25 Aug 2023
25 Aug 2023
This industrial gases producer touched an all-time high of Rs 6,165 on Wednesday after receiving a Letter of Acceptance (LoA) from Indian Oil Corporation (IOCL), for an order for the installation, operation, and maintenance of an air separation unit at IOCL’s Refinery in Panipat for 20 years.
Linde India has risen by 27.4% over the past month and made it to a screener of companies with strong momentum. The company, during its annual general meeting, stated that the industrial gases market is poised for robust growth of around 9% in the near term. It anticipates an increase in demand for gas and improved opportunities from the steel sector, driven by consolidation, and productivity increases. The company’s positive outlook is also supported by the healthcare sector’s growth prospects. Linde India foresees robust growth in SPC (special purpose chemicals) products, while also expecting an uptick in nitrogen opportunities.
The company released its Q1FY24 results earlier this month. Its net profit has dropped by 41.9% to Rs 99.9 crore due to increasing costs of raw materials, power and fuel, and other expenses. However, its revenue improved by 23% to Rs 721.1 crore, led by strong performance in the gases, related products, and project engineering segments.
Linde India ranks high on Trendlyne’s checklist with a score of 69.9%. It is currently trading in the ‘Strong Sell’ zone, based on the time spent below its current PE, suggesting expensive valuations.
2. GMR Airports Infrastructure:
This airport development company rose by over 9.4% on Thursday. The stock touched a 52 week high of Rs 66.8 in intraday trade today. It has also surged by 15.9% over the past week till Friday. The firm shows up in a screener for stocks trading above their short, medium and long-term moving averages. This upswing in share price comes on the back of increased passenger traffic in its airports. In Q1FY24, the company’s revenue jumped by 40.2% YoY to Rs 2,017.6 crore, beating Trendlyne Forecaster’s revenue estimates by 1.1%. Additionally, its net loss narrowed to Rs 29.8 crore from Q1FY23’s Rs 137 crore, aided by a one-time gain of Rs 76.1 crore from asset sales.
GMR Airports Infra has benefitted from the rise in air travel demand in India, as it currently operates international airports in Delhi, Hyderabad, and Goa. In Q1FY24, the passenger traffic at Delhi and Hyderabad international airports grew by 18% and 24% YoY respectively. The management expects the positive momentum in traffic to continue, fueling growth. The addition of new routes and increased airline capacity are expected to boost air traffic.
To meet the growing demand, the company has been expanding its terminals in Delhi and Hyderabad with a capex of Rs 17,000 crore. This will increase the terminal capacity in Delhi by 51.5% to 100 million passengers (pax) and in Hyderabad by 183.3% to 34 million pax by the end of FY24.
ICICI Securities believes that the merger of GMR Airports with GMR Airports Infrastructure will simplify the firm’s corporate structure and lead to substantial value creation for its shareholders. The company received approval for the merger from the Competition Commission of India in Q3FY23.
3. Lemon Tree Hotels:
This hotel company has risen by 10.9% over the past week to its all-time high of Rs 111.2 per share. This boost follows the announcement of the company signing license agreements for two properties in Bhubaneswar and Kasauli. This rise helps it to appear in a screener of stocks with prices above short, medium and long-term moving averages. The properties are expected to be operational by FY25 and FY26, respectively.
Lemon Tree Hotels posted its Q1FY24 results on August 11, with a 69.4% YoY increase in net profit to Rs 23.5 crore. Its revenue has also improved by 15.7% YoY to Rs 222.2 crore, aided by growth in gross average room rate (ARR), revenue per available room (RevPAR), and occupancy. However, its revenue and net profit missed Trendlyne’s forecaster estimates by 3.1% and 12.6%, respectively.
Its margins contracted by 834 bps QoQ on account of higher advertising expenses and employee costs due to new hotel openings. Lemon Tree has planned a capex of Rs 40 crore for FY24 to revamp its budget hotels, which is expected to impact EBITDA margins by 200-250 bps.
Speaking about the results, the company’s Chairman and Managing Director said, “Growth in the coming quarters will be from two new hotels opening in October 2023. Also, our asset-light model will help accelerate growth in our managed and franchised portfolio.”
IDBI Capital maintains its ‘Buy’ call on Lemon Tree Hotels, with a target price of Rs 110 per share. The brokerage believes that the company will benefit from increased demand in leisure travel, corporate travel, and meetings, conferences and exhibitions (MICE). The demand-supply mismatch in the near-term also seems favourable for overall earnings growth of the industry. It expects the company’s revenue to grow at a CAGR of 33.2% over FY22-25.
4. Bharat Forge:
This industrial products manufacturer has risen by 6.8% in the past week and hit an all-time high of Rs 1,052.1 on Thursday. The price rise comes as the company’s defence arm, Kalyani Strategic Systems, won an export order worth 93.9 million euros (approx Rs 850 crore) to supply components and armoured vehicle chassis.
In Q1FY24, Bharat Forge’s net profit grew by 25.9% YoY to Rs 223.4 crore, beating Trendlyne Forecaster’s estimate by 7.9%. It’s revenue also increased by 36.7% YoY, beating the estimate by 20.1%. The revenue growth was led by defence and passenger vehicle component exports. The company’s foreign subsidiaries have particularly excelled in revenue growth, driven by the aerospace segment. Orders from the US for class 8 trucks are also seeing good traction. Its EBITDA margin has fallen marginally by 20 bps YoY due to an increase in raw material expenses. The company also appears in a screener for stocks with increasing revenue for the past four quarters.
Bharat Forge's current order pipeline stands at Rs 2,200-2,300 crore, scheduled to be executed over the next 18 months. Defence and aerospace orders worth around Rs 1,700 crore and Rs 500 crore, respectively, are expected by the end of FY25.
Motilal Oswal reiterates its ‘Buy’ call on Bharat Forge and estimates a revenue and profit CAGR of 13% and 85% respectively over FY24-25 The expected surge in the order book and an upswing in exports are projected to drive revenue growth. The brokerage maintains its stance on the back of executions of the orders in the coming quarters.
5. KEI Industries:
Thiselectrical equipment stock has risen by 8.6% in the past week, according toTrendlyne Technicals. KEI Industries is among India’s top three wire and cable manufacturers, with a product portfolio ranging from housing wires to Extra High Voltage (EHV) cables. KEI derives 63% of its revenue from cables, 6% from EPC, and 31% from wires.
The stock has declined by 6.5% after announcing its Q1FY24 results. KEI Industries reported a revenue growth of 13.9% and a profit growth of 17% YoY. The jump in revenue was led by a 22% increase in cable business volume. KEI reported an EBITDA margin expansion of 5 bps YoY – the muted margin growth was on account of higher expenditure on IPL advertisements, and capacity constraints. The firm's strategy to diversify itself into the retail business has resulted in the retail segment contributing 44% of the revenue, with the housing wires segment driving retail sales. KEI’s current order book stands at Rs 3,567 crore. It shows up in ascreener for companies that are efficiently managing assets to generate profits.
KEI saw a capacity crunch in Q1FY24, impacting cable manufacturing volumes. This has resulted in KEI running at full capacity and achieving only 22% volume growth in cables, as compared to its peers,Polycab India (42%) andHavells India (24%). However, the brownfield expansion of cable manufacturing is set to be completed in Q2FY24, which should address the capacity issues.
Anil Gupta, the Managing Director of KEI Industries, has provided a guidance of 17% revenue growth for FY24, with EBITDA margins maintained at current levels of 11%. KEI has also planned a capex outlay of Rs 1,000 crore over the next three years for its capacity expansion. The stock is in the ‘Sell’ zone, according to the time spent below its current PE.
