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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%).

 
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The Baseline
26 Jul 2023
Five Finance Stock Picks from Analysts
By Abhiraj Panchal

This week we look at analyst picks from the banking and finance sector with net profit and revenue growth in Q1FY24. 

  1. ICICI Bank: Edelweiss maintains its ‘Tactical Buy’ rating on this bank with a target price of Rs 1,195, indicating an upside of 20.3%. In Q1FY24, the bank’s net profit surged by 39.7% YoY to Rs 9,648.2 crore, while the revenue increased by 36.8% YoY. It beat Trendlyne Forecaster’s net profit estimates by 4.3%. Analyst Raj Jha is positive about the bank’s consistent return ratios and sound asset quality. 

Overall advances and deposits have grown by 18% YoY each. “Growth remains broad-based,” says Jha. Even though net interest margins (NIM) expanded by 77 bps YoY, the analyst expects pressure due to the increased cost of funds in the coming quarters. But he says that despite this pressure, ICICI Bank will sustain its strong performance on most parameters. He concludes that the bank’s focus on a digital push, risk-calibrated operating returns, and a strong balance sheet will result in growth.

  1. CreditAccess Grameen: Motilal Oswal reiterates its ‘Buy’ call on this bank with a target price of Rs 1,660. This indicates an upside of 19%. In Q1FY24, the bank's profit grew 161.2% YoY to Rs 346.3 crore, while revenue increased by 88.4%. It beat Trendlyne Forecaster’s net profit estimates by 20.1%. Analysts Abhijit Tibrewal,  Nitin Aggarwal and Parth Desai note that “margin expansion and opex efficiencies led to a strong quarter.”

The analysts are optimistic about the bank’s focus on new customer acquisitions and the addition of 40 new branches. CreditAccess Grameen also plans to increase the proportion of its long-term borrowings. The analysts expect the firm to dominate on the back of lowest-cost organized financing,  improved operational efficiency through technology, and integrated risk management in every process, leading to superior asset quality and lower credit costs. “With a strong capital position, the bank can navigate any potential future disruptions, and capitalise on the growth opportunity over the medium term,” they say.

  1. Karur Vysya Bank: ICICI Securities maintains a 'Buy' rating on this bank with a target price of Rs 165, indicating a potential upside of 27.6%. In Q1FY24, the bank reported net profit growth of 56.8% YoY to Rs 358.6 crore, while revenue increased by 27.8% YoY.  It beat Trendlyne Forecaster's net profit estimates by 4.8%. The analysts at ICICI Securities are optimistic about the bank's outlook due to its impressive loan book growth, leading to a healthy quarter.

One key reason for the analysts' optimism is the bank's lowest cost of deposits compared to its peers. The analysts project that the bank will achieve superior return ratios, possibly outperforming its competitors. The bank's presence in tier-1 cities, with 16% of its capital employed there, strengthens its position. Another factor adding to their bullish view is the bank's decision to aggressively hire new employees. This move is expected to enhance its franchise strength, which adds to its growth prospects.

  1. IndusInd Bank: BoB Capital Markets maintains its ‘Buy’ rating on this bank and raises the target price to Rs 1,755 from Rs 1,550. This implies an upside of 24.1%. In Q1FY24, the bank’s standalone net profit rose by 32.5% YoY to Rs 2,123.6 crore and revenue increased by 31.1% YoY. It beat Trendlyne Forecaster’s net profit estimates by 0.2%.  

Analyst Ajit Agrawal says the healthy growth in net profit is from rising net interest income and lower provisions. He expects loan growth to continue in FY24 on the back of traction in the vehicle finance and microfinance institution (MFI) segments. Agrawal adds, “Corporate loans did well, led by small businesses (+10% QoQ), and the bank aims to double this book to 20% of the corporate mix in 2-3 years.”

Overall, Agrawal believes that the bank’s strong growth momentum in vehicle finance and MFI loans, along with improving asset quality and a healthy loan mix, bodes well for its future growth. He anticipates the firm’s net profit to grow at a CAGR of 22.4% over FY23-25.  

  1. Can Fin Homes: Axis Direct keeps its ‘Buy’ rating on this housing finance company and raises the target price to Rs 930 from Rs 675, implying an upside of 16.5%. In Q1FY24, the company’s standalone net profit rose 13.1% YoY to Rs 183.5 crore and revenue increased by 34.8% YoY. It beat Trendlyne Forecaster’s net profit estimates by 14.3%.

Analysts Dnyanada Vaidya, Prathamesh Sawant and Bhavya Shah are positive about the housing finance company’s medium-term growth prospects on the back of improving demand trends, helped by a pause in rate hikes and easing supply-side constraints. They also like that the company keeps its assets under management (AUM) growth guidance at 18-20% over the medium term. 

The analysts add, “Despite the sharp run-up in the stock (+ 45% in 3 months), it trades at valuations lower than its peers.” They believe the company shows robust growth while maintaining stable asset quality and improving profitability. The analysts expect the firm’s net profit to grow at a CAGR of 19% 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
26 Jul 2023
Market closes higher, Yatharth Hospital's Rs 686.5 crore IPO gets bids for 1.08X of shares

Trendlyne Analysis

Nifty 50 closed at 19,778.30 (97.7, 0.5%), BSE Sensex closed at 66,707.20 (351.5, 0.5%) while the broader Nifty 500 closed at 16,975.00 (78.1, 0.5%). Of the 1,945 stocks traded today, 1,020 were in the positive territory and 848 were negative.

Indian indices closed in the green, with the benchmark Nifty 50 index closing above the 19,750 mark. The Indian volatility index, Nifty VIX, rose sharply by 2.2%. Shree Cements rose over 2.3% and closed in the green after its net profit jumped 84% YoY to Rs 581 crore in Q1FY24. Tata Motors share price rose over 3.5% intraday after the company posted a net profit of Rs 3,202.8 crore Q1FY24, as compared to a net loss of Rs 5,006.6 crore in Q1FY23. However, the auto manufacturer's share price fell from its day high and settled 0.26% higher. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Pharma and Nifty Realty closed higher than Tuesday's close. According to Trendlyne's sector dashboard, Telecom Services was the top-performing sector of the day. 

Major Asian indices closed in the red, except for India’s BSE Sensex and Australia’s All Ordinaries index, which closed in the green. European stocks traded in the red, in line with the US index futures, which also traded lower ahead of the expected 25 bps rate hike by the US Fed later today. Brent crude oil futures traded in the red, after rising nearly 4% in the last four trading sessions.

  • Hindustan Petroleum Corp sees a long buildup in its July 27 future series as its open interest rises 47% with a put-call ratio of 0.75.

  • According to CRISIL, operating profit for oil marketing companies (OMCs) could increase to Rs 1 lakh crore in FY24, up from FY23's low of Rs 33,000 crore. The rating agency believes that this healthy profitability would improve the sector's credit metrics.

  • Bajaj Finance is rising as its net profit grows 25.6% YoY to Rs 2,959.1 crore in Q1FY24. Revenue jumps 30.9% YoY, helped by improvements in new loans booked and assets under management. The lender's asset quality improves as its gross NPA declines by 35 bps YoY. It features in a screener of stocks with increasing revenue for the past four consecutive quarters.

  • Yatharth Hospital & Trauma Care Services' Rs 686.5 crore IPO gets bids for 1.08X the available 1.7 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 1.25X of the available 83.1 lakh shares on offer.

  • RBL Bank rises over 5% as reports suggest that a Mahindra Group company has acquired around a 4% stake in the bank through the open market route.

