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The Baseline created a screener Reversals in the past …

08 Dec 2021

Reversals in the past month

Multibagger stocks that saw sharp reversals in share price over the past month

The Baseline

03 Dec 2021

Five Interesting Stocks Today

Dish TV India: This DTH player’s stock hit its upper circuit in trade today after a news report said Bharti Airtel was looking to buy a majority stake in the company at a 16% premium. In a clarification to the exchanges, the company denied these reports. The Supreme Court on Tuesday overturned a High Court order freezing Yes Bank’s 25.6% stake in the DTH company which allowed the private bank to participate in the AGM later in the day. It will be interesting to see if the reported interest in Dish TV actually pans out.
Gujarat Fluorochemicals: This specialty chemicals maker is on fire. It touched a 52-week high of Rs 2,387.80 on Thursday after ICICI Securities initiated a ‘Buy’ rating with a target price upside of 50%. The brokerage sees the company poised to benefit from its presence in manufacturing fluorochemicals polymers. These products are increasingly being used to make lithium-ion batteries, solar panels and green hydrogen. GFL is in the process of expanding its production capacity of fluoropolymers. The company is also expanding into other fluorine derivatives used for the same use cases. It earmarked Rs 2,500 crore to invest in its capacity expansion. It will be interesting to see how this pans out.
Cadila Healthcare: This pharmaceutical company is interestingly poised. Its Q2FY22 net profit rose over 6.5 times to over Rs 3,000 crore due to a near Rs 2,500 crore exceptional gain of its animal healthcare business. The company’s stock took off in April 2021 and touched a life high of Rs 673.70 around the middle of June 2021. But the stock has since tapered off to Rs 454.20 as of Thursday end of trade. Now, the company’s under production Covid-19 vaccine ZyCoV-D will be used in as many as seven states. Although the vaccine was approved for use in for those aged under 12 years, it will be initially used to inoculate only adults in states with low vaccinations. The company will provide the government 1 crore doses. The company’s US business is facing some slowdown, and will take at least a year to stabilise once its foray into complex injectables picks up.
Hero MotoCorp: This two-wheeler maker’s stock was the only one that hit a 52-week low on Thursday before bouncing back up. The company’s weak November 2021 wholesales fell 41% to 3,49,393 units as delayed monsoon withdrawal impacted its harvesting in many parts of the country, which led to muted post festival demand. This fall in wholesales led the two-wheeler maker to surrender the title of the largest two-wheeler seller in India to Bajaj Auto based on November’s wholesales data.
BSE: This exchange’s stock is flying. It’s one of the most overbought stocks among the Nifty 500 companies according to technical indicators like RSI and MFI. The stock touched a 52-week high today in trade with nearly 2.75 times its weekly average volumes being traded on Thursday.

The Baseline

25 Nov 2021

Five Interesting Stocks Today

Vedanta: This mining company’s stock is buzzing after the company announced a review of the company’s businesses that will lead to a reorgainsation creating individual standalone entities in the aluminium, iron and steel, and oil and gas business. Nearly a week after this announcement, two promoter group entities—Twin Star Holdings and Vedanta Netherlands B.V.—together bought 5.7% stake in Vedanta.

Then, as a seventh encumbrance on their shareholding in Vedanta (65.18%), promoter group entities used their entire shareholding in the company as a guarantee to lenders to raise $800 million from Standard Chartered Bank, London. For context, Vedanta’s entire promoter shareholding is already pledged, and this is an additional encumbrance. This additional encumbrance, which is reported under SEBI’s pledged shares rules to stock exchanges, was executed to help Vedanta’s promoter entities buy additional shares in the company.