BOB Capital sees growth traction in its export orders and cable business. The improvement in working capital is margin accretive. Due to the recent stock price appreciation and its capacity constraints, the stock has been downgraded from ‘Buy’ to ‘Hold’.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
25 Aug 2023
Trendlyne Analysis
Nifty 50 closed at 19,265.80 (-120.9, -0.6%), BSE Sensex closed at 64,886.51 (-365.8, -0.6%) while the broader Nifty 500 closed at 16,820.85 (-109.3, -0.7%). Of the 1,926 stocks traded today, 694 showed gains, and 1,180 showed losses.
Indian indices extended the losses from the afternoon session and closed in the red, with the Nifty 50 closing at 19,266. The volatility index, Nifty VIX, rose by 3.2% and closed at 12.1 points. Aurobindo Pharma plans to sell its injectable business for $2 - $2.5 billion.
Nifty Smallcap 100 and Nifty Midcap 100 closed in the red following the benchmark index. Nifty Realty and Nifty Metal closed sharply lower, compared to Thursday’s closing levels. According to Trendlyne’s sector dashboard, forest materials emerged as the top-performing sector of the day, with a rise of over 3.6%.
Most European indices trade in the green. US indices futures trade higher, indicating a positive start. Germany’s GDP contracted 0.2% in the second quarter of 2023 giving rise to recessionary fears. JP Morgan expects the European Central Bank (ECB) to pause rate hikes in the ECB’s next monetary policy meeting.
Money flow index (MFI) indicates that stocks like GMR Airports Infrastructure, Solar Industries India, Trent and Whirlpool of India are in the overbought zone.
Lupin receives US FDA approval for its abbreviated new drug application for Pirfenidone Tablets in strengths of 267 mg and 801 mg. It is used for treating idiopathic pulmonary fibrosis, a lung condition. The tablets have an estimated annual sales of $218 million in the United States. The company appears in a screener of stocks with strong annual EPS growth.
Suzlon Energy is rising as it wins an order to install 64 of its largest wind turbine generators with a rated capacity of 3.15 MW each. The order amounts to a total installation capacity of 201.6 MW. The wind power project is expected to be commissioned in 2025. The stock shows up in a screener for companies with strong annual EPS growth.
The Fertilisers and Chemicals Travancore, APL Apollo Tubes, and Tata Elxsi’s stock prices increase 813.8%, 610.3% and 581.3% respectively over the past three years.
Union Bank of India falls despite its board of directors approving the allotment of 57.8 crore shares for Rs 5,000 crore through qualified institutional placement (QIP). SBI Life Insurance, ICICI Prudential Life Insurance and Life Insurance Corp of India are the largest buyers as they are allotted more than 10% share each.
Premier Explosives and Supreme Industries touch their 52-week highs of Rs 1,218 and Rs 4,566.4 respectively. The former has risen 23.4% over the past month, while the latter increased by 20.2%.
Power companies like Adani Energy Solutions, ABB India, Adani Power, Power Grid Corp of India and NTPC are falling in trade. Barring CG Power and Industrial Solutions, all the other constituents of the broader sectoral index, BSE Power, are trading in the red.
Vishnu Prakash R Punglia's Rs 308.9 crore IPO gets bids for 10.63X the available 2.2 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 12.88X of the available 1.1 crore shares on offer.
Foreign institutional investors invest Rs 90.4 crore in the equity market over the past week, according to Trendlyne's FII dashboard. Meanwhile, index options witness the highest investment of Rs 12,850.6 crore from foreign investors.
Sanjay Tibrewala, Whole-Time Director and CFO at Fineotex Chemicals, says the company is aiming for a revenue of around Rs 600 crore in FY24, with margins of 23-25%. He also highlights that it derives around 35% of volumes from the textiles industry, and expects it to grow further as demand improves.
FINEOTEX CHEMICALS
— Mangalam Maloo (@blitzkreigm) August 25, 2023
Mgmnt targets ~600 Cr revenue this year with 23-25% margins
Targets capacity utilization of 75% in FY24 on expanded capacity
Says textile demand is looking up, 50% revenue & 35% volumes generated from Textiles #StockMarkethttps://t.co/qjTon1kdxWMax Ventures Holdings, promoter of Max Financial Services, sells a 3.6% stake in the company. It now holds a 6.4% stake in the company.
Indiabulls Housing Finance rises more than 5% in trade as it repays Rs 2,232 crore of dollar-denominated external commercial borrowings to ANZ banking group, Barclays bank PLC and State Bank of India. With this, the company has repaid all its foreign currency debt taken in the past few years. It appears in a screener of stocks with strong momentum.
Bharat Electronics rises to an all-time high of Rs 137.9 as the Defence Acquisition Council grants 'acceptance of necessity' to the Indian Air Force for acquiring electronic warfare (EW) suites from the company. These advanced defence components will be integrated into Mi-17 V5 helicopters, enhancing their survivability. Reports indicate that the order amounts to approximately Rs 7,800 crore.
According to reports, 2.3 crore shares (3.6% equity) of One97 Communications (Paytm) have changed hands in a block deal. Its promoter Antfin is the likely seller.
#MarketsWithBS | Shares of One97 Communications-owned #Paytm hit a 18-month high at Rs 939, as they rallied 4% on the #BSE in Friday’s intra-day trade.#markets#One97Communications#buzzingstocks#sharemarket#stockmarket#buzzingstockshttps://t.co/22KMPJkeys
— Business Standard (@bsindia) August 25, 2023Sun TV Network surges more than 5% to touch a new 52-week high of Rs 615.8 per share. It ranks high on Trendlyne's checklist with a score of 69.6%. The stock has a consensus estimate of 'Strong Buy' from 11 out of 17 analysts. However, it is in the 'Sell' zone. It appears in a screener of affordable stocks with high return on equity (RoE) and momentum.
ICICI Direct maintains its ‘Buy’ rating on Can Fin Homes with a target price of Rs 930, implying an upside of 26.4%. The brokerage believes the company’s future growth will be driven by geographic expansion, increasing ticket size and robust underwriting practices. It expects the firm’s net profit to grow at a CAGR of 16.7% over FY23-25.
PSU banks like Indian Bank, Punjab & Sind Bank, UCO Bank and Punjab National Bank are falling in trade today. All other constituents of the broader Nifty PSU Bank index are also trading in the red.
- Nomura initiates coverage on Birlasoft with a ‘Buy’ rating and a target price of Rs 610. The brokerage believes that the recent organisational changes will enhance stability and revenue. It highlights that the firm’s business metrics have improved substantially over the years and anticipates industry-leading growth in the medium term.
Brokerage Radar | @Nomura on Birlasoft: Initiate ‘Buy’; Ongoing organization changes to drive stability and revenue growth pic.twitter.com/FJAPXi5tLt
— ET NOW (@ETNOWlive) August 25, 2023 Bharti Airteladds 1.4 million new customers to its wireless subscriber base and 1,34,021 to the wireline segment. As of June 2023, the company's total broadband subscribers stand at 248.06 million, placing it in the 2nd position among the top five telecom service providers. It appears in a screener for stocks with consistent share price growth.
Hulst B V, promoter of Coforge, sells a 26.6% stake in the company for approx Rs 7,683.5 crore in a bulk deal on Thursday.
Power Mech Projects is rising as it bags two orders worth Rs 723.9 crore. The first project, valued at Rs 565.2 crore, is from Madhya Pradesh State Mining Corp and involves sand mining for three years. The second, worth Rs 158.7 crore, is from Raichur Power Corp and involves the maintenance and operation of a coal-based thermal power station in Karnataka.
