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Trendlyne Marketwatch
Trendlyne Marketwatch
03 Aug 2023
Market closes lower, Sun Pharmaceutical Industries' Q1FY24 net profit falls by 1.9% to Rs 2,022.5 crore

Trendlyne Analysis

Nifty 50 closed at 19,381.65 (-144.9, -0.7%), BSE Sensex closed at 65,240.68 (-542.1, -0.8%) while the broader Nifty 500 closed at 16,772.30 (-86.7, -0.5%). Market breadth is in the green. Of the 1936 stocks traded today, 1017 were in the positive territory and 850 were negative.

Indian indices closed in the red, with the Nifty 50 closing below the 19,400 mark. The Indian volatility index, India VIX, settled above 11 points. Varun Beverages closed 2% higher after its Q1FY24 net profit rose 26.2% YoY to Rs 993.8 crore on the back of lower raw material costs, higher realisations and operational efficiencies.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher, despite the benchmark index closing in the red. Nifty Media and Nifty Pharma closed higher than Thursday’s close. According to Trendlyne's sector dashboard, Pharmaceuticals & Biotechnology was the top-performing sector of the day in a weak market.

Major European indices traded in the red, in line with the Asian indices, which closed lower. US index futures traded in the red, indicating a negative start to the trading session. Brent crude oil futures also traded lower after falling 2.7% on Thursday.

  • Relative strength index (RSI) indicates that stocks like Escorts Kubota, Eris Lifesciences, BEML and Cipla are in the overbought zone.

  • Sun Pharmaceutical Industries' Q1FY24 net profit falls by 1.9% to Rs 2,022.5 crore, while revenue rises by 10.7%. The decline in profit is due to the rise in input costs and employee benefit expenses. The company features in a screener for stocks with low debt.

  • Jefferies maintains its ‘Underperform’ rating on Hindustan Petroleum but raises the target price to Rs 225. The brokerage says the company reported strong results in Q1FY24 but highlights that earnings have peaked. It also believes that the increase in oil prices will impact marketing.

  • Mahindra and Mahindra (M&M) enters into a securities subscription agreement of Rs 1,200 crore with Temasek Holdings. As part of this agreement, Temasek will acquire a 1.5% to 3% stake in M&M's EV business, Mahindra Electric Automobile (MEAL), at a valuation of Rs 80,580 crore.

  • Akzo Nobel India rises to an all-time high of Rs 2,930.9 as its Q1FY24 net profit increases by 42.9% YoY to Rs 109.9 crore. Its revenue grows by 7% YoY on the back of the coatings segment. The company appears in a screener of stocks with improving RoA.

  • SBFC Finance's Rs 1,025 crore IPO gets bids for 1.91X the available 13.4 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 2.06X of the available 6.6 crore shares on offer.

  • Dixon Technologies (India) rises by over 8% today as the government bans the import of laptops, personal computers, tablets, etc. for foreign companies without proper licenses. This firm operates in the electronic manufacturing services (EMS) space in India and will directly benefit from this ban. It appears in a screenerof stocks with strong momentum.

  • Dabur India recovers after an initial 3% fall today as its Q1FY24 net profit rises 5.4% YoY to Rs 463.9 crore, and revenue grows by 10.9% YoY, led by its consumer care and food segments. The company had declined earlier today as reports surfaced claiming the presence of carcinogenic materials (cancer-causing substances) in its honey product, Dabur Honey.

  • Tech giant Apple plans to shift at least 20% of iPhone production to India from China, amid Washington- Beijing tensions and Covid-induced uncertainty.

  • Hindustan Petroleum Corp falls despite its Q1FY24 net profit rising to Rs 6,765.5 crore, compared to a net loss of Rs 8,557.1 crore in Q1FY23. The growth is due to lower raw material expenses and inventory. Its revenue grows by 4.3% YoY, beating Trendlyne's Forecaster estimates by 9.1%. The company appears in a screener of stocks with increasing quarterly profits.

  • Motilal Oswal downgrades its rating on Oberoi Realty to ‘Neutral’ from ‘Buy’ but raises the target price to Rs 1,200 from Rs 1,140. This implies an upside of 10.4%. The brokerage cites the stock's current valuation for the downgrade. However, it remains optimistic about the firm’s prospects, given its healthy launch pipeline in FY24.

  • Varun Beverages is rising as its Q1FY24 net profit rises 26.2% YoY to Rs 993.8 crore on the back of lower raw material costs, higher realisations and operational efficiencies. Its revenue increases by 13.6% YoY despite a soft demand environment caused by high unseasonal rainfall in Q1. The company shows up in a screener for stocks with consistently high returns over the past five years.

  • Sterlite Technologies rises as it bags an order worth Rs 250 crore from a public sector entity. The project involves designing, building, commissioning, and maintaining 2 data center facilities across India. The company appears in a screener of stocks with increasing quarterly net profit and margins.

  • FSN E-Commerce Ventures (Nykaa) is declining as it responds to a Reuters report about the departure of five key executive employees from the firm. The company says that they have hired new top-level executives as part of a strategic realignment and cost rationalization, and to address the growing complexity of the business. It appears in a screener of stocks with a major fall in TTM net profit.

  • Vedanta falls sharply as reports suggest that 16.5 crore shares (4.5% equity) of the company, amounting to Rs 4,270 crore, change hands in a block deal. Promoter Twin Star Holding is the likely seller in this transaction.

  • Zydus Lifesciences is rising as it receives final approval from the US FDA to manufacture and market indomethacin suppositories. The drug is a generic version of the reference listed drug (RLD) indocin suppositories, used to treat arthritis patients. According to IQVIA, the drug has an estimated annual sales of $95 million in the USA for the year ended April 2023.

  • Hero MotoCorp is falling after the Enforcement Directorate (ED) reportedly seized cash and jewellery worth Rs 25 crore during raids on the executive chairperson Pawan Kant Munjal and other top officials of the company. The ED also claims to have discovered "incriminating" documents in the residences and offices of Pawan Kant Munjal and others.

  • ICICI Prudential Life Insurance and Societe Generale buy a 0.8% and 0.5% stake in Campus Activewear respectively in bulk deals on Wednesday.

  • Lupin, Aurobindo Pharma, Zydus Lifesciences, Laurus Labs and Ipca Laboratories are rising in trade. Barring Pfizer, all other constituents of the broader sectoral index, Nifty Pharma, are also trading in the green.

  • India’s Services PMI jumps to a 13-year high of 62.3 in July from 58.5 in June amid strong demand and an increase in new orders.

  • Mankind Pharma rises as its Q1FY24 net profit increases by 66.4% YoY to Rs 486.9 crore due to lower inventory and finance expenses. Its revenue also grows by 20.1% YoY on the back of expansion in the domestic consumer healthcare and exports segments. The company appears in a screener of stocks nearing their 52-week high with significant volumes.

  • Gujarat Gas is falling as its net profit plunges by 43.4% YoY to Rs 215.9 crore in Q1FY24 owing to an increase in employee benefit and excise duty expenses. Its revenue also declines by 26% YoY due to reduced natural gas prices. The company features in a screener of stocks with declining profits for the past three consecutive quarters.

  • Morgan Stanley raises its rating on India to ‘Overweight’, citing favourable valuations and sound growth outlook. The brokerage believes the country is poised for significant and sustained economic growth.

  • Ambuja Cements acquires a 56.7% stake in Sanghi Industries at an enterprise value of Rs 5,000 crore. The acquisition will be fully funded through internal accruals.

  • InterGlobe Aviation falls despite its Q1FY24 net profit rising to Rs 3,090.6 crore, compared to a net loss of Rs 1064.3 crore in Q1FY23. The growth is due to lower aircraft fuel expenses. Its revenue also grows by 31.8% YoY, beating Trendlyne's Forecaster estimates by 4.4%. The company appears in a screener of stocks with increasing quarterly profits and margins.

  • Titan is falling as its net profit declines by 4% YoY to Rs 756 crore in Q1FY24 due to an increase in expenses for raw materials, employee benefits and advertising. However, its revenue grows by 21% YoY, aided by improved sales from the jewellery, watches & wearables and eyecare segments. It appears in a screener of stocks where mutual funds have decreased their shareholding in the past quarter.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (44.70, 12.59%), Dixon Technologies (India) Ltd. (4,443.35, 7.66%) and IDBI Bank Ltd. (64.40, 6.45%).

Downers:

Largecap and midcap losers today include Vedanta Ltd. (254.05, -6.65%), Godrej Properties Ltd. (1,573.00, -5.23%) and Kansai Nerolac Paints Ltd. (320.50, -4.90%).

Movers and Shakers

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

Top high volume gainers on BSE included KSB Ltd. (2,717.65, 18.06%), FDC Ltd. (372.95, 8.73%) and Dixon Technologies (India) Ltd. (4,443.35, 7.66%).

Top high volume losers on BSE were Vedanta Ltd. (254.05, -6.65%), Kansai Nerolac Paints Ltd. (320.50, -4.90%) and InterGlobe Aviation Ltd. (2,447.75, -4.58%).

VIP Industries Ltd. (597.95, 1.27%) was trading at 15.4 times of weekly average. MRF Ltd. (1,06,973.35, 4.27%) and Gujarat Gas Ltd. (455.05, -3.60%) were trading with volumes 7.4 and 6.5 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 2 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Abbott India Ltd. (24,555.80, 1.96%), Ajanta Pharma Ltd. (1,721.55, 2.23%) and Akzo Nobel India Ltd. (2,900.50, 4.30%).

Stocks making new 52 weeks lows included - UPL Ltd. (600.45, -3.02%) and VIP Industries Ltd. (597.95, 1.27%).

7 stocks climbed above their 200 day SMA including Laurus Labs Ltd. (384.35, 5.42%) and Indian Railway Catering & Tourism Corporation Ltd. (660.20, 3.52%). 16 stocks slipped below their 200 SMA including Mas Financial Services Ltd. (758.75, -4.05%) and Sheela Foam Ltd. (1142.00, -2.86%).

 
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The Baseline
02 Aug 2023
Five outperformers that beat expectations in Q1 | Stocks where promoters increased pledged shares
By Deeksha Janiani

It's that time of the year, when promises that CEOs made in the previous quarter are checked against actual financial results.

And so far, it’s been a mixed bag for Q1FY24.  

Sectors like banking and finance, auto ancillaries, capital goods and construction have continued to outperform, with impressive growth and a promising outlook. Uday Kotak, Managing Director at Kotak Mahindra Bank, said that the financial sector "is in its Goldilocks period. Clock striking midnight feels far away for Cinderella.” 

In contrast, the IT sector and a few FMCG players have seen a growth slowdown so far. And textiles and chemicals players were hit by a YoY decline in their Q1 revenue and profits.

When we look beyond sectoral trends, an intriguing volume story has also emerged this quarter.

