thursday.

  • GMM Pfaudler rises in trade as its Q1FY24 net profit increases by 22% YoY to Rs 835.2 crore. Revenue improves by 23.4% YoY due to robust performance in its overseas segment. It appears in a screener of companies with zero promoter pledge.

  • PSU banks like Indian Overseas Bank, Central Bank of India, UCO Bank, Punjab & Sind Bank and Bank of Maharashtra are rising in trade. The broader sectoral index, Nifty PSU Bank, is also trading in the green.

  • Morgan Stanley has an ‘Overweight’ rating on Page Industries and raises the target price to Rs 44,738. The brokerage believes that the company's margins have improved sharply in Q1 on the back of cost-control measures. It adds that the firm's volume has been impacted by lower demand, but the management is hoping for a strong festive season.

  • Life Insurance Corporation of India rises as its Q1FY24 net profit increases by 13.9X YoY to Rs 9,543.7 crore due to a change in the accounting of solvency margin. While its revenue grows by 12% YoY, the gross value of new business added drops by 7% YoY. The company appears in a screener of stocks with strong annual EPS growth.

  • HCL Technologies is rising as it signs a deal worth $2.1 billion with Verizon Business to provide managed network solutions to its global enterprise customers. The total contract value will be spread out over the next six years. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Steel Authority of India falls as its Q1FY24 net profit decreases by 73.6% YoY to Rs 212.5 crore due to higher finance and inventory expenses. However, its revenue grows by 2.6% YoY, aided by Salem, IISCO and Durgapur steel plants. The company appears in a screener of stocks with a significant drop in TTM net profit.

  • Hero MotoCorp’s Q1FY24 net profit rises 20.3% YoY to Rs 710.1 crore and revenue grows by 4.8% YoY. Its EBITDA margin expands by 250 bps YoY to 13.8%, driven by softening commodity costs, cost-saving programs and strategic price hikes. Niranjan Gupta, CEO of the company, says, "The key economic indicators are trending in a positive direction, and a normal monsoon augurs well for demand, as we will soon enter the festive season.”

Riding High:

Largecap and midcap gainers today include Indian Overseas Bank (30.55, 13.36%), Gujarat Fluorochemicals Ltd. (2,916.10, 6.51%) and Supreme Industries Ltd. (4,071.35, 5.72%).

Downers:

Largecap and midcap losers today include Alkem Laboratories Ltd. (3,822.10, -7.71%), Torrent Power Ltd. (639.90, -4.71%) and Info Edge (India) Ltd. (4,460.80, -4.06%).

Volume Rockets

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

Top high volume gainers on BSE included Indian Overseas Bank (30.55, 13.36%), Kalyan Jewellers India Ltd. (202.40, 11.52%) and GMM Pfaudler Ltd. (1,590.10, 9.67%).

Top high volume losers on BSE were Apollo Tyres Ltd. (395.85, -8.27%), Alkem Laboratories Ltd. (3,822.10, -7.71%) and Polyplex Corporation Ltd. (1,195.45, -4.76%).

Supreme Industries Ltd. (4,071.35, 5.72%) was trading at 13.5 times of weekly average. Relaxo Footwears Ltd. (956.60, 0.94%) and Central Bank of India (32.95, 6.63%) were trading with volumes 8.4 and 8.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

32 stocks hit their 52-week highs,

Stocks touching their year highs included - 3M India Ltd. (29,350.00, 4.38%), AIA Engineering Ltd. (3,600.65, 0.37%) and Ashok Leyland Ltd. (187.10, 0.48%).

15 stocks climbed above their 200 day SMA including GMM Pfaudler Ltd. (1,590.10, 9.67%) and RHI Magnesita India Ltd. (724.25, 7.42%). 5 stocks slipped below their 200 SMA including Container Corporation of India Ltd. (677.95, -2.67%) and Pfizer Ltd. (3,965.25, -1.84%).

 
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The Baseline
10 Aug 2023
Chart of the Week: HDFC AMC and Timken India top in promoters selling shares in the June quarter
By Akshat Singh

Promoters, being the driving force behind a company, have a clearer view of its operations, strategies, and potential. Their level of ownership reflects their confidence in the company's growth prospects. 

So high promoter holdings can signify strong ownership and confidence in the company., The high stake aligns their interests with shareholders and provides management stability. Fluctuations in promoter holdings can indicate potential risks, impacting market sentiment, and raising concerns about minority shareholders' interests. It can also signal strong buying interest from an outside investor, which compels promoters to sell some stock. So while promoter selling can be a negative signal for the company, it has to be viewed in context of the company’s overall performance and the size of the promoter’s current holding.

