My Newsfeed

logo
The Baseline
17 May 2023, 11:36PM
Good things come in small packages: 7 smallcap stars | Screener of recently upgraded stocks
By Deeksha Janiani

There' was a lot of optimism around global growth at the beginning of 2023. China was reopening post Covid, inflation was slowing in the EU and US. India's rise was also being noticed by many analysts - "India is on the move", the writer Noah Smith declared.

But it's May now, and some of that early cheer has wilted in the heat. Germany, Europe's growth engine, is slowing down, China's reopening bump has faded, and Nomura in its recent report said that India is also affected. “India is on the cusp of a macro change," Nomura wrote, "moving from a 'high growth, high inflation' regime to a 'low growth, low inflation' one.”

India's retail inflation dropped to 4.7% in April (good), but industrial output stayed flat in March (not so good).  

Financial organisations now forecast India’s GDP growth rate falling to 6% on average in FY24. They aren’t as optimistic as the RBI, which raised its growth forecasts slightly in April.  

Signs of a slowdown are also visible in the Q4 results. According to India Inc’s Q4 results so far, net profit growth has fallen to single digits due to weaker sales growth, higher interest costs, and depreciation. On the positive side, industries like cement, paints and auto have seen margins improve as their input costs declined. 

Even with growth decelerating, some companies have achieved industry-beating performance in Q4 and are confident of their prospects in the year ahead. 

In this week’s Analyticks:

  • Smallcap stars: Industry outperformers which are forecasting good growth in FY24
  • Screener: Stocks which saw recent broker target price or recommendation upgrades

Let’s get into it.

When good things come in small packages: Seven smallcap stocks that are beating their industries

Size isn't everything. Tendulkar was the 'Little Master' of cricket for decades - his height was probably the only area where he underperformed compared to the other cricketers.

Some companies in the smallcap index are similar outperformers. We identify seven stocks from the BSE SmallCap that have beaten their respective industries in terms of both top-line and bottom-line growth in Q4. These companies also have a positive growth outlook for the future.

Syngene International to benefit from global supply chain shifts

Pharma player Syngene International beat consensus net profit estimates by 18% in Q4. Its growth was driven by its strong performance in both research services and contract manufacturing. 

Commenting on the demand environment, Jonathan Hunt, CEO at Syngene, said, “We have seen a weaker funding environment for biotech startups in the US. So they are much more cost conscious and are looking to make sure that the funding they have can go a long way. That’s not a bad thing for Syngene as we are cost-competitive”.

The company’s management has guided for a 17%-19% growth in FY24 revenue (dollar terms). However, net profit growth may be lower due to a change in the tax rate. But analysts expect Syngene’s profits to rise by over 25% in rupee terms. 

KPIT Technologies to gain from changing auto priorities in FY24

This tech player, which serves the auto space, outperformed the industry’s net profit growth by more than 30 percentage points in Q4. KPIT Tech’s strong performance in both top line and bottom line, with  over 35% growth, was driven by the European markets. 

Going forward, the company’s management is confident of clocking 27%-30% revenue growth (in dollar terms) in FY24. Its focus remains on getting more business from existing clients. 

With auto OEMs working to reduce the number of electronic control units in vehicles, KPIT sees a big opportunity. It expects OEMs to spend $40 billion annually over the next 5-7 years to build centralized software architecture.  

Market share gains, capacity additions to boost Blue Star’s growth

Blue Star surpassed its industry’s revenue and net profit growth by over 15 percentage points (excluding extraordinary gains) in Q4. Its growth was driven by its unitary products segment, which includes room ACs and commercial refrigerators.

The company sees the room AC market growing at a CAGR of 20% in the next three years, as summers keep getting hotter. Its own business will grow even faster aided by market share gains. To capture a higher share, Blue Star plans to spend Rs 500-600 crore in capex in the next two years. 

Analysts are optimistic about the company and expect it to clock bottom-line growth of over 40% in FY24, backed by healthy sales and margin improvement. 

Craftsman Automation set to see growth in all segments in FY24

Craftsman outperformed the auto parts industry’s net profit growth by over 90 percentage points in Q4FY23. This was partly due to the acquisition of DR Axion India in the quarter. 

Going forward, the company sees all its segments - powertrain, aluminum die-casting, and industrial engineering - growing by at least 20% in FY24. The demand for off-highway commercial vehicles and trucks is expected to be the driver for its powertrain business. 

Analysts predict over 40% top-line and bottom-line growth in FY24. Their estimates are high as they see DR Axion contributing an additional 20-25% to its revenues. 

Glenmark Life set for a turnaround in FY24

Glenmark Life delivered an impressive earnings performance in Q4. It beat analyst estimates on net profit growth by 35%. However, the API maker posted lackluster growth in FY23, due to inventory rationalization undertaken by its parent company, and contract manufacturing clients.

During a recent earnings call, Yasir Rawjee, Managing Director at Glenmark Life, commented, “Glenmark Pharma was in inventory tightening mode. But they have finished that. So, we began to see very good demand from them in Q4, which will be sustainable.” 

The company’s management has guided for 12%-14% top-line growth in FY24 and plans to double its reactor capacity by FY26. Analysts' growth expectations are similar. 

Newgen focuses on larger deal wins 

Newgen Software beat the IT industry’s net profit growth by over 35 percentage points in Q4. It also delivered a double-digit earnings surprise. Its growth was driven by the India and Middle East markets.

The company is now focussing on winning more business from existing clients and pulling in larger accounts. Commenting on the latter strategy, Virender Jeet, CEO at Newgen, said, “Initially in the US, we focused on banks which were sized from $1 billion and up to $20 billion. We have now started focusing on banks which are at least $10 billion”.

Newgen has set a minimum revenue growth target of 20% in FY24. However, analysts are slightly conservative here. 

Stylam Industries announces new capex plans

This laminates maker outperformed its industry’s net profit growth by over 50 percentage points in Q4. Growth was fueled by a jump in exports and healthy growth in the domestic markets.

Stylam is planning a greenfield expansion involving an outlay of Rs 150 crore in FY24. This has a sales potential of Rs 500 crore. Including Stylam’s ongoing brownfield expansion, its overall capex spends will be around Rs 170-176 crore. 

Going forward, the company sees a resilient export market and expects strong demand from new home construction in the domestic market. Analysts expect the company’s bottom line to rise over 25% in FY24. 

Screener: Stocks which saw recent broker target price or recommendation upgrades 

This screener shows stocks which have received broker upgrades for target price and recommendationin the past month, while also boasting a high analyst rating.

Stocks from the banking, NBFC, hotels, gems & jewellery and personal products industries feature in the screener. Major stocks in the screener are Cholamandalam Finance, ICICI Bank, Titan, Indian Hotels and SRF.

Chola Finance stands out with seven target price upgrades from brokers over the past month. These upgrades were driven by the company’s impressive growth in Q4 and improving asset quality. With an average broker rating of 4.6, it leans towards a ‘Strong Buy’ consensus.

ICICI Bank has received six target price upgrades from brokers in the past month. This comes as a result of its strong growth in Q4 net profit and continued investments in its digital capabilities. The stock has an average broker target price upside of nearly 20%.

Titan has six target price upgrades and one recommendation upgrade from brokers in the past month. Brokers remain positive on the stock following the Q4 results, citing strong demand trends in jewellery and scalability in wearables, eyewear and Taneira. 

