It’s normal for analysts covering publicly-listed companies to differ in their views on where a company’s stock price is headed in the near future. But some stocks and industries, in particular, have wildly divergent analyst views in terms of target share price.
If we divide the highest target price for a stock by the lowest target price, we can see the disagreement ratio in analyst views on a stock’s future price.
The stocks with the highest divergence (above 2 in disagreement ratio) are mainly metal, banks, heavy electrical equipment makers, internet companies and consumer electronic companies, among others. Some metal stocks see huge differences of opinion with the likes ofSteel Authority of India,JSW Steel, andTata Steel seeing the highest divergence in the highest and lowest target price, Trendlyne’s Forecaster estimates show.Steel Authority’s highest target price is nearly 4.5 times its lowest target price.
Given the ongoing geopolitical tensions in Europe and lockdowns in China, this divergence among analysts on metal stocks is understandable. Companies likeJSW Steel, andTata Steel’s high and low target prices differ by 3.8 times and 3 times respectively, as predicted by various analysts.
Bank stocks likeBank of Baroda andBandhan Bank’s target price difference ratio is 2.9 and 2.8 times respectively.Canara Bank’s highest target price is nearly 3.1times its lowest target price. It will be interesting to see if this changes once all the Q4FY22 results of the banks are declared soon.
Then there is tech. Last year saw many tech-based startups list in India to much fanfare, but this has also brought in a lot of divergence among analysts as to their future business prospects.One97 Communications or Paytm’s stock price has thehighest divergence among analysts (highest target price is 3.6 times the lowest target price), followed byZomato(highest target price is 2.9 times the lowest target price), andNazara Technologies(highest target price is 2 times the lowest target price).
Trendlyne Analysis
Nifty 50 closed in the red with the Indian volatility index, India VIX rising above 20%. Asian indices closed lower as investors remain anxious about the effect of Covid-19 lockdowns in parts of China. However, China’s central bank said it would support its economy as worries grew about Beijing’s insistence on continuing with a “Zero-Covid” policy that would harm domestic and global growth. All US indices closed sharply lower on Tuesday led by the tech-heavy NASDAQ 100, which closed over 3.8% lower. Stock markets remain jittery amid mixed earnings, rising inflation, and prospect of aggressive monetary policy by the US Fed. Oil prices rose after Russia said it would cut natural gas supply to Eastern Europe. The pan-European index, STOXX 600 trades lower, extending its losses for a fourth straight day as investors monitor earnings and natural gas supply chain disruption in Europe.
Nifty Smallcap 100 and Nifty Midcap 100 closed lower, following the benchmark index. Nifty Bank and Nifty Auto closed lower than Tuesday’s levels. Nifty IT also closed in the red, tracking the tech-focused NASDAQ 100, which closed sharply lower on Tuesday.
Nifty 50closed at 17,038.40 (-162.4, -0.9%),BSE Sensexclosed at 56,819.39 (-537.2, -0.9%) while the broader Nifty 500closed at 14,756.00 (-142.4, -1.0%)
Market breadth is overwhelmingly negative. Of the 1,864 stocks traded today, 507 were gainers and 1,329 were losers.
Endurance Technologies,V Mart Retail, Procter & Gamble Hygiene & Healthcare, and Krishna Institute of Medical Sciences are trading with higher volumesas compared to Tuesday.
Stocks like Adani Enterprises, Havells India, Ambuja Cements, NLC India, and Mahindra & Mahindra, are in the overbought zone according to the technical indicator relative strength index or RSI.
Syngene International's Q4FY22 profit rises 7% YoY to Rs 148 crore and revenue rises 14% YoY to Rs 773 crore. The growth is result of the company catching up on projects delayed by supply chain issues and other Covid-related disruptions. In FY22, the company's profit rises 10% YoY to Rs 421 crore.
HDFC Securities initiates a 'BUY' on Mahindra & Mahindra with a target price upside of 17.8%. The brokerage is positive on the auto major as it is witnessing a strong traction in its utility vehicle segment especially for new launches like XUV 700. HDFC Sec also expects the sales volumes for M&M's tractor segment to revive in FY23.