With inflation falling and demand bouncing back, several big companies reported a strong jump in their Q1 sales volumes. This is especially true for building material companies like UltraTech Cement, Supreme Industries and APL Apollo. 

Similar signs of a volume rebound are visible in the pharma and FMCG spaces. But there are also bigwigs like HUL, who were left out and are still waiting for the volume recovery to come their way.

One group of companies in particular, managed to impress the street with their growth. This week, we bring you an exclusive report on these five players, which surpassed analyst expectations and sector performance to deliver outstanding Q1 results. 

In this week’s Analyticks:

  • Q1FY24 outperformers: Companies that surprised investors with a strong Q1 showing
  • Screener: Stocks where promoters increased pledged shares QoQ

Let’s get into it.

Results special: Five companies that beat estimates in Q1

In this week’s edition, we look at five players that easily beat revenue and profit growth expectations in Q1FY24. Many of these companies are also reasonably valued relative to their future prospects.  

L&T beats expectations with strong infra and energy execution 

This engineering & construction major beat analysts' net profit expectations by 19% in Q1. Revenue for its core engineering business jumped nearly 50%, thanks to a pick up in project execution in infrastructure and energy.

Order wins were equally encouraging for L&T in Q1. The company received bookings across segments like railways, renewables, rural water supply, transmission & distribution, and commercial & residential buildings. 

For the rest of FY24, L&T sees order prospects worth Rs 10.07 lakh crore, an increase of over 30% from the previous year. Prospects - meaning projects that L&T can bid for - have risen due to higher activity in the Middle East, especially Saudi Arabia, where the government is flush with budget surpluses. 

R Shankar Raman, CFO at L&T, commented onthe Middle East growth,“Recently, there has been a shift in investment preference in the Middle East. They want to develop rail networks, invest in solar energy and green hydrogen. Fortunately, that plays to our strengths.” 

Tata Motors:  Jaguar Land Rover presses the accelerator

This auto major beat analyst expectations on net profit by 16% in Q1FY24. This was driven by a 40% surge in revenue and a seven percentage point rise in EBITDA margin. The highlight of the quarter was the JLR business. 

Tata Motors’ JLR division sells high-margin luxury SUVs. It saw a strong jump in the wholesales of Range Rover, Range Rover Sport and Defender during the quarter. Sales were particularly strong in regions like North America, the Middle East and China. 

The company expects the demand for the JLR division to rise in H2FY24, as it ramps up production. It also sees a recovery in demand for its commercial vehicles after the monsoons. The management acknowledged the especially strong growth in heavy commercial vehicles, which is expected to continue.

Tata Motors faced high net losses between FY19 and FY22, but it was back in the black in FY23. Analysts predict that the company’s profits will jump over 8X in the next two years, helped by a low base. Consequently, it has attractive valuations. 

JSW Steel 'steals' the show with robust sales volume and lower costs

This metals company exceeded analyst profit estimates by a whopping 162% in Q1. Lower input and power costs drove a margin rise of over five percentage points. 

A jump in steel sales volume boosted JSW Steel’s revenue growth. The infrastructure and construction space drove demand, as did its retail customer segment. 

Going forward, the company has guided for steel sales of 25 million tonnes in FY24, which translates to 12% YoY growth. JSW Steel also plans to expand its production capacity by over 30% in the next two years. Analysts expect the company to benefit from rising government capex, and predict a rebound in net profits by FY25. 

Cipla's American business helps it shine 

This pharma major surpassed analyst net profit estimates by 11% in Q1. The top-line growth was driven by a strong performance of the US business, and a decent show in the India business.

Cipla saw robust volume growth for its basic generics business in the US. Commenting on this, Umang Vohra, CEO at Cipla, said, “The supply-demand equation in the US market is readjusting and competition is falling, due to companies going up for sale or facing bankruptcy. This is resulting in growth for Cipla's base families. Pricing pressures are also easing.”

Cipla’s branded prescription business in India also did well in Q1, beating the growth of the broader pharmaceutical market. The company’s growth has been especially strong in the respiratory and cardiac segments.

Going ahead, Cipla has a good launch pipeline for the US market. The company is reasonably valued and analysts foresee a profit growth of over 20% in the next two years.

Favourable demand for wires and cables is boosting Polycab India

This consumer durables player beat consensus net profit (net income) estimates by 46% in Q1FY24. The revenue growth in its flagship wires and cables division drove the bottom line, with a 50-60% YoY volume jump. 

Infrastructure, electricity transmission & distribution, and the real estate segments drove domestic demand for wires and cables. Exports also saw strong momentum, thanks to healthy demand from the oil and gas, and renewables sectors. 

Commenting on the growth trajectory, Gandharv Tongia, CFO at Polycab, said, “We should be able to get to a top line of Rs 20,000 crore by FY26, but it is also possible that we achieve it sooner.” The management's confidence here suggests growth beyond the target CAGR of over 12%. 

Analysts expect that the company will achieve a revenue and net profit growth of over 18% in the next two years. But the stock is currently trading at expensive valuations relative to its prospects.  

Screener: Stocks where promoters have increased pledged shares QoQ in Q1

As the latest shareholding data for companies comes out, we take a look at the stocks that saw a significant rise in promoter-pledged shares (which indicates higher loans taken out against stock). This screener shows stocks with increasing promoter pledges over the past quarter. This is typically a negative signal for a company.

The screener has 18 stocks from Nifty 500 and one stock from Nifty 50, representing sectors like banking, pharmaceuticals & biotechnology and utilities. Major stocks that appear in the screener are Hindustan Zinc, Eris Lifesciences, Max Financial Services, Ajanta Pharma, PVR Inox and Aurobindo Pharma.

Hindustan Zinc stands out with the highest rise of 11.8 percentage points QoQ in promoter-pledged shares. Its promoter, Vedanta, increased its pledged shares to 99.4% of its total holding. It pledged 4.4% of its holding on May 25 to Glencore International against a loan of $250 million and 3.3% of its holding to Axis Trustee Services for an undisclosed amount. 

Max Financial’s promoters increased their pledge by 8.3 percentage points over the past quarter. This takes the promoter pledge to 93.3% of their total holding. The life insurance player struggled with declining net profits and profit margin in Q4FY23. 

Eris Lifesciences’ promoters pledged 11.4% of their holding in Q1FY24. This is the first time the promoters have pledged shares. Share price performance dwindled as it posted declining net profit and revenue for the second consecutive quarter in Q4FY23. 

You can find some popular screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
02 Aug 2023
Market closes lower, Ipca Labs acquires 33.4% stake in Unichem Lab for Rs 1,034.1 crore

Trendlyne Analysis

Nifty 50 closed at 19,526.55 (-207, -1.1%), BSE Sensex closed at 65,782.78 (-676.5, -1.0%) while the broader Nifty 500 closed at 16,858.95 (-192.2, -1.1%). Of the 1,947 stocks traded today, 519 showed gains, and 1,388 showed losses.

Indian indices extend the losses from the morning session and close in the red, with the Nifty 50 closing at 19,527. The volatility index, Nifty VIX, rose by 9.7% and closed at 11.3 points. Godrej Properties’ Q1FY24 net profit jumps 174.3% YoY to Rs 125 crore against the consensus estimates of Rs 131 crore.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red following the benchmark. All major sectoral indices closed lower than Tuesday’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 2.4%. 

Most European indices trade in the red. US indices futures trade lower, indicating a negative start. Global rating agency Fitch lowers US credit rating to AA+ from AAA. The rating agency flagged concerns over the rising debt burden and the government’s inefficiency in resolving pressing fiscal issues. The rating agency predicted the US government’s fiscal deficit to reach 6.3% of GDP in 2023 against 3.7% in 2022.

  • Money flow index (MFI) indicates that stocks like BEML, Kansai Nerolac Paints, Ajanta Pharma and Eris Lifesciences are in the overbought zone.

  • SpiceJet reportedly seeks shareholder approval to issue 5.9% equity to Carlyle Aviation Partner. The lessor plans to convert its debt of $28 million to equity and values the airline's share at Rs 48 per share.

  • Godrej Properties’ Q1FY24 net profit jumps by 174.3% YoY to Rs 124.9 crore, and revenue surges by 282.6% YoY on the back of strong traction in deliveries, business development and cash collections. However, its sales bookings fall by 11% YoY due to a delay in launches. The stock shows up in a screener for companies with net profits rising sequentially over the past three quarters.

  • Strides Pharma Science plunges more than 6% as its revenue declines 1.1% YoY to Rs 9,299.9 crore in Q1FY24. However, its net loss contracts by 32.1% YoY owing to a decrease in raw material, employee benefits and finance costs. The company appears in a screener of stocks with high promoter pledge.

  • Campus Activewear falls as 91 lakh shares (3% equity) of the company, amounting to Rs 265.2 crore, change hands through block deals.

  • Ipca Laboratories acquires 33.4% controlling stake in Unichem Laboratories for Rs 1,034.1 crore. The deal received approval from the Competition Commission of India on July 27. Ipca plans to make a 26% open offer to public shareholders following SEBI regulations. The company appears in a screener of stocks with low debt.

  • Ambuja Cements falls as Sanghi Industries rises on reports of a possible majority stake acquisition by the Gautam Adani-led company. Ambuja Cements is expected to buy out the owners of Sanghi Industries, giving the small-cap cement company an enterprise value of Rs 5,000 crore.

  • Thyrocare Technologies is falling as its Q1FY24 net profit drops by 20.4% YoY to Rs17.3 crore. However, revenue rises by 5.5% YoY due to an improvement in diagnostic testing services. It appears in a screener of stocks with high momentum scores.

  • India’s GST collections rise 11% YoY to Rs 1.6 lakh crore in July, according to the data released by the finance ministry.

  • Adani Ports & Special Economic Zone records a 7% YoY rise in cargo volumes to 34 million metric tonnes in July 2023. Container volume increases by 23% YoY, while liquids and gas volume improves by 27%.

  • KRChoksey downgrades its rating on Sonata Software to ‘Add’ from ‘Buy’ but raises the target price to Rs 1,148 from Rs 1,122. This implies an upside of 9.3%. The brokerage cites the stock’s expensive valuations for the recommendation downgrade. However, it is positive about the firm’s medium-to-long-term prospects given its strong deal momentum, focus on enterprise clients and tailwinds in the managed cloud services.

  • Redington falls as its Q1FY24 net profit decreases by 21.2% YoY to Rs 248.8 crore due to higher inventory, employee benefits, and finance expenses. However, its revenue grows by 26.3% YoY, aided by robust growth in Singapore, India & South Asia, and the rest of the world regions. The company appears in a screener of stocks with declining quarterly profits.

  • Metal & mining stocks like Jindal Steel & Power, National Aluminium Co, Coal India, Tata Steel and NMDC are falling in trade. All the constituents of the broader sectoral index, BSE Metal, are also trading in the red.