  • Telecom stocks like Vodafone Idea, Indus Towers, Tata Communications, Route Mobile and Bharti Airtel are rising in trade. The broader sectoral index, S&P BSE Telecom, is also trading in the green.

  • The National Company Law Tribunal (NCLT) accepts the corporate insolvency plea for Coffee Day Global, the parent company of Café Coffee Day, following a petition filed by IndusInd Bank. As of the first week of July, the company has disclosed its total debt to be Rs 465.3 crore.

  • Shree Cements is rising as its net profit jumps 84% YoY to Rs 581 crore in Q1FY24. Revenue grows 19% YoY, aided by a rise in sales volumes and an increase in sales of premium products. The company has also approved a capex of Rs 7,000 crore to set up manufacturing plants in Rajasthan, Uttar Pradesh and Karnataka, among others.

  • Axis Direct maintains its ‘Buy’ rating on Relaxo Footwears and raises the target price to Rs 1,050 from Rs 990. This implies an upside of 10.9%. The brokerage remains optimistic about the firm’s growth prospects on the back of stable raw material prices, improving demand, increasing production capacity, market share gains and premiumisation. It expects the company’s net profit to grow at a CAGR of 29.1% over FY24-25.

  • Amit Syngle, MD & CEO of Asian Paints, says, the company has seen strong growth in tier 1-2 and tier 3-4 cities in Q1FY24. He adds that it targets volumes to grow in double-digits in FY24. He expects the home decor segment to pick up from Q2.

  • Delta Corp is rising as its Q1FY24 net profit increases by 6.4% YoY to Rs 51.2 crore and revenue grows by 4.1% YoY led by healthy growth in the casino gaming division. EBITDA margin expands by 10 bps YoY to 35.1%. The stock shows up in a screener for companies with strong annual EPS growth.

  • Mindspace Business Parks REIT rises as its Q1FY24 net profit grows by 7.9% YoY to Rs 127.5 crore due to lower power expenses. Its revenue increases by 22.7% YoY on the back of robust growth in the facility rentals and maintenance services segment. The company appears in a screener of stocks with improving RoCE.

  • Can Fin Homes falls after reporting a case of fraud at its Ambala branch, where three employees were involved in misappropriating funds amounting to around Rs 38.5 crore. Suresh Srinivasan Iyer, MD & CEO of the company says, this incident is isolated to the branch and anticipates an impact of Rs 35-38 crore in Q2FY24 profitability.

  • Amber Enterprises India is rising as its Q1FY24 net profit improves by 8.5% YoY to Rs 45.6 crore due to a decrease in employee expenses and finance costs. Revenue declines by 6.4% YoY. It appears on a screener of stocks that are volume shockers.

  • Cyient’s Q1FY24 net profit rises 3% QoQ to Rs 168.1 crore on the back of a fall in the cost of materials consumed. However, its revenue declines 3.7% QoQ due to weakness in the design-led manufacturing segment. The stock shows up in a screener for companies with declining cash flows from operations over the past two years.

  • Yatharth Hospital raises Rs 206 crore from anchor investors ahead of its IPO by allotting 68.7 lakh shares at Rs 300 each. Investors include ICICI Prudential AMC, HDFC Mutual Fund, Aditya Birla Sun Life Trustee, Bandhan Mutual Fund, HSBC Global Investment Funds, SBI Life Insurance, BNP Paribas Arbitrage and Goldman Sachs.

  • Transformers & Rectifiers (India) is rising as it bags an order worth Rs 134 crore from the central utility for transformers. This order takes the company's total order book to Rs 1,955 crore. The stock is currently trading 214.2% higher than its 52-week low.

  • Tata Motors’ board of directors, through a scheme of arrangement, approves the cancellation of the entire DVR (differential voting rights) shares of the company to simplify the capital structure. The shareholders will receive seven ordinary shares for every 10 DVR shares held in the company.

  • UTI Asset Management Company rises as its Q1FY24 net profit grows by 66% YoY to Rs 164.5 crore. Its revenue increases by 47.2% YoY on the back of robust growth in the cash & arbitrage and income segment. The company appears in a screener of stocks with strong momentum.

  • SBI Life Insurance is falling despite a 45% YoY rise in its net profit to Rs 381 crore in Q1FY24. Revenue surges 6x YoY, aided by improvement in gross premium income. It appears in a screener of stocks where analysts have upgraded recommendations or target prices over the past quarter.

  • Ceat rises as its Q1FY24 net profit increases by 14.6X YoY to Rs 144.6 crore due to lower raw material and inventory expenses. Its revenue also surges by 4.2% YoY and EBITDA margins improve by 7.3 percentage points. The company appears in a screener of stocks with increasing quarterly net profit and margins.

  • The International Monetary Fund (IMF) revises India's GDP growth forecast for 2023 to 6.1%, an increase of 20 bps from its earlier estimate of 5.9% due to higher domestic investment. However, it keeps its April prediction for 2024's growth rate of 6.3% unchanged.

  • Ashish Kacholia cuts stake in Megastar Foods to below 1% in Q1FY24, as against 1.1% stake held in Q4FY23.

  • Larsen & Toubro is rising as its Q1FY24 net profit improves by 46.5% YoY to Rs 2,493 crore and revenue increases by 33.6% YoY. The company’s order inflow surges by 57% YoY to Rs 65,520 crore, with international orders making up 42% of the total inflow. The firm also approves to buy back shares worth Rs 10,000 crore at a maximum price of Rs 3,000 per share through the tender offer route.

  • Dixon Technologies falls despite its Q1FY24 net profit rising by 50.6% YoY to Rs 68.8 crore due to lower raw material and finance expenses. Its revenue increases by 14.7% YoY on the back of robust growth in the mobile & electronics manufacturing services segment. The company appears in a screener of stocks with increasing quarterly revenue.

  • Tata Motors is back in the black in Q1FY24 with a net profit of Rs 3,202.8 crore, as compared to a net loss of Rs 5,006.6 crore in Q1FY23. Profitability improves on the back of robust sales from its Jaguar Land Rover unit and a stronger operating performance in its commercial vehicles business. Revenue rises 42.1% YoY, driven by healthy sales growth across all business segments.

Riding High:

Largecap and midcap gainers today include Tata Motors Limited (DVR) (419.45, 12.03%), Vodafone Idea Ltd. (8.75, 10.76%) and Indus Towers Ltd. (180.70, 5.18%).

Downers:

Largecap and midcap losers today include Gland Pharma Ltd. (1,194.55, -2.66%), Adani Transmission Ltd. (814.95, -2.38%) and Bajaj Finance Ltd. (7,433.15, -2.28%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Tata Motors Limited (DVR) (419.45, 12.03%), Sobha Ltd. (637.45, 10.08%) and Piramal Enterprises Ltd. (1,084.20, 7.99%).

Top high volume losers on BSE were Can Fin Homes Ltd. (771.20, -9.40%), Deepak Fertilisers & Petrochemicals Corporation Ltd. (552.50, -6.48%) and Aether Industries Ltd. (1,019.25, -5.19%).

TCI Express Ltd. (1,543.95, 5.22%) was trading at 25.7 times of weekly average. Tata Investment Corporation Ltd. (2,452.80, 4.08%) and Amber Enterprises India Ltd. (2,411.50, 6.49%) were trading with volumes 18.1 and 11.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

53 stocks made 52-week highs,

Stocks touching their year highs included - Aurobindo Pharma Ltd. (789.45, 0.22%), Bajaj Holdings & Investment Ltd. (7,426.45, -1.03%) and Bharat Heavy Electricals Ltd. (101.20, 3.53%).

