Trendlyne Blog: The Baseline, Latest on stock market and finance in India and the world.

The Baseline created a screener Stocks At Their All …

17 Sep 2021

Stocks At Their All Time Highs

Stocks where the day high is the all time high

The Baseline

17 Sep 2021

Five Interesting Stocks Today

Mindtree: This IT services company’s stock is the most overbought stock among Nifty 500 companies based on technical indicators like RSI and MFI. Over the past 18 months, this stock rose 5.7 times from the lows of March 2020 and is touching new 52-week highs regularly (including on Thursday). Investors only need to look at the company’s average broker one-year target price of Rs 2,440 to get a sense of how much the stock has run up over the past many months.
Cipla: This pharmaceutical company’s promoter group-controlled entities sold a stake (0.73% stake) in the company in the open market for the first time in two years. This comes a couple of months after the stock touched a 52-week high of Rs 997, which is also incidentally its lifetime high. Like other pharmaceutical companies, Cipla also gained from the pandemic and reported revenues above Rs 5,000 crore in three out of the past four quarters. The only time quarterly revenues dipped below Rs 5,000 crore in the past four quarters was in Q4FY21, as a result of which its net profit dipped below Rs 500 crore. Analysts are upbeat about the company’s prospects as can be seen in the average target price of Rs 1,063.5.
Home First Finance: Home First Finance, a technology-based financing company for affordable housing, listed in stock markets earlier this year, and has continued to trade above its issue price post IPO. The company recently received a buy call from Edelweiss with a price target of Rs. 763, an upside of 35%. It delivered a robust 49% AUM CAGR over FY17-FY21 despite FY21 being impacted by the Covid-19 pandemic.
Vodafone Idea: This beleaguered telecom company’s stock is one of the best performing stocks over the past week among Nifty 500 companies, rising 34%, with 25% gains coming on Thursday. These gains come after the Union Cabinet approved a rescue plan for the telecom sector which would ease its cash flows over the next four years. The relief entails moratorium on all dues, including spectrum, spectrum usage charges, and annual gross revenues based levies, and also rationalisation of various levies. This move will enable the company to survive impending doom and help the Indian telecom industry to continue to have three private players.
Poonawalla Fincorp: This non-banking finance company’s Managing Director Abhay Bhutada was banned by the market regulator SEBI from accessing capital markets for a year due to a violation of its insider trading regulations. This relates to trades executed by entities related to Bhutada in the company (previously known as Magma Fincorp) before the announcement of its acquisition by Rising Sun Holdings, controlled by Adar Poonawalla. SEBI held that entities controlled by Bhutada, and seven others, traded in Magma Fincorp’s shares before the disclosure of Rising Sun Holdings acquisition of a majority stake in the company. Bhutada resigned as managing director of the NBFC on Thursday evening.

The Baseline

16 Sep 2021

Chart of the week: HDFC Life and ICICI Prudential’s rising market share

As the Life Insurance Corporation of India's (LIC) IPO looks to hit markets in FY22, all eyes are on life insurers. And for India's listed private life insurance companies, market share is changing fast.

The market share (based on first year premiums) of the largest private life insurance company - SBI Life Insurance Company (a joint venture between the State Bank of India and BNP Paribas Cardif) fell to 8% in August 2021 from 8.8% in January 2021. In that time, HDFC Life Insurance Company's market share improved to 6.4% from 5.8% while ICICI Prudential Life Insurance Company's market share improved to 4.6% from 0.4%. LIC of India commanded a 68% share of the life insurance market as of August up from 61.5% in January 2021.

The Baseline created a screener Relative outperformers vs Nifty50, …

13 Sep 2021

Relative outperformers vs Nifty50, with brokerage buy calls and target price upgrades

Stocks that outperformed the Nifty50 in the past one month, with brokerage buy calls and target price upgrades

The Baseline

12 Sep 2021

Stocks with buy calls and price upgrades, that are outperforming Nifty50

For this week's analysis, we look at five stocks that:

1) have target price upgrades from analysts (within the past month)

2) outperformed the Nifty50 index over the past one month and

3) received multiple broker buy calls in the past one year.

