Trendlyne Talk    
15 Dec 2018, 10:22AM
Does promoter shareholding change make a difference to returns? Two backtest results

The market closely follows promoter movements, and their buying and selling of stocks. Does this make a difference to the performance in share price, at least in the short term?

We ran short-term weekly backtests for two queries: where promoters increased their shareholding QoQ by more than 2%, and where promoters decreased their shareholding QoQ for more than 2%. There does appear to me a difference - in the first case, returns outperformed Nifty since the September shareholding change, and in the second, returns significantly underperformed Nifty since the September shareholding change (weekly backtests, two months). 

We will continue tracking this in December. For all shareholding screeners, click here.

Trendlyne Marketwatch    
14 Dec 2018
The Closer: Markets end day higher, Airtel among top gainers

Markets ended the day modestly higher, capping three days of gains, and breadth is horizontal. Of the 1175 stocks traded today, 526 were on the uptick, and 532 were down. Bharti Airtel was among the top gainers today after TDSAT had yesterday quashed TRAI's order on predatory pricing, which Airtel and Vodafone had alleged was discriminatory to major telecom players. 

Riding High:

Largecap and midcap gainers today include Bandhan Bank Ltd. (534.10 6.46%), Bharti Airtel Ltd. (319.00 5.32%) and Supreme Industries Ltd. (1107.00 5.21%).

Downers:

Largecap and midcap losers today include Torrent Power Ltd. (253.00 -3.21%), Aurobindo Pharma Ltd. (725.90 -3.03%) and Bharat Electronics Ltd. (82.40 -2.94%).

Volume Rockets

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

Top high volume gainers on BSE included Max India Ltd. (80.15 20.26%), Reliance Naval and Engineering Ltd. (16.70 15.97%) and Vinati Organics Ltd. (1665.00 7.42%).

Top high volume losers on BSE were Fortis Healthcare Ltd. (141.10 -6.53%), Schneider Electric Infrastructure Ltd. (103.90 -3.48%) and JM Financial Ltd. (86.05 -3.10%).

Aster DM Healthcare Ltd. (151.50 0.80%) was trading at 43.4 times of weekly average. eClerx Services Ltd. (1099.90 0.91%) and Gujarat Gas Ltd. (678.10 4.32%) were trading with volumes 11.6 and 11.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

2 stocks made 52 week highs, while 3 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Colgate-Palmolive (India) Ltd. (1310.35 0.44%) and Vinati Organics Ltd. (1665.00 7.42%).

Stocks making new 52 weeks lows included - Jammu & Kashmir Bank Ltd. (35.80 -0.42%) and Syngene International Ltd. (576.00 4.19%).

13 stocks climbed above their 200 day SMA including Navin Fluorine International Ltd. (728.00 4.88%) and GE Power India Ltd. (844.80 4.29%). 9 stocks slipped below their 200 SMA including Fortis Healthcare Ltd. (141.10 -6.53%) and Schneider Electric Infrastructure Ltd. (103.90 -3.48%).

Photo by Satish Krishnamurthy

Larsen & Toubro Ltd.    
14 Dec 2018
1410.65
-1.11%
Larsen & Toubro (L&T) is seeing slowing new project announcements, prompting analyst relook

Larsen & Toubro (L&T, which is in eleven stock screeners) has had analysts taking another look at the stock as the company's new project announcements have slowed in recent months. Analysts are increasingly expecting new project announcements to come in mostly in the next financial year. Deustche Bank research has maintained its buy call on the stock but cut its price target; its buy target now stands at Rs. 1,620 per share, down from Rs. 1,650.

Upcoming central government elections may see funds diverted into farm loan waivers and big agri giveaways, with large infrastructure projects de-prioritized. These risks are the highest for L&T in the lead-up to elections. Wavering appeal for the BJP, visible in recent state elections, may also impact project outlook in the next financial year. A new set of political parties elected in the next election could result in a relatively slow-moving coalition, or a government less focused on infrastructure development. 

Analysts however remain largely optimistic on L&T's prospects, with the average broker target on Trendlyne above current price and approximately Rs. 1,530. L&T management expects revenue growth in FY19 to be better than the 16.7% YoY growth in FY18; it expects industry growth to do well into the next financil year. 

L&T's technicals are mid-range currently and the company has seen modest share price gains in one month despite stock market volatility (+3.03% increase in share price). 

Number of FIIs/FPIs holding stock rose by 9 to 947 in Sep 2018 qtr.
Trendlyne Marketwatch    
14 Dec 2018
Opening bell: Markets up in trade after opening lower, Motherson Sumi gains on merger buzz

Markets are up in morning trade, and breadth is horizontal. Of the 394 stocks traded today, 208 showed gains, and 142 showed losses. Motherson Sumi Systems is a top gainer today on buzz of a possible merger with the German company Leoni. 