13 stocks climbed above their 200 day SMA including Sobha Ltd. (637.45, 10.08%) and Indus Towers Ltd. (180.70, 5.18%). 8 stocks slipped below their 200 SMA including Bayer Cropscience Ltd. (4,406.90, -1.84%) and Adani Power Ltd. (255.50, -1.79%).

 
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The Baseline
26 Jul 2023
TCS, Infosys guidance cuts point to harder days ahead | Tech winners and losers screener
By Shreesh Biradar

The Indian investing community had high hopes for Nifty 50 reaching the 20,000 mark last week, but Infosys' results caused a pullback just before this milestone.

Indian IT 's earnings season began on a cautious note. TCS, a key player in the industry, noted that global macro headwinds "are affecting revenue and margins". Morgan Stanley had previously predicteda modest performance for Indian tech in Q1FY24, with improvement in the second half of FY24.

India’s software services has been a driving force in India's growth, contributing nearly 19% of overall exports and growing by 20% in FY23. However, the Q1FY24 earnings season has been underwhelming - the big four IT firms (TCS, Infosys, Wipro and HCL Technologies) reported tepid earnings and lower revenue guidance. The management is focusing on cost-cutting measures amid the slowdown.

Nifty IT rose by just 3% in the April-June 2023 quarter as investors re-evaluated what used to be a booming sector. The broader Nifty 50 rose by around 11% in the same period, so IT is now a clear laggard, as recessionary pressures, global financial turmoil, spending cuts, and the rise of technologies like AI raise questions about the growth outlook.

In this week’s Analyticks:

  • Losing Momentum?: Global headwinds slow IT sector growth
  • Winners and losers screener: IT stocks which outperformed and underperformed Trendlyne's Forecaster estimates in Q1FY24

Let’s get into it.

IT firms cut down their revenue guidance

The earnings season for the majority of Indian IT firms was not celebratory and was quite a mixed bag, with TCS and HCL recording a moderate performance, while Infosys' and Wipro's weak numbers underlined the slowdown. A major highlight of the season has been the cut in revenue guidance. For instance, Infosys revised its FY24 revenue guidancefrom its eariler estimate of 4-7% constant currency growth to 1-3.5%.  

Commenting on the lower guidance, Infosys CEO Salil Parekh  said, “In the short term, we see some clients reducing or even stopping work on transformational programs and projects. This is especially visible in financial services, mortgages, asset management, investment banking, payments, telecom, high-tech, and parts of retail.”

While Wipro hinted at -2% to 1% revenue guidance, HCL and TCS pegged their numbers at around 5% to 7%.  A key driver for the lower revenue guidance has been the slowdown in the global BFSI (Banking, Financial Services and Insurance) sector. This vertical contributes nearly 30% of IT services revenue, and has seen a spending cut in discretionary tech services. 

Except for HCL, all other firms have seen a drop in revenue from BFSI clients. Indian IT has in the meantime, diversified its exposure to retail, pharma, auto, and other sectors. The BFSI share has significantly decreased from the 40% it had three years ago.

The telecom sector has also seen its share of revenue drop. On the upside, the retail, energy and manufacturing sectors are moving towards technology adoption post-pandemic.

Slower decision-making clogs up deal pipeline for tech companies

As interest rates rose, the collapse of Silicon Valley Bank in the US and Credit Suisse in Europe spread cracks across the US and European banking sector. Banks and finance companies have decided to wait out the storm and delay new IT spending.

While large deals are still coming through, they are taking longer to finalize due to decision-making getting pushed all the way up to the CEOs and CTOs in client companies.

When interest rates were low and money was cheap, a lot of tech moonshot projects were getting funded by customers. Now that has changed. According to CEO of TCS, K Krithivasan, “Macro uncertainties have made clients more cautious. They are taking a month to month approach, and that means low visibility on their future spending. We will prioritize projects that are business-critical and offer faster ROI realization. Long-running discretionary projects are now coming back with reduced scope or pace.”

While the deal pipeline is holding steady, the conversion rate for new deals has decreased. So order inflow will likely slow down going forward.

The new deals already signed might see execution delays. However, regular spending on maintenance projects is expected to continue at the previous pace. It is discretionary spending, which involves smaller budgets and faster turnaround times, that is seeing the biggest cuts. 

Retaining talent becomes key, as hiring slows down

The pressure on the sector's top-line growth has pushed the management to focus on margins. However, the margins of the IT pack have fallen since Q4FY23. The recent salary hikes have offset some of the gains from lower subcontractor costs and higher resource utilisation. According to TCS CFO Samir Seksaria, salary hikes have resulted in a 200 bps impact on the EBIT margins.

Lower attrition has controlled the decline in margins for the IT pack. However, the attrition rate continues to be above pre-pandemic levels of 10 -12%. Companies are responding by trying to retain and promote their new talent pool instead of hiring external replacements. This has led to a higher utilisation of the bench pool and lower net additions of employees. 

If the attrition rate falls by another 300 bps, IT firms could see a margin expansion in the range of 75-100 bps. Currently, the net additions of employees for large IT firms have been negative or marginally positive.

The impact of the AI revolution is still undecided

With the rise of Chat GPT and Google Bard, generative AI has become the buzzword in IT circles.

But there are many uncertainties around AI right now - clients are unsure about how to use it. Client engagements for AI projects have revealed ever-changing requirements, and clarity is lacking on how to integrate AI into business processes. The high error rates, and the 'hallucinations' of chatbots, have made customers cautious about adoption. Indian IT firms are investing into in-house pilot projects to get a better understanding of AI's nuances and possibilities. 

However, Infosys CEO Salil Parekh was clear on the promise, saying, “AI will not replace human jobs but complement them, and Infosys has seen a 10-30% productivity improvement using AI internally and with clients.”

Recognizing the significance of AI, Wipro has committed $1 billion to building AI technology, including acquiring established AI firms. Wipro CEO Thierry Delaporte believes that, “AI is a fast-moving field. Especially with the emergence of generative AI, we expect a  shift in all industries. It’s meant to empower our talent pool and help clients”.

TCS is training 50,000 employees under its AI program, while Wipro has pledged to train its entire workforce of 2,50,000 employees in generative AI. 

Overall, IT firms are focusing on steadying their revenue and margin growth amid the global slowdown. Deals are still happening, and there are no immediate threats from disruptive AI. The Indian IT sector is for now, well-equipped to handle the slowdown, so long as it's temporary.

Tech winners and losers screener: IT stocks which outperformed and underperformed Trendlyne's Forecaster estimates in Q1FY24

As the software & services sector releases its Q1FY24 results, we take a look at how these companies have performed compared to their revenue and net profit estimates.This screenershows tech stocks that have outperformed and underperformed analyst estimates.

Notable stocks in the screener are Infosys, Wipro, HCL Technologies, Tata Consultancy Services (TCS), LTIMindtree, Coforge, Tanla Platforms, IndiaMart InterMeshand One97 Communications.

Tanla Platforms’ net profit grew by 12.6% QoQ to Rs 135.4 crore inQ1FY24, beating Trendlyne’s Forecaster estimates by 16.2%. Its revenue also rose 9.3% YoY to Rs 911.1 crore, surpassing estimates by 7.6%. The company’s revenue grew on the back of the enterprise and platform segments, aided by a recovery in transaction volumes and an international long-distance (ILD) rate hike.

Tata Consultancy Services is the only big four tech giant to beat Forecaster estimates for net profit, despite a 2.8% QoQ fall to Rs 11,047 crore in Q1FY24. However, revenue remains flat at Rs 59,381 crore, in line with estimates. This was caused by muted growth in the BFSI and retail segments, combined with delays in non-critical projects. 