Only 29 stocks qualify for all three criteria across the entire stock universe. We picked out some interesting ones:

Dalmia Bharat: This cement company has caught the attention of brokerages and is in Trendlyne's top screeners as well. It outperformed the Nifty50 by over 14% in the past one month and received five brokerage buy calls over the past year, as well as one target price upgrade in the past month. Geojit notes, "DBL’s strong capacity expansion plans to become a pan India player with 110-130MT by 2031 (48MT by FY24) while maintaining a strong balance sheet (target Net Debt /EBITDA <2x) supports valuation re-rating."
Apollo Hospitals: This healthcare company has been under the radar in the past year with Covid19 limiting patient access and voluntary treatments. But in the past quarter, it has outperformed the Nifty50, and also beat the index by 11% in the past month, and HDFCSec notes that, "With multiple growth drivers in place, Apollo is likely to report strong revenue/EBITDA CAGRs of 31%/52% over the next two years."
KNR Constructions: This construction company is gaining on expectations that it will benefit from the boost in government infrastructure spending. The stock outperformed the Nifty50 by over 3.5% in the past month. As of Jun’21 end, Axis Direct analysts point out, "the KNRCL order book stood robust at Rs 6,596 Cr (2.44x of FY21 revenue), comprising both road and irrigation projects. The current order book size reflects comfortable revenue visibility for the next 2-3 years."
FIEM Industries: This smallcap automotive light and indicator manufacturer has stolen the limelight after emerging as the sole parts supplier for Ola Electric in key products. This pivots this small player into the realm of larger suppliers, opening up to new orders just as the industry is ramping up, according to analysts. The company outperformed the Nifty50 by 34% the past month as investors jumped into the stock on the Ola news.
Oil India: Post result analysis of Oil India have been optimistic about its prospects, with the economic rebound. The company's stock was a muted performer over the past year but has seen a steady climb since May, and outperformed the Nifty50 by over 10.9% in the past month. Brokerages have given the stock three target price upgrades in the last month alone.

The Baseline

12 Sep 2021

Five Interesting Stocks Today

Sobha: For the first time in FY22, this real estate company’s insiders are selling shares. And it’s not just any insider, but the company’s Managing Director. On September 3, JC Sharma, the Managing Director of Sobha sold 30,000 shares worth Rs 2.1 crore in an insider trade, during a week when the stock jumped over 30%. Then, on September 7, he sold another 8,000 shares for Rs 65.3 lakhs in another insider trade. The last time a promoter, promoter group, key managerial personnel, or an institutional investor sold the company’s shares was during the first Covid-19 wave in April 2020 when L&T Mutual Fund sold over 21 lakh shares (2.2% stake). Since then, the stock is up by 4.5X.
NOCIL: Brokers are gushing about this specialty chemical manufacturing company. Three brokerages — Axis Direct, Prabhudas Lilladher, and Motilal Oswal gave it a ‘Buy’ rating with an 11% target price. Axis Direct in a note expects the company’s rubber chemicals division to receive a boost due to the resurgent demand for tyres domestically. The average broker target price is at an upside of 26%.
Blue Dart Express: This logistics company’s stock is rallying with cheap valuations despite Superstar investors taking profits. In one month, the stock is up by nearly 16%. However, it remains historically cheap as its trailing 12-month price to earnings (PE) ratio is 58.5 times compared to an average PE of 85.5 times, putting it in the buy zone. In the June 2021 quarter, Radhakishan Damani’s Bright Start Investments sold 67,000 shares in the company, reducing its stake by 0.28% sequentially.
Apollo Hospitals Enterprise: This healthcare company’s promoters have resumed pledging shares. On September 6, the company’s promoter K Vishweshwar Reddy pledged 70,000 shares worth Rs 35 crore. This is the second time Reddy pledged the company’s shares in FY22. Back in April 2021, he pledged 2 lakh shares worth Rs 58 crore. In Q1FY22, 29.9% of the promoter’s shareholding was locked in pledges, a 200 basis points increase sequentially. This was the first time, promoter’s pledges increased sequentially since Q3FY20.
Greaves Cotton: This engineering company is set to strengthen its position in the electric vehicles market. On September 9, it launched a multi-brand retail store for electric two wheelers, three wheelers, and automotive components. The company already has a strong base in the electric scooter market through its wholly-owned subsidiary Ampere Vehicles. Brokerages value Ampere Vehicles at Rs 1,800 crore and expect it to generate Rs 400 crore in sales by FY23 or 20% of the company’s total expected revenue.

