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April marks the beginning of the new financial year. Tracking investments at this point gives us an insight into which sectors and stocks may be outperformers over the rest of the year. This year, April saw the Nifty 50 index begin the month with levels of 18,000, falling over the next few weeks to end the month with a loss of more than 1,200 points.

This fall did not spare any sector or industry, and stocks right from blue chips to small caps dropped drastically on the exchanges. Even during the fall in April however, fund managers have made their bets on some stocks, including banks, pharmaceuticals, healthcare, and even a major two-wheeler manufacturer.

HDFC Bank - Merger announcement spurs interest in this stock

HDFC Bank has the highest market capitalisation currently among banks in India. The recent announcement of the merger with its parent company HDFC created a buzz in the market. This merger hinges upon how well regulatory issues will be addressed during the merger process. Most market participants view the merger as positive for the bank, as the merged entity will be one of the biggest financial institutions in the country.

The Q4FY22 results for HDFC Bank saw the highest revenues in the last 10 quarters at Rs 43,960 crore and net profit at Rs 10,443 crore, a YoY increase of 24%.

Fund Managers who bought shares of HDFC Bank

Shares were added to their respective schemes by Hiten Shah forKotak Equity Arbitrage Fund Growth, Kinjal Desai and Anand Gupta forNippon India Arbitrage Fund Growth, Gaurav Misra and Gaurav Khandelwal forMirae Asset Large Cap Fund Regular Growth and Krishan Kumar Daga, Arun Agarwal and Sankalp Baid forHDFC Arbitrage Fund Wholesale Plan Growth.

Hindalco - Forging ahead with expansion plans

Hindalco is the world’s largest aluminum company by revenue, and part of the Aditya Birla Group. Over the years, Hindalco transformed its business model to reduce dependence on volatile LME (London metal exchange) price movement, and is focusing on a portfolio of value added products.

During the analyst call for Q3FY22 results, it unveiled a capex plan of approx US$8 billion over the next five years. Of the total capex, $4.5-$4.8 billion would be incurred by its  subsidiary Novelis, while around $3.37 billion would be spent on the India business. This capex would be spent on upstream and downstream aluminum processes and on the copper business.

Fund Managers who bought shares of Hindalco

Fund managers who bought shares of Hindalco were Hiten Shah forKotak Equity Arbitrage Fund Growth, Rama Iyer Srinivasan and Mohit Jain forSBI Multicap Fund Regular Growth, Priyanka Khandelwal, Sankaran Naren and Dharmesh Kakkad forICICI Prudential Value Discovery Fund Growth and Kayzad Eghlim, Priyanka Khandelwal and Nikhil Kabra for ICICI Prudential Equity Arbitrage Fund Regular Growth

Bandhan Bank - Improved operating metrics in one of the banks best quarters

Bandhan Bank commenced operations in 2015, beginning as a micro finance institution(MFIs) a few years ago before getting the banking license. Hence MFIs loans are its forte.The bank has a strong presence in eastern and northeastern India.

Bandhan Bank’s Q4FY22 results delivered its highest ever quarterly revenues at Rs 4,836 crore, a 28% YoY growth and net profits of Rs 1.902 crore, a 1,746% YoY growth. This quarter also saw improved NIMs, improved asset quality with sizable recoveries, and healthy balance sheet growth. 

Fund Managers who bought shares of Bandhan Bank

Shares for their schemes were added by Rama Iyer Srinivasan and Mohit Jain to SBI Multicap Fund Regular Growth, Mahesh Patil to Aditya Birla Sun Life Frontline Equity Fund Growth, Mohit Jain and Dinesh Balachandran toSBI Contra Fund Regular Payout Inc Dist cum Cap Wdrl and Mahesh Patil and Kunal Sangoi toAditya Birla Sun Life Focused Equity Fund Growthschemes respectively.

SBI Cards and Payments Services - Profitability grows as the economy opens up

SBI Cards and Payment Services is the largest issuer of credit cards in India. It operates in more than 130 cities and is a subsidiary of State Bank of India with 69.2% stake in the company.