Tata Teleservices (Maharashtra): This communications solutions provider’s stock is the highest gainer among the Nifty 500 companies over the past week. The rise in its stock price has also made it one of the most overbought stocks, and this probably led its stock to be the most overbought according to technical indicators like RSI and MFI. This enthusiasm among investors and traders in the company’s stock is bewildering considering it hasn’t reported a quarterly profit since Q4FY19.
Hero Motocorp: This two-wheeler maker’s stock was meandering along sideways since the declaration of Q2FY22 results on November 15, 2021. Net profits fell 17% YoY to Rs 794 crore and revenue from operations fell 11% YoY to Rs 8,543 crore. Even after this tepid performance during the quarter, brokerages maintain a ‘Buy’ rating on this company’s shares. Analysts at brokerages seem optimistic about volume growth in 2HFY22 because of rural economic recovery, improving exports, and expansion in the electric vehicle (EV) segment. However, analysts at Axis Securities and Prabhudas Liladher, who reduced their target price, believe a reduction in commodity prices in 2HFY22, and rising exports will drive up growth. LKP Securities and IDBI Capital upgraded their target price due to higher sales and operating margins in Q2FY22.
Elgi Equipments: This air compressor maker’s stock recently touched a 10-year high mark as its net profits rose 55% YoY to Rs 52 crore in Q2FY22. This company is the second-largest player in the Indian air compressor market with a 22% market share. Analysts believe its expansion plans in the international market will steer long-term growth. Revenues grew 35.8% YoY to Rs 652 crore in Q2FY22, and brokerages expect revenues to grow up to 19% in FY22-FY23. Although some Covid-related disruptions were observed in Australia and South-East Asian markets, the company clocked good revenues across other markets. The company’s automotive business bounced back to pre-Covid levels with revenues rising by 45% YoY, showing incremental growth for this segment. The management is positive to pull off the same performance in Q3FY22 as well.
Bharti Airtel: Telecom major Bharti Airtel’s stock recently scaled a 10-year high of Rs 779.70 on BSE after the firm hiked tariffs by 20%-25% for its prepaid and data top-up plans effective November 26. The prepaid plans segment contributes 65% to its overall sales. This move coupled with the company’s robust operational performance in Q2FY22 led to its credit rating being upgraded by Moody’s to ‘Positive ’from ‘Stable’. The company’s topline rose 13% YoY to Rs 28,326 crore and posted a profit of Rs 1,134 crore in Q2FY22. Its customer base now stands at an impressive figure of 48 crore. The rating agency feels the change in outlook to positive, if sustained, could support an upgrade to investment grade within the next 12-18 months. Brokerage houses such as Motilal Oswal and ICICI Securities raised their target prices on the stock with an upside of 24% and 16% respectively.

The Baseline

24 Nov 2021

Chart of the week: Reliance Jio improves active user percentage, while losing subscribers

Reliance Industries’ subsidiary Reliance Jio’s 1.9 crore decline in subscribers affected India’s entire mobile user base - India’s total user base slipped by 2 crore subscribers in September, and. now stands at 116 crore subscribers. In comparison, Bharti Airtel added 2.7 lakh subscribers while Vodafone Idea lost 10.7 lakh subscribers in the July-September quarter.

Reliance Jio’s 1.9 crore mobile subscriber loss in September 2021 might have a silver lining for investors. Jio’s active subscriber base touched 35.5 crore. This is 84% of its total subscriber base. This is the first time since December 2020 that Reliance Jio’s active subscriber base as a proportion of its total subscriber base crossed the 80% mark. Bharti Airtel, which has the highest percentage of active subscribers in the industry, saw this number stay constant even as it added 2.7 lakh subscribers to its portfolio.

The Baseline

20 Nov 2021

Five Interesting Stocks Today

Tanla Platforms: This communication platform as a service (CPaaS) provider’s stock recently touched a 10-year high. The company is reporting consistent profit growth for the last six quarters and its Q2FY22 net profits rose 67% YoY to Rs 136.2 crore. The good performance is because of high-paying existing clients and additional market share from acquiring Trubloq. Going forward, the company plans to invest in AI, machine learning, and crypto technologies. It also plans to target global markets, specifically the Middle East, Indonesia, and the UK. Recently, Superstar Investor Azim Premji's investment arm Premji Invest bought a stake in the company which boosted the company’s stock price.
Aditya Birla Fashion: Analysts are quite enthused with the recovery of this fashion retail company’s business in Q2FY22 after being marred by lockdowns during the second wave of the pandemic. The company swung back to profits in Q2FY22 (Rs 9 crore) after two consecutive quarters of losses. Its lifestyle brands revenues recovered to nearly 95% of sales seen in H1FY20, while Pantaloons recovery was at 49% of H1FY20 levels. Analysts at ICICIdirect believe that the company’s balance sheet strength will help with store expansions, which will eventually lead to higher revenues. ABFRL plans to open over 60 Pantaloon stores and over 400 franchisee lifestyle brand stores.
Lumax Industries: This auto ancillary company’s stock hit a 52-week low ahead of its Q2FY22 results but it posted margins better than its industry peers and brokerages like Axis Direct and Chola Wealth are positive on the company’s future prospects. Lumax’s Q2 net profits stand at Rs 15 crore after reporting a net loss of Rs 9.9 crore in Q2FY22. Rising raw materials cost and shortage of semiconductors are driving the net profit lower to lower down. The result of price escalations will begin to show results in Q3FY22 and Q4FY22. With the demand scenario improving for the auto industry and the company’s decent segment mix of products for two-wheelers, passenger vehicles, and commercial vehicles, the company may witness revenue growth of 6-9% in the coming years. Lumax’s expansion into electronic components also augurs well for its future prospects as the conventional lighting segment contributed 66% to revenues in H1FY22. The segment can grow 45-50% in the next two years.
Escorts: This auto company’s stock rose nearly 20% over the past week as it prepares to welcome a new large shareholder in Japan’s Kubota Corp. The Japanese company will acquire an additional 5.99% stake in Escorts through a preferential issue at Rs 1,900 per share, and will also make an open offer for a 26% stake. Many of Kubota’s subsidiaries will also probably be merged into the newly renamed entity Escorts Kubota. This deal is expected to bring newer technology and better products on the market from the Escorts stable.
Sheela Foam: This foam and mattress maker’s stock was on a tear over the past one-and-a-half months. In this period, the stock is up over 36% and breached its 52-week high in this past week. This made it the most overbought stock according to technical indicators like RSI and MFI.

