- Vedant Fashions Ltd. Thisspecialty retail firm has risen 40% since it went public in February 2022. According to Trendlynetechnicals, its share price has increased by 9.4% in the past week. Manyavar, as the company is known to its customers, specializes in Indian wedding and celebration wear and operates 640 franchise-owned brand outlets. The market for the celebratory wear segment is highly fragmented and dominated by informal players. Manyavar’s inventory management through data-driven demand forecasting and tech-enabled supply chain management has led to cost optimization, while franchise-based outlets have helped achieve an ROIC of 58% with minimal capex requirements. The stock has seen a 10% increase in the past week.
Manyavar is nurturing its emerging brands like Mohey, Twamev and Manthan to cater to different segments with varying price points across geographies. Mohey, which caters to women's traditional wear, currently contributes 10% of the total revenues and has the potential to be a game changer for Manyavar. The women’s celebratory clothing market is roughly 5x bigger than the men’s market and is valued at Rs 74,000 crore. Indian customers are also notably less price-sensitive in the wedding and celebratory clothing category.
Manyavar has generated Rs 1,317 crore in the trailing twelve months, with an operating margin of nearly 50%. The company has a cash surplus of Rs 790 crore on its balance sheets, providing a sufficient cushion for further expansion and brand building.
Motilal Oswal, in its initiating coveragereport, has highlighted Manyavar’s asset-light model and underpenetrated market, which provide an edge. Also, its higher margins and ability to scale different brands make it attractive. The brokerage has estimated profits to grow at 21% CAGR in FY23-25 and initiated a ‘Buy’ rating with a target price of Rs 1,400.
- Anupam Rasayan: This agrochemicals company rose 3.9% and touched its 52-week high of Rs 993.7 on Thursday, after signing an agreement with a Japanese multinational. The letter of intent (LOI) is valued at $182 million (approximately Rs 1,500 crore) and covers the manufacture and supply of three specialty chemicals, which are advanced intermediaries for highly specialized polymers and liquid crystals. The period of the agreement is set for seven years.
The stock has risen 32.8% over the past month, owing to multiple order wins and capex plans for expansion. This places the company in a screener of stocks that have gained more than 20% over the past month.
On March 22, the company signed a memorandum of understanding (MoU) with the Gujarat government to establish three plants in Surat and Bharuch, with an estimated capex of Rs 670 crore. The company also signed another letter of intent worth $120 million (approximately Rs 984 crore) for a period of six years with a Japanese chemical company to supply an advanced intermediate as an active ingredient for life science on March 23.
According to Nirmal Bang, the carry-over of higher cost inventory may subside compared to Q3FY23, while declining input chemical prices and container freight/shipping rates could reduce costs and support production growth. However, the brokerage sees a mixed trend for agrochemical stocks in Q4FY23 and has reduced the stock's target price to Rs 841 citing declining profit margins.
- Bank of Baroda: This banking stock rose 3% in trade on Wednesday after reporting its Q4FY23 provisional data. The bank has seen growth in domestic advances by 17% YoY to Rs 7.9 lakh crore, while deposits rose 15% YoY. Its CASA ratio stands at 36.8% in Q4 and overall business has crossed Rs 21.7 lakh crore. The stock has risen 42.6% in the past year.
Nitin Agrawal, Head of BFSI Research at Motilal Oswal Financial Services, says that Bank of Baroda’s CASA and deposit growth are better than its peers. He adds that the faster repricing of loans, compared to deposits, may lead to net interest margin (NIM) growth in Q4. However, according to him, Bank of Baroda’s advances growth may slow down in FY24. Nevertheless, the bank’s CEO and MD, Sanjiv Chadha, says that it aims to grow better than industry standards.
Given the tightening liquidity by RBI, banks are expected to mobilize deposits to meet their credit demand, which bodes well for deposit growth for the bank and the sector in general. According to a report, deposit growth is likely to be around 10%-11% for FY24E. Trendlyne’s Forecaster estimates a 3.6% net profit growth for the bank in Q4FY23.
Prabhudas Lilladher has given a ‘Buy’ rating on the stock with a target price of Rs 220, given its robust advances and deposit growth. It also expects the bank’s NIMs to improve in Q4. The bank’s main focus is on deposit mobilization aiding in a lower cost of funds, which is likely to support margin growth.
- Eicher Motors: This automobile manufacturer has risen 9.5% over the past week till Thursday on the back of healthy growth in its wholesale volumes. The firm’s monthly wholesales of commercial vehicles in March rose 35.2% YoY to 11,906 units. In FY23, its sales increased 39.5% YoY, led by robust growth in its domestic business operations. However, Royal Enfield’s monthly wholesale volumes for March increased due to a 34% YoY rise in exports. But in FY23, its total wholesales expanded 39% YoY, led by growth in domestic wholesales (41% YoY).
Despite reports of Macquarie downgrading its rating on Eicher Motors to ‘Neutral’, citing a weak earnings outlook on the back of lower volumes and margins, the stock continued its uptrend on Wednesday. On the other hand, Goldman Sachs initiated coverage on the stock with a ‘Buy’ rating, believing that the company faces the least amount of risk from electric vehicle disruption in the coming five years. It expects margins to expand due to an improving product mix for the international market. It also sees sales volumes in the domestic market rising due to the low sensitivity of its 250cc+ motorcycles to high-interest rates.
Although different brokerages have divergent views on the company’s growth outlook, the street’s consensus remains largely positive. According to Trendlyne’s Forecaster, the consensus recommendation from 37 analysts on the company is a ‘Buy’.
Going forward, the company’s management plans to increase its domestic sales by expanding into tier-3 and smaller markets. It also plans to ramp up exports by expanding its international presence and product portfolio.
- Titan Company: This textiles, apparels & accessories company rose around 1.4% on Monday after reporting healthy growth across its key businesses. Titan has risen 10.9% in the past month and is currently trading near its 52-week high. In Q4FY23, the company’s revenue grew by 25% YoY with help from its watches & wearables and emerging business categories.
The watches & wearables segment expanded by 41% YoY, while emerging businesses, including fragrances & fashion accessories (F&FA) and Indian dress wear (Taneira), grew by 31% YoY. The company’s Managing Director C K Venkatraman expects Taneira, women’s bags, and the fine fragrances divisions to contribute significantly to its revenue in the next five years.
Despite gold prices rising significantly in 2023, Titan’s jewellery segment, which accounts for the majority of its revenue, clocked a 23% YoY growth during the quarter. The segment’s strong performance was driven by growth in the new and existing customer base, high ticket sizes and a recovery in wedding sales. Titan has seen margin expansion to the tune of 60 bps in 9MFY23 on account of a better product mix. Also, the diversification of its brand portfolio is helping margins improve with value-added products.
ICICI Securities believes that the jewellery segment will likely outperform the consumer discretionary segment in the medium term. However, the pressure on gross margins will remain on account of increasing gold prices. Despite this, the brokerage has maintained a ‘Buy’ rating on the stock.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