Riding High:

Largecap and midcap gainers today include Motherson Sumi Systems Ltd. (176.25 9.44%), Indian Oil Corporation Ltd. (141.55 2.76%) and Bandhan Bank Ltd. (514.50 2.55%).

Downers:

Largecap and midcap losers today include YES Bank Ltd. (171.80 -1.72%), UPL Ltd. (761.30 -1.51%) and Bharat Electronics Ltd. (83.65 -1.47%).

BSE 500: highs, lows and moving averages

1 stock made 52 week highs, while 3 stocks tanked below their 52 week lows.

Stock touching their year highs included - Colgate-Palmolive (India) Ltd. (1308.75 0.32%).

Stocks making new 52 weeks lows included - Jammu & Kashmir Bank Ltd. (35.80 -0.42%) and Syngene International Ltd. (561.00 1.47%).

4 stocks climbed above their 200 day SMA including Himadri Speciality Chemical Ltd. (140.35 5.84%) and Indian Energy Exchange Ltd. (163.50 4.47%). 3 stocks slipped below their 200 SMA including Adani Ports & Special Economic Zone Ltd. (368.20 -0.77%) and JSW Energy Ltd. (70.90 -0.70%).

Trendlyne Marketwatch    
13 Dec 2018
The Closer: Markets end higher, inflation lower than expected

Markets ended the day higher today, and market breadth is balanced. Of the 1154 stocks traded today, 563 were gainers and 488 were losers. Lower than expected inflation figures have cheered markets, and the new RBI governor made public remarks suggesting that he is watching markets closely and willing to "hear out problems". Markets rose with some hoping that rate increases may slow and reverse with inflation growing lesser of a threat. 

Riding High:

Largecap and midcap gainers today include PC Jeweller Ltd. (78.55 18.12%), Larsen & Toubro Infotech Ltd. (1748.50 7.75%) and Bandhan Bank Ltd. (503.00 6.26%).

Downers:

Largecap and midcap losers today include YES Bank Ltd. (174.70 -6.38%), ICICI Lombard General Insurance Company Ltd. (887.90 -3.28%) and Reliance Infrastructure Ltd. (286.95 -2.83%).

Crowd Puller Stocks

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

Top high volume gainers on BSE included PC Jeweller Ltd. (78.55 18.12%), Timken India Ltd. (583.05 8.63%) and Ujjivan Financial Services Ltd. (245.60 8.07%).

Top high volume losers on BSE were Orient Cement Ltd. (78.10 -3.10%), Schaeffler India Ltd. (5395.80 -1.54%) and General Insurance Corporation of India (272.05 -1.45%).

Max India Ltd. (66.80 4.87%) was trading at 34.5 times of weekly average. Vinati Organics Ltd. (1552.40 5.12%) and Bajaj Holdings & Investment Ltd. (2998.80 1.11%) were trading with volumes 6.9 and 6.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

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

Stocks touching their year highs included - Colgate-Palmolive (India) Ltd. (1303.50 2.07%), Ipca Laboratories Ltd. (802.95 1.90%) and PVR Ltd. (1535.10 -0.96%).

Stock making new 52 weeks lows included - Jammu & Kashmir Bank Ltd. (36.00 -2.17%).

13 stocks climbed above their 200 day SMA including Larsen & Toubro Infotech Ltd. (1748.50 7.75%) and Godrej Consumer Products Ltd. (808.70 4.30%). 6 stocks slipped below their 200 SMA including Phoenix Mills Ltd. (619.15 -0.92%) and Navin Fluorine International Ltd. (697.30 -0.88%).

Reliance Industries Ltd.    
13 Dec 2018
1110.00
0.27%
Markets rise, but Reliance Industries seeing average momentum, as Airtel and Vodafone win relief from TDSAT

Reliance Industries (which is in ten stock screeners, including rising delivery) has been seeing mid-range technicals in the past few days, not seeing significant movement alongside a rising stock market. The brokerage Sharekhan has expressed bullishness on the stock, and recommended a buy rating on the stock with a target price of Rs 1465. The company's most recent year high was on August 28. 

There have been limited new announcements, but Reliance Jio's competitors Airtel and Vodafone got some relief today when the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) killed TRAI provisions related to predatory pricing and discounted tariffs from an order that the Telecom Regulatory Authority of India had issued in February. Airtel and Vodafone had contested the order, which had demanded that the telcos provide details of the discounts and tariffs they offered existing customers. They had argued that such a requirement could be used by competitors to poach customers. 

