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    The Baseline

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    The Baseline
    22 Aug 2024
    Chart of the Week: Indian rupee holds steady despite big shifts in monetary policies across the globe

    Chart of the Week: Indian rupee holds steady despite big shifts in monetary policies across the globe

    By Satyam Kumar

    On August 5, 2024, the Indian rupee reached its all-time low of Rs 84.1, driven by escalating geopolitical tensions in the Middle East and recession fears in the United States. Though the Indian rupee has hit its all-time low multiple times in the past year, the fall has been marginal, thanks to intervention by the Reserve Bank of India, limiting the losses. 

    High volatility can complicate trading and investing in the rupee, potentially increasing costs for businesses and investors. However, interventions by the central bank and optimism surrounding potential rate cuts by the US Federal Reserve (Fed) kept the rupee around the critical threshold of Rs 84. The chart above shows that over the past year, the Indian rupee has depreciated by only 0.8% against the US dollar, reflecting its relative stability compared to other currencies like the Brazilian real and the Russian ruble. The Euro and Australian dollar have risen over the past year driven by growing expectations that the Fed might soon begin cutting interest rates.

    RBI Governor, Shaktikanta Das, said, “It is always the priority of the RBI to ensure stability of Indian rupee.” This stability the governor talks of has been hard-won – a decade ago, the Indian rupee was one of Asia’s most volatile currencies. US-based Global Finance magazine has ranked Das as the top central banker globally for the second consecutive year, a ranking based on his success in managing inflation, promoting economic growth, and ensuring the currency’s stability while overseeing interest rate policies. 

    The governor’s job is a tightrope, in ensuring the economy’s stability while facing pressures from corporates and consumers around interest rates. And not everyone is pleased. The International Monetary Fund (IMF) says that excessive forex intervention has contributed to the rupee-dollar moving within a narrow range since December 2022 and reclassified India’s exchange rate regime to ‘stabilized arrangement’ from ‘floating’

    This week’s Chart of the Week examines the rupee’s performance among global currencies over the past year and the factors contributing to its improving stability over the past decade. 

    How does the Yen carry trade impact the Indian rupee?

    The yen carry trade, a popular strategy for over a decade, has been undergoing significant unwinding recently, affecting global markets, including India. This trade involves borrowing Japanese yen at the country’s very low interest rates (around 0.1%) and investing in higher-yielding assets abroad. However, the strategy has become less profitable due to recent changes in Japan’s monetary policy.

    On the 31st of July, the Bank of Japan (BoJ) increased interest rates by 25 basis points (bps) to 0.25% from near-zero levels, and hinted at further hikes this year. Analysts also expect the US Federal Reserve to cut interest rates by 75 basis points in 2024, squeezing the differential between US-Japan interest rates and impacting profit margins further for those engaged in yen carry trades.

    The BoJ's rate hike has led to a sharp 8% appreciation of the yen over the past month. As the yen strengthens, it becomes more expensive for investors to maintain yen-funded positions, prompting a rapid unwinding of these trades. This shift has had a noticeable impact on India’s financial markets. Following the BoJ’s rate hike, India's benchmark index, Nifty50, experienced a significant sell-off, dropping over 1,000 points from its peak of 25,000 within just three trading days. This decline is partly attributed to the fact that 23% of total inflows into India since January 2023, amounting to $10.3 billion, were invested by participants in yen carry trades.

    US rate cuts: Potential boon for the Indian rupee

    The anticipated rate cuts by the US Federal Reserve, expected to be around 75 bps in 2024, could, however, prove advantageous for the Indian rupee. Lower interest rates in the US often lead to increased foreign investment in emerging markets like India. As the interest rate differential between India and the US widens, India may become a more attractive investment destination compared to the US. 

    The expected inflow of foreign capital could further boost Indian markets. Foreign institutional investors, who had withdrawn from Indian markets as the US Fed started to hike interest rates, could return as the interest rate environment shifts.

    The lower US interest rates would also increase the availability of dollars, potentially leading to a softer dollar and a stronger rupee. A stronger rupee could benefit India by reducing its import bill, particularly for oil, which constitutes more than 80% of its total imports. A stronger rupee would help lower import costs, alleviate the current account deficit, and improve the fiscal deficit. A fiscal deficit represents the gap between how much the government earns and how much it spends. It would also make it cheaper for India to service its foreign debt.

    Strong economic growth coupled with RBI’s intervention has led to a stable rupee

    Volatility in the Indian rupee has fallen to a decade-low

    Even though the Indian rupee has consistently weakened against the dollar over the past decade, the volatility has significantly decreased over time. This relative stability can be attributed to robust economic growth, consistent policy measures, and political stability coupled with RBI intervention whenever needed. Continuity in the Central government after the recent elections in June has boosted the confidence of foreign investors. Key reforms, such as assigning an inflation-target mandate to the central bank and reducing the budget deficit, have further supported this stability. India now boasts the world’s fourth-largest pile of foreign reserves.

    By buying dollars when the rupee strengthens and selling foreign exchange when it weakens, the RBI has moderated significant currency fluctuations. This intervention helps smooth out the value of the rupee by managing the supply of dollars in the market.

    However, the RBI's approach has its limitations. The central bank's interventions can sometimes mask changes in economic fundamentals, meaning that strong growth, which usually supports currency strength, might not always translate into a stronger rupee if the RBI continues to buy dollars.

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    The Baseline
    20 Aug 2024
    Five stocks to buy from analysts this week - August 20 2024

    Five stocks to buy from analysts this week - August 20 2024

    By Divyansh Pokharna

    1. PCBL:

    ICICI Direct maintains its ‘Buy’ rating on this black carbon manufacturer with a target price of Rs 500, indicating a potential upside of 18.1%. Analysts Chirag Shah and Shashank Kanodia highlight the recent acquisition of Aquapharm Chemicals, which reported a Q1FY25 EBITDA of Rs 55 crore with 75% capacity utilization. Shah and Kanodia said, “Aquapharm’s performance is promising, with EBITDA expected to rise to Rs 80-90 crore by Q4FY25.”

    PCBL reported net sales of Rs 2,144 crore in Q1FY25, with carbon black sales volumes reaching 154 KT, up 25% YoY. Net profit for the quarter was Rs 118 crore, supported by the highest-ever EBITDA of Rs 358 crore. The company’s near-term capacity expansion aims to increase carbon black production to 10 lakh tonnes, with further medium-term plans for an additional 4 lakh tonnes. 

    Shah and Kanodia note that the company targets a five times increase in PAT, reaching Rs 2,500 crore by FY29. They also highlight strong export performance, with export volumes reaching 21% of total sales in Q1FY25 and expected to grow to 45% by FY27, supporting robust long-term growth.

    2. Ipca Laboratories:

    Sharekhan upgrades its rating on this pharma company to ‘Buy’ with a higher target price of Rs 1,600. This indicates a potential upside of 15.6%. The company's Q1FY25 sales grew 32.9% YoY to Rs 2,092 crore. The analyst attributes this growth to the integration of the Unichem business, and strong domestic and international sales. IPCA has surpassed the Indian Pharmaceutical Market (IPM) growth of 8-9% with a 11.6% increase in the domestic brand. The company appears in a screener of stocks that have outperformed their respective industry over the past month.

    Unichem's integration is expected to add to profitability, with EBITDA set to reach Rs 225 crore by FY25 from Rs 100 crore in FY24. The company plans to launch 4-5 new products in the US market in FY25 and expand its international presence. Bayshore, now part of Unichem, will handle distribution of IPCA’s US products.

    Analysts highlight the company’s promising growth prospects, driven by strong API demand and capacity expansion. It has set up a new 50MT API plant at Ratlam, nearing commercialization. Despite short-term cost pressures, new plants and increased formulation opportunities are expected to drive future growth.

    3. EPL:

    Motilal Oswal maintains its ‘Buy’ rating on this plastic packaging company with a target price of Rs 275, indicating an upside of 9.7%. In Q1FY25, the company’s net profit grew 18% YoY to Rs 64.2 crore, and revenue increased by 10.2% YoY to Rs 1,013 crore. According to analyst Sumant Kumar, improved operating performance in the US and Europe drove profits higher. The EBITDA margin grew by 610 bps to 15.8% in the US region.

