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

03 Dec 2019

Top Recommendations by Analysts this Week

by Ritmbarah Arora

“If you don’t study companies, you will have the same success with stocks as you do in a poker game, when you bet without looking at your cards”- Peter Lynch on investing. Before someone decides to invest in a particular company, thorough research is necessary before putting in hard earned cash.

Based on reports on Trendlyne, here are the top five stocks recommendations by analysts this week, and their rationale:

Symphony Ltd Recommended by Axis Direct: Headquartered in Ahmedabad, Gujarat, Symphony Ltd manufactures products like domestic air coolers and industrial air coolers. Having operations in about 60 countries, Symphony is known for the world’s largest functioning air cooler, as certified by the Guinness World Records.Axis Direct recommended buying Symphony with a target price of Rs 1,448 on November 29. The price at recommendation was Rs 1,148 and since then, the stock has seen an incremental growth of 31.1%. Symphony reported higher revenues, both on standalone and consolidated levels in Q2FY20. Revenues grew 13% YoY at Rs 272 crore as against Rs 240 crore in Q2FY19. The gross margins stood at 47.4% during the quarter over 46.3% in Q2FY19. The EBITDA margins improved to 23.2%, up 525 bps YoY while the consolidated Net PAT increased by 57% to Rs 58 crore as against Rs 37 crore in Q2FY19. Axis Direct expects the revenue of Symphony to grow at 20% CAGR between FY19-21E.
Bank of Baroda Recommended by Geojit BNP Paribas: Headquartered in Vadodara, Gujarat, Bank of Baroda is the third largest public sector bank and the second bank by assets in India. The bank has a network of 9583 branches and 10,442 ATMs in India and overseas. On September 17, 2018, the Government of India had announced the merger of Bank of Baroda, Vijaya Bank and Dena Bank, to create the country’s third largest lender. The merger was in effect from April 1, 2019. Geojit BNP Paribas has recommended to buy Bank of Baroda with a target price of Rs 113 on November 27. The price at recommendation was Rs 104.9 and since then, the bank’s share price has observed an incremental growth of 7.9%. Post the merger, Net Interest Margin (NIM) improved 19 bps sequentially to 2.8% led by 22 bps QoQ improvement in domestic margins. Net advances witnessed a meagre growth of 0.7% QoQ, with domestic advances flat YoY. The cost to Income ratio stood at 45.8% as against 49.2% in Q2FY20. The bank’s rating profile has improved with 26.1% of the loans falling in the BBB and below rating compared to 32.1% in Q1FY20.
VRL Logistics Recommended by BOB Capital Markets: Headquartered in Hubballi, Karnataka, VRL Logistics Limited has operations in around 23 states of India and 4 Union Territories. The business operation of the company includes road transportation, logistics, publishing, etc. VRL Logistics is one of the largest logistics and transport companies in India with 419 tourist buses and 3,941 transport goods vehicles. BOB Capital Markets recommended to buy VRL Logistics with a target price of Rs 330 on November 28. The company has seen an incremental growth of 17.8% since the time of recommendation at Rs 274.1. Despite a prolonged growth slowdown, competitive moats of the company are intact with a wide network, vast scale of operations, and cost and capital efficiency. BOB Capital Markets expects VRL Logistics to outperform the industry once the economic cycle turns, by virtue of its superior business model. The broker estimates a moderate 6% topline CAGR over FY19-FY22, though earnings are forecast to log a 14% CAGR due to a lower tax rate.
VIP Industries Recommended by IDBI Capital: Mumbai headquartered VIP Industries manufactures luggage and travel accessories. The company is the world's second largest and Asia’s largest maker of luggage and has more than 8,000 retail outlets across India and a network of retailers in 50 other countries. IDBI Capital has recommended buying VIP Industries with a target price of Rs 574 on November 28. The price at recommendation was Rs 436.9 and then, the company has observed an incremental growth of 35%. The company is a leader in an industry dominated by unbranded players. IDBI Capitals expects the sale/EBITDA/net profits of the company to grow at a CAGR of 11%/25%/20% over FY19-22E. VIP is the leader inorganized luggage segment in India with a market share of 46%.
L&T Finance Holdings Recommended by Motilal Oswal: Based out of Mumbai, L&T Finance Holdings provides consumer financial products and services. The company is engaged in the business of providing auto, two-wheeler and loyalty finance loans, as well as real estate finance and wealth management services. Motilal Oswal recommended buying L&T Finance Holdings with a target price of Rs 130 on November 27. CRISIL rated the company ‘AAA’ in October 2019 on the back of a diversified loan and borrowing book. Profitability of the business has been largely intact over the past four quarters with a stable RoE of 16%. The company is poised to deliver steady retail loan growth, increasing share of AMC profits and healthy RoE.

