Market this week 7-10-2023
Increasingly negative analyst calls for Divi’s Labs and Dr. Reddy’s
Pharma firms Divi’s Laboratories and Dr. Reddy’s Labs have both seen a gloomy outlook in Moneycontrol’s analyst call tracking. As valuations appear to have gotten ahead of the few growth chances, “Buy” calls on Divi’s Laboratories stock fell to six from 14, while those on Dr. Reddy’s Laboratories plummeted to 18 from 36.
Although Divi’s stock has had a good year, returning 9.6% YTD, the business’s earnings for the quarter ending in June fell short of analysts’ projections. Revenue for the first quarter of FY24 was down 21.1 percent year over year to Rs 1,778 crore, while EBITDA was down 40.5 percent to Rs 5,040 crore and net profit was down 49.3 percent to Rs 356 crore. The decrease year over year is due to a low base created by the supply of molecules utilized in Covid therapy.
While custom business had a 45.1 percent YoY decline to Rs 656 crore, generic business saw an 8.1 percent YoY decline to Rs 944 crore. Custom synthesis accounts for 40% of company sales, with generic pharmaceuticals making up the remaining 60%.
After bullish predictions from Jefferies and Morgan Stanley, Godrej Consumer gains
On October 6, Godrej Consumer Products Ltd (GCPL) increased by 1% to reach its day’s high of Rs 987 after receiving a bullish rating from both global brokerage companies Morgan Stanley and Jefferies.
The call came after the company released its Q2FY24 business update, which showed a mid-single digit volume rise.
The stock has a “buy” recommendation from Jefferies analysts, who have set a target price of Rs 1,200 per share. With a target price of Rs 1,072 per share, Morgan Stanley analysts have a “overweight” rating on the stock.
According to the company, volume growth in the home-care segment was in the mid-single digits, but it was in the low-single digits for personal care.
Zomato is downgraded by CLSA to “outperform,” and the stock loses value.
Zomato Ltd. shares lost their morning gains and were trading slightly down after brokerage company CLSA lowered the stock from a previous rating of ‘buy’ to ‘outperform’ due to valuation issues.
The stock increased by more than 1% during the day to a new 52-week high of Rs 107 a share. However, the stock was down 0.33 percent from its previous close as of 12.30 p.m. on the BSE, trading at Rs 105. Since April, the stock has increased by almost 106 percent while the Sensex has increased by 11.6 percent.
After doubling in the previous six months, the brokerage business claimed that the stock is unlikely to move in the near future. In addition, CLSA stated that although Zomato’s profitability is increasing, concerns about growth may return owing to weak demand in the second quarter of FY24, according to CLSA channel checks.
Thomas Cook India gains 4% as a result of a higher Crisil rating
Thanks to a higher Crisil rating, Thomas Cook India sees a 4% increase.
According to a statement from Crisil on October 5, the upgrade is the result of Thomas Cook’s swift recovery from the pandemic and a considerable increase in revenues across all divisions as it continues to maintain healthy operating margins that help with cash creation.
Due to its recent increase of more than 100%, the stock has proven to be a desirable investment for investors.
Our post-pandemic quick expansion, supported by an accelerated digital transformation and solid cost control, played a key role in achieving record operating profits for FY23, which were maintained in Q1 FY24, according to the management.
JLR announces a 29% increase in Q2 volumes, helping Tata Motors gain 1%.
On October 6, as its wholly owned subsidiary Jaguar Land Rover (JLR) reported a 29 percent increase in Q2 volumes, Tata Motors’ stock increased 1% in trading.
The filing also stated that, despite the yearly two-week summer plant downtime, wholesale volumes were recorded at 96,817 automobiles (excluding the Chery Jaguar Land Rover China JV), up 29% from the year-ago quarter and 4% higher from the period from April to June. In comparison to the same period last year, wholesale volumes for the first half of the financial year increased by 29% to 190,070.
The notification went on to say that demand for the most lucrative Range Rover, Range Rover Sport, and Defender models accounted for 77 percent of the orders, and that the order book remained robust at 168,000 units, declining in accordance with the fulfillment of client orders. Beginning in November, JLR will release its full Q2 FY24 financial data.