Trendlyne Marketwatch    
25 May 2022
Market closes lower, ICICI Direct maintains a ‘Buy’ rating on Divi’s Laboratories

Trendlyne Analysis

Indian indices closed in the red with the volatility index, India VIX, easing by 1.4%. Major Asian indices closed higher than Tuesday’s levels amid mixed global cues. Investors continue to monitor the impact of global sell-off in technology stocks and growing worries of imminent rate hikes by central banks. US indices closed flat to lower on Tuesday amid high volatility. The tech-focused NASDAQ 100 fell over 2% after Snapchat’s parent company, Snap plunged 43% as the company warned of a worsening economic outlook. The Dow Jones recovered towards the end of the trading session and closed marginally higher. Investors await minutes from the US Federal Reserve’s previous meeting, which is due later today. European indices trade in the green, recovering from their fall on Tuesday. Eurozone's business slowed down in May as Eurozone Manufacturing Purchasing Managers Index (PMI) came in at 54.4 while services PMI decreased to 51.8. Both PMI numbers failed to meet the estimates.

Nifty Next 50 and Nifty Smallcap 100 closed in the red despite the benchmark index trading flat. Nifty Metal, which lost over 9% in the last two trading sessions, extended its losing streak to three days. Nifty IT closed deep in the red, following the NASDAQ 100, which fell over 2% on Tuesday.

Nifty 50 closed at 16,025.80 (-99.4, -0.6%), BSE Sensex closed at 53,749.26 (-303.4, -0.6%) while the broader Nifty 500 closed at 13,587.75 (-159.5, -1.2%)

Market breadth is moving down. Of the 1,882 stocks traded today, 241 showed gains, and 1,617 showed losses.

  • Mangalore Refinery And Petrochemicals, SIS, GMR Infrastructure, and TeamLease Services are trading with higher volumes as compared to Tuesday.

  • Hindustan Zinc rises as the Union Cabinet Committee on Economic Affairs approves selling the Centre's entire stake in Hindustan Zinc, according to reports. The government holds a 29.5% stake in the company worth Rs 36,000 crore.

  • Johnson and Johnson’s and Momenta Pharmaceuticals file a case against Natco Pharma and its marketing partner Mylan Pharmaceuticals in Pennsylvania Federal Court in USA for infringement of two patents. These patents are associated with 20mg/ml and 40mg/ml glatiramer acetate injection.

  • ICICI Direct maintains a ‘Buy’ rating on Divi’s Laboratories with a target price of Rs 4,655, indicating an upside of 19%. The brokerage is positive about the company as it remains well positioned in the custom synthesis and active pharmaceutical ingredients or API segments. The brokerage expects the company’s revenue to grow at a CAGR of 7.5% over FY22-24.

  • Aether Industries’ Rs 808-crore IPO gets bids for 49% of the available 93.5 lakh shares on offer on the second day of bidding. The retail investor quota gets bids for 67% of the available 45.4 lakh shares on offer.

  • Media stocks like Zee Entertainment Enterprises, Sun TV Network, Network 18 Media & Investments, Saregama India, and TV 18 Broadcast, among others, are falling in trade. The broader sectoral index Nifty Media is also trading in the red.

  • Edible oil companies' stocks like Adani Wilmar, Ruchi Soya Industries, Gujarat Ambuja Exports, among others, slump in trade after government exempts customs duty and agri cess on importing 2 million tonnes of soyabean and sunflower oil per year. This exemption is applicable for crude soyabean and sunflower oil for FY23 and FY24.

  • Metropolis Healthcare is falling as its Q4FY22 net profit declines 34.8% YoY to Rs 40 crore despite a 4.9% increase in revenue to Rs 305.9 crore. EBITDA margin falls 7.2 percentage points YoY to 26% on the back of a rise in cost of materials consumed. Revenue per patient declines by 2% YoY to Rs 904 and number of patient visits increases by 7% to 34 lakh.

  • Aster DM Healthcare is trading with more than 37 times its weekly average trading volume. Bayer Cropscience, SIS, Minda Industries, and TCI Express are trading at more than four times their weekly average trading volumes.

  • JM Financial's Q4FY22 profit rises 1.18% YoY to Rs 178.8 crore despite a 0.2% YoY fall in revenue to Rs 839.2 crore. The profit rises as the company's finance cost and employee benefit expense falls. The board of directors recommends a final dividend of Rs 1.15 per share.

  • All IT stocks trade in the red after Nomura downgraded its target price and revised its recommendation for Tata Consultancy Services, Larsen & Toubro Infotech, Wipro, HCL Technologies, and Persistent. It expects tech spending to fall because of changes in macro-economic conditions and deceleration in revenue. Nomura downgraded its rating for Tata Consultancy Services, Larsen & Toubro Infotech to 'Reduce' from 'Neutral'. It cuts its rating on Wipro, HCL Technologies, and Persistent's rating to 'Neutral' from 'Buy'.