The Baseline

29 Nov 2019

Top Gainers in the News: Future Retail, Adani Gas, Adani Transmission, Gayatri Projects

by Ritmbarah Arora

Future Retail: Future Retail is on the top of the list of top gainers today in the stock market. The shares surged up to 13% at Rs 370 and reached a high of Rs 387.9 in the early trading hours, as of this writing. Around 1 million shares in volume have been traded today so far. The news of Competition Commission of India (CCI) approving of Amazon.com NV Investment Holdings’ proposal to acquire about 49% share in Future Coupons (FCL), a subsidiary of Future Group has driven up share price. The stocks of Future Retail fell 6% to Rs 323.6 on November 15 after the company reported a decline in its consolidated net profit for the Q2FY20. As per Trendlyne data, the stock price has increased by 12.1% in this week. The stock is listed in 20 screeners on Trendlyne. Link

Adani Gas: The shares of Adani Gas have gained in the stock market for third consecutive day and is among the top gainers today rising 10% intraday. Around 7.2 million shares in volume have been traded today so far. CCI has approved the acquisition of stake in the company by Total Group on November 28, post which the stock price continued to rise. The deal is expected to bridge the energy deficit and enhance the supply of natural gas in India. Adani gas shares are up by 11.4% as per Trendlyne data. The stock is listed in 23 screeners on Trendlyne. Link

Indiabulls Housing Finance: The shares of Indiabulls Housing Finance initially advanced 12.5% at Rs 376.7 and was among the top gainers today. The price advanced after a Government affidavit released which mentioned that no irregularities in loans extended by the company to certain entities were found as alleged in a public interest litigation (PIL). By afternoon however, share price fell sharply after the Delhi High Court adjourned the Citizen Whistle Blower Forum PIL against the firm to Feb. 28, 2020.
Global firm CLSA maintained ‘buy’ call on the stock with a revised target of Rs 450. CLSA said, “MCA affidavit should abate concerns”. The stock is listed in 22 screeners on Trendlyne. Link

Adani Transmission Ltd: The shares of Adani Transmission increased 12% to Rs 315 today and is among the top gainers in the stock market. Around 1.2 million shares in volume have been traded today so far. Adani Transmission belongs to the Adani group and because of the news of approval from CCI for the acquisition of stake in the company by Total Group, the share price surged of the complete Adani Group stocks. The shares of Adani Transmission are up by 16.3% in this week as per Trendlyne data. The stock is listed in 26 screeners of Trendlyne.

Gayatri Projects: The shares of Gayatri Projects are among the top gainers today. The price surged 10% at Rs 69.6 today and around 8 lakh shares in volume have been traded so far. The shares of the company had hit a four-year low of Rs 62.5 on Friday, November 22 and were locked in lower circuit band of 10% after the lenders to the company invoked pledged shares. CARE Ratings revised the ratings of long-term and short-term bank facilities of Gayatri Projects to ‘CARE D’ because of delay in servicing debt obligations. The shares advanced by 11.1% in this week as per the data on Trendlyne. The stocks of Gayatri Projects are listed in 17 screeners on Trendlyne.

The Baseline

28 Nov 2019

Screener: Even with recent price rise, some stock PEs lower than long term averages

One way to track how expensive a stock is, is not just with respect to its peers but also based on its own PE history. Even with recent upswings in share price, around 101 Nifty500 companies have current PEs that are less than 3 year, 5 year and 10 year PE averages. This screener (subscription, but screenshot above) includes GlaxoSmithKline Pharma, Jyothy Labs, Delta Corp, and Godrej Industries among the stocks with lower PE compared to long-term averages.

It helps to look at share prices in time periods greater than a year. While stocks may look expensive at certain valuations, smart money follows stocks whose fundamentals are strong, but share price is depressed due to short-term dynamics. This may explain why some companies have been hitting fresh highs and gaining attention in the recent bullishness - this includes pharma stocks like GSK Pharma, which have recently seen an upswing.

