Coal India: This mining company’s stock suddenly moved upwards in the first trading session of 2022  after the company released its quarterly update for Q3FY22. Its volumes were up by 12.8% YoY to 174 million tonnes taking its 9-month volumes to 481.8 million tonnes, up by 17.6% YoY. The increase in volumes is because of the rise in demand for coal since most coal-fired power plants in India had low stock of coal during Q3. Also, a spike in global prices meant Indian importers were forced to look for domestic alternatives. This led to a rise in demand for local coal. A report by ICICI Securities suggests that a rise in coal prices globally is inevitable as Indonesia banned the export of coal. This might make domestic consumers turn to Coal India as its prices are at a 50% discount (approximately) compared to international prices. Analysts remain positive on the stock especially in terms of volume growth and expect volumes to reach 625 million tonnes in FY22.

Schaeffler India: This bearing maker’s stock is among the top five overbought stocks among the Nifty 500 stocks according to technical indicators like RSI (relative strength index) and MFI (money flow index). The company recently got approval of its shareholders on December 21 for a stock split in the ratio of 5:1. The stock touched a lifetime high of Rs 9,530.70 on Thursday and has more than doubled in the past year. The stock is currently trading above all its simple moving averages. 

IRB Infrastructure Developers: This road developer recently completed an equity fund raising of Rs 5,347 crore (announced on October 26, 2021) from Cintra INR Investments BV (affiliate of Spain’s Ferrovial S.A. and Bricklayers Investment Pte. (affiliate of Singapore’s GIC). This will mean Ferrovial will hold up to 24.86% stake in the company and GIC will hold a total of 19.87% stake in the company post the deal. At the same time, Virendra Mhaiskar will continue as the company’s promoter. He also gave non disposal undertakings to the tune of a total of 16.80% of his shareholding (and through IRB Holding). There is also an undertaking to maintain his stake (through affiliates) in the company at 25.1% till March 31, 2025, at 21.6% till March 31, 2026, 18.1% till March 31, 2027 and so on. For context, the promoter gave a similar undertaking in March 2020 for GIC’s investment in the company’s private infrastructure trust IRB Infrastructure Trust.

HDFC Bank: This private bank’s Q3FY22 update shows it humming along as its advances at the end of the quarter grew 16.4% YoY to Rs 12.6 lakh crore. According to Emkay Global, this bodes well, as the bank’s major loan portfolios showed decent growth. Commercial and rural banking loans grew the most at 29.5% YoY. Retail loans increased 13.5% YoY and corporate and wholesale loans grew 7.5% YoY. What will really enthuse investors is the robust growth in the bank’s credit card business. Since RBI lifted its ban on issuance of credit cards by the bank, it clawed back its market share in the credit card segment. RBI data for November 2021 shows its market share stood at 23%, the highest among its peers. Emkay Global is of the view that the bank is gaining strong traction in the credit card segment which will aid margin recovery in Q3FY22. Motilal Oswal expects HDFC Bank to report a 17% YoY increase to Rs. 10,246.2 crore in its net profits for Q3FY22.

Newgen Software: This enterprise software company has analysts at Edelweiss enthusiastic about its prospects despite its volatile revenues and profits due to seasonality of its business. While Q4 is the peak in terms of revenues (30%-36% revenues), Q1 is the trough (17%-20% of revenues). The brokerage sees this dissipating as the company’s software as a service (SaaS) or subscription revenues pick up coupled with its operations scaling up in developed markets. SaaS revenues contribute 9% of its revenues. The company is realigning its business by focusing on partnerships with system integrators, focusing on subscription revenues and developed markets. The company aims to grow its revenues at double-digits.