1. Titan Company:
This gems and jewellery manufacturer rose by 13.6% in the past quarter and 3% on Monday to touch its new 52-week high of Rs 3,776.8. In its Q3 business update, the firm reported a 23% YoY increase in revenue from the domestic jewellery segment, driven by increased volumes and a marginal increase in average selling prices. The jewellery segment accounts for over 85% of the firm’s revenue. Caratlane, a subsidiary of Titan, saw a 31% YoY revenue increase due to high demand in the wedding segment.
The watches and wearables division also reported a 23% YoY increase in revenue, led by the wearables segment, which achieved a 64% YoY growth. However, revenue from its eye care and fragrances and fashion accessories segments declines by 3% and 9% YoY, respectively. Margins are expected to remain flat in Q4FY24 due to lower studded jewellery sales and higher discounts.
Titan opened 90 new stores in Q3, including stores in the US and Singapore by its subsidiary, Tanishq, bringing its total store count to 2,949 in 2023. Despite a 15% increase in gold prices in 2023, demand for gold remained stable, supported by the wedding season and its status as an inflation hedge.
According to Sharekhan, market share gains, high traction on e-commerce platforms, and sustained expansion in its retail space will help the firm post consistent growth in the medium to long term.
2. Angel One:
This capital markets stock has risen by 6.5% over three sessions, hitting its all-time high of Rs 3,896 per share following its Q3FY24 business update on January 4. The update showed a 55.5% YoY increase in the company’s overall client base to 1.5 lakh. The stock has risen by 27.4% over the month, appearing in a screener of stocks with improving return on equity (RoE) over the past two years.
The overall client base increased on the back of a 149.1% YoY improvement in gross client acquisition. The company’s average daily turnover (ADTO) in the overall equity and futures & options (FnO) segments grew by 148.5% YoY and 151.3% YoY, respectively. Owing to this, its market shares in these two segments expanded by 529 bps YoY each to 26.8% and 26.9%, during the quarter. Trendlyne’s Forecaster expects a 10.9% YoY increase in the company’s revenue and a 38.5% YoY growth in net profit in Q3FY24.
Motilal Oswal Financial Services maintains its ‘Buy’ rating on the stock post-update with an upgraded target price of Rs 4,100 per share. This implies a potential upside of 8%. The brokerage remains confident in the stock due to the improvement in the number of orders per day and FnO volumes during the quarter. It also expects the recovery in cash volumes to improve the company’s mutual fund book.
3. FSN E-Commerce Ventures (Nykaa):
This internet and catalogue retail company has risen 10.3% in the past week till Friday following its Q3FY24 business update. It highlighted a 20% YoY growth in net sales value in its beauty and personal care segment during the quarter. As a result, the company features in a screener of companies with prices above their short, medium, and long-term moving averages.
As per the quarterly update, Nykaa’s beauty and personal care (BPC) vertical is expected to report GMV (gross merchandise value) growth of around 24-26% YoY in Q3. In Q2FY24, the beauty segment’s GMV growth was 23% YoY. The company's footprint in the BPC industry is expanding, driven by the growth of its own brands and early success in newer ventures like Superstore By Nykaa.
Meanwhile, the fashion vertical continues the momentum from the previous quarter with around 40% GMV growth. In contrast, according to Nykaa’s management, the broader industry’s growth was muted in Q3 due to lower-than-expected demand during the festive season. Trendlyne’s Forecaster expects the company’s revenue to grow by 21.3% YoY in Q3FY24.
Post Nykaa’s business update, HSBC Global Research has raised the target price to Rs 250 and maintains its ‘Buy’ rating on the stock. The brokerage says Nykaa is well-positioned to capture long-term value in the beauty and personal care sector, citing its pan-India network, growing portfolio of skin and beauty products, and loyal customer base.
The stock ranks medium in Trendlyne’s checklist with a score of 39.1%. According to Trendlyne’s Forecaster, Nykaa has a consensus recommendation of ‘Hold’ from 22 analysts, with an average target price of Rs 178 per share.
4. Lemon Tree Hotels:
This hotel firm rose by 2% on January 9 after signing a franchisee agreement for the Lemon Tree Hotel in Meerut, which is expected to be opened in FY25. According to Trendlyne’s Technicals, the company has risen by 13% in the past month, outperforming the hotels, restaurants, and tourism sector by 7.7%. This rise can be attributed to the management's optimistic outlook, citing growing occupancy and average room rates (ARR) due to the demand-supply gap in the premium segment in major metro cities.
The company is set to benefit from changing market dynamics in key areas like NCR and Mumbai due to the opening of mega convention centres like the Jio Convention Centre and Bharat Mandapam. Due to this increased demand and a limited supply growth of 2-6% CAGR for FY24 - 28, these cities are expected to contribute around 24% and 17%, respectively, to the company’s consolidated revenue by FY24. Aurika Mumbai Skycity, an upper upscale hotel by Lemon Tree, will benefit from the rising demand in the luxury segment and could contribute 21% to the company’s revenue by FY26.
Lemon Tree is shifting towards an asset-light model by increasing its share of managed rooms (franchise model) from the current 39% to 55% by the end of FY27. The firm plans to add 3,354 managed rooms and double its operational rooms to 20,000 by FY27. This expansion in management contracts will likely boost margins and drive growth in the company’s management fees. By FY26, management fees are expected to reach Rs 94.3 crore, showcasing a 38% CAGR.
Motilal Oswal expects the addition of Aurika, room renovations, and expansion through management contracts to further contribute to the company’s growth. The brokerage maintains a ‘Buy’ rating on the stock.
5. Brigade Enterprises:
This realty company has risen by 5.3% in the past week, reaching its all-time high of Rs 1,000 on Tuesday. The surge followed the signing of two memorandums of understanding (MoU) worth over Rs 3,400 crore with the Government of Tamil Nadu to set up two high-rise residential buildings and high-rise commercial and residential developments. The company also signed a lease agreement with Sidvin Core-Tech India to provide 54,300 square feet of office space in Bengaluru.
Trendlyne Forecaster estimates the company to report a net profit of Rs 91.6 crore in Q3FY24, as against the actual profit of Rs 56.9 crore in Q3FY23. It also estimates revenue at Rs 1,039.7 crore.
Brigade Enterprises has 3.1 million square feet (mnsft) of ongoing projects available for sale and a launch pipeline of 11.1 mnsft in residential properties. Of that, 6.5 mnsft is expected to be launched in H2FY24, which will drive sales momentum. The company has a total land bank of 479 acres, with a development potential of 54.5 mnsft. By FY27, the management aims for an annual pre-sales of 10 mnsft. The company is also looking at expansion into other cities.
Despite the positive growth, Geojit BNP Paribas assigns a ‘Sell’ rating on the stock, citing moderate growth outlook and premium valuation. The brokerage notes the company’s expensive valuation compared to its peers and Nifty Realty. Brigade Enterprises appears in a screener for stocks with broker downgrades in price or recommendation in the past month.
Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.