The Baseline

28 Nov 2019

Top Gainers in the News: Vodafone Idea, IIFL, Bharti Infratel, Indiabulls Housing, Corporation Bank

Vodafone Idea: The shares of Vodafone Idea are among the top gainers today in the stock market. Around 259.5 million shares have been traded in volume so far and is leading the list of most traded stocks on NSE. The price of the share rose by 12.7% to Rs 6.7. Vodafone Idea is in need of an 83% jump in its average revenue per user (ARPU) according to latest reports to meet its cash needs by FY23. Kotak Institutional Equities estimates that annual cash outflow requirements would add up to Rs 30,100 crore by FY23, for which Vodafone Idea would need a monthly ARPU of Rs 196 which would further rise to Rs 212 in the absence of waivers on its AGR.

On November 23, Care Ratings downgraded the rating of the company on its long-term bank facilities and non-convertible debentures (NCDs) due to significant erosion in overall risk profile post the judgement of Supreme Court on adjusted gross revenue (AGR) issue. Care Ratings downgraded the long-term bank facilities from A minus to BBB minus under credit watch with negative implications. Vodafone Idea is listed in 18 screeners of Trendlyne.

IIFL Finance Ltd: Shares of IIFL Finance have continued to stay in the list of top gainers for second consecutive day after Wednesday, November 27. The share price of the company surged 12.4% at Rs 170.7 and 11.8% intraday to Rs 169.9 which is the highest since June 14, 2019. Around 9.4 lakh shares have been traded in volume so far. The shares of IIFL are up by 15.9% as per the data on Trendlyne. There is a buy call for IIFL Finance with a target price of Rs 195 and a stop loss of Rs 166 by the brokers. The company is listed in 27 screeners of Trendlyne.

Bharti Infratel Ltd: The shares of Bharti Infratel witnessed a surge of 8% in its share price at Rs 243.4 and is among the top gainers in the stock market today. Around 16.3 million shares have been traded in volume so far. The company had reported a consolidated net profit of Rs 964 crore for Q2FY20, while consolidate revenue declined marginally YoY to Rs 3,638 as against Rs 3,668 in Q2FY19. Bharti Infratel is listed in 11 screeners of Trendlyne.

Indiabulls Housing Finance: The shares of Indiabulls Housing Finance are among the top gainers today with an advance of 7.9% in the share price at Rs 289.3. Around 29.1 million shares in volume have been traded today so far. The shares of Indiabulls are up by 28% from the beginning of this week, as per Trendlyne data. Kunal Bothra, an independent analyst had issued a ‘buy’ call on these shares with a target price of Rs 280 which already crossed today. The share price at the time of recommendation was Rs 259.7 on November 26. Indiabulls Housing Finance is listed in 20 screeners of Trendlyne.

Corporation Bank: The shares of Corporation Bank advanced 9.1% at Rs 25.1 and is among the top gainers and most traded shares in the stock market today. Around 4.8 million shares in volume have been traded so far. The bank was among the top gainers on November 25 after the announcement that the Government of India, Ministry of Finance and Department of Financial Services has accorded its in-principle approval to the proposed amalgamation of Corporation Bank and Andhra Bank into Union Bank of India, through its Alternative Mechanism. Corporation Bank is listed in 21 screeners of Trendlyne.

The Baseline

27 Nov 2019

$Top Gainers in the News: YES Bank, RBL Bank, DCM Shriram, Orient Refractories, ICICISec$

Top Gainers in the News: YES Bank, RBL Bank, DCM Shriram, Orient Refractories, ICICISec

by Ritmbarah Arora

YES Bank: The shares of YES Bank are among the top gainers today in the stock market primarily after the bank is looking at fundraising through the issue of fresh equity. The bank said in a regulatory filing that a meeting of the board of directors is scheduled on November 29 to consider and approve the raising of funds by issue of equity/equity-linked securities subject to necessary regulatory approvals. The share prices increased by 5.9% at Rs 66.9. YES Bank had incurred a loss of Rs 600.1 crore for Q2FY20 post which the share price had fallen drastically. The bank is in 26 screeners of Trendlyne. Link

RBL Bank: The shares of RBL Bank hit 2-months high and are in the list of top gainers in the stock market today. The share price advanced 6% in intra-day trade at Rs 369 on a report that the bank is looking to raise up to Rs 2,000 crore through a qualified institutional placement (QIP) offering. RBL Bank had reported the worst quarter results thisQ2FY20 since its listing on August 31, 2016. The management commented on the quarter results, “Given the difficult credit environment, the bank has faced challenges in a few corporate accounts. As a matter of prudence, the bank has taken higher than required provisions on these accounts which have impacted bank’s bottom-line". The bank is listed in 11 screeners of Trendlyne. Link

DCM Shriram: The shares of DCM Shriram surged 5.7% at Rs 367 by entering the list of top gainers today. Around 3,40,000 shares in volume have been traded so far. The company had reported a net profit of Rs 119 crore for Q2FY20 which dipped by almost 30% as compared to Q2FY19. The company’s share price had advanced by 10% on November 25, 2019. The current price to earnings ratio of DCM Shriram stands at 6.3X based on rolling 12-month earnings. The company is listed in 20 screeners of Trendlyne. Link

Orient Refractories: The shares of Orient Refractories soared today. At its peak the share price increased 12.3% at Rs 241.4. Around 2,25,000 shares in volume have been traded so far. Orient Refractories is listed in 14 screeners of Trendlyne.