You can find some popular screenershere.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
17 May 2023, 03:45PM
Market closes lower, Devyani International's Q4 net profit falls 20.5% YoY to Rs 60.7 crore

Trendlyne Analysis

Nifty 50 closed at 18,181.75 (-104.8, -0.6%), BSE Sensex closed at 61,560.64 (-371.8, -0.6%) while the broader Nifty 500 closed at 15,426.35 (-66.1, -0.4%). Of the 1,950 stocks traded today, 887 were on the uptick, and 993 were down.

Indian indices closed in the red, with the benchmark Nifty 50 index closing below the 18,200 mark. Devyani International fell over 4.1% after its Q4 net profit declined by 20.5% YoY to Rs 60.7 crore due to rising raw material costs and employee expenses.

Nifty Smallcap 100 closed in the green, despite the benchmark index closing in the red. Nifty Auto and Nifty FMCG closed around their Tuesday closing levels. According to Trendlyne’s sector dashboard, fertilizers was the top-performing sector of the day.

European indices traded in the red as investors awaited the release of the eurozone inflation data for April. Major Asian indices closed in the red except for Japan’s Nikkei 225 and Taiwan’s TSEC 50, which closed higher. Brent crude oil futures traded higher after falling over 1.1% on Tuesday.

  • Dabur India beats Marico in YoY revenue growth, MF holdings, price-to-book ratio and broker average rating. But it lags in YoY net profit growth, PE ratio, FII holdings and one-year price change.

  • Eris Lifesciences Q4FY23 net profit falls 23.1% YoY to Rs 61.5 crore while its revenue rises 28.6%. The dip in profit is due to the increase in employee benefits and depreciation, and amortisation expenses. The company features in a screener for stocks with low debts.

  • Forest materials, transportation and realty sectors rise by more than 13% over the past 90 days.

  • CCL Products India and Cera Sanitaryware touch their all-time highs of Rs 627 and Rs 7,494.7 per share respectively. The former has risen 8.4% over the past month, while the latter gained 13.7%.

  • Abhay Soi, Chairman and Managing Director of Max Healthcare, anticipates an increase in EBITDA margin in FY24 due to capacity addition. The firm plans to add 2,900 beds in the next four years, with an estimated capex of Rs 4,500 crore.

  • Jubilant Foodworks rises despite Q4FY23 net profit falling 70.3% YoY to Rs 28.5 crore, as revenue grows 8.5% YoY. The company has opened 61 new stores in India. It appears in a screener for stocks with consecutive revenue growth for three quarters.

  • Sterlite Technologies surges as its Q4FY23 net profit turns positive at Rs 65 crore, compared to a net loss of Rs 22.4 crore in Q4FY22. Revenue rises 25.1% YoY, driven by strong growth in the optical networking business. The stock appears in screener for companies with no promoter pledges.

  • Devyani International is falling as its Q4FY23 net profit declines by 20.5% YoY to Rs 60.7 crore on the back of rising raw material costs, employee expenses and other expenses. However, its revenue grows by 27.8% YoY driven by robust store additions and healthy demand.

  • Paradeep Phosphates falls as its net profit declines 72% YoY to Rs 10 crore in Q4FY23. EBITDA margin contracts 240 bps YoY to 2.4% due to higher expenses in raw materials, finance, and employee benefits. However, revenue grows 91.9% YoY.

  • Amber Enterprises India surges as its Q4FY23 net profit jumps 81.7% YoY to Rs 104 crore, driven by a 55.3% YoY increase in revenue. The company features in a screener for stocks with improving book value per share over the past two years.

  • Media stocks like PVR INOX, TV18 Broadcast, Dish TV India, Zee Entertainment Enterprises and New Delhi Television are falling in trade. The broader sectoral index Nifty Media is also trading in the red.

  • Rail Vikas Nigam secures an order worth Rs 81.2 crore for automatic block signalling system installation in the Balharshah-Makudi section of the Secunderabad division. The stock shows up in a screener for companies with improving net cash flows over the past two years.

  • Indian rupee depreciates 10 paise to Rs 82.35 per US dollar in early trade today on the back of a negative trend in the equities market.

  • CreditAccess Grameen touches its 52-week high of Rs 204.3 as its net profit expands 86.4% YoY to Rs 296.5 crore in Q4FY23. Interest income grows by 32.4% YoY on the back of an improving loan portfolio. The lender's asset quality improves as gross and net NPAs decline by 240 bps YoY and 86 bps YoY respectively. It features in a screener of stocks which have gained more than 20% over the past month.

  • KRChoksey upgrades its rating on Cipla to ‘Buy’ from ‘Accumulate’ but lowers its target price to Rs 1,167 from Rs 1,289. The brokerage cites a strong product portfolio, and focus on domestic market and US generics as drivers for future profitability. It expects the firm’s net profit to grow at a CAGR of 15.2% over FY23-25.

  • Man Industries (India) receives new orders worth around Rs 500 crore. The total order book to be executed in the next six to eight months stands at approximately Rs 2,300 crore.

  • The National Company Law Tribunal defers the hearing on the SpiceJet-Lessor case to May 25 and asks both parties to resolve the issue. However, the lessor claims that SpiceJet's proposed offer is unacceptable.

  • Realty stocks like Oberoi Realty, Prestige Estates Projects, Macrotech Developers and DLF are falling in trade. The broader sectoral index Nifty Realty is also trading in the red.

  • Adani Ports & Special Economic Zone handles 120.51 million metric tonnes of cargo in FY23, marking a 22.2% YoY increase. The company generates Rs 14,000 crore in revenue from rail cargo for Indian Railways during the same period.

  • Suzlon Energy is rising as it secures an order to supply 33 wind turbine generators for a 99 MW wind power project. The project is expected to be commissioned by FY25. The stock shows up in a screener for companies with high TTM EPS growth.

  • Amit Mahajan, Director of Paras Defence & Space Technologies, says that the fall in EBITDA is due to high raw material costs. The company's order book stands at Rs 550 crore. He adds that the revenue is expected to grow by 40% in FY24.

  • Redington is falling as Q4FY23 net profit drops 10.9% YoY to Rs 310.10 crore despite a 26.4% YoY rise in revenue. The decline in profit is attributed to increased purchase of traded goods. The board recommends a dividend of Rs 7.20 per equity share for FY23. The company appears in the screener for stocks with consistently high returns over the past five years.

  • Jindal Steel & Power is falling as its net profit declines 69.4% YoY to Rs 462.6 crore in Q4FY23 on the back of lower steel prices and higher raw material costs. Revenue also drops by 2% YoY to Rs 15,792.4 crore. The company shows up in a screener of stocks where mutual funds have decreased their shareholding in the past quarter.

  • Oberoi Realty is falling despite its Q4FY23 net profit jumping 106.7% YoY to Rs 480.3 crore and revenue growing by 16.8% YoY on the back of robust retail demand. Vikas Oberoi, Chairman & MD of Oberoi Realty, says, “Demand for housing has continued to grow, driven by the aspiration of continued home ownership by end users. Industry consolidation has led to incremental market share gains for organised players.”

  • Bharti Airtel’s Q4FY23 net profit rises 49.7% YoY to Rs 3,005.6 crore aided by lower spectrum charges and tax expenses. Its EBITDA margin expands by 144 bps YoY. The company’s revenue grows by 14.3% YoY as its average revenue per user and 4G customers increases on a YoY basis. The stock shows up in a screener for companies with revenues increasing sequentially over the past eight quarters.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (56.65, 6.29%), Endurance Technologies Ltd. (1,434.90, 3.57%) and Jubilant Foodworks Ltd. (481.10, 3.09%).

