1. Marico: The stock of this FMCG major fell nearly 6% after it released its Q4FY22 business update on April 5. According to the company, its Q4 revenue grew in ‘low-single digits’ while there was a marginal rise in the sales volumes. What this means is that the revenue growth was primarily driven by the growth in sales realisations in the quarter gone by. This is understandable as the company hiked prices of products in its value-added hair oils segment, Saffola Edible Oils segment and the FMCG segment in the wake of the current cost inflationary pressures.

What disappointed the street in general was the YoY fall in sales volumes reported by the company’s flagship product segment Parachute Coconut Oil. This segment’s volumes grew a mere 1% YoY back in Q3FY22 as well. Another interesting trend here is softening copra prices, a key raw material for Marico, since February 2021. In fact, the company cut prices for Parachute Oil back in October 2021, December 2021 and January 2022 in order to pass the benefit of lower copra prices to customers. Volumes were still subdued in the past two quarters. A possible reason for this could be market share gains by Dabur in the coconut oil segment. While the overall volumes for the FMCG sector fell in January 2022 and February 2022 (according to Neilsen), Marico’s flagship segment particularly seems at a saturation point even though product prices remain benign.                                                                        

2. Titan: This jewellery and watchmaker’s stock fell over 3.3% on Thursday after it released its Q4FY22 business update. Titan’s jewellery segment revenue fell 4% YoY in Q4FY22 despite the quarter usually being a strong one for the jewellery industry. The disruption due to partial lockdowns in many states across India due to the Omicron wave in January 2022, which started in December 2021, hit revenues. In addition, the volatility in gold prices due to the ongoing Russia-Ukraine war also impacted jewellery sales.

The jewellery segment is a major revenue generator for the company as it contributes over 85% of total revenues. But network expansion continued to progress in Q4 in anticipation of an upbeat Q1FY23, which is expected to be a normal quarter after two years of intermittent lockdowns. Titan added 16 new jewellery stores in Q4FY22 compared to 14 stores in Q3FY22. This takes the total number of jewellery stores to 444.  Revenue from the jewellery segment rose 37% YoY in Q3FY22 to Rs 8,563 crore on the back of festive purchases in October and November.

Titan gets 9% of its total revenues from the watches and wearables segments. This segment clocked a 12% YoY rise in revenue in Q4FY22, despite a challenging external environment with sales increasing across offline channels. Smartwatches and headphones also saw brisk business on the back of new launches like ‘Titan Smart Pro’ in Q4FY22. Eyecare segment’s revenues grew 5% YoY in Q4 while other businesses’ (fragrances and fashion accessories) revenues rose 23% YoY, driven by a strong performance by the fashion accessories businesses.

3. Zee Entertainment Enterprises: The stock of this media and entertainment company slipped nearly 2% in trade on April 7, 2022 after its single largest investor, Invesco announced its intention to sell nearly 7.8% stake in the company, according to news reports. Invesco will continue to hold around 11% stake in the company even after this stake sale. This comes shortly after Invesco decided not to pursue its demand for an extraordinary general meeting to remove Managing Director Punit Goenka and two independent directors. In fact, Invesco believes that the corporate governance issues that persisted earlier will get resolved once the board gets reconstituted after the merger of Sony Pictures and Zee Entertainment.

Notably, Invesco had picked up a 11% stake in Zee Entertainment for Rs 4,224 crore back in May 2019 to rescue its promoters as they were in dire need of funds. The average price of the stock as on May 27, 2019 was Rs 357.45. Hence, it is quite intriguing that Invesco now is willing to offload its stake at a loss of roughly 20% now, even though it reiterated its faith in the Sony-Zee merger deal. Invesco is reducing its stake in Zee Entertainment in accordance with their overall ‘portfolio construction approach’ for Asian markets. With Invesco cutting its stake to 11%, the merger deal going through is almost assured.

4. Bandhan Bank: This bank’s Q4FY22 business update indicates that its fortunes are turning for the better after three painful quarters in FY22. Its loan book grew 16% YoY to Rs 1.01 lakh crore, while its deposits grew 24% YoY to Rs 96,331 crore and retail by 21% YoY to Rs 74,441 crore. This is due to a strong recovery in credit demand as lockdowns eased. With economic activity picking up, the prospects for improvement in asset quality look promising as the overall collection efficiency ratio (CER) was 96% in Q4FY22 compared to 93% in Q3FY22. Collection efficiency ratio indicates the total  loans recovered to total loans to be recovered during the same financial period. Emerging Entrepreneurs Business’ (EEB) collection efficiency was 98% in Q4FY22, close to its pre-covid level of 99%. “Improving trends in collection efficiency should continue to moderate credit cost and support earnings,” said analysts at Motilal Oswal.

Also, the bank's parent company-Bandhan Financial Holdings-led consortium is set to acquire IDFC Asset Management Company (AMC) Rs 4,500 crore. The acquisition brings the group closer to its goal of diversifying its product portfolio to expand its presence in the financial services sector. Through this acquisition, the group will be able to offer financial products such as mutual funds. For the bank though, this is an opportunity to boost its fee income through cross-selling of mutual fund products, as currently the share of non-interest income of the overall income for the bank is less than 25%. The holding company wants to scale up the business (post-acquisition) by strengthening the product portfolio. It plans to add more equity-based funds targeted toward retail investors and enhance the distribution footprint by tying up with banks and small finance banks.

5. Hindustan Aeronautics (HAL): This aerospace company’s stock rose 6.1% in five consecutive sessions, till Thursday, after it announced record high revenues. In FY22, revenue grew 6% YoY to Rs 24,000 crore. This was led by production and delivery of 44 new helicopters, 84 new engines, and the overhaul of 203 aircraft and 478 engines in FY22. Recently, the company bagged a contract to make aircrafts worth Rs 3,887 crore for the Indian Air Force and the Indian Army. Additional orders are expected for helicopters and the LCA (Light-Combat Aircraft) in the coming quarters.

With a robust order pipeline, the company's Chairman and Managing Director R Madhavan said revenues will grow 6-7% in FY23. The order inflow is expected to grow as the Centre pushes for more indigenisation of its defence needs to reduce dependence on imports. The Ministry of Defence has fixed timelines for indigenisation, after which certain products will be procured domestically. The share of domestic procurement in the total defence capital outlay is estimated to rise from less than 60% in FY20 to 68% in FY23. HAL’s order at the end of Q3FY22 stands at Rs 79,230 and the order pipeline for the next two years looks strong at Rs 50,000 crore. A strong order book and healthy business outlook bodes well for HAL.

Trendlyne's analysts identify stocks that are seeing interesting price movement, analyst calls or new developments. These are not buy recommendations.