1. Tata Motors: This auto stock has outperformed its sector by 6.1% in the past week and rose 7%, according to Trendlyne’s technicals. The stock reaction comes after the company released its global wholesales number on January 9. Total global wholesales grew 13% YoY to 3.2 lakh units in Q3FY23. Its subsidiary, Jaguar Land Rover (JLR), has also seen its wholesales increase 15% YoY and 5.2% QoQ to 79,591 units. The company’s domestic wholesales grew 17.7% YoY to 2.2 lakh units in Q3.

Although JLR’s wholesales volumes have grown in North America and UK markets, its China volumes were impacted by COVID spread. Its order book stands at 2.15 lakh, led by the new order for the Range Rover series. Improvement in chip supplies has positively pushed JLR’s wholesales in Q3. The company says JLR’s free cash flow (FCF) will be positive and is likely to be over 400 million euros. The stock reacted positively to this news and rose nearly 6% in trade on Tuesday.

Mitul Shah from Reliance Securities says that despite supply constraints and inflation, the company is likely to report net profit growth in Q3. However, Reliance Securities has not changed its target price and continues to hold its ‘Buy’ rating on the stock. Other brokerages like CLSA have upgraded their recommendation to ‘Buy’, while JP Morgan maintains ‘Neutral’. JP Morgan says that JLR needs to achieve the FCF guidance even in Q4FY23 to meet its full-year guidance since the FCF has been negative until H1FY23.

Overall analysts expect the auto sector to revive from one of its worst slowdowns by FY23-24. Jefferies has a positive stance on the auto sector and expects 12-18% volume CAGR growth over FY23-25E for passenger vehicles and two-wheelers. Tata Motors shows up in a screener of stocks showing positive shifts in share price and rising delivery volumes ahead of its Q3FY23 results on January 25.

2. Titan: This jewelry and watchmaker’s stock has fallen nearly 4% in the past four days till Thursday in reaction to the company’s Q3FY23 business update. Titan’s share price fell despite the company reporting a 12% YoY growth in combined sales across its standalone businesses. Q3 is generally a strong quarter for Titan due to festivals spread across the period. The company still managed to post double-digit growth on a high base but investors weren’t excited as the share price fell on Monday and Tuesday. One reason could be higher growth expectations. This is reflected in the company’s high TTM price-to-earnings ratio of 70. The TTM PE ratio is still below its historical averages, putting the stock in the PE Buy zone.

The jewelry segment is Titan’s major revenue contributor. The company derived over 86% of its total revenues from this segment in Q2FY23. In Q3, jewelry segment sales rose 11% YoY. Healthy new buyer growth in the festive period and higher-value purchases in the studded category drove sales. While its watch sales (10% of total revenue) rose 14%, eyecare product sales rose 10%.

Post the Q3FY23 business update release, brokerages like ICICI Securities and Prabhudas Lilladher maintain their ‘Add’ rating on Titan. However, ICICI Sec has reduced the target price by 5% to Rs 2,800, citing a possible demand slowdown due to macroeconomic factors. As a result, Titan features in a screener of stocks with recent broker downgrades in recommendation or target price.

3. Godrej Consumer Products: Since announcing its quarterly update on January 5, this FMCG company has risen nearly 3% till Thursday and outperformed the Nifty FMCG by 2.4%. As a result of this uptrend in share price, the stock is above its short, medium and long-term moving averages.

The management expects the company to deliver double-digit sales growth and single-digit volume growth amid softness in domestic demand. This comes after three consecutive quarters of YoY decline in volumes. The management indicated sales growth to be broad-based across segments, led by double-digit growth in the home care and personal care segments. Also, the household insecticides segment is expected to improve, according to reports. This is likely to aid performance as the segment has been weighing down the company’s topline performance for a few quarters.

At a consolidated level, the firm anticipates double-digit growth in rupee terms with volumes being more or less flat. With palm oil prices declining, the company expects gross margin recovery and healthy sequential growth in net profit. Trendlyne’s forecaster estimates its net profit to rise by 27.5% QoQ. Godrej Consumer’s Indonesia business is finally showing signs of recovery as its sales decline has come down to single digits from double digits. The firm’s Africa, US and Middle East businesses are expected to maintain their robust sales growth momentum in Q3FY23.

However, the management acknowledges that the demand environment has not yet completely recovered, as rural demand weakness still looms. The company’s ability to sustain this improvement in sales and volumes will be key for medium and long-term growth.

4. Sobha: This realty company has been on an uptrend after it reported a strong business update on January 6, 2023. The company’s share price has risen over 3% in a weak market as it reported its highest-ever sales value of Rs 1,425 crore, a 36% YoY growth. Its average price realisation is up 21.9% YoY to Rs 9,650 per square foot. The company has also outperformed the Nifty Realty index by 7.1% in the past week.

While Bangalore continues to contribute a significant share (60%) of its real estate sales, projects from other cities make up 40% of the total sales volume during the quarter. Gurugram clocked its highest-ever quarterly sale, backed by the launch of new towers. The management says, “Requirement for larger homes has been the consistent theme in the past couple of years. Adoption of our home designs to cater to this demand across cities has helped us in improved sales volume and higher realizations.”

Besides, the company’s cash flows have been strong in Q3FY23 and led to a reduction in net debt. As a result, it features in a screener of companies with improving cash flow from operation for the past two years.

Post this business update, ICICI Securities maintains its ‘Buy’ rating on the stock with a target price of Rs 808. The brokerage believes that Sobha is well on track to achieve its FY23 guidance with the 9MFY23 sales bookings up 35% YoY.

5. One97 Communications (Paytm): This internet software & services company rose 2.3% on Monday in reaction to its Q3FY23 business update. Paytm’s loan disbursements have grown 357% YoY to Rs 9,958 crore in Q3FY23. But investors’ enthusiasm quickly waned on Thursday as the stock plunged 6.2% on the news of Alibaba selling 2 crore shares (or 3.1% stake) in the company, according to reports.

In its business update, Paytm reported a  32% YoY rise in monthly transacting users (MTUs) and 190% YoY growth in devices deployed. These two factors aided the jump in gross merchandise value (GMV) by 38% YoY to Rs 3.5 lakh crore. The company says that, over the past few quarters, its focus has been on payment volumes that generate profitability, either through net payments margin or from direct upsell potential.

According to reports, Morgan Stanley, on Thursday, stated that One97 Communications will be a major beneficiary of the government’s unified payments interface (UPI) incentive scheme. The cabinet has approved an incentive scheme of Rs 2,600 crore for the promotion of RuPay Debit Cards and low-value BHIM-UPI transactions. The brokerage estimates that the company will receive 5-7% of the incentive.

Paytm has also signed a sponsorship deal with Zee Entertainment Enterprises for the DP World International League T20 on Thursday, according to reports. The company features in a screener of stocks which are efficient in managing their assets.

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