  • Zee Entertainment Enterprises is falling as IDBI Bank moves the National Company Law Appellate Tribunal (NCLAT) to challenge the National Company Law Tribunal's decision to set aside its plea to initiate insolvency proceedings against the media company. The petition is listed to be heard by the NCLAT bench today.

  • Rating agency Fitch Ratings downgrades the US's long-term foreign-currency issuer default rating (IDR) to ‘AA+’ from ‘AAA’ with a "stable" outlook. The downgrade is due to factors including fiscal deterioration and increasing government debt.

  • Sula Vineyards falls as it receives an excise demand notice of Rs 115.9 crore issued by the Minister of State Excise Revenue, Government of Maharashtra. The company appears in a screenerof stocks with a negative breakdown at third support.

  • Kushal Pal Singh, promoter of DLF, sells his entire 0.6% stake for approx Rs 727.1 crore in the company on Tuesday. Promoter group Mallika Housing LLP also sells a 0.2% stake in the company.

  • Syrma SGS Technology is falling despite its Q1FY24 net profit rising by 83% YoY to Rs 28.5 crore. Its revenue improves by 59.1% YoY, driven by a robust performance in the consumer segment. It appears in ascreener of companies with low debt.

  • Ambuja Cements falls despite a 20.4% YoY rise in its net profit to Rs 905.6 crore in Q1FY24. Revenue grows by 8.5% YoY, aided by an improvement in sales. Its EBITDA margin expands by 288 bps YoY on the back of reduced employee benefits and power & fuel expenses. The company features in a screener of stocks with increasing revenue for the past two quarters.

  • Syrma SGS Technology acquires a 51% stake (17.7 lakh shares) in Johari Digital Healthcare for Rs 229.5 crore. This marks the firm's entry into the lucrative electronic medical devices market.

  • Thermax rises despite its Q1FY24 net profit falling 0.1% YoY to Rs 58.9 crore. However, its revenue grows by 18.6% YoY on the back of robust growth in the industrial products and green solutions segment. The company appears in a screener of stocks with strong momentum.

  • TVS Motor Co is rising as its total wholesales in July increase by 3.6% YoY to 3,25,977 units, led by healthy growth in domestic two-wheeler sales. Its total two-wheeler wholesales improve by 4.2% YoY, driven by a 17% YoY growth in domestic two-wheeler wholesales. However, its exports decline by 20.4% YoY.

  • Power Grid Corporation of India rises as its board of directors approves an investment in an 85 MW solar power project at Nagda, Madhya Pradesh. The project will cost Rs 554.9 crore and will be implemented in 10 months. The company appears in a screener of stocks with improving RoCE.

  • Morgan Stanley maintains its ‘Overweight’ rating on Navin Fluorine International but lowers the target price to Rs 4,951. The brokerage is bullish on the company’s balanced business mix, strong agrochemical portfolio, and new orders. Despite a 17.4% decline in net profit to Rs 61.5 crore, the company's revenue has increased by 23.5% to Rs 491.2 crore in Q1FY24.

  • GE Power India is rising as it bags a contract worth Rs 444 crore from Gujarat State Electricity Corp for the manufacturing and installation of a flue gas desulfurization system. The stock shows up in a screener for companies with zero promoter pledge.

  • Bikaji Foods International rises to an all-time high of Rs 504 as its Q1FY24 net profit increases by 156.5% YoY to Rs 41.7 crore. The growth was due to lower inventory and finance expenses. Its revenue grows by 15.1% YoY on the back of growth in the ethnic and western snacks segment. The company appears in a screener of stocks with strong annual EPS growth.

  • Metro Brands’ Q1FY24 net profit declines by 11.4% YoY to Rs 92.8 crore on the back of higher input costs and employee expenses. However, its revenue rises by 14.7% YoY as it expands its presence across markets. The company added 27 new stores and entered eight new cities in Q1. It shows up in a screener for companies with cash flows from operations declining over the past two years.

Riding High:

Largecap and midcap gainers today include Laurus Labs Ltd. (364.60, 1.76%), Bayer Cropscience Ltd. (4,584.25, 1.71%) and Divi's Laboratories Ltd. (3,690.60, 1.40%).

Downers:

Largecap and midcap losers today include NHPC Ltd. (49.20, -5.29%), Zee Entertainment Enterprises Ltd. (226.75, -4.35%) and Max Financial Services Ltd. (775.65, -4.27%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Star Cement Ltd. (158.70, 10.36%), JM Financial Ltd. (82.55, 5.63%) and Prism Johnson Ltd. (129.35, 4.06%).

Top high volume losers on BSE were Redington Ltd. (164.20, -10.37%), Campus Activewear Ltd. (290.00, -4.29%) and Bosch Ltd. (18,262.25, -3.86%).

KEC International Ltd. (633.85, 1.36%) was trading at 19.7 times of weekly average. Metro Brands Ltd. (1,059.70, 1.77%) and Triveni Turbine Ltd. (398.40, 1.31%) were trading with volumes 10.4 and 10.3 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

22 stocks overperformed with 52-week highs, while 1 stock was an underachiever and hit its 52-week low.

Stocks touching their year highs included - Berger Paints (India) Ltd. (711.65, 1.32%), Caplin Point Laboratories Ltd. (910.00, 0.28%) and Carborundum Universal Ltd. (1,240.55, -3.58%).

Stock making new 52 weeks lows included - Campus Activewear Ltd. (290.00, -4.29%).

6 stocks climbed above their 200 day SMA including PVR INOX Ltd. (1,609.15, 2.79%) and Laurus Labs Ltd. (364.60, 1.76%). 23 stocks slipped below their 200 SMA including Redington Ltd. (164.20, -10.37%) and Rain Industries Ltd. (163.25, -3.97%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
01 Aug 2023
Market closes flat, Bosch's Q1 net profit up by 22.5% YoY to Rs 409.3 crore

Trendlyne Analysis

Nifty 50 closed at 19,733.55 (-20.3, -0.1%) , BSE Sensex closed at 66,459.31 (-68.4, -0.1%) while the broader Nifty 500 closed at 17,051.15 (-7.9, -0.1%). Of the 1,950 stocks traded today, 1,146 were in the positive territory and 745 were negative.

Indian indices pare the early gains from the morning session and close flat, with the Nifty 50 closing at 19,734. The volatility index, Nifty VIX, dropped by 1.2% and closed at 10.3 points. Bosch’s Q1FY24 net profit increases by 22.5% YoY to Rs 409 crore against the consensus estimates of Rs 384 crore.

Nifty Smallcap 100 closed in the green, while Nifty Midcap 100 closed flat, following the benchmark. Nifty IT and Nifty Metal closed higher, compared to Monday’s closing levels. According to Trendlyne’s sector dashboard, coal emerged as the top-performing sector of the day, with a rise of over 4.3%.

Most European indices trade in the red. US indices futures trade lower, indicating a negative start. The data released by Hamburg Commercial Bank (HCOB) indicated that the Eurozone’s July manufacturing purchasing managers’ index (PMI) contracted to 42.7 from 43.4 in June. The Eurozone manufacturing PMI for July is at a 38-month low, with the sharpest decline reported from France, Germany, Austria and Ireland.

  • Escorts Kubota sees a long buildup in its August 31 future series as its open interest rises 29% with a put-call ratio of 0.72.

  • Escorts Kubota touches a 52-week high as its net profit jumps 106.2% to Rs 289.9 crore in Q1FY24. Its revenue rises 15.9% YoY to Rs 2,355.2 crore. The company features in a screener of stocks with strong momentum.

  • Yes Bank rises as it clarifies reports about the acquisition of Spandana Sphoorthy. The bank aims to enhance its business in priority sectors through organic and inorganic sources, but at present, it has not made any acquisitions. It appears in a screener of stocks with increasing profits for the past two quarters.

  • PVR Inox rises despite reporting a net loss of Rs 44.1 crore in Q1FY24, against a net profit of Rs 68.3 crore in Q1FY23. The loss is due to higher consumption of food & beverage and finance expenses. Its revenue grows by 32.4% YoY on the back of robust growth in the movie exhibition segment. The company appears in a screener of stocks with declining net profit and margins.

  • Mahindra & Mahindra is rising as its total auto wholesales in July grow by 18% YoY to 66,124 units. The increase is led by utility vehicle sales volumes increasing by 30% YoY to 36,205 units, its highest-ever SUV sales in a month. The company’s farm equipment segment also sees its total wholesales rise by 8% due to healthy domestic demand, which offsets the fall in exports.

  • Coal India rises as its July production grows by 13.4% YoY to 53.6 metric tons. The company appears in a screener of stocks with improving RoA.

  • India’s fiscal deficit widens by 21.2% YoY to $4.51 trillion in Q1FY24. This increase is due to a strong improvement in capital expenditure, a rise in tax devolution to state governments, and efforts to offset the increase in non-tax revenues.

  • Ambuja Cements, Carborundum Universal, Engineers India and Hindustan Petroleum’s weekly average delivery volumes rise ahead of their Q1FY24 results tomorrow.

  • Axis Direct downgrades its rating on IDFC First Bank to ‘Hold’ from ‘Buy’ but raises the target price to Rs 90. This implies an upside of 1.9%. The brokerage sees a limited upside for the stock, given its current valuation. However, it remains positive about the bank’s prospects due to its stable margins, strong growth in advances, and improving asset quality.

  • Bosch rises as its Q1FY24 net profit increases by 22.5% YoY to Rs 409.3 crore. Its revenue also grows by 20.7% YoY, driven by the automotive products segment. The company appears in a screener of stocks with high TTM EPS growth.

  • Bajaj Auto’s total monthly wholesales in July fall by 10% YoY to 3,19,747 units due to a 15% YoY decline in total two-wheeler wholesales. However, the company’s commercial vehicle wholesales rise by 29% YoY. The stock shows up in a screener for companies with declining cash flows.

  • Larsen & Toubro's arm, L&T Construction, wins multiple orders worth Rs 2,500-5,000 crore for its heavy civil infrastructure business. The orders include an underground metro project from Rail Vikas Nigam and a mandate and rehabilitation of structures for special systems from a Middle Eastern client.

  • Hero MotoCorp's stock falls over 4% as ED reportedly raids its chairman Pawan Munjal’s residence in connection with a case by the Directorate of Revenue Intelligence. It appears on a screener for volume shocker stocks.

  • Reliance Jio gains 30.4 lakh wireless subscribers in May on a net basis, while Bharti Airtel adds 13.3 lakh and Vodafone Idea loses 28.9 lakh.

  • Cochin Shipyard rises as it is upgraded to 'Schedule A' from 'Schedule B' of central public sector enterprise. This will enable the company to operate with the larger senior management capacity required for managing its seven units across the country. The company appears in a screener of stocks nearing a 52-week high with significant volumes.