Rainbow Childrens Medicare’s Rs 1,580.85-crore IPO gets bids for 29% of the available 2.05 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 48% of the available 1.01 crore shares on offer. The public issue comprises of a fresh issue of equity shares of Rs 280 crore and an offer for sale of up to Rs 1,300.85 crore.
Campus Activewear’s Rs 1,400-crore IPO gets bids for 3.21X of the available 3.36 crore shares on offer on second day of bidding. The retail investor quota gets bids for 3.94X of the available 1.6 crore shares on offer.
Public sector bank stocks like State Bank of India, Bank of Baroda, and Canara Bank, among others, are falling in trade. The broader sectoral index Nifty PSU Bank is also trading in the red.
KPIT Technologies Q4FY22 net profit rises 14.6% QoQ to Rs 80.5 crore and revenue rises 5.3% QoQ to Rs 664.8 crore. The growth in revenues is primarily due to the Americas region with a 10.1% QoQ rise in revenues to Rs 250.6 crore. However, employee benefits expense rises 57.1% QoQ.
Mahindra Logistics is trading with more than 32 times its weekly average trading volume. KPIT Technologies, Vardhman Textiles, UTI Asset Management Company, and Dilip Buildcon are trading at more than four times their weekly average trading volumes.
CARE Ratings slumps in trade after Managing Director and CEO Ajay Mahajan resigns citing personal reasons. His resignation is effective from the closure of business hours on May 31. Executive Director Mehul Pandya will be the interim CEO from June 1 onwards.
NTPC signs a memorandum of understanding (MoU) with Energy Vault Holdings for the deployment of gravity-based energy storage technology. The objective of the MoU is to form a long-term partnership with Energy Vault for the deployment of Energy Vault’s EVx, a gravity-based energy storage technology and software solutions, based on the outcome of a joint feasibility study.
Axis Securities maintains a ‘Buy’ rating on Cyient with a target price of Rs 1,000, indicating an upside of 11%. The brokerage believes the company’s recent acquisition of Citec will provide profitable growth in the coming quarters. The brokerage remains positive on the company’s order pipeline, which has multiple long-term contracts in the field of ER&D (Engineering Research & Development).
Tata Consultancy Services, HDFC Bank, ACC, and Hathway Cable & Datacom, among others, are outperforming the Nifty 50 index over the past week, post Q4FY22 results.
Life Insurance Corporation of India (LIC) IPO's price band is set at Rs 902-949 per share. The Centre will now sell only up to 3.5% stake in the IPO instead of the earlier 5%. The Centre expects to receive up to Rs 21,000 crore from the share issue. The IPO opens on May 4 and closes on May 9.
Omaxe surges after securing funding of Rs 440 crore from Varde Partners, a global alternative investment firm. The company will deploy the funds for the acceleration of construction and expansion and delivery of its projects.
United Breweries’ Q4FY22 profit rises 61% YoY to Rs 163.4 crore and revenues increase by 1.3% to Rs 3,664.7 crore. Net profit rises despite a marginal increase in revenue as the company reported an exceptional item loss of Rs 62.2 crore in Q4FY21.
Schaeffler India rises as its Q4FY22 net profit rises 48.4% YoY to Rs 207.1 crore and revenue rises 18.6% YoY to Rs 1,587.6 crore driven by growth in the mobility components segment.
AU Small Finance Bank’s Q4FY22 net profit rises 105% YoY to Rs 346 crore and revenue rises 26% YoY to Rs 1,978.4 crore on higher interest margins. Net interest income rises 42.8% YoY to Rs 937 crore and net interest margin rises by 60 bps YoY to 6.3%. The lender’s net NPAs (non-performing assets) decline by 170 bps YoY to 0.5%.