HCL Technologies missed the Forecaster estimates for revenue and net profit by the largest margin among the big four in Q1FY24. Its net profit declined 11.3% QoQ to Rs 3,534 crore, missing Forecaster estimates by 8.3%. Similarly, revenue fell by 1.5% QoQ to Rs 26,640 crore, missing Forecaster estimates by 1.9%. This decline can be attributed to the slowdown in revenue from the technology and telecommunications segments due to a cut in discretionary spending and decision delays.

You can find more screeners here.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
25 Jul 2023
Market closes flat, Shoppers Stop's net profit down 36.5% YoY in Q1FY24

Trendlyne Analysis

Nifty 50 closed at 19,680.60 (8.3, 0.0%), BSE Sensex closed at 66,355.71 (-29.1, 0.0%) while the broader Nifty 500 closed at 16,896.90 (31.8, 0.2%). Of the 1,948 stocks traded today, 943 were gainers and 941 were losers.

Indian indices switched between losses and gains throughout the day and settled flat, with the Nifty 50 closing below the 19,700 mark. The Indian volatility index, Nifty VIX, fell sharply by over 12%. Asian Paints fell over 4% despite its Q1FY24 net profit rising by 52.5% YoY to Rs 1,550.4 crore due to lower raw material and inventory expenses.

Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Metal and Nifty Energy closed sharply higher than Monday’s close. According to Trendlyne's sector dashboard, Utilities was the top-performing sector of the day.

Major Asian indices closed in the red, except for India’s BSE Sensex and Japan’s Nikkei 225, which closed flat. European indices traded in the green, following the US index futures, which also traded higher. Investors are waiting for corporate earnings from major companies and keeping an eye on cues from the Federal Reserve and the European Central Bank regarding interest rate hike decisions.

  • Money flow index (MFI) indicates that stocks like Aarti Drugs, Rites, Gland Pharma, and Sterling and Wilson Renewable Energy are in the overbought zone.

  • 5paisa Capital and Jindal Steel & Power touch their 52-week highs of Rs 472.35 and Rs 667.9 respectively. The former has risen 30.5% over the past month, while the latter increased by 16.8%.

  • Aurobindo Pharma rises as its wholly owned subsidiary, Eugia Pharma Specialities, receives approval from the USFDA to manufacture and market Plerixafor Injection. Plerixafor is used in the preparation of autologous stem cells for transplantation in patients with non-Hodgkin’s lymphoma or multiple myeloma. It appears in a screener of stocks with strong momentum.

  • Jubilant Foodworks rises despite its net profit falling by 74.1% YoY to Rs 28.9 crore and revenue increasing by 6.2% YoY. The decline in profit is due to the rise in input cost, employee benefits, and depreciation expenses. The company appears in a screener for stocks with low debt.

  • Utility stocks like Adani Green Energy, SJVN, Reliance Infrastructure, NAVA and Inox Green Energy Services are rising in trade. The broader sectoral index, S&P BSE Utilities, is also trading in the green.

  • Bajaj Auto is falling despite its Q1FY24 net profit rising by 41.3% YoY to Rs 1,644.1 crore and EBITDA margin expanding by 280 bps YoY to 19%. Its revenue increases by 28.8% YoY driven by strong volume growth and healthy domestic demand. The stock shows up in a screener for companies with book value per share increasing over the past two years.

  • Asian Paints falls despite its Q1FY24 net profit rising by 52.5% YoY to Rs 1,550.4 crore due to lower raw material and inventory expenses. Its revenue grows by 6.7% YoY on the back of robust growth in the domestic decorative segment. The company appears in a screener of stocks nearing a 52-week high with significant volumes.

  • KPIT Technologies rises as its Q1FY24 net profit increases by 20.1% QoQ to Rs 134 crore due to lower inventory expenses. Its revenue also surges by 7.9% QoQ on the back of robust growth in the UK and Europe segments. The company appears in a screener of stocks with improving quarterly profits.

  • SpiceJet is rising as the DGCA removes it from 'enhanced surveillance' after conducting 51 spot checks of 23 aircraft. The regulator has made 95 observations, which they found were of routine nature, and highlighted that the airline took suitable maintenance action.

  • ICICI Securities downgrades its rating on Ashok Leyland to ‘Hold’ from ‘Add’ but increases the target price to Rs 185 from Rs 176, implying an upside of 1.6%. The brokerage believes that the stock’s positives are already priced in and is trading at an expensive valuation given its recent uptrend. However, it sees the company’s margins and market share expanding over the coming quarters.

  • Reliance Industries is rising as it enters an agreement with Mercury Holdings SG Pte, a joint venture between Brookfield Infrastructure and Digital Realty, to acquire a 33.3% stake in each of the five Indian special purpose vehicles of Mercury Holdings. The total investment for this acquisition is Rs 378 crore.

  • Larsen & Toubro's power transmission and distribution arm secures new orders worth Rs 1,000-2,500 crore. While one order is to implement IT infrastructure in central Gujarat, another is to build a transmission line in Jharkhand. The third and fourth orders involve the construction of a high-voltage direct current transmission line and a substation in West Asia and Malaysia respectively.

  • RHI Magnesita India rises as Dalmia OCL acquires the remaining 98 lakh shares (49% equity) of RHI Magnesita Seven Refractories, a wholly owned subsidiary of RHI Magnesita India, for Rs 61.8 crore. It appears in a screener of stocks in the Nifty 500 with consistent high returns over five years.

  • Shoppers Stop is falling as its net profit plunges 36.5% YoY to Rs 14.9 crore in Q1FY24. However, its revenue increases by 4.8% YoY, aided by improved sales in the first citizen loyalty customers, private brands, and beauty segments. It features in a screener of stocks with decreasing net profit and profit margin (YoY).

  • Jyothy Labs touches a new 52-week high as its net profit increases by 101.7% YoY to Rs 96.3 crore in Q1FY24 on the back of decreased finance costs. Its revenue also grows by 15.1% YoY, driven by the dishwashing and fabric care segment. The stock has reported its fifth consecutive quarter of margin expansion.

  • Aarti Drugs rises to a new 52-week high of Rs 267.5 as its net profit increases by 37.5% YoY to Rs 47.9 crore in Q1FY24 due to lower raw material and inventory expenses. Its revenue grows by 6.3% YoY, driven by the domestic segment. Additionally, its board has approved a share buyback of 0.7% equity (6.7 lakh shares) at Rs 900 per share. The company appears in a screener of stocks with strong momentum.

  • CreditAccess Grameen splits the roles of Managing Director (MD) and Chief Executive Officer (CEO), with effect from August 1. It promotes Ganesh Narayan as the CEO from his previous role of Deputy CEO, while Udaya Kumar Hebbar (current MD and CEO) will continue to lead as the MD.

  • Metal & mining stocks like APL Apollo Tubes, JSW Steel, National Aluminium Co, Tata Steel and Jindal Steel & Power are rising in trade. All constituents of the broader sectoral index, BSE Metal, are also trading in the green.

  • K Satyanarayana Raju, MD & CEO of Canara Bank, says the bank has witnessed healthy loan growth in Q1FY24. He also highlights that there is stress on NIMs due to the high cost of funds. He expects credit cost to be in the range of 1.1-1.2% in FY24.

  • Porinju Veliyath sells a 0.6% stake in Cupid for approx Rs 2.5 crore in a bulk deal on Monday.

  • JK Paper rises as its net profit increases by 17.8% YoY to Rs 308.7 crore in Q1FY24 due to lower raw material, inventory, and finance expenses. Its revenue also grows by 11.9% YoY on the back of robust performance in the paper and packaging segment. The company appears in a screener of stocks with improving quarterly net profits.

