- Rail Vikas Nigam (RVNL): This construction & engineering company, an infrastructure arm of the Ministry of Railways, has outperformed the Nifty 50 index by 6.7 percentage points in the past week. However, the stock price has fallen 9.4% over the past 30 days. Because of the sharp rise over the past week, the company features in a screener of stocks with the highest recovery from 52-week low.
RVNL rose 12.3% on Thursday on the back of an order win from the joint venture with Metrowagonmash and Locomotive Electronic System. The Rs 24,000 crore order is for the manufacture and maintenance of 200 Vande Bharat trains. It also includes the upgradation of government manufacturing facilities and train depots.
The company had risen 4.4% on February 24 as well after winning another order worth Rs 196.8 crore from Madhya Kshetra Vidyut Vitaran for the supply, installation, testing and commissioning of new 11 KV lines in Bhopal.
These order wins take the company’s order book to approximately Rs 77,862.8 crore. The orders come on the back of the government’s capex push in the railways segment. The government increased the capex for railways by 16% to Rs 2.92 lakh crore in the FY24 budget announcement. It will be used for building railway tracks, wagons, trains, electrification, signalling and developing facilities at stations.
- Uflex: This containers & packaging stock had a shaky end to February as the Income Tax (IT) department conducted raids across 64 locations related to the company, causing the stock price to nose-dive more than 11% in the past week. It fell 17% on February 27, hitting a 52-week low despite the company releasing a clarification. But the clarification came six days after the exchange sought an explanation.
According to media reports, the IT department found irregularities of Rs 1,000 crore in Uflex’s financial statements and allegedly seized evidence to the tune of Rs 4,000 crore from its Noida office. Bogus company transactions through 60 shell companies were also reported. IT officials have seized 28 bank lockers linked to the company. This was similar to the raid in 2014 where Rs 300 crore in cash was seized from Uflex’s office. Notably, Ashok Chaturvedi, the company’s promoter, was investigated by the IT Dept in 2007 in another case.
The stock gained 7% on Tuesday and 10% on Wednesday, erasing nearly all losses after the company released a clarification denying all media reports of the seizing of assets or financial documents. The company, in its filing, says it continues to adhere to good business practices. However, the IT department is yet to make an official statement regarding the matter. Uflexshows up in a screener of stocks losing more than 20% in one month and declining net cash flow.
- Delhivery: This logistics company’s share price fell 2.1% in intra-day trade on Thursday after Softbank’s arm SVF Doorbell cut its stake by 3.84% (Rs 954 crore) to around 14% through a block deal. This comes after Tiger Global pared its holding in the company to 2.98%, after it sold 1.2 crore shares worth Rs 414.2 crore on February 24. The company’s stock has been picked up by many investment firms and funds like Baillie Gifford, Saudi Arabian Monetary Authority, BNP Paribas Arbitrage and City of New York Group Trust.
The stock currently trades 30.4% lower than its issue price of Rs 487 as of Friday. But the firm has risen over 8% since announcing its Q3FY23 results on February 10. Even though its revenue fell and net loss widened on a YoY basis, its performance improved sequentially on the back of cost optimisations and market share gains. The stock shows up in a screener for companies with increasing revenue sequentially over the past two quarters. According to Trendlyne’s Forecaster, the consensus recommendation on the company is ‘Buy’.
The company’s partial truckload (PTL) volumes have been consistently improving since November 2022, after a dip in the initial days of Q3FY23 due to unseasonal rains. The management points out that the company has renegotiated contracts with its low-margin clients in the PTL business, which resulted in better margins from the segment. It expects the momentum to carry forward in Q4FY23 and FY24, and is confident about expanding its market share. Overall, the firm expects e-commerce shipments to grow 15-20% and the PTL market to grow 10-12% in a year.
- Vedanta Limited (VEDL): This Metals and Mining firm has been in the news for locking horns with the Government of India over a proposed related-party transaction (RPT) withHindustan Zinc. The stock hastumbled by 18% from its January-31 peak to Rs 268. In January, Hindustan Zinc, via its promoter group, has approved the purchase of Vedanta’s zinc assets for USD 2.98 billion over a span of 18 months. This was despite the dissent of Hindustan Zinc’s directors representing the government. The government has plans to sell part of its stake in Hindustan Zinc in line with its divestment plans.
Hindustan Zinc is a subsidiary of Anil Agarwal’s Vedanta Limited. The promoter group owns a 69.69% stake in Vedanta, and Vedanta owns a 64.92% stake in Hindustan Zinc. Among minority shareholders, the Government of India owns 29.54% in Hindustan Zinc.
As Hindustan Zinc’s plan to buy VEDL’s assets will come under RPT, SEBI regulations mandate the approval of minority shareholders in full majority. The government, with its 29.54% stake, has voted against the RPT stating that it is against Hindustan Zinc using the cash reserve to buy VEDL assets.
Vedanta was selling its assets as part of its plans to reduce its debt by USD 4 billion in three years. In the past 11 months, VEDL has reduced its debt by USD 2 billion. The sale of its zinc assets would have ensured smooth sailing of the debt reduction commitment. According to VEDL,it has fulfilled all debt obligations till March 2023 and has sufficient cash flows to manage debt payments till June 2023. Further, VEDL is in talks to raise USD 1 billion via a syndicated bank loan.
- Power Grid Corporation of India: This electric utilities company closed in the red on Wednesday despite its order win to establish an inter-state transmission system. However, the stock has risen 2.7% in the past week, outperforming the Nifty 50 index by 3.6% in an overall weak market. Due to the rise in stock price, the company features in a screener of stocks trading above their short-, medium- and long-term moving averages.
Post market hours on Tuesday, the company was declared the successful bidder under tariff-based competitive bidding to establish an inter-state transmission system for Khavda Pooling Station-3 in Khavda RE Park, on a build own operate and transfer (BOOT) basis. The project includes the establishment of a new 765/400kV GIS substation, a 765kV direct current transmission line, and associated works in Gujarat.
The stock has been on an uptrend since February 23 with JP Morgan’s upbeat outlook on the company, according to reports. The brokerage has an ‘Overweight’ rating with a target price of Rs 255. This implies an upside of 18%. It believes that the company targets to grow generation capacity at a 10% compounded annual rate to meet the power demand. The rise in stock price was also because of its board approving a Rs 803 crore investment in electricity transmission projects. Currently, Power Grid has ongoing projects worth Rs 7,600 crore, new projects for Rs 27,000 crore and tariff-based competitive bidding projects of Rs 13,000 crore, totalling to Rs 47,600 crore, according to Sharekhan.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
