1. KEC International: This heavy electrical equipment manufacturer has made headlines after winning orders worth Rs 1,042 crore across segments. This has resulted in a 5% increase in its stock price. According to Trendlyne Technicals, the stock has gained 10.7% in the past month. The management, in its recently concluded analyst meeting in June, discussed its shift in strategy from relying on traditional transmission and distribution (T&D) orders to venturing into new segments like railways, telecommunications and civil.

In line with this shift, KEC International’s order book now comprises of T&D (47%), civil (33%) and railways (13%). Of the Rs 22,398 crore worth of new orders in FY23, nearly 60% came from non-T&D segments. The management expects to add another Rs 25,000 crore to its order book after executing orders worth Rs 20,000 crore in FY24. The firm currently has a tender pipeline of Rs 1 lakh crore. It is handpicking orders to increase its operating margins.

KEC has seen an increase in order inflow from international markets, particularly SAARC nations and the Middle East. The firm has also executed its legacy orders and aims to reduce its working capital cycle from 118 days in FY23 to 110 in FY24. It has also reduced debt by Rs 1,000 crore in the past three quarters, against the initial guidance of Rs 500 crore. It shows up in a screener of stocks with consistent high returns over five years compared to the Nifty 500

ICICI Securities says the management’s efforts to diversify into non-T&D businesses are seeing results with higher order inflow. The brokerage maintains a ‘Buy’ rating on the company and highlights that improved margins and better cash utilization will help in maintaining an optimum balance between execution and profitability. 

2. Macrotech Developers: This realty stock rose 3.8% on Thursday and touched its 52-week high of Rs 740 per share after posting a strong business update for Q1FY24. This helped the stock grow 8.9% over the past week, while it has risen 26.9% over the past month. This helped it appear in a screener of stocks with prices above short, medium and long-term moving averages.

In Q1FY24, the company’s pre-sales bookings grew by 17% YoY to Rs 3,350 crore. It also acquired five land parcels with a gross development value of Rs 12,000 crore. Consequently, its net debt rose marginally to Rs 7,260 crore. Abhishek Lodha, MD and CEO of the company, said that the pre-sales performance was in line with its projected 20% growth in pre-sales bookings for FY24. The peaking of interest rates is a good sign for the realty sector. Any potential decrease in interest rates would aid volume sales in the realty market.

The company recently launched a luxury residential project in Mumbai, with prices starting from Rs 6.5 crore. According to some reports, 70% of the properties launched have already been booked. 

Motilal Oswal maintains its ‘Buy’ rating on the stock with a target price of Rs 775, indicating a potential upside of 10.6%. The brokerage believes that the realtor will sustain its strong pre-sales growth rate, backed by focused project additions, faster turnarounds and healthy sales. It expects the company’s revenue to grow at a CAGR of 5.9% over FY23-25.

3. Hero MotoCorp: This motorcycle company has risen 11.3% over the past week till Friday and gained 8.6% since announcing the launch of its new bike, X440, on July 3. The new bike is jointly developed by Hero and Harley Davidson, and will be manufactured in India, with prices starting from Rs 2.29 lakh. 

With the markets responding positively to X440., Hero’s stock grew. Its rival  Eicher Motors has fallen by more than 11% in response since July 3. Even though Royal Enfield commands a market share upwards of 90% in the premium bike segment in India, the entry of new models from Hero and Bajaj Auto (in partnership with Triumph) is expected to reduce Royal Enfield’s market dominance and profit margins. 

However, it's not all smooth sailing for Hero MotoCorp. Its total monthly wholesales in June fell by 10% YoY, with domestic sales and exports declining by 8.7% and 34.3% YoY respectively. Also, a weak monsoon season will lower rural demand, thus impacting Hero’s sales.

To make matters worse, there has been a shift in demand in the Indian market favouring 125cc bikes over 100cc ones. This does not bode well for the company as it commands an 80% share in the 100cc segment, which accounts for 78% of its volumes. The company’s market share in the 125cc segment has declined to 21% in FY23 from 55% in FY19, with competitors like TVS Motor Co, Royal Enfield and Suzuki Motorcycle India capturing a larger share. 

In response, the management has lined up new launches in the 125cc and above segments in FY24, aiming to regain its lost market share. However, whether the company succeeds will depend on its execution. According to Trendlyne Forecaster, the consensus recommendation on the stock from 38 analysts is a ‘Hold’.

4. Blue Dart Express Ltd - This logistics firm has been in the news for adding two aircraft to its existing fleet of six. The stock has risen 15.4% in the past month, according to Trendlyne Technicals. The two new aircraft will cater to Tier-II and Tier-III cities, allowing Blue Dart to establish new routes and enhance connectivity across India. The recent decline in Aircraft Turbine Fuel (ATF) prices has also aided the rise in the stock’s price. ATF prices have declined by 25% in the past three months. The ATF cost accounts for nearly 40% of Blue Dart’s expenses. In Q4FY23, its margins were compressed on account of these fuel charges.

Blue Dart plans to increase its surface revenue share from the current 35% to 40-45%. The growing popularity of online shopping is expected to contribute to higher volumes, as nearly 25% of the firm's revenue comes from this sector. Blue Dart's strategy of implementing an annual 10% price hike will support its growth above inflation rates. Additionally, the company's focus on technology-driven logistics enables cost optimization and expands its reach.It shows up in a screener for stocks showing strong momentum, with prices above short, medium and long-term moving averages.

Motilal Oswal says the recent fleet expansion and price hikes will help in boosting the top line. Its overall volume is expected to grow by 12% in FY24. The decline in ATF prices is expected to boost margins, with EBITDA margins projected to grow from 10-11% to 13-14% in FY24. The brokerage has revised its rating from ‘Neutral’ to ‘Buy’.

5. Bajaj Finance: This banking and finance company rose over 7% on Tuesday after announcing a strong Q1FY24 business update. This was driven by robust growth in volume and loans, and healthy new customer acquisition. Bajaj Finance touched its new 52-week high of Rs 7,999.9 on Wednesday and has risen 7.4% over the past week till Friday. As a result, the company features in a screener of stocks with strong momentum. 

In Q1FY24, the company’s AUM (assets under management) increased by 32% YoY to around Rs 2.7 lakh crore, backed by improvement in new loans booked and deposits. New loans booked during Q1FY24 grew by 34% YoY to 9.94 million, while the company reported its highest quarterly customer franchise of 3.8 million during the same period. 

Bajaj Finance’s focus on customer acquisition through multiple channels and diversified products has been key to its AUM growth over the past few years. In addition, the expansion of distribution into Tier II and Tier III cities has helped with AUM growth. During the company’s Q4FY23 earnings call, Managing Director Rajeev Jain had said that it targets an AUM growth of 28-29%, with a sharp focus on profitability in FY24. 

Following the company’s strong performance, foreign brokerage CLSA upgraded its rating to ‘Buy’ and raised the target price by 50% to Rs 9,000. According to the brokerage, Bajaj Fin’s QoQ AUM growth of 9% beat its estimate of 6-7%. The company is in the PE Buy Zone as its current PE is lower than its historical PE ratios. 

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