- According to reports, 74.1 lakh shares (2.6% equity) of UNO Minda, amounting to Rs 447 crore, have changed hands in a block deal.
#UnoMinda#LargeTrade | 74.1 lakh shares (2.6% equity) worth ?447 cr change hands in block deal pic.twitter.com/KUPG9WiAfk
— CNBC-TV18 (@CNBCTV18Live) August 25, 2023 Ashish Kacholia buys an 8.5% stake in Universal Autofoundry for approx Rs 16.7 crore in a bulk deal on Thursday.
Kaynes Technology rises to an all-time high of Rs 2149.9 as it signs a memorandum of understanding with the Government of Karnataka to invest Rs 3,750 crore. The investment aims to set up a semiconductor assembly & testing (OSAT) facility and a printed circuit board (PCB) manufacturing plant through its subsidiaries. The company appears in a screener of stocks with improving RoA.
Astra Microwave Products rises as it bags an order worth Rs 158 crore from the Defence Research and Development Organisation (DRDO), the Indian Space Research Organisation (ISRO), and the Defence Public Sector Undertaking (DPSU). The order involves the supply of satellite sub-systems, airborne Radar, and sub-systems of radar and electronic warfare projects. The company appears in a screener of stocks nearing their 52-week highs, with significant volumes.
Shoppers Stop’s Managing Director and CEO, Venu Nair, resigns from his post with effect from August 31, citing personal reasons. The company appoints Kavindra Mishra, CEO of Homestop, as the Executive Director and CEO for a three-year term from September 1.
Riding High:
Largecap and midcap gainers today include Vodafone Idea Ltd. (8.70, 9.43%), Tube Investments of India Ltd. (2,882.75, 4.08%) and Indus Towers Ltd. (168.35, 2.93%).
Downers:
Largecap and midcap losers today include Macrotech Developers Ltd. (654.80, -3.97%), Syngene International Ltd. (766.35, -3.77%) and Mahindra & Mahindra Financial Services Ltd. (294.25, -3.22%).
Volume Shockers
19 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Vodafone Idea Ltd. (8.70, 9.43%), Asahi India Glass Ltd. (558.70, 9.42%) and Indiabulls Housing Finance Ltd. (172.95, 8.91%).
Top high volume losers on BSE were Shoppers Stop Ltd. (709.05, -12.71%), Blue Star Ltd. (704.70, -3.39%) and Endurance Technologies Ltd. (1,609.65, -2.66%).
UNO Minda Ltd. (592.85, -2.04%) was trading at 13.8 times of weekly average. Mastek Ltd. (2,256.75, 2.56%) and Firstsource Solutions Ltd. (168.20, 7.44%) were trading with volumes 8.4 and 4.1 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
23 stocks hit their 52-week highs, while 2 stocks hit their 52-week lows.
Stocks touching their year highs included - 3M India Ltd. (3,0340.75, -0.68%), AIA Engineering Ltd. (3,650.00, 0.01%) and Bharat Electronics Ltd. (133.40, -0.74%).
Stocks making new 52 weeks lows included - Vedanta Ltd. (233.30, -1.79%) and Jio Financial Services Ltd. (214.50, 0.49%).
11 stocks climbed above their 200 day SMA including Asahi India Glass Ltd. (558.70, 9.42%) and Tube Investments of India Ltd. (2,882.75, 4.08%). 9 stocks slipped below their 200 SMA including Shoppers Stop Ltd. (709.05, -12.71%) and Ambuja Cements Ltd. (434.60, -3.20%).
25 Aug 2023
Imagine being trapped in a car for three days without food or water as a fire rages in your city. This harrowing experience happened to thousands of families caught in the recent wildfiresin the Hawaiian island of Maui. The lucky ones reached safety with singed hair and faces blackened by soot. By the time the fire receded, over a 100 people were dead and around 850 are still missing.
Just a month ago, Rhode Island in Greece saw its biggest-ever fire evacuation, relocating nearly 30,000 people to safety. And last week, people were being evacuated from wildfires across British Columbia in Canada.
The mercury is rising like never before - Southern Europe saw unusual summer heat, US states have suffered historic droughts. At an Iran airport, the heat index reportedly hit 66 degrees celsius. In the critical trade route that is the Panama Canal, which moves half a billion tons of cargo every year, low water levels are forcing ships to load only partially, and wait for four days or more (and 20 days in some cases) to cross the waterway. In India, we endured our hottest February ever, followed by unseasonal rains.
Such extreme climate events are threatening human lives and affecting world economies. UN Secretary General António Guterres described these changes as a ‘crisis multiplier’, and its effects are becoming increasingly undeniable. Indian CEOs say that it is beginning to impact businesses and balance sheets.
In this week’s Analyticks:
- Nature’s fury hits certain pockets of the economy and industry in India
- Screener: Growth outperformers in sectors affected by climate change in India
Let’s get into it.
Climate change unnerves Indian farmers, consumers and companies in 2023
Among this year’s bestsellers is Jeff Goodell’s The Heat Will Kill You First, which looks at our rapidly heating planet. He provides some sobering numbers: land animals are moving upwards one mile every year to cooler regions. 489,000 people are dying every year from extreme heat - nearly double the number killed by firearms annually. And global agricultural production has fallen by 21% in the last two decades due to rising heat and drought.
The average global temperature change consistently exceeded one degree Celsius every year from 2015-2020. Humans are now seeing temperatures never experienced before in our history.
The increase in mean temperatures is resulting in heatwaves, erratic rainfall patterns, and water shortages everywhere.
Global heat escalates throughout the 21st century
India is not spared from these impacts. It experienced extreme weather events for 84 out of the 120 days in the first four months of 2023, according toITC’s chairman Sanjiv Puri. El Nino has adversely impacted the monsoon season as well. As Indian companies grapple with this severe weather, the effects are turning up in their financials.
India's rainfall is uneven and deficient so far, threatening agri yields
Ritesh Tiwari, CFO at Hindustan Unilever, pointed out an interesting fact in the recent earnings call: “Quantity, timing and placement of the rain - all three have to work to ensure that the monsoon supports agricultural growth and rural growth.” And all three factors have been disrupted this season.
The monsoons began late in 2023 and have been below average in August. Karnataka faced a challenging situation in June, as water levels in the Krishna and Kaveri river basins were significantly low, impacting coarse cereal production. The state is still running in a rainfall deficiency.
Below-average rainfall persists, and state-wise distribution remains uneven
Uttar Pradesh, India’s largest food grains producer, is also experiencing a rainfall deficit. This is likely to impact the yields of kharif crops like paddy, maize and millets. Unexpected flooding in states like Punjab and Haryana, major rice producers, is raising concerns about this season's rice output as well.
To control rising prices, the Indian government banned white rice exports in July. Since India is the world’s largest rice exporter, this has raised food insecurity risks for importing countries.
India dominates global rice exports with over one-third market share
The sugar output for the current marketing season ending September 30 is also expected to decline, due to poor rainfall in cane-producing states like Maharashtra and Uttar Pradesh.
Sugar production and exports set to fall
Retail inflation in India spikes as food prices climb
The RBI’s efforts to tame retail inflation through a series of interest rate hikes, and the decline in global commodity prices had paid off for a while. However, the erratic weather events of 2023 have again put pressure on the Central Bank.
India’s retail inflation spikes again
Consumer price inflation has crossed the 7% mark for the first time since September 2022. This is owing to the rise in prices of key vegetables, cereals and pulses.
Tomatoes, a staple in Indian cooking, reached Rs 250/kg in some regions, prompting some tomato sellers to hire security guards, and quick-service restaurants like Burger King and McDonalds to omit it from their burgers.