  • IRB Infrastructure Developers is falling as its Q1FY24 net profit decreases by 63.2% YoY to Rs 133.8 crore due to increased roadwork and site expenses. Revenue also declines by 12.5% YoY due to poor performance in the construction & unallocated corporate segment. It appears in a screener of stocks with weak momentum.

  • Reliance Industries is falling despite signing an MoU with Brookfield Asset Management to explore opportunities to manufacture renewable energy and decarbonization equipment in Australia. Brookfield has outlined a plan to invest $20-30 billion over the next 10 years to accelerate its energy transition.

  • Petronet LNG is rising as its Q1FY24 net profit increases by 13% YoY to Rs 819.3 crore, aided by a 20.2% YoY fall in the cost of raw materials. However, its revenue declines by 18.3% YoY to Rs 11,656.4 crore. The stock shows up in a screener for companies with net profit growth and profit margin growth.

  • Transport Corporation of India is rising as its Q1FY24 net profit increases by 5.9% YoY to Rs 82.3 crore. However, its revenue falls by 4.6% YoY due to poor performance in the seaways division. It appears in a screener of companies with zero promoter pledge.

  • India’s manufacturing PMI falls marginally to 57.7 in July from 57.8 in June. The PMI reading, however, stays above the 50-mark for the 25th consecutive month, indicating an expansion in manufacturing activity.

  • Rail Vikas Nigam rises as it bags two projects worth Rs 331.6 crore from Madhya Pradesh Poorv Kshetra Vidyut Vitran Co. The order involves the supply, installation, testing and commissioning of new transmission lines in two packages of Jabalpur Company Area. The company appears in a screener of stocks with improving cash flow from operations.

  • Sterling and Wilson Renewable Energy is falling as promoter Shapoorji Pallonji and Co sells a 0.4% stake in the company. It now holds an 18.1% stake.

  • DLF is falling as reports suggest that a promoter sells a 0.9% stake worth Rs 1,185 crore in the company in a block deal.

  • Jefferies downgrades its rating on GAIL to 'Underperform' with a target price of Rs 105. The brokerage says the company's Q1FY24 results took a hit due to the transmission and petrochemical segments. It also expects high gas prices to restrain EBITDA growth in transmission.

  • Engineers India is falling despite bagging an order worth Rs 837.3 crore from Oil and Natural Gas Corp for the renovation of the Hazira plant in Gujarat. The project is estimated to be completed in 45 months. The stock shows up in a screener for companies with declining cash flows from operations over the past two years.

  • KEI Industries falls despite its Q1FY24 net profit rising by 17% YoY to Rs 121.4 crore due to lower inventory expenses. However, its revenue grows by 14.1% YoY on the back of the cables & wires and engineering, procurement & construction projects segments. The company appears in a screener of stocks with improving book value per share.

  • Centre raises windfall tax on locally produced crude oil to Rs 4,250 per tonne from Rs 1,600 earlier. It also increases the export tax on diesel to Rs 1 per litre from 'Nil', while keeping it unchanged on petrol and aviation turbine fuel (ATF).

  • Adani Energy Solutions (formerly Adani Transmission) rises despite its Q1FY24 net profit decreasing by 5.9% YoY to Rs 175.1 crore. However, its revenue grows by 16.1% YoY on the back of robust growth in the generation, transmission & distribution and trading segments. The company appears in a screener of stocks with declining quarterly profits.

  • Maruti Suzuki India’s Q1FY24 net profit jumps 143.7% YoY to Rs 2,525.2 crore, aided by better realisations and a 14.3% YoY decline in raw materials prices. The revenue rises by 22% YoY, driven by a 6.4% YoY growth in total sales volume in Q1. The stock shows up in a screener for companies with high TTM EPS growth.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (62.95, 8.63%), Atul Ltd. (7210.30, 6.09%) and Indian Railway Finance Corporation Ltd. (40.50, 6.02%).

Downers:

Largecap and midcap losers today include Power Grid Corporation of India Ltd. (251.80, -5.36%), Polycab India Ltd. (4,630.20, -3.87%) and Max Healthcare Institute Ltd. (572.30, -3.80%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included KIOCL Ltd. (237.95, 15.09%), Jindal Worldwide Ltd. (339.50, 9.68%) and IDBI Bank Ltd. (62.95, 8.63%).

Top high volume losers on BSE were KEI Industries Ltd. (2,270.35, -6.55%), Aptus Value Housing Finance India Ltd. (267.90, -5.34%) and Hero MotoCorp Ltd. (3,102.10, -3.17%).

Affle (India) Ltd. (1,138.85, 6.06%) was trading at 9.8 times of weekly average. Polyplex Corporation Ltd. (1,282.70, 4.79%) and Grindwell Norton Ltd. (2,439.50, 5.24%) were trading with volumes 8.3 and 8.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

70 stocks took off, crossing 52 week highs, while 1 stock tanked below their 52 week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,820.00, 1.61%), Apollo Tyres Ltd. (427.25, -1.28%) and Astral Ltd. (2,000.60, 1.59%).

Stock making new 52 weeks lows included - UPL Ltd. (625.70, 0.16%).

18 stocks climbed above their 200 day SMA including KIOCL Ltd. (237.95, 15.09%) and Jindal Worldwide Ltd. (339.50, 9.68%). 4 stocks slipped below their 200 SMA including Aptus Value Housing Finance India Ltd. (267.90, -5.34%) and Blue Dart Express Ltd. (6,611.30, -1.74%).

 
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The Baseline
01 Aug 2023
Five Construction and Metal Stock Picks from Analysts
By Satyam Kumar

This week we look at five analyst picks from the construction and metal sector: 

  1. Larsen & Toubro: HDFC Securities maintains its 'Buy' rating on this construction and engineering company, with a target price of Rs 3,002, implying an upside of 12.2%. Analysts Parikshit D Kandpal, Nikhil Kanodia, and Manoj Rawat are optimistic about its all-time high order book of Rs 4.1 lakh crore. In Q1FY24, the company's profit surged by 46.5% YoY to Rs 2,493 crore, while revenue saw a 33.5% YoY increase, surpassing Trendlyne Forecaster's estimates by 18% and 19%, respectively.

The analysts at HDFC Securities are confident in the company's consistent outperformance, driven by robust execution. They believe that infrastructure margins have reached the lowest point and are likely to improve in the future. Analysts also expect an improvement in the performance of its subsidiaries.

The analysts estimate a robust prospects pipeline for 9MFY24, with an estimated value of Rs 10 lakh crore compared to Rs 7.5 lakh crore a year ago, indicating promising growth opportunities. Notably, they estimate a significant uptick in the hydrocarbon prospect pipeline, valued at Rs 3.5 lakh crore, suggesting potential opportunities in the energy sector.

  1. Jindal Stainless: ICICI Securities maintains a ‘Buy’ call on this steel manufacturer with a target price of Rs 445. This indicates an upside of 13.1%. In Q1FY24, the company reported a 132.1% YoY growth in net profit to Rs 745.8 crore and an 86.3% increase in revenue. It beat Trendlyne Forecaster’s net profit estimate by 23.9%. The company’s EBITDA stands at Rs 1,120 crore, up 35% YoY (beating the brokerage’s estimate by 9%). 

Analysts Amit Dixit, Mohit Lohia and Pritish Urumkar remain positive about Jindal Stainless as its shipments rose by 54% YoY to a record level. Its domestic subsidiaries have also performed well, while overseas subsidiaries faced challenges. The management foresees a 20-25% growth in volume in FY24 and FY25 each. They expect the acquisition of Jindal United Steel to eliminate related-party transactions and drive synergies across the full value chain. 

The analysts say, “We perceive Jindal Steel to be in the pole position to capture domestic growth as it is the only domestic producer with spare capacity.” They have raised their EBITDA estimates for FY24 and FY25  to  16% and 12%, respectively, factoring in higher sales volume and lower power and fuel costs.

  1. Dalmia Bharat: Geojit BNP Paribas upgrades its rating on this cement manufacturer to ‘Buy’ from ‘Hold’ and raises the target price to Rs 2,234 from Rs 2,200. This implies an upside of 14.3%. In Q1FY24, the firm’s net profit fell 33.7% YoY to Rs 130 crore but revenue grew by 9.8% YoY. 

Despite the fall in net profit, analyst Vincent Andrews turns positive about the company’s prospects, given its healthy volume growth and a strong focus on capacity expansion. He is optimistic about its FY24 volume growth guidance of 15-17% and believes it is on track to achieve this target through organic expansion and acquisitions. He adds, “The demand outlook is positive, given the Centre’s focus on infrastructure & housing and pre-election spending.”

Although Dalmia Bharat’s EBITDA margin contracted despite volume growth in Q1, the analyst anticipates margins to improve in the coming quarters due to declining fuel costs. He expects the company’s net profit to grow at a CAGR of 38.3% over FY23-25. 

  1. Tata Steel: Bob Capital Markets maintains a ‘Buy’ call on this steel manufacturer with a target price of Rs 145, indicating an upside of 17.6%. In Q1FY24, the company’s profit fell by 91.8% YoY to Rs 634 crore, and revenue declined by 4.8% YoY. Its EBITDA was 6% ahead of consensus but 1% below BoB’s forecast. 

Analysts Kirtan Mehta and Yash Thakur remain positive as Tata Steel is prioritizing capex plans over leverage targets. They say, “This is a positive decision as completion of ongoing capex will generate cash flows and help lower leverage over the medium term.” The company has maintained its capex plan of Rs 16,000 crore for FY24. 

The analysts also remain optimistic about Europe operations turning EBITDA-positive, the potential resolution of the restructuring in UK operations, and the startup of the blast furnace at TSK. “We remain confident of Tata Steel’s ability to weather the downturn and deliver on earnings-accretive growth,” they conclude.

  1. UltraTech Cement: KRChoksey keeps its ‘Buy’ rating on this cement maker and raises the target price to Rs 9,439 from Rs 9,105. This implies an upside of 13.5%. In Q1FY24, the company’s net profit rose by 6.6% YoY to Rs 1,688.5 crore and revenue grew by 17%. It beat Trendlyne Forecaster’s revenue and profit estimates by 2% and 0.8% respectively. 

Analyst Abhishek Agarwal attributes the firm’s healthy Q1 performance to a 20% YoY growth in volume, led by robust demand. He also cites lower energy costs for margin expansion and profit growth. He believes that “the recent correction in energy prices will continue to ease margin pressures in the medium-term”.

With the demand environment remaining strong, Agarwal expects the company’s capacity expansion efforts to drive future growth and market share gains. “Given the ongoing capex, UltraTech Cement is poised to maintain its industry leadership,” he adds. The analyst anticipates the company’s revenue to grow at a CAGR of 16.4% 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
31 Jul 2023
Market closes higher, UPL's Q1FY24 net profit drops 81.1% YoY to Rs 166 crore

Trendlyne Analysis

Nifty 50 closed at 19,753.80 (107.8, 0.6%), BSE Sensex closed at 66,527.67 (367.5, 0.6%) while the broader Nifty 500 closed at 17,059.00 (110.7, 0.7%). Of the 1,978 stocks traded today, 1,257 were on the uptick, and 670 were down.