The Baseline

09 Sep 2021

Chart of the week: Hero stumbles while others see two-wheeler sales rise

As economic activity ramps up, spending on two-wheelers is up. Since the peak of India's second Covid-19 wave, two-wheeler wholesales rose by nearly 82%.

However, the increase is not consistent across two-wheeler makers. For the market leader Hero MotoCorp, two-wheeler wholesales fell consecutively in July and August. But Bajaj Auto, TVS Motor Company, and Eicher Motors' Royal Enfield saw wholesales rise between May and August 2021.

The Baseline created a screener Brokerage Buy Calls and …

06 Sep 2021, 04:59PM

Brokerage Buy Calls and Buy/Sell Zone

The Baseline

06 Sep 2021, 01:52PM

Five analyst stock picks this week

Jubilant Foodworks: There's plenty to be jubilant about Jubilant Foodworks, according to Motilal Oswal, which gives the company an upside of 17% on a price target of Rs. 4830. "In addition to its delivery and value moat, Jubilant Foodworks is boosting its technological moat to enhance its lead over its QSR peers and aggregators," analysts Krishnan Sambamoorthy and team note. "Given the structural opportunities in the QSR space and JUBI's dominant positioning, with a proven and profitable model, we expect it to be the key beneficiary of favorable trends (shift towards branded players)."
Easy Trip: For ICICI Securities, this newly listed online travel platform is a buy, with a target price of Rs 600 - an upside of 25%. "It is the fastest growing and only profitable company among online travel portals in India," analyst Rashesh Shah writes. He notes key drivers of long term growth of Easy Trip and online travel: "(1) Increased adoption of internet platforms in under-penetrated segments such as hotels, international travel and buses, (2) growth in demand in air and hotel segments due to rising income levels and (3) deeper penetration of travel into lower tier towns."
Bajaj Auto: In the auto sector, it is Bajaj Auto that is speeding away with the prize, according to Axis, which gives the stock an upside of 13%+ on a target price of Rs. 4250. "Prudent cost management by the company led to margin expansion," analyst Darshan Gangar says, "BA’s exports business is doing better than ever, which helped it cover for the weakness in the domestic market. EV business and Triumph partnership will be the key future growth drivers moving forward."
Exide Industries: Geojit is bullish on this battery storage company, giving it an upside of 16% on a target of Rs. 220. "Despite 20% increase in the lead price for the quarter, stringent cost control measures led the PAT to grow by 185% YoY," analyst Saji John observes. "The overall demand scenario is showing sign of pick up due to cyclicality. We expect the margin to show some resilience going forward due to cost optimization." Some risks remain, however. "We factor 140bps lower margin from our early estimate due to lower supply of raw material and demand normalization in the after market segment."
Nazara Technologies: Prabhudas Lilladhar has pressed play on this gaming company, initiating coverage with a bullish buy call - an upside of 29% on a target price of Rs. 2342. Analysts Jinesh Joshi and Shweta Shekhawat write, "Nazara is India’s only listed gaming company with no competitive benchmarking. As business model is scalable and focus is on growth, we don’t rule out intermittent volatility in profitability."

But still, they insist, the company is a good investment. "We believe that a portfolio approach to gaming eliminates shelf life risks, as the business model can be altered depending on technological advancements and changing taste of consumers. With net cash balance sheet of Rs 4.8bn, Nazara has plans to expand its gaming portfolio inorganically which offers distinct option value."

The Baseline

02 Sep 2021

Some auto execs see big jumps in pay, despite downturn

FY21 was a tough year for automobile original equipment manufacturers (or auto OEMs) due to the pandemic and lockdowns. However, it was a good year for some auto OEMs' executives. Three of the top four listed two-wheeler makers' Managing Directors' (MD) remuneration ratios jumped in FY21 (The remuneration ratio is the ratio of the salary of a company's top management to the median employee's).

As per Eicher Motors' annual report, MD Siddhartha Lal's salary was Rs 21.1 crore in FY21, or 340 times the salary of the median employee. This was an increase from 311 times the median salary in FY20. Meanwhile, Eicher Motors' net profits in FY21 fell by 26%.

Rajiv Bajaj, MD of Bajaj Auto, received an annual salary of Rs 40.5 crore (621 times the median salary), and Pawan Munjal received an annual salary of Rs 86.9 crore (826 times the median salary). Bajaj Auto and Hero MotoCorp's FY21 net profits fell by 7% and 20%, respectively.