Vegetables contribute the most towards July CPI food inflation
With uneven monsoons threatening the yield of kharif crops as well, this inflation spike does not look like an isolated event. The increase in prices could also dampen rural demand, which had just started to recover for FMCG players.
Unpredictable weather hits FMCG, white goods and agrochemical makers
This summer season has had unexpected twists. Product categories and segments that flourished in previous summers due to heatwaves found themselves in a downturn this year, thanks to unseasonal rains. Demand for fruit beverages, carbonated drinks, ice creams, cooling hair oils, ACs, fans and coolers declined YoY between April and June.
Commenting on this, Mohit Malhotra, CEO at Dabur, said, “When it rains, people tend to stay indoors, impacting the sales of eating and drinking outlets. This affects our beverage portfolio.” Notably, the company gets 30% of its beverage demand from out-of-home consumption.
FMCG players are seeing underperformance in the food and beverages business
Brands like Glucon-D, Real Fruit Juice and Tropicana saw lower sales growth in Q1. These are manufactured by Zydus Wellness, Dabur and Varun Beverages respectively. Among consumer durable makers, Blue Star’s AC segment faced sluggish revenue growth. Voltas and Havells did better due to market share gains.
Havells and Voltas see healthy growth in the AC business
Domestic agrochemical players were already going through a rough patch. Unseasonal rainfall resulting in a delayed kharif season has only amplified their woes.
India needs to step up as climate change intensifies
According to the World Meteorological Organization, there is a high chance of temperature rise exceeding 1.5 degrees in the next five years. And with this, the climate goals in the Paris Agreement may become very difficult to achieve.
India’s faraway target of achieving net zero emissions by 2070 might come with a heavy cost to its GDP by 2050. The agricultural sector will also face consequences. According to India’s agriculture ministry, climate change may reduce wheat and rice yields by over 19% by 2050. Poor farm incomes will hurt livelihoods, and hit FMCG and auto sectors.
India’s 2070 goal is not sufficient to counter climate change
Scientists’ repeated warnings about the dire effects of climate change are now becoming a reality. Humans are notoriously bad at paying attention to warnings for events that might happen far in the future - but as climate change accelerates, the world as we know it is immediately at risk. Governments need to move quickly with incentives and investments, to change the course that we are on.
Screener: Stocks outperforming their sectors’ revenue and net profit growth - Climate change special
Bikaji Foods leads in net profit growth outperformance
In this edition, we take a look at outperformers in sectors where revenue and net profit growth were affected by extreme climate change in Q1FY24. This screener shows companies that have outperformed their climate-impacted sectors in terms of net profit growth and revenue growth.
The sectors include FMCG, food & beverages, consumer durables and chemicals & petrochemicals (agrochemicals industry mainly).
Major stocks that appear in the screener are Bikaji Foods International, Kaynes Technology India, Jyothi Labs, Emami, Polycab India and United Spirits.
Bikaji Foods’ revenue and net profit outperformed the FMCG sector by close to 13 and 146 percentage points respectively in Q1FY24. Revenue growth was aided by increased sales volumes in ethnic snacks, packaged sweets and western snacks. Net profit growth was helped by the reduction in input and finance costs.
Kaynes Technology saw its revenue and net profit outperform the consumer durables sector by 37 and 119 percentage points respectively in Q1FY24. Its revenue rose due to higher demand from the industrial, railways, automotive, aerospace and IT segments. The company is a contract manufacturer for electronics and is not exposed to the B2C segment.
United Spirits beat the food & beverages sector in terms of revenue and net profit growth by nearly 133 and 68 percentage points, respectively, during the quarter. The spirits maker’s revenue increased on the back of healthy volume growth and the initiation of IPL’s five-year media rights.
You can find some popular screenershere.
24 Aug 2023
Trendlyne Analysis
Nifty 50 closed at 19,386.70 (-57.3, -0.3%), BSE Sensex closed at 65,252.34 (-181.0, -0.3%) while the broader Nifty 500 closed at 16,930.15 (-20.1, -0.1%). Market breadth is neutral. Of the 1,922 stocks traded today, 895 showed gains, and 978 showed losses.
Indian indices pared their gains from the afternoon session and closed in the red, with the Nifty 50 closing at 19,387. The volatility index, Nifty VIX, rose by 0.3% and closed at 11.7 points. GAIL India announces a capex of Rs 30,000 crore over the next three years for pipelines, ongoing petrochemical projects and city gas distribution projects.
Nifty Midcap 100 closed in the green, while Nifty Smallcap 100 closed lower, following the benchmark index. Nifty IT and Nifty FMCG closed higher, compared to Wednesday’s closing levels. According to Trendlyne’s sector dashboard, telecommunications equipment emerged as the top-performing sector of the day, with a rise of over 1.4%.
Most European indices trade in the green. US indices futures trade higher, indicating a positive start. Nasdaq futures rallied 1% after NVIDIA’s profits exceeded consensus estimates and announced a share buyback of $25 billion. NVIDIA’s Frankfurt-listed shares jumped 9% in early trade.
Coforge sees a long buildup in its August 31 future series as its open interest rises 72% with a put-call ratio of 1.04.
Swan Energy surges more than 7% in trade today. The stock ranks high on Trendlyne's checklist, with a score of 69.6%, and also appears in the 'Strong Buy' zone. The company features in a screener of stocks with increasing profits for the past three quarters.
SpiceJet falls as the Delhi High Court orders the company and its promoter Ajay Singh to pay Rs 100 crore by September 10. Additionally, the company has been directed to pay a total of Rs 270 crore plus interest to Kalanithi Maran. The company appears in a screener of stocks with high promoter pledges.
Aeroflex Industries' Rs 351 crore IPO gets bids for 76.77X the available 2.3 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 30.35X of the available 1.2 crore shares on offer.
Vishnu Prakash R Punglia's Rs 308.9 crore IPO gets bids for 2.45X the available 2.2 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 3.43X of the available 1.1 crore shares on offer.
Gujarat Ambuja Exports rises as it receives a no objection certificate (NOC) from the Gujarat Pollution Control Board. The NOC allows the company to set up a greenfield corn wet milling plant with a capacity of 900 tonnes per day (TPD) at Himmatnagar, Gujarat. The company appears in a screener of stocks with strong momentum.
GMR Airports Infrastructure and Mahindra Holidays & Resorts touch their all-time highs of Rs 66.5 and Rs 397 respectively. The former has risen by 48.9% over the past month, while the latter increased by 9.5%.
Procter & Gamble Health is falling as its Q1FY24 net profit dips by 27.6% YoY to Rs 29.8 crore, while its revenue increases by 2.6% YoY. The profit fall is attributed to the rise in employee benefit expenses. The company also features in a screener for stocks with no debt.
GAIL India is rising as it aims for a capex of Rs 30,000 crore in the next three years. This investment will be directed towards pipelines, ongoing petrochemical ventures, and city gas distribution projects. The company also expects to transmit more than 120 MMSCMD of natural gas, with sales of over 100 MMSCMD in FY24.
ICICI Securities maintains its ‘Sell’ rating on Garden Reach Shipbuilders & Engineers but raises the target price to Rs 440 from Rs 370. This implies a downside of 44.5%. The brokerage believes the stock has limited room for growth as it expects the firm’s revenue to peak in FY25. It also anticipates a decline in net profit after FY25.
TVS Motor Company rises as it invests a total capex of Rs 250 crore for its newly launched TVS X electric scooter. The company appears in a screener of stocks nearing 52-week high with significant volumes.
According to RBI Governor Shaktikanta Das, vegetable prices in India are projected to fall from September. This will lead to a moderation in CPI inflation, which reached 7.44% in July, the highest in 15 months.