    Revenue growth was driven by broad-based regional performance, and a 6% YoY increase in the personal care segment, which now contributes 47% to total revenue. Kumar also highlights the company’s strong momentum in Brazil, where new customer acquisitions are driving the Brazil plant's utilization rate to 65-70%. He expects the firm to post revenue CAGR of 8% and adjusted net profit CAGR of 30% over FY25-26.

    EPL is experiencing significant demand for sustainable products, with the share of sustainable tubes rising to 29% of total volume in Q1FY25, up from 21% in Q1FY24. The company aims to sustain double-digit growth with margins exceeding 20%.

    4. Hindalco Industries:

    Axis Direct has reaffirmed its ‘Buy’ rating for Hindalco Industries, a key player in aluminum and aluminum products, with a target price of Rs 715, indicating a potential upside of 6.3%. In Q1FY25 the company's net profit rose 25.3% YoY to Rs 3,074 crore, driven by higher EBITDA. Its operating revenue increased 7.6% YoY to Rs 57,013 crore, fueled by higher sales from its upstream and aluminium business, and copper business segments.

    Analyst Aditya Welekar highlights that the downstream capex for its extrusion plant in Silvassa, Gujarat and flat rolled products (FRP) plant in Odisha is nearly complete and is expected to operate at full capacity from Q4FY25. For upstream projects, alumina expansion in Odisha will commence first, followed by the Copper smelter (280-300 kt) and a 180-pot Aluminium smelter (180 ktpa) expansion in Aditya with RE-RTC power. Each of these projects will have a capex of Rs 8,000 crore.The company is also in the process of securing Stage I & II forest clearances. It owns several key assets, including the Chakla coal mine (5.5 mtpa), Meenakshi West (5 mtpa), and Meenakshi mine (12 mtpa).  Welekar anticipates that the company's expansion projects will result in EBITDA and revenue growth of 6% and 7.7 % respectively for FY25-26, with PAT and EPS growth of 11% over the same period

    5. Fineotex Chemical:

    KRChoksey retains its ‘Buy’ rating on this small cap Fineotex Chemical with a target price of Rs 529, indicating a potential upside of 44.5%. This specialty chemicals company reported a net profit of Rs 28.8 crore in Q1FY25, a 12% rise YoY. Revenue grew 7.3% YoY to Rs 146.8 crore, although it declined by 7% quarter-on-quarter (QoQ) due to lower realizations, while volume growth was maintained, according to analyst Unnati Jadhav.

    Jadhav highlights that during the quarter, the company allotted 9.7 lakh fully paid-up equity shares and issued 26.3 lakh share warrants, each convertible into one equity share, were issued at Rs 346 per share. The company raised a total of Rs 56.2 crore this quarter. An additional round of 28.2 lakh equity shares and warrants, both priced at Rs 387.4 per share, has also been announced, totaling Rs 192.5 crore.

    Jadhav notes multiple triggers coming into play for next year such as increasing cotton demand, inorganic international opportunities and the expansion of cleaning and hygiene segment. She expects EPS estimates for FY 25-26 to be Rs 13.7 and Rs 17.5, respectively, with a revenue CAGR of 23% and a PAT CAGR of 32% over the same period.

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

    (You can find all analyst picks here)

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    The Baseline
    16 Aug 2024
    Five Interesting Stocks Today - August 16, 2024

    Five Interesting Stocks Today - August 16, 2024

    1. Voltas:

    This consumer electronics company surged 10.8% on Monday after announcing Q1 results that beat estimates on all fronts. The company reported revenue growth of 45.8% YoY, reaching Rs 5,001.3 crore in Q1FY25, surpassing Trendlyne’s Forecaster estimate by 9%. Net profit rose 158.5% YoY to Rs 334.2 crore, beating the estimate by 35.9%.

    If we look at the revenue mix, the company’s cooling products segment, which contributed more than 75% to its topline, saw volume growth of 67%. The heat waves drove demand up during the peak summer months, powering the segment’s revenue higher by 51% on a YoY basis. The electro-mechanical projects segment also saw revenue growth of 40% YoY to Rs 949 crore.

    Voltas saw its market share fall to 18.7% in FY24 in air conditioners, down from 21.6% in FY23. Meanwhile, its major competitor Blue Star’s market share rose by 25 bps to 13.8%.and hopes to drive it higher by 100 bps every year. 

    In its latest annual report, the company projects the overall AC market to grow at a CAGR of 10% in FY25-28. Managing Director and CEO, Pradeep Bakshi, said, “The company has begun the groundwork to set up a manufacturing plant in Tamil Nadu to cater the rising demand for ACs which has grown by 75% in the past few quarters.” He highlights that this facility will have a manufacturing capacity of 2 million cooling units and focus mainly on southern and western India.

    BOB Capital Markets maintains its ‘Hold’ rating on Voltas as they are optimistic about future growth, considering the under penetration of ACs in India. They are also upbeat about the growth outlook of its home appliances brand ‘Voltas Beko’ which manufactures fridges, washing machines, etc. as it achieved 12% of sales from e-commerce channels in FY24.

    2. Signatureglobal (India):

    This realty company has risen 296.8% since its listing on September 23 of last year and has surged 8.9% in the past week following its results announcement on August 7. The company reported a net profit of Rs 6.8 crore in Q1FY25 compared to a net loss of Rs 7.2 crore in Q1FY24. Its operating revenue grew 141.5% YoY to Rs 400.6 crore, driven by a 148% YoY rise in sales in the real estate segment. It beat Forecaster revenue estimates by 92.6%.

    Revenue growth was driven by the company’s pre-sales, which reached Rs 3,120 crore in Q1FY25, marking a remarkable growth of 255% YoY with a 63% CAGR in pre-sales over FY21-24. Pradeep Kumar Aggarwal, Chairman and Whole-Time Director, said, "In the first quarter itself, we have achieved 30% of our annual pre-sales target. We are planning to launch a few projects over the coming quarters, which are likely to boost our operational targets.” The growth is primarily due to the successful launch of Phase 1 of the group housing project 'TITANIUM SPR' in Sector 71, Gurgaon – the project has accounted for 87% of sales.

    The company plans to increase its launches by four-fold YoY to 32 million sq. ft. (msf) worth Rs 16,000 crore in FY25 (from Rs 4,200 crore in FY24). Some of the existing projects in the pipeline for FY25 include premium projects in Gurgaon at Sector 71, Sector 84 and Sector 37D, worth Rs 8,700 crore, as well as mid-income projects with independent floors at Sohna, Haryana with gross development value (GDV) of approximately Rs 5,800 crore. Additionally, the company will launch industrial plot projects at Sohna and Manesar in Haryana, worth Rs 1,500 crore.

    In Q4FY24 Signatureglobal had launched its first premium project, Deluxe-DXP at Sector 37D in Gurugram, which sold out in 48 hours. Its second high-priced project also received a strong response, with 85% of inventory sold at launch.

    Motilal Oswal has initiated a ‘Buy’ rating with a target price of Rs 2,000. The brokerage believes that the strong pre-sales growth will lead to a rapid scale-up across key parameters, such as cash flows, revenue and profitability, enhancing the company’s execution capability and future growth potential. The firm expects the growth momentum to remain intact and estimates that Signatureglobal will deliver a 35% CAGR in bookings over FY25-27.

    3. FSN E-Commerce (Nykaa): 

    This internet retail company rose over 1% after its net profit surged 191.9% YoY to Rs 9.6 crore in Q1FY25. Revenue rose 22.8% YoY to Rs 1,746.1 crore during the quarter, driven by growth in the beauty & personal care (BPC) and fashion segments. The company’s revenue was in line with Trendlyne’s Forecaster estimates, but profit missed estimates by 43.5%. 

    During the quarter, Nykaa’s GMV (gross merchandise value) grew 25% YoY, with the BPC segment’s (constituting over 76% of the total GMV) GMV rising 28%. Nykaa’s owned brands GMV grew 47% YoY in Q1. The fashion segment (which makes up 23% of the total GMV) saw its GMV increase by 15% YoY in a highly competitive space. Analysts noted that fashion GMV growth was slower compared to 27% in Q4FY24, due to a drop in store visits, and slower demand amid fewer wedding dates during the quarter. Nykaa provided discounts across its beauty and fashion categories due to the lack of festivities, but expects discounts to moderate in Q3 and Q4 as demand picks up in the festive season.