  • ICICI Direct upgrades its rating on JK Cement from ‘Hold’ to ‘Buy’ with a target price of Rs 2,850, indicating an upside of 20%. The brokerage expects the company to expand its market share in Northern India due to its increasing production capacity. The brokerage expects the company’s profit to grow at a 22.5% CAGR over FY22-24.

  • Minda Industries’ rises even though its Q4FY22 net profit falls 4.7% YoY to Rs 156.2 crore because of a one-time deferred tax credit payment of Rs 15.6 crore. However, revenue increases 7.9% YoY to Rs 2,415 crore. The board approves the issue of bonus shares in the ratio of 1:1 and a final dividend of Rs 1 per equity share for FY22.

  • Wipro and Info Edge (India) touch 52-week low of Rs 447.7 and Rs 3,380 respectively. Both stocks are falling for four sessions.

  • Aster DM Healthcare is rising as its Q4FY22 net profit jumps 2.2 times YoY to Rs 226.3 crore and revenues increase by 14.1% to Rs 2,727.8 crore. Net profit rises as laboratory outsourcing costs fall 61% YoY to Rs 54.8 crore. Outpatient visits rise 22.2% to 5.5 lakh and in-patient visits increase by 16.5% YoY to 46,600.

  • Latent View Analytics is falling as its Q4FY22 net profit declines 28.8% QoQ to Rs 35.6 crore despite a revenue rise of 9% to Rs 117.5 crore. Net profit falls in Q4 as the company posted an exceptional item gain of Rs 22.6 crore in Q3FY22 as a part of economic relief provided by the US government. EBITDA margin increases by 60 bps QoQ to 30.5%.

  • Rail India Technical and Economic Service (RITES) is falling as its Q4FY22 net profit is flat, rising only 0.6% YoY to Rs 142.4 crore. However, revenue rises 21.7% YoY to Rs 766 crore led by export sales rising 161.3% YoY to Rs 250.1 crore. EBITDA margin falls by 170 bps YoY to 26.7%. The board recommends a dividend of Rs 3.5 per share for FY22.

  • Paint company stocks like Asian Paints and Berger Paints are down as Grasim Industries announces it will double its investment in the paints business to Rs 10,000 crore from the earlier announced Rs 5,000 crore. The company is accelerating the execution of its paints business with two of its plants at Panipat and Ludhiana already under construction.

  • Ipca Laboratories is falling as its Q4FY22 net profit declines by 19.3% YoY to 130.2 crore despite a revenue rise of 15.7% to Rs 1,289.1 crore. EBITDA margin decreases by 265 bps YoY to 18.1%. Revenue from India business rises 27% YoY to Rs 551.8 crore while revenue from active pharmaceutical ingredients or API exports falls 14% to Rs 180.8 crore.

  • Adani Ports & Special Economic Zone’s Q4FY22 net profit falls 21.8% YoY to Rs 1,033.2 crore as total expenses increase 31% to Rs 3,309.9 crore. Revenue from operations increases 6.6% YoY to Rs 3,845 crore with port and SEZ activities revenue rising marginally by 1.4% YoY to Rs 3,369 crore. EBITDA is down 19.5% to Rs 1,858.8 crore with operating margin falling 6.8 percentage points to 62.2% in Q4FY22. The board recommends a dividend of Rs 5 per share for FY22.

Riding High:

Largecap and midcap gainers today include Container Corporation of India Ltd. (623.70, 6.28%), Bayer Cropscience Ltd. (4,974.30, 5.09%) and Balkrishna Industries Ltd. (2,161.50, 4.55%).

Downers:

Largecap and midcap losers today include Asian Paints Ltd. (2,838.05, -8.06%), Coromandel International Ltd. (896.70, -7.85%) and Berger Paints (India) Ltd. (566.15, -7.21%).

Volume Rockets

24 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Minda Industries Ltd. (889.85, 6.52%), Bayer Cropscience Ltd. (4,974.30, 5.09%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (595.90, 4.96%).

Top high volume losers on BSE were Balrampur Chini Mills Ltd. (354.70, -8.85%), Asian Paints Ltd. (2,838.05, -8.06%) and Berger Paints (India) Ltd. (566.15, -7.21%).

Aster DM Healthcare Ltd. (179.60, 4.51%) was trading at 60.3 times of weekly average. Nesco Ltd. (548.35, 3.48%) and Prism Johnson Ltd. (106.90, -5.40%) were trading with volumes 16.9 and 14.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

1 stock made 52-week highs, while 61 stocks were underachievers and hit their 52-week lows.

Stock touching their year highs included - Coromandel International Ltd. (896.70, -7.85%).

Stocks making new 52 weeks lows included - Akzo Nobel India Ltd. (1,729.00, -2.70%) and Amara Raja Batteries Ltd. (485.10, -0.96%).

12 stocks climbed above their 200 day SMA including Minda Industries Ltd. (889.85, 6.52%) and Bayer Cropscience Ltd. (4,974.30, 5.09%). 29 stocks slipped below their 200 SMA including Chambal Fertilisers & Chemicals Ltd. (358.40, -10.70%) and Balrampur Chini Mills Ltd. (354.70, -8.85%).

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