Indian indices closed in the green, with the Nifty 50 rising above the 19,750 mark. The Indian volatility index, Nifty VIX, rose sharply by 2.7%. NTPC closed over 3.6% higher as its Q1FY24 net profit increased by 23.8% YoY to Rs 4,873.2 crore, led by a decline in fuel costs.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green and outperformed the benchmark index. Nifty Energy and Nifty Realty closed higher than Friday’s close. According to Trendlyne's sector dashboard, General Industrials was the top-performing sector of the day.

Major Asian indices closed in the green, except for Taiwan’s TSEC 50 index, which closed lower. European indices recovered from their day lows and traded flat or higher, in line with the US index futures. Investors awaited key eurozone growth and inflation data, scheduled to be released later today. Brent crude oil futures traded higher and are set to post their biggest monthly gains since January 2022.

  • Money flow index (MFI) indicates that stocks like Finolex Industries, Sterling and Wilson Renewable Energy, Engineers India and Finolex Cables are in the overbought zone.

  • UPL is falling as its Q1FY24 net profit plunges by 81.1% YoY to Rs 166 crore, and revenue decreases by 17.2% YoY due to a 21.2% YoY drop in its crop protection business. The company has also slashed its FY24 revenue guidance to 1-5% from 6-10% earlier. Mike Frank, the CEO of UPL, says, "The global agrochemical industry has been going through a challenging phase over the past two quarters as distributors prioritized destocking and focused on tactical purchases amid high channel inventories."

  • NHPC touches a 52-week high as reports suggest that 2.3 crore shares (0.2% equity), amounting to Rs 116.1 crore, have changed hands in a block deal.

  • Piramal Enterprises plunges more than 5% as its net profit declines 95% YoY to Rs 577 crore in Q1FY24. This fall is due to a one-time exceptional profit the company earned in Q1FY23. Its revenue improves by 126.3% YoY, aided by growth in assets under management. The company appears in a screener of stocks with a decline in net profit and profit margin (YoY).

  • IDFC First Bank rises to a new 52-week high of Rs 88.3 as its Q1FY24 net profit increases by 61.3% YoY to Rs 765.2 crore. Its net interest income also grows by 39.5% YoY, driven by the treasury and retail banking segments. The bank's asset quality improves as its gross and net NPA ratios fall by 119 bps and 60 bps YoY respectively. It appears in a screener of stocks with increasing quarterly net profit and margins.

  • Welspun India surges by more than 10% as its Q1FY24 net profit jumps 621.4% YoY to Rs 162.7 crore, and its EBITDA margin expands by 6.5 percentage points YoY to 14.2%. Its revenue rises 11.6% YoY, led by healthy growth in the home textiles and flooring segments. BK Goenka, the Chairman of Welspun Group, says, "The domestic consumer business further strengthened its market leadership, with Brand Welspun being the most widely distributed Home Textile brand in India, increasing its reach with a presence at more than 13,000 outlets pan India."

  • Bharti Airtel prepays a loan of Rs 8,024 crore to the Department of Telecommunications. The loan is part of its deferred liabilities for the spectrum acquired in the 2015 auction. The company appears in a screener of stocks with strong momentum.

  • Mangalore Refinery And Petrochemicals is falling as its Q1FY24 net profit declines by 62.6% YoY to Rs 1014.8 crore. Revenue also decreases by 23% YoY. It appears in a screener of stocks with falling profit margins YoY.

  • Rajneesh Karnatak, MD & CEO of Bank of India, says it targets a deposit growth of 10-11% and loan growth of Rs 11-12% in FY24. He adds that the bank will maintain its net interest margins at 3-3.05%.

  • HDFC Securities downgrades its rating on JK Lakshmi Cement to ‘Add’ from ‘Buy’ and lowers the target price to Rs 700 from Rs 815. This implies an upside of 13.4%. The brokerage believes the company’s plans of capacity expansion and acquisitions by raising debt will impact its balance sheet and return ratios. It also adds that the firm’s net profit in Q1FY24 missed its estimates.

  • NTPC is rising as its Q1FY24 net profit increases by 23.8% YoY to Rs 4,873.2 crore, led by a decline in fuel costs. However, its revenue marginally falls by 0.2% YoY due to a 1.3% YoY decrease in its generation segment. The management also announces the separation of its coal mining business into a 100% subsidiary, NTPC Mining.

  • UCO Bank falls despite its Q1FY24 net profit rising by 80.8% YoY to Rs 223.5 crore. Its net interest income grows by 35.6% YoY on the back of robust growth in the treasury, corporate banking and retail banking operations segment. The bank's asset quality improves as its gross and net NPA ratios fall by 294 bps and 131 bps YoY respectively. The company appears in a screener of stocks with increasing quarterly revenue.

  • GAIL is rising as UBS double-upgrades its rating to ‘Buy’ from ‘Sell’ and raises the target price to Rs 150. The brokerage believes that the markets are yet to fully factor in the benefits of realized tariffs (from tariff integration), the scope of India's growing gas consumption, and the expansion of GAIL's pipeline.

  • SBI Cards and Payment Services falls as its net profit decreases by 0.5% YoY to Rs 593.3 crore. However, its revenue rises by 4% YoY on the back of growth in interest and fees & commission income. The NBFC's asset quality declines as its gross and net NPA ratios increase by 17 bps and 9 bps YoY respectively. The company appears in a screener of stocks with declining net profit and margins.

  • Glenmark Life Sciences is rising as reports suggest that Nirma Group is the frontrunner to acquire the company for an estimated consideration of Rs 6,664 to 7,000 crore from Glenmark Pharmaceuticals.

  • The Delhi High Court rejects SpiceJet’s former promoter Kalanithi Maran’s plea seeking Rs 1,323 crore damage claim from the company, according to reports. The high court also refuses to interfere with the 2018 arbitral award that has asked SpiceJet to refund Rs 579 crore along with interest to Maran.

  • Nazara Technologies rises as its net profit increases 7.6X QoQ to Rs 19.5 crore due to lower content, event and web server expenses. However, its revenue falls by 12% QoQ on the back of a decline in the gaming and eSports segments. The company appears in a screener of stocks with increasing quarterly net profit and margins.

  • Metal stocks like APL Apollo Tubes, NMDC, Hindalco Industries, Tata Steel and Steel Authority of India are rising in trade. All the constituents of the broader sectoral index, BSE Metal, are also trading in the green.

  • Bandhan Bank rises more than 2% in trade as reports suggest that 1.8 crore shares (1.1% equity), amounting to Rs 385.4 crore, have changed hands in a block deal.

  • Chalet Hotels rises as its Q1FY24 net profit increases by 210.6% YoY to Rs 88.7 crore, while revenue improves by 21% YoY. The profit rise is on the back of high deferred tax credit. The company features in a screener for stocks with strong annual EPS growth.

  • Bank of India rises as its Q1FY24 net profit increases 2.8X YoY to Rs 1,551.1 crore. Its net interest income also grows by 44% YoY on the back of robust growth in the treasury, wholesale banking and retail banking operations segment. Its asset quality improves as the gross and net NPAs decline by 263 bps and 56 bps YoY respectively. The company appears in a screener of stocks with increasing quarterly profits.

  • Power Grid Corp of India rises as it wins transmission system projects for the evacuation of power from a renewable energy zone in Rajasthan and for a solar energy zone in Ananthpuram and Kurnool, Andhra Pradesh.

  • Macquarie remains cautious on the hospitals space in the medium term as it believes that soft demand and capacity expansion may impact the companies’ profitability. It initiates an ‘Underperform’ rating on Apollo Hospitals and Max Healthcare.

  • Power Mech Projects surges to a new all-time high of Rs 5,069.5 per share as it bags an order worth Rs 30,438 crore from SAIL in a consortium with PC Patel Infra. The order is for a mine development & operation (MDO) project of the Tasra open cast project (OCP) in Dhanbad, which will also include setting up a 3.5 MTPA coal washery and supplying steel grade coking coal to SAIL.

  • United Breweries falls as its Q1FY24 net profit decreases by 16% YoY to Rs 136.2 crore due to higher excise duty expenses. However, its revenue rises by 0.9% YoY on the back of marginal growth in the beer segment. The company appears in a screener of stocks with a major fall in TTM net profit.

  • Marico remains flat despite a 15.6% YoY rise in its net profit to Rs 427 crore in Q1FY24. However, its revenue declines by 3.2% YoY on the back of a fall in the prices of products. Its EBITDA margin improves by 494 bps YoY, aided by a reduction in the cost of raw materials. The company appears in a screener of stocks with high promoter pledges.

Riding High:

Largecap and midcap gainers today include Indian Railway Finance Corporation Ltd. (38.20, 8.99%), Adani Power Ltd. (273.30, 5.70%) and Supreme Industries Ltd. (3,550.00, 5.66%).

Downers:

Largecap and midcap losers today include Syngene International Ltd. (796.10, -3.49%), Apollo Hospitals Enterprise Ltd. (5,173.45, -3.24%) and Zomato Ltd. (84.10, -3.11%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Hindustan Copper Ltd. (141.10, 10.36%), Welspun India Ltd. (109.65, 9.32%) and Indian Railway Finance Corporation Ltd. (38.20, 8.99%).

Top high volume losers on BSE were Rossari Biotech Ltd. (840.00, -3.97%), Narayana Hrudayalaya Ltd. (1,010.50, -3.50%) and NLC India Ltd. (117.00, -1.60%).

KIOCL Ltd. (206.75, 7.99%) was trading at 15.0 times of weekly average. Eris Lifesciences Ltd. (791.70, 2.12%) and NOCIL Ltd. (220.80, 2.96%) were trading with volumes 11.4 and 10.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Abbott India Ltd. (23,999.35, -0.25%), Balkrishna Industries Ltd. (2,542.35, 3.16%) and Bharat Forge Ltd. (931.45, 3.17%).

Stock making new 52 weeks lows included - UPL Ltd. (624.70, -0.07%).

17 stocks climbed above their 200 day SMA including KIOCL Ltd. (206.75, 7.99%) and Adani Power Ltd. (273.30, 5.70%). 6 stocks slipped below their 200 SMA including Blue Dart Express Ltd. (6,728.15, -2.87%) and United Breweries Ltd. (1,540.25, -1.92%).

 
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The Baseline
28 Jul 2023
Five Interesting Stocks Today
  1. Tanla Platforms: This software and services company’s share price grew by 79.4% in the past quarter and hit its 52-week high of Rs 1,317.5 on Monday. In Q1FY24, the company’s profit improved by 12.6% QoQ, while the revenue increased by 9.3%, beating Trendlyne’s Forecaster estimates by 16.2% and 7.6%, respectively. The company also features in a screener for stocks with QoQ growth in net profit and increasing profit margin.