#RBI Governor Shaktikanta Das stated that vegetable prices in India are expected to decrease from September, potentially easing the recent surge in retail inflation, which reached 7.44% in July, the highest in 15 months.https://t.co/lglnqIbPhA
— Mint (@livemint) August 24, 2023
Zydus Lifesciences gets USFDA nod for its Zinc Sulfate Injection USP in three strengths: 10 mg/10 mL (1 mg/mL), 30 mg/10 mL (3mg/mL), and 25 mg/5 mL (5 mg/mL) pharmacy bulk package vials. This injection is used for adult and pediatric patients as a source of zinc for parenteral nutrition when oral or enteral nutrition is not possible. These vials generated annual sales of Rs 146 crore in the US in June.
Sugar stocks like Bajaj Hindusthan Sugar, Shree Renuka Sugars, EID Parry (India) and Balrampur Chini Mills are rising as reports suggest that the Centre may ban sugar exports. The broader sugar industry is also trading in the green.
Suzlon rises as it bags an order to develop a wind power project with a capacity of 31.5MW for Integrum Energy Infrastructure in Maharashtra and Karnataka. The project is expected to be commissioned by May 2024. The company appears in a screener of stocks with strong annual EPS growth.
Porinju Veliyath sells a 0.7% stake in RPSG Ventures on August 16. He now holds a 2.1% stake in the company.
- Reports suggest that 1.5 crore shares (25.4% equity) of Coforge, amounting to Rs 7,329 crore, change hands through a block deal. HULST BV (Baring), promoter of the company, is the likely seller in this transaction.
#LargeTrade | 1.54 cr shares (25.4% equity) of Coforge worth Rs 7,329.3 cr change hands in a block deal https://t.co/31af9kYV59pic.twitter.com/5AuUKcLDB6
— CNBC-TV18 (@CNBCTV18Live) August 24, 2023
NHPC is rising as it signs a memorandum of understanding (MoU) with Andhra Pradesh Power Generation Corp to implement pumped storage hydropower and renewable energy projects. The MoU also allows the company to form joint ventures to operate and sell power generated at these plants.
Reliance Industries announces that Qatar Investment Authority will invest Rs 8,278 crore to acquire nearly 1% stake in the firm’s arm, Reliance Retail Ventures, at an equity value of around Rs 8.3 lakh crore. The stock shows up in a screener for companies with net cash flows improving over the past two years.
Manappuram Finance falls as an 11% stake in the company reportedly changes hands in a block deal today. Details about buyers and sellers remain unknown.
Bernstein initiates coverage on One97 Communications (Paytm) with an ’Outperform’ rating and a target price of Rs 1,100. The brokerage highlights that the firm is a dominant player in the digital payments space. It expects strong growth in the company’s loan disbursal volumes and market share to improve to around 4%. With margins stabilizing in the payments segment, it anticipates the business to breakeven by FY25.
Brokerage Radar | Bernstein on PayTM: Initiate Outperform; To be on the right side of the disruption pic.twitter.com/JZNIAUJGxE
— ET NOW (@ETNOWlive) August 24, 2023
Vishnu Prakash R Punglia raises Rs 91.8 crore from anchor investors ahead of its IPO by allotting 92.7 lakh shares at Rs 99 each. Investors include Quant Mutual Fund, Max Life Insurance Co, Societe Generale, Kotak Mahindra Life Insurance Co, BNP Paribas Arbitrage and Copthall Mauritius Investment.
Vascon Engineers rises to an all-time high of Rs 65.7 as it bags an order worth Rs 605.7 crore from Bihar Medical Services & Infrastructure Corp. The order involves the construction of hospital and residential buildings for Lohia Medical College & Hospital, Supaul. The project is expected to be completed in 36 months. The company appears in a screener of stocks with improving RoA.
Ramkrishna Forgings is rising as it bags a contract worth 17.2 million euros (approximately Rs 156 crore) from a Eurasian client to supply forged and machined transmission and engine components. The agreement is for four years, with an annual contract value of 4.7 million euros.
Riding High:
Largecap and midcap gainers today include Coforge Ltd. (5,390.85, 9.72%), MphasiS Ltd. (2,463.90, 4.66%) and APL Apollo Tubes Ltd. (1,655.60, 4.14%).
Downers:
Largecap and midcap losers today include Jio Financial Services Ltd. (213.45, -4.99%), Max Healthcare Institute Ltd. (563.30, -2.98%) and Bank of India (87.45, -2.35%).
Movers and Shakers
26 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Indiabulls Real Estate Ltd. (69.25, 10.45%), Coforge Ltd. (5,390.85, 9.72%) and GMR Airports Infrastructure Ltd. (64.90, 9.44%).
Top high volume losers on BSE were Procter & Gamble Health Ltd. (5,086.95, -4.80%), Manappuram Finance Ltd. (142.25, -2.64%) and Kalpataru Projects International Ltd. (633.20, -0.35%).
Gujarat Ambuja Exports Ltd. (257.30, 4.87%) was trading at 16.7 times of weekly average. Rallis India Ltd. (229.50, 5.30%) and G R Infraprojects Ltd. (1,269.00, 1.45%) were trading with volumes 16.0 and 7.0 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
53 stocks hit their 52 week highs, while 1 stock tanked below their 52 week lows.
Stocks touching their year highs included - 3M India Ltd. (30,589.95, 1.15%), AIA Engineering Ltd. (3,649.60, 0.20%) and Axis Bank Ltd. (981.35, 0.21%).
Stock making new 52 weeks lows included - Jio Financial Services Ltd. (213.45, -4.99%).
15 stocks climbed above their 200 day SMA including Indiabulls Real Estate Ltd. (69.25, 10.45%) and Gujarat Ambuja Exports Ltd. (257.30, 4.87%). 5 stocks slipped below their 200 SMA including Aptus Value Housing Finance India Ltd. (267.65, -2.00%) and Reliance Industries Ltd. (2,479.80, -1.68%).
23 Aug 2023
Trendlyne Analysis
Nifty 50 closed at 19,444.00 (47.6, 0.3%), BSE Sensex closed at 65,433.30 (213.3, 0.3%) while the broader Nifty 500 closed at 16,950.25 (45, 0.3%). Of the 1,934 stocks traded today, 1,098 were in the positive territory and 779 were negative.
Indian indices maintained their gains from the afternoon session and closed in the green, with the Nifty 50 closing at 19,444. The volatility index, Nifty VIX, dropped by 0.2% and closed at 11.7 points. Jio Financial Services' promoters acquire a 45.8% stake (291 crore shares) in the company under the scheme of arrangement between Reliance Industries and its shareholders.
Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Media and Nifty Bank closed higher, compared to Tuesday’s closing levels. According to Trendlyne’s sector dashboard, hardware technology & equipment emerged as the top-performing sector of the day, with a rise of over 5.9%.
Most European indices trade in the green. US indices futures trade higher, indicating a positive start. The data released by S&P Global indicates that the UK’s composite PMI for August has contracted to 47.9, against the estimates of 50.3. UK’s composite PMI for July stood at 50.8.
Relative strength index (RSI) indicates that stocks like Apar Industries, Escorts Kubota, REC and BLS International Services are in the overbought zone.
According to a survey of economists, India’s GDP is expected to grow by 7.8% in Q1FY24, compared to 6.1% in Q4FY23, driven by factors like robust domestic demand and government investments.