Downers:

Largecap and midcap losers today include Oberoi Realty Ltd. (914.90, -6.18%), LIC Housing Finance Ltd. (370.45, -6.14%) and Jindal Steel & Power Ltd. (532.10, -5.05%).

Movers and Shakers

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

Top high volume gainers on BSE included Amber Enterprises India Ltd. (2,171.85, 15.39%), Tanla Platforms Ltd. (748.30, 11.80%) and CreditAccess Grameen Ltd. (1,171.50, 7.88%).

Top high volume losers on BSE were Oberoi Realty Ltd. (914.90, -6.18%), LIC Housing Finance Ltd. (370.45, -6.14%) and Jindal Steel & Power Ltd. (532.10, -5.05%).

Sterlite Technologies Ltd. (164.65, -0.15%) was trading at 14.9 times of weekly average. IDBI Bank Ltd. (56.65, 6.29%) and Exide Industries Ltd. (205.45, 5.49%) were trading with volumes 8.5 and 8.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

19 stocks took off, crossing 52-week highs, while 4 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - CCL Products India Ltd. (607.55, 2.56%), Cera Sanitaryware Ltd. (7,330.00, -1.46%) and Cyient Ltd. (1,287.25, 4.64%).

Stocks making new 52 weeks lows included - Ipca Laboratories Ltd. (683.90, -0.98%) and PVR INOX Ltd. (1,366.60, -4.78%).

17 stocks climbed above their 200 day SMA including Amber Enterprises India Ltd. (2,171.85, 15.39%) and Tanla Platforms Ltd. (748.30, 11.80%). 13 stocks slipped below their 200 SMA including LIC Housing Finance Ltd. (370.45, -6.14%) and Devyani International Ltd. (174.30, -4.15%).

 
logo
The Baseline created a screener test
16 May 2023, 05:44PM
 
Trendlyne Marketwatch
Trendlyne Marketwatch
16 May 2023, 03:46PM
Market closes lower, Indian Oil Corp's Q4 net profit rises 54.8% YoY to Rs 10,289.8 crore

Trendlyne Analysis

Nifty 50 closed at 18,286.50 (-112.4, -0.6%) , BSE Sensex closed at 61,932.47 (-413.2, -0.7%) while the broader Nifty 500 closed at 15,492.40 (-57.3, -0.4%). Of the 1,954 stocks traded today, 934 were on the uptick, and 959 were down.

Indian indices pare gains and closed in the red, with the Nifty 50 falling below the key 18,300 mark. The volatility index, Nifty VIX rises above 13 at the close. Shapoorji Pallonji group looks to raise USD 1.6 billion by pledging Tata Sons shares.

Nifty Smallcap 100 closed flat, while Nifty Midcap 100 closed in the green, despite the benchmark index closing lower. Nifty PSU Bank closed higher than Monday’s closing levels. Nifty IT closed higher, tailing the tech-heavy Nasdaq 100 closing in the green on Monday. According to Trendlyne’s sector dashboard, coal was the top-performing sector of the day as it rose over 1.25%.

Most European indices traded flat except for Switzerland’s Swiss Market Index, which traded in the red. On Monday US indices closed marginally higher as investors remain wary of the ongoing US debt ceiling negotiations. Only a fortnight remains before the US government could default.

  • LIC Housing Finance sees a long buildup in its May 25 future series as its open interest rises 19.5% with a put-call ratio of 0.8.

  • According to reports, Nomura upgrades its rating to ‘Buy’ from ‘Reduce’ and raises the target price on Indian oil marketing companies such as Hindustan Petroleum Corp, Bharat Petroleum Corp and Indian Oil Corp. The brokerage attributes lower crude prices, improving margins and rising global oil demand for its optimistic outlook.

  • Granules India is falling despite its net profit rising 7.8% YoY to Rs 119.6 crore in Q4FY23. Revenue improves by 16.1% YoY to Rs 1,195.5 crore. The company shows up in a screener of stocks in the PE buy zone.

  • Max Healthcare Institute is falling despite its net profit jumping 102.8% YoY to Rs 250.9 crore and revenue rising 29.6% YoY. Its EBITDA margin expands by 340 bps YoY to 28.2% YoY. The stock shows up in a screener for companies with improving cash flows from operations over the past two years.

  • Keshav Bhajanka, Executive Director at Century Plyboards (India), says the company targets double-digit revenue growth for the plywood business in FY24. He adds that the margin guidance for the plywood business is 13-15%.

  • Indian Oil Corp touches its 52-week high of Rs 87.7 per share as net profit rises 54.8% YoY to Rs 10,289.8 crore in Q4FY23. Revenue rises 10.4% YoY supported by growth in petroleum products and other business activities. It features in a screener of top Indian exporters among listed companies.

  • Bank of Baroda is rising as its net profit improves by 168.5% YoY to Rs 4,775.3 crore in Q4FY23. Revenue grows by 42.3% YoY on the back of increased interest earned in the treasury, retail and wholesale banking segments. The bank's asset quality improves as gross and net NPAs decline by 282 bps YoY and 83 bps YoY respectively.

  • Axis Direct upgrades its rating on Relaxo Footwear to ‘Buy’ from ‘Hold’ and increases the target price to Rs 980 from Rs 850. This implies an upside of 11.5%. The brokerage turns positive about the company’s prospects on the back of improving demand environment, stable raw material prices, market share gains and increasing production capacity.

  • Britannia Industries' annual return on equity (RoE) stands at 65.7% in FY23, rises 36.2 percentage points over the past five years.

  • B Ramesh Babu, Managing Director and CEO of Karur Vysya Bank, expects a loan growth of over 14% in FY24. He says the bank plans to maintain its corporate book at around 21%.

  • Housing Development Finance Corp is trading below its third support or S3 level.

  • Procter & Gamble Health is rising as its net profit grows by 15.7% YoY to Rs 59.2 crore in Q4FY23. Revenue rises 19.8% YoY on the back of healthy growth in sales. However, EBITDA margin declines by 86 bps YoY due to the rise in employee benefits and other expenses. It shows up in a screener of stocks with increasing revenue every quarter for the past four quarters.

  • Thermax, SKF India and Honeywell Automation are rising ahead of their Q4FY23 results tomorrow.

  • Astral is rising as its Q4FY23 net profit increases 45.5% YoY to Rs 205.7 crore, aided by a 7.1% YoY fall in raw material costs. Its revenue grows by 8.3% YoY, driven by healthy growth in its plumbing and paints segments.

  • Centre removes the windfall tax on locally produced crude oil from the earlier Rs 4,100 per tonne, while it remains nil on petrol, diesel and aviation turbine fuel (ATF).

  • President of India, promoter of ITI, acquires a 1.2% stake in the company on Thursday, now holds 90.3%.

  • Goldman Sachs sells its stakes in Devyani International, Affle (India) and Varun Beverages through block deals on Monday. The transactions amount to Rs 73.7 crore.

  • Jefferies maintains its ‘Buy’ rating on Polycab India with a target price of Rs 4,290. The brokerage says there has been strong B2B demand on the back of private capex and government measures.

  • Cipla inks an agreement to sell its entire stake of 51% in Saba Investment to Shibam Group Holding for $6.5 million.

  • Aether Mauritius, True North Fund and Orange Clove Investments collectively sell a 5.3% stake in Home First Finance, amounting to Rs 330.16 crore. Societe Generale and Norges Bank of Account have acquired the shares.