  • SJVN surges to a new all-time high of Rs 62.7 per share as it bags orders for five hydropower projects, totalling 5097 MW, from the Arunachal Pradesh government. All the projects are located in the Dibang Basin, with an estimated outlay of Rs 50,000 crore.

  • CLSA downgrades its rating on DLF to 'Outperform' with a target price of Rs 547. The brokerage believes that housing demand momentum will continue, and highlights that the company has a sound new launch pipeline for H2FY24.

  • DCM Shriram is falling as its Q1FY24 net profit decreases 77.7% YoY to Rs 56.6 crore due to a 37.6% YoY rise in input costs. Its revenue also drops by 2.5% YoY, led by a decline in the chloro-vinyl and sugar segments. The stock shows up in a screener for companies with declining net cash flows.

  • Relaxo Footwear rises as its Q1FY24 net profit increases by 45.6% YoY to Rs 56.3 crore. Its revenue also grows by 11.1% YoY. The company appears in a screener of stocks with high momentum scores.

  • Tata Steel’s Q1FY24 net profit falls 91.8% YoY to Rs 634 crore due to higher inventory and finance costs. Its revenue also declines by 6.2% YoY on the back of lower volumes and weakness in its European operations. The stock shows up in a screener for companies with low Piotroski scores.

Riding High:

Largecap and midcap gainers today include Adani Green Energy Ltd. (1,088.05, 10.00%), Adani Power Ltd. (260.15, 9.31%) and Adani Transmission Ltd. (834.85, 7.97%).

Downers:

Largecap and midcap losers today include Asian Paints Ltd. (3,400.40, -4.04%), PB Fintech Ltd. (718.50, -3.54%) and Vedant Fashions Ltd. (1,242.00, -3.50%).

Movers and Shakers

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

Top high volume gainers on BSE included Jyothy Labs Ltd. (290.90, 19.98%), Adani Green Energy Ltd. (1,088.05, 10.00%) and Adani Power Ltd. (260.15, 9.31%).

Top high volume losers on BSE were DCM Shriram Ltd. (848.50, -6.14%), Asian Paints Ltd. (3,400.40, -4.04%) and Campus Activewear Ltd. (299.55, -3.01%).

Thermax Ltd. (2623.95, 7.22%) was trading at 20.4 times of weekly average. JK Paper Ltd. (326.00, 4.05%) and Ajanta Pharma Ltd. (1511.75, 6.09%) were trading with volumes 13.6 and 13.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Ajanta Pharma Ltd. (1,511.75, 6.09%), Bharat Heavy Electricals Ltd. (97.75, -0.31%) and Zydus Lifesciences Ltd. (621.75, 1.30%).

Stocks making new 52 weeks lows included - SRF Ltd. (2,164.10, 0.92%) and UPL Ltd. (626.00, -0.97%).

10 stocks climbed above their 200 day SMA including Adani Power Ltd. (260.15, 9.31%) and Sobha Ltd. (579.10, 4.22%). 12 stocks slipped below their 200 SMA including DCM Shriram Ltd. (848.50, -6.14%) and Vedant Fashions Ltd. (1,242.00, -3.50%).

 
Trendlyne Marketwatch
Trendlyne Marketwatch
24 Jul 2023
Market closes lower, TVS Motor's Q1 net profit rises 42.2% YoY

Trendlyne Analysis

Nifty 50 closed at 19,672.35 (-72.7, -0.4%), BSE Sensex closed at 66,384.78 (-299.5, -0.5%) while the broader Nifty 500 closed at 16,865.15 (-39.2, -0.2%). Of the 1,986 stocks traded today, 954 were on the uptick, and 964 were down.

Indian indices dropped from the day’s high and closed in the red, with the Nifty 50 closing at 19,672. The volatility index, Nifty VIX, rose by 1.4% and closed at 11.6 points. Kotak Mahindra Bank’s net profit increased by 67% YoY to Rs 3,452 crore in Q1FY24.

Nifty Smallcap 100 closed in the green, while Nifty Midcap 100 closed lower, following the benchmark index. Nifty Healthcare and Nifty Pharma closed higher, compared to Friday’s closing levels. According to Trendlyne’s sector dashboard, coal emerged as the top-performing sector of the day, with a rise of over 0.9%.

Most European indices trade flat, except for Switzerland’s Swiss Market Index trading higher. US indices futures trade higher, indicating a positive start. The data released by Hamburg Commercial Bank (HCOB) indicates that France’s composite PMI for July has dropped to 46.6, against the estimates of 47.7. The reading has further cemented the recessionary fears in Europe.

  • Relative strength index (RSI) indicates that stocks like Mphasis, Union Bank of India, Tanla Platforms and Zensar Technologies are in the overbought zone.

  • TVS Motor Co is falling despite its Q1FY24 net profit rising 42.2% YoY to Rs 434.3 crore and revenue increasing by 23.8% YoY, led by healthy growth in the automotive vehicles and financial services segments. The stock shows up in a screener for companies with improving cash flows and high durability scores.

  • Tata Teleservices, Shyam Metalics and Energy and Sona BLW Precision Forgings' weekly average delivery volumes rise ahead of their Q1FY24 results on Thursday.

  • Canara Bank rises as its net profit jumps by 74.8% YoY to Rs 3,535 crore in Q1FY24. Its net interest income increases by 27.7% YoY. The bank's asset quality improves as gross and net NPAs fall by 183 bps and 91 bps YoY respectively. The company appears in a screener of stocks with increasing quarterly profits.

  • IDBI Bank is rising as its Q1FY24 net profit increases by 61.9% YoY to Rs 1,224.2 crore, while its net interest income jumps 61% YoY. The bank's net interest margin (NIM) also expands by 178 bps YoY to 5.8%. Its asset quality improves as its GNPA and NNPA decline by 14.85 percentage points and 0.82 percentage points YoY respectively.

  • United Spirits and Mazagon Dock Shipbuilders touch their 52-week highs of Rs 1,050 and Rs 1,957.8 respectively. The former has risen 15.5% over the past month, while the latter increased by 58.1%.

  • GMR Power and Urban Infra is rising as reports suggest that its step-down subsidiary, GMR Smart Electricity Distribution Private Limited, has received an order worth Rs 7,593 crore to install 75 lakh smart meters in Uttar Pradesh. It appears in a screener of stocks with strong momentum.

  • Kotak Mahindra Bank falls despite its net profit rising by 67% YoY to Rs 3,452 crore in Q1FY24. Its net interest income also increases by 33% YoY on the back of robust growth in corporate banking, insurance, and retail banking segments. The bank's asset quality improves as gross and net NPAs decline by 52 bps and 26 bps YoY respectively. The company appears in a screener of stocks with strong momentum.

  • SRF's Q1FY24 net profit falls by 41% YoY to Rs 359 crore, while its revenue decreases by 14.3% YoY to Rs 3,338 YoY. A downcycle in the packaging film business led to the profit decline. Managing Director Ashish Bharat says, "This is expected to continue for the medium term." The company features in a screener for stocks with low debt.

  • Power Finance Corp touches an all-time high of Rs 244 per share as it signs 20 memorandums of understanding (MoUs) worth approximately Rs 2.4 lakh crore. The MoUs have been signed with companies like Adani, Greenco and ReNew to fund projects in the clean energy sector.

  • Computer hardware, other leisure facilities and sugar industries rise by more than 3% in trade today.

  • ITC falls sharply as the board of directors grants an in-principle approval for the demerger of its hotel business. The company will hold a 40% stake in the new entity.