ICICI Securities: The shares of ICICI Securities are on the list of top gainers today in the stock market. Around 5,50,000 shares in volume have been traded so far today. The stock price surged by 6.9% at Rs 335.7. The company had posted a revenue of Rs 418.2 crore for Q2FY20 as against Rs 458.1 crore in Q2FY19 and PAT of Rs 134.2 crore. There was a fall in the revenue of the company because of a decline in retail broking revenues and regulatory changes in mutual fund distribution business. MD and CEO, Vijay Chandok commented, “As a virtual financial supermarket, our continuing endeavour is to meet all the three need sets of our customers - wealth management and investments, protection of life and assets, and their borrowing needs". ICICI Securities is in 20 screeners of Trendlyne. Link

The Baseline created a screener Performance of stocks with …

26 Nov 2019

Performance of stocks with Durability Score < 35

Few stocks with durability score less than 35 saw positive year change in share price

The Baseline

26 Nov 2019

Stocks seeing FIIs raise stake: Future Lifestyle Fashion, Mahanagar Gas, IEX

The FII shareholding change screenertracks stocks that are seeing an increase in FII holding QoQ, with the stocks with substantial changes shown first. Approximately 28 stocks saw FIIs increase their shareholding by more than 2%. Topping this list is Future Lifestyle Fashion, which also has a large percentage of promoter pledges.

This big shift emerged with Blackstone, the world’s biggest private equity firm, investing Rs 1,750 crore in the company through debentures for a 6% stake. Other companies that saw FII stake increase substantially are Indian Energy Exchange, where FIIs raised their stake 6.9%, Lemon Tree Hotels, Mahanagar Gas and Varun Beverages.

The Baseline

25 Nov 2019

Top Gainers in the News: eClerx, Aditya Birla Cap, Adani Green Energy, Vodafone Idea

by Ritmbarah Arora

eClerx Services Ltd: The shares ofeClerx are on the top list of gainers since Friday, November 22. Around 62,475 shares in volume have been traded so far today which is a 6.3X over two-week average daily of 9,900 shares. The stock has increased by 14.6% to Rs 575.7.

The Q2FY20 results were announced on November 8 where the company reported an incremental improvement in outlook and was upgraded by analysts and brokers to buy this stock. While the target price to buy this stock was Rs 500 by Reliance Securities on November 8, the stock has already crossed that bar and reached to Rs 575.7. The price to earnings ratio is 10.3 of this company based on last twelve months. eClerx has made its place in25 screeners of Trendlyne so far as against 23 screeners on Friday.Link

Aditya Birla Capital Ltd: The shares ofAditya Birla Capital have made second place in the list of top gainers today. The company reported a consolidated net profit of Rs 256 crore for Q2FY20, with a profit of Rs 186 crore. The 37% growth in net profit shows the strength of the diversified business portfolio with 8% growth in revenue and 4% in its overall lending book. The shares of the company surged 10.6% at Rs 110.8. Around 19 million shares have been traded so far in volume. Aditya Birla is listed in25 screeners of Trendlyne. Link

Corporation Bank: The shares ofCorporation Bank are one of the companies listed in the top gainers of the stock market today. Around 1.5 million shares have been traded today in the share market. The share price increased by 7.1% at Rs 25. Today, Corporation Bank announced that the Government of India, Ministry of Finance and Department of Financial Services has accorded its in-principle approval to the proposed amalgamation of Corporation Bank and Andhra Bank into Union Bank of India, through its Alternative Mechanism. The bank is listed in15 screeners of Trendlyne.Link

Adani Green Energy: The shares of Adani Green Energy Ltd have hit its new high today. The shares surged 7% at Rs 115 with huge trading volumes with a combined 2.4 million shares in the first half-an-hour of trading today. Rating agency India Ratings and Research commented on the performance, “ Higher-than-expected operational performance of the special purpose vehicles (SPVs), availability of strong liquidity buffers leading to consolidated interest coverage ratio above 2.0 times on a sustained basis, and reduction in ratio of under construction assets to operational assets would be positive for the ratings". The company reported a profit of Rs 102 crore in its September quarter results and is listed in30 screeners of Trendlyne.Link

