1. Varun Beverages: This soft drink bottler’s stock has improved 10% in the past three days and touched a new 52-week high on Thursday. The rise in share price could be attributed to robust Q2FY23 results. A strong rise in net profit and operating profit margin despite an inflationary environment excited investors. With this rise in stock price, Varun Beverages features in a screener that lists companies whose share prices are trading above short-, medium-, and long-term moving averages. 

Revenue rose 33% YoY and net profit increased by 58.7% in Q2. While a 24% YoY volume growth led revenue growth, a 7% rise in realisations on the back of price hikes led to increased profits. In addition, its higher-margin energy drink, Sting, was the star product in Q2, driving both top line and margins higher. The management said Sting’s overall realisation was higher than the average realisation by 65%, helping the EBITDA margin rise 140 bps YoY to 22%. 

Brokerages like Axis Direct, ICICI Direct and Motilal Oswal raised their target prices after the Q2FY23 results announcement. Brokerages are positive about the company on the back of its expanding distribution network and product mix shift towards higher margin products like ‘Sting’. 

2. Bandhan Bank: This bank’s stock has been falling for the past 90 days. Looking at the technicals, the stock fell 17% in the past three months and 10% on Monday alone after reporting a 74.6% QoQ dip in net profit to Rs 209.3 crore. It missed Trendlyne’s Forecaster estimates by 72%. Although the bank’s profitability is positive considering its reported a net loss of Rs 3,008.6 crore in Q2FY22, this has not enthused investors as many key metrics including asset quality have worsened. It shows up on a screener of bearish stocks with low Trendlyne Momentum scores and falling RoE for the past two years.

The bank’s fall in net profit can be attributed  to an increase in provisions which almost doubled to Rs 1,279 crore in Q2FY23. A rise in provisions indicates that the bank has a higher pool of stressed loans. It has had some slippages in loan books despite no restructuring in the last two quarters. Overall, slippages amounted to Rs 3,954 crore with the maximum slippage (Rs 3,624 crore) coming from the EEB (Emerging Entrepreneur Business) segment. Bad loan write-offs stood at Rs 3,539 crore.

On the positive side, Bandhan Bank’s advances grew 17.4% YoY to Rs 95,834 crore. Despite muted Q2 growth, analysts maintain a sturdy rating and expect the bank to perform well in H2FY23. Consensus estimates from analysts show 17 analysts recommending a ‘Buy’ on the stock with five recommending ‘Hold’ and one recommending ‘Sell’. Emkay Global expects the bank to deliver an RoE of 20-22% by FY24-25E. The management offered a positive outlook in their earnings call, expecting to report better earnings in Q3 and Q4 with improving asset quality.

3. Supreme Industries: This plastic processing company’s stock rose over 8% since announcing its results on October 31. This upswing comes despite a 64.1% YoY drop in net profit, with its EBITDA margin contracting 905 bps YoY to 7.1% in Q2FY23. This led the company to miss Trendlyne’s Forecaster profit estimates by 48.9%. The drop in profitability is due to inventory losses as polymer prices fell.  

However, the stock surged as the street has a positive outlook on the company’s prospects. This mostly comes on the back of the management raising its volume growth guidance to 20% from 15% for FY23. The firm’s top-line growth was supported by a 9% volume growth in Q2 due to softening resin prices. Also, the management believes that the price of Polyvinyl Chloride (PVC) resin dropping by 38% since April augurs well for volume growth from H2FY23. PVC-based products contributed around 80% of the firm’s sales volume in Q2. The company, while increasing its volume growth guidance, has lowered its operating margin guidance to 12-12.5% from 15% for FY23.

For H2FY23, the management expects robust demand for its piping products on recovery in rural demand and declining commodity and polymer prices. The stock shows up on the screener for companies that benefit from lower crude oil prices. According to ICICI Direct, the company’s piping segment’s volume will grow at a CAGR of 19% over FY22-24 on the back of a recovery in demand from the agriculture, housing, and infrastructure segments. Supreme Industries plans to incur a capex of Rs 700 crore in FY23, which will mostly be used to increase production capacity.

4. FSN E-Commerce Ventures (Nykaa): This internet platform company posted a surge in its net profit, up  251.1% YoY to Rs 4.1 crore, and revenue grew 39% YoY to Rs 1,230.8 crore in Q2FY23, as a result of new launches and festive demand. But its revenue and profit missed Trendlyne’s Forecaster estimates by 0.3% and 30.5%, respectively. Nykaa’s gross merchandise value (GMV) also rose 45% YoY to Rs 2,345.7 crore during the quarter, with Fashion GMV contributing 26%.  

Falguni Nayar, Executive Chairperson, Managing Director, and CEO, said, "Consumer demand for premium beauty, personal care, and wellness is showing signs of buoyancy as we gear up for a promising H2FY23.”

However, the company has been underperforming ahead of the expiry of the one-year lock-in period for its pre-IPO shareholders on November 10. It hit a 52-week low in the past week due to a large sell-off, especially from foreign investors. 

On the bright side, several brokerages are optimistic about the company because of strong Q2 results. Foreign brokerage Jefferies said the company delivered better than estimates on the GMV, revenue, and EBITDA but maintains its ‘Buy’ rating with a target price of Rs 1,650 as it expects volatility ahead of lock-in expiry. 

5. Triveni Turbines: Despite a fallout with its joint venture partners, the stock has managed to sail well, even as  markets turned volatile with rising inflation and recession fears. The stock has given decent returns as it shows up on a screener of stocks with consistently high returns over the last five years. The stock rose 20% in the last 30 days and nearly 46% in the past 90 days.

Triveni’s rise in share price comes as reports suggest that the company will cater to the entire 3-100 MW markets globally. The stock rose 5% in trade on October 21, after the news came to light. Currently, the company has a market share of more than 50% and the order book of the company stands at Rs 3,610 crore. With rising demand from international markets like Southeast Asia, Europe, West Asia and North America and the ongoing global energy crisis, energy transition through renewable sources and methods will be sped up which is an opportunity to grab.

The growth story does not stop here. The stock rose 2% on Wednesday after declaring its Q2FY23 results. It reports an increase in net profit by 21% QoQ to Rs 46.2 crore. On a YoY basis, this fell 73.4% because of an exceptional item gain in Q2FY22 (settlement amount from litigation between the company and its joint venture). Reports suggest that the management guides a 35% revenue growth for the next few years and aims to maintain the PBT above 20% to maintain high margins. Centrum Broking initiates coverage on the stock with a ‘Buy’ rating and expects a 14% CAGR growth on order inflows over FY22-25E. Triveni Turbines also shows up on a screener of stocks with improving book value per share for the last two years.

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