#GDP growth: Indian economy likely grew 7.8% in Q1 FY24, say economists
— The Times Of India (@timesofindia) August 23, 2023
This GDP growth will be a step up from the 7.2% growth in the previous fiscal year and the 6.1% growth in the preceding March quarter.https://t.co/IM7QipNtP5Atul Auto and Hindustan Aeronautics touch their 52-week highs of Rs 453.45 and Rs 4,049.9 respectively. The former has risen 17.9% over the past month, while the latter increased by 3.3%.
JB Chemical & Pharmaceuticals rises as it receives US FDA approval for its abbreviated new drug application (ANDA) for Doxepin Hydrochloride capsules. The drug is used for the treatment of anxiety, depression and other target symptoms of psychoneurosis. The company appears in a screener of stocks nearing 52-week high.
Aeroflex Industries' Rs 351 crore IPO gets bids for 21.1X the available 2.3 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 17.78X of the available 1.2 crore shares on offer.
PSU Banks like UCO Bank, Punjab & Sind Bank, Bank of Maharashtra and Central Bank of India are rising in trade. All constituents of the broader Nifty PSU Bank are also trading in the green.
Goldman Sachs says that the IT sector’s revenue is expected to grow by 9-10% YoY from FY25, driven by increased demand for IT services and the tailwinds from adopting Generative AI. The brokerage has initiated coverage on LTIMindtree, Infosysand TCS with a ‘Buy’ rating.
A revival in India’s $245-billion IT sector is only a matter of time as the services outsourcing is essential spending, says #GoldmanSachs.@tds19 reports.https://t.co/qEDACfBH7e
— BQ Prime (@bqprime) August 23, 2023Shriram Properties (SPL) rises as Omega Holdings sells a 2.3% (39,00,000 shares) stake in the company at an average price of Rs 78.4 per share, amounting to Rs 30.6 crore. SPL & ASK Property Fund have announced a joint investment of Rs 206 crore for 100% development rights of a project in Chennai, through SPL's subsidiary Shrivision Elevations. The company appears in a screener of stocks with strong momentum.
ICICI Direct keeps its ‘Buy’ rating on Mahindra Lifespace Developers with a target price of Rs 650, implying an upside of 22.9%. The brokerage is positive about the firm’s prospects due to its launch pipeline, focus on improving scalability and healthy balance sheet. It expects the company’s revenue to grow at a CAGR of 42.5% over FY23-25.
Himadri Speciality Chemicals surges to an all-time high of Rs 190.9 following its partnership with Dalmia Bharat Refractories. This partnership aims to engage in the corporate insolvency resolution process of Birla Tyres. The company appears in a screener of stocks with strong annual EPS growth.
Joi Financial Services' promoters acquire a 45.8% stake (291 crore shares) in the company under the scheme of arrangement between Reliance Industries and its shareholders. This coincides with the stock's continued plunge for a second consecutive session. The stock is also in danger of being removed from all BSE indices from August 29. However, if it falls for two more consecutive days, the removal will be delayed by another three days. The exclusion comes as the stock hits the lower circuit for two consecutive sessions after an underwhelming listing on Monday.
Hindalco Industries rises following an announcement during the annual general meeting that the company plans to invest up to Rs 2,000 crore to set up a first-of-its-kind copper and e-waste recycling unit in India. It appears in a screener for stocks with strong momentum.
VD Nanavaty, the Executive Director (Finance) & CFO of Gujarat State Fertilizers & Chemicals, expects volume growth of 15-120% in its fertilizer segment. He adds that the company will commission a new factory in FY24, followed by three more in the next year, with a capex lineup of Rs 4,000 crore. He highlights that the caprolactam benzene spreads are expected to be in the $800 range.
#OnCNBCTV18 | Expect caprolactam benzene spreads to be in the $800 range. Govt was liberal on the subsidy front last year, they are reducing subsidies now, says VD Nanavaty of GSFC pic.twitter.com/rkzSPaa7HG
— CNBC-TV18 (@CNBCTV18Live) August 23, 2023Vodafone Idea rises as reports suggest that the company plans to clear approx Rs 2,400 crore dues to the government by September 2023.
Larsen & Toubro hits a record high as its arm, L&T Construction, wins orders worth Rs 2,500-5,000 crore from the Middle East. The order involves establishing a gas-insulated substation and associated transmission lines in the United Arab Emirates, and setting up two new substations in Dubai and four in Kuwait.
According to credit rating agency Crisil Ratings, the Indian footwear industry’s revenue is expected to grow by 11% in FY24, driven by higher realisations, with a 4% volume growth. It also anticipates operating margins to expand by 125 bps to 9%, supported by the moderation in raw material prices.
Footwear industry revenue is striding ~11 per cent ahead this fiscal year on higher realisations with volume up ~4 per cent, said an analysis by CRISIL Ratings (@CRISILLimited ).https://t.co/SVKWEsKoLw
— Financial Express (@FinancialXpress) August 23, 2023Metal stocks like Hindalco Industries, NMDC, APL Apollo Tubes, National Aluminium Co and Tata Steel are rising in trade. All the constituents of the broader sectoral index, BSE Metal, are also trading in the green.
Reliance Industrial Investments and Holdings, promoter of Reliance Industries, buys a 3.6% stake in the company on Tuesday.
TVS Supply Chain Solutions’ shares debut on the bourses at a 5.1% premium to the issue price of Rs 197. The Rs 880 crore IPO has received bids for 2.8 times the total shares on offer.
JP Morgan maintains its 'Neutral' rating on Tata Motors with a target price of Rs 635. The brokerage believes the firm has outperformed its peers in the USA and China but underperformed in Europe. The brokerage says that their product mix remains healthy at over 80%.
Brokerage Radar | JPMorgan on Tata Motors: Maintain Neutral; JLR outperforms peers in the U.S. and China, underperforms in Europe pic.twitter.com/GPpB41b8w1
— ET NOW (@ETNOWlive) August 23, 2023Linde India rises to an all-time high of Rs 6,165 as it bags an order from the Indian Oil Corporation (IOCL) for 20 years. The order involves the installation, operation and maintenance of an air separation unit. This unit will be responsible for the production and supply of instrument air, plant air and cryogenic nitrogen to the IOCL Panipat Refinery Expansion Project. The company appears in a screener of stocks with improving cash flow from operations.
Rites is rising as its bags an order worth Rs 65.4 crore from the Railway Board for testing and inspecting rails for the Indian Railways. The stock shows up in a screener for companies with no debt.
BEML rises to an all-time high of Rs 2,183.7 as it bags an order worth Rs 101 crore from the Ministry of Defense. The order involves the supply of command post vehicles to the army. The company appears in a screener of stocks with improving RoCE.
The Securities and Exchange Board of India (SEBI) reportedly bars Brightcom Group’s Chairman and CEO, Suresh Kumar Reddy, and its CFO, Narayan Raju, from participating in company boards due to fraud and alleged misrepresentation of financial statements. They are also not allowed to dispose of their shares in Brightcom until further notice.
Riding High:
Largecap and midcap gainers today include One97 Communications Ltd. (904.75, 5.53%), Federal Bank Ltd. (141.70, 4.15%) and Crompton Greaves Consumer Electricals Ltd. (308.90, 3.64%).
Downers:
Largecap and midcap losers today include Adani Transmission Ltd. (890.40, -7.26%), Adani Power Ltd. (322.85, -7.07%) and Adani Enterprises Ltd. (2,530.30, -6.22%).
Movers and Shakers
33 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included MMTC Ltd. (43.50, 10.13%), Alok Industries Ltd. (18.45, 8.21%) and Jubilant Ingrevia Ltd. (476.15, 7.68%).
Top high volume losers on BSE were Borosil Renewables Ltd. (430.40, -3.86%), Poly Medicure Ltd. (1,411.35, -1.88%) and Endurance Technologies Ltd. (1,629.70, -0.80%).
