1. UltraTech Cement: With a capacity of 121.35 metric tonnes per annum (mtpa), this cement and construction company  has plans to increase its capacity to 153.85 mtpa by FY25/FY26.

UltraTech Cements reported revenue growth of 19.5% YoY in Q3FY23, but its EBITDA margins declined 33bps YoY. The rise in revenue was led by an increase in volumes, while margins contracted due to the higher cost of raw materials. The price hike undertaken by UltraTech lagged cost increases, and the increase in energy costs adversely impacted the margins of the firm.

Energy costs (petcoke/coal) have decreased by 30% in CY23.  The benefit of this will start to reflect in Q4FY23. FY24 being an election year, government spending on infra projects is expected to be high. UltraTech might see a jump in volumes due to this. However, in the near term, the company is more focused on volumes and will restrict its price hikes. The stock has gained 4.27% in the past three trading sessions and shows up in a screener for growth in net profit with an increasing profit margin.

Geojit BNP Paribas says demand for cement remains strong despite inflationary headwinds led by infrastructure and housing sector initiatives. Furthermore, a drop in raw material costs will enhance the company’s margins. Ultratech’s premium brand positioning, pan-India presence and efficient capacity utilization will aid bottom-line growth.

2. One97 Communications (Paytm): This internet & software services stock rose 6.9% on Wednesday after Macquarie upgraded its rating to ‘Outperform’ from ‘Underperform’ and revised the target price to Rs 800 from Rs 450 per share. This implies a potential share price upside of 28.4%. During previous broker downgrades, Macquarie was one of the first brokerages to slash Paytm’s target price to Rs 450 and recommendation to ‘Underperform’. However, Macquarie appears to have changed its mind and turned bullish on the stock. The recent upward target price revision has helped Paytm to show up in a screener of stocks with upgraded recommendation or target price in the past three months. The stock is currently trading 245.1% below its issue price of Rs 2,150 per share.

According to the brokerage, the company has outperformed on the distribution of financial services revenue by a huge margin, while also controlling the overall expenses and charges. This can be observed in its strong operating performance in January-February. The company’s loan disbursement increased by 286% YoY to Rs 8,086 crore, while its gross merchandise value (GMV) witnessed a growth of 41% YoY. Its average monthly transacting users (MTU) also rose 28% YoY in January-February.

Owing to this strong operational performance, Trendlyne’s forecaster estimates the company’s annual revenue to grow by 37.6% to Rs 7,969 crore and its losses to contract by 21.7% to Rs 1,966.9 crore. However, one thing to keep an eye on is Paytm’s NPA levels on loans, as interest rates continue to increase. 

3. Phoenix Mills: This realty company has risen 5.8% over the past week on the back of the street’s positive outlook on its prospects. Post the second Covid wave, the company has witnessed a gradual recovery in demand and footfall across its retail, office and commercial spaces. The firm’s mall portfolio is expected to increase to 14 million square feet (msf) by FY27, from 9 msf in March 2023. The realty company aims to add at least one million square feet of retail space every year. By June this year, the company will be adding three more malls to its portfolio of 11 now. According to reports, the management claims leasing occupancy rates across its malls have improved to 94%-99% as retail consumption improves. The stock shows up in a screener for companies with improving cash flow and high durability. 

Motilal Oswal recently re-initiated its coverage on Phoenix Mills with a ‘Buy’ rating. The brokerage believes that healthy pre-leasing trends across its upcoming malls provide strong near-term visibility on rental growth. It is also especially positive about the firm’s mixed-use strategy, where the company plans to add office spaces on top of or adjacent to its existing and upcoming malls, to improve the blended yield of the assets.

The company expects a consumption boom in India over the coming quarters and plans to expand into newer urban markets across the country. However, medium-term risks like a slowdown in consumption recovery and lower-than-expected leasing demand can impact the company’s expansion plans.

4. Anupam Rasayan India: This agrochemicals company rose over 2.5% in trade on Thursday after it signed a letter of intent (LoI) worth $120 million (Rs 984 crore) with a Japanese chemical company. The LoI is for the supply of new-age advance intermediates for life science ingredients over six years. Commenting on the same, Managing Director Anand Desai says, "This LoI demonstrates the company’s ability to work on a niche molecule with Japanese customers, and strengthens the revenue growth visibility in the coming years.” Trendlyne’s forecaster estimates Anupam’s revenue to grow by 28.2% in FY23. 

The company has been on an uptrend recently, rising around 33% in the past month on the back of a strong outlook. As a result of the uptick in share price, the company features in a screener of stocks  with strong momentum. It has also risen around 56% from its 52-week low of Rs 546.7. Anupam Rasayan has focused on expanding its product portfolio in fluorination chemistry, and plans to launch 14 molecules in the next 12-18 months, and five molecules in Q4FY23. The company also has a robust pipeline of contracts worth Rs 2,620 crore, says KRChoksey.

In addition, Anupam Rasayan has signed a Memorandum of Understanding (MoU) worth Rs 670 crore with the Government of Gujarat to set up three chemical plants, according to media reports. These plants will focus on manufacturing fluorochemicals.

5. Indian Oil Corporation (IOC): This oil marketing & distribution stock has fallen 1.13% in the past week despite announcing new ventures and improving refining capabilities. On Monday, IOC inked a pact with NTPC’s arm to form a joint venture for setting up a renewable energy power plant to meet IOC’s power requirements. Reports suggest that the transition of energy production from fossil-based systems to renewable energy is a good move, given that demand for petrol and diesel will slowly fall as companies shift to renewable energy sources. This is also in line with IOC’s target to increase its green energy share to 12% by 2030 from the current 9%.

On Tuesday, IOC’s board gave in-principle approval to prepare a feasibility report to set up a petrochemical complex at Paradip, Odisha. The estimated cost of the project is Rs 61,077 crore. The project in Paradip will help IOC improve its petrochemical intensity (% of crude oil converted to chemicals) and also reduce import dependency.

IOC’s Chairman Shrikant Madhav Vaida says that the company’s petrochemical intensity is currently at 5%-6%, and it plans to increase it to 10%-12%. He adds that refineries at locations like Panipat and Odisha will see the intensity go as high as 25%. Despite the announcement, the stock fell 1.3% in trade on Tuesday.

However, it has gained 8.2% in the past three months, thanks to a steady fall in crude prices. ICICI Direct maintains its ‘Buy’ call on the company with a target price of Rs 79.9. It recommends keeping the stop loss at Rs 77.7. Geojit BNP Paribas maintains a ‘Hold’ on the stock and expects effective cost optimization and enhanced utilization to aid earnings in the near term. Trendlyne’s consensus recommendation has 16 analysts recommending a ‘Buy’, 8 suggesting ‘Hold’ and 4 ‘Sell’.

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