  • Samir Dhir, Managing Director and CEO of Sonata Software, says that the company's revenue growth has been 4.5% in Q4FY23 and is expected to improve in FY24. He adds that the company targets to achieve a margin of around 20% by FY26.

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

  • Coromandel International is rising despite its Q4FY23 net profit declining 15% YoY to Rs 246.6 crore on the back of rising cost of raw materials. However, its revenue grows by 29.6% YoY to Rs 5,475.8 crore. The stock shows up in a screener for stocks with no debt.

  • Berger Paints is trading flat as its net profit falls 15.5% YoY to Rs 186 crore in Q4FY23 due to a 13.7% increase in expenses. Operating margin declines 221 bps YoY to 11.14%. However, input costs marginally decrease by 1% in Q4, while revenue grows 12%. It shows up in a screener of stocks with declining profits in the past three quarters.

  • Pfizer is rising as it reports a 3% YoY increase in net profit to Rs 129.6 crore and a 4% growth in revenue. The board has recommended a final dividend of Rs 35 per share and a special dividend of Rs 5 per share due to business expansion at the Thane plant. The stock is trading above its first resistance or R1 level.

  • PVR INOX’s net loss widens to Rs 333.4 crore in Q4FY23 as compared to Rs 105.5 crore in Q4FY22 due to a sharp increase in movie exhibition costs, employee costs and other expenses. On the other hand, revenue jumps by 112.8% YoY as the movie exhibition segment surges by more than 2X YoY. The stock shows up in a screener for companies with high-interest payments compared to earnings.

Riding High:

Largecap and midcap gainers today include Astral Ltd. (1,686.50, 5.69%), PB Fintech Ltd. (627.50, 4.70%) and Aurobindo Pharma Ltd. (641.45, 4.53%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (738.60, -5.00%), Adani Transmission Ltd. (812.10, -3.39%) and Berger Paints (India) Ltd. (612.10, -2.72%).

Volume Shockers

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

Top high volume gainers on BSE included Mishra Dhatu Nigam Ltd. (225.60, 9.33%), Sonata Software Ltd. (954.25, 7.81%) and Mazagon Dock Shipbuilders Ltd. (809.45, 7.42%).

Top high volume losers on BSE were Jubilant Ingrevia Ltd. (396.40, -5.88%), J B Chemicals & Pharmaceuticals Ltd. (1,999.80, -2.32%) and PVR INOX Ltd. (1,435.15, -2.04%).

Garware Technical Fibres Ltd. (2,976.75, 0.39%) was trading at 22.5 times of weekly average. Astral Ltd. (1,686.50, 5.69%) and Trident Ltd. (35.20, 7.32%) were trading with volumes 12.2 and 11.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

28 stocks overperformed with 52 week highs, while 2 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,464.50, -0.59%), Aurobindo Pharma Ltd. (641.45, 4.53%) and Cera Sanitaryware Ltd. (7,438.95, 3.98%).

Stocks making new 52 weeks lows included - PVR INOX Ltd. (1,435.15, -2.04%) and Sumitomo Chemical India Ltd. (388.75, -0.47%).

26 stocks climbed above their 200 day SMA including Mishra Dhatu Nigam Ltd. (225.60, 9.33%) and Trident Ltd. (35.20, 7.32%). 9 stocks slipped below their 200 SMA including Jubilant Pharmova Ltd. (336.30, -3.68%) and Reliance Industries Ltd. (2,453.80, -1.42%).

 
logo
The Baseline
16 May 2023, 02:46PM
Five analyst picks trading in the PE Buy Zone post Q4 results
By Suhas Reddy

This week, we take a look at five analyst picks trading in the PE Buy Zone (a stock is in the PE Buy Zone if it is trading at a PE lower than its historical PE average). These stock picks also have PE TTM lower than their respective industry, as well as revenue and profit growth of more than 10% YoY.

  1. Chalet Hotels: IDBI Capital maintains its ‘Buy’ rating on this hotel chain with a target price of Rs 457, implying an upside of 9.2%. The company is trading in the PE Buy zone and its current PE TTM is lower than the hotel industry’s PE average. Over the past year the company has gained 45.5%. 

In Q4FY23, Chalet posted a net profit of Rs 39.3 crore, an improvement compared to a loss of Rs 11.6 crore in Q4FY22. Its revenue has also jumped 128.3% YoY.  

Analyst Archana Gude states that the firm beat her estimates on various key parameters and “the company continued its robust operational performance in Q4FY23 as well, which resulted in highest-ever quarterly net sales and best ever margins”. The analyst believes that the company’s foray into the leisure segment by acquiring Dukes Retreat, Lonalvla, is encouraging, as it will add inventory, particularly in an industry facing rising demand and supply shortages.

The analyst believes that the hotel is well-placed to benefit from the growing demand for corporate travel in the near  term. She anticipates the company’s revenue to grow at a CAGR of 21.5% over FY23-25. 

  1. Equitas Small Finance Bank: ICICI Securities keeps its ‘Buy’ rating on this bank and increases its target price to Rs 100 from Rs 70. This implies an upside of 27.1%. The stock is trading in the PE Buy zone, and its current PE TTM is lower than the banking industry’s average. Over the past year the stock rose by 44.2%.

    In Q4FY23, the bank’s net profit rose 59% YoY to Rs 190 crore and revenue grew by 29%. Analysts Renish Bhuva, Jai Prakash Mundhra and Chintan Shah attribute the bank's profitability growth to a sustained rise in advances, stable NIMs, and a decline in the cost/income ratio. They believe that continued investments towards building capabilities and new product launches have aided growth momentum. They add, “Disbursements in its newly launched products (e.g. affordable housing,  used car financing, etc) continue to gain momentum”.

    Bhuva, Mundhra and Shah highlight that the bank’s asset quality has improved on the back of slippages moderating sharply in Q4. They are also optimistic about the bank’s ability to maintain its credit cost within its guided range of 1.2%-1.25% in FY24. The analysts expect the bank’s net profit to grow at a CAGR of 42.1% over FY23-25.  

  2. Craftsman Automation: Motilal Oswal reiterates its ‘Buy’ call on this auto parts manufacturer with a target price of Rs 3,950, indicating an upside of 12.8%. The company is currently trading in the PE Buy Zone, and its PE TTM is lower than the auto parts and equipment industry’s average. Its price changed by 59.9% in the past year.

    In Q4FY23, Craftsman Automation’s profit grew by 50.9% YoY to Rs 77.7 crore, and revenue increased 49.1% YoY. According to analysts Jinesh Gandhi, Amber Shukla and Aniket Desai, the company’s growth has been driven by the auto powertrain, Al products and Industrials & storage segments.

The analysts say, “Craftsman’s track record of creating and gaining market leadership organically is uncommon in the auto component industry.” They believe that this has enabled it to deliver a good balance of strong growth and superior capital efficiency. The analysts expect growth in the aluminum division and industrials to drive overall growth in FY24/25. They estimate consolidated revenue and profit CAGR of 27% and 37%, respectively, for FY24-25.

  1. Mahanagar Gas: ICICI Direct maintains its ‘Buy’ call on this utilities provider with a target price of Rs 1,300, indicating an upside of 22.5%. The company is currently trading in its PE Buy Zone, and its PE TTM is lower than the non-electrical utilities industry average. Its price rose by 44.5% in the past year.

    In Q4FY23, Mahanagar Gas’s net profit increased by 103.9% YoY to Rs 268.8 crore and its revenue grew by 35.8% YoY to Rs 1,644.1 crore (in line with the brokerage’s estimate). 

