1. PNC Infratech: This roads and highways company rose 1.5% on Wednesday as it bagged a contract worth Rs 1,260 crore from the National Highways Authority of India (NHAI) for the construction of the Varanasi-Ranchi-Kolkata highway. The contract is for two years of construction and 15 years of highway operation. However, the stock has fallen 14.3% over the past month despite winning three orders worth Rs 3,264.4 crore in March, as its revenue and net profit missed Trendlyne’s forecaster estimates by 4.1% and 5.5% respectively in Q3FY23. 

Sharekhan retains its ‘Buy’ rating on the stock with a target price of Rs 390, indicating a potential upside of 34.5%. The brokerage believes that the receipt of appointed dates for hybrid annuity model (HAM) projects from NHAI and expected order wins in the near term will lead to higher revenue growth during FY24-25. 

The company also stands to benefit from the 36% (Rs 2.7 lakh crore) increase in budget allocation for the road and highways segment. The company shows up in a screener of stocks where brokers have upgraded recommendation or target price in the past three months.  

2. Sona BLW Precision Forgings: This auto parts & equipment company’s stock fell over 6% on Monday as Blackstone offloaded its 20.5% stake (11.9 crore shares) worth Rs 4,917.4 crore in a bulk deal. The shares have been picked up by the Government of Singapore, Societe Generale and HDFC Mutual Fund, among others. In the past week, the stock has fallen 8.6%, underperforming the Nifty 50 index by 4.3% and currently trades near its 52-week low. 

However, brokerages remain bullish on the stock after the bulk deal, with some expecting a 35%+ upside. On Wednesday, Jefferies initiated coverage on Sona BLW Precision Forgings with a ‘Buy’ rating and a target price of Rs 575. The brokerage believes the company can grow its differential business with a focus on R&D and the Indian cost advantage. It likes Sona's strategy to expand its component portfolio in order to meet the electrification and autonomous trends in the global auto sector. Overseas markets contributed to around 70% of Sona BLW’s total revenue in Q3FY23, with the North American market being a major revenue contributor (45%).

Another brokerage, CLSA, also maintains its ‘Buy’ rating on the stock but cuts target price to Rs 529 from Rs 599. The brokerage believes that the impact of Blackstone's exit on the company’s future growth will be limited as it maintains a strong order book. In Q3FY23, Sona’s order book has risen 16.1% QoQ to 23,800 crore. 

3. KPIT Technologies: This IT consulting & software company rose by 8.8% on Wednesday amid high volatility in the market. This positive price movement has helped the company show up in a screener for stocks near their 52-week high with high volumes.
   
   This uptrend in stock price comes on the back of the company announcing a new deal to expand its partnership with Honda and accelerate its software-defined mobility (SDM) technology. The management says the partnership will have over 2,000 of KPIT’s software & vehicle systems professionals working on Honda’s SDM technology until 2030 and beyond. According to reports, Kishor Patil, the firm’s CEO, says that the deal with Honda is larger than its previous deal with Renault. He adds that the company will be involved in all aspects of future mobility with Honda. 

In addition to this massive deal win, the company has also posted healthy results in Q3FY23. Its net profit grew 20.4% QoQ and beat Trendlyne’s Forecaster estimates by 5%. The stock also ranks high on Trendlyne’s checklist with a score of 69.57%.

Despite the economic downturn in the US and European markets, the management states that the company has not seen any budget cuts from its clients. It won orders with a total contract value of $272 million in Q3FY23. Going forward, KPIT plans to focus on improving the quality of hiring as it expects to win more complex projects in the coming quarters. 

4. GAIL: This utility firm has been bogged down by the erratic supply of LNG since the start of the Russia and Ukraine war. GAIL had signed a contract with Russia-backed Gazprom’s subsidiary GMTS Germany to supply 2.5 million tonnes of LNG per year until 2039. However, due to sanctions imposed on Russia, GMTS Germany was acquired by Sefe. Sefe stopped the supply of LNG to GAIL after the war, as it was unable to fulfill the demand in Europe and there was not enough inventory for export. 

This forced GAIL to purchase LNG from other sources for a higher price. The recent drop in spot LNG prices has caused GAIL to incur Rs 1,100 crore loss on its inventory. Now GAIL is set to receive two shipments from Sefe for the first time since the supply was halted, as the German company has decided to resume supply from its Non-Russia portfolio. 

GAIL’s top line increased by 37.2% YoY in Q3FY23 but EBITDA declined 93.8%. The EBITDA decline was on account of inventory losses and lower price realisations in hydrocarbons and petrochemicals. GAIL’s investment in capex augurs well with its growth trajectory. GAIL has a planned capex of Rs 6,300 crore in FY23 and Rs 9,500 crore in FY24. The company expects its Urja Ganga pipeline to be completed in Q1FY24. The stock shows up in a screener with increased mutual fund shareholding in the past month.

ICICI Securities says pickup in gas transmission and petchem volume will drive revenue for the company. Gas trading is also expected to improve with new contracts. The brokerage has revised its ‘Buy’ rating to ‘Hold’.

5. Mahindra & Mahindra: This automobile stock fell 2.7% in trade on Monday after it sold a 6.1% stake (2.3 crore shares) in Mahindra CIE Automotive, where Mahindra & Mahindra (M&M) is a promoter. The transaction was worth Rs 823 crore. M&M has been gradually exiting Mahindra CIE Automotive, in line with its earlier plans of exiting non-core asset businesses. Analysts at Sharekhan believe this move to be good for M&M as these funds can be allocated to other structural areas which will determine long-term growth for the company. In the past week, the stock has fallen 9.5%.

In a similar move, M&M’s Bangladesh subsidiary, Mahindra Bangladesh Private (MBPL), has decided to liquidate the entire business. The stock fell nearly 3% in trade on Tuesday and traded almost flat on Wednesday. MBPL ceased to exist as M&M’s wholly owned subsidiary from March 14. Since March 31, 2022, MBPL had no income from operations and its net worth had reduced to 0.01% of M&M’s net worth. 

On a positive note, M&M’s wholesales have gained traction in the past few months. In February, M&M’s passenger vehicles and three-wheeler wholesales went up 10% YoY and 40% YoY respectively. Motilal Oswal suggests that its tractor demand has been intact in FY23 and will likely benefit from high MSP (minimum support prices) and positive agro-economic indicators. However, tractor demand may weaken in FY24, even if the country sees normal monsoons. The El Nino effect may hamper agriculture growth, dampening demand for tractors as it is highly dependent on farmers’ earnings. Despite this, the consensus recommendation from 34 analysts on the stock remains ‘Buy’, while two maintain ‘Hold’ and ‘Sell’. 

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