  • Samvardhana Motherson International’s arm Samvardhana Motherson Automotive Systems signs a pact to acquire assets and shares of the Germany-based Dr. Schneider Group for an enterprise value of 118.3 million euros (Rs 1,074 crore). The German company is a manufacturer of high-end electronic polymer components. Through this acquisition, the firm aims to gain access to innovative electronic polymer components.

  • Rites wins an order worth Rs 500 crore from CFM, Mozambique, for the supply of 10 locomotives and 150 wagons.

  • CreditAccess Grameen surges to an all-time high of Rs 1,427 per share as its net profit jumps 151.5% YoY to Rs 348.5 crore in Q1FY24. Net interest income (NII) grows 65.4% YoY, backed by an increase in the company's gross loan portfolio. The lender's asset quality improves, with its gross and net NPAs declining by 221 bps and 88 bps YoY respectively. It shows up in a screener of stocks with increasing revenue for four consecutive quarters.

  • HDFC Securities keeps its ‘Buy’ rating on Persistent Systems and raises its target price to Rs 6,430 from Rs 6,410. This implies an upside of 34%. The brokerage expects the company to outperform its peers due to robust client mining and an increase in its large client count. The brokerage believes that the firm is well-positioned to double its revenue over the next four years.

  • Bain Capital is set to acquire a 90% share in Adani Capital and Adani Housing. The deal will result in a total purchase of the Adani family's private stake in the business. It will infuse $120 million  in primary capital and $50 million in liquidity line to facilitate the NBFC's growth.

  • Biocon falls more than 4% as the USFDA conducts inspections at its manufacturing facility in Malaysia. The agency has issued Form 483 with eight observations relating to enhancing the operational procedures and strengthening training programmes. It appears in ascreener of companies with declining net cash flows.

  • Vedanta falls as its net profit decreases by 40.3% YoY to Rs 2,640 crore in Q1FY24. Its revenue also drops by 12.9% YoY due to reduced performance in the domestic zinc & lead, aluminum, and international zinc segments. Its EBITDA margin declines by 7.9 percentage points on the back of increased raw material and finance expenses. The company appears in a screener of stocks with declining net cash flow.

  • Vijay Kedia sells a 0.3% stake in Repro India in Q1FY24. He now holds a 6.8% stake in the company.

  • Jayant Acharya, MD & CEO of JSW Steel, says the company’s realisations were aided by an improvement in export booking and value-added products in Q1. He adds that coking coal price will drop by $45-50 per tonne in Q2FY24. He also expects an improvement in the company's debt situation in the future.

  • Ashish Kacholia cuts stake in Creative Newtech to below 1% in Q1FY24, as against a 2.7% stake held in Q4FY23.

  • Sunil Singhania sells a 1.3% stake in Rajshree Polypack in Q1FY24. He now holds a 6.2% stake in the company.

  • CLSA maintains its ‘Underperform’ rating on HDFC Life Insurance Co with a target price of Rs 680. The brokerage says the company has witnessed sound growth in APE (annual premium equivalent) across various products and channels in Q1FY24. However, it highlights a limited upside for HDFC Life in the near term.

  • One97 Communications rises as its net loss contracts by 45% YoY to Rs 358 crore in Q1FY24. Its revenue grows by 39% YoY on the back of robust growth in payment & financial and cloud services. The company appears in ascreener of stocks with increasing quarterly revenue.

  • Tejas Networks falls as its net loss drops by 295.9% YoY to Rs 26.3 crore due to increased raw material and employee benefit expenses. However, its revenue rises by 43.6% YoY. The company appears in ascreener of stocks with declining quarterly net profit.

  • Reliance Industries is falling as its net profit decreases 5.9% YoY to Rs 18,258 crore in Q1FY24. Revenue also drops 4.7% YoY due to a plunge in the order-to-cash (O2C) business caused by dipping crude oil prices. It features in a screener of stocks with declining revenue for two consecutive quarters.

Riding High:

Largecap and midcap gainers today include REC Ltd. (172.95, 6.86%), NHPC Ltd. (49.90, 6.17%) and Power Finance Corporation Ltd. (239.75, 5.62%).

Downers:

Largecap and midcap losers today include United Spirits Ltd. (977.65, -5.91%), Biocon Ltd. (249.50, -5.47%) and One97 Communications Ltd. (802.00, -5.01%).

Movers and Shakers

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

Top high volume gainers on BSE included Aarti Drugs Ltd. (605.50, 18.60%), SJVN Ltd. (57.10, 13.86%) and REC Ltd. (172.95, 6.86%).

Top high volume losers on BSE were Hikal Ltd. (280.40, -7.28%), One97 Communications Ltd. (802.00, -5.01%) and Indraprastha Gas Ltd. (470.55, -4.80%).

IFB Industries Ltd. (845.00, 1.15%) was trading at 12.2 times of weekly average. CreditAccess Grameen Ltd. (1,373.00, 4.53%) and BASF India Ltd. (2,660.00, 1.88%) were trading with volumes 9.3 and 8.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

54 stocks overperformed with 52-week highs,

Stocks touching their year highs included - AIA Engineering Ltd. (3,548.80, 1.03%), Ashok Leyland Ltd. (182.45, 0.33%) and Aurobindo Pharma Ltd. (785.30, 0.74%).

11 stocks climbed above their 200 day SMA including Aditya Birla Sun Life AMC Ltd. (401.80, 3.30%) and KRBL Ltd. (379.90, 2.68%). 6 stocks slipped below their 200 SMA including Rallis India Ltd. (213.15, -2.20%) and Trident Ltd. (33.05, -0.60%).

 
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The Baseline
21 Jul 2023
Five Interesting Stocks Today
  1. Polycab India: This consumer durables company has surged over 19% since Tuesday and touched a new all-time high of Rs 4,717.4 on Thursday. This comes after it reported strong Q1FY24 results, beating analyst estimates. 

During the quarter, Polycab’s revenue increased 42% YoY to Rs 3,889.4 crore, led by the wires & cables and international businesses. The company’s net profit also grew by 81% YoY to Rs 399.3 crore. Both revenue and net profit beat Trendlyne’s Forecaster estimates by 24.8% and 45.9% respectively. EBITDA margins also improved by 270 bps YoY due to a fall in commodity prices, and price hikes by the firm. 

Polycab’s cables & wires segment, which contributes 89% of its total revenue pie, has clocked a 47% rise in revenue on the back of strong volume growth in both domestic and international markets. The FMEG (fast-moving electrical goods) segment saw a 2% increase due to subdued demand. Commenting on the company’s performance, Inder T Jaisinghani, Chairman and MD, said: “The company registered its best-ever first quarterly revenues and profitability. Centre’s focus on infrastructure development and structural reforms, improving private capex and continued momentum in real estate has given us favourable results.”

Several analysts are bullish following the company’s strong performance and expect a recovery in the FMEG segment in the near future. BoB Capital maintains its ‘Buy’ rating but raises the target price to Rs 5,000. The brokerage believes that Polycab will achieve its revenue target of Rs 20,000 crore before FY26, as guided in FY21 under Project Leap. As a result, the company features in a screener of stocks where brokers have upgraded recommendations or target prices in the past month.

  1. CIE Automotive India Ltd: Thisauto part and equipment manufacturer has risen by 33% in the past quarter, while the broader benchmarkNifty Auto increased by 19.6%. The stock is trading at a 52-week high, according toTrendlyne’s Technicals. The firm’s Q2CY23 earnings released on Tuesday, showed its revenue and profits increasing by 5% and 16% YoY respectively. The boost in net profit was aided by a margin expansion of 260 bps. The revenue slump was due to a slowdown in the EU business, while  in India the company was impacted by lower demand from 2- wheelers and commercial vehicles.

