1. InterGlobe Aviation (Indigo): This airline stock fell 4.9% following its Q2FY23 results as it posted a net loss of Rs 1,435.7 crore. However, the company’s revenue rose by 122.8% YoY to Rs 12,497.6 crore on the back of a 75.9% YoY increase in passengers carried in Q2FY23 (1.9 crore).

Pieter Elber, Chief Executive Officer (CEO) of the company, said, “This is the second consecutive quarter in which we operated at higher than pre-covid capacity. In spite of a seasonally weak quarter, we witnessed relatively good yields with strong demand across the network. However, fuel prices and exchange rates have adversely impacted our financial performance.” The company’s revenue beat Trendlyne’s Forecaster estimates by 10.9%.

Over the past two weeks, the stock rose 10.7% as the airline launched its first freighter aircraft from Mumbai to Delhi on November 15. More recently, Indigo launched 19 connecting flights to Europe under its codeshare partnership with Turkish Airlines on Thursday. The airline will have connecting flights to Portugal and Switzerland through Istanbul.

According to ICICI Securities, domestic demand will continue to rise in the upcoming festive and winter season. International air travel has also demonstrated a strong recovery, which is likely to continue. The company features in a screener of stocks benefiting from lower crude oil prices.

2. Aarti Industries: This specialty chemicals company was up 2.4% in trade on Monday after it announced a 20-year arrangement for the supply of Nitric Acid worth Rs 8,000 crore with Deepak Nitrite on November 19. Although the stock rose on Monday, it cut its gains and is now trading near its 52-week low of Rs 642.1. The company has underperformed the Chemicals & Petrochemicals sector by 1.8%; its PE ratio TTM (18.6) is below the sector PE ratio.

Post Aarti’s announcement, Anand Rathi maintained its ‘Buy’ rating and revised the target price to Rs 800. The brokerage believes that the agreement with Deepak Nitrite would enable Aarti Industries to focus on growth opportunities and introduce value-added products.

However, the company’s share price has fallen over 50% from its 52-week high after the demerger from its pharma business. Rajendra Gogri, Chairman and Managing Director, said in the earnings call, “This will extensively enhance value for our stakeholders and also help us achieve operational efficiencies.”

KR Choksey maintains its ‘Buy’ rating on the stock with a target price of Rs 841. This indicates a potential upside of 24.2%. The brokerage says that the demerger from Aarti’s pharma business will enable it to pay attention to its core speciality chemicals business.

3. Medplus Health Services: This healthcare supplies company has risen nearly 15% after its Q2FY23 results announcement. Medplus Health Services’ revenue grew over 20% YoY in Q2 but its net profit fell sharply by 68% due to high overhead costs. But what’s exciting investors could be the pace at which the company is adding new stores. The company is in a phase of rapid expansion. It added 348 stores (net) in Q2FY23, which is 1.5x its usual average. In fact, in the last 12 months, Medplus’s total store count increased by 42%. Management expects sales growth to remain steady as stores mature, and margin pressure to continue in the near term as it maintains 1,000+ store additions in FY23.

The pharmacy segment (both offline and e-commerce) is under intense competition with companies from different industries. While peers like PharmEasy are expanding aggressively in this segment, hospital companies like Apollo Hospital Enterprises and Aster DM Healthcare are also after market share in the pharmacy space. As a result, Medplus’ stock price fell over 35% from its issue price of Rs 796 and hit a lifetime low of Rs 570 on November 10. However, with the Q2 results announcement, MedPlus’ share price recovered, helping it feature in a screener of companies that are classified as overbought by the money flow index (MFI).

Post Q2 results, Nomura and Credit Suisse maintained their ‘Buy’ rating on Medplus and increased their target price. Nomura sees an upside of 60%, while Credit Suisse’s target price implies an upside of 28%. With 33% of the total stores being less than 12 months old, brokerages believe an improvement in margins from these store additions could help ease the margin pressure for Medplus going forward.

4. One97 Communications (Paytm): It is not a ‘Happy anniversary’ for this internet software company as the stock lost more than 70% of its price value in the last year. Trendlyne’s technicals suggest that Paytm fell over 42% in the last three months alone. While looking at the financials, Paytm’s Q2FY23 results have been encouraging as its net loss narrowed to Rs 588.8 crore in Q2FY23, compared to Rs 628 crore in Q1FY23. Revenue also grew by 10.6% QoQ to Rs 1,490.2 crore, with the most revenue coming in from payment services given to merchants.

What triggered the decline was the end of the lock-in period for pre-IPO investors, which ended on November 15. The first investor to offload a stake in the company was Societe Generale, cutting a 0.06% stake in the company for Rs 23.2 crore in a bulk deal. The stock fell 4% in trade after the deal but the bigger cut was by SVF India Holdings, a subsidiary of Softbank. SVF India sold a 4.5% stake (worth Rs 1,630.8 crore) in Paytm on November 17, which caused the stock to crash more than 10% in trade. It now holds a 12.9% stake in Paytm, compared to 17.4% earlier. Although other funds like BNP Paribas Arbitrage, BofA Securities Europe and Morgan Stanley picked up nearly 2.8% stake in Paytm, the investor sentiment is yet to turn positive on the stock. 

To add to this, Macquarie said that Jio Financial Services’ foray into the payment provider space may add to the problems of Paytm. The stock fell 11% on Tuesday on the fresh speculation. Suresh Ganapathy, an analyst at Macquarie, says that although Jio Financial Services has not declared the segments it plans to target, it will be focused on customer and merchant lending. It may prove to be a threat to not only Paytm, but also NBFC players like Bajaj Finance. Trendlyne’s consensus recommendation suggests that six analysts recommend a ‘Buy’ while two recommend a ‘Hold’ and ‘Sell’.

5. Escorts Kubota: This commercial vehicle manufacturer’s stock rose 8% till Thursday since holding its analyst & investor meet on Friday. The upward price movement enabled this company to show up in a screener for stocks with strong momentum where their prices are above the short, medium, and long-term moving averages.

The positive price movement comes on the back of the street’s healthy business outlook for the company after it unveiled its medium-term business plan. The company aims to increase its revenue 2.5X by FY28 and increase the contribution of its exports towards the revenue to 15-20% from 6.4% in FY22. Overall, the management aims to increase the firm’s revenue by expanding its network and production capacity, gaining market share and increasing exports. The company is targeting the key high-volume export markets of US, Europe, Thailand and Brazil. Another element of the management’s medium-term strategy is to increase its dividend payout and buybacks by using up to 40% of its net profit.

To carry out its medium-term business plans, the management has planned a capex of Rs 4,000 crore. This will be spent on greenfield expansion, repaying the debt of the merged entity, and new product launches. The company plans to build a new manufacturing facility to increase its production capacity of tractors and engines by 76.5% to 3 lakh units by FY28. The management also aims to ramp up its distribution network by 50% from its current network of about 1,400 dealers. Although Escorts Kubota has laid out a positive trajectory for itself, effective execution will be key in realising its growth potential in the coming quarters.

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