The Nifty 50 saw gains in the first half of January but then faced selling pressure due to expectations of populist moves in India’s budget. HDFC Bank's share price dropped sharply due to slower-than-expected deposit growth and a surprise moderation in margins post-merger. The broader Nifty 500 still managed a 1.9% gain in the month.

Banking and finance stocks led the subdued performance of the Nifty 50.  Global ratings agency S&P noted a potential moderation in India’s banking credit growth to 12-14% due to lower deposits. Nifty Financial Services declined by 4.6% in the month. 

However, higher volumes in the auto sector and pick up in mining and manufacturing helped midcap and smallcap stocks perform better.

Indian equity mutual funds saw a net inflow of Rs 21,781 crore in January, with smallcap funds registering the highest inflow of Rs 3,257 crore. Midcap stocks followed at Rs 2,061 crore. As a result, Nifty Midcap 100 and Nifty Smallcap 100 rallied by 5.2% and 5.8%, respectively. Three new open-ended schemes launched during the month also attracted Rs 967 crore in investments.

Delhiverys’ MF holdings increase to 1,240 lakh shares in January 

Delhivery eyes growth with ONDC and E-commerce expansion

Delhivery (DELHIVERY) operates in transportation, warehousing and last-mile logistics, offering logistics management systems and supply chain consulting to businesses and retailers. The firm serves 18,675 pin codes through 3,404 express delivery centres across India. It also has a fleet size with a daily average of 13,688 vehicles as of Q3FY24.

Delhivery has turned profitable in Q3FY24, a result of margin expansion and higher revenue from its premium express freight services. This improvement is on account of higher-capacity trucks for line-haul operations. Most of the volumes have been from metros and Tier-1 cities, while rural demand is yet to pick up. Delhivery has also been strategizing for diversification. Its top five clients' revenue share dropped from 44% at the start of FY24 to 40% currently. It expects growth through the Open Network for Digital Commerce (ONDC) and an increase in online shoppers.

Fund managers who bought shares of Delhivery

Fund managers who added shares of Delhivery to their portfolios include Neelesh Surana and Ankit Jain for Mirae Asset Large & Midcap Fund, Ashish Naik and Vinayak Jayanath for Axis Business Cycles Fund, and Himanshu Mange for Nippon India ETF Nifty Midcap 150. Fresh buys were done by Ravi Gopalakrishnan and Ashish Aggarwal for Sundaram Large and Mid Cap Fund, and Manish Gunwani and Rahul Agarwal for Bandhan Core Equity Fund.

Jubilant Foodworks attracts customers with quick delivery and rewards

Jubilant Foodworks (JUBLFOOD) is in the restaurant business and owns a portfolio of brands like Domino’s, Popeyes, Dunkin, and Hong’s Kitchen. It relies heavily on Domino’s for revenue, which contributed 69.7% in Q3FY24. The firm has exclusive rights to develop and operate Domino’s Pizza in India, Sri Lanka, Bangladesh and Nepal. Jubilant Foodworks has 1,928 Domino’s stores across 407 cities.

The firm reported a 2% decline in its Q3FY24 revenue despite the festive season and the ICC Cricket World Cup. Efforts like 20-minute delivery, a rewards programme and combo sales have improved ticket size and customer loyalty, but lower footfalls at restaurants have impacted margins. With increased competition, the firm is focusing on cost optimisation through store launches and delivery improvements. The company expects moderating inflation, industry expansion and store additions to drive its bottom line.

Fund managers who bought shares of Jubilant Foodworks

Fund managers who added shares of Jubilant Foodworks to their portfolios include Aditya Khemani and Amit Ganatra for Invesco India Mid Cap Fund, Ratish Varier and Sudhir Kedia for Sundaram Multi Cap Fund, Kinjal Desai and Rupesh Patel for Nippon India Growth Fund and, Atul Penkar and Dhaval Joshi for Aditya Birla Sun Life Equity Advantage Fund. Fresh buys were done by Saurabh Pant and Mohit Jain for SBI Large & Midcap Fund.

Aurobindo Pharma leverages unsecured loans to sustain margins 

Aurobindo Pharma (AUROPHARMA) is a pharma firm and a major manufacturer of active pharmaceutical ingredients (APIs), branded drugs, and generic pharmaceuticals. US and European markets account for nearly 75% of its revenue. The firm has received 466 Abbreviated New Drug Approvals (ANDAs) from the US Food and Drug Administration (USFDA) so far.

Aurobindo Pharma’s Q3FY24 revenue increased by 14.7% YoY and net profit by 90.6%. The profit growth was aided by margin expansion due to higher price realization and lower raw material costs. The company reported higher sales in the US (25% YoY growth) on the back of increased demand. New products like gRevlimid and Eugia are expected to drive growth momentum. 

However, a USFDA action on Eugia’s manufacturing unit 3 could impact injectable sales by $20 million in Q4 The firm has other drugs in the pipeline, including Trastuzumab biosimilar and Pen–G injectable.

