1. Marico: This FMCG company rose 1.9% on Thursday following its Q3FY23 business update. The company’s Indian business has improved marginally as it posted mid-single-digit volume growth. The Saffola franchise sales, which contribute 20% of its revenue, increased in double digits with Saffola Oils putting up volume growth in the low teens.

Premium personal care also witnessed double-digit growth in line with sectoral trends. The management expects the gross and operating margins to improve YoY and sequentially in Q3FY23 as raw material prices stabilise along with consumer pricing. According to analysts, FMCG companies are optimistic about growth in revenue with the aid of a rise in rural sales. They also expect inflation to drop and demand to rise. However, Pushan Sharma, director of research of CRISIL Market, says, “Volume growth for the sector will remain subdued owing to rising inflation and sluggish rural demand, which accounts for almost 40 per cent of overall FMCG demand.”

The company has also launched ready-to-eat snacks under the brand name of Saffola Munchiez to expand its range of packaged foods, according to reports. The stock rose 2.6% on December 9, 2022, as its subsidiary, Marico South East Asia Corp (MSEA) signed a definitive agreement to acquire 100% shares in personal care brand, Beauty X, for approximately Rs 172 crore. The company also features in a screener of stocks with improving return on equity (RoE) over the past two years.

2. Avenue Supermarts: This retailing company’s share price fell over 3% on Wednesday after it announced its standalone (D-Mart) Q3FY23 update. Revenue from operations has risen 24.7% YoY to Rs 11,304.6 in Q3, and the company has added four new stores, taking the total count to 306. But its share price has fallen as revenue growth and store additions slowed down compared to historical levels. Top-line growth in Q3 has been the slowest since Q4FY22. As a result of the share price fall, this company features in a screener of stocks with weak momentum: prices below short, medium and long-term averages.

Brokerages like Motilal Oswal and Macquarie remain cautious about Avenue Supermarts amid slowing top-line growth, according to reports. Macquarie has an 'underperform' rating on Avenue Supermarts due to the company's worse-than-expected commentary on outlook and slow store additions in Q3. For reference, the company added 18 and 50 new stores in H1FY23 and FY22 respectively. However, mutual funds are positive about the company as they increased their shareholding in Avenue Supermarts last month.

In its Q2FY23 earnings call, the management said that sales of discretionary items in the non-FMCG segment were recovering, but yet to match pre-pandemic levels. However, overall standalone revenue has risen 67% YoY in Q3FY23, when compared to pre-Covid levels or Q3FY20. Avenue Supermarts is yet to announce a date for its Q3FY23 results. According to Trendlyne’s forecaster estimates, both Q3FY23 and FY23 revenue are expected to rise nearly 30% YoY.

3. NCC: This mid-cap construction & engineering company recently announced five order wins worth Rs 3,601 crore from state government agencies. The stock zoomed 9% in trade on Tuesday after it released the filing. Of the five orders, two pertain to the water and electrical division and are worth Rs 1,871 crore and Rs 993 crore respectively. Another order is from the irrigation division, costing Rs 738 crore. In the past six months, the stock has risen 71%, and 31% in one year. It is also trading near its 52-week high and rose 2.5% on Thursday in a weak market.

NCC’s total order book stands at Rs 40,020 crore as of Q2FY23. ICICI Direct and Geojit BNP Paribas have raised their target price by 22% and 21% respectively. The brokerages expect the order book to improve with a 16% CAGR growth over FY22-25E. However, Geojit BNP Paribas has reduced its EBITDA margin guidance by 50 bps to factor in commodity prices.

Vijay Kumar, Head & VP of Finance of NCC, says that the order book has been robust and H1FY23 saw an order inflow of Rs 6,800 crore. He adds, “We are one of the front runners in Jal Jeevan Mission and have orders from Uttar Pradesh, Karnataka and other states. Going forward, these segments are going to contribute a good chunk of revenue to the top line of the company.” NCC has given a guidance of 30% revenue growth and margin guidance of 9.5-10% for FY23. It also plans to reduce its gross debt from Rs 1,985 crore in H1FY23 and bring it in the range of Rs 1,500 crore in FY23 due to rising cash flows.

The stock ranks high on Trendlyne’s DVM score and shows up in a screener with negative to positive growth in sales and profit with strong price momentum.

4. IndusInd Bank: This banking stock closed in the red on Wednesday, taking cues from the Nifty 50, despite reporting a strong business update. The lender has seen a steady increase in loans disbursed and deposits. In Q3FY23, its net advances have risen 19% YoY to Rs 2.7 lakh crore, and deposits 14% YoY to Rs 3.3 lakh crore. The bank’s advances stood at Rs 2.6 lakh crore and deposits at Rs 3.2 lakh crore in Q2FY23.

Several analysts are bullish on the bank due to the strong trend in its loan and deposit growth. Foreign brokerage CLSA believes that 2023 would be a strong year for Indian banks. It has upgraded rating on IndusInd Bank to ‘Buy’ from ‘Outperform’ and also raised the target price to Rs 1,500. As a result, the stock features in a screener of companies where brokers have upgraded recommendations or target prices in the past three months. Consensus estimates show 27 analysts recommending a ‘Strong Buy’ on the stock with seven recommending ‘Buy’ and five recommending ‘Hold’.

Meanwhile, on Thursday, IndusInd Bank announced a tie-up with two leading international airlines (Qatar Airways and British Airways) to introduce a co-branded credit card. Soumitra Sen, Head of Consumer Banking & Marketing of the bank said, “With this credit card, our aim is to shift the power of choice completely into the hands of the customers.”

The stock features in a screener of stocks near their 52-week highs with significant volumes.

5. APL Apollo Tubes: This iron & steel products manufacturer’s sales volume has grown 50% YoY in Q3FY23, led by robust demand in its structural and coated products categories. Since announcing its Q3 sales figures on Monday, the stock has been on an uptrend. This led to it showing up in the screener for stocks with strong momentum. It grew 6.4% over the past week till Thursday, outperforming the Nifty Metal index by 4.2% over the same period.

The company’s sales volume growth has been led by the structural product segment’s volumes surging 61.9% YoY. Its structural/coated products are manufactured in its latest plant in Raipur, which has seen a 3.8X QoQ growth in sales volumes. The management expects an upswing in its sales volume in the coming quarters, as it plans to ramp up production in its new Raipur plant. According to reports, as the Centre prioritises infrastructure and construction, the company is expected to see further growth in volumes, with a surge in demand for its value-added products, which will lead to an improvement in margins. According to Trendlyne’s Forecaster, the company’s Q3 net profit is expected to surge by 77.2% YoY and the consensus recommendation from 12 analysts is ‘Buy’.

The company has a healthy new product pipeline and it aims to expand its distribution reach in the coming quarters. The company seems to be well-positioned to capitalise on the expected rise in demand for steel given that it has a 55% market share in India’s structural steel tube industry. 

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