    Meanwhile, Nykaa continued to expand its retail network, with stores reaching the 200 mark. During the quarter, the company announced the acquisition of an additional 39% stake in Dot & Key Wellness for Rs 265.3 crore. With this, company's stake will increase from 51% to 90%. Earlier in March the e-commerce company entered the GCC (Gulf Cooperation Council) Beauty space, under the brand Nysaa. GCC Beauty is estimated to be a $30 billion market and the company expects this to be a significant growth driver in the future.

    Nykaa increased its warehouse count to 44 in Q1, with an aim to improve its delivery timelines. Falguni Nayar said, “Given the investments we have made in the space, our key objective is to improve consumer experiences by getting the product into the consumer’s hands faster. We aim to deliver 70–80% of orders placed in major cities and 50% of other cities, on the same day or the next day by September”.

    ICICI Securities maintains its ‘Add’ rating with a target price of Rs 210. The brokerage remains cautious on the company and believes success in the fashion business can be difficult given the intense competition in the category. 

    4. Aurobindo Pharma: 

    This pharmaceuticals company rose by 4.1% in three sessions after posting its Q1FY25 results on Saturday. Its revenue increased by 10.5% YoY to Rs 7,567 crore, in line with Forecaster estimates, driven by improvements in the US, Europe, and in rest of the world (ROW) formulations, as well as a rise in the active pharmaceutical ingredient segment. 

    The company’s stock price rose by 4.5% on August 7 after it received final approval from the US FDA to manufacture and market Estradiol Vaginal Inserts. The drug is a generic equivalent of Novo Nordisk’s VAGIFEM, and has an estimated market size of $268 million. However, it pared its gains on Friday and fell 2% after the US FDA issued a warning letter for its Eugia II formulations manufacturing plant.

    Aurobindo’s net profit grew by 61.5% YoY to Rs 919.2 crore, backed by reduced raw material costs. However, net profit still missed Forecaster estimates by 3.1%. The US formulations segment (which contributes to 47% of total revenue) witnessed just 8% revenue growth YoY. Growth was helped by improvements in specialty and injectables. 

    Growth was muted and in single digits due to the remedial actions taken by the company after the US FDA issued an official action indicated (OAI) status on its Eugia III plant. The rest of the world (ROW) formulations experienced a 49.2% YoY rise in revenue during the quarter, led by new product launches. 

    The company has been rapped on the knuckles multiple times by the FDA this year, and received multiple Form 483s or its Eugia plant in India since December 2023. This has resulted in a hit of $30-40 million in its revenue in Q4FY24 and Q1FY25, combined with a remediation cost of $8-9 million for the plant. These consistent issues have led to the company posting a 3-year revenue CAGR of 5.5%, which is lower than its competitors like Cipla (10.9%), Dr Reddy’s Laboratories (14.3%) and Sun Pharmaceutical Industries (13.2%). As a result, the company has developed the Vizag plant as a back-up and expects US FDA approval by the end of FY25. Puvvala Yugandhar, CEO of Eugia, expects the plant to be running at full capacity from Q2FY25 onwards.

    Speaking on the company’s results, its Vice-Chairman and MD, K Nithyananda Reddy, says, “Our EBITDA margin remained at 21.4% and is in line with expectations. EBITDA margins are supported by stable raw material prices. We are confident in our ability to achieve our EBITDA growth target of 21-22% for FY25. We also expect the current pricing scenario in the US market to continue.” 

    Post results, Axis Direct maintains its ‘Buy’ call on the company with a higher target price of Rs 1,612 per share. This indicates a potential upside of 7.3%. The brokerage remains confident about the stock due to its new launches in the US formulations and planned entry into biosimilars, peptides, and contract development & manufacturing organizations (CDMO) services. It expects the company’s revenue to grow at a CAGR of 5.7% over FY25-26.

    5. Oil India:

    This oil exploration and production company rose by 10.6% over the past week after the Ministry of Petroleum and Natural Gas approved a 20% premium on gas prices from new wells. Oil India plans to grow its gas output by 50% over FY25-26, building gas production infrastructure to increase domestic production.

    The company’s net profit rose 32.2% YoY to Rs 1,885.8 crore, helped by inventory destocking. Revenue grew 30.9% YoY to Rs 9,350 crore in Q1FY25, beating Trendlyne’s Forecaster estimates by 70%. The Gross Refining Margin (GRM) of Numaligarh Refinery (NRL) stood at $6.4 per barrel in Q1FY25, compared to a negative margin of $15.6 per barrel in Q1FY24. 

    Analysts predict that the GRM across the industry will decline to $6-8 per barrel in FY25, down from an average of $10-12 per barrel in FY24 – a narrowing discount on Russian crude and a decrease in the profit margin from selling refined products are impacting GRMs.

    The company’s NRL expansion project, with a total cost of Rs 28,000 crore, has achieved 65% progress and is expected to be completed by December 2025. CFO Rupam Baura said “Once the new capacity is installed, we expect it to operate at around 50-60% in the first year, gradually ramping up to 90% by the second year. This expansion will increase the refinery’s capacity from 3 MMTPA to 9 MMTPA.” The firm plans to build a gas pipeline to connect the stranded North Brahmaputra fields which has a capacity of 3 bcm, equivalent to FY24 gas production.

    Post results, Prabhudas Lilladher has upgraded the stock to ‘Buy’ with a raised target price of Rs 766. This indicates a potential upside of 13%. It remains positive about the NRL expansion, expecting it to boost gas production. Prabhudas Lilladher predicts that Oil India will see volume CAGRs of 8% for oil and 16% for gas over FY25-26.

    Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

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    The Baseline
    14 Aug 2024
    Which stocks did superstar investors sell in Q1FY25?

    Which stocks did superstar investors sell in Q1FY25?

    By Melissa Koshy

    Investments by superstar investors like RARE Enterprises, Ashish Kacholia, Sunil Singhania, and Vijay Kedia are closely tracked by investors for valuable insights into the market. Their buys and sells help investors identify interesting sectors and stocks. Here we look at the sells made by these superstar investors during Q1FY25.

    The chart below shows the changes in superstar investors' current portfolio net worth. Note that net worth reflects both changes in current holdings as well as new buys and sells. 

    Some superstar investors see their net worth rise in Q1FY25

    Previously, we looked at the key superstar buys in Q1FY25. Now, let's analyse their sells. During the latest quarter, most superstars went on a selling spree as many stocks hit sky-high valuations, and adjusted their holdings in key sectors. The following chart shows their biggest sells during this period. 

    Biggest sells by superstars in Q1FY25

    RARE Enterprises makes minor stake sales 

    Rakesh Jhunjhunwala’s portfolio made some cuts, but with a cautious knife. The portfolio, currently managed by Rekha Jhunjhunwala and investment firm RARE Enterprises, cut minor stakes in multiple companies. The portfolio’s net worth grew 4.5% to Rs 50,586.1 crore after Q1FY25.

    Jhunjhunwala’s portfolio pares minor stakes in multiple companies

    In the April-June quarter, the late big bull’s portfolio cut a 0.2% stake in internet software company Nazara Technologies, and now holds an 8.37% stake. Its share price rose by 37.3% in the past year, underperforming its industry by 71.1 percentage points. This is the third consecutive quarter the portfolio has reduced its stake in the company. RARE also cut a 0.2% stake in edible oils maker Agro Tech Foods, taking the holding to 7.3%. Previously, it held an 8.1% stake in the firm since Q1FY24 before reducing it to 7.5%. 

    During the latest quarter, RARE reduced a minor 0.1% stake each in bank stocks — Federal Bank, and Karur Vysya Bank. It now holds 2.5% and 4.27%, respectively, in the banks. 

    RARE Enterprises also sold a 0.1% stake each in other industrial goods firm Raghav Productivity Enhancers, other financial services company Crisil, capital markets stock Geojit Financial, and pharmaceuticals firm Jubilant Pharmova during the quarter. The portfolio now holds 5%, 5.36%, 7.2%, and 6.57%, respectively, in these companies. 

    Ashish Kacholia goes on a selling spree

    Does Ashish Kacholia know something that we don’t, about the stock market? His net worth fell by 15.9% to Rs 2,847.1 crore after Q1FY25 as he pulled back on multiple stocks. The investor, who is usually a bullish player in midcap and smallcap stocks, reduced his stakes inAdor Welding to below 1% from 4.2% in Q4FY24. The Industrial goods company’s share price rose by 16.8% in the past year underperforming its sector by 128.9 percentage points. 