Harshal Mehta and Payal Shah note that the company has passed on the benefits of revised APM gas prices to its customers  while still maintaining profitability. In Q1FY24, spot LNG prices have further softened. Owing to these reasons the analysts say, “growth in sales volume will be a key factor to monitor, going ahead.” 

Mehta and Shah remain positive as they believe Mahanagar Gas will benefit from India’s aim to increase the share of natural gas in the energy mix from 6% to 15% by 2030, and also due to the company’s debt-free balance sheet and consistent dividend payout.

  1. DCB Bank: Axis Securities maintains its 'Buy' rating on this bank with a target price of Rs 140, indicating an upside of 20.5%. The company is currently trading in the PE Buy Zone, and its PE TTM is lower than that of the banking industry. Its price rose by 39.1% in the past year. In Q4FY23, DCB Bank's operating revenue increased by 28.19% YoY to Rs 1,179.28 crore, and its net profit grew by 25.36% YoY to Rs 142.21 crore.

According to analysts Dnyanada Vaidya, Prathamesh Sawant, and Bhavya Shah, DCB Bank will sustain its growth momentum as it looks to double its balance sheet in the next four years. They believe the bank is on track to deliver a 1% RoA and an RoE of 11-13% over the medium term.

The analysts expect advances growth of 18% CAGR over FY24-25 due to strong traction in disbursements with continuous sequential growth. They opine that the stock currently trades at attractive valuations as the bank aims to double its balance sheet to Rs 1 trillion in four years.

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

(You can find all analyst picks here)

 
logo
The Baseline
15 May 2023
By Abdullah Shah

Foreign portfolio investors (FPIs) have been net buyers in the Indian equity market in April, the second consecutive month in 2023 after selling equities earlier in the year due to the Adani-Hindenburg debacle.

FPIs started buying Indian equities in November 2022, as they turned optimistic with falling inflation and slowing rate hikes. We take a look at the sectors that have attracted them to the market over the past twelve months.

In April 2022, the market saw a sell-off of Rs 17,141 crore from FPIs, on the back of rising interest rates and inflation. The financial services and IT sectors had the highest outflows of Rs 12,891 crore and Rs 8,579 crore respectively. However, FPIs invested Rs 5,231 and Rs 1,756 crore in the healthcare and FMCG sectors respectively, indicating that they shifted towards a defensive play due to fears of an economic downturn. 

June 2022 saw a massive selling spree that resulted in Rs 50,203 crore being wiped out from the market. All major sectors witnessed an outflow with the financial services and IT sectors experiencing the largest outflows. 

However, FPIs became net buyers of equities in August 2022, as companies posted strong results for the June quarter. The month saw a net inflow of Rs 51,206 crore, with investments in all sectors. Financial services and healthcare had the largest investments of Rs 12,799 crore and Rs 8,509 crore, respectively, in August.

However, there were two more months of outflows from FPIs in September and October. This trend  reversed in November, as FPIs became net buyers with an inflow of Rs 36,240 crore in equities. Financial services had the highest investment of Rs 14,205 crore that month, while sectors like FMCG, IT, automobile & auto components and consumer services saw a healthy inflow. 

FPIs made these  investments  with the hope that rate hikes would slow down due to falling inflation. This sentiment continued in December 2022, with FPIs net buyers of Rs 11,120 crore in equities.

In contrast FPIs sold equities worth Rs 28,851 crore in January 2023, with Indian markets losing ground to China  as lockdown restrictions there were lifted. The second half of January was marred by the explosive Adani-Hindenburg saga, which further discouraged foreign investors. Financial services and oil, gas & consumable fuels sectors saw the highest outflows of Rs 15,204 crore and Rs 7,596 crore respectively during the month.

In the past year, FPIs have made a net investment of Rs 11,629 crore in the market as inflation and rate hikes  have eased up. Most of the major sectors had a net inflow during the month, with financial services attracting the highest investment and IT experiencing the highest outflow.

 
Trendlyne Marketwatch
Trendlyne Marketwatch
15 May 2023
Market closes higher, DLF's Q4FY23 net profit rises 40.6% YoY to Rs 570 crore

Trendlyne Analysis

Nifty 50 closed at 18,398.85 (84.1, 0.5%), BSE Sensex closed at 62,345.71 (317.8, 0.5%) while the broader Nifty 500 closed at 15,549.70 (72.4, 0.5%). Of the 1,983 stocks traded today, 1,006 were gainers and 902 were losers.

Indian indices closed in the green, with the volatility index, India VIX, rising above 13%. The benchmark Nifty 50 index rose over 80 points but closed just below the 18,400 mark. DLF rose over 7.2% after its Q4 net profit increased by 40.6% YoY to Rs 570 crore due to declining costs of land and finance costs.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, outperforming the benchmark index. Nifty Media and Nifty Bank closed higher than their Friday closing levels. According to Trendlyne’s sector dashboard, realty was the top-performing sector of the day.

European indices traded in the green, in line with the US indices futures. Most major Asian indices closed in the green amid positive global cues. Investors keep an eye on US debt ceiling talks and Turkish election results. Brent crude oil futures traded marginally higher after falling for three consecutive trading sessions.

  • Relative strength index (RSI) indicates that stocks like Siemens, ABB India, Chalet Hotels and Intellect Design Arena are in the overbought zone.

  • Kalyan Jewellers India is falling as its Q4FY23 net profit declines 3.1% YoY to Rs 70.1 crore due to a loss of Rs 33.3 crore arising from the disposal of non-core assets. However, its revenue rises by 18.4% YoY, driven by healthy demand in India and the middle east. The stock shows up in a screener for companies with book value per share improving over the past two years.

  • Century Plyboards is rising as its net profit increases by 29.5% YoY to Rs 114.6 crore in Q4FY23. The company's revenue also grows by 7.1% YoY, driven by the plywood and container freight station services sectors. It features in a screener of stocks with high volume and gain.

  • Zydus Lifesciences, ITC and Krishna Institute of Medical Sciences’ weekly average delivery volumes rise ahead of their Q4FY23 results on Thursday.

  • Sumitomo Chemical India and PVR INOX touch their 52-week lows of Rs 388.9 and Rs 1,416.3 per share respectively. The former has fallen .2% over the past month, while the latter declined 4.6%.

  • Media stocks like Navneet Education, Network 18 Media & Investments, Sun TV Network, Zee Entertainment Enterprises and PVR INOX are rising in trade. The broader sectoral index Nifty Media is also trading in the green.

  • Naresh Patel, Chairman and Managing Director of Ami Organics, says the company will continue to grow by 20-25%. He also anticipates an improvement in the margin of the pharma business, projecting it to reach 22-25%.

  • Karur Vysya Bank rises as its Q4FY23 profit increases 58.3% YoY to Rs 337.8 crore and revenue improves 34.3% YoY. The growth in revenue is primarily driven by the retail banking and treasury segments. The company appears in a screener for stocks with low debt.

  • DLF rises to touch its 52-week high as its Q4FY23 net profit surges 40.6% YoY to Rs 570 crore on the back of declining costs of land, finance costs and other expenses. However, its revenue falls by 5.9% YoY despite robust growth in new sales bookings in Q4. The stock shows up in a screenerfor companies with net profits increasing sequentially over the past four quarters.

  • Hindustan Petroleum Corp is falling despite its net profit growing 78.8% YoY to Rs 3,608.32 crore in Q4FY23. Revenue rises 8.7% YoY while excise duty declines, helping the EBITDA margin to improve by 188 bps YoY. The company shows up in a screener of stocks trading near their 52-week highs with significant volumes.