Fund managers who bought shares of Aurobindo Pharma

Fund managers who added shares of Aurobindo Pharma to their portfolios include Sanjay Bembalkar and Hardick Bora for Union Midcap Fund, Manish Lodha and Abhinav Khandelwal for Mahindra Manulife Mid Cap Fund, and Niket Shah and Ankush Sood for Motilal Oswal Midcap Fund. Fresh buys were done by Ankit Jain for Mirae Asset Midcap Fund, and Sharmila D’mello and Vaibhav Dusad for ICICI Prudential Focused Equity Fund.

AU Small Finance Bank eyes loan growth with strong deposit base 

AU Small Finance Bank (AUBANK) is a Rajasthan-based private bank focusing on retail banking. It transitioned from an NBFC to a licensed bank in 2017. It has a loan book of Rs 67,624 crore currently and 476 branches. 

The bank faced margin pressures in its Q3FY24 earnings due to rising cost of funds caused by intense competition for deposits from large banks. The firm has room for further loan expansion as its CD ratio stands at 84.3%, in contrast to major banks whose CD ratios are above 90%. 

AU Small Finance Bank recently acquired Fincare Small Finance Bank (SFB) for Rs 4,411 crore in an all-stock deal. Fincare SFB is expected to diversify AU SFB’s presence in South India. Fincare SFB will add a Rs 10,541 crore loan book to the firm and also give access to rural and microfinance portfolios. However, the quality of Fincare SFB’s loan book and expensive valuation remain a concern. 

Fund managers who bought shares of AU Small Finance Bank

Fund managers who added shares of Au Small Finance Bank to their portfolios include Chirag Setalvad and Dhruv Muchhal for HDFC Mid-Cap Opportunities Fund, Jay Kothari and Vinit Sambre for DSP Midcap Fund, and Devender Singhal and Satish Dondapati for Kotak Nifty Bank ETF. Fresh buys were done by Harish Krishnan and Dhaval Joshi for Aditya Birla Sun Life Flexi Cap Fund, and Sailesh Raj Bhan and Kinjal Desai for Nippon India Multi Cap Fund.

Voltas gears up for growth in washing machines and refrigeration 

Voltas (VOLTAS) is a consumer electronics firm known for its air conditioners and refrigeration units. It has partnered with Beko to manufacture refrigerators and washing machines. It is also engaged in the EPC business, providing solutions across MEP (mechanical, electrical and plumbing) and HVAC (heat, ventilation and air conditioning) projects. As part of the Tata Group, the firm has an annual turnover of Rs 10,000 crore.

Voltas posted a revenue growth of 31% YoY in Q3FY24. However, a margin contraction of 270 bps YoY due to a Rs 30 crore loss in electromechanical projects dampened its success. Its room air conditioner (RAC) business grew by 27% YoY. The festive and wedding seasons contributed to the higher volume offtake. The washing machine segment’s losses have reduced drastically, helping  margins. 

Fund managers who bought shares of Voltas

Fund managers who added shares of Voltas to their portfolios include Kinjal Desai and Sanjay Doshi for Nippon India Growth Fund, Niket Shah and Ankush Sood Motilal Oswal Midcap Fund, and Trideep Bhattacharya and Sahil Shah for Edelweiss Mid Cap Fund. Fresh buys were done by Dhaval Shah and Dhaval Joshi for Aditya Birla Sun Life Multi-Cap Fund, and Harsha Upadhyaya and Abhishek Bisen for Kotak Multicap Fund.

Cyient’s MF holdings stand at 235 lakh shares in January

Cyient aims growth in digital engineering & technology and aerospace 

Cyient (CYIENT), a software and services firm headquartered in Hyderabad, has interests in global digital engineering and technology solutions. It specializes in geospatial, engineering design, IT solutions, and data analytics. Cyient has over 300 customers and a presence in 19 countries. It has annual sales of around Rs 7,000 crore. Its major clients are from the US and Europe.

Cyient’s revenue growth moderated to 12.6% YoY in Q3FY24 due to its design-led manufacturing (DLM) segment, which reported 49.7% YoY growth. This surge was attributed to increased order intake from the aerospace and defence segments. 

Meanwhile, the digital engineering & technology (DET) segment reported an 8.1% YoY growth, which is expected to increase further to around 13% in Q4FY24. The company is poised for EBIT expansion, thanks to a drop in its attrition rate and increased resource utilisation. Cyient won orders worth $297 million in the quarter, with DET contributing $137 million.   

Fund managers who bought shares of Cyient

Fund managers who added shares of Cyient to their portfolios include Vaibhav Dusad and Sharmila D’mello for ICICI Prudential Technology Fund, Mayur Patel for 360 ONE Focused Equity Fund, and Kunal Sangoi and Dhaval Joshi for Aditya Birla Sun Life Pure Value Fund. Fresh buys were done by Pranav Gokhale and Shridatta Bhandwaldar for Canara Robeco Small Cap Fund, and Ankit Jain for Mirae Asset Multicap Fund.

EID Parry targets growth in non-sugar segments

EID Parry (India) (EIDPARRY), part of the Murugappa group, is a food beverage & tobacco company operating in the sweeteners and nutraceuticals space. With six sugar plants and a standalone distillery in South India, the firm has a cane-crushing capacity of 40,300 tonnes per day and a distillery capacity of 417 kilolitres per day. The company also has a significant presence in refined sugar and farm inputs through its subsidiaries.