Vodafone Idea Ltd: The shares of Vodafone Idea is among the top gainers today. The share price of the stock nearly doubled in the last week with an expectation of a government relief package. The government provided relief in the form of a two-year moratorium on spectrum-related dues amounting to Rs 42,000 crore of financial support. Around 8 crore shares have been traded today so far making it among the most traded stock on the NSE today. “To ensure that its customers continue to enjoy world-class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1, 2019,” the company said.. The company is listed in15 screeners of Trendlyne so far.Link

The Baseline

22 Nov 2019

Top Gainers Today: Suven Life, eClerx, Caplin Point, Graphite India

by Ritmbarah Arora

Suven Life Sciences Ltd: The shares of Suven Life Sciences surged 5% to Rs 309.5 by making place in the list of top gainers in the stock market today. The share price increased more than 3% intraday post the announcement that the phase 2 data of its Alzheimer’s drug will be out in a week. As per a statement by the Chairman and CEO Venkat Jasti, “no new drug to treat the mind-robbing disease has been discovered since 2003”. The stock has gained over 31% since last nine months. Suven Life Sciences is listed in22 screeners on Trendlyne.Link

eClerx Services Ltd: The shares of IT consulting and outsourcing firm eClerx are topping the gainers in the stock market today. The shares have surged 15.4% to Rs 484.2 in the share market. Around 2,17,065 shares have been traded today. eClerx is listed in around23 screeners on Trendlyne.Link

Caplin Point Laboratories: The shares of Caplin Point Laboratories also make a place in the top gainers list today. The company traded a volume of 29,876 shares by 10:47 am today which is 3.2X times over two-week average daily volume of 9,363 shares. The stock price increased 9.2% to Rs 335. The company is listed in around 19 screeners on Trendlyne so far.Link

Graphite India: The shares of graphite electrode manufacturer Graphite India have made a place in the list of top gainers in the stock market today. The shares advanced 5.1% to Rs 320. Around 3.38 lakh shares have been traded so far as against the average daily volumes of 2.12 lakh shares in the last one month. Graphite India is listed in20 screeners on Trendlyne so far. Link

The Baseline

21 Nov 2019

Top Gainers in the News: Network18, Zee Entertainment, KNR Constructions, IRB Infra

by Ritmbarah Arora

Network18 Media & Investments Ltd: The share price of Network18 Media & Investments is amongst the top gainers in the stock market today. Japan headquartered Sony Corporation is in talks to acquire stake in Network18 Media and Investments Ltd. The acquisition discussion is still under preliminary stages and management says it is too soon to comment on anything. Investors are nevertheless enthused, and the share price has gone up by almost 17% after this news started trending. Network18 Media & Investments holds its position in around 15 screeners of Trendlyne. Link

KNR Constructions Ltd: The share price of KNR Constructions increased by 7.7% and is amongst the top gainers today. Trendlyne had already published a report according to which the stocks of KNR Constructions are expected to hit a target price of Rs 275 as recommended by experts to buy this stock. The company recorded a volume of 73,948 shares which is around 9X the two-week average daily volume. KNR Constructions has its position in 22 screeners of Trendlyne so far. Link

Zee Entertainment Enterprises Ltd: The share price of Zee Entertainment Enterprises rose 15% in the early trade today and is amongst the top gainers as well. The promoter of the company, Essel Group is considering selling around 16.5% stake in the company. Post this transaction, the holding of Essel Group will come down to 5% in the company. The stake sale is being planned to clear the loan obligations to certain lenders of the group. The 16.5% stake sale will lower promoter debt by 58-65% to Rs 2,400-2,900 crore, as per MoneyControl. Zee Entertainment is listed in around 24 screeners of Trendlyne so far. Link

IRB Infrastructure Developers Ltd: The shares ofIRB Infrastructure Developers surged 12.6% to Rs 85.6 and is amongst the top gainers list today. Around 1.3 lakh shares were traded in the counter today as compared to average daily volumes of 1.3 lakh shares in the past one month. The stock had hit a record high of Rs 169.2 on December 21, 2018 and a 52-week low of Rs 56.1 on October 11, 2019.IRB Infrastructure is listed in around 19 screeners of Trendlyne so far with different queries. Link