The holiday-shortened week is likely to be action-packed with the beginning of earnings season, inflation and industrial output data, and Ukraine-Russia crisis expected to keep markets volatile. Stock-specific opportunities may arise from the earnings season.
The market managed to eke out gains in a volatile week ended April 8 that saw several key developments. HDFC twins merger decision lifted sentiment on Monday followed by a correction in the next three days amid the US Fed’s hawkish tone and Ukraine-Russia tensions. Also on the last day there was renewed buying interest given the status quo on policy rates maintained by the Reserve Bank of India with a focus on inflation and growth.
Bharat Dynamics | The stock jumped 26 percent after the government announced plans to expand procurement of locally manufactured products. Defence Minister Rajnath Singh on Thursday released the third positive indigenisation list of 101 equipment and platforms, which the services can procure only from the domestic industry. The list includes naval utility helicopters, light tanks, small unmanned aerial vehicles, and anti-ship missiles among others.
Tejas Networks | The share price gained 25 percent in the week gone by. Tata Group firm said it would buy 64.40 percent stake in wireless solutions company Saankhya Labs for Rs 283.94 crore in an all-cash deal. The initial acquisition of Saankhya’s shares is expected to close within the next 90 days, Tejas Networks said. “Tejas Networks, upon procuring all necessary consents and approvals, also intends to proceed with acquiring the balance 35.60 percent shares through a merger process or a secondary acquisition,” the statement said.
Zee Entertainment | The stock shed over four percent last week. Segantii India Mauritius and Morgan Stanley cumulatively picked 2.09 percent stake in media company Zee Entertainment Enterprises via open market transactions on April 7. Invesco Oppenheimer Developing Markets Fund has sold all its 7,43,18,476 shares (or 7.74 percent of total paid up equity) in Zee Entertainment, as per the bulk deals data. These shares were sold at an average price of Rs 281.46 per share on the BSE. Invesco, which had already intimated about its stake sale, had a total of 17.88 percent stake along with OFI Global China Fund LLC as of December 2021.
RBL Bank | The stock price shed over six percent in the week gone by. Singapore-based investment company Integrated Core Strategies Asia Pte Ltd offloaded 34,30,700 shares in private sector lender RBL Bank. These shares were sold at an average price of Rs 139.07 on the NSE. Morgan Stanley has maintained an underweight call on the stock with a target of Rs 140. The bank said its gross advances grew three per cent to Rs 61,929 crore in the last fiscal. It had recorded gross advances worth Rs 59,983 crore in FY21. Retail advances declined eight per cent year-on-year but grew one per cent sequentially. Wholesale advances surged 19 per cent year-on-year and six per cent quarter-on-quarter for the three months ended March 31, 2022, RBL Bank said.
Future Retail | The scrip was down over seven percent last week. Fitch Ratings affirmed Future Retail’s long-term issuer default rating at RD (restricted default) according to a CNBC-TV18 report. The RD rating reflects the uncured default in meeting repayment obligations on the bulk of onshore debt, which was restructured under the Reserve Bank of India’s August 2020 One Time Restructuring framework. Fitch had downgraded Future Retail to RD in April 2021 after restructuring as the ratings firm viewed it as a distressed debt exchange. It has also affirmed $ 500 million 5.6 percent senior secured notes due 2025 at C, with a recovery rating of RR5.
Ashok Leyland | The scrip rose 8 percent in the week gone by. The Hinduja Group flagship firm reported a 17 percent YoY growth in its total vehicle sales, including exports, at 20,123 units in March. The company had sold a total of 17,231 vehicles in March 2021, Ashok Leyland said in a statement. Total medium and heavy commercial vehicle (M&HCV) sales spiked 26 percent to 13,990 units in March 2022, as compared to 11,101 units in March 2021. Total domestic sales grew 18 percent in the previous month to 18,556 units, as against 15,761 units clocked in March 2021, with M&HCV sales recording 29 percent growth at 12,734 units, while the LCV (light commercial vehicle) sales declined 1 percent at 5,822 units, as against 5,860 units sold in March 2021.
Tata Power | The scrip added 13 percent last week. Shares of power generators gained further on hopes that their revenue will be stoked by higher returns from merchant and short-term sales as discoms will have to shell out more to meet growing demand in summers. As temperature has soared across the country since mid-March, there has been a sudden increase in power demand, widening the demand-supply gap. To curb profiteering by generation companies, the Central Electricity Regulatory Commission has put a cap of Rs 12 a unit as against the previous limit of Rs 20 a unit for electricity traded on the exchanges. Generations companies may report higher revenue and better cash flow in the fourth quarter.
Bharat Electronics | The stock price was up over 11 percent in the week gone by. Vidnyan Sawant, AVP, technical research at GEPL Capital, has a buy on the stock with a target of Rs 293. Bharat Electronics is trading at a lifetime high and has given five-month consolidation breakout on the weekly charts that it had been forming since November 2021. “We expect the price to move at higher levels towards Rs 273 after which it may move towards Rs 293. We recommend a stop-loss of Rs 215 on a daily closing basis,” Sawant said. Defence stocks are in focus after the government announced plans to expand procurement of locally manufactured products. Defence Minister Rajnath Singh on Thursday released the third positive indigenisation list of 101 equipment and platforms, which the services can procure only from the domestic industry. The list includes naval utility helicopters, light tanks, small unmanned aerial vehicles, and anti-ship missiles among others.
Vodafone Idea | The share rose over 10 percent after British telecom major Vodafone raised its stake in debt-ridden Vodafone Idea to 47.61 per cent through its subsidiary Prime Metals, a filing said on Monday. The company earlier held 44.39 per cent stake in Vodafone Idea. “Prime Metals held 2,18,55,26,081 shares, representing 7.61 per cent of the share capital. It has acquired 570,958,646 shares through allotment of shares pursuant to a preferential issue of the company,” the filing said.
Angel One | The stock added 10 percent in the week gone by. The company said that its client base rose 5.2 percent to 9.21 million in March 2022 as against 8.76 million in February 2022. The company’s client base surged 123.7 percent year on year. Gross client acquisition was 0.48 million in March 2022 compared with 0.45 million in February 2022 (up six percent) and 0.38 million in March 2021 (up 26.4 percent). Angel’s overall average daily turnover (ADTO) was Rs 8,84,200 crore in March 2022 (down 0.4 percent sequentially and up 121.6 percent year on year). ADTO from the F&O segment stood at Rs 8,58,700 crore, accounting for 97.12 percent of the overall ADTO during the month.
Sandip Das
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