  • Bank of Baroda, Granules India and Jindal Steel & Power fall 0.7%, 1.2% and 2% respectively over the past week, ahead of their Q4FY23 results tomorrow.

  • IT stocks like Tech Mahindra, Infosys, Coforge, L&T Technology Services and Wipro are rising in trade. All the constituents of the broader sectoral index Nifty IT are also trading in the green.

  • India’s WPI inflation falls to -0.92% in April from 1.34% in March. The decrease is due to a fall in the prices of basic metals, food products, mineral oil and textiles, among others.

  • ICICI Securities downgrades its rating on Hindustan Aeronautics to ‘Add’ from ‘Buy’ but raises the target price to Rs 3,385 from Rs 2,850, implying an upside of 12.1%. The brokerage remains optimistic about the firm’s growth prospects given its robust order book but believes any delay in executing the LCA Tejas Mk1A orders is a key risk, leading to the downgrade in rating.

  • Antony Cherukara, CEO of VST Tillers Tractors, expects the company to grow by 20% in FY24, led by the small farm mechanisation segment. He adds that VST is on track to achieve its revenue target of Rs 3,000 crore by FY26.

  • Data Patterns is falling as its net profit declines 10.2% YoY to Rs 55.4 crore in Q4FY23. However, revenue grows 8.5% YoY on the back of improving order book. The order book for FY23 stands at Rs 900 crore. The company shows up in a screener of stocks with declining net profit and profit margin (YoY).

  • Rail Vikas Nigam is rising as its joint venture with SCC Infrastructure bags an order for the design and construction of high canals to provide irrigation facilities for a land area of 41,903 hectares in Rajasthan. The project is worth Rs 2,248.9 crore.

  • India’s CPI inflation eases to 4.7%% in April, down from 5.66% in March. The fall is due to a decline in food inflation which stands at 3.84%.

  • Great Eastern Shipping Co is rising as its Q4FY23 net profit jumps by 282% YoY to Rs 721.9 crore, while its revenue rises 58.9% YoY on the back of 70.9% growth in the shipping segment. The company shows up in a screener for stocks in the PE Buy zone with a high durability score and rising momentum score.

  • Realty stocks like DLF, Sobha, Mahindra Lifespace Developers and Godrej Properties are rising in trade. The broader sectoral indices Nifty Realty and BSE Realty are also trading in the green.

  • Goldman Sachs maintains ‘Buy’ on Tata Motors with a target price of Rs 600, citing favourable demand from JLR and the domestic EV segment. JLR is expected to report over 6% EBIT margin in FY24.

  • Porinju Veliyath adds Thejo Engineering to his portfolio in Q4FY23, buys a 1.2% stake in the company.

  • Birla Corp’s wholly owned subsidiary acquires limestone mining rights on 889.7 hectares of land in a tripartite agreement with the Madhya Pradesh government and Sanghi Infrastructure. The acquisition cost is Rs 51.5 crore. The stock ranks high on Trendlyne's checklist score.

  • Ashish Kacholia buys a 0.1% stake in Beta Drugs in Q4FY23. He now holds 5.8% in the company.

  • Avenue Supermarts (D-Mart) is falling despite reporting a 7.8% YoY increase in net profit to Rs 460 crore in Q4FY23. Its revenue has increased 21% YoY, led by increased sales in the FMCG and staples segments. Neville Noronha, MD & CEO, says lower consumer spending in general merchandise and apparel has impacted the margin, which fell 110 bps YoY to 7.3% in Q4.

  • Tata Motors is back in the black as it reports a net profit of Rs 5,407.8 crore in Q4FY23 against a net loss of Rs 1,032.8 crore in Q4FY22. According to the management, volumes have improved in India and supplies increased at Jaguar Land Rover. Its revenue has increased 35% YoY on improved average selling prices (ASPs). The company has declared a final dividend of Rs 2 per share subject to shareholders’ approval.

Riding High:

Largecap and midcap gainers today include DLF Ltd. (468.15, 7.39%), Oberoi Realty Ltd. (986.90, 4.87%) and Max Healthcare Institute Ltd. (519.90, 4.01%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (777.45, -5.00%), Adani Transmission Ltd. (840.60, -5.00%) and Avenue Supermarts Ltd. (3,523.40, -4.19%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included Zensar Technologies Ltd. (384.15, 13.15%), Sobha Ltd. (554.05, 11.78%) and Elgi Equipments Ltd. (467.30, 8.70%).

Top high volume losers on BSE were Home First Finance Company India Ltd. (694.20, -4.29%), Avenue Supermarts Ltd. (3,523.40, -4.19%) and Aegis Logistics Ltd. (364.35, -3.52%).

Mahindra Lifespace Developers Ltd. (402.15, 6.71%) was trading at 21.2 times of weekly average. Great Eastern Shipping Company Ltd. (721.50, 6.61%) and Hikal Ltd. (296.65, -0.47%) were trading with volumes 14.5 and 6.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

24 stocks took off, crossing 52-week highs, while 3 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,460.00, -0.42%), Colgate-Palmolive (India) Ltd. (1,673.65, 2.82%) and Cyient Ltd. (1,279.60, 5.84%).

Stocks making new 52 weeks lows included - PVR INOX Ltd. (1,465.05, 1.24%) and Affle (India) Ltd. (921.40, 0.16%).

21 stocks climbed above their 200 day SMA including Elgi Equipments Ltd. (467.30, 8.70%) and Mahindra Lifespace Developers Ltd. (402.15, 6.71%). 9 stocks slipped below their 200 SMA including Edelweiss Financial Services Ltd. (61.20, -5.70%) and Rashtriya Chemicals & Fertilizers Ltd. (105.15, -1.59%).

 
logo
The Baseline
12 May 2023
Five Interesting Stocks Today
  1. Godrej Consumer Products: This FMCG company is trading near its 52-week high of Rs 992.5 after reporting strong Q4 results on Thursday. Godrej Consumer’s net profit has grown 24.5% YoY to Rs 452.1 crore, beating Trendlyne’s Forecaster estimates by 1.8%. Its revenue also increased by 10% YoY, led by a volume growth of 6%. The personal care (which contributes to 58% of total revenue) and home care (39% of total revenue) segments grew by 17% and 14% respectively. 

Commenting on the results, Managing Director and CEO, Sudhir Sitapati, says that the performance is broad-based, with the India-branded business experiencing a 13% increase in volumes.

In International markets, the Africa, USA, and Middle East cluster delivered 8% sales growth, while the Latin American region witnessed a 3% decline. The performance in Nigeria was impacted by the election and demonetisation. 

Post the results, ICICI Securities maintains its ‘Add’ rating and raises the target price to Rs 1,050, implying an upside of 6.9%. The brokerage believes that Godrej Consumer’s margins have improved, led by a moderation in input costs. As a result, the company features in a screener of companies where brokers have upgraded their recommendations or target prices in the past three months.

  1. KEI Industries: This electrical cables and wires manufacturer has risen 10.8% till Friday since announcing its Q4FY23 results on May 2. Its net profit rose 19.1% YoY to Rs 138.1 crore and revenue grew 9.1% YoY in Q4, driven by growth across all its segments. This healthy performance has enabled the stock to show up in a screener for companies with net profits rising sequentially for the past three quarters. According to Trendlyne’s Forecaster, the consensus recommendation from 13 analysts on the company is ‘Buy’. 

