1. RBL Bank: This bank stock rose by 20% on Wednesday as it sold off its entire stake in Kilburn Engineering. The stake cut began on May 17 with RBL Bank holding a 19.6% stake in the company. It acquired shares in Kilburn on February 23, 2021, as a part of its debt restructuring plan which had a one-year lock-in period. With the lock-in period over, the bank went on a selling spree and held a 1.89% stake on Aug 19. The final announcement on Tuesday revealed that the bank has sold off the remaining stake and does not hold any equity shares in the company.  

On Monday, the bank announced the issuance of debt securities worth Rs 3,000 crore on a private placement basis, meaning the offering of securities is for a certain set of people (less than 50 people) as it is not a public offering. 

RBL Bank also shows up on the screener with changes in FII holdings in Q1FY23. RBL Bank’s FII holdings fell 2.1% QoQ. On Wednesday, College Retirement Equity Fund bought a 0.76% stake (45.8 lakh shares) in the bank worth Rs 49.9 crore. Reports suggest that the stock rose 5% on Thursday on short-term positive sentiment. The stock is also outperforming the Nifty 500 index by around 30% over the past month.

Emkay Global gives a ‘Buy’ call on the stock as it sees the bank’s capital to be at comfortable levels, according to reports. RBL Bank’s gross NPAs are falling since Q3FY22 and net interest income increased 6% YoY, indicating an improvement in the bank’s asset quality.

2. Lupin: This pharma company had an eventful week as it received USFDA approval for its abbreviated new drug application, acquired two brands for Rs 207 crore, and entered into a licensing agreement for a biosimilar drug. 

On Wednesday, Lupin received USFDA approval for its Formoterol Fumarate inhalation solution. This drug, which is used to treat patients with asthma, is the generic equivalent of Perforomist inhalation solution with an estimated annual sales of $282 million in the U.S. On Thursday, the drug maker entered into a licensing pact with Japan-based I'rom Group Co for a biosimilar product used in the treatment of osteoporosis in women. Under the terms of agreement, Lupin and the Japanese drug maker will conduct clinical trials, and market biosimilar Denosumab in Japan on an exclusive basis. Lupin will also receive multiple milestone payments. Currently, Denosumab has a market size of about $500 million in Japan. 

This comes at a time when the company is restructuring its businesses in the US and is also diversifying away from the US. This, alongside the prevalent price erosion caused Lupin to post weak Q1FY23 results. Both revenue and net profit missed Trendlyne’s Forecaster estimates by a big margin in Q1. As a result, it shows up in a screener that lists companies with broker downgrades in price or rating in the past month. However, mutual funds increased their holdings in the company in the past month and promoters also raised their shareholding in the past quarter. 

3. New Delhi Television (NDTV): The stock of this media company rose 10% in just two trading sessions till Thursday after the news of stake acquisition by Adani Group on Tuesday. Adani Enterprises’ media arm, namely AMG Media Networks will acquire 29.18% stake in NDTV through its subsidiary Vishwapradhan Commercial (VCPL). Adani Group bought VCPL for Rs 114 crore and this company simply exercised its pre-existing warrants to take over the complete holdings of the promoter entity RRPR Holdings.

The key promoters in this company are Radhika Roy and Prannoy Roy who together hold a 32.2% stake in NDTV. Meanwhile, Foreign institutional investors hold 14.2% share in the company. Now, AMG Media announced an open offer to acquire 26% stake from the other public shareholders of NDTV owing to regulatory requirements. Will this action cede controlling stake to the Adani Group? Here’s the catch. Adani Group companies have set the offer price as Rs 294 apiece, which is at a discount of 28% to Thursday’s closing price. With no money left on the table and rather a clear loss, shareholders will likely not opt for this open offer. This also puts into question the ability of Adani Group to acquire additional stake in NDTV, let alone control this media entity. 

If we analyze the revenue growth of NDTV and market leaders like Zee Entertainment and SunTV for the past three years, it has been either flat or negative. Fall in advertising spends across sectors post the pandemic clearly impacted the growth trajectories of these companies. However, NDTV did see its profits jump nearly 8X between FY19 and FY22 backed by cost control measures. This does provide a compelling case for Adani Group to buy a material stake in this media house. 

4. Deepak Fertilisers & Petrochemicals Corp: This commodity chemical maker’s stock rose 5% and hit the upper circuit, touching an all-time high of Rs 977.1 on Tuesday. In fact, over the past month, the stock has risen 48.1%, mainly due to robust profit growth and a healthy business outlook. In Q1FY23, the company’s net profit rose nearly 3.4X YoY to Rs 433.9 crore and revenue grew 59.3% YoY, beating Trendlyne Forecaster’s revenue estimates by 5%. The company’s profitability has been improving on better operational efficiencies and diversified end-user segments. This has helped it show up on a screener which lists stocks that effectively use shareholder’s funds. Its return on equity has been improving over the past two years. The proportion of promoters’ shares that is pledged reduced to 27.7% from 90.6% QoQ.

The company manufactures industrial, agricultural and mining chemicals, which enables it to possess a diversified product portfolio. The management has a positive outlook on the mining, infrastructure, and power sectors, and expects demand from these sectors to fuel business growth in the coming quarters. It anticipates increased demand for mining chemicals such as technical ammonium nitrate (TAN) to drive profitability. To meet the expected rise in demand for mining chemicals, the management plans to add a capacity of 3.76 lakh million tonnes per annum by FY25. 

Going forward, the management expects the demand and prices for nitric acid to remain strong in the coming quarters aided by diminishing availability of the product in China. It also expects to benefit from the China plus one policy as the shift in global supply chains towards India will continue to increase demand from its downstream customers.

5. Kalyan Jewellers India: This jewellery company’s stock rose 15.1% over the past week on healthy earnings and a positive business outlook. It is expected to benefit from the surge in demand this festive season due to a growing shift in preference for organised retail in jewellery, according to IDBI Capital. In Q1FY23, the company was back in black on a YoY basis and revenues surged more than 2X YoY. It turned profitable on the back of robust growth in footfalls, store expansion in the non-South Indian market and increased studded jewellery sales. This helped the company beat Trendlyne Forecaster’s consensus profit estimates by 3.7%. The company shows up on a screener which lists stocks in the PE buy zone with a reasonable durability score and a rising momentum score.

Going forward, the management is focused on penetrating newer markets by increasing the number of stores outside of South India, its core market. They see considerable headroom to grow in the non-south regions where studded jewellery is preferred by customers. This bodes well for the company as studded jewellery has higher margins than gold jewellery.  Revenues from the non-South Indian regions grew 145% YoY and revenue contribution increased to 35% in Q1. In addition, the management expects organised retail to have a 40% share in the entire jewellery market by 2025. To increase its market share and accelerate expansion, the company has adopted a franchise model. It plans to add 12-15 new showrooms in India annually over the coming years and will be adding 18 new stores in FY23.

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