TRAI's rules on predatory pricing had also been perceived by other players as arbitrary and tilted in favor of Reliance Jio. 

Reliance Jio has separately announced that it will be separating its fibre and tower businesses into separate companies.This gives Jio an opportunity to reduce debt by monetizing or liquidating these assets, and expanding the revenue from these businesses by leasing and selling these to other companies. 

Sharekhan increased Buy price target of Reliance Industries Ltd. to 1465.0 on 11 Dec, 2018.
Vinati Organics Ltd.    
13 Dec 2018
1665.00
7.25%
Vinati Organics: Exit of a major competitor, and market share gains is driving growth

By Suhani Adilabadkar

Vinati Organics (which is in 15, mostly bullish stock screeners) is despite its strengths, not an obvious investment for the average retail investor. The word ‘chemical’ brings about a general feeling of disenchantment even among savvy equity investors smitten by auto, banking, FMCG, IT and even telecom (even at a time of poor returns), since they are easily understandable businesses.

Chemicals however, are omnipresent in our daily routines, a constant in-demand product - fulfilling the basic principle of long-term value investing. From toothpaste to soaps and detergents to paper, vinegar, salt, paints, resins, cosmetics, everything has a dash of some chemical compound or other making it an integral part of the manufacturing industry and an important part of global economic cycles.

Vinati Organics, one of the major commodities and specialty chemical companies, is part of the growing $160 bn Indian chemical industry. The company’s stock has hit successive lifetime highs in 2018 and multiplied investor wealth 10 times over the past 5 years.

Quick Takes

  • Established in 1989, Vinati Organics laden with cutting-edge technology has emerged as niche specialty chemical producer. Its main competitor Lubrizol recently exited the business.  Lubrizol’s exit in December last year has increased Vinati’s ATBS market share from 40% to 65% in 2018.
  • Vinati Organics is the global leader with more than 60% market share for Isobutyl Benzen (IBB) and ATBS.
  • VO reported Revenue at Rs. 253 cr rising 57% YoY and PAT growing twofold at Rs. 65 cr in September quarter FY19.
  • The company expects to double its revenues in the next three years, with steady margins of 25% and bottom-line galloping at 35-40%.

Strong Financial and Chemical Base

Established in 1989, Vinati Organics laden with cutting-edge technology, high economies of scale and environment friendly processes has emerged as niche specialty chemical producer over the past 30 years producing aromatics, monomers, polymers and other specialty products catering to automotive, textile, pharmaceuticals, construction and engineering industry.

It is the world’s largest producer of jey chemicals including Isobutyl Benzene (IBB), the key ingredient for ibuprofen, and ATBS. The company operates through its two plants at Mahad and Lote Parashuram both situated in Maharashtra. With 70% revenue dependence on exports, Vinati Organics has a strong clientele line-up including BASF, DOW Chemicals, Akzo Nobel, SNF, NALCO, Chemtall, Perrigo, Clariant, and Shasun.

The company seems to be on a roll since March Quarter FY18 with the exit of its major competitor, Lubrizol. Thus, with widened market share and higher pricing power, Vinati Organics reported revenue at Rs. 253 cr rising 57% YoY and PAT growing twofold at Rs. 65 cr.

EBDITA or operating profit came out at Rs. 95 cr supported by strong product mix and high economies of scale rising more than 100% YoY. EBDITA margin at 37.67% jumped 900 basis points whereas Net Profit Margin expanded 758 basis points YoY reported at 25.72% in Q2 FY19 against 18.14% corresponding quarter previous year.

The company stands debt free with strong promoter ownership of 74% and FIIs and DIIs improving their stake to 10.31% in September quarter from 9.68% corresponding quarter the previous year.

A global leader for ATBS chemicals

Vinati Organics was churned out of obscurity in 2015 as it became global leader for ATBS. The company attained 40% ATBS market share globally. Vinati’s ascendency was further propelled with its debt free status and stock price jumped from Rs.450 levels in 2016 to highs of Rs. 1600 in 2018.

Though the market realized it late, the major raison d'etre for its superior return ratios, twofold jump in operating profit and 16% CAGR for PAT over the past five years is its niche product mix. Vinati Organics is the global leader with more than 60% market share for Isobutyl Benzene (IBB), a key ingredient for Ibuprofen. ATBS, the current revenue growth driver is high margin accretive product with wide applications across oil & gas, water treatment, paper, paints, cosmetics, mining, textiles and personal care industry.