In Q4FY22, revenues grew 22% YoY to Rs 3,016 crore and profits grew 230% YoY to Rs 580.9 crore. In Q4 FY22, the company added one million new accounts with 27%+ YoY growth. New accounts registered 16% YoY growth in FY22, as the company added over 3.5 million new accounts. 

Spending in the month of January was affected by the Omicron wave in India, but subsequent recovery in February and March saw higher spending and one of the highest monthly spends on credit cards.

Fund Managers who bought shares of SBI Cards and Payments

Fund managers who bought shares include Priyanka Khandelwal, Sankaran Naren and Dharmesh Kakkad forICICI Prudential Value Discovery Fund Growth, Gaurav Misra forMirae Asset Focused Fund Regular Growth, Milind Agrawal forSBI Banking & Financial Services Regular Growth and Hiten Shah forKotak Equity Arbitrage Fund Growthschemes.

TVS Motor Company - Widening its presence in the electric mobility space

TVS Motor Company is the third-largest two-wheeler manufacturer in India, and it sells motorcycles, scooters, mopeds and three-wheelers in India.

The electric scooter, TVS iQube got a strong customer response and continues to grow with more than 12,000 units sold in FY22. The electric scooter is currently present in 33 cities and aims for pan India presence by end of Q1FY23 along with some international markets. Recent tie up with Jio-BP, a Reliance Industries joint venture with BP, Tata Power and CSL network for charging infrastructure will enhance the customer experience. 

On exports, TVS is performing well and gaining market share in the African and Latin American markets. TVS has invested around Rs 700 crore in new e-mobility companies namely SEMG and Norton, both of which are profitable companies. SEMG will focus on the European market which is the fastest-growing market for electric two-wheelers.

Fund Managers who bought shares of TVS Motor Company

Shares were purchased by Rama Iyer Srinivasan and Mohit Jain forSBI Multicap Fund Regular Growth,Edelweiss Arbitrage Fund Regular Growth, Bhavesh Jain and Dhaval Dalal forEdelweiss Balanced Advantage Fund Regular Plan Growth and Aniruddha Naha and Vivek Sharma forPGIM India Midcap Opportunities Fund Regular Growthschemes respectively.

Aster DM Healthcare - Expansion plans underway in India with asset light business model

Aster DM Healthcare operates hospitals, clinics, retail pharmacies and provides healthcare services to patients across economic segments in India and several GCC (Gulf Cooperation Council) countries.

Aster is looking to expand its network following an asset light model in India. It has increased focus on asset light retail models like diagnostics, pharmacy distribution, homecare along with push towards integrated virtual platforms. It is pursuing aggressive expansion in both GCC and India but remains on firm footing due to cash generation from existing GCC operations.

Aster’s plan includes the addition of hospitals at Areekode, Begaluru, Chennai and Kannur to be completed over the next two to three years.

Fund Managers who bought shares of Aster DM Healthcare

Shares were added to their respective schemes by Priyanka Khandelwal, Sankaran Naren and Dharmesh Kakkad forICICI Prudential Value Discovery Fund Growth, Mohit Jain and Dinesh Balachandran forSBI Contra Fund Regular Payout Inc Dist cum Cap Wdrl, Priyanka Khandelwal and Harish Bihani for ICICI Prudential Smallcap Fund Growth and Chirag Setalvad and Sankalp Baid forHDFC Small Cap Fund Growth.

Gland Pharma - Opportunity in the US market with drugs in short supply

Gland Pharma is a pharmaceutical company which manufactures injectable products. It has 11 injectable products in the USFDA shortage list, which have a combined sales of $400 million over the past year. Among the Indian players present in the US, it appears to be the largest beneficiary from drugs under shortages due to consistent compliance and manufacturing capacity/capabilities.

There are certain drugs where more than five of its peers have ANDA approvals. Despite that, the drugs are under shortage due to increased demand or reduced supply or manufacturing constraints/discontinuation by existing companies.