The revenue from the enterprise communications segment(90% of total revenue) has also risen by 9% QoQ, marking growth after four quarters in a seasonally weak period. It was driven by an increase in transactional app-to-customer messaging volume and a price hike in the international long-distance segment. The Chairman and Chief Executive Officer Uday Reddy said, “We are now in the phase of price expansion and expect further increases in  Q2.” The firm anticipates price hikes in its domestic business to drive growth.

Tanla Platforms recently acquired ValueFirst Digital Media for $45.5 million, leading to a gain in market share of over 35% in India. Speaking about the acquisition, Reddy said, “We expect to achieve double-digit EBITDA in a couple of quarters.” 

The digital platforms segment’s revenue also grew by 8% QoQ, driven by Wisely, a patented anti-phishing platform. Wisely has completed proof-of-concept with three leading banks and has a revenue potential of Rs 50-100 crore per year. “The focus in Q2 will be on accelerating the go-to-market strategy and commercial holders,” Reddy added.

HDFC Securities is optimistic about Tanla Platforms and expects a revenue CAGR of 24% over FY24-26, led by a revival in the enterprise business and new product launches in the platform business. 

  1. Cipla: This pharma company’s stock surged by 9.6% on Thursday, and hit a new all-time high of Rs 1,219.4 per share, as its net profit jumped by 45.1% YoY to Rs 995.7 crore in Q1FY24. This helped the company beat Trendlyne’s Forecaster estimates for net profit by 22.7%. Its revenue has also risen by 17.7% YoY to Rs 6,329 crore, helped by increased sales from India, the US, and South Africa, with improvements in the prescription, trade generic, and consumer health segments.

Cipla’s EBITDA margin also expanded by 230 bps YoY to 23.6%, owing to lower raw material costs and reduced price erosion in the US market due to declining competition. This helped the company appear in a screener of stocks with increasing net profit and profit margin (YoY). 

Umang Vohra, Managing Director and Chief Executive Officer (CEO) of the company, said, “The company plans to launch 30 to 35 products in the Indian market, which will contribute to 2.5-3% of revenue. A large number of these products will be in the respiratory segment.” The management is optimistic about revenue growth in the US business.

Post results announcement, Motilal Oswal Financial Services maintains its ‘Neutral’ rating on the stock with a target price of Rs 1,130 owing to limited upside at the current price. This indicates a potential downside of 4.2%. However, the brokerage is optimistic about the company's profitability growth, as it expects a revival in the US market and strong performance in the branded generics segment in India and South Africa.

According to reports, the promoters of Cipla are considering  selling a portion of their overall stake in the company. However, Cipla has issued a clarification stating that they are not aware of any specific event that requires disclosure under the listing regulations.

  1. Nestle India: This FMCG stock declined by 3.3% in Thursday’s intra-day trade after announcing its Q2CY23 results. This is despite its net profit rising by 35.5% YoY and revenue growing by 15.4% YoY. However, this has not cheered investors as its revenue growth seems to be mostly led by price hikes, with underlying volume growth of 4-5%. According to reports, its volume growth is below the street’s estimates.

    Although the firm saw healthy growth on a YoY basis, its net profit and revenue fell by 5.2% and 3.6% QoQ respectively. The stock shows up in a screener for companies with declining revenue, profit and operating profit margin on a QoQ basis. 

The company’s top-line growth is driven by a 14.6% YoY increase in domestic sales, with healthy contributions from categories like milk products, beverages and nutrition, despite inflationary pressures. Suresh Narayanan, Chairman and MD of the firm, said, “Our RURBAN strategy was successful as we expanded our distribution footprint in key portfolios, leading to higher penetration. We witnessed strong growth across megacities and metros, robust performance in Tier 1 to 6 towns, and continued strength in rural markets.” 

The company’s gross margins have expanded by 80 bps YoY to 54.6%, aided by stable fresh milk prices and declines in prices of edible oils, wheat, and packaging materials. However, its beverages segment saw inflationary pressures due to elevated robusta (coffee beans) prices, which are expected to remain volatile. ICICI Securities believes that a correction in milk prices will free up more resources for advertising spends and innovation to drive growth.  

  1. Mphasis Ltd: Thesoftware and services firm saw its stock price increase by 22.3% in the past month, according toTrendlyne’s Technicals. On July 20, the company announced its Q1FY24 earnings, reporting a decline of 3.2% QoQ on a constant currency basis. However, the stock rose 5.3% the next day. This rise was primarily driven by high deal wins in the quarter, which amounted to $707 million, almost twice the average of the past four quarters. 

The decline in revenue was on account of a cut down in discretionary spending by clients in the banking and mortgage sector. The firm is trying to diversify itself by acquiring deals in the non-banking and financial services (BFS) sector. Nearly 60% of the deal wins are from non-BFS verticals in the quarter.

The firm has launched an AI business unit which bagged nearly one-third of the deal wins in Q1FY24. This includes one deal with a ticket size greater than $100 million. Its EBIT margins expanded by10 bps QoQ to 15.4%. The company plans to increase its margins to around 16% in the following quarters by improving the productivity of its offshore workforce. Its net profit declined by 2.2% QoQ. Mphasis shows up in ascreener for stocks with strong momentum, with prices above short, medium and long-term averages.

Commenting on the earnings, Mphasis CEONitin Rakesh said, “Revenue growth will pick up in FY24 as the firm currently has a good pipeline of deals. The mortgage industry will also ramp up from current levels.”

HoweverICICI Securities holds a less favourable view. It cites the global slowdown and banking crisis in the US and Europe, which have led to delayed decision-making around discretionary projects and spending cuts in banking and capital markets. This will lead to muted growth for Mphasis. The brokerage has downgraded its rating from ‘Hold’ to ‘Sell’.

  1. Jyothy Labs: This personal products company has risen over 25% since Monday after reporting robust Q1FY24 results, beating consensus estimates. This recent surge has driven the company’s share price up by 84.2% in the past year. However, over five years, the share price has grown by only 36.2%. 

During the quarter, Jyothy Labs’ revenue increased by 15.1% YoY to Rs 687.1 crore, beating Trendlyne’s Forecaster estimates by 4.7%. This was fueled by strong performance across the company’s major segments. Its net profit jumped by 101.7% YoY to Rs 96.3 crore, and beat estimates by 27.2%. This was due to moderating input costs and an increase in the disposable income of consumers. 

The company’s fabric care segment (which markets Henko and Ujala, and contributes 43% of the total revenue) has seen an 18% YoY rise in revenue. Its dish wash segment (that houses brands like Exo Bar and Pril) also improved by 11% YoY. 

Managing Director M R Jyothy said, “The company will deliver double-digit revenue growth, and EBITDA margin will be in the range of 15-16% in FY24.” She also highlighted the company’s plan to strengthen distribution, increase marketing investment, and optimize cost structures. 

Following the company’s strong performance, ICICI Securities maintains its ‘Buy’ rating but raises its target price by 16.8% to Rs 340. The brokerage says the company remains its top pick in the consumer staples space and is positive about the management’s strategy of prioritising market share gains and volume growth. As a result, the company features in a screener of stocks where brokers have upgraded their 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
28 Jul 2023
Market closes flat, Rail Vikas Nigam bags an order worth Rs 1,088 crore

Trendlyne Analysis

Nifty 50 closed at 19,646.05 (-13.9, -0.1%), BSE Sensex closed at 66,160.20 (-106.6, -0.2%) while the broader Nifty 500 closed at 16,948.35 (29.2, 0.2%). Of the 1,943 stocks traded today, 984 were in the positive territory and 888 were negative.

Indian indices recovered from their day lows and closed flat, with the benchmark Nifty 50 closing just below the 19,650 mark. The Indian volatility index, Nifty VIX, fell sharply by 3.5%. Macrotech Developers hit a 52-week high and closed 2.7% higher after its pre-sales jumped 17% YoY to Rs 3,350 crore in Q1FY24. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Metal and Nifty Media closed higher than Thursday's close. According to Trendlyne's sector dashboard, Healthcare Equipment & Supplies was the top-performing sector of the week.

Major European indices traded in the red, despite the Asian indices closing mixed. However, US index futures traded in the green, indicating a positive start to the trading session. Brent crude oil futures traded higher and are set to post gains for a fifth straight week.

  • Relative strength index (RSI) indicates that stocks like Cipla, Alkem Laboratories, Natco Pharma and Zydus Lifesciences are in the overbought zone.

  • Route Mobile is falling as its net profit declines by 9% QoQ to Rs 92.4 crore in Q1FY24. Its revenue is also down by 4.1% YoY, impacted by the overseas segment. It shows up in a screener of stocks where mutual funds have reduced their shareholdings over the past quarter.

  • Motherson Sumi Wiring India is falling as its Q1FY24 net profit declines by 2.2% YoY to Rs 123.1 crore due to higher raw material costs and employee expenses. Its revenue rises by 11.2% YoY to Rs 1,858.8 crore.

  • AstraZeneca Pharma India and Anand Rathi Wealth touch their 52-week highs of Rs 3,901.25 and Rs 1,141.65 respectively. The former has risen 4.3% over the past month, while the latter increased by 30.5%.

  • Castrol (India), GAILand Power Grid Corp of India rise more than 6% during the past week, ahead of their Q1FY24 results on Monday.

  • Godawari Power & Ispat falls as its Q1FY24 net profit drops by 29.4% YoY to Rs 230.9 crore due to higher inventory and finance expenses. Its revenue decreases by 20.1% YoY on the back of declining realization in the iron ore pellets and ferroalloys segments. The company appears in a screener of stocks with a major fall in TTM net profit.

  • Mahindra & Mahindra Financial Services falls despite posting a 52.8% YoY growth in its net profit to Rs 352.7 crore in Q1FY24. Revenue surges by 24.5% YoY, backed by the financing activities segment. It appears in a screener of stocks with increasing debt.

  • Rail Vikas Nigam bags an order worth Rs 1,088 crore from the Haryana Rail Infrastructure Development Corp for the construction of railway infrastructure. The stock shows up in a screener for companies with improving cash flows and high durability scores.

  • Yatharth Hospital & Trauma Care Services' Rs 686.5 crore IPO gets bids for 36.15X the available 1.7 crore shares on offer on the third day of bidding. The retail investor quota gets bids for 8.3X of the available 83.1 lakh shares on offer.

  • Rakesh Jhunjhunwala's portfolio sells an 8.2% stake in Rallis India between March 11 and July 20. It now holds a 2.3% stake in the company.