The Baseline

12 Nov 2021

Five Interesting Stocks Today

Thermax: This heavy engineering company’s stock touched a new 52-week high after it posted a near tripling of its Q2FY22 net profit YoY to Rs 88 crore. This rise was exacerbated by an exceptional charge in Q2FY21 in its German subsidiary. The company’s revenues grew at 29% to Rs 1,469 crore as its energy and environment segments saw robust uptick in revenues. This company’s order book looks healthy at Rs 6,516 crore, which is 26% higher than the previous year. Its shares were therefore the highest gainers on Thursday.
HCL Technologies: This IT services company’s stock got the highest number of target price upgrades over the past month by brokerages. Brokerages seem positive on this stock despite weakness in its Q2FY22 performance. This company is one of the IT services companies currently trading lower than its average target price. Analysts seem enthusiastic about the prospects of this company despite the management cutting its revenue growth guidance for its product and platforms vertical to flat on in FY22. The company said there were some delays in signing deals in the vertical and claims the business will merely be pushed forward a quarter and said there is no loss of business.
TVS Motor: This two- and three-wheeler maker’s stock was on a tear over the past few trading sessions on news that it would raise funds for its electric vehicle unit. The company denied these reports which led the stock to give up some minor gains. However, the movement of this stock over the past week or so made it the most overbought stock among the Nifty 500 companies based on technical indicators like RSI and MFI.
Britannia: This company’s trying to battle rising input costs but is struggling to maintain its profit margins. In Q2FY22, its net profit fell 23% YoY to Rs 384 crore. A fall in profit margins is a direct result of the rise in input prices. The company hiked prices by 33.3% and reduced product grammage by 66.66% to help shore up its margins. This will only begin to show results in the coming quarters. The price hike helped the company post marginally higher revenues of Rs 3,607 crore, up 6% YoY. The company cut promotional expenses to improve its profitability. Brokerages believe that price hikes will help in improving profitability and combating input price inflation.
KPIT Infotech: This IT consulting firm’s stock is the highest gainer among the Nifty 500 companies. This comes on the back of a 8% rise in the company’s Q2FY22 net profit to Rs 65.1 crore on the back of a 21.7% rise in revenues to Rs 590.9 crore. The company’s stock didn’t immediately react after its results were announced on the first day of the month, but after the last few trading sessions, it is currently trading above all its simple moving averages.

The Baseline created a screener Stocks With Analyst Enthusiasm …

11 Nov 2021

Stocks With Analyst Enthusiasm Post Results, and Low Volatility

Low volatility stocks which post results have seen brokerage upgrades

The Baseline

11 Nov 2021

Chart of the Week: Entertainment, Hotels, Real Estate recover strongly in Q2

Many industries that were impacted by the Covid-19 pandemic saw their fortunes change in Q2FY22. Realty surprised investors with one of highest rise in profits due to robust growth in sales bookings of constituent companies. Another beneficiary of the unlock theme has been the logistics.

Revival of business activity across industries boosted the companies' profits including BlueDart and TCI Express. Steel companies continued to outperform due to steep rise in HRC prices and buoyant steel demand. Hotels witnessed a strong recovery in sales due to easing of travel restrictions and revenge travel trend. See the full results dashboard.

