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19 Nov 2019, 04:25PM

Top Recommendations by Analysts this Week

by Ritmbarah Arora

“A smart investor is excited about the returns one gets from a bull market, and super excited about low cost investment one makes in a bear market. It’s a win-win...Volatility is an investor's best friend!” – this is Author Manoj Arora’s take on making the right investment. Based on the current market scenario, here is the list of top five stocks based on experts’ recommendations:

Infosys Recommended by HDFC Securities: Bangalore headquartered Infosys Limited is engaged into business consulting, information technology and outsourcing services. It is the second largest IT company in India after Tata Consultancy Services. HDFC Securities has recommended to buy Infosys at a target price of Rs 840. The price at recommendation was Rs 705.20 and since then, the stock has seen an incremental growth of 19.12%.

HDFC Securities recommended buying of this stock based on better visibility on growth, stable margin trajectory and the recent stock underperformance. Infosys is focusing on increasing its share within large accounts, chasing large public sector deals and has increased bandwidth around large deals from a deal inception stage. The company has outperformed on large account mining over the past two years.

Infosys is however, fighting margin shrinkages in a slowing global market. Direct cost per employee increased by 7% over Q1FY19-Q1FY20, while revenue productivity increased by 1.4% resulting in 8.8% lower Gross Profit per employee. Another risk factor remains the ongoing SEC investigation into Infosys whistleblower complaints. Adverse findings there are likely to impact the share price.

Minda Industries Recommended by Axis Direct: Gurugram headquarteredMinda Industries is a supplier of automotive solutions to original equipment manufacturers. The company offers a wide range of products in various sectors of auto components. It is also engaged in the business of blow molding components and aluminium die casting.

Axis Direct recommended buying of Minda Industries after the company showed steady performance during Q2FY20. Consolidated revenues stood at Rs 1,360 crore in Q2FY20, EBITDA of Rs 167 crore was reported with EBITDA margin of 11.9%. Total Comprehensive Income of Rs 47 crore was reported on account of higher interest costs. Axis Direct recommended buying of this stock when the price was Rs 338. Since then, the stock price has seen an incremental growth of 20.61% and is expected by the analysts to reach a target price of Rs 410.

Blue Star Recommended by Nirmal Bang Institutional: Mumbai headquarteredBlue Star specializes in designing, developing, manufacturing and marketing a wide variety of products in the air conditioning and commercial refrigeration industry. It is the country’s second largest company in the air conditioning space.

Nirmal Bang Institutional recommended the buying of this stock because of healthy growth, decent margins and bright outlook. The hotter the summer, the better for Blue Star, and India has been seeing some of the hottest summers on record. Blue Star reported consolidated revenue of Rs 12.5 billion for Q2FY20, up 21% YoY. Consolidated EBITDA margin rose by 30bps YoY to 5.9%, PAT grew by 94% YoY to Rs 379 mn. Nirmal Bang recommended buying of this stock at Rs 798.10 with a target price of Rs 970. Since the time of recommendation, the stock has seen an incremental growth of 21.54%.

KNR Constructions by Reliance Securities:KNR Construction is a multi-domain infrastructure project development company. It undertakes engineering, procurement and construction (EPC) contracts and build-operate-transfer (BOT) projects across various verticals.

Reliance Securities recommended buying of KNR Constructions as the company continued to report a strong operating performance in Q2FY20. Revenue of the company grew by 31% YoY and 17% QoQ to Rs 5.5 billion while EBITDA margin stood at 19.7%. Reliance Securities recommended buying of this stock at Rs 245 with a target price of Rs 275. Since the time of recommendation, the stock has seen a growth of 11.47%.

PNC Infratech by BOB Capital Markets: Based out of Agra, PNC Infratech engages in infrastructure construction, development and management of major infrastructure projects including highways, flyovers, bridges, airport runways, power transmission lines and industrial area development. The company provides end-to-end infrastructure implementation solutions for engineering, procurement and construction (EPC).

BOB Capital recommended buying of this stock after the company showed strong quarter results. Core revenue ex-arbitral awards grew 92% YoY to Rs 10.7 bn, core EBITDA margin was at 13.8% and recurring PAT was reported at Rs 619 mn. Net worth of the company stood at Rs 24.1 bn and gross debt at Rs 3.8 bn. BOB Capital recommended buying of this stock at Rs 187.95 with a target price of Rs 245.