  • LT Foods is rising as its Q1FY24 net profit improves by 44.4% YoY to Rs 137.4 crore. Revenue rises by 10.4% YoY due to strong performance in basmati & other specialty segment. It appears in a screener of stocks with strong momentum.

  • KRChoksey downgrades its rating on HDFC Life Insurance Co to ‘Add’ from ‘Buy’ but raises the target price to Rs 720 from Rs 650, implying an upside of 9.8%. The brokerage remains positive about the firm’s growth prospects given its healthy product launch pipeline. However, it revises its rating as it believes the stock is trading at an expensive level.

  • Shyam Metalics & Energy is falling as its net profit declines 43% YoY to Rs 235 crore in Q1FY24. Revenue grows by 3% YoY due to reduction in sales of ferro products, finished steel and steel billets. Its EBITDA margin plunges 660 bps YoY caused by a rise in cost of raw materials and employee benefit expenses. The company appears in a screener of stocks with declining net profit and profit margin (YoY).

  • Indian rupee depreciates 31 paise to 82.23 against the US dollar in early trade today, due to the outflow of foreign funds and higher crude oil prices, among other factors.

  • IT stocks like Mphasis, Tata Consultancy Services, HCL Technologies, Coforge andTech Mahindra are falling in trade. Barring L&T Technology Services, all the other constituents of the broader sectoral index, Nifty IT, are trading in the red.

  • Ajanta Pharma hits a new 52-week high of Rs 1,735 as Q1FY24 net profit rises by 19.2% YoY to Rs 208.1 crore and revenue increases by 7% YoY. The company's EBITDA margin also improves by 300 basis points YoY. The company features in a screener for stocks with low debt.

  • Sona BLW Precision Forgings' Q1FY24 net profit rises 47.7% YoY to Rs 112 crore due to lower inventory expenses. Its revenue grows by 25% YoY on the back of robust growth in the battery electric vehicle (BEV), non-BEV and international light vehicle segments. The company appears in a screener of stocks with strong momentum.

  • Macrotech Developer rises to its 52-week high of Rs 745 per share as its pre-sales jump 17% YoY to Rs 3,350 crore in Q1FY24. However, its net profit falls 34.1% YoY to Rs 178.4 crore, while revenue declines 39.6% YoY. The company features in a screener of stocks with a decline in quarterly net profit (YoY).

  • Bharath Uppiliappan, CEO of Dr Lal PathLabs, says that the company's non-covid revenue has risen by 9.7% in Q1FY24 and expects an improvement in volume growth. He believes that Lal PathLabs will achieve its pre-covid margin target of 26%.

  • Utilities stocks like Tata Power Co, Torrent Power, Power Grid Corp of India, NTPC and NAVA are rising in trade. The broader sectoral index, S&P BSE Utilities, is also trading in the green.

  • Intellect Design Arena surges more than 10% as its net profit jumps 3.1% QoQ to Rs 934.7 crore in Q1FY24. Revenue grows 3.9% QoQ helped by improvement in the platform, license and AMC segments. It shows up in a screener of stocks with increasing net profit and profit margin (YoY).

  • Indus Towers falls despite its Q1FY24 net profit rising 182.4% YoY to Rs 1,348 crore. Its revenue grows by 2% YoY on the back of growth in tower additions and tenancies. The company appears in a screener of stocks with strong momentum.

  • HSBC maintains its ‘Buy’ rating on Shriram Finance with a target price of Rs 228. The brokerage says the company’s profit beat estimates by 4% due to lower provisions, despite an increase in operating costs.

  • Societe Generale buys a 0.6% stake in Indiabulls Housing Finance for approx Rs 35.6 crore in a bulk deal on Thursday.

  • Indian Hotels Company rises as its Q1FY24 net profit increases by 30.8% YoY to Rs 222.4 crore due to lower finance expenses. Its revenue grows by 15.8% YoY on the back of robust growth in the room and food & beverage segments. The company appears in a screener of stocks with high momentum scores.

  • Bharat Electronics’ Q1FY24 net profit rises by 47.3% YoY to Rs 538.5 crore and revenue grows by 12.5% YoY, led by order wins and healthy execution. Its order book, as of July 1, stands at Rs 65,356 crore. The stock shows up in a screener for companies with consistently high returns over the past five years.

Riding High:

Largecap and midcap gainers today include Torrent Power Ltd. (671.80, 6.29%), Tata Power Company Ltd. (234.65, 6.22%) and Indian Bank (344.55, 4.89%).

Downers:

Largecap and midcap losers today include Supreme Industries Ltd. (3,359.80, -7.86%), Sona BLW Precision Forgings Ltd. (565.10, -4.47%) and Mahindra & Mahindra Financial Services Ltd. (299.60, -3.96%).

Movers and Shakers

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

Top high volume gainers on BSE included Intellect Design Arena Ltd. (690.90, 19.70%), Godfrey Phillips India Ltd. (2,073.00, 8.64%) and Prestige Estates Projects Ltd. (590.30, 8.14%).

Top high volume losers on BSE were Supreme Industries Ltd. (3,359.80, -7.86%), JK Lakshmi Cement Ltd. (617.80, -7.65%) and Blue Dart Express Ltd. (6,926.75, -4.18%).

Orient Electric Ltd. (229.15, -1.06%) was trading at 35.0 times of weekly average. JM Financial Ltd. (76.80, 3.85%) and Sundram Fasteners Ltd. (1,240.75, 1.86%) were trading with volumes 14.8 and 10.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

52 stocks hit their 52-week highs, while 2 stocks tanked below their 52-week lows.

Stocks touching their year highs included - Abbott India Ltd. (24,040.00, 1.41%), Ajanta Pharma Ltd. (1,615.75, 4.07%) and Alembic Pharmaceuticals Ltd. (777.20, 6.10%).

Stocks making new 52 weeks lows included - Rajesh Exports Ltd. (511.75, 1.02%) and UPL Ltd. (625.15, -0.26%).

13 stocks climbed above their 200 day SMA including Godfrey Phillips India Ltd. (2,073.00, 8.64%) and Tata Chemicals Ltd. (1,051.05, 5.78%). 6 stocks slipped below their 200 SMA including Affle (India) Ltd. (1,046.80, -1.82%) and Coal India Ltd. (227.10, -0.85%).

 
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The Baseline
27 Jul 2023
By Akshat Singh

Most governments have some debt on their books. It helps fund the country’s public expenditure, capital investment, and crisis response. So a country’s debt-to-GDP ratio is key to measuring its fiscal health and economic stability. A high debt-to-GDP ratio means more money going into interest payments, making countries vulnerable in times of crisis and downturns. 

In this edition of Chart of the Week, we take a look at the government debt-to-GDP ratios of various countries.

India’s debt to GDP improves from pandemic peak

India’s quarterly debt-to-GDP ratio stands at 55.7% as of March 2023, according to the latest estimates by the Ministry of Finance. During the COVID-19 pandemic in March 2021, the debt to GDP ratio reached 58.7% (an increase of 11.6 percentage points from the previous year) as the government borrowed more to cover additional expenses, amid declining revenues and a sharp fall in GDP. The quarterly ratio has fallen by 300 bps since the pandemic peak in March 2021. The country’s government debt levels have stabilized, with low risks of currency fluctuations and high interest rates. 

India’s annual debt to GDP is estimated to fall from 84.5% in 2022 to 83.8% by 2025, driven by capex-led growth planned in the 2023 fiscal budget. For reference, the annual 10-year average ratio of the country hovers around 74.2%.

The United States made headlines recently for blowing past its debt limit. As of March 2023, its quarterly debt-to-GDP ratio stands at 121.3%, a significant jump from 108.1% in March 2020. The pandemic in the US played a starring role in this escalation, with the ratio surging by 25.7 percentage points to 133.8% in March 2021. This jump was due to the government's aggressive spending on stimulus measures and the public health crisis. 

Japan, US and UK see soaring debt levels

As a result, US debt crossed $31 trillion for the first time, raising concerns that it would breach the $31.4 trillion debt ceiling. However, a fresh debt limit bill signed on June 3 raised the ceiling and averted a default.

The United Kingdom has rejoined “100% debt to GDP ratio club” after 60 years, with a quarterly ratio of 100.1% as of May 2023. Debt  has been increasing since the pandemic due to rising costs post-Brexit, energy subsidy schemes, inflation-linked benefit payments, and interest payments on debt. 

In contrast, France has shown a declining debt trend post-pandemic, despite increased social security payments and an ageing population. Finance Minister Bruno Le Maire expects the debt to GDP ratio to decline to 108.3% by 2027 on the back of plans to control spending and use 30 billion euros in savings from the relief fund for the energy crisis towards lowering the debt.

Let’s now focus on Asian countries. As of March 2023, Japan's quarterly debt-to-GDP ratio stands at 226.1%, the highest globally, and its debt has hit $9.2 trillion. 

Over the past three years, its ratio has risen by 25.9 percentage points due to social welfare packages and the costs of an ageing population. As a result, last year, Japan allocated 22% of its annual budget to debt redemption and interest payments, which exceeded the combined 15% spending on public works, education, and defence. 

China’s debt to GDP still the lowest, Brazil’s falls

Meanwhile, China’s debt ratio is at 21.4%, the lowest among the countries in focus. However, it has increased by 4 percentage points since the pandemic, driven by local authorities borrowing heavily to support the economy amid the central government's zero-COVID policy. As a result, credit to the nonfinancial sector reached $51.87 trillion, accounting for 295% of GDP in 2022. China’s debt as of April 2023 stands at $14.4 trillion.

Moving on to countries with relatively lower debt-to-GDP ratios, Brazil’s figure as of March 2023 stands at 72.8%, which is well under its general threshold limit of 77%. Crossing this threshold could result in a 1.7 bps decrease in annual real growth for each additional percentage point of debt. Despite higher government spending, Brazil has managed to reduce its debt to GDP ratio by approximately 15.8 percentage points since the pandemic. The Brazilian central bank says this was due to a higher-than-expected economic growth (3%) in 2022, the rise of the Brazilian currency against the US dollar, and net debt redemption. As of December 2022, total government debt stands at $36.6 billion, the lowest in five years. 

South Korea and Indonesia are the other two countries with low debt-to-GDP ratios, at 47.8% (December 2022) and 39.1% (March 2023) respectively. However, South Korea’s annual ratio has also increased since the pandemic and is estimated to reach 57.2% by 2026. The government has proposed spending cuts for the first time in 13 years to cope with the pandemic’s effects and inflationary pressure. 

Indonesia has reduced its ratio by 120 bps in the past year, thanks to a 7.6% YoY fall in external debt as of December 2022. This declining trend is because of the government moving its bonds to local markets amid unstable global financial conditions. Currently, the country is facing loan default problems from various construction companies, including the $8.3 billion default by Waskita Karya. As of April 2023, the total government debt stands at $532.2 billion.