    Kacholia sells stakes in multiple companies

    The marquee investor also reduced his stake in the non-ferrous metals company Gravita India to below 1% compared to 2.2% in Q4FY24. This company is in a strong PE sell zone with its promoter holdings decreasing from 66.48% in Q4FY24 to 63.37% in Q1FY25.

    Kacholia also cut his stake to below 1% each in apparels & accessories company Vaibhav Global, finance company Ugro Capital, industrial machinery company HLE Glascoat, iron & steel products retailer Shankara Building Products, and restaurants chain Barbeque-Nation Hospitality.

    He reduced his stakes in other companies – 0.7% in Shaily Engineering Plastics, 0.5% in Garware Hi-Tech Films, 0.4% in Repro India, 0.1% in NIIT Learning Systems, 0.2% in Ami Organics and 0.3% in Aditya Vision. He also sold 0.8% each in PCBL and Sastasundar Ventures during the quarter. A likely reason for Kacholia’s multiple sells is the soaring valuations in the midcap and smallcap space. 

    Raging bull market can be trouble some for experienced investors https://t.co/QZDIgoNgdo

    — Ashish Kacholia (@LuckyInvest_ARK) June 28, 2024

    Sunil Singhania’s Abakkus Fund adjusts holdings in key sectors

    Sunil Singhania’s Abakkus Fundsaw its net worth fall 10.3% to Rs 2,741 crore after Q1FY25. The fund reduced its stake in Route Mobile to below 1% during the quarter, after holding a 2.4% stake in the internet services & software company in Q4FY24. Its share price has risen marginally by 0.7% over the past year, underperforming its industry by 107.6 percentage points. It also reduced its stake in PSP Projects, a construction and engineering company, to below 1% from 1.5% in Q4FY24.

    Singhania trims his stake in Route Mobile and PSP Projects to below 1%

    Singhania’s fund also trimmed its stake in IIFL Securities by 0.2%, now holding 3.1% of the capital markets company. It sold a 0.1% stake in Mastek and now holds 3% in the IT consulting & software company. 

    Abakkus cut a 0.09% stake in the construction & engineering company HG Infra Engineering. It now holds 1.35% compared to 1.44% in Q4FY25. Its share price rose by 60.3% in the past year, underperforming its industry by 33 percentage points. 

    Vijay Kedia cuts stakes in three companies

    Vijay Kedia reduced his holdings in three companies in Q1FY25, with stakes below 1% in two companies. His net worth dropped 12.8% to Rs 1,615.2 crore since the end of Q1FY25. During the quarter he reduced his stake to below 1% in auto parts & equipment manufacturer Talbros Automotive Components and in electric utilities company Reliance Infrastructure from 1% each in Q4FY24. Over the past year, its share price increased by 28.8%, underperforming its industry by  82.

    Kedia reduces stakes in Talbros Auto, Reliance Infra to below 1%

    Kedia also cut his stake in Patel Engineering to 1.4% from 1.6% in Q4 FY24. The ace investor had added the construction & engineering company to his portfolio in Q4FY23, by buying a 1.3% stake. The company’s share price has fallen by 7.6% over the past quarter.

    Dolly Khanna cuts stakes in four companies 

    Dolly Khannareduced her holdings in four companies in Q1FY25, including one where her stake fell below 1%. Her net worth has increased by 4.2% to Rs 608.4. crore since the end of Q1FY25. During the quarter, she reduced her stake in Salzer Electronics (an other electrical equipment/ products manufacturer) to below 1%, from the 1% held in Q4FY24. She added the firm to her portfolio in Q2FY24 by buying a 1.1% stake but reduced her holding to 1% in Q3. Over the past year, Salzer has risen by 195.6%, underperforming its industry by 978.4 percentage points. 

    Dolly Khanna pares stakes in Salzer Electronics, Deepak Spinners and others

    During the April-June quarter, Dolly Khanna cut her stake in Deepak Spinners by 0.7% to 1.04%. She held a 1.77% stake in the small-cap textiles company in Q4FY24. 

    The ace investor reduced 0.1% stake each in National Oxygen and Control Print, taking her holding to 1.16% and 1.1%, respectively, in the industrial gases and computer hardware companies. 

    Porinju Veliyath cuts stakes in two companies in Q1

    Porinju V Veliyath’s net worth increased by 17.3% to Rs 224.2 crore after Q4FY24. During the quarter, he reduced his stakes in two companies. Porinju cut a 0.2% stake in Mitsu Chem Plast, taking his holding to 1.5%. He added the containers & packaging firm to his portfolio in Q4FY24 by buying a 1.7% stake. Over the past year, the company’s share price has declined by 25.2%, underperforming its industry by 85.8 percentage points. 

    Porinju pares stakes in Kaya and Mitsu Chem

    During the latest quarter, the marquee investor reduced a minor stake (0.1%) in special consumer services company Kaya, taking his holding to 2.9%. He has consistently held a 3% stake for a year since Q4FY23. The company has an expensive valuation with a score of 19.7, but a moderately bullish momentum score of 63.7. 

    Mohnish Pabrai reduces stake in a realty company to below 1% 

    Mohnish Pabrai’s net worth fell by 81.1% to Rs 92.5 crore after Q1FY25, and publicly holds just one company currently. During the quarter, he reduced his holding in Sunteck Realty to below 1%, from 2.2% in Q4FY24.  He consistently held a 6.7% stake in the company since Q1FY23, before reducing it to 2.2% in the March quarter. The realty company’s share price has risen by 58.5% over the past year but underperformed its industry by 60.4 percentage points.

    Pabrai trims stakes in two companies in Q1

    During Q1, Pabrai cut his stake in Edelweiss Financial Services by 3.9%, taking his holding to 1.2%. He held a 5.1% stake in the other financial services company in Q4FY24. Over the past quarter, Edelweiss has risen by 9.9%, underperforming its industry’s 22.9% growth.

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    The Baseline
    14 Aug 2024
    Five stocks to buy from analysts this week - August 14 2024

    Five stocks to buy from analysts this week - August 14 2024

    By Ruchir Sankhla

    1. Maruti Suzuki India:

    KRChoksey maintains a ‘Buy’ rating on this cars and utility vehicles manufacturer with a target price of Rs 14,148, indicating a potential upside of 15.3%.  The stock is currently in a strong PE buy zone. The company saw a strong performance in Q1FY25, where its net profit rose 48.9% YoY to Rs 3,759.7 crore, driven by cost reduction initiatives, favorable commodity prices and foreign exchange rate. Revenue grew 10.6% YoY to Rs 36,839.9 crore.

    Analyst Unnati Jadhav says, “The growth was primarily driven by strong export sales which increased by 11.6% YoY, with Jimny being the highest exported vehicle during the quarter.” She notes the company’s plans to double its production to 4 million vehicles by FY30-31 from the current level of 2.2 million.

    Jadhav anticipates that stronger rural markets will drive increased demand for hatchbacks, as the company aims to boost exports and CNG sales. Revenue, EBITDA, and adjusted PAT are expected to grow at a CAGR of 11.5%, 9.4%, and 12.6%, respectively, over FY25-FY26, as margins continue to improve.

    2. Coal India:

    ICICI Direct makes a ‘Buy’ call on this coal mining and production company with a target price of Rs 650 and a potential upside of 24.6%. The company reported a net profit of Rs 10,959.5 crore for Q1FY25, up 37.5% YoY. This increase was driven by lower material costs, reduced employee benefits, and decreased inventory. Its revenue grew 2.2% YoY to Rs 38,349.2 crore. Coal India is classified a strong performer as shown by its DVM score.

    Analyst Shashank Kanodia and Manisha Kesari note that the company is expanding its portfolio into new areas, including coal gasification through JV agreements with BHEL and GAIL, investments in thermal power such as Mahanadi Basin Power and exploring acquisitions of critical mineral assets both domestically and internationally. They remain optimistic about Coal India, citing strong volume growth prospects, ongoing diversification into emerging sectors, a healthy net cash positive balance sheet, and dividend yield of approximately 5%. Analysts expect coal production to grow at an 11% CAGR from FY25 to FY26 to 950 metric tonne (MT) by FY26, and anticipate a 7% CAGR growth in sales and PAT over the same period.