The firm is adding new orders from EV manufacturers under its aluminum and steel forging segment. It received a new EV transmission system order worth $20 million (apart from the existing $80 million order) from US-based gear manufacturer Metalcastello. CAIL has also won orders from Bosch, Royal Enfield, Stellantis, and Tata Motors. 

The firm is focusing on profitability rather than scaling up low-margin businesses. It expects 50% of its new business to come from EVs (currently 30%) in the next two years. It shows up in ascreener of stocks with growth in net profit and profit margin

Mahindra & Mahindra recently exited from CIE Automotive and is no longer considered a promoter of the firm. This has positioned CIE as a pure-play MNC with no conflict of interest. As a result, CIE India now directly operates under CIE Spain, granting it access to the European market and technology.

According toICICI Securities, the firm’s growth will be driven by its EV portfolio expansion, new order execution, 2-wheeler revival, and new passenger vehicle launches. It is expected to expand its margin to 18-19% from the current 17.7%. The brokerage maintains a ‘Buy’ rating on the firm.

  1. LTIMindtree: This IT consulting & software stock fell 2.6% on Tuesday despite its net profit growing 3.4% QoQ to Rs 1,151.5 crore in Q1FY24, as it missed Trendlyne’s Forecaster estimates by 3.1%. Revenue was flat, while also missing Forecaster estimates marginally by 0.7%. 

The rise in net profit has helped the company appear in a screener of stocks with increasing net profit over the past two quarters. Muted growth in the banking, financial services & insurance segment, which constitutes 38% of the company’s revenue, hit revenue growth.

The company’s EBITDA margin expanded by 90 bps QoQ to 20% in Q1, owing to reduced subcontracting expenses. It also booked new orders worth $1.4 billion during the quarter, reflecting a rise of 4.9% QoQ. The management remains confident of regaining demand momentum and profit margin in the medium to long term, driven by previously won orders. Citing these reasons, the management has given a revenue guidance of single-digit to low double-digit growth for FY24.

However, ICICI Securities believes that the company is unlikely to achieve its double-digit guidance in FY24 owing to the Q1 estimates miss and the muted demand outlook for the BFSI segment in Q2 as well. But it maintains its ‘Add’ rating on the stock post results and lowers the target price to Rs 5,325 from Rs 5,582 per share. This indicates a potential upside of 8.2%. It expects some revenue pick up in H2FY24, from a strong order book, healthy deal pipeline, and revival in broader tech demand. The broker expects the company’s revenue to grow at a CAGR of 10.3% over FY23-26.

  1. Kajaria Ceramics: This tiles & ceramics manufacturer has risen 10.2% over the past week till Friday, ahead of its Q1FY24 results on July 26. The firm is expected to benefit from the decline in commodity prices like oil and natural gas amid rising domestic demand. The company’s profitability and margins are likely to increase due to the correction in natural gas prices, which account for roughly 20-25% of its costs. The management expects to save Rs 130-140 crore in power and fuel costs in FY24 and has guided for EBITDA margins in the range of 14-16%, compared to 13.5% in FY23. 

In Kajaria’s Q4FY23 earnings call, it provided volume growth guidance of 13-15% for FY24. This growth is expected to be led by demand from tier-2 and tier-3 cities, an enhanced distribution network, and strong brand recall. Moreover, there is a steady shift in demand towards the organised sector, which is favourable for large organised players like Kajaria Ceramics, according to reports. The management has given a revenue growth guidance of 14-16% for FY24. 

According to Trendlyne’s Forecaster, the ceramic maker’s revenue and net profit are expected to rise by 14.4% YoY and 42.5% YoY respectively. The stock also shows up in a screener for companies with low debt. 

ICICI Direct believes the company will be a major beneficiary of these industry tailwinds, given its healthy balance sheet, superior brand, and its expanding reach. The consensus recommendation from 27 analysts on the company is ‘Buy’.

  1. CCL Products India: This coffee products manufacturer’s stock price fell by 15.1% in the past week despite a 15.1% YoY rise in Q1FY24 net profit to Rs 60.7 crore. Its revenue also increased by 28.6% YoY. The drop in price was likely due to a decline of 551 basis points in EBITDA margins, which now stands at 16.2%. The company also missed Trendlyne’s Forecaster’s net profit estimate by 20%. 

The fall in price can also be attributed to the management's decision to increase the debt guidance to Rs 2,000 crore for FY25, due to rising capex. It plans to expand the capacity to approx 77,000 metric tonnes (MT) by FY25 in Vietnam and India. This includes a 16,500 MT facility in Tirupati and capacity expansion in the Vietnam plant by FY24. 

CCL Products aims to double its market share to 15% and targets substantial volume growth. Speaking about this, Managing Director Praveen Jaipuriar says, “We are looking to end the year at somewhere between 20 to 25% volume growth.” The company also plans to increase outlets in the domestic market by 30-40%. It is also trying to expand its footprint in the United Kingdom by acquiring Lofbergs Group’s six coffee brands. 

IDBI Capital maintains a ‘Buy’ call on CCL Products India due to its aggressive capacity expansion and strong growth visibility. The brokerage expects sales and net profit to grow at a CAGR of 19% and 27%, respectively, over FY24-25. The company also features in a screener for stocks with broker target price or recommendation upgrades in the past month. According to Trendlyne’s Forecaster, it has a consensus recommendation of ‘Buy’ from 10 analysts.

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
21 Jul 2023
Market closes lower, ICICI Securities maintains its ‘Buy’ rating on Finolex Industries

Trendlyne Analysis

Nifty 50 closed at 19,745.00 (-234.2, -1.2%), BSE Sensex closed at 66,684.26 (-887.6, -1.3%) while the broader Nifty 500 closed at 16,904.30 (-138.3, -0.8%). Of the 1,937 stocks traded today, 862 were in the positive territory and 1,014 were negative.

Indian indices extended their losses from the afternoon session and closed in the red, with the Nifty 50 closing at 19,745. The volatility index, Nifty VIX, dropped by 2.9% and closed at 11.4 points. JSW Steel’s net profit surged 2.9x YoY to Rs 2,428 crore in Q1FY24.

Nifty Smallcap 100 closed in the green, while Nifty Midcap 100 closed lower, following the benchmark index. Nifty IT and Nifty FMCG closed sharply lower compared to Thursday’s closing levels. According to Trendlyne’s sector dashboard, healthcare equipment and supplies emerged as the top-performing sector of the day, with a rise of over 2.1%.

Most European indices trade in the green, except for Germany’s DAX trading lower. US indices futures trade higher, indicating a positive start. Tesla shares traded 9.7% lower post results, despite reporting earnings of $0.91 per share, beating the consensus estimates of $0.79

  • Money flow index (MFI) indicates that stocks like Polycab India, Mahindra Holidays & Resorts India, Sterling and Wilson Renewable Energy and Zensar Technologies are in the overbought zone.

  • Can Fin Homes and APL Apollo Tubes touch their 52-week highs of Rs 845.45 and Rs 1,438.80 respectively. The former has risen 11.7% over the past month, while the latter increased by 5%.

  • Glenmark Lifesciences falls despite its profit increasing by 23.4% YoY to Rs 135.5 crore in Q1FY24 due to falling inventory expenses. Its revenue rises by 18.1% YoY. The company appears in a screener of stocks with increasing quarterly revenue.

  • UltraTech Cement is falling despite its Q1FY24 net profit rising by 6.6% YoY to Rs 1,688.5 crore and revenue growing 17% YoY. However, the EBITDA margin declines 320 bps YoY to 17.2% due to rising raw material costs, power & fuel expense and freight costs. The stock shows up in a screener for companies with declining net cash flows.