Recently hit by recession, Germany has a quarterly debt-to-GDP ratio of 65.9% as of March 2023. The country has maintained a stable ratio over the years, but the pandemic caused an abrupt increase of 9 percentage points. Currently going through an energy crisis, the government has allocated $800 billion to address the situation. To manage the situation better, the Finance Ministry is also planning to restore the borrowing cap known as the debt brake. As a result, the annual ratio is expected to fall by another 220 bps to 64.1% in 2024.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
27 Jul 2023
Markets closes lower, Jindal Stainless' Q1 net profit jumps 132.1% YoY to Rs 745.8 crore

Trendlyne Analysis

Nifty 50 closed at 19,659.90 (-118.4, -0.6%) , BSE Sensex closed at 66,266.82 (-440.4, -0.7%) while the broader Nifty 500 closed at 16,919.20 (-55.8, -0.3%). Of the 1,936 stocks traded today, 931 were in the positive territory and 950 were negative.

Indian indices extended the losses from the afternoon session and closed in the red, with the Nifty 50 closing at 19,660. The volatility index, Nifty VIX, rose by 0.5% and closed at 10.5 points. Tata Consumer’s Q1FY24 net profit increased by 23.9% YoY to Rs 317 crore against the consensus estimates of Rs 336 crore.

Nifty Midcap 100 closed in the green, but Nifty Smallcap 100 closed flat, with the benchmark index closing lower. Nifty Healthcare and Nifty Realty closed higher compared to Wednesday’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 3.4%.

Most European indices trade in the green. US indices futures trade higher, indicating a positive start. Meta share surged by 8% after market hours as its second-quarter earnings indicated a 12% rise in advertisement revenue driven by artificial intelligence. The firm guided a 15-24% growth rate by the end of 2023. Its competitor Google saw its advertisement revenue grow by 3% in the same period.

  • Money flow index (MFI) indicates that stocks like Rites, Sterling and Wilson Renewable Energy, Engineers India and Jyothy Labs are in the overbought zone.

  • Indian Energy Exchange (IEX) is falling despite its Q1FY24 net profit rising 9.7% YoY to Rs 75.8 crore and revenue growing by 5.8% YoY. The stock shows up in a screener for companies with sequentially rising net profits over the past three quarters.

  • Escorts Kubota and Castrol India touch their 52-week highs of Rs 2,475.9 and Rs 148.5 respectively. The former has risen 10.5% over the past month, while the latter increased by 21.5%.

  • Shriram Finance is falling despite its Q1FY24 net profit rising 25.1% YoY to Rs 1,675.4 crore and net interest income growing by 11.3% YoY. Its total assets under management also increases by 18.6% YoY. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • CG Power and Industrial Solutions falls despite its Q1FY24 net profit rising by 56.9% YoY to Rs 203.7 crore. Its revenue grows by 14.1% YoY on the back of robust growth in the power and industrial systems segments. Its EBITDA margins also improve by 340 bps YoY due to lower inventory expenses. The company appears in a screener of stocks with increasing quarterly profits.

  • Birlasoft rises to its 52-week high of Rs 411.8 per share as its net profit grows by 22.6% YoY to Rs 137.5 crore in Q1FY24. Revenue increases by 3% YoY, aided by improvement in revenue from the BFSI, manufacturing and energy & utilities segments. It features in a screener of stocks near their 52-week highs with significant volumes.

  • Tata Consumer falls despite its Q1FY24 net profit rising by 23.9% YoY to Rs 316.6 crore. Its revenue grows by 13% YoY on the back of growth in the domestic and international business segments. The company appears in a screener of stocks nearing their 52-week highs with significant volumes.

  • Yatharth Hospital & Trauma Care Services' Rs 686.5 crore IPO gets bids for 2.13X the available 1.7 crore shares on offer on the second day of bidding. The retail investor quota gets bids for 2.52X of the available 83.1 lakh shares on offer.

  • Maricois rising as it signs a definitive agreement to acquire a 58% stake in Satiya Nutraceuticals, which owns the brand The Plant Fix-Plix, for a consideration of Rs 369 crore.

  • BoB Capital Markets downgrades its rating on Dixon Technologies to ‘Hold’ from ‘Buy’ but raises the target price to Rs 4,300 from Rs 4,100. This implies an upside of 1.6%. The brokerage believes the company is trading at an expensive valuation, given its recent run-up. However, it remains positive about the company’s growth prospects, as it believes the firm is better positioned in the electronic manufacturing space compared to its peers.

  • Jindal Stainless rises to an all-time high of Rs 386.9 as its Q1FY24 net profit grows by 132.1% YoY to Rs 745.8 crore due to lower power & fuel expenses. Its revenue increases by 86.3% YoY on the back of growth in sales in the domestic and export segments. The company appears in a screener of stocks with increasing quarterly revenue.

  • Zydus Lifesciences rises as it receives final approval from the US FDA for plerixafor injection, which is used to prepare patients with certain types of cancer for stem cell transplant. It has an annual sales of $210 million in the United States.

  • Nestle India is falling despite its Q2CY23 net profit rising 36.9% YoY to Rs 698.3 crore and revenue increasing by 15.1% YoY, driven by healthy growth in domestic sales and exports. Suresh Narayanan, Chairman & MD of the firm, says, “This marks the fifth consecutive quarter of double-digit growth across all product groups. Domestic sales growth is broad-based and grew by 14.6%."

  • Sunil D’Souza, Managing Director of Tata Consumer Products, says the FMCG industry is under pressure globally as the Canadian market is contracting. He adds that the company is implementing structural cost corrections in the UK and it will continue to deliver double-digit growth.

  • Pharmaceutical stocks like Cipla, Gland Pharma and Aurobindo Pharma rise more than 5% in trade. The broader Nifty Pharma index is trading 3.6% higher.

  • Colgate Palmolive rises to an all-time high of Rs 2,009.9 as its Q1FY24 net profit increases by 30.5% YoY to Rs 273.7 crore. Its revenue also grows by 10.8% YoY on the back of robust growth in the domestic segment. The company appears in a screener of stocks with a positive breakout at third resistance.

  • SIS falls despite its Q1FY24 net profit rising by 8.4% YoY to Rs 89.5 crore on the back of lower inventory expenses. Its revenue grows by 11.2% YoY aided by robust growth in domestic security services and facilities management. The company appears in a screener of stocks with strong momentum.

  • Cipla surges more than 5% as its net profit rises 45.1% YoY to Rs 995.7 crore in Q1FY24. Its revenue also grows by 17.7% YoY, aided by India, the US and South Africa, and EBITDA margin expands 233 bps YoY on the back of reduced raw material expenses. The company appears in a screener of stocks with a shift from negative to positive growth in sales and net profit, with strong price movement.

  • Rail Vikas Nigam declines by more than 4% as its two-day offer for sale (OFS) begins. Through the OFS, the Centre plans to offload around 5.36% stake in the company, amounting to Rs 1,330 crore, and has set a floor price of Rs 119.

  • Kalpataru Projects International touches a new 52-week high today as it bags new orders worth Rs 2,261 crore. Out of this, Rs 2,036 crore is for orders in the transmission and distribution (T&D) business in overseas markets, and Rs 225 crore is for the oil & gas pipeline project in India. It appears in a screener of stocks with strong momentum.

  • Tech Mahindra is falling as its Q1FY24 net profit drops by 38% QoQ to Rs 692.5 crore, and revenue decreases by 4.1% QoQ. This decline is due to continued weakness in the communications, media and entertainment (CME) vertical. Its total contract value (TCV) of deal wins has reduced for the second consecutive quarter, falling by 39% QoQ to $359 million. The stock shows up in a screener for companies with declining net profit sequentially over the past two quarters.

  • Netweb Technologies India's shares debut on the bourses at an 89.4% premium to the issue price of Rs 500. The Rs 631 crore IPO has received bids for 90.4 times the total shares on offer.

  • JP Morgan maintains its ‘Overweight’ rating on Axis Bank with a target price of Rs 1,000. The brokerage says the bank’s PAT was 2% higher than estimates led by lower provisions, while core PPoP (pre-provision operating profit) missed estimates. It highlights that loan growth was moderate at 2% QoQ.

  • BofA Securities Europe SA buys a 0.59% stake in Delta Corp for approx Rs 31 crore in a bulk deal on Wednesday.

  • Mahindra & Mahindra is falling after it acquires a 3.5% stake in RBL Bank for Rs 417 crore. It may also consider increasing its stake in the bank to 9.9%.

  • Schaeffler India rises as its Q2CY23 net profit increases by 5.1% YoY to Rs 237.3 crore due to lower inventory expenses. Its revenue grows by 5.4% YoY, driven by the automotive technologies and automotive aftermarket segments. The company appears in a screener of stocks with improving quarterly net profit and margins.

  • Reliance Industries is rising as Jio Financial Services enters a 50:50 joint venture (JV) with BlackRock. Both companies are targeting an initial investment of $150 million each towards this Indian asset management venture called Jio BlackRock.

Riding High:

Largecap and midcap gainers today include Cipla Ltd. (1,171.45, 9.64%), REC Ltd. (188.20, 8.44%) and Colgate-Palmolive (India) Ltd. (2,001.90, 6.28%).

Downers:

Largecap and midcap losers today include Mahindra & Mahindra Ltd. (1,447.40, -6.31%), Tech Mahindra Ltd. (1,099.90, -3.79%) and Hindustan Petroleum Corporation Ltd. (290.70, -3.65%).

Volume Rockets

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

Top high volume gainers on BSE included Godfrey Phillips India Ltd. (1,908.15, 10.71%), Cipla Ltd. (1,171.45, 9.64%) and REC Ltd. (188.20, 8.44%).

Top high volume losers on BSE were Mahindra & Mahindra Ltd. (1447.40, -6.31%), Fine Organic Industries Ltd. (4462.00, -5.40%) and Tech Mahindra Ltd. (1,099.90, -3.79%).

Mas Financial Services Ltd. (789.55, 2.77%) was trading at 30.7 times of weekly average. MMTC Ltd. (35.85, 6.70%) and Nesco Ltd. (661.95, 5.12%) were trading with volumes 14.6 and 11.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

56 stocks overperformed with 52 week highs, while 2 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Ajanta Pharma Ltd. (1,552.55, 3.10%), Alembic Pharmaceuticals Ltd. (732.50, 3.43%) and Aurobindo Pharma Ltd. (835.55, 5.84%).

Stocks making new 52 weeks lows included - Rajesh Exports Ltd. (506.60, -1.07%) and Campus Activewear Ltd. (298.55, -1.06%).

9 stocks climbed above their 200 day SMA including Godfrey Phillips India Ltd. (1,908.15, 10.71%) and Granules India Ltd. (321.65, 4.40%). 6 stocks slipped below their 200 SMA including Shree Cements Ltd. (23,900.00, -1.54%) and Deepak Nitrite Ltd. (1,977.60, -1.41%).