Trendlyne Analysis

Nifty 50 closed in the red on a volatile day of trade. Indian indices closed lower after rising sharply on Monday led by technology stocks tracking other Asian indices. Major Asian indices closed mixed amid falling bond prices as investors monitor the impact of imminent interest rate hikes by central banks to curb high inflation levels. US indices closed deep in the green on Monday led by the tech-heavy NASDAQ 100, which closed 3.3% higher. Crude oil rises sharply and trades at elevated levels as European Union agrees to slash oil imports from Russia by the end of 2022, leading to further disruption in its supply. German consumer price index rose to a multi-decade high of 7.9% in May, topping analysts’ expectations. European indices trade mixed as investors continue to monitor high inflation levels and the effects of ongoing geopolitical crisis.

Nifty Smallcap 100 closed 1.2% higher despite the benchmark index closing in the red. Nifty Media and Nifty Realty, which opened lower than Monday’s levels, closed sharply higher. Nifty IT closed in the red, despite the tech-focused NASDAQ 100 closing deep in the green on Monday.

Nifty 50 closed at 16,584.55 (-76.9, -0.5%), BSE Sensex closed at 55,566.41 (-359.3, -0.6%) while the broader Nifty 500 closed at 14,119.60 (-35.2, -0.3%)

Market breadth is in the green. Of the 1,880 stocks traded today, 990 were in the positive territory and 845 were negative.

• Kansai Nerolac Paints, Orient Electric, Equitas Small Finance Bank, and Chemplast Sanmar are trading with higher volumes as compared to Monday.

• Piramal Enterprises sees a long build-up in its Jun 30 futures series as its open interest rises 12% with put to call ratio at 1.10

• Stocks like Hindustan Petroleum Corporation, Honeywell Automation India, Lupin, Ipca Laboratories, and Sundaram Finance, among others, are in the oversold zone according to the technical indicator relative strength index or RSI.

• Lemon Tree Hotels is rising as the company inks a license agreement for a 40-room hotel at Chirang, Assam under the Company’s brand Keys Select. Carnation Hotels, an hotel management arm of the company will be operating this hotel.

• Anupam Rasayan India and Hikal touch 52-week low of Rs 677.7 and Rs 332.2 respectively. While Anupam Rasayan India falls for four consecutive sessions, Hikal is trading down for three.

• Hem Securities maintains a ‘Buy’ rating on Inox Leisure with a target price of Rs 600, indicating an upside of 23%. The brokerage believes the company’s extensive network of theatres, robust consumer demand, and a healthy release pipeline in the movie industry will lead to strong revenue growth in FY23. The brokerage expects the company’s revenue to grow at a 109.5% CAGR over FY22-24.

• Metal stocks like Vedanta, Hindustan Copper, JSW Steel, and Welspun Corp are rising in trade. The broader sectoral index Nifty Metal is also trading in green.

• Realty stocks like DLF, Macrotech Developers, Godrej Properties, Oberoi Properties, and Phoenix Mills, among others, are rising in trade. The broader sectoral index Nifty Realty is also trading in the green.

• NCC rises as it bags three orders worth Rs 6,388 crore in May 2022. All orders come under the building division. The largest order of Rs 5,688 crore is from the Municipal Corporation of Greater Mumbai for designing, building, and operating the Malad wastewater treatment facility.

• KNR Constructions is trading with more than eight times its weekly average trading volume. Natco Pharma, Fine Organic Industries, Sundram Fasteners, and Sundaram Finance are trading at more than four times their weekly average trading volumes.

• Axis Securities maintains a ‘Buy’ rating on Bata India with a target price of Rs 2,200, indicating an upside of 22%. The brokerage is positive about the company as it is expanding in low-tier cities, where the unorganized segment is dominant. The brokerage expects the company’s revenue to grow at a CAGR of 34.7% over FY22-FY24.

• Ethos is rising as its Q4FY22 net profit rises 73.7% YoY to Rs 7.8 crore and revenue rises 28.9% to Rs 158.7 crore. Revenue grows on the back of total billings rising 30% YoY to Rs 185 crore. Profit is up as the EBITDA margin rises by 110 bps YoY to 9.6% led by a higher share of inhouse brand sales.

• Jubilant Foodworks is falling as its Q4FY22 net profit falls 8.1% YoY to Rs 96.8 crore as raw material costs rise 16.6% YoY to Rs 255 crore. Revenue rises 13.3% YoY to Rs 1,176 crore, driven by robust growth in Domino’s delivery channel. Operating margin rises by 50 bps YoY to 24.6%.