    3. Krishna Institute of Medical Sciences (KIMS):

    Edelweiss retains a ‘Buy’ recommendation on Krishna Institute of Medical Sciences (KIMS) setting a target price of Rs 2,560, suggesting a potential upside of 15.2%. This healthcare facilities company posted a 7.2% YoY increase in net profit to Rs 86.6 crore and a 13.8% YoY rise in revenue to Rs 693 crore in Q1 FY25. Analysts Thakur Ranvir Singh and Pawan Bhatia say,”Growth in revenue was helped by 21% YoY rise in ARPOB, 8% YoY growth in IP volume and 10% rise in OP volume”.

    KIMS plans to add approximately 1,800 beds in two years through various greenfield and brownfield plans. Analysts highlight that the company is on track to commence operations at its Nasik unit (300-beds) and newly acquired 200-bed multi-specialty Queen’s NRI Hospital (QNRI) at Vizag in Q2FY25, which is expected to improve performance in H2FY25.

    Singh and Bhatia believe the company has a strong expansion plan for the next 3 years, anticipating an increase in the total bed capacity to approximately 6,300 in FY27 from 3,975 in FY24. They retain their FY25 estimates, with a revenue, EBITDA, PAT CAGR of 23%, 22%, 19% respectively for FY 25-26. They also revised theirFY26 revenue, EBITDA and PAT forecasts upwards  by 6%, 5%, 8% due to the addition of new beds.

    4. Oil And Natural Gas Corporation:

    Emkay maintains a ‘Buy’ rating on this exploration and production company with a target price of Rs 360. This indicates an upside of 7.2%. The company has received approval for the restructuring of its ONGC Petro Additions (OPaL) project. The government has approved a Rs 10,501 crore investment in OPaL, including financial support for raw materials, with gas priced up to 20% above the Administered Price Mechanism (APM).

    ONGC reported a revenue growth of 19% YoY to Rs 1,69,562.3 crore in Q1FY25, but missed the Forecaster estimates by 5.8%. The revenue increase was driven by higher crude sales, while lower gas output impacted results. ONGC Videsh (OVL) saw costs reduce due to a shift in royalty payments from cash to kind, though production remained unchanged.

    Analysts Sabri Hazarika, Harsh Maru, and Arya Patel are optimistic about ONGC’s investment in green energy, targeting 10GW by CY30, and its plans to expand gas production capacity by developing new wells throughout the year. They anticipate positive developments in premium gas pricing and a boost from increased capex for Mozambique projects.

    5. Tech Mahindra:

    Geojit BNP Paribas upgrades this IT consulting firm to ‘Buy’ with a target price of Rs 1,645, indicating a potential upside of 9.4%. The company’s EBITDA margin improved by 180 bps, and lower interest expenses supported net profit growth in Q1FY25. However, revenue dropped 1.2% YoY to Rs 13,006 crore, impacted by the communications segment.

    The company introduced TechM VerifAI, a framework for validating AI systems, and developed over 100 AI solutions. During the quarter, Tech Mahindra expanded its workforce by 2,165 employees, and continued strategic initiatives like Project Fortius and Turbocharge to enhance margins. The analyst says, “The company's investment in AI and its workforce expansion, coupled with cost-saving initiatives, should  yield enhanced margins and drive growth in the manufacturing segment”. Additionally, they anticipate stable demand in the BFSI segment, as the company continues to explore new opportunities with existing clients. 

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

    (You can find all analyst picks here

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    The Baseline
    13 Aug 2024
    COTW: When it comes to the Olympic race, India lags in medals to GDP ratio

    COTW: When it comes to the Olympic race, India lags in medals to GDP ratio

    By Satyam Kumar

    The Paris 2024 Summer Olympics ended with Indian athletes winning a total of six medals (one silver, five bronze) –three in shooting, and a medal each in hockey, wrestling, and athletics (javelin). 

    Successful Olympic athletes like Abhinav Bindra and Neeraj Chopra have won golds in the past and have become national heroes, inspiring others. Rifle shooter Abhinav Bindra was the first Indian to win an Olympic gold medal in an individual event at Beijing in 2008 and was the only one to do so for over a decade before Neeraj’s javelin triumph at Tokyo in 2020.

    Last year in October, Prime Minister Modi expressed hopes that India would host the Olympics in 2036, pledging to leave no stone unturned in the effort. However, there is still a lot of work to be done if we want to get a piece of the global sports action.

    The International Monetary Fund in May projected that India will surpass Japan to become the 4th largest economy in the world in terms of nominal GDP in 2025. With a growth rate of over 7%, India will very likely become the third largest economy in the coming years. However our performance in the Olympics is a different story. 

    India stands last in terms of number of medals to GDP ratio in the 2024 Olympics, at 0.05 medals for every $100 billion in GDP.

    In this week’s Chart of the Week, we explore why India lags so far behind in global sports. Countries like the United States, China, and Australia dominate the medal tally, and even smaller developing nations like Jamaica, Mexico, and Brazil are far ahead of us.

    An Olympic medal is a rarity in India: one per 250 million people

    India ranks last in medal density among the most populous nations

    In 2023, India beat China to become the most populous country in the world, with over 1.4 billion people. More than half of the population is under the age of 25, and the average age in India is 29 years, compared to 37 in China and 48 in Japan. 

    You would imagine that this kind of demographics would produce hundreds of thousands of talented Indian athletes. 

    But despite  having the highest youth population, only 117 Indians went to compete in the Olympics this year. China in comparison, sent around 388 people who participated in a total of 33 events. From the above chart, it is clear that qualifying for the Olympics events and winning medals is very rare for India. If we look at the tally this year, India has won only one medal per 250 million people, which translates to 0.004 medals per million people. Meanwhile, countries like the United States, Japan and Brazil won 0.38, 0.36 and 0.10 medals respectively per million people.

    Sports: A neglected field in terms of government spending

    Budget allocation for sports has been below 0.1% for the past decade

    The percentage of the total budget allocated to the Ministry of Youth Affairs and Sports, which oversees sports, games, and youth welfare programs, is abysmal. For over a decade, this allocation has remained below 0.1% of the total budget. This underinvestment could be a major reason why a country with the largest youth population ranks 71 in terms of medal tally in the 2024 Olympics.

    Over the past decade, the government has launched various initiatives to promote sports in India. To enhance Olympic and Paralympic performance, the Ministry of Youth Affairs and Sports introduced the Target Olympic Podium Scheme (TOPS) in 2014. It ensures that a ‘core group of athletes’ have all necessary, personalised support in terms of foreign exposure, hiring of specific coaches, training and competition abroad.

    In 2018, another program was launched by the name “Khelo India Program” which aimed at reviving the sporting culture in India at the grassroots. It has been more than five years since the programme was launched, and has seen participation of around 20,000 athletes. 3,000 athletes identified as Khelo India Athletes are currently training at Khelo India Academies, and are given an out-of-pocket allowance of Rs 10,000 per month.

    A lot of noise, but not enough money: China spends ten times more than India on sports

    At the outset, it looks like the government has only revamped the names of various sports programs but changed little else. For instance, Sports Authority of India (SIA) centers have been renamed Khelo India Academies, but little to no effort have been put into increasing the budget allocation.

    India has aims to become a developed nation by 2047. To compete globally at a level that reflects our rising economic strength, India needs substantial investment in infrastructure and athlete development. In the FY25 Budget, the government has allocated Rs 3,442 crore for the development of sports, which translates to approx. $410 million. In comparison,, China spent around $3.2 billion in 2023, and has plans to spend around $1 billion in 2024.

    The cause of our medal drought is clear: sports in India is severely underfunded and has failed to  keep up with other nations. The government's ambitious goal of hosting the Olympics in 2036 may not materialze if we don’t do a big overhaul, in funding as well as infra and training for young athletes. 

    To excel on the global stage and nurture our talent, the Indian government needs to step up to the plate. Else we will continue to finish dead last in the race.

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    The Baseline
    09 Aug 2024
    Five Interesting Stocks Today - August 09, 2024

    Five Interesting Stocks Today - August 09, 2024

    1. BSE:

    This stock market exchange saw an 8.4% surge on Thursday following the announcement of its Q1 results after market hours on Wednesday. The firm posted a revenue growth of 2.5X YoY at Rs 674 crore in Q1FY25, surpassing Trendlyne's Forecaster estimate by 14.5%. Adjusted net profit rose 2.6X YoY to Rs 265 crore, beating estimates by 14%.