Bajaj Finance’s Q4FY22 net profit rises 79.6% YoY to Rs 2,420 crore and revenue rises 25.9% YoY to Rs 8,630.3 crore. Net interest income grows 30% YoY to Rs 6,068 crore and fee income rises 51% YoY to Rs 1,164 crore. Total AUM (assets under management) for the NBFC rises 29% YoY to Rs 1.97 lakh crore.
Tata Coffee’s net profit rises 12% YoY to Rs 64.28 crore in Q4FY22 and revenues increase by 8% to Rs 663.4 crore. Net profit rises despite a 31.2% increase in cost of raw materials to Rs 256.4 crores due to changes in inventories of finished goods, work in progress, and stock-in-trade.
Rainbow Childrens Medicare raises Rs 470 crore from anchor investors by selling 86.63 lakh equity shares at Rs 542 per share. Investors include Government of Singapore, Monetary Authority of Singapore, IIFL Special Opportunities Fund, Bajaj Allianz Life Insurance, HDFC Life Insurance, SBI Mutual Fund (MF), HSBC, Nippon India, among others.
Wipro to acquire Rizing Intermediate Holdings, a global SAP consulting firm to help expand its SAP consulting operations. According to reports, the value of the deal is $540 million. The deal is expected to help Wipro expand its services in oil and gas, utilities, manufacturing, and consumer industries. The acquisition is subject to regulatory approvals and the transaction will close before June 30.
Largecap and midcap gainers today include Endurance Technologies Ltd. (1,239.05, 6.54%), Ruchi Soya Industries Ltd. (1,103.45, 6.53%) and Adani Power Ltd. (299.20, 4.74%).
Largecap and midcap losers today include Bajaj Finance Ltd. (6,714.10, -7.27%), MindTree Ltd. (3,538.35, -4.35%) and Trent Ltd. (1,225.00, -4.29%).
24 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Alok Industries Ltd. (27.75, 16.35%), KPIT Technologies Ltd. (586.55, 12.50%) and IIFL Finance Ltd. (388.25, 9.83%).
Top high volume losers on BSE were UTI Asset Management Company Ltd. (860.05, -7.51%), Bajaj Finance Ltd. (6714.10, -7.27%) and Krishna Institute of Medical Sciences Ltd. (1,295.70, -3.13%).
Mahindra Logistics Ltd. (517.15, 8.74%) was trading at 40.9 times of weekly average. TTK Prestige Ltd. (777.55, -0.87%) and Schaeffler India Ltd. (2,234.90, 6.48%) were trading with volumes 11.4 and 6.8 times weekly average respectively on BSE at the time of posting this article.
10 stocks hit their 52-week highs, while 2 stocks hit their 52-week lows.
Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (887.30, -2.44%), Adani Power Ltd. (299.20, 4.74%) and EID Parry (India) Ltd. (522.45, -3.81%).
Stocks making new 52 weeks lows included - Infibeam Avenues Ltd. (17.50, -3.31%) and Zomato Ltd. (75.85, -4.71%).
14 stocks climbed above their 200 day SMA including Alok Industries Ltd. (27.75, 16.35%) and Just Dial Ltd. (914.50, 6.83%). 19 stocks slipped below their 200 SMA including Bajaj Finance Ltd. (6,714.10, -7.27%) and Hindustan Petroleum Corporation Ltd. (281.85, -3.64%).
Trendlyne Analysis
Nifty 50 closed in the green with the Indian volatility index falling by 9.5%. Asian shares closed higher after all major indices closed in the red on Monday. US indices recovered their losses towards the end of the trading session to close higher on Monday after Twitter’s board accepted Elon Musk’s $44 billion cash offer to take the company private. Global sentiment remains fragile on the back of China’s economic slowdown, high inflation level, and prospect of aggressive monetary policy tightening by the Fed. Crude oil continues to fall as investors assess the impact of China’s Covid-19 resurgence on the outlook for global demand. European indices trade higher, following the global trend amid mixed cues.
All sectoral indices closed in the green. Nifty Smallcap 100 and Nifty Midcap 100 closed higher, following the benchmark index. Nifty Metal, which lost 2.85% on Monday, closed 1.28% higher. Nifty IT also closed in the green, tracking the tech-heavy NASDAQ 100, which closed 1.32% higher on Monday.