CESC Ltd. (83.85, 6.82%) was trading at 13.9 times of weekly average. Hitachi Energy India Ltd. (4,600.00, 3.40%) and Global Health Ltd. (708.40, 2.14%) were trading with volumes 9.9 and 9.5 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
51 stocks took off, crossing 52-week highs, while 1 stock was an underachiever and hit its 52-week low.
Stocks touching their year highs included - 3M India Ltd. (3,0240.00, 2.23%), Bank of Maharashtra (39.65, 3.93%) and Bharat Electronics Ltd. (133.40, 0.08%).
Stock making new 52 weeks lows included - Easy Trip Planners Ltd. (39.05, 4.13%).
18 stocks climbed above their 200 day SMA including Jubilant Ingrevia Ltd. (476.15, 7.68%) and Quess Corp Ltd. (420.80, 4.74%). 1 stock slipped below their 200 SMA including Adani Enterprises Ltd. (2,530.30, -6.22%).
22 Aug 2023
This week we take a look at stocks with high upside from analysts post Q1 results.
1. Godrej Industries:
ICICI Securities maintains a 'Buy' rating on this holding company of the Godrej Group, with a target price of Rs 764, indicating an upside of 53.6%. In Q1FY24, the company's revenue increased by 12% YoY to Rs 4,505.7 crore, while net profit decreased by 30.9% YoY. This profit decrease was attributed to revenue declines in the chemical business due to strong headwinds in the industry.
Despite the fall in profit, analysts Aniruddha Joshi and Nilesh Patil remain optimisticas the company continues to generate considerable value from its listed subsidiaries, namely Godrej Properties and Godrej Agrovet (profit rose 174.3% YoY and 27.3% YoY, respectively).
The analysts estimate the company's value to be trading at a discount of 66% by considering the target prices for its subsidiaries along with a 50% holding discount. The company also operates Godrej International and has initiated its housing finance business under Godrej Capital. They believe that the listed subsidiaries will gain from the economic revival and the ongoing migration of value from unorganised to organised sectors.
2. Crompton Greaves Consumer Electricals:
HDFC Securities maintains its ‘Buy’ rating on this household appliances manufacturer with a target price of Rs 400, implying an upside of 34.2%. In Q1FY24, the company’s net profit fell by 2.2% YoY to Rs 118.3 crore and revenue grew by 0.8% YoY.
Analysts Naveen Trivedi, Paarth Gala and Riddhi Shah see the firm’s Q1FY24 performance as a mixed bag. While its revenue growth beat their expectations by 4.4%, margins fell short. They attribute the margin decline to increased advertising expenses, delayed price hikes, and higher research & development expenses. They add, “These costs are upfront in nature, thereby impacting operating margin.”
Although the analysts expect margin pressure to persist in the near term, they foresee gradual revenue growth. They project the company’s revenue to grow at a CAGR of 12.4% over FY23-26.
3. Dilip Buildcon:
Geojit BNP Paribas maintains its ‘Buy’ call on this construction company with a target price of Rs 367, indicating an upside of 19.5%. In Q1FY24, the company reported an EBITDA margin expansion of 500 bps YoY to 12.8%, despite a marginal rise of 1.3% in revenue. Analyst Antu Eapen Thomas says that the margin expansion was led by a fall in input costs and better absorption of overheads. The company’s management expects execution to pick up pace and guides a revenue growth of 8-10% with an EBITDA margin of 13% in FY24.
Thomas believes that Dilip Buildcon has strong growth visibility for the next two years, with its order book in Q1 reaching Rs 24,051 crore, which is 2.4x the trailing twelve-month revenue. He expects a recovery in execution starting from H2FY23 on account of improvements in inflows and the completion of legacy projects. He concludes, “We maintain our stance due to expected improvements in execution and margins.”
4. KNR Constructions:
Axis Direct keeps its ‘Buy’ rating on this construction company but lowers the target price to Rs 305 from Rs 325. This implies an upside of 12.8%. In Q1FY24, the firm’s net profit surged by 53% YoY to Rs 137.1 crore and revenue grew by 0.1% YoY.
Analysts Uttam K Srimal and Shikha Doshi believe that the company is well-placed to capitalise on the Centre’s increased infrastructure spending, given its presence in diverse segments like roads, railways, metro and urban infrastructure. They add, “With newer opportunities emerging in various infra-related sectors, the diversification strategy augurs well for the company.”
The analysts believe the firm’s order book stands strong despite a slowdown in order inflows. They expect the order inflow to pick up in the coming quarters, led by road projects. Srimal and Doshi estimate the firm’s revenue to grow at a 12% CAGR over FY23-25.
5. Vinati Organics:
Motilal Oswal reiterates its ‘Buy’ call on this specialty chemicals company but reduces the target price to Rs 2150. This indicates an upside of 18.7%. In Q1FY24, the company’s revenue stood at Rs 446.4 crore (down 15% YoY), which is 9% below the brokerage’s estimate. Analysts Aman Chowdhary and Rohit Thorat say, “About 90% of the revenue decline was due to reduced volumes.” However, they expect demand to recover in H2FY24.
The analysts are cautious on the back of lower offtakes and underperformance of ATBS (40% of total revenue) in Q1. The delay in the plan to expand ATBS capacity by 50% until the end of FY24 also contributes to their expectation. The management sees a muted performance in FY24.
The analysts maintain optimism as Vinati Organics’ arm Veeral Organics is set to commence production of guaiacol, anisole and iso-amylene by the end of FY24, which they believe will drive the company into the next leg of growth. They forecast a revenue CAGR of 17% over FY24-25, translating into an EBITDA CAGR of 19%.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
(You can find all analyst picks here)
22 Aug 2023
Trendlyne Analysis
Nifty 50 closed at 19396.45 (2.9, 0.0%) , BSE Sensex closed at 65,220.03 (3.9, 0.0%) while the broader Nifty 500 closed at 16,905.25 (53.2, 0.3%). Of the 1,934 stocks traded today, 1,206 were gainers and 664 were losers.
Indian indices closed flat, with the benchmark Nifty 50 index settling just below the 19,400 mark. The Indian volatility index, Nifty VIX, fell below 12 points. Glenmark Pharmaceuticals closed 2% lower after its wholly owned subsidiary in the US signed an antitrust settlement with the Department of Justice (DOJ), Antitrust Division, to resolve all court proceedings involving historical pricing malpractices by former employees.
Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Media and Nifty Metal closed higher than Monday’s levels. According to Trendlyne's sector dashboard, Telecommunications Equipment was the top-performing sector of the day.
Major Asian indices closed in the green, except for India’s BSE Sensex, which closed flat. European indices traded in the green. US index futures also traded higher, indicating a positive start to the trading session. However, Brent crude oil futures traded in the red, extending their losses from Monday.
Money flow index (MFI) indicates that stocks like Solar Industries India, Emami, Shyam Metalics and Energy, and Escorts Kubota are in the overbought zone.
Birla Cable and Dixon Technologies (India) touch their 52-week highs of Rs 298 and Rs 5,035 respectively. The former has risen 59.5% over the past month, while the latter increased by 17.8%.
Aeroflex Industries' Rs 351 crore IPO gets bids for 6.72X the available 2.3 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 14.72X of the available 1.2 crore shares on offer.
Pyramid Technoplast's Rs 153.1 crore IPO gets bids for 18.29X the available 75.6 lakh shares on offer on the third day of bidding. The retail investor quota gets bids for 11.71X of the available 46.1 lakh shares on offer.