    In Q1FY25, transaction charges, which make up more than half of the total revenue, soared 5.6X YoY to Rs 366 crore. Revenue from equity derivatives jumped to Rs 242 crore, compared to just Rs 1.6 crore in Q1FY24, thanks to a relaunch in May last year. However, the currency derivatives segment faltered as revenue plunged by 85% YoY, following the RBI mandate requiring traders to demonstrate foreign currency exposure to participate in this segment.

    BSE shares had surged 6% on July 31 after SEBI proposed seven key amendments to curb the FnO frenzy. SEBI had observed that most traders lose money on expiry day trading, where premiums are low but risk is high. One of the amendments aims to limit both NSE and BSE to only one weekly expiry contract each. 

    Analysts anticipate these changes to impact FnO volumes. But they also forecast a significant market share gain for BSE from its current 20% level, since these amendments are expected to impact NSE more severely, as it currently holds 80% market share with four weekly expiry contracts on different days, compared to BSE's two.

    MD & CEO Sundararaman Ramamurthy said, “BSE’s foray into single stock derivatives space from July 1, 2024, with a mid-month expiry, has gained considerable traction.” He highlights that performance has exceeded his expectations, with a total turnover of Rs 341 crore in July.

    Motilal Oswal reiterates its ‘Neutral’ rating on BSE due to the uncertainty surrounding potential new regulations for FnO. However, they view the relaunch of BSE derivatives products last year as a game-changer and expect the recent launch of stock derivatives to drive further market share gains for BSE.

    2. Adani Wilmar:

    This edible oils company rose by 10.6% over the past week, after Adani Enterprises approved a scheme of arrangement to demerge its food FMCG business and transfer it to Adani Wilmar, along with investments in Adani Commodities LLP.

    Adani Wilmar reported a net profit of Rs 313.2 crore in Q1FY25 compared to a net loss of Rs 78.9 crore in Q1FY24, helped by inventory destocking. Revenue grew 9.6% YoY to Rs 14,168.6 crore, during the quarter. The firm missed Trendlyne’s forecaster estimates for revenue by 1.6%, but beat net profit estimates by 81.9%. 

    Adani Wilmar got a boost from a notable increase in volumes, with edible oils up 12% YoY and Foods & FMCG up 42% YoY. The company increased its market share by 60 bps to 19% in the edible oil business, with its brand "Fortune" leading the segment. The firm’s market share in edible oil is nearly 1.5 times that of its next competitor, Patanjali Foods, dominating in North and Central India. CFO Shrikant Kanhere said, “We expect 30-40% YoY annual volume growth for the next three years once our Gohana plant is operational, enabling a more efficient in-house supply chain.”

    The company has broadened its product range with "Pehli Dhaar," a cold-pressed mustard oil, and is utilizing its established distribution network to boost food product sales and reach more customers. It plans to cover 50,000 rural towns by March 2025 to enhance product distribution. Adani Wilmar also aims to expand its export business, focusing on specialty chemicals and branded food products, to explore new markets.

    KRChoksey maintains its “Accumulate” rating with an upgraded target price of Rs 382.4, indicating a potential upside of 6.5%. The brokerage highlights favorable commodity prices, improved margins, and a scaling up of the food portfolio as drivers for future growth.

    3. Godrej Consumer Products:

    This personal products maker has declined more than 3.9% in the past two days after announcing its Q1FY25 results. Its revenue declined 3% YoY to Rs 3,409 crore in Q1, missing Forecaster estimates by 2.4%. This was largely due to a 25% YoY decline in GAUM ( Godrej Africa, USA, and Middle East).  Net profit grew 41.4% YoY to Rs 450.7 crore during the quarter, but missed estimates by 8.2%. 

    International markets (which make up around 37% of the total revenue), saw Godrej Consumer’s Indonesia business outperform, with a 7% YoY growth in volumes. The growth was led by its hair colour business, and the newly launched Stella Electric Diffuser. However, Africa, US & Middle East business volumes declined due to devaluation of Nigeria’s naira currency, and the Red Sea crisis. 

    In the domestic business, the homecare segment (which contributes around 38% of revenue) grew 8% YoY led by air fresheners and liquid detergent. However, the household insecticide business was impacted by severe heatwaves. The management highlighted that Goodknight Agarbatti is scaling up and gaining market share from unorganised incense stick players. Meanwhile, the personal care segment (contributing around 58% of the revenue) sales grew by 6% YoY. 

    Meanwhile, Godrej Consumer Products announced its entry into the pet care industry, by creating a subsidiary, Godrej Pet Care, with an expected cash investment of Rs 500 crore planned over the next five years. The production will begin in Q2FY26, and the company will have a manufacturing agreement with Godrej Agrovet, operating in the animal feed and agribusiness sectors. Aasif Malbari, the CFO acknowledged the jump in pet ownership in India, saying,  “Pet foods is a Rs 5,000-crore category with the potential for strong double-digit growth for the next few decades”.

    Post results, Motilal Oswal maintains its ‘Buy’ rating with a target price of Rs 1,700. The brokerage believes the implementation of disruptive innovations, the introduction of access packs, expansion into new growth categories, and increased advertising expenditure will contribute to a consistently robust growth trajectory. 

    4. Carborundum Universal:

    This industrial products company fell by over 10.8% over the past week. It announced its results on July 31s – the company’s net profit fell by 0.2% YoY to Rs 112.5 crore in Q1FY25, while its revenue fell by 2.4% YoY, mainly on the back of declines in electro minerals and ceramics segment revenues. The firm missed trendlyne’s forecaster estimates for revenue by 5.4% and for net profit by 14.7%. The stock shows up in a screener for stocks in the PE sell zone.

    Electro minerals are the basic raw material used in the manufacturing of abrasives and for surface preparation in tile and paint industries. Carborundum Universal manufactures these, as well as industrial ceramics like Zirconia Ceramic, which is used in the food industry for grinding applications. The company’s consolidated electro-minerals sales struggled in Q1, falling by 9% YoY to Rs 380 crore due to a drop in price realization by 4-6% from Chinese dumping. Consolidated ceramics sales fell by 6% YoY to Rs 270 crore, primarily due to delays in refractory orders. 

    China has cast a shadow on Carborundum Universal’s numbers. Analysts note that the firm has reported a muted set of results since the last four quarters on account of competition with Chinese abrasives, loss of a customer in engineered ceramics, and the decline of the Russian ruble, which negated the gains of growth in subsidiaries’ revenues.

    Sridharan Rangarajan, MD of the firm, commented: “For FY25, in the previous call  we said that full-year consolidated sales growth could be 9% to 11% and consolidated sales could be Rs. 5,100 to 5,200 crore. We are confident of delivering the same. We expect growth of 11% to 12% in Abrasives, 12% to 14% in Ceramics as told earlier. We maintain the same stands for Electro Minerals as well, a growth of 5% to 6%. Abrasive India growth would be 9% to 11%. We expect the second half to be better. All the projects that we plan to execute are in line and we are confident of what we guided in the last call.”

    Despite management optimism, ICICI Securities has downgraded the stock to a “Sell” rating with a target price of Rs 1,450. The brokerage highlights that due to its well-diversified and large product basket, the firm is a key beneficiary of the increased focus on hi-tech manufacturing in the domestic market. However, with near-term headwinds in mind, the brokerage has maintained Its target price and now values the stock at 36x FY26 EPS.

    5. Torrent Power:

    This electric utilities company surged 16.5% to its all-time high of Rs 1,908 per share on 31 July, the day after its Q1FY25 results. The company’s net profit grew by 88% YoY to Rs 972.2 crore, beating Forecaster estimates by 50.1% while its operating revenue rose by 22.9% YoY to Rs 9,110 crore, largely driven by higher merchant power sales of 1.7 billion units (vs. 400 million units YoY).

    During the quarter, the company reported a sales growth of 65% YoY in the generation segment from Rs 2,229.3 crore in Q1FY24 to Rs 3,677.6 crore in Q1FY25. Its transmission and distribution segment grew 4.7% YoY to Rs 6,934.3 crore while its renewables segment grew 5.5% YoY.

    The company also signed a memorandum of understanding (MoU) with AIA Engineering and Torrent Urja 16 to supply renewable energy. This agreement involves developing and setting up hybrid projects with a capacity of up to 33 MW in Gujarat. The power will be supplied to AIA's production units through open access from the TU16 project.