The Baseline

18 Nov 2019

Result Screener: 84 Nifty500 companies see results with rising operating profit margins

This Live Result Screener tracks companies that declared results within the past two weeks, and are seeing rising operaint profit margins YoY as well as rising net profit growth. 84 Nifty 500 stocks fulfill this criteria include Jindal Steel (Hisar), Ipca Labs, Apollo Hospitals and PNC Infratech.

The Baseline

13 Nov 2019

Result Analyzer: Prestige Estates, Cochin Shipyard, Sundaram Finance, Bliss GVS

by Ritmbarah Arora

Companies like Prestige Estates, Cochin Shipyard, Sundaram Finance and Phoenix Mills have experienced a rise in operating profits, while Venky’s and Bliss GVS Pharma saw losses. Here’s a detailed outlook towards the quarter results of these companies. The full result analyzer is here.

Prestige Estates falls on results, focus now on affordable housing

Headquartered in Bangalore, real estate firm Prestige Estates Projects Limited focuses on the development and construction of properties, and leasing of commercial properties.

The firm reported an operating profit of Rs 609.9 crore for Q2FY20 as against Rs 370 crore in Q2FY19. Profit Before Tax was reported at Rs 224.8 crore in Q2FY20 as compared to Rs 143.4 crore in Q2FY19 while Net Profit was at Rs 152 crore as against Rs 92.8 crore in Q2FY19. Share price fell on the result announcement, with revenues below analyst expectations. The company said that it plans to focus on mid-income and affordable housing projects, which has been driving demand for residential units in India.

Cochin Shipyard delivers a 40.3% rise in net profit YoY

Kochi headquartered Cochin Shipyard is the largest shipbuilding and maintenance facility in India. It is a part of maritime-related facilities in the port-city of Kochi. The services provided by the shipyard are building platform supply vessels and double-hulled oil tankers. The company has been awarded with Miniratna status. Currently, Cochin Shipyard is building India’s first indigenous aircraft carrier.

Cochin Shipyard announced its September quarter results on November 12 with a 40.3% rise in its consolidated net profit to Rs 206.33 crore for Q2FY20 as against Rs 147.1 crore during Q2FY19. The total income on a consolidated basis rose 22.8% to Rs 1,050.8 crore in Q2FY20 as compared to Rs 855.3 crore in Q2FY19. Total expenses were at Rs 789.6 crore in Q2FY20 as against Rs 623.58 crore in Q2FY19. Net Sales at Rs 971.20 crore up 21.49% from Rs 799.4 crore in September 2018. EBITDA stands at Rs 285.8 crore, up by 17.2% from Rs 243.86 crore in Q2FY19. The board of directors of Cochin Shipyard declared an interim dividend of Rs 1.63 per equity share of Rs 10 each for the financial year 2019-20.

Sundaram Finance surges in net profit YoY by 74.3%

Chennai, Tamil Nadu headquartered Sundaram Finance is a financial and investment service provider. The company had 640 branches across the country and offers vehicle loan, construction equipment loan, wealth management, commercial finance and infrastructure flights. Sundaram Finance also offers services such as commercial finance, investment banking, private equity, treasury advisory and credit cards. It serves corporate, retail and institutional customers through its Investment Arm.

Sundaram Finance reported a surge in net profit by 74.32% to Rs 269 crore on 28.85% rise in total income to Rs 1,058 crore in Q2FY20. The assets under management were Rs 30,256 crore on September 30, 2019 as against Rs 27,228 crore registered in the same period last year. Profit Before Tax was reported at Rs 322.1 crore in Q2FY20 over Rs 232.2 crore in Q2FY19 while operating profit was at Rs 802.4 crore in Q2FY20 as against Rs 668.4 crore in Q2FY19.

Venky’s (India) disappoints in September quarter

Pune headquartered Venky’s (India) Ltd is a part of VH Group, an integrated poultry group in Asia. The major business segment of the company is in poultry and poultry products which consists of production and sale of day-old broiler.

The Q2FY20 results for Venky’s has been announced today showing a lackluster performance in the September quarter. Total revenue for Q2FY20 was at Rs 824 crore as compared to Rs 651 crore in Q2FY19. The company witnessed an operating loss of Rs 2.5 crore in Q2FY20 as against a profit of Rs 19.9 crore in Q2FY19. Venky's reported a before taxes loss of Rs 7.4 crore in Q2FY20 as against a profit of Rs 8.8 crore in Q2FY19. Net profit was positive due to lower tax deductions, reported at Rs 13.6 crore for Q2FY20 over Rs 5.5 crore in Q2FY19.

