1. Maruti Suzuki India: This carmaker’s stock has plunged 4% after it announced its wholesale numbers for April. Total wholesales fell 1.6% YoY to 1.57 lakh units while passenger vehicle wholesales fell 2.9% YoY to 1.52 lakh units. However, the company posted robust Q4FY22 results, as its net profit rose 51.1% YoY to Rs 1,875.8 crore, beating Trendlyne’s Forecaster estimates by 23.7%. Revenue grew 12.7% YoY to Rs 27,191.9 crore, even though the company sold 0.7% lower vehicles in Q4FY22 compared to Q4FY21. The rise in margins, despite the fall in volumes, is due to price hikes, lower discounts and softening of input costs. However, the company’s wholesales grew 14% QoQ in Q4FY22.

The management expects demand for the passenger vehicles for the industry to grow to 34-35 lakh units in FY23 driven by robust demand despite the Covid-19 headwinds. The company increased its focus on high-end compact and utility vehicles to regain its lost market share in this space. The demand momentum looks stable as the order book as of April, 2022 stands at 3.2 lakh units, up 21.2% from the end of December 2021. However, the shortage of semiconductors and electronic components will most likely affect production in FY23. Though raw material costs dipped in 4QFY22 as metal prices softened, the management expects inflation to kick in during H1FY23 led by high steel prices.

Brokerages like Axis Securities and Prabhudas Lilladher maintain a ‘Buy’ rating on the stock as they expect margins to expand on healthy demand and reduction in input costs. ICICI Direct maintains a ‘Hold’ rating due to the shortage of semiconductors despite healthy demand prospects.

2. Tata Chemicals: This chemical company’s stock surged 11.7% after it announced its Q4FY22 results on April 29. Net profit surged 39X YoY to Rs 462.9 crore and revenue rose 32.8% YoY to Rs 3,586.9 crore. The company’s profit growth was driven by a revival in demand, a rise in export prices, absorption of high input costs, and lower taxes. EBITDA grew 133% YoY to Rs 657.4 crore due to improved realisations, despite high costs of gas, coal and freight.

The basic chemical segment accounts for 75% of the company’s revenue and the segment also saw the highest growth in Q4FY22 – grew 37.5% YoY to Rs 2,902 crore led by favourable soda ash market conditions. Globally, demand for soda ash is rising, led by demand for lithium carbonate batteries and solar panels. Motilal Oswal expects demand for soda ash to stay robust for the next 18-24 months due to supply constraints and container freight issues. The brokerage expects the tight demand-supply situation to benefit the company.

The highest revenue growth came in from the North American and Indian regions at 35.3% YoY and 31.8% YoY, respectively. The company has earmarked Rs 2,000 crore for capex to expand capacity in its India business during H2FY24. This capacity expansion will be spread over 5 years, which will increase the company’s production capacity of soda ash by 30%, soda bicarb by 40%, and silica by 5X.

3. TVS Motor: This auto maker’s two-wheeler wholesales for the month of April 2022 rose 24% YoY to 2.8 lakh units, surpassing the growth rates of all other peers. The low base effect caused by the second Covid wave had a part to play here. This 20%+ YoY growth was primarily driven by TVS Motors’ scooter segment, the wholesales for which jumped over 50% YoY. The motorcycle segment on the other hand, posted lacklustre growth of just 4% YoY in April. Most two-wheeler makers except Bajaj Auto reported a YoY rise in their monthly wholesales for the first time in 2022 buoyed by the wedding and festive season. If we also consider the wholesales reported by TVS Motors for Q4FY22, it fell by just 8% YoY to 8,14,682 units, lower than the double-digit fall witnessed by all other competitors. Hence, its performance on the sales volume front was fairly resilient.  According to HDFC Securities, TVS Motors also gained market share on YoY basis in FY22 for both motorcycles and scooters segments.

The company reported a 7.4% YoY rise in its operating revenues while its profit fell over 10% YoY to Rs 278 crore. Higher input costs and semi-conductor shortages hit the profitability of the two-wheeler industry in FY22. But top players expect a strong pick-up in demand in next two months on improved rural sentiment. Outlook for TVS Motor is especially positive since it has a strong pipeline of 2W and 3W electric vehicles to be launched in the next 2 years.

4. Alembic Pharmaceuticals: This pharma company’s stock fell over 8% intraday on Monday after it announced its Q4FY22 results. Its profit fell 86% YoY in Q4FY22 to Rs 35.6 crore mainly due to a Rs 188 crore worth of non-recurring expenses related to its wholly-owned subsidiary Aleor Dermaceuticals. As a result, the company’s net profit missed Trendlyne's Forecaster estimates by 76.6%. However, revenue rose 9% YoY in Q4FY22 to Rs 1,426 crore on the back of 17% growth to Rs 557 crore in the generic US business.

Alembic Pharma’s US business grew despite the prevailing pricing pressure in the US market, due to one-time sale opportunities, market share gain in a few products, and stock adjustments. The company also launched its first inhalation product in the US in Q4FY22. Alembic Pharma has invested about Rs 1,800 crore over recent years, geared towards US formulations including acquiring Aleor Dermaceuticals on March 29. Given the intense competition in the US market, pricing pressure will continue to impact the company’s margins in FY23. In Q4FY22, EBITDA margin (pre-research & development expenses) fell 12 percentage points YoY to 30% due to an increase in logistics costs, raw material costs, and pricing pressure.

Brokerages like ICICI Direct, BoBCaps, and Yes Securities maintained their ‘Hold’ rating but reduced the target price because of the margin pressure and additional integration costs for Aleor Dermaceuticals. The brokerages have a neutral outlook on the company because of the slow growth outlook in US generics and delay in its new product launches.

5. Godrej Properties: This realty company’s stock fell by more than 5% on the bourses on Thursday even after its Q4FY22 results show a strong recovery. The company is back in the black with a net profit of Rs 260 crore against a loss of Rs 192 crore in Q4FY21. The booking value also sees a 111% jump sequentially to Rs 7,861 crore.

With demand picking up, the company’s collections in Q4 were its highest ever rising 44% YoY increase to Rs 2,900 crore. Brokerage Motilal Oswal is quite optimistic about the stock and expects the business momentum to continue over the next three years. It expects pre-sales CAGR to grow by 23% over FY22-24. On the other hand, Godrej Properties is also facing the brunt of inflation as its input costs see a 1.2X surge to Rs 1,166.2 crore. However, the company hiked its prices by 5-7% across its portfolio to mitigate margin pressures. However, with the recent repo rate hike by the Reserve Bank of India, home loans will get expensive soon. With most of its project pipeline of premium residential projects to be completed by H1FY23, it’ll be interesting to see if demand holds up.

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