    Saurabh Mashruwala, Chief Financial Officer of the company said, “The current electricity market conditions are favorable for generators like us, given sufficient capacity and the lack of recent major investments in thermal power. We expect to reach 5 GW of renewable energy capacity in the next two to three years.” The company is capitalizing on these favorable conditions by investing in the development of two major transmission projects. The first, the Khavda Transmission Project, which has a return on equity of 15% and is expected to cost more than Rs 800 crores. Second is the Solapur transmission project which will involve an investment of Rs 470 crores.

    ICICI Securities maintains a ‘Hold’ rating on the stock with a target price of Rs 1,825. The brokerage does not expect contribution to decline in the next three quarters, leading to moderation in quarterly profit, and expects EBITDA margin to be 17.1% in FY25 and 18.7% in FY26.

    Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

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    The Baseline
    08 Aug 2024
    Which stocks did superstar investors buy in Q1FY25?

    Which stocks did superstar investors buy in Q1FY25?

    By Ruchir Sankhla

    Investments by superstar investors like RARE Enterprises, Ashish Kacholia, Sunil Singhania, and Vijay Kedia are closely tracked by investors for valuable insights into the market. Their buys and sells help investors identify interesting sectors and stocks. Here we look at the buys made by these superstar investors during Q1FY25.

    (You can now also invest in shadow superstar baskets available on Starfolio, which are updated and rebalanced as per Trendlyne's superstar portfolios).

    In Q1, superstar investors made fewer additions and more stake sales, with some only making small increases in stakes and no new buys during the quarter. The chart below shows the changes in superstar investors' current portfolio net worth. Note that net worth reflects both changes in current holdings as well as new buys and sells. 

    Some superstars see a fall in their net worth in Q1FY25

    The public portfolio of each superstar investor indicates their investing style and preferred approaches. The following chart gives a breakdown of the dominant sectors in each investor’s portfolio. 

    Sectors preferred by superstars

    Sector preferences vary among superstar investors – RARE Enterprises leans towards the textiles apparels & accessories sector, while Ashish Kacholia and Sunil Singhania favor the general industrials sector. Vijay Kedia’s preferred industry is automobiles & auto components. Dolly Khanna prefers the oil & gas industry, and Porinju Veliyath favors software & services.

    RARE Enterprises’ only buy is a minor stake in a healthcare company

    Rakesh Jhunjhunwala’s portfolio, currently managed by Rekha Jhunjhunwala and RARE Enterprises, fell by around 10.9% to Rs 46,092.1 crore by the end of Q1FY25. During the first quarter, no new additions were made. RARE Enterprises made just a minor stake increase in healthcare facilities firm Fortis Healthcare by 0.1%. The portfolio now holds a 4.2% stake. Over the past year, the company’s share price has increased by 43.7%. 

    Ashish Kacholia adds a new listed company to his portfolio

    Ashish Kacholia’s net worth declined by 6.9% to Rs 2,718.5 crore after Q1FY25. During the quarter, the marquee investor added recently listed special consumer servicesAwfis Space Solutions to his portfolio, by buying a 4.8% stake. 

    Awfis Space Solutions debuted on the stock exchanges on May 30, 2024. The company’s share price has increased by 64.3% from its listing price. 

    During Q1, the ace investor also bought a 0.2% stake in Dhabriya Polywood. He now holds a 6.67% stake in the plastic products company. Kacholia added it to his portfolio in Q2FY24 by purchasing a  6.4% stake. The company’s share price has grown by 70.5% over the past year, outperforming its industry by 27.4 percentage points. 

    During Q1, Kacholia also bought a minor stake in Brand Concepts. He now holds 1.6% in the specialty retail company. The company’s share price rose by 65.9% in the past year. 


    Ashish Kacholia adds Awfis Space Solutions to his Portfolio

    Sunil Singhania’s Abakkus Fund makes no new buys in Q1

    Sunil Singhania’s Abakkus Fund saw its net worth fall by 4.2% to Rs 2,711.3 crore after Q1FY25. The fund didn’t make any buys during the quarter. The fund’s activity in  Q4FY24 was also limited, adding just minor stakes to current holdings. Abakkus Fund increased its holdings in household appliances manufacturer, Hindware Home Innovation, to 4.5%.  It also added minor stakes in Shriram Pistons & Rings and IIFL Securities. 

    Vijay Kedia increases stake in an airline company

    Vijay Kedia’s net worth increased by 33.6% to Rs 1,659.9 crore after Q1FY25. During the April-June quarter, the ace investor did not add any new stocks to the portfolio and increased his stake in just one company – airlines stock Global Vectra Helicorp, by buying a 1.9% stake. Kedia now owns 4.9% of the company. Over the past year, the company’s share price has increased by 260.4%.

    Vijay Kedia buys a 1.9% stake in Global Vectra Helicorp

    Dolly Khanna adds five new companies to her portfolio in Q1

    Dolly Khanna’s net worth increased by 25.5% after Q1FY25 to Rs 615.7 crore, she publicly holds 21 companies. During Q1, the investor continued to expand her portfolio by adding five new companies and raising stakes in four others. Among her new investments is a 1.6% stake in capital market company Emkay Global Financial Services and a 1% stake in Tinna Rubber and Infrastructure, a specialty chemicals company. She also bought a 1.1% stake each in textile stock Super Sales India, non-ferrous metals company Nile and bank stock Ujjivan Small Finance Bank. 

    Dolly Khanna adds five stocks to her portfolio

    During the first quarter, Khanna bought a 0.53% stake inexploration & production companySelan Exploration Technology, taking her holding to 1.56%. She bought a 0.4% stake in breweries & distilleries company Som Distilleries & Breweries and now holds a 1.5% stake. The ace investor added minor stakes in the sugar stockZuari Industries and the housing finance company Repco Home Finance. She now holds 1.9% and 1.2% stakes respectively, in these companies. 

    Porinju Veliyath buys a small stake in an IT company 

    Porinju Veliyath’s net worth increased by 37.3% to Rs 262.3 crore after Q1FY25. During the first quarter, he increased investments in two companies. The investor bought a 0.4% stake in Aurum Proptech and now holds 4.9% in the IT consulting & software company. In the last one year this company has outperformed its industry by 21%.

    Porinju adds minor stakes in Aurum Proptech and TAAL Enterprises

    The ace investor also increased his stake in airlines industry company TAAL Enterprise by adding 0.2%, taking his holding to 1.3%. The company has a good durability score of 65. 




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    The Baseline
    07 Aug 2024

    Chart of the Week: Sectors and stocks with the highest dividend yields in the past year

    By Satyam Kumar

    There are two popular ways to generate returns from stocks: 1) when your capital appreciates with share price growth, and 2) dividends. Investing in dividend-paying stocks gives you a share of a company’s profits through regular cash payments. Such high-dividend stocks serve as reliable sources of income. 

    The dividend yield, expressed as a percentage, is the annual dividend payment relative to the stock’s current price. The significance of the dividend yield for a company lies in its ability to attract and retain investors for longer. A higher dividend yield boosts the stock’s appeal, especially for investors looking for a steady income.

    It's important to note that the dividend yield isn't a static figure; it changes as the stock price fluctuates. A falling stock price can inflate the dividend yield, a factor investors need to consider when analysing this metric. 

    In this edition of Chart of the Week, we will look into sectors and companies with the highest 1-year dividend yield over the past year. The full high dividend screener is here.

    Aster DM Healthcare gives a special dividend after sale of its Gulf business

    Healthcare facilities company Aster DM Healthcare announced a special dividend of Rs 118 per share from the proceeds after the sale of its Gulf business. Its share price rallied after the company completed the separation of its India and GCC businesses on April 3. The management said the Indian healthcare market looks promising and, after segregation, the company would focus on increasing its footprint in India. 

    Through both greenfield and brownfield opportunities, the company aims to take its total bed count in India to more than 6,600 in the next three years. The expansion plan will encompass the upcoming Aster Capital in Trivandrum, and Aster MIMS Kasargod projects, and adding bed capacity to existing hospitals. The healthcare company will also be looking at potential markets such as Maharashtra and Uttar Pradesh – while UP is a demographically younger market compared to South India, it is highly underserved when it comes to health facilities. The capital allocation for this expansion is in the range of Rs 1,000 crore.