  • HDFC Life Insurance's Q1FY24 profit rises 15.4% YoY to Rs 415.3 crore and assets under management increase by 19% YoY. Total annualized premium equivalent and value of new business also improve in line with profit. The company features in a screener for stocks with low debt.

  • Hindustan Zinc is falling as its net profit declines by 36.5% YoY to Rs 1,964 crore in Q1FY24. Revenue also plunges by 23% YoY due to lower lead, zinc and silver volumes. Its EBITDA margin contracts 876 bps on account of higher raw material and inventory costs. The company features in a screener of stocks with high increase in promoter pledges.

  • Ashok Leyland rises as its net profit increases by 699.3% YoY to Rs 543.9 crore in Q1FY24. Its revenue also grows by 34.3% YoY on the back of robust growth in the commercial vehicles and financial services segment. The company appears in a screener of stocks with strong momentum.

  • Capital goods stocks like Suzlon Energy, Larsen & Toubro, Sona BLW Precision Forgings andLakshmi Machine Works are rising in trade. The broader sectoral index BSE Capital Goods is also trading in the green.

  • ICICI Securities maintains its ‘Buy’ rating on Finolex Industries and raises the target price to Rs 230 from Rs 210. This implies an upside of 22.3%. The brokerage remains positive about the firm’s prospects, citing demand and margin tailwinds driven by lower raw material prices in the agri and non-agri segments.

  • PVR INOX rises over 4% in trade following the announcement of a 12-screen Superplex in Bangalore. The upcoming theatrical releases are also supporting the rise in share price.

  • JSW Steel rises to its all-time high of Rs 823.4 per share as its net profit surges 2.9x YoY to Rs 2428 crore in Q1FY24. Revenue grows 10.8% YoY on the back of improvement in steel sales. Its EBITDA margin expands by 538 bps YoY, owing to reduced power and fuel expenses. The company features in a screener of stocks where FIIs and FPIs are increasing their shareholdings.

  • Persistent Systems plunges as its net profit falls 9% QoQ to Rs 228.8 crore in Q1FY24. Revenue grows 3% QoQ owing to improvements in the banking, financial services & insurance (BFSI) and software, hi-tech and emerging industries segments. The company appears in a screener of stocks with decreasing net profit and profit margin (QoQ).

  • IT stocks like Infosys, Persistent Systems, Tech Mahindra, HCL Technologies and Coforge are falling in trade. The broader sectoral index, Nifty IT, is also trading in the red.

  • REC plans to sign MoUs worth Rs 2 lakh crore with over 20 renewable energy companies (from both public and private sectors) to support their energy transformation projects, say reports. These projects include renewable energy sources like solar, wind, green hydrogen, decarbonization, and battery storage.

  • Mphasis rises as its net profit increases by 2.4% QoQ to Rs 456.3 crore in Q1FY24. However, its revenue falls by 3.2% QoQ due to a decline in the banking and financial services segment. Its EBITDA margins improve by 50 bps on the back of reduced employee benefit expenses. The company appears in a screener of stocks with growing quarterly net profit.

  • Tanla Platforms is rising as its net profit grows by 12.6% QoQ to Rs 135.4 crore in Q1FY24. Revenue improves by 9.3% QoQ aided by growth in the digital platforms and enterprise communications segments. It features in a screener of stocks with increasing net profit for the past four quarters.

  • Larsen & Toubro touches a new 52-week high today as it wins an order worth more than Rs 7,000 crore from the National High-Speed Corp for the construction of a 135.45 km stretch of Mumbai-Ahmedabad high-speed rail project. It appears in a screener of stocks with strong momentum.

  • A Manimekhalai, MD and CEO of Union Bank of India, says the bank targets to maintain its credit costs at 1% or lower, and net interest margins at 3%. She highlights that it has delivered a strong performance in Q1FY24, with advances and deposits surpassing the guidance.

  • Dolly Khanna buys a 0.3% stake in Monte Carlo Fashions in Q1FY24. She now holds a 2.4% stake in the company.

  • Shares of Utkarsh Small Finance Bank debut on the bourses at a 60% premium to the issue price of Rs 25. The Rs 500 crore IPO has received bids for 101.9 times the total shares on offer.

  • Sunil Singhania cuts stake in Tracxn Technologies to below 1% in Q1FY24, as compared to 1.3% held in Q4FY23.

  • Nomura maintains its 'Buy' rating on Coforge with a target price of Rs 5,300. The brokerage says that the company has reported healthy Q1FY24 earnings with robust revenue growth due to strong order booking. It expects AI to drive revenue in the medium term. Meanwhile, Motilal Oswal reiterates its 'Neutral' stance, stating that the strong earnings are already factored into the stock price.

  • Mohnish Pabrai buys a 0.6% stake in Edelweiss Financial Services in Q1FY24. He now holds a 7.6% stake in the company.

  • Jindal Stainless is rising as it acquires a 74% stake in Jindal United Steel (JUSL) for Rs 958 crore. Earlier, Jindal Stainless held a 26% stake in JUSL, making it now a 100% owned subsidiary. Abhyuday Jindal, MD of Jindal Stainless, says, “This acquisition would result in improved synergies between both the companies and a preferred governance structure, thereby enhancing value for all stakeholders.”

  • Hindustan Unilever’s Q1FY24 net profit rises by 7.3% YoY to Rs 2,554 crore, as raw material costs and inventory expenses fall. Its revenue grows by 6% YoY, driven by robust growth in the home care segment. The stock shows up in a screener for companies with improving cash flows over the past two years.

  • Infosys’ Q1FY24 net profit falls 3% QoQ to Rs 5,945 crore due to rising employee expenses and sub-contractor costs. The firm’s revenue grows 10% QoQ, led by the manufacturing and hi-tech business verticals. The management says the impact is on the back of slow decision-making and low client spending, and revises its FY24 revenue guidance to 1-3.5% from 4-7% in constant currency.

Riding High:

Largecap and midcap gainers today include United Spirits Ltd. (1,039.05, 6.56%), Atul Ltd. (7,014.15, 6.56%) and MphasiS Ltd. (2,330.85, 5.28%).

Downers:

Largecap and midcap losers today include Infosys Ltd. (1,331.60, -8.13%), Persistent Systems Ltd. (4,749.60, -5.83%) and Dalmia Bharat Ltd. (1,920.00, -5.00%).

Volume Rockets

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

Top high volume gainers on BSE included Tanla Platforms Ltd. (1,266.10, 13.32%), IndiaMART InterMESH Ltd. (3,151.00, 8.64%) and Rites Ltd. (454.70, 7.19%).

Top high volume losers on BSE were Infosys Ltd. (1,331.60, -8.13%), Dalmia Bharat Ltd. (1,920.00, -5.00%) and Hindustan Unilever Ltd. (2,604.00, -3.67%).

Atul Ltd. (7,014.15, 6.56%) was trading at 19.8 times of weekly average. General Insurance Corporation of India (194.15, 3.66%) and Indian Railway Finance Corporation Ltd. (34.95, 5.11%) were trading with volumes 10.6 and 7.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Ashok Leyland Ltd. (181.85, 3.50%), Aurobindo Pharma Ltd. (779.55, 0.90%) and Bharat Heavy Electricals Ltd. (94.50, -1.31%).

Stock making new 52 weeks lows included - Atul Ltd. (7,014.15, 6.56%).

4 stocks climbed above their 200 day SMA including MMTC Ltd. (34.15, 3.02%) and Trident Ltd. (33.25, 1.37%). 5 stocks slipped below their 200 SMA including Infosys Ltd. (1,331.60, -8.13%) and TTK Prestige Ltd. (784.35, -1.82%).