Fund Managers who bought shares of Gland Pharma

Fund managers who added to respectives schemes include Gaurav Misra and Gaurav Khandelwal for Mirae Asset Large Cap Fund Regular Growth, Mahesh Patil forAditya Birla Sun Life Frontline Equity Fund Growth, Neelesh Surana and Ankit Jain for Mirae Asset Emerging Bluechip Fund Growth and Mahesh Patil and Kunal Sangoi for Aditya Birla Sun Life Focused Equity Fund Growth

Shriram Transport Finance - Revival of the economy drives demand for transportation

Shriram Transport Finance, part of the Shriram Group is India's largest player in commercial vehicle finance. The company is a leader in organized financing of pre-owned trucks with presence in 5-10 year old trucks.

Shriram Transport Finance delivered a strong result in Q4FY22. It recorded its highest ever quarterly revenues at Rs 5,087.6 crore and highest ever quarterly net profit at Rs 1091.2 crore. The operating profit margin in Q4FY22 at 74.4% was the highest in the last ten quarters. 

In Q4FY22, the economic recovery after months of the pandemic pushed up demand for trucks, which led to higher demand for commercial vehicle finance.

Fund Managers who bought shares of Shriram Transport Finance

Shares were added to respective schemes by Neelesh Surana and Ankit Jain toMirae Asset Emerging Bluechip Fund Growth, Neelesh Surana toMirae Asset Tax Saver Fund -Regular Plan-Growth, Hiten Shah toKotak Equity Arbitrage Fund Growth and Ankit Jain toMirae Asset Midcap Fund Regular Growth

Minda Corporation - Rising component share across electric two wheelers

Minda Corporation serves auto original equipment manufacturers (OEMs) across two main verticals, mechatronics and aftermarket products. Its products include safety & security, die-casting, starter motors etc. as well as information & connected systems.

Minda Corporation is stepping up its game in the EV space with development of new products. The potential kit value in electric 2-wheeler is at Rs 16,000-20,000/unit. An increase in kit value is envisaged through content increase in existing products as well as new product offerings. Its key clients include leading EV 2-wheeler OEMs like Ola Electric, Hero Electric, Ampere among others.

Fund Managers who bought shares of Minda Corporation

Additions to their portfolios were made by Aniruddha Naha and Ravi Adukia toPGIM India Flexi Cap Fund Regular Growth, Anupam Tiwari and Hitesh Das toAxis Small Cap Fund Regular Growth, Anupam Tiwari and Sachin Jain toAxis Multicap Fund Regular Growth and Aniruddha Naha and Ravi Adukia to PGIM India Small Cap Fund Regular Growth schemes respectively.

Godrej Agrovet - Strong performance across verticals in Q4FY22

Godrej Agrovet is a major player in the animal feed business in India, producing animal feed and nutrition products for dairy cattle, broiler chicken, layer chicken and aquaculture sectors.

In Q4FY22, it reported a strong operating performance, with YoY revenue growth of 48.4% at Rs 2,133 crore and net profit YoY growth of 116% at Rs 122.3 crore. EBIT grew 6x and 55% YoY in palm oil and crop protection segments respectively. EBIT margin expanded across segments with the highest for palm oil vertical at 25.2%. Animal feed, which was affected by higher input costs, was the only underperforming segment.

Fund Managers who bought shares of Godrej Agrovet

Buying interest was shown by fund managers, Samir Rachh and Kinjal Desai forNippon India Small Cap Fund - Growth, and Nippon India Multi Cap Fund - Growth, Yogesh Patil forLIC MF Large & Mid Cap Regular Growth and Aniruddha Naha and Ravi Adukia for PGIM India Small Cap Fund Regular Growth

1. Dalmia Bharat: Motilal Oswal maintains a ‘Buy’ rating on this cement company but cut its target price to Rs 1,915 from Rs 2,000, indicating an upside of 34.6%. Analysts Sanjeev Kumar Singh and Mudit Agarwal cut their target price as they expect high energy costs and freight costs to persist. However, the analysts “like the company owing to its growth plans, a locational advantage in East India and cost reduction measures”. Revenue rose 7% YoY to Rs 3,380 crore driven by improvements in realisations and sales volume and realisation improved 4% YoY to Rs 5,121 per tonne, as cement prices increased during Q4FY22. 