Prabhudas Lilladher lowers its 12-month Nifty 50 target to 20,735 from its earlier estimate of 21,430. The brokerage expects the domestic market to account for political risks as state and Lok Sabha elections approach. It also adds low earnings estimates due to floods and the late festive season as reasons for the target cut.
The brokerage firm has trimmed the Nifty target primarily because of a cut in earnings and expects markets to consolidate ahead of the 2024 elections.https://t.co/IvCkw4KAVp
— Mint (@livemint) August 22, 2023Newgen Software Technologies surges as it wins an international order worth $9,90,000 for licensing, product implementation, and support services.
Telecommunication stocks like GTL Infrastructure, Tata Teleservices (Maharashtra), Mahanagar Telephone Nigam, Tata Communications and Railtel Corp of India are rising in trade. Barring Optiemus Infracom, all other constituents of the broader sectoral index, S&P BSE Telecom, are trading in the green.
Glenmark Pharmaceuticals falls as its wholly owned subsidiary in the US signs an antitrust settlement with the Department of Justice (DOJ), Antitrust Division, to resolve all court proceedings involving historical pricing malpractices by former employees. The company will pay $30 million ( Rs 249 crore) in six instalments to the DOJ. It appears on a screener of stocks with declining quarterly net profit.
According to reports, one crore shares (33.1% equity) of SJS Enterprises, amounting to Rs 610 crore, have changed hands in a block deal. Evergraph Holdings and Sanders Consulting are likely the sellers in this transaction.
#SJSEnt Large Trade | 1 cr shares (33.1% equity) of worth ?610 cr change hands at ?605/sh#BlockDealhttps://t.co/3H6SDbVh9kpic.twitter.com/JzOqYg4TM1
— CNBC-TV18 (@CNBCTV18Live) August 22, 2023NBCC (India) surges more than 5% in trade and hits a 52-week high of Rs 51.4 per share. The stock ranks high on Trendlyne's checklist with a score of 77.3%. It is also in the strong buy zone. The company appears in a screener of stocks where analysts have upgraded their recommendations or target prices over the past quarter.
One97 Communications (Paytm) rises as it plans to invest in artificial intelligence (AI) for the development of an artificial general intelligence software stack. It aims to help financial institutes in identifying possible risks and frauds, while also protecting them from new risks arising out of advances in AI.
ICICI Securities initiates coverage on IIFL Finance with a ‘Buy’ rating and a target price of Rs 760, implying an upside of 28.8%. The brokerage is optimistic about the company’s growth prospects given its extensive footprint, diverse portfolio and asset-light approach. It expects the firm’s net profit to grow at a CAGR of 27% over FY23-25.
Lemon Tree Hotels rises to its all-time high of Rs 108.5 per share as it signs two new properties in Bhubaneswar and Kasauli. The Bhubaneswar property is expected to be operational by Q4FY25 and will be managed by Carnation Hotels while the Kasauli property will be operational by Q3FY24 under Lemon Tree Hotels.
Harsh Dugar, Executive Director of Federal Bank, notes a rise in deposit rates across the banking sector. He highlights strong demand from both rural and urban areas and expects the bank's loan growth to exceed the industry average by 4-5% and reach 18-20%. He adds that the net interest margin could be around 3.3-3.4% in FY24.
Federal Bank Says
????Rural & urban demand has been quite robust
????Expect Loan Book to double by 2027, will outgrow industry by 4%-5%
????NIM would be at 3.3%-3.4% in FY24@FederalBankLtd#StockMarket#Niftyhttps://t.co/rUZ4taTvqX— Nigel D'Souza (@Nigel__DSouza) August 22, 2023
Tata Motors sees seven analyst target price upgrades and one recommendation upgrade in the past month. UltraTech Cement, Maruti Suzuki, ICICI Bank and Axis Bank see six analyst target price upgrades over the same time period.
Welspun Enterprises touches its all-time high of Rs 318.7 per share as it completes the acquisition of 50.1% stake in Michigan Engineers for Rs 137.1 crore from Authum Investment & Infrastructure and Sansaar Housing Finance.
Patel Engineering is rising as it bags an order worth Rs 1,275.3 crore through a joint venture from the Madhya Pradesh government. The order involves the construction and maintenance of infrastructure for drinking water supply and storage. The company’s share in the joint venture is worth Rs 446.4 crore.
Aeroflex Industries raises Rs 103.7 crore from anchor investors ahead of its IPO by allotting around 96 lakh shares at Rs 108 each. Investors include Nippon Life Insurance, Societe Generale, Bank of India Mutual Fund, Whiteoak Capital Mutual Fund and Winro Commercial India.
Nomura maintains its ‘Buy’ rating on Bharat Forge with a target price of Rs 1,157. The brokerage believes that the company has the potential to be a major defense exporter, and will witness exponential growth. It anticipates a strong ramp-up in the defense space in FY24-25.
Brokerage Radar | Nomura on Bharat Forge: Maintain 'Buy'; Defence segment witnessing a sharp ramp-up in FY24-25 pic.twitter.com/YKcGVhieE4
— ET NOW (@ETNOWlive) August 22, 2023
Adani Enterprises rises as promoter Kempas Trade & Investment buys a 2.3% stake in the company. It now holds a 69.9% stake.
Ambuja Cements makes an open offer to acquire a 26% stake in Sanghi Industries for Rs 767.2 crore. The offer opens on September 29 and closes on October 13.
Brigade Enterprises is rising as it enters into a sale deed to acquire a 6.5-acre land parcel in Chennai to develop a residential project. The company shows up in a screener for stocks with consistently high returns over the past five years.
Union Bank of India’s board approves the raising of Rs 5,000 crore by issuing equity shares through the qualified institutional placement (QIP) route. The floor price is set at Rs 91.1 per share. The stock shows up in a screener for companies with high TTM EPS growth.
Riding High:
Largecap and midcap gainers today include Adani Power Ltd. (347.40, 6.94%), General Insurance Corporation of India (217.05, 5.59%) and Tata Communications Ltd. (1,782.15, 4.59%).
Downers:
Largecap and midcap losers today include Colgate-Palmolive (India) Ltd. (1,939.75, -2.69%), Union Bank of India (90.00, -1.96%) and Bharat Petroleum Corporation Ltd. (346.90, -1.46%).
Volume Shockers
22 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Bharat Heavy Electricals Ltd. (111.05, 10.00%), Linde India Ltd. (5,765.75, 9.86%) and Tata Teleservices (Maharashtra) Ltd. (82.15, 8.52%).
Top high volume losers on BSE were J B Chemicals & Pharmaceuticals Ltd. (2,650.25, -0.58%), Brigade Enterprises Ltd. (589.40, -0.45%) and Solar Industries India Ltd. (4,359.40, -0.11%).
The New India Assurance Company Ltd. (131.20, 5.93%) was trading at 30.4 times of weekly average. Mahindra Lifespace Developers Ltd. (528.25, 3.51%) and General Insurance Corporation of India (217.05, 5.59%) were trading with volumes 15.9 and 11.9 times weekly average respectively on BSE at the time of posting this article.
BSE 500: highs, lows and moving averages
43 stocks made 52 week highs,
Stocks touching their year highs included - Bharat Electronics Ltd. (133.30, 3.13%), Bharat Forge Ltd. (1,006.70, 2.72%) and Bharat Heavy Electricals Ltd. (111.05, 10.00%).
17 stocks climbed above their 200 day SMA including Tata Teleservices (Maharashtra) Ltd. (82.15, 8.52%) and KNR Constructions Ltd. (270.30, 5.79%). 4 stocks slipped below their 200 SMA including Elgi Equipments Ltd. (466.40, -1.83%) and TTK Prestige Ltd. (764.80, -1.37%).
21 Aug 2023