1. InterGlobe Aviation (Indigo):

This airline company rose by 1.2% over the past week and 14.6% over the past month, mainly due to a decline in global crude oil prices and increasing demand in domestic passenger air traffic during the festive season. Fuel costs are  40% of total expenses for airline firms. Brent Crude, the global benchmark for crude oil, dropped by more than 3% on December 12 and over 18% from $90 per barrel in September to $73 per barrel in December on concerns of oversupply and low demand. 

With the recent rally in its share price, the firm has now become the sixth-largest airline in the world by market capitalization, surpassing US-based United Airlines. Additionally, the firm, with an order book of 980 aircraft, received approval from IFSC Gift City on Tuesday to set up an aircraft leasing venture. This initiative, with an investment outlay of Rs 11,000 crore over the next five years, will provide operating and financial leasing services.

The management is expanding its international presence through loyalty programs and strategic partnerships like its code-sharing agreement with Turkish Airlines. This allows flights to be operated and marketed by two airlines, streamlining operations. 

According to Motilal Oswal, Indigo plans to increase its fleet size to 350 in FY24, up from 306 in FY23, and add over 10 new destinations. It also expects passenger traffic to rise to 100 million in FY24 from 85 million in FY23. However, analysts predict that the decrease in expenses and the surge in demand for air travel will lead to intense competition in the industry, particularly with Air India’s turnaround and the entry of Akasa Air. This may complicate Indigo’s efforts in expanding its share of the pie.

2. Coforge:  

This software and services company has been in the news as global brokerage agency Jefferies increased its target price by 5.3% to Rs 6,580. Following this report, the company's stock rose by 1.4% on Monday. According to Trendlyne Technicals, the stock touched a 52-week of Rs 6,530 today. Jefferies, after an investor meeting with Coforge’s management, reported a positive outlook for the firm despite current macro challenges.

The management outlined recent deal wins in BFSI (banking, financial services, and insurance) as proof of its resilience in a tough environment. The focus on cost optimization is also expected to improve margins by 150-300 bps over the next three years. However, longer-than-usual furloughs in the third quarter will impact efficiency. Coforge shows up in a screener for stocks with increasing revenue for the past eight quarters.

Its promoter Baring PE sold its entire stake of 26.6% through block deals on August 24. The exit of the promoter will have not much impact as the promoters had little influence on its operations. Coforge plans to increase its revenue to $2 billion through its four new verticals: public sector, healthcare, HiTech and retail.   

Coforge reported deal wins of $331 million in Q2FY24, resulting in a 12-month executable order book of $935 million. The firm has maintained a revenue growth guidance of 13-15% for FY24. Margins are expected to expand by another 50 bps on the back of higher utilisation levels and currency hedging positions.

3. Syrma SGS Technology: 

This electrical equipment/products firm rose by 3.9% on December 6 after incorporating a semiconductor subsidiary, Syrma Semicon. In November 2023, Syrma SGS Technology was one of the participants in Intel’s collaboration with local EMS companies to produce entry-level laptops. According to Trendlyne’s Technicals, the stock has risen by 25.4% in the past month, outperforming the consumer durables sector by 17.9%. 

In Q2FY24, the company’s revenue improved by 52.4% YoY. The auto, consumer, and industrial segments saw significant growth, recording increases of 83.3%, 162.6%, and 27.0% YoY, respectively. However, healthcare, IT, and railways experienced a decline in revenue. The company’s EBITDA margins contracted by 306 bps YoY due to changes in the revenue mix. 

The management expects a decline in revenue from healthcare over the next 1-2 quarters, with a recovery in Q4FY24. It plans a capex growth of 81% YoY to Rs 250 crore in FY24, aiming to expand its Chennai business and rent a space in Noida to meet rising market demand. The firm maintains a 35% revenue growth guidance for both FY24 and FY25.

In Q1, Syrma acquired a 51% stake in Johari Digital Healthcare (JDHL) for Rs 260 crore. With this acquisition now complete, JDHL is expected to generate Rs 100 crore in revenue in H2FY24 and around Rs 250 crore in FY24. 

BOB Capital notes that Syrma is expanding its electronic manufacturing service, targeting the global and domestic markets. The JDHL acquisition helped its entry into medical devices, and it has plans for more acquisitions. However, the brokerage sees margin contractions ahead due to shifts in consumer products and expects challenges in margin recovery until FY25 due to the limited share of original design manufacturer products. It maintains a ‘Hold’ on the stock.

4. Prestige Estates Projects:

This property developer hit its all-time high of Rs 1,231.3 on Thursday, marking a 32.1% increase over the past month. This surge follows the announcement of its new residential project, Prestige Glenbrook, in Bangalore. It has a revenue potential of Rs 550 crore. The development includes 285 apartments, with a developable area of 0.7 million square feet (msf).

Prestige plans to launch 63 msf of residential projects in H2FY24 and FY25. The management expects to clock Rs 20,000 crore in gross sales bookings in FY24 and double annual residential sales bookings to Rs 25,000 crore annually over FY24-26. The developer is also expanding into cities beyond its traditional stronghold of Bangalore. Major upcoming launches in H2FY24 include Pallava Gardens in Chennai (Gross developed value (GDV) of Rs 4,500 crore), Prestige City in Hyderabad (GDV of Rs 7,000 crore), and Ocean Towers and Nautilus in Mumbai (GDV of Rs 15,000 crore).

Prestige registered its highest-ever presales in Q2FY24, with bookings worth Rs 7,090 crore, a 102% YoY increase driven by new launches. Despite strong bookings, the company's net debt level is increasing as it continues to incur annual land/stake buyouts. It plans to invest Rs 5,500 crore in commercial capex in FY24 and Rs 6,600 crore in future commercial capex. Its profit increased 6x YoY and beat Trendlyne Forecaster’s estimate by almost 7x. 

HDFC Securities remains positive on Prestige Estates Projects on the back of a strong launch pipeline and robust collections. The company features in the screener for stocks where brokers have upgraded recommendations or target prices.

5. GMR Airports Infrastructure:

This construction and engineering company has risen by 25.6% in the past week, reaching a new 52-week high of Rs 78.9 on Thursday. This jump comes after GQG Partners and Goldman Sachs Trust II bought a 4.7% stake (28.3 crore shares) in the company for Rs 1,671.5 crore on December 8. Nomura India Investment Fund Mother Fund also picked up a 1% stake (6.25 crore equity shares) in the company. The company makes it to a screener of stocks with prices above short, medium and long-term moving averages. 

GMR’s passenger traffic grew 19% YoY to 98.4 lakh in October. According to  CAPA India,  India is expected to be the third-largest aviation market by 2030. Analysts believe that GMR Airports will likely be a key beneficiary. The increase in passenger traffic and the addition of new domestic and international airports are expected to drive earnings growth for the company.   

On December 9, the company’s arm, GMR Visakhapatnam International Airport, signed a Rs 3,215 crore financing agreement with a consortium of five banks. This funding is earmarked for the partial financing of Bhogapuram International Airport.

Kotak Securities remains cautious due to risks such as debt for projects like the Bhogapuram airport.  However, the brokerage is optimistic about increasing passenger traffic and the company’s capabilities to cater to the rising traffic. It has a ‘Reduce’ rating on the company. 

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