Market this week 18-2-2022

Market this week 18-2-2022
  • Gujarat Gas’ stock has dropped dramatically as experts have lowered their earnings forecasts following a dismal third quarter.
  • On stronger volumes, Adani Wilmar gains 38 percent in two sessions.
  • Morgan Stanley doubles its target price for Tata Power, which adds about 3%.
  • SpiceJet’s stock price has risen by 8% since the company became profitable in Q3FY22.
  • For the first time since its IPO, Zomato has fallen below the issue price.

Gujarat Gas’ stock has dropped dramatically as experts have lowered their earnings forecasts following a dismal third quarter.

Gujarat Gas’ stock sank 6% in morning trade on February 9 after brokerages lowered their earnings estimates for the firm following disappointing results for the quarter ended December.

Due to a steep increase in raw material prices, Gujarat Gas recorded a 69 percent year-on-year fall in net profit to Rs 121.9 crore for the quarter ended December on February 8. During the quarter, the company’s cost of materials increased by 132 percent year over year to Rs 4,671.4 crore, owing to rising natural gas prices.

The firmness of the company’s topline performance was evident. Revenues increased by 81 percent year over year to Rs 5,241.2 crore in the December quarter, owing mostly to higher gas prices. The company’s operating margin fell to 4.6 percent from 21.7 percent in the prior quarter, owing to increasing raw material prices.

On stronger volumes, Adani Wilmar gains 38 percent in two sessions.

On Wednesday, shares of Adani Wilmar Ltd, a newly listed Adani group company, surged over 19 percent on stronger volumes, extending their gains for the second day. In the last two sessions, the stock has risen approximately 38%.

On the BSE, the stock rose as much as 18.7% during the day, reaching a new high of Rs 314.85 a share. It was trading at Rs 314 at 10.22 a.m., up 18.4 percent from its previous close.

According to analysts, the company is currently trading at a respectable price when compared to its peers. Adani Wilmar’s price earnings ratio is 37.56x, compared to 81.6x and 54.7x for Nestle and Britannia Industries, respectively. Despite a lackluster response to its initial public offering due to sluggish local equity markets and after several recent IPOs failed to provide good returns on the first day of trading, the stock rose roughly 37.8% from its issue price. It was put on the market on Tuesday.

Morgan Stanley doubles its target price for Tata Power, which adds about 3%.

On February 16, the Tata Power share price rose nearly 3% intraday to Rs 236.75 after Morgan Stanley, a foreign research firm, boosted the target price.

According to CNBC-TV18, Morgan Stanley maintained an equal-weight rating on Tata Power and boosted the target price to Rs 228 per share.

According to the research group, the major factor to monitor is the valuation attributed to green enterprises and the parameters being agreed upon for the Mundra resolution. For F22-24, earnings have been revised by 2%, -6%, and 10%, respectively.

SpiceJet’s stock price has risen by 8% since the company became profitable in Q3FY22

SpiceJet’s stock rose substantially from its early-day 52-week low of Rs 56.25 as the low-cost carrier declared a profitable December quarter 2021 after seven consecutive quarterly losses.

In the December quarter, SpiceJet made a consolidated net profit of Rs 42.5 crore, compared to a deficit of Rs 66.7 crore the year before. The company’s total sales increased by 33.8 percent to Rs 2,263 crore from Rs 1,692 crore in the previous quarter. A one-time loss of Rs 77.4 crore was included in the profit.

For the first time since its IPO, Zomato has fallen below the issue price.

Zomato Ltd’s stock fell below the issue price for the first time since it went public on Tuesday. On the BSE, the stock touched a low of Rs 75.75, down 8% from its issue price. The stock has been falling for four sessions in a row, losing around 20% during that time. The stock was first listed on July 23, 2021, at a price of Rs 76. It’s down 45 percent so far this year.

On the BSE, the stock reached an all-time high of Rs 169.10 on November 16, 2021, and has since dropped over 55%. The stock was a massive wealth creator, rising 65.79 percent on its first day of trading. The IPO raised approximately Rs 9375 crore for the company.

The stock’s ongoing decline comes after several investors expressed displeasure with recent purchases made at higher valuations. Zomato stated last month that it would purchase a 19 percent investment in adtech business Adonmo for Rs 112 crore in cash, as well as a 5% share in B2B software platform UrbanPiper for Rs 37.38 crore.

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