There are multiple near-term worries for the stock of India's largest listed consumer company, Hindustan Unilever (HUL). While inflationary pressures will weigh on its profitability, demand pressures - especially in the rural market - are expected to hit the firm's revenues. This is why brokerages have cut the earnings estimates for financial year 2022-23 (FY23) by 7-10 per cent.
Distribution yields could rise, but risk of Covid, higher interest rates remain.
What has hit sentiment further is a draft proposal by the government to increase vehicle insurance premiums for financial year 2022-23 (FY23). Third-party motor insurance premiums have not been increased over the last two years and if this is approved, insurance costs for specific segments could rise by a fifth. The worst impacted is the 350cc and above two-wheeler segment, where premiums are up 21 per cent. Royal Enfield (Eicher Motor) is the market leader in the segment. The premiums in the 150-350cc two-wheeler category are also being inc
Tata Motors' UK-based subsidiary, Jaguar Land Rover or JLR, reported a muted operational performance in the December quarter of financial year 2021-22 (Q3FY22). The luxury carmaker saw a 33 per cent year-on-year (YoY) decline in wholesale volumes to just under 70,000 units in Q3, against estimates that were 16 per cent higher. The drop in despatches to dealers was on account of shortage in semiconductors.
A weak margin outlook in the near term and lack of fresh triggers may keep the Godrej Consumer Products (GCPL) stock under pressure. The stock, after tepid September quarter (Q2) results and marginal downward revision in earnings estimates, declined 3.5 per cent in trade on Friday. Though consolidated sales of the company, which owns the Goodknight and Cinthol brands, grew 8.5 per cent year-on-year (YoY), its operating profit declined because of the sharp contraction in margins.
Despite unprecedented levels of uncertainty in Samvat 2077, investors have little to complain about on the returns front. The BSE Sensex delivered returns of 38 per cent in this period, while the Nifty registered a return of over 40 per cent. As is the case in bull markets, companies in the small- and mid-capitalisation basket outperformed the benchmarks, with returns almost twice those of frontliners.
'Multiplexes will thrive by Q4 if 100% capacity is restored and a third Covid wave doesn't happen.'
The infra-major going belly up cracked open some major flaws in the system - the most evident being weak corporate governance and how layers of corporate structures could be formed adding to the opaqueness of the group.
While domestic market growth is important, the sales trajectory in the international markets, which account for 45 per cent of the revenues, will be a key rerating trigger, say analysts.
Despite a shaky Q3, conviction over the stock remained high, with 65 per cent of the analysts polled on Bloomberg retaining their 'buy' recommendation.
Near-term prospects hinge on the progress of the second wave of Covid-19. A lockdown will dent prospects as 60 per cent of revenues come from the dine-in segment.
The gains came on expectations that the company will post strong growth given its presence in application to peer services and the fast-growing communication platform as a service segment.
Given the expectations of growth in the packaged foods segment, the company seeks to become a Rs 1-trillion FMCG business by FY30.
Check out some of the stocks that will react on the basis of their numbers in the near term.
This is a key reason for the finance ministry's objection to fixing the tenure at 100 years, as it is pushing PSBs to be self-dependent and raise funds from the market, reports Hamsini Karthik.
It is nearly after 13 years that a foreign brokerage has resumed holistic coverage on stocks of public sector banks (PSBs). To that extent, Morgan Stanley's report dated March 3, where the analysts have listed their order of preference for PSB stocks, is an indication that the state-owned banks may once again be attracting some interest, thanks to three back-to-back quarters of good results in FY21 so far. "State-owned banks' balance sheets have improved, and bad loans formation should moderate going forward," the analysts note and this is the key reason for them to relook at their stance on PSBs. While State Bank of India (SBI) remains their preferred pick, stocks of Bank of Baroda (BOB) and Punjab National Bank (PNB) have been upgraded from 'underweight' to 'equal-weight'. The brokerage maintains its underweight recommendation on Bank of India and Canara Bank.
For non-banks, the IL&FS crisis was nothing short of India's Lehman moment, which has for a foreseeable future reset the sector on multiple grounds.
The focus of the company would be to develop its capability across segments of injectables, vaccines, biosimilars, inhalation and APIs to drive growth.
Investors should await consistent growth metrics before looking at an investment in the company.
In addition to new launches and restructuring across product segments, festival demand also aided growth.
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