Phoenix Mills sees consolidated profits rise 6%

Mumbai based Phoenix Mills Limited is engaged in the construction of buildings carried out on own-account basis or on a fee or contract basis, in the development and operation of malls and other real estate properties. The company specializes in the ownership, management and development of retail-led mixed-use properties that include shopping, entertainment, commercial, residential and hospitality assets.

The September quarter results for Phoenix Mills was announced on Monday, November 11 after market hours. Consolidated net profit rose 6% to Rs 65.7 crore in Q2FY20 from Rs 62 crore in Q2FY19. A 2.7% increase in the consolidated total income has been reported by the company from operations to Rs 434.5 crore on YoY basis. Phoenix Market City Mumbai, Pune and Bangalore were the top performing retail assets demonstrating strong consumption and rental income growth. The retail consumption increased by 1% to Rs 1,694.8 crore in Q2FY20 over Q2FY19. Consolidated EBITDA stood at Rs 210.7 in Q2FY20, showing a rise of 6% on YoY basis. The EBITDA margin showed a marginal improvement to 51% in Q2FY20 from 49% in Q2FY19.

Shishir Shrivastava, Joint Managing Director of Phoenix Mills commented on the company performance, “We are pleased to report a robust performance. Consumption at our malls was resilient, our commercial portfolio across Mumbai and Pune continued to deliver a strong operational performance. I am glad to inform that work across our under-construction retail and commercial projects is progressing well and we are on course to double our retail portfolio and substantially increase our office portfolio over the next five years."

Bliss GVS Pharma falls on negative revenues and profit

Mumbai headquartered Bliss GVS Pharma Ltd is a pharmaceutical company. The company primarily develops, manufactures and markets products across various therapeutic categories including anti-fungal, contraceptive, laxative, anti-haemorrhoidal, anti-spasmodic, anti-malarial, anti-biotic, anti-microbial, anti-inflammatory, antipyretic, analgesic and several others.

Bliss GVS Pharma reported a net profit decline, to Rs 30.9 crore in Q2FY20 as against Rs 39 crore in Q2FY19. Net profit growth is lower than historical averages. Operating profit at Rs 25.5 crore in Q2FY20 as against Rs 41.5 crore in Q2FY19.

The Baseline

11 Nov 2019

Result Analyzer: Motherson Sumi, Renuka Sugars gain on results

Auto ancillary firm Motherson Sumi is among the companies announcing results today. Share price of the company gained sharply on its September quarter numbers, which were better than analyst estimates. While revenues rose 5.4% YoY to Rs. 15,924 crore, net profits declined by 7.5%. Operating profit margins fell by 3.8% YoY. Pharma company AstraZeneca was green all around. Revenues are up 29% YoY, net profits up 57.8%. Share price has jumped on the news. See the full results analyzer.

India Cements fell on falling revenue and EBIDT decline YoY, while Renuka Sugars jumped on results that showed 39.5% revenue growth YoY and 86.9% jump in net profit YoY.

The Baseline

09 Nov 2019

Taking the bull by the horns: Look for a long horizon

This line is from Warren Buffett, American investor and Chairman of Berkshire Hathaway. Buffett, who never bets for the short-term, is considered one of the most successful investors in the world, and has an approximate net worth of Us $82 billion, which makes him the third-wealthiest person internationally.

Buffett's investing philosophy is, "Don't lose money". But he personally lost about $23 billion in the financial crisis of 2008, and his company lost its AAA ratings. So what does this mean? Buffett's argument is about mindset - don't play to lose when it comes to the stock market. Do your homework. Don't gamble, don't invest like it's a card game.

Buffett believes the most important quality for an investor is not intelligence, but attitude and approach to the stock market, and a willingness to show patience. A good investor focuses on their own goals rather than being swayed one way or another by the crowd. Markets will swing. That's the nature of the market. But up or down, the investor keeps to the strategy that they have found works for them. And the strategy tends to be a long-term, patient one.

The Baseline

08 Nov 2019

Results Screener: DLF, Indraprastha Gas among firms with profit growth YoY and QoQ

With results season in full swing, September quarter performance numbers are coming out everyday. The Live Results Screeners sift through these results to identify the best and worst performers. This Results Screener looks at stocks that announced results within the past two days, and saw net profit growth both YoY and QoQ (subscription, but screenshot above). Companies delivering a good performance on these metrics include real estate firm DLF, Indraprastha Gasand NBFC company Manappuram Finance.