• Aurobindo Pharma is rising despite its Q4FY22 net profit falling 28% YoY to Rs 576.5 crore and revenues decreasing by 3.2% YoY to Rs 5,809.4 crore. Revenue from the US business falls 4.7% YoY to Rs 2,728.1 crore, while revenue from the Europe business is flat YoY at Rs 1,540.7 crore. EBITDA margin falls 4.4 percentage points YoY to 16.8%.

• Value vs High valuation

  "For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favourable business developments.”
  Warren Buffett

  — Samir Arora (@Iamsamirarora) May 30, 2022

• GAIL India rises as the management announces plans to invest Rs 6,000 crore in renewable energy in the next three years. The company’s management expects this investment to go up to Rs 20,000 crore by 2030. The company plans an overall capex of Rs 40,000 crore for the next five years covering a wide range of areas including procuring a 10 megawatt capacity of liquid hydrogen and adding 3 GW of renewable capacity.

• Jindal Steel and Power’s Q4FY22 net profit rises 3.2% YoY to Rs 2,207 crore and revenue rises 35.3% YoY to Rs 14,339.5 crore. Revenue rises on the back of higher steel volumes and prices. EBITDA falls 38.1% YoY to Rs 3,070 crore as total expenses rise 75.4% YoY to Rs 11,914.1 crore.

• Indian rupee depreciates 0.17% to Rs 77.67 against the US dollar in early trade today.

• Sun Pharmaceutical Industries is falling as it posts a loss of Rs 2,277.2 crore in Q4FY22 as opposed to a profit of Rs 894.1 crore in Q4FY21. The company posts a loss due to a one-time Rs 3,935.7-crore one-time settlement and restructuring charge. Revenue rises 10.8% YoY to Rs 9,446.8 crore driven by revenue from the India formulations segment rising 16% YoY to Rs 3,095.6 crore.

• Medplus Health Services is falling as its Q4FY22 net profit falls 36.1% YoY to Rs 11.7 crore. However, revenues increase by 4.7% YoY to Rs 985.9 crore on the back of revenue growth in its pharmacy retail segment. Net profit falls as employee benefits expense rises 44% YoY to Rs 113.7 crore.

• Life Insurance Corporation of India’s Q4FY22 net profit falls 18% YoY to Rs 2,371.5 crore because of the bonus amount paid to shareholders, which stands at Rs 48,270.6 crore. The insurance company did not pay any bonus amount in the same quarter last year. Net benefits paid rise 18.95% YoY to Rs 1.2 lakh crore. Net premium income rises 18.2% YoY to Rs 1.4 lakh crore with gross first-year premium income increasing 33.4% to Rs 14,614.3 crore. The board recommends a dividend of Rs 1.5 per share for FY22.

Riding High:

Largecap and midcap gainers today include Info Edge (India) Ltd. (4,164.40, 9.44%), AIA Engineering Ltd. (2,277.75, 8.38%) and Piramal Enterprises Ltd. (1,894.95, 6.62%).

Downers:

Largecap and midcap losers today include Adani Green Energy Ltd. (1,888.95, -12.21%), Adani Total Gas Ltd. (2,397.90, -7.40%) and Aarti Industries Ltd. (760.75, -6.21%).

Movers and Shakers

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

Top high volume gainers on BSE included Info Edge (India) Ltd. (4,164.40, 9.44%), Computer Age Management Services Ltd. (2,325.70, 9.34%) and Route Mobile Ltd. (1,392.30, 9.24%).

Top high volume losers on BSE were Adani Green Energy Ltd. (1,888.95, -12.21%), Adani Total Gas Ltd. (2,397.90, -7.40%) and IOL Chemicals and Pharmaceuticals Ltd. (358.60, -7.21%).

Shriram City Union Finance Ltd. (1,716.55, 1.29%) was trading at 14.6 times of weekly average. Tube Investments of India Ltd. (1,570.35, -1.88%) and KNR Constructions Ltd. (260.00, 6.54%) were trading with volumes 10.9 and 10.7 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

9 stocks took off, crossing 52-week highs, while 6 stocks hit their 52-week lows.

Stocks touching their year highs included - AIA Engineering Ltd. (2,277.75, 8.38%), EID Parry (India) Ltd. (555.65, -0.43%) and Mahindra & Mahindra Ltd. (1,034.35, 3.61%).

Stocks making new 52 weeks lows included - Bajaj Consumer Care Ltd. (136.25, -0.58%) and Natco Pharma Ltd. (690.95, 3.72%).

25 stocks climbed above their 200 day SMA including Suzlon Energy Ltd. (8.55, 7.55%) and Century Plyboards (India) Ltd. (573.95, 6.95%). 14 stocks slipped below their 200 SMA including ZF Commercial Vehicle Control Systems India Ltd. (7,607.75, -4.21%) and Jyothy Labs Ltd. (149.00, -3.87%).