The company’s sales volume increased by 13% YoY on the back of lower metal prices, but this also meant selling prices fell in Q4FY23. However, the decline in raw material costs boosted its EBITDA margin by 66 bps YoY to 10.7%. Also, the management’s focus on increasing the contribution of the retail and extra-high voltage segments towards revenue aided margin expansion. 

The management believes that the firm is well-placed to capitalise on the Centre’s infrastructure push, given its capex plans to increase production capacity. Anil Gupta, Chairman and MD of KEI Industries, says, “We'll be spending around Rs 250 crore to Rs 300 crore every year over the next three years to maintain a revenue CAGR of 17% to 18% per annum, as against achieved CAGR of around 15% during the last 15 years.” He adds that the capex requirements will be entirely funded by internal accruals. The management aims to improve EBITDA margins by increasing retail sales, exports, and optimising costs in the coming quarters. 

  1. Shoppers Stop Ltd: Thisretailing firm owned by Raheja group has a pan-India presence with 280 stores in 54 cities, and an online channel that contributes to nearly 33% of its revenue. According to Trendlyne Technicals, its share price has increased 13.5% in the past month. Shoppers Stop has expanded itself in major Tier 1 and Tier 2 cities, which are high-growth areas with major sales in private brand labels. The firm has done Rs 280 crore capex for store expansion and technology, and plans a capex of Rs 150-200 crore for FY24.

In Q4FY23, Shoppers Stop reported its highest-ever revenue and gross margins at Rs 1,175 crore and 43.2% respectively. The increase in the volume mix of private labels has been driving margins, with revenue from the private brand and beauty segments growing 35% and 29% YoY respectively. The firm’s average transaction value (ATV) per customer and average selling price of products (ASP) grew 6% (to Rs 4,086) and 9% YoY (to Rs 1,540), respectively. This has led to growth in the bottom line. The firm increased its Q4FY23 profit by 35% YoY by pruning loss-making stores and optimizing store sizes and its distribution network. 

It expects growth in its beauty segments and categories (loungewear, innerwear, athleisure) by partnering with international brands. The stock shows up in thescreener for stocks that have been efficiently managing their assets to generate profits and improve ROA over the past two years.

HDFC Securities says Shoppers Stop’s aggressive focus on store expansion and assortment management reflects its outperformance in key performance indicators. However, business relevance and longevity remains an open question, as the company directly contends with deep-pocketed e-tailers. The brokerage has maintained a ‘Sell’ rating on the stock on account of higher valuation.

  1. Escorts Kubota: This commercial vehicles manufacturer traded lower on Tuesday and Wednesday but recovered on Thursday. However, the stock closed 0.34% lower on Friday. Its Q4FY23 earnings report showed a 14% YoY increase in consolidated net profit to Rs 216.4 crore. However, the company still faces challenges due to the high cost of materials, with input costs rising 38% YoY in Q4. Despite this, the stock gained 4% in the past week, outperforming the automobiles & auto components sector by nearly 1%.

The company’s domestic wholesales have fallen 5.5% YoY in FY24, according to its recent business update. Its exports fell by more than 50%. Retail sales were also impacted by unseasonal rainfall and crop damage in certain regions. However, the management remains positive about demand revival and expects rural demand to bounce back in Q2FY24, driven by better crop prices. Bharat Madan, CFO of Escorts Kubota, says the company is targeting a 25% growth in exports in FY24, once supply chain issues ease up. 

The management plans to double tractor capacity and invest Rs 350 crore in capex (a 40% YoY increase) in FY24. With the government's continued support for infrastructure projects and strong demand, the company's earnings are expected to improve. The management expects margins to improve further as commodity prices decline. It also forecasts mid-single-digit growth in wholesales in FY24. According to Trendlyne’s consensus recommendation, five analysts maintain a ‘Buy’, seven recommend ‘Hold’, and 10 maintain ‘Sell’ on the stock. 

  1. Dr. Reddy's Laboratories: This pharmaceutical company announced its Q4FY23 results on Wednesday, reporting a significant increase in net profit to Rs 960.1 crore – up nearly 10x YoY. The surge in profit was due to a high base of expenses on the impairment of non-current assets in Q4FY22, when the profit had fallen 82.6% YoY.

The impairment cost of non-current assets decreased from Rs 741 crore in Q4FY22 to Rs 54 crore in Q4FY23. If the charges are adjusted, the profit has risen only 22.3% YoY during Q4FY23. According to the Q4FY22 earnings call, the high impairment charges were partially caused by the decrease in market potential of Tepilamide Fumarate Extended-Release Tablets (PPC-06) valued at Rs 430 crore, and also the impairment of Shreveport plant assets and goodwill of Rs 310 crore. 

Even with the adjustment, the pharma company is still profitable in YoY terms. Its revenue increased 15.3% YoY to Rs 6,453.7 crore. The management attributed the growth to new product launches, though it was partly offset by price erosion. Dr. Reddy's Laboratories features in a screener for stocks that have seen improvement in net profits, operating profit margin and revenues in recent quarters. 

Despite the positive results, the company’s share price fell 8.2% since results, as it did not meet its estimates. According to Trendlyne’s Forecaster estimates, the pharma company missed net profit estimates by 6.3% for Q4FY23.

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
12 May 2023
Market closes flat, HAL's Q4FY23 net profit declines 8.8% YoY to Rs 2,831.2 crore

Trendlyne Analysis

Nifty 50 closed at 18,314.80 (17.8, 0.1%), BSE Sensex closed at 62,027.90 (123.4, 0.2%) while the broader Nifty 500 closed at 15,477.35 (-6.7, 0.0%). Of the 1,944 stocks traded today, 825 showed gains, and 1,043 showed losses.

Indian indices recover from the days low and closed in the green, with Nifty 50 rising above the key 18,300 mark. The volatility index, India VIX dropped below 13 at close. On Thursday, MSCI cut weights of 15 Nifty 50 stocks which might result in USD 1 billion outflow.

Nifty Smallcap 100 and Nifty Midcap 100 closed sharply lower despite the benchmark index closing in the green. Nifty Auto and Nifty Bank closed higher than Thursday’s closing levels. Nifty IT closed lower, despite the tech-heavy Nasdaq 100 closing in the green on Thursday. According to Trendlyne’s sector dashboard, forest materials was the top-performing sector of the day as it rose over 1.5%.

Most European indices traded in the green tailing the US indices futures, which are trading higher than Thursday’s closing levels. On Thursday, the data released by US Labor Department indicated April CPI at 4.9% against an expectation of 5.0%. This raises hopes of the Federal Reserve’s pausing interest rate hikes.

  • Glenmark Pharmaceuticals sees a short buildup in its May 25 future series as its open interest rises 28.4% with a put-call ratio of 1.

  • Vedanta is falling as its net profit plunges 56.9% YoY to Rs 3,132 crore in Q4FY23. Revenue has also dropped by 5.4% due to reduced revenue from its zinc, oil & gas, and aluminium segments. The company features in a screener of stocks where mutual funds have decreased their holding in the past quarter.

  • Cipla is rising as its net profit improves by 45.2% YoY to Rs 525.6 crore in Q4FY23. Revenue also grows 8.5% YoY to Rs 5,665.9 crore on the back of an increase in pharmaceutical sales. The company shows up in a screener of stocks with improving net profit for the past three consecutive quarters.

  • Polycab India and Tata Motors touch their 52-week highs of Rs 3,390 and Rs 520.5 respectively. Polycab has risen 10.2% in the past month, while the other increased by 12.7%.

