Titan posted better than expected revenue growth in the March quarter of the financial year 2022-23 (Q4FY23), powered by strong demand trends in the jewellery and watch segment. Standalone jewellery sales for the firm were up 24 per cent year-on-year (YoY) on a slightly lower base and aided by like-to-like growth of 19 per cent. The company highlighted that new buyer growth was at 15 per cent while average ticket size was up 8 per cent.
With the Nifty50 just about 3 per cent away from its all-time closing high of 18,812 points, analysts at BofA Securities suggest investors book profit. Their reasons for the advice include risks like the possibility of a cut in corporate earnings growth forecasts, high valuation (one-year forward P/E of 19.5x), interest rates staying elevated for longer-than-expected and credit tightening. Going ahead, they expect the Nifty50 index to drop to 16,000 levels - down nearly 12 per cent from the current level of 18,255 points, which they believe would be a good time to buy.
'As the Indian economy continues to expand over the next three years, mid- and small-caps should do well as they have higher exposure to the domestic economy than large-caps.'
'Indian equity valuations, although not very expensive, are not cheap either.'
The mid-and small-cap segments at the bourses have outperformed their larger peers thus far in fiscal 2023-24 (FY24). While the S&P BSE Small-cap index has surged around 5.7 per cent in FY24, the S&P BSE Midcap index has gained 4 per cent during this period. In comparison, the S&P BSE Sensex has moved up around 2.2 per cent.
'The impact of CEO transition is fairly even for stocks, with about half (53 per cent) of the events not producing any change in the relative performance of the stock.'
After lagging behind other segments in the automotive (auto) space over the past few years, two-wheelers are expected to reverse their volume underperformance. After witnessing a 36.3 per cent volume decline over the 2018-19 (FY19) through 2021-22 (FY22) periods, the sector staged a recovery in 2022-23 (FY23), with volumes rising 17 per cent. While volumes are still a quarter lower than the FY19 peak of 21 million units, a double-digit growth trajectory is expected to prolong.
While weather forecasters remain divided on how the monsoons will play out in India over the next few months, analysts believe the news at the current juncture - at best - can trigger a knee-jerk reaction in the markets. They believe it is too early to say whether the sub-par monsoon on account of El Nino can seriously dent the market sentiment in the short-to-medium term. "These are just initial forecasts and we will have another round / status update from the weather forecasters a month down the line.
The stock of Divis Laboratories is up 10 per cent over the last couple of trading sessions on expectations that the worst is behind and the company could see a sequential growth in the March quarter of the 2022-23 financial year (Q4FY23). The stock witnessed the highest downgrades among Nifty50 index stocks with earnings cuts over a third after the Q3FY23 results. The company had posted a 32 per cent drop in revenues over the year ago quarter in Q3FY23 and 8 per cent sequentially, which was sharply lower than Street expectations.
The stock of the retail chain Avenue Supermarts (Dmart) was the biggest loser in the BSE 100 Index shedding 4.35 per cent on Thursday and added to these losses on Monday by falling an additional 1.3 per cent. The Street was reacting to lower than expected operational performance by the company in the March quarter. The country's largest listed retailer by market capitalisation reported a 20 per cent year-on-year (y-o-y) growth in its top line to Rs 10,337 crore.
The third-quarter financials didn't excite market watchers. But equity investors can still make money if they invest in the right stocks.
The stock of auto component major Bosch was up 2.5 per cent on Wednesday and in the process hit its 52-week high. Expectations of higher volumes of medium and heavy commercial vehicles' (M&HCV), rise in content supplies on account of BS VI stage 2 implementation from April, and improved profitability are some of the positives for the stock. In addition to this, the company appointed a new managing director and joint managing director last week, which will come into effect from July 1.
The sharp correction in the Indian markets from their peak levels has made valuations attractive, say analysts, who advise buying selectively, but only from a long-term perspective. Fifty-six of the Nifty 100 stocks, according to Mahesh Nandurkar, managing director at Jefferies, now trade below the 10-year historical averages, including stocks in financial, select auto, and pharma sectors. "Valuation (one-year forward consensus price-to-earnings, PE) has declined 25 per cent from October 2021 peak, almost matching the 33 per cent price-earnings contraction during the 2011 tightening cycle when repo rates went up by 375 basis points (bps) versus 250 bps this cycle.
Earnings growth, attractive valuations and change in FPI flows from negative to positive over the next 12 months are some of the key triggers for an upside. "A poor monsoon, high inflation and further rate hike are some of the key risks
Brokerages have cut their estimates of listed diagnostics players for the financial year 2023-24 (FY24) after mixed December quarter results and muted near-term outlook. Their volumes and realisations will be under pressure due to weakness in Covid-adjusted performance and higher competitive pressures, the brokerages believe. In a post-Q3 results note on Dr Lal Pathlabs, Bhavesh Gandhi of YES Securities pointed out that there has been a lack of volume revival in recent quarters, with an increasing likelihood that FY24 too would be a work-in-progress year for the company's initiatives to bear fruit.
'We are not entirely out of the woods.' 'The broader trajectory remains tentative.' 'However, we may expect some near-term bounce.'
India's largest listed pharmaceutical (pharma) company - Sun Pharmaceutical Industries (Sun Pharma) - is expected to maintain its outperformance vis--vis the sector's, as its multiple bets on specialty products, improving product mix, recent acquisitions, and branded business are finding favour with brokerages. While it has gained 7 per cent over the past year, the Nifty Pharma Index is down 13.6 per cent. Its outperformance over two years has been fairly evident, with the market leader gaining 66 per cent to Nifty Pharma's minus 1.4 per cent.
Since its October high last year, the stock of innerwear major Page Industries has been on a downtrend, shedding a little over 30 per cent of its market value. Higher competitive intensity, muted volumes, pressure on margins, and rich valuations have led to downgrades for the stock. The October-December quarter (third quarter, or Q3) performance was lower than the Street's expectations - both on volumes/sales and margins.
Even as most of its large-cap pharmaceutical peers have struggled to stay above water on the returns front, Zydus Lifesciences has been one of the big outperformers within the sector over the past year with a return of over 30 per cent. The gains have come on the back of multiple triggers such as the scaling up of new product launches in the US market, clearance for its Moraiya (Gujarat) facility and steady performance in the domestic market. Though it has been the top pharma gainer in the 2022-23 financial year (FY23), brokerages continue to maintain their 'buy' stance, given the strong visibility in the US market.
The combined market-cap of all listed Adani group firms has plunged nearly Rs 7.11 trillion since January 24 when the Hindenburg report was made public.
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