The Baseline

05 Nov 2021

What Superstars bought in Q2FY22

Investors usually track the portfolios of large investors, or Superstars, to take cues on stocks that might do well in the future. So, the changes in their portfolios are keenly followed. We take a look at the stocks in which superstars bought or added to their portfolios in Q2FY22.

Superstar buys Rakesh Jhunjhunwala buys stake in NALCO and Canara Bank

Rakesh Jhunjhunwala, the ‘Big Bull’, bought 1.1% stake in Indiabulls Real Estate and 1.36% stake in National Aluminium Company. Shares of NALCO surged nearly 7% after he added this state-owned miner to his portfolio. This is his second bet on a commodity company after he added SAIL to his portfolio in Q1FY22.

He also bought a 1.6% stake in Canara Bank. The state-owned bank reported a three-fold rise in its net profits at Rs 1,333 crore as its net NPAs fell 3.21% YoY to Rs 20,862 crore in Q2FY22 results. This bank declared positive results in the previous quarters and the ace investor seems bullish on this stock.

Ashish Kacholia on buying spree in Q2

Ashish Kacholia bought a 2.8% stake at Faze Three. The shares of the company rose 44% within two sessions after Kacholia bought its shares.

Kacholia seems to have focused on small and mid cap companies in Q2FY22, as he bought a 1.55% stake in Somany Home Innovation. This company primarily focuses on consumer appliances. The two other stocks he added to his portfolio are Gateway Distriparks and Xpro India. He bought a stake of 1.54% and 2.52% in the two companies, respectively. Gateway Distriparks reported 41% jump in net profits to Rs 48 crore in their Q2FY22 results and Xpro India gave a high 19-fold year-to-date returns to its investors. Xpro India focuses mainly on polymer processing.

Porinju V Veliyath adds Kerala Ayurvedic to his portfolio

Porinju Veliyath made few bets in Q2FY22. He bought a 2.1% stake in McDowell Holdings, a 1.3% stake in Cupid, and a 1.12% stake in Swelect Energy systems. Swelect Energy system makes solar power systems.

Porinju also bought a 1.3% stake in Kerala Ayurveda. The company primarily engages in wellness, hospitals, products and services in India and the US. This business also has its own manufacturing and R&D centres.

Sunil Singhania’s Abakkus buys newly listed companies in Q2

Sunil Singhania’s Abakkus Fund added a 2.5% stake in the newly-listed Paras Defence and Space Technologies. The company’s stock hit the upper circuit limit after its debut on October 1.

Singhania added two new companies to Abakkus’ portfolio in Q2FY22. He added a 1.23% stake in PSP Projects and a 8.2% stake in Rajshree Polypack. PSP Projects is a construction company that is mainly engaged in designing, planning and post construction activities. Rajshree Polypack makes rigid plastic packaging products. The company aims to co-develop products and focus on material that have higher margins, and expand their customers in the US and UK.

Vijay Kedia buys two small cap companies in Q2FY22

Vijay Kedia bought a 15.25% stake in Affordable Robotic & Automation in Q2FY22, which designs automation systems for manufacturers across sectors. The company’s stock price has surged more than 50% year-to-date.

The investor also added two other small cap companies in his portfolio. These were a 10.7% stake in Innovators Facade Systems and he also raised his stake in Ramco Systems to 2.56% from 1.81%. Ramco System’s stock has dipped by 25% in 2021. It appears Kedia is bullish on this stock.

Dolly Khanna’s portfolio saw no major changes in Q2FY22

Ace investor Dolly Khanna increased her stake in Nitin Spinners to 1.64% from 1.24% in Q1FY22. This stock gave a 3X return in the last one year. She also bought a 1.1% stake in New Delhi Television in Q2FY22. There were no massive changes in her portfolio in Q2.

The Baseline

03 Nov 2021

Chart of the week: Commercial vehicle sales see steady recovery

A key indicator of a recovering economy is construction and infrastructure activity. Looking at the recovering sales of commercial vehicles (CV) - particularly the medium and heavy commercial vehicles (MHCV) - the outlook for construction activity appears positive.

In April 2021, when the second wave struck, CV sales tanked. The four major listed CV makers — Tata Motors, Eicher Motors' VECV, Ashok Leyland, and Mahindra & Mahindra (M&M)'s total MHCV wholesales dropped by close to 60% MoM.

Since then, CV sales have steadily recovered. By October 2021, the four CV makers' MHCV sales rose by 30-80% in six months. Some CV makers like Eicher Motors' VECV and Tata Motors' MHCV sales dipped in October compared to September. However, MHCV sales for M&M and Ashok Leyland have been on a steady incline since April.