  • Sapphire Foods India is falling despite a 411% YoY rise in Q4FY23 profit to Rs 135.5 crore while its revenue rises 12.9% YoY. Its profit has been boosted by the reassessment of the recoverability of unrecognised deferred tax assets. The company features in a screener for highly durable stocks with EPS growth.

  • Metal stocks like Jindal Stainless, Hindalco Industries, Hindustan Copper, Vedanta and Jindal Steel & Power are falling in trade. All constituents of the broader sectoral index, Nifty Metal, are also trading in the red.

  • Hindustan Aeronautics is falling as its Q4FY23 net profit declines 8.8% YoY to Rs 2,831.2 crore due to higher input costs and impairment loss. On the other hand, the company’s revenue rises 8.1% YoY to Rs 12,494.7 crore. The stock shows up in a screener for companies with declining net cash flows.

  • Ramesh Kumar Dua, CEO of Relaxo Footwear, expects the company’s volume to grow in double digits in FY24. He adds that it will maintain a margin of 15% moving forward.

  • Marico rises 10.2% over the past week. The company ranks high on Trendlyne’s Checklist, scoring 60.9%. It features in a screener of stocks near their 52-week highs.

  • ICICI Securities downgrades its rating on Indian Hotels Co to ‘Add’ from ‘Buy’ and maintains its target price of Rs 399. This implies an upside of 12%. The brokerage attributes the rating downgrade to the recent run-up in the stock price. However, it remains optimistic about the firm’s prospects given the healthy demand trends.

  • Zee Entertainment is falling in trade following reports that the NSE and BSE may reconsider their approval regarding the Sony-Zee merger. This comes as the market regulator, SEBI, alleges Shirpur Gold Refinery of abusing insolvency law and divesting funds to its promoter entities. Shirpur Gold Refinery is owned by Essel Group, a promoter of Zee Entertainment.

  • Max Healthcare Institute, Eicher Motors and Glenmark Pharmaceuticals are trading above their third resistance or R3 level.

  • The Society of Indian Automobile Manufacturers (SIAM) reports that two-wheeler sales have risen to 13.4 lakh units in April, compared to 12.9 lakh units in March. Passenger vehicle sales stand at 3.3 lakh units.

  • Utilities stocks like Adani Transmission, Power Grid Corp of India, NTPC and Gujarat Industries Power are falling in trade. The broader sectoral index BSE Utilities is also trading in the red.

  • Goldman Sachs sells stakes worth Rs 161.6 core in Cholamandalam Investment & Finance, Jubilant Foodworks, Titan, Varun Beverages, Affle (India) and Devyani International through various block deals on Thursday. The shares have been picked up by Sector Investment Funds through other block deals.

  • Adani Total Gas and Adani Transmission are falling as Morgan Stanley Capital International (MSCI) has removed them from the MSCI India Standard Index in its May 2023 rejig. Due to the removal, an outflow of $201 million for Adani Transmission and $186 million for Adani Total Gas is expected.

  • Ittira Davis, Managing Director of Ujjivan Small Finance Bank, says that the net interest margin (NIM) of the bank is expected to be around 9.1% in H1FY24 and is likely to improve in H2. He expects loan disbursals of around Rs 4,800 crore in Q1FY24.

  • Reports suggest that Maruti Suzuki plans to invest $5.5 billion to double its production capacity to 40 lakh vehicles by 2030. The stock ranks high on Trendlyne checklist score and is trading near its 52-week high. It shows up in a screener of stocks where brokers have upgraded their recommendations in the past three months.

  • South Indian Bank surges as its Q4FY23 profit rises by 22.6% YoY to Rs 333.5 crore, while revenue grows by 26% YoY, mainly driven by the corporate banking and retail banking segments. The company shows up in the screener for stocks with strong annual EPS growth.

  • Goldman Sachs maintains its ‘Neutral’ rating on Dr. Lal Pathlabs with a target price of Rs 1,950. The brokerage says that the company’s EBITDA margin is below its estimates by 29 bps, and adds that the non-Covid revenue has fallen marginally QoQ in Q4FY23.

  • Zensar Technologies is rising despite its Q4FY23 net profit declining by 8.2% YoY to Rs 119.2 crore due to higher employee costs and other expenses. The company’s revenue increases 5.1% YoY, led by the digital and application services segment. The company shows up in a screener for stocks near their 52-week highs and that have significant volumes.

  • NBCC rises as it announces the receipt of orders worth Rs 1,264.8 crore in April. The stock is trading near its 52-week high.

  • Deepak Nitrite falls as its Q4FY23 net profit decreases 12.5% YoY to Rs 233.8 crore on rising expenses of power, fuel and input costs. However, revenue has increased by 4.8%, led by improving revenue across the advanced intermediates and phenolics segment in Q4. The board has declared a final dividend of Rs 7.5 per share for FY23.

  • Siemens touches a 52-week high as its Q4FY23 net profit rises 38.6% YoY to Rs 471.4 crore, despite a 26% YoY increase in expenses. Its revenue grows 28% led by growth across all segments like energy, smart infrastructure, mobility and digital industries. The company has also bagged new orders worth Rs 31,151 crore in Q4.

  • Eicher Motors’ Q4FY23 net profit rises 48.4% YoY to Rs 905.6 crore and revenue grows 19.1% YoY, driven by robust growth across all its business segments. The company’s board of directors has declared a final dividend of Rs 37 per share for FY23 and approved a cash outlay of more than Rs 1,000 crore towards capex for FY24.

Riding High:

Largecap and midcap gainers today include Dr. Lal Pathlabs Ltd. (2,040.90, 7.06%), Eicher Motors Ltd. (3,626.35, 6.49%) and Polycab India Ltd. (3,388.95, 4.75%).

Downers:

Largecap and midcap losers today include Adani Total Gas Ltd. (818.35, -4.29%), Hindalco Industries Ltd. (404.75, -3.83%) and ICICI Prudential Life Insurance Company Ltd. (433.30, -3.71%).

Volume Shockers

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

Top high volume gainers on BSE included Intellect Design Arena Ltd. (531.35, 13.93%), Zensar Technologies Ltd. (339.50, 9.43%) and Dr. Lal Pathlabs Ltd. (2,040.90, 7.06%).

Top high volume losers on BSE were Jindal Stainless Ltd. (277.95, -6.13%), Balrampur Chini Mills Ltd. (386.60, -5.38%) and Adani Total Gas Ltd. (818.35, -4.29%).

Eureka Forbes Ltd. (373.00, -0.75%) was trading at 10.6 times of weekly average. Eicher Motors Ltd. (3,626.35, 6.49%) and Max Healthcare Institute Ltd. (499.85, 3.26%) were trading with volumes 9.2 and 7.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Akzo Nobel India Ltd. (2,470.45, 0.05%), Bajaj Auto Ltd. (4,538.90, -0.20%) and Cera Sanitaryware Ltd. (7,201.10, 5.62%).

Stock making new 52 weeks lows included - Orient Electric Ltd. (218.75, -1.44%).

20 stocks climbed above their 200 day SMA including Intellect Design Arena Ltd. (531.35, 13.93%) and Grindwell Norton Ltd. (2,000.00, 5.25%). 13 stocks slipped below their 200 SMA including Manappuram Finance Ltd. (109.95, -4.81%) and Hindalco Industries Ltd. (404.75, -3.83%).

 
logo
The Baseline created a screener Revenue and Net Profit …
12 May 2023