Nifty 50closed at 17,200.80 (246.9, 1.5%), BSE Sensexclosed at 57,356.61 (776.7, 1.4%) while the broader Nifty 500closed at 14,898.35 (225.4, 1.5%)
Market breadth is in the green. Of the 1,872 stocks traded today, 1,102 were in the positive territory and 733 were negative.
AIA Engineering, IFB Industries, Thyrocare Technologies, and Sanofi India are trading with higher volumes as compared to Monday.
Hindustan Aeronautics and Bharat Electronics rise as they ink a pact to co-produce and develop ‘Long Range Dual Bank IRST (Infra-Red Search & Track System)’ for Sukhoi 30 MKI. This development of high-end strategic technology for the air fighter is a part of the ‘Make in India’ initiative.
PSU Bank stocks like Canara Bank, State Bank of India, Bank of Baroda, and Indian Bank, among others, are rising in trade. The broader sectoral index Nifty PSU Bank is also trading in the green.
Atul is falling as the company's Q4FY22 profit falls 22.7% YoY to Rs 136.56 crore due to a rise in expenses of materials, power, fuel, and water, despite a 22.8% YoY rise in revenue to Rs 1,370.42 crore. In FY22, the company's profit falls 8.4% YoY to Rs 604.74 crore.
IT stocks like Wipro, Infosys, Tech Mahindra, and MphasiS, among others, are in the oversold zone, according to the technical indicator relative strength index or RSI.
Auto stocks like Ashok Leyland, TVS Motor, Bajaj Auto, and Hero MotoCorp, among others are rising in trade. The broader sectoral index Nifty Auto is also trading in green.
Campus Activewear’s Rs 1,400-crore IPO gets bids for 1.24X of the available 3.36 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 1.88X of the available 1.6 crore shares on offer. The issue is entirely an offer for sale of Rs 1,400 crore.
ACC, Angel One, Cyient, and Mahindra CIE Automotive, among others, are rising over the past week after announcing their Q4FY22 results
Shriram Properties signs an MoU with LOGOS for a sale of 90 acres of land in Shriram Grand City, Kolkata. LOGOS will use this land to build a warehousing and logistics park. Post the transaction the project is likely to complete by H2FY23.
ICICI Direct maintains a ‘Buy’ rating on Tata Communications with a target price of Rs 1,610, indicating an upside of 30%. The brokerage remains positive on the company due to its improving cash flows, growing digital platforms and data business, and a healthy order pipeline. The brokerage expects net profit to rise at a 13.7% CAGR over FY22-24.
Meghmani Finechem's Q4FY22 net profit jumps 3X YoY to Rs 99 crore while revenues rise 93% YoY to Rs 499 crore. Higher sales realizations for caustic soda and hydrogen peroxide product lines drives overall profit growth in Q4FY22
MindTree outperforms Larsen & Toubro Infotech (LTI) by 4.0 percentage points in QoQ net profit growth in Q4FY22. However, LTI outperforms MindTree on nine out of 16 fundamental parameters like QoQ revenue growth, annual return on equity, price-to-earnings ratio, among others, according to Trendlyne’s Stock Comparison tool.
Gujarat Mineral Development Corporation reports a net profit in Q4FY22 of Rs 175.8 crore against a loss of Rs 184.6 crore a year ago. Revenue rises 80.3% YoY to Rs 1,097 crore driven by growth in the mining and power segments. In FY22, the company reports a net profit of Rs 405 crore against a loss of Rs 39.3 crore a year ago and revenue rises 93.6% YoY to Rs 2,888.9 crore.
Tatva Chintan Pharma Chem is falling as Q4FY22 profit falls 7.2% YoY to Rs 18.9 crore and revenue falls 3.2% YoY to Rs 103.1 crore. In FY22, the company's profit rises 83% to Rs 95.9 crore.
