1. United Spirits: This alcoholic beverage company’s share price has risen nearly 10% since it announced its Q2FY23 results. United Spirits comfortably beat Trendlyne’s forecaster estimates in both revenue and net profit. According to Trendlyne’s comparison tool, United Spirits outperformed its peers United Breweries, Radico Khaitan and Globus Spirits in YoY revenue and net profit growth in Q2.  

Despite a recent run-up in the share price, United Spirits is in the PE Buy zone and features in a screener for stocks in the PE Buy Zone with reasonable durability and rising momentum scores. 

Strong volume growth of 13% YoY in its premium and above segment drove revenue growth in Q2. However, volumes from the popular segment remained flat YoY. This is in line with the management’s guidance as it is changing the product mix to high-margin premium & above segment, which contributed nearly 80% of the total revenue in Q2. 

The management aims to derive 90% of its revenue from the premium segment in the near term. As part of this premiumisation drive, the company sold 32 popular brands amounting to Rs 372 crore in Q2FY23. These brands accounted for about 14% of the sales in H1FY23–meaning sales from this segment could see a YoY decline in H2FY23. However, with new premium product launches, margins are expected to improve. In Q2, gross margins fell 560 bps YoY to 39.5% due to double-digit inflation in raw material prices. The management said input cost inflation will continue in Q3FY23 as well due to the rise in glass manufacturing and Extra Neutral Alcohol (ENA) costs. 

2. Hindalco Industries: This aluminium manufacturer gained nearly 5% since announcing its Q2FY23 results on November 11. This rise in its stock price comes despite a 35.5% YoY drop in its net profit. It also missed Trendlyne’s Forecaster profit estimates by 14.4%. The street’s optimism around the company comes on the back of its aluminium production reaching record highs amid high input costs.

The business outlook for the firm looks healthy as the London Metal Exchange (LME) aluminium prices are expected to rise and demand for aluminium remains strong. This confidence in the company’s prospects is echoed by brokerages as well. Over the past month, it witnessed four broker target price upgrades and one broker recommendation upgrade.

The management expects the firm’s margins to expand in the coming quarters on better coal availability, as its captive coal mines start contributing effectively. This will bring down energy costs in the medium-to-long term. According to ICICI Securities, capacity expansion at Utkal Alumina will lead to a further fall in input costs for the company.

The management says it expects a robust demand environment in India, but a slowdown in the US may be a concern. ICICI Securities sees the Indian market driving growth for the company in the near-to-medium term. The company has allocated a capex of Rs 2,500 crore for the rest of FY23, which it plans to finance with its cash flows and not take on any debt. 

3. Tata Motors: The commercial vehicles manufacturer fell almost 5% following its Q2FY23 results on November 9. The company reported a loss of Rs 944.6 crore and 29.7% YoY rise in revenue to Rs 79,661.4 crore. It was backed by growth in revenues from Jaguar Land Rover, commercial vehicles and passenger vehicles segments. 

Shailesh Chandra, Managing Director, said the company remains vigilant about the evolving demand and supply situation and will stay active to take swift actions while focusing on further improving profitability. 

The company beat Trednlyne’s Forecaster estimates for revenue by 2.4% while net profit missed the forecaster estimates. Prabhudas Lilladher maintains ‘Buy’ rating on the company with a target price of Rs 520. The brokerage believes that the company’s likely market share gains in the PV segment led by a revamped portfolio, customer preference for SUVs and rising EV penetration along with the revival in Jaguar Land Rover and strong order book will benefit and drive free cash flow generation. 

Bringing in more business, the company’s commercial vehicles segment won an order for 1,000 buses from Haryana Roadways. The 52-seater fully built BS6 diesel buses will be supplied to the state in a phased manner. The stock also features on a screener of top Indian exporters in listed companies.

Meanwhile, Jaguar Land Rover’s Chief Executive Officer Thierry Bolloré resigned from the position due to personal reasons on November 17. 

4. Trent: This retailing company witnessed robust sales during the recently ended quarter. Although revenue was up 66% YoY to Rs 1,929 crore, its rise in profit was marginal at 0.5% YoY (Rs 93 crore). While its margins declined due to inflationary pressures, Trent’s revenue growth was backed by festive demand and in-store sales. It outperformed the industry. 

Noel Tata, Chairman of Trent, said the company’s fashion concepts have displayed encouraging growth momentum in Q2FY23. He added that Trent continues to expand its reach with vigour, and reinforce lifestyle offerings across concepts, categories and channels.

Brokerages like ICICI Direct, Axis Direct and Motilal Oswal are optimistic and give it a ‘Buy’ call on the back of the retailer’s robust performance and growth prospects. They expect Trent to add over 200 stores across various brands in the next two-three years. They believe that brands like Zudio and Star will drive growth in the coming years. 

While comparing Trent with its peer Aditya Birla Fashion and Retail using Trendlyne’s Stock Comparison tool, it outperformed in 30 out of 42 parameters, including revenue and net profit QoQ growth. 

The stock features in a screener for companies with strong annual EPS growth.

Trendlyne’s Forecaster estimates Trent’s revenue to grow 42.7% and EPS, 76.3% in FY23. 

5. Aster DM Healthcare: This healthcare facilities provider's share price fell over 18% in three trading sessions after it announced Q2FY23 results. The company's net profit fell 57% YoY and missed Trendlyne's Forecaster estimates by a significant margin. Net profit fell despite a 12.5% rise in revenue, mainly due to a sharp fall in the Gulf Cooperation Council (GCC) clinics and losses incurred by new hospitals in GCC. As a result, this company comes up in a screener of companies that posted a decline in quarterly net profit with a falling profit margin (YoY). 

Aster DM derives nearly 75% of its revenue from the GCC. The company has an established business in the GCC but has been expanding in India through an asset-light model. Revenue from hospitals in India rose 18.7% YoY in Q2, while GCC hospitals' revenue increased 8.2%. In addition, Indian hospitals boast higher operating profit margins or OPM (18.3%) than GCC hospitals (13.9%). 

To grab this opportunity in India, Aster DM has allocated a significant portion of Rs 600 crore capex planned for FY23 to increase bed counts in India. In order to strengthen its presence in South India, the hospital company inked a deal with Tirupathi-based Narayanadri Hospital & Research Institution in October to manage its hospital operations. This is in line with management's guidance of adding over 500 beds in India over FY23.

Another company expanding its footprint in South India is Krishna Institute of Medical Sciences (KIMS). According to Trendlyne’s comparison tool, KIMS beats Aster DM in YoY revenue and net profit growth in Q2. However, Aster DM hopes to leverage its multiple growth levers such as its pharmacy business and diagnostics business in GCC and India to drive top line growth. 

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