The Baseline

06 Nov 2019

It's the season for CFO resignations

Results season is also the time that Chief Financial Officers and other C-Suite management resign, either because they were waiting out the clock till the end of the quarter, or because of missed targets, with quarter result numbers that their bosses are not happy about. Either way however, investors see big resignations like these - and their timing - not good news for companies. Some resignations over the past 24 hours:

The CFO of fertilizer company Aries Agro has resigned. The firm is a majority family owned company, and investor Vijay Kedia held stock in the firm until June 2018.
CFO of CIMMCO has resigned. In CIMMCO's case the resignation may partly be an outcome of the company merger with parent firm Titagarh Wagons, although the cause has been publicly notified as 'personal'.
The CFO of pharma firm Piramal Phytocare has resigned, as has the CFO of Radha Madhav Corporation.
(To track all major resignations, use Discover)

An auditor submitting a resignation letter while citing their "concerns" sends share prices spiralling down. However, a CFO’s exit can precede this and is a relatively early sign that some things are going financially wrong with a company - before a balance sheet reveals it. It's not the case every time, but if a company is already weakening, a CFO resignation is an additional red flag.

The Baseline

25 Oct 2019

Markets Today: Opening bell, Oct 25, 2019

Nifty 50 was trading at 11585.50 (2.9, 0.0%) , BSE Sensex was trading at 39144.17 (123.8, 0.3%) while the broader Nifty 500 was trading at 9436.30 (-1.4, -0.0%)

Market breadth is holding steady. Of the 1263 stocks traded today, 560 were gainers and 611 were losers.

Riding High:

Largecap and midcap gainers today include PNB Housing Finance Ltd. (502.15, 12.36%), IDFC First Bank Ltd. (40.25, 3.60%) and Infosys Ltd. (651.80, 2.59%).

Downers:

Largecap and midcap losers today include Vodafone Idea Ltd. (3.85, -11.49%), Bharti Infratel Ltd. (224.40, -5.54%) and InterGlobe Aviation Ltd. (1586.45, -4.71%).

BSE 500: highs, lows and moving averages

7 stocks overperformed with 52 week highs, while 11 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Granules India Ltd. (124.35, 0.00%), Titan Company Ltd. (1379.90, 0.39%) and Reliance Industries Ltd. (1430.00, -0.45%).

Stocks making new 52 weeks lows included - Bharti Infratel Ltd. (224.40, -5.54%) and CCL Products India Ltd. (196.00, -1.56%).

5 stocks climbed above their 200 day SMA including Castrol India Ltd. (147.60, 2.07%) and Swan Energy Ltd. (105.05, 0.62%). 10 stocks slipped below their 200 SMA including Hexaware Technologies Ltd. (337.45, -2.54%) and AIA Engineering Ltd. (1645.05, -0.98%).

The Baseline

24 Oct 2019

Results Analyzer: Agro tech Foods, Polycab India deliver strong results

by Ritmbarah Arora

Aided by the recent corporate tax cut, early trends are showing resilient double-digit growth in the quarterly results despite the slowdown (with some exceptions, like Maruti Suzuki). Agrotech Foods, the Rakesh Jhunjhunwala portfolio stock, and Polycab India delivered strong results.

Agro Tech Foods Profile and Quarter Performance

Gurgaon headquartered Agro Tech Foods Ltd (ATFL) is in the business of marketing food and food ingredients to consumers and institutional customers. The company is affiliated to ConAgra Foods Inc. of USA, which is one of the largest food companies. ATFL offers its products under various categories including edible oils and sprays, snacks, soups, puddings, desserts, spreads, meal and meal enhancers. The quarterly result of the company has been announced today, post and the company rendered a good performance in the last quarter.

Net profit of ATFL increased by 68.6% YoY to Rs 15.4 crore in Q2FY20 as against Rs 9.14 crore during the previous Q2FY19. Sales declined 3.01% to Rs 204.46 crore in Q2FY20 as against Rs 210.80 crore during the previous Q2FY19. The total revenue for the current quarter has been reported Rs 205.6 crore as against Rs 211.7 crore during Q2FY19.

Though the total revenue is less than the last year same period revenue, growth of total revenue quarter is higher than historical averages. Operating profit observed a sharp increment from the last quarter and also Q2FY19. The operating profit is Rs 18.4 crore as against Rs 14.6 crore in the Q1FY20 and Rs 17.8 crore in Q2FY19. Profit before tax also observed an upsurge reported at Rs 14.4 crore as against Rs 10.7 crore in Q1FY20 and Rs 14.1 crore in Q2FY19.