The firm faced challenges in the quarter due to export restrictions on sugar. However, higher price realisation in the domestic market partially offset the effect. Unpredictable rainfall affected sugarcane yields, impacting production. The management plans to increase capital allocation in biofuels and non-sugar consumer segments. EID Parry is diversifying its FMCG portfolio to include -value-added products like jaggery, low-glycemic sugars, rice, dal and millets. 

Fund managers who bought shares of EID Parry (India)

Fund managers who added shares of EID Parry (India) to their portfolios include Yogesh Patil and Dikshit Mittal for LIC MF Multi Cap Fund, and Arun Agarwal and Abhishek Mor for HDFC Nifty Smallcap 250 ETF. Fresh buys were done by Raunak Onkar and Rajeev Thakkar for Parag Parikh Flexi Cap Fund, R. Srinivasan and Mohit Jain for SBI Small Cap Fund, and Krishna Sanghavi and Renjith Radhakrishnan for Mahindra Manulife Business Cycle Fund.

DCX Systems aims to reduce dependence on offset projects

DCX Systems (DCXINDIA), a leading Indian defence manufacturing player, specialises in manufacturing electronic systems and cable harnesses for both international and domestic customers. It caters to clients across aerospace, naval & land defence systems, satellites and civil aviation. It stands as a major Indian Offset Partner (IOP) to the Israeli Defence Company (IDC).

DCX Systems has formed a JV with Israel-based ELTA Systems (a defence manufacturer) to enhance its capabilities beyond defence and aerospace segments. The JV aims to win orders from the railways, healthcare and civilian sectors. The company plans to increase its non-IOP revenue from the current 15% to 40%. The firm currently has an order book of Rs 1,530 crore. It has also received orders worth $2 million from Lockheed Martin. This association is expected to increase new orders. 

Fund managers who bought shares of DCX Systems

Fund managers who added shares of DCX Systems to their portfolios include Abhishek Jain for Groww Nifty Total Market Index Fund, and Swapnil Mayekar for Motilal Oswal Nifty Microcap 250 Index Fund. Fresh buys were done by Sumit Agrawal and Ritika Behera for Bandhan Focused Equity Fund, and Gopal Agrawal and Dhruv Muchhal for HDFC Dividend Yield Fund.

V-Mart Retail eyes online marketplace turnaround for margin expansion

V-Mart Retail (VMART) is a retailing firm engaged in manufacturing and selling textiles, garments and accessories. The firm operates through 454 stores across 270 cities. It has also ventured into online sales via its digital marketplace, LimeRoad. It plans to add 50 new stores per year for the next three years. 

V-Mart’s revenue in Q3FY24 grew by 14% YoY on the back of festive demand and a favourable shift in the winter season, which boosted sales of new merchandise. The company’s EBITDA margin increased 12 bps YoY to 13.5%, driven by lower losses from LimeRoad (losses reduced by 29%). LimeRoad is expected to further reduce losses by 30% in Q4FY24. The firm is focusing on the youth demographic by adding new products to the inventory and is closing loss-making stores. It is also expanding into rural and small towns to increase its customer base.   

Fund managers who bought shares of V-Mart Retail

Fund managers who added shares of V-Mart Retail to their portfolios include Harsha Upadhyaya and Abhishek Bisen for Kotak Multicap Fund, Himanshu Mange for  Nippon India Nifty Smallcap 250 Index Fund, and Sailesh Jain and Tejas Gutka for Tata ELSS Tax Saver Fund. Fresh buys were done by Ajay Khandelwal and Niket Shah for Motilal Oswal Small Cap Fund, and Viraj Kulkarni for Bandhan Multi Asset Allocation Fund.

Cochin Shipyard set to boost order capacity with new facilities

Cochin Shipyard (COCHINSHIP) is a marine port & service firm with expertise in the construction, repair, refit and upgrade of vessels. The public sector undertaking firm has tie-ups with ship manufacturing firms in the US and Europe. It derives a major portion of its revenue from Navy contracts (75% of the order book) and is involved in coast-guard projects and naval/commercial vessel construction and repairs.  

With a order backlog of Rs 21,500 crore slated for execution in the next few years, the firm is poised for strong earnings visibility. The company expects repeat defence orders and other opportunities worth Rs 13,000 crore in FY24-25. The expanded dry dock, which became operational in January 2024, is expected to double the operational capability and allow the company to construct and repair larger vessels.

Fund managers who bought shares of Cochin Shipyard

Fund managers who added shares of Cochin Shipyard to their portfolios include Arun Agarwal and Abhishek Mor for HDFC Nifty Smallcap 250 ETF, Harsh Sethi for SBI Nifty Smallcap 250 Index Fund, and Himanshu Mange for Nippon India Nifty Smallcap 250 Index Fund. Fresh buys were done by Shridatta Bhandwaldar and Pranav Gokhale for Canara Robeco Small Cap Fund, and Gargi Banerjee and Deepak Ramaraju for Shriram Flexi Cap Fund.


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