Widely used for Oil recovery applications, ATBS revenue is highly resilient to oil market mood swings as lower oil prices reduces raw material costs (raw material is mainly crude derivative sourced from refineries) enhancing EBDITA margins whereas higher oil prices increase ATBS demand buffeting company’s bottom-line.

Vinati organics initiated backward integration by manufacturing Iso Butylene (IB), a key raw material for ATBS and also caters to 80% domestic demand. The company has further widened its product basket as the largest domestic manufacturer of HPMTBE (High Purity- Methyl Tertiary Butyl Ether) used in pharmaceuticals and organometallic compounds as speciality solvent and also the only manufacturer for TBA (N-Tertiary Butyl Acrylamide) utilized in water treatment and personal care and TOA (N-Tertiary Octyl Acrylamide) extensively used in adhesives and enhanced oil recovery. 

Gaining rapidly on growth
Vinati Organics success mantra is based on three-pronged stringent product selection strategy. Firstly, ability to earn ROI of 20%, production process should be completely environment friendly and existence of strong technical entry barrier. In addition to this filtration process, the product should be easily integrated whether forward, backward or horizontal with its existing product line
enhancing margins and improving economies of scale.

For instance, IB with its current 30,000 TPA capacity is raw material for both ATBS, its upcoming product butylated phenol and is also sold
domestically. Coming to its upcoming product line up, Butylated Phenol has wide applications across industries such as fragrance, resins, lubricants, plastics and inks. It is mainly imported from Singapore and Korea with no manufacturing presence in India. Thus, Vinati Organics is expected to garner 80-70% of domestic market share with its 37000 tonnes capacity to be commercialized by
April 2019.

But the market stands in waiting for Vinati’s PAP (Para Amino Phenol) project, an intermediate for manufacturing Paracetamol (analgesic and antipyretic drug) with 30,000 TPA capacity. Commercial decisions with respect to its commercialization will be taken after successful trials in its prototype pilot plant within next six months.

In addition to all of this, Lubrizol’s exit in December last year has increased Vinati’s ATBS market share from 40% to 65% in 2018 and will be further expanded with capacity expansion undertaken by the company from 26000 TPA to 40,000 TPA to be completed by April next year.

IBB capacity has already been enhanced to 25000 TPA last year. The management expects all this to culminate into Rs. 1500 cr revenue in the next three years, growing twofold with steady margins of 25% and bottom-line galloping at 35-40%. This seems to be tempting enough for a long-term sturdy portfolio. 

Vinati Organics Ltd. is trading at high volume of 122.9K with price gain of 7.25.
Trendlyne Marketwatch    
13 Dec 2018
 Opening bell: Markets make strong gains in morning trade, Bandhan Bank up on expansion

Markets are rising sharply in morning trade, and breadth is highly positive. Of the 427 stocks traded today, 270 were on the uptick, and 130 were down. PFC and REC  are reportedly set for downgrade by Moody's, and Sun Pharmaceutical Industries is among the top losers today after SEBI said that it is investigating the whistleblower complaint.  Bandhan Bank is up after the bank said that it is planning a significant branch expansion by the end of the year, adding another 40 branches. 

Riding High:

Largecap and midcap gainers today include Indiabulls Ventures Ltd. (424.10 6.56%), Indian Bank (239.65 5.39%) and Bandhan Bank Ltd. (495.25 4.63%).

Downers:

Largecap and midcap losers today include Sun Pharmaceutical Industries Ltd. (422.50 -1.93%), UPL Ltd. (780.25 -1.24%) and Cipla Ltd. (526.40 -1.06%).

BSE 500: highs, lows and moving averages

2 stocks made 52 week highs,

Stocks touching their year highs included - Colgate-Palmolive (India) Ltd. (1294.55 1.37%) and Hindustan Unilever Ltd. (1855.20 0.93%).

9 stocks climbed above their 200 day SMA including Larsen & Toubro Infotech Ltd. (1665.00 2.60%) and Godrej Consumer Products Ltd. (792.20 2.17%). 1 stock slipped below their 200 SMA including Procter & Gamble Hygiene & Healthcare Ltd. (9718.30 0.29%).

Rakesh Jhunjhunwala    
12 Dec 2018
Tracking updates, upcoming calendar, deals, on superstar portfolios and elsewhere

Check out the new Updates tab on Superstar Portfolios and elsewhere, which makes it easy to track upcoming calendar and announcements (including Bonus and Splits). It helps you see any announcements, deals, news and stock details for the list of the specific stocks in the table. 

Via the updates tab for example, we can see that a Jhunjhunwala stock Bilcare has an upcoming corporate action. Similarly finding out all the deals happening on Jhunjhunwala's stocks is just a click away.