In this edition of Chart of the Week, we will analyze companies from a screener which shows the percentage QoQ change in promoter holdings.

Major sectors that appear in the screener are general industrials, banking & finance and automobile & auto components. Notable stocks include MTAR Technologies, HDFC Asset Management Company and Craftsman Automation.

We begin with the companies where promoters have the highest holdings, but are reducing their stake. Topping this list is HDFC Asset Management Company, which has a promoter holding of 52.6% in June 2023. The firm has seen its promoter holding reduce by 10.2 percentage points QoQ. HDFC AMC’s promoter Arbdn Investment divested a 10.2% stake and exited as a promoter just before the HDFC merger. This ended the JV it had formed with Housing Development Finance Corp to form HDFC AMC. The sold holdings have been acquired by foreign institutional investors (FIIs) and mutual Funds (MFs), which have invested 5.5% and 4.3% stakes respectively. A notable FII that invested is SmallCap World (0.4% stake), and MFs are SBI Mutual Fund (7% stake) and Nippon Life India (1.8% stake). 

Now, we move on to the auto components major, Craftsman Automation with a promoter holding of 55% in June 2023. Its promoter divested a 3.8% stake in the June quarter. The divestment was compensated by a 3.3% investment from FIIs. Among the major investors, Goldman Sachs (1.2% stake) stands out. This interest by FIIs in the stock aided its price to grow by 44.8% over the past quarter.

In the general industrial sector, RHI Magnesita India and Timken India have a promoter holding of 55.5% and 57.7% in June 2023.They have seen their promoter holdings decrease by 4.66 percentage points and 10.1 percentage points QoQ respectively. For RHI Magnesita, this was compensated by investments from FIIs and MFs, accumulating to 1.5 and 5.3 percentage points respectively. A major MF investor in this case is Axis Mutual Fund (0.2% stake). 

On the other hand, Timken India’s reduction in shareholding has primarily been compensated by investments from MFs, aggregating to 5.2%. Prominent MF investors include SBI Tax Advantage Fund (4.7% stake), Nippon Life (0.8% stake) and Aditya Birla Sun Life (1.2% stake).  

From the higher promoter holding companies, we move on to the ones with lower promoter holdings with falling stake. MTAR Technologies’ has a promoter holding of 39.1% and has been reduced by 7.5 percentage points in June 2023. Kalpataru Projects International also saw a dip of 6.1 percentage points. Some of the stakes sold by promoters were picked up by FIIs (1.2%) and MFs (3.9%). MFs that invested in the company are ICICI Prudential (1.4% stake) and Aditya Birla Sun Life (2.4% stake). 

Central Depository Services’ promoter holding stood at 15% in June 2023,  after a decrease of 5 percentage points QoQ. It has a single promoter, BSE (Bombay Stock Exchange). The promoter selling was compensated by an increase in MF stake by PGIM India Trustee (1.4% stake). According to Trendlyne’s Shareholding data, 47.9% stake of the company lies with the public. 

Unlike HDFC AMC, other banking & finance majors like PNB Housing Finance and Home First Finance Company India have comparatively lower promoter holdings of 28.2% and 30.2% as of June 2023. PNB’s promoter shareholding fell by 4.4 percentage points QoQ. In March 2023, the company raised Rs 2,494 crore through a rights issue, because of which the promoter shareholding went down to 28%. Similarly, Home First’s promoter shareholding fell by 3.3 percentage points QoQ. This was offset by FIIs and MFs purchasing 1.9% and 2.2% stakes respectively. Notable investors include Invesco India Tax Plan (1% Stake) among MFs and Government of Norway Pension Fund (3.2% Stake) among FIIs.

The sole representative of the software & services sector in our list, Coforge, saw its promoters reducing their holdings by 3.5 percentage points QoQ to 26.6%. This sale was made by its promoter, Baring PE, through a subsidiary, Hulst BV. This was balanced by MFs investing a 4.3% stake. The MFs that invested in the company are Aditya Birla Sun Life (0.1% stake), Motilal Oswal Flexi Cap Fund (2.7% stake), Mirae Asset (1.1% stake) and Invesco India Contra Fund (1.2% stake). Motilal Oswal maintains a ‘Neutral’ rating and says  that the company’s robust performance growth and profitable deal wins in FY24 have likely been factored into the stock price, leaving limited potential upside.  

Lastly, Sona BLW Precision Forgings’ promoter holding has declined by 3.2 percentage points QoQ to 29.8% in June 2023. As of December 2022, the company’s total promoter holding stands at 53.5%. But with Blackstone selling its entire stake of 20.5% in March 2023, the holding has been lowered to 33%. Again in May 2023, the company’s promoter, Aureus Investment, reduced its exposure by 3.2%.