Citi upgrades Reliance Industries to ‘Buy’ with a target price of Rs 3,170, according to reports. It expects the company’s EBITDA to grow 3-9% over FY23-24. However, the brokerage sees no major growth in the O2C (oil-to-chemical) segment in Q4FY22.
Veranda Learning Solutions is rising as it acquires T.I.M.E (Advanced Educational Activities Pvt Ltd) for Rs 287 crore. The acquisition includes the business of spoken English under VETA brand and pre-school operations under T.I.M.E brand. The acquisition will be in a phased manner with 80% of the outstanding capital along with management control in phase 1, followed by the purchase of the remaining 20% at the end of two years.
Tata Investment Corporation’s Q4FY22 net profit rises more than 7X YoY to Rs 20.2 crore and revenue rises 71% YoY to Rs 50.9 crore on the back of a rise in dividend income and net gain on fair value changes. In FY22, net profit rises 38.6% YoY to Rs 214.46 crore and revenue rises 55% YoY to Rs 254 crore.
Campus Activewear raises Rs 418.3 crore from investors by selling 1.43 crore equity shares at Rs 292 per share to 32 anchor investors. Investors include Abu Dhabi Investment Authority, Nomura, CLSA, Societe Generale, Goldman Sachs, ICICI Prudential, HDFC Life Insurance, Motilal Oswal, among others.
Mahindra CIE Automotive reports net profit in Q1CY22 of Rs 168.69 crore against a loss of Rs 76.1 crore a year ago. Net sales rise 14.6% YoY to Rs 1,202.2 crore with revenue increasing 16.4% YoY to Rs 992.4 crore.
Biocon’s subsidiary Biocon Biologics bags a three-year contract for its recombinant brand of human insulin, worth Rs 688.45 crore from Malaysia’s Health Ministry. Biocon Sdn. Bhd., the Malaysian subsidiary of Biocon Biologics will manufacture and supply the range of insulins.
Largecap and midcap gainers today include Ruchi Soya Industries Ltd. (1,035.80, 9.07%), Adani Transmission Ltd. (2,812.55, 7.52%) and Cholamandalam Investment & Finance Company Ltd. (764.00, 6.82%).
Largecap and midcap losers today include Gland Pharma Ltd. (3,142.95, -4.57%), Atul Ltd. (9,358.00, -4.47%) and Laurus Labs Ltd. (572.10, -3.67%).
21 stocks in BSE 500 are trading on high volumes today.
Top high volume gainers on BSE included Mahindra CIE Automotive Ltd. (223.55, 12.39%), Gujarat Alkalies & Chemicals Ltd. (1,028.75, 10.89%) and Ruchi Soya Industries Ltd. (1,035.80, 9.07%).
Top high volume losers on BSE were Atul Ltd. (9,358.00, -4.47%) and Procter & Gamble Hygiene & Healthcare Ltd. (13,822.55, -1.60%).
Endurance Technologies Ltd. (1,162.95, 3.28%) was trading at 14.0 times of weekly average. TVS Motor Company Ltd. (681.50, 4.95%) and Bombay Burmah Trading Corporation Ltd. (1,026.55, 8.87%) were trading with volumes 8.5 and 7.9 times weekly average respectively on BSE at the time of posting this article.
12 stocks made 52-week highs, while 1 stock hit their 52-week lows.
Stocks touching their year highs included - Adani Ports & Special Economic Zone Ltd. (909.50, 5.81%), Adani Power Ltd. (285.65, 5.00%) and Cholamandalam Investment & Finance Company Ltd. (764.00, 6.82%).
Stock making new 52 weeks lows included - Infibeam Avenues Ltd. (18.10, -2.43%).
25 stocks climbed above their 200 day SMA including Mahindra CIE Automotive Ltd. (223.55, 12.39%) and Ruchi Soya Industries Ltd. (1,035.80, 9.07%). 11 stocks slipped below their 200 SMA including Atul Ltd. (9,358.00, -4.47%) and Laurus Labs Ltd. (572.10, -3.67%).
