1. Dixon Technologies (India) Ltd: This consumer electronics manufacturer has made headlines for its partnership with Xiaomi to manufacture smartphones in India. The stock has gained 33.9% in the past month, according to Trendlyne Technicals. Recent reports also suggest that Dixon is in talks with Google to produce Google Pixel Phones in India. Dixon has received large orders from Jio and Nokia and has already started producing 4G phones for Jio since May 2023. The firm expects the revenue potential from smartphone manufacturing to reach around Rs 6,000 crore in FY24.

Dixon’s Q4FY23 revenue has increased marginally by 4% on account of lower sales in TVs and LED lights. Price corrections in open cells led to lower price realization for TVs. The firm has received orders for HD set-top boxes from Airtel, with production expected to start in the second half of FY24. Dixon’s EBITDA margin improved by 110 bps YoY to 5.1% and is expected to increase by another 30 bps in FY24. The firm plans to improve its margin by adding more products under original design manufacturing and backward integration, and a capex of Rs 400 crore for FY24. The stock shows up in the screener with growth in quarterly net profit and increasing profit margin.

ICICI Securities says Dixon Technologies has the ability to deliver revenue and PAT growth of 42.5% and 65% respectively in FY24. However, the stock’s recent run-up discounts all its near-term positive outlook. The brokerage maintains a ‘Hold’ rating on the stock. It is currently in the Sell zone and trading above consensus estimates. 

2. Lupin: This pharmaceuticals company rose by 6.4% in intra-day trade on Wednesday and touched its 52-week high of Rs 885.3. This comes as the US FDA approves the company’s generic version of Spiriva, a drug used to treat patients with COPD (Chronic Obstructive Pulmonary Disease). According to the management, this is the first generic approval for Spiriva in the US, making Lupin the first Indian pharmaceutical firm to get it. The drug has an estimated annual sales of $1.2 billion in the US as of March 2023. This is expected to help the company’s operations in the US as it will have the first-mover advantage for two-three years.

However, the street’s outlook on the company varies after this announcement. Axis Direct is optimistic about the approval, expecting Lupin to expand its market share and generate $100 million in sales from the generic drug in FY24. The brokerage also anticipates improved margins on the back of lower raw materials costs. 

On the other hand, ICICI Securities maintains its ‘Sell’ rating, as it believes the firm is trading at expensive levels. However, it has increased the target price on the stock as it sees the company’s new launches driving margin expansion and revenue growth in FY24. According to Trendlyne’s Forecaster, Lupin’s annual revenue and net profit are estimated to grow by 11.7% and 176.7% in FY24 respectively.  

The pharma giant’s new product launches in the US market look promising but the introduction of the Inflation Reduction Act of 2022 may dampen market conditions. The US government is focused on lowering drug prices for American consumers, and the Act includes provisions to bring down prescription drug costs across the board and reduce government spending. This has led to pharmaceutical industry lobby groups suing the US government. 

3. Larsen & Toubro: This construction & engineering stock touched its all-time high of Rs 2,427 per share on Friday after signing a contract with DRDO (Defence Research & Development Organisation). The stock has risen 83.8% over the past five years, helping it appear in a screener of consistent high-return stocks.

The contract with DRDO involves the development of two indigenous air-independent propulsion systems for Indian Navy submarines. The company’s hydrocarbon business also won an order worth Rs 1,000-2,000 crore from an undisclosed overseas client on June 13. The order is for the engineering, procurement, construction and installation of hydrocarbon power plants.

The company’s order inflow for FY23 stood at approximately Rs 2.3 lakh crore, with 72% of orders coming from the domestic market and the remaining 28% from international clients. The management expects a 10-12% growth in its order book in FY24. Geojit BNP Paribas has upgraded the stock to ‘Buy’ from ‘Hold’, with a revised target price of Rs 2,610. This indicates a potential upside of 9.2%. The brokerage believes that the company has a healthy order pipeline, with a good mix of orders from both the government and private sectors.

The stock ranks high in Trendlyne’s checklist with a score of 71.4%, while it has a consensus recommendation of ‘Buy’ from 35 analysts. It appears in a screener of stocks where brokers have upgraded recommendations and target prices in the past three months. 

4. InterGlobe Aviation (IndiGo): This airline company touched an all-time high of Rs 2,490 on Tuesday after placing an order worth $50 billion with the European aircraft manufacturer Airbus SE for 500 A320 Family aircraft. This is the largest-ever order in the global aviation industry and will be delivered between 2030 and 2035. The company already has a previous order of 480 aircraft, expected to be delivered by 2030.
   
   With this, IndiGo’s order book (a mix of A320NEO, A321NEO and A321XLR aircraft) consists of around 1,000 aircraft in the pipeline. The management expects IndiGo to benefit from the fuel-efficient A320NEO family aircraft, which will help reduce operating costs and deliver fuel efficiency.

The stock has risen by 2.5% in the past week till Friday, supported by an increase in its market share, which grew by 3.9 percentage points to 61.4% in May. Due to the recent rise in stock price, the company makes it to a screener of stocks with high momentum.

Following the order announcement, ICICI Securities maintains its ‘Buy’ rating with a target price of Rs 3,000, implying an upside of 21.1%. According to the brokerage, the repeat order indicates consistency in its business strategy. 

5. Rail Vikas Nigam (RVNL): This execution arm of Indian railways opened 5.2% lower on Tuesday, following reports of challenges faced by the Vande Bharat train project. According to reports, RVNL has requested a higher stake in the joint venture (JV) with Russian company TMH Group’s Metrowagonmash. 

The consortium, which won the bid to supply 200 Vande Bharat sleeper trains in March 2023, originally had RVNL holding a 25% stake in the JV. Due to US sanctions on the Russian TMH Group, the Indian government has reportedly asked RVNL to be the majority shareholder to protect the JV. While RVNL is keen to take a higher stake of 69%, it clarified that reports on breaking the JV were “false”. The company added that the MoU is still valid. The Railway Ministry has asked the issue to be resolved at the earliest or a re-tender of the Rs 36,000 crore project will be undertaken.

RVNL’s stock is up by 305.2% in the past year and rose by 4.2% intra-day on Wednesday. This growth can be attributed to its huge order book of Rs 56,000 crore. Additionally, it recently bagged an order worth Rs 1,731 crore from Chennai Metro Rail for the construction of underground stations. RVNL has lately been diversifying from Railway projects and expanding into other EPC projects like highways, metros, and ports. 

Currently, RVNL’s average execution period is 2.5 to 3.5 years. However, JVs with technological partners aim to cut down the execution time and also improve its margins. Successful execution is key for RVNL's growth. The company features in a screener for stocks with strong cash-generating ability from core businesses.

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