The analysts expect demand for cement to grow at 8-9% over the next few years, driven by higher Infrastructure spending, low-cost housing and rural demand. They believe the company is well-placed to benefit from the rise in demand given its focus on capacity expansion and cost-efficiency measures. They expect the company’s operating revenue to grow at a 10.9% CAGR over FY22-24.

2. Polycab India: BOB Capital Markets maintains a ‘Buy’ rating on this cable and fast moving electrical goods maker with a target price of Rs 3,000, indicating an upside of 16.5%. Analysts Vinod Chari, Someel Shah, and Tanay Rasal remain positive about the company’s prospects given its robust Q4FY22 results, market leadership in cables and wires, and distribution presence. The company’s Q4FY22 net profit rose 20% YoY to Rs 320 crore and revenue rose 35% YoY to Rs 3,943.7 crore led by growth across the cables and wires segments.

The analysts say that “being the market leader in cables and wires, we expect Polycab to not only pass on the higher raw material cost but also to gain market share given its superior product quality”. The company commands 22-24% market share in the organised market and 15-16% share in the fragmented market in India The brokerage take is that the ongoing revival in infrastructure and construction activities to benefit the cable and wire industry, especially organised market leaders like Polycab. The analysts expect the company’s revenue to grow at a 15.1% CAGR over FY22-24.

3. Federal Bank: Axis Securities maintains a ‘Buy’ rating on this bank stock but reduced its target price to Rs 115 from Rs 125. The new target price indicates an upside of 35.2%. “Federal Bank reported a muted Q4FY22 with operational performance below our expectations,” says analyst Dnyanada Vaidya. In Q4FY22, Net Interest Income grew by 7% YoY to Rs 1,525 crore which was below the brokerage’s estimate of Rs 1,595 crore, he added  Vaidya says that lower than expected provisions for NPAs supported profit growth. Provisions were down 69% YoY to Rs 75 crore which led to profit rising 13% YoY to Rs 541 crore, he said. 

Vaidya adds that the bank “has been taking a cautious approach in building the loan mix toward high-rated corporates and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of 92% and the bank looking to improve its CASA deposits gradually over the medium term.” He expects that the bank’s focus on high-margin businesses such as microfinance institutions and credit cards will gradually aid in margin improvement.

4. SRF: Edelweiss maintains its ‘Buy’ call on this chemical company’s stock and increased its target price to Rs 2,800 from Rs 2,700, indicating an upside of 24.9%. “SRF Ltd posted a strong beat on the top line and bottom line, underpinned by highest ever operating performance in Chemicals Business,” says analyst Anshul Verdia. In Q4FY22 the company’s consolidated revenue grew 36% YoY to Rs 3,549 crore, higher than the brokerage’s estimate. According to Verdia, the positive growth in the chemicals business was driven by the strong demand across the markets and new capacity addition in Hungary and Thailand.

Verdia expects refrigerant gas prices to remain firm. He also expects the demand for specialty chemicals to continue to remain strong and packaging segment volumes to be driven by upcoming biaxially oriented polypropylene and aluminum foil capacity. Lastly, the brokerage remains positive as the company has also planned capex of about Rs 2,600 crore for FY23.

5. Hindalco Industries: ICICI Securities maintains its ‘Buy’ rating on this aluminium miner's stock with a target price of Rs 700, indicating an upside of 78.8%. Analysts Abhijit Mitra, Mohit Lohia, and Pritish Urumkar say that “progressively higher contract prices across product segments are also leading to an improved margin outlook in the medium term”. They expect the demand for beverage cans and automobiles to grow 5% YoY and 10% YoY in CY22, respectively. They believe the company is well-placed to benefit from the rise in demand given its capacity expansion and healthy balance sheet.

The analysts expect the $2.5-billion greenfield investment in Alabama to improve EBITDA margins and reduce manpower costs by 30% through automation in the coming years. Furthermore, they see limited earning tailwinds from Novelis and expect its earnings to continue to benefit from cyclicality in FY23. The key risks for the company are lower aluminium prices, lower profitability at Novelis, and a reduction in LME spreads, according to the analysts.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.