Polycab India Profile and Quarter Performance

Polycab India Ltd also announced its results today. As soon as the numbers came out, the share price hit its 52-week high on news that the company’s revenues had increased by 24% YoY to Rs 2,242 crore led by strong growth across segments. Net profit stood at Rs 194 crore in Q2Y20 as against a profit of Rs 90 crore in Q2FY19. EBITDA margin improved to 12.1% from 11.9% in Q2FY19. PAT grew by 117% to Rs 1,938 mn in Q2FY20 as against Rs 895 mn in Q2FY19.

Polycab India Limited produces and distributes electronic equipment. The company offers cables, wires, fans, switches, lighting equipment, junction boxes, circular lids, inspection bends and accessories. The Chairman and Managing Director of Polycab India, Inder Jaisinghani commented on the financial performance, “We have delivered another quarter and half year of robust growth. Our profitability has more than doubled during the quarter and our customer-centric focus and robust distribution network have ensured that we maintain our growth momentum”.

The Baseline

24 Oct 2019

Markets close lower, Maruti Suzuki falls on results

Markets closed lower today. Nifty 50 closed at 11579.15 (-25.0, -0.2%) , BSE Sensex closed at 39020.39 (-38.4, -0.1%) while the broader Nifty 500 closed at 9436.35 (-22.3, -0.2%). Market breadth is in the red. Of the 1651 stocks traded today, 656 showed gains, and 900 showed losses.

Maruti Suzuki fell on results which showed profits declining over 39% YoY, with car sales numbers falling 30% YoY. Discounting and price cuts have also impacted the auto maker's margins.
Granules India sees a breakout today, gaining sharply on high volumes.
The CFO of TVS Sricharkaannounced his resignation. Track keywords in stock exchange filings via Discover.
Approximately 10 lakh shares of Varun Beverages changed hands in a block deal.
Top gainers in markets today include Inox Leisure and Pi Industries.
Agrotech Foods is up on results, with the company showing slight decline in revenue growth YoY and a 15%+ jump in net profit growth YoY.
Markets are up in early trading. Nifty 50 was trading at 11647.65 (43.6, 0.4%) , BSE Sensex was trading at 39215.53 (156.7, 0.4%) while the broader Nifty 500 was trading at 9490.25 (31.6, 0.3%). Market breadth is in the green. Of the 1355 stocks traded today, 842 were on the uptick, and 432 were down.

Riding High:

Largecap and midcap gainers today include Castrol India Ltd. (144.85, 8.10%), PI Industries Ltd. (1428.15, 6.96%) and Torrent Pharmaceuticals Ltd. (1768.00, 5.22%).

Downers:

Largecap and midcap losers today include Vodafone Idea Ltd. (4.25, -24.78%), Indian Bank (123.95, -13.26%) and Bharti Infratel Ltd. (237.00, -8.62%).

Movers and Shakers

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

Top high volume gainers on BSE included Thyrocare Technologies Ltd. (561.95, 9.01%), Navin Fluorine International Ltd. (827.55, 8.90%) and Castrol India Ltd. (144.85, 8.10%).

Top high volume losers on BSE were Vodafone Idea Ltd. (4.25, -24.78%), Bharti Infratel Ltd. (237.00, -8.62%) and Hexaware Technologies Ltd. (344.70, -5.86%).

Blue Dart Express Ltd. (2321.55, -0.85%) was trading at 33.9 times of weekly average. Varun Beverages Ltd. (629.10, 0.70%) and Bharti Airtel Ltd. (372.00, 3.23%) were trading with volumes 16.8 and 8.6 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

23 stocks made 52 week highs, while 15 stocks tanked below their 52 week lows.

Stocks touching their year highs included - Adani Transmission Ltd. (266.30, 1.52%), Divi's Laboratories Ltd. (1766.50, 1.80%) and Gillette India Ltd. (7867.15, 0.74%).

Stocks making new 52 weeks lows included - Bharti Infratel Ltd. (237.00, -8.62%) and CCL Products India Ltd. (199.30, -8.49%).

9 stocks climbed above their 200 day SMA including Castrol India Ltd. (144.85, 8.10%) and Torrent Pharmaceuticals Ltd. (1768.00, 5.22%). 19 stocks slipped below their 200 SMA including J B Chemicals & Pharmaceuticals Ltd. (329.95, -7.06%) and Hexaware Technologies Ltd. (344.70, -5.86%).