    Indian Oil & its subsidiary Chennai Petroleum Corp. deliver the highest dividend yield among oil & gas companies

    The oil & gas sector had a dividend yield of 1.7% in the past year. Companies in the lead are Indian Oil Corporation, Chennai Petroleum Corporation and Bharat Petroleum with dividend yields of 7.2%, 6.1% and 3.8% respectively. It is important to note here that central public sector enterprises must pay a minimum annual dividend of 30% of profit after tax or 5% of net worth, whichever is higher as per guidelines given in 2020.

    In FY24, Indian Oil gave a 4X higher dividend of Rs 12 on a YoY basis, thanks to the cheap Russian crude that boosted gross refining margins over the past year. However, Trendlyne’s Forecaster estimates that the dividend per share will fall to Rs 6.8 in FY25. This is because discounts have almost halved to $3-6/barrel from $8-10/barrel in FY24, mainly due to higher freight and insurance costs because of Ukrainian drone attacks. This is evident in the net profit of oil & gas companies in Q1FY25. Indian Oil saw its net profit decline 75.6% YoY, while Chennai Petroleum’s net profit declined by 35.8% on a YoY basis.

    Bharat Petroleum also saw its net profit decline by 73.3% on a YoY basis in Q1FY25. Trendlyne’s Forecaster estimates the company will lower its dividend payout by 35.7% in FY25 compared to that in FY24. However, due to inflationary headwinds and a slowing global economy which might even lead to a recession in the US, crude oil prices are trading below the $80 level. This can be a major tailwind for refining margins and profitability, leading to potentially higher payouts/dividends.

    Vedanta’s dividend yield takes a hit, as it aims to deleverage balance sheet

    The metals & mining sector on the other hand had a dividend yield of 2.1%. Companies with the highest dividend payout in this sector are Vedanta, Coal India and NMDC with yields of 6.3%, 4.9% and 3.9% respectively. All three companies saw their share price nearly double over the past year.

    Contrary to the estimate beating dividend per share payout of Rs 101.5 in FY23, Vedanta missed the FY24 dividend payout estimates by 17.1%. This comes as the debt-heavy mining company works to deleverage its balance sheet via strategic demerger and asset sale. In Q4FY24, the company reduced its debt by 10% on a QoQ basis and improved its net debt to EBITDA ratio to 1.5X from 1.7X.

    Meanwhile, the banking & financial services firm had an overall dividend yield of 1% in FY24. The top dividend-paying stocks in this sector are ICICI Securities, UTI Asset Management Company and Ujjivan Small Finance Bank, offering yields of 5.2%, 4.8% and 3.5% respectively.

    Among the stocks that made it to the list, only Ujjivan Small Finance Bank’s share price fell over the past year.

    It’s worth noting that there are many reasons for companies to pay out dividends. While some aim to distribute profits back to shareholders, others might do so due to a lack of significant expansion plans. Companies that pay dividends are typically considered more stable and financially sound and, historically, dividend stocks have proven to be a safe bet during market downturns.

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    The Baseline
    07 Aug 2024
    Five stocks to buy from analysts this week - August 7 2024

    Five stocks to buy from analysts this week - August 7 2024

    By Divyansh Pokharna

    1. Tata Consumer Products:

    Motilal Oswal reiterates a ‘Buy’ rating on this tea & coffee company with a target price of Rs 1,380, indicating a potential upside of 15%. In Q1FY25, Tata Consumer Products' revenue grew 15.6% YoY to Rs 4,391 crore. EBITDA margins improved 80 bps YoY led by strong performance in the international beverage segment and higher coffee prices within the unbranded business.

    Analysts Sumant Kumar and Meet Jain highlight the acquisitions of Capital Foods and Organic India, which contributed nearly 5% to the company’s revenue. They are optimistic about the company's plans to diversify its product portfolio through the ready-to-drink segment, and its entry into the branded dry fruits market. Additionally, the company plans to digitize its supply chain to improve operational efficiency and cost management.

    Kumar and Jain are positive about the management's focus on strengthening the core business and expanding its distribution network. They project a revenue and PAT CAGR of 12% and 20% respectively, over FY25-26.

    2. Granules India:

    ICICI Direct maintains a ‘Buy’ rating on this pharmaceuticals company with an upgraded target price of Rs 765. This indicates an upside of 16.5%. In Q1FY25, Granules India’s revenue grew 20% YoY to Rs 1,176 crore driven by a 45% increase in US sales, which accounts for 74% of total sales.

    The company saw a 90% YoY growth in EBITDA, driven by enhanced margins and a favorable product mix. Analysts Siddhant Khandekar and Shubh Mehta are upbeat about the company's plans to produce essential raw materials in-house to secure its supply chain.They are positive about Granules expanding its product portfolio, particularly in formulations, with a targeted launch of 7-8 products annually in the US. The firm’s Genome Valley plant began operations in March, which increased its production capacity to 2 billion units. 

    ICICI Direct projects a revenue CAGR of 12.9% and a net profit CAGR of 37.9% over FY25-26, driven by the company’s emphasis on increasing sales of its formulation products, especially in the US and Europe.

    3. NLC India:

    Axis Direct initiates a ‘Buy’ rating on this electric utilities company with a target price of Rs 340, indicating a potential upside of 30.2%. In FY24, the company’s net profit rose 32.8% YoY to Rs 1,854,1 crore, missing Forecaster estimates by 7.4%. However, operating revenue fell 19.6% YoY to Rs 12,999 crore.

    Analysts Aditya Welekar and Darsh Solanki notes the company’s plans to increase its mining capacity from 50 MTPA to 102 MTPA, thermal power capacity from 4,640 MW to 10,465 MW, and renewable energy capacity from 1,431 MW to 8,059 MW by 2030. These capacity expansions will require a capital expenditure of Rs 1 lakh crore. These efforts aim to diversify cash flows and mitigate risks during the thermal power expansion.

    Welekar and Solanki value the conventional thermal business at 1.8 times the FY33 equity projections. They value the regulated mining business at 1.9 times FY26 equity, the renewable energy business at 9.0 times EV/EBITDA on FY26 EBITDA, and the merchant coal business at 7.0 times EV/EBITDA on FY26 EBITDA.

    4. Indraprastha Gas:

    Sharekhan has a ‘Buy’ rating on this non-electrical utilities company with a target price of Rs 648, indicating a potential upside of 19.4%. In Q1FY25, the company’s net profit fell 7.8% YoY to Rs 481.2 crore but beat Trendlyne’s Forecaster estimates by 11.5%. Its operating revenue rose 3.3% YoY to Rs 3,520.6 crore driven by a 7.4% increase in the sales volume of piped natural gas (PNG), reaching 198.4 million standard cubic meters (scm) compared to 184.7 million scm in Q1FY24.

    Analysts note the company’s capex for FY25 is projected to be Rs 1,700-1,800 crore, with around Rs 300 crores spent in Q1FY25. They also highlight the company’s plans to establish 10 new compressed biogas (CBG) plants in FY25, with an estimated project cost of Rs 300-350 crore, shared equally in a joint venture. The company plans to expand its network by adding 90 new CNG stations.

    The analysts expect increased consumption from ongoing infrastructure development and the introduction of CNG-compatible bikes to enhance consumption levels. The growth in LNG sales, which benefits from higher margins, also contributes to this optimistic forecast.

    5. ICICI Lombard General Insurance:

    Geojit BNP Paribas maintains a ‘Buy’ rating on this general insurance company with a target price of Rs 2,331, indicating an upside of 20.5%. In Q1FY25, the company’s gross direct premium income (GDPI) rose 20.4% YoY to Rs 7,688 crore, beating the industry’s 13.3% YoY growth. It appears in a screener of stocks outperforming their industry during the quarter. 

    The health segment saw a growth of 28.5% YoY, helped by the launch of a new health insurance solution ‘Elevate’. The analyst remains optimistic about the boost in the retail health business, driven by shifting consumer preferences and improved servicing capabilities. ICICI Lombard has expanded its product offerings with new long-term insurance products for the private car and 2-wheeler segment.

    Geojit projects ICICI Lombard’s premium earnings to grow at 16.4% CAGR and net profit CAGR of 25.1% over FY25-26, helped by its strong product mix and demand of